Thursday, March 3, 2011

100 Books 13 - Tyler Cowen's THE GREAT STAGNATION

The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better:A Penguin eSpecial from Dutton - Tyler Cowen

There's a wee bit of monomania going on in The Great Stagnation, which kind of befits its subject, the current economic downturn and how it is unlikely to really end anytime soon. Cowen's fixation as he ponders our plight is on the idea of "low-hanging fruit" and what it means when it's all gone. It's interesting to contemplate and Cowen makes a lot of good points with it but it's also pretty simplistic, and the resulting book suffers from a lot of confirmation bias.

What Cowen means when he refers to low-hanging fruit is the idea that, as a (North American) society, we've exploited all of the easy answers to our economic problems to the full: cheap energy, automation, global transportation, getting everyone into a public education system, abundant and unspoiled land, etc. From his perspective of omniscient hindsight, all of the innovation we've achieved to date has been easy*; it's future innovation that's unthinkably difficult because we've done it all, used it all, tapped it all out.

Married to this idea, Cowen pronounces what amounts to doom for our recovery from the current crisis, seeing even the signs of hope and change like the internet in the most negative light possible. For instancewhile it's nice that people are finding non-material ways of satisfying themselves, he says, that satisfaction does not help the economy -- but his reasoning here seems flawed. The fun we have on the internet (and he focuses unduly on the internet as a source of fun and maybe, occasionally, of education and collaboration. Maybe), you see, is really hard to measure using conventional statistical tools. It doesn't show up on old-style measures of productivity, for instance, and its effect on things like Gross National Product as currently evaluated is close to invisible. Rather than calling for new tools or new measures, though, Cowen simply pronounces our intangible internet fun an economic dud. The low-hanging fruit is gone, but don't look for a ladder.

Cowen also seems to be ignoring something else I see every day on the internet, which is innovation. When I go surfing, it's hard not to encounter an elegant new idea for managing riverine pollution, say, or a device that can allow its owner to tote hundreds and hundreds of books around in an object that weighs less than a single paperback. Cowen dismisses these as mere attempts to squeeze more juice out of the low-hanging fruit; I see them as ways that more people can benefit from it than currently do, an issue he does not bring up at all. In his world, there is only the West and its only our needs and our growth and forward progress and increase in living standards that matter. I find this more than a little reprehensible. But maybe, you know, I just don't get it and it's really great that we're worrying about how we're not as rich as we thought we were while there are still lots of people in the world who like both kinds of food, rice and rice.

Microfinance doesn't count as an innovation, either. Or portable water purifiers.

What's really good about this book, though, is the argument Cowen makes about the tendency in the West to use intellectual property laws and copyright to stifle others' efforts to improve their living standards. Whether it's hamstringing gadgets and content with DRM and other means of creating artificial scarcity to protect legacy businesses or banning age-old practices like seed saving, these kinds of practices can and do hold everyone back except for the elite few who benefit from them and have the resources to persuade political authorities to keep them in place. That doesn't just retard our Western GNP growth, but our future as a species.

On the whole, though, well, I'm glad this book was short. I'm loath to put books aside this year as I plod towards the 100 books goal, but were I not feeling self-imposed pressure to finish what I start no matter what, I might have given this one up, not due to its difficulty or its dullness (for it is not a dull book) so much as to my having read it all before. There are lots of books out there to explain the financial crisis and tell us we're stuck for a while and this is not a standout in that field for me. *I've got to wonder, though, what, say, Edison or Ford or George Washington Carver would say, if told that their innovations had been so easy or obvious!

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