Self-recommending. As usual, Russ does not just throw softballs at the guest, so you get more interesting at-bats. For example,
[Russ]: I don’t sense the distinction between a less dynamic, more stable economy and a complacent one. So, tease that out a little bit for us.
[Tyler]: In a lot of the late 19th century it’s not even clear according to the numbers that our rate of productivity growth was always so high. Yet American society was not complacent. We had a frontier mentality, an immigrant mentality; we were very likely to move across state lines; we were willing to accept a lot of risk. And that in turn helped us later on, get the rate of productivity growth up higher. But I see today it’s a culture where younger people are more willing to keep on living with their parents, less interested in buying a car, more likely to aspire to being on Disability as a kind of future, and less interested in, you know, protests and social change than, say, they were in the 1960s or in the 1970s. Those to me are all signs of complacency.
And by the way, today the new edition of my Three Languages of Politics is available.
I think the stagnation/complacency idea is like my oft-referred to analogy of how Warren Buffett said people either get Value investing or they don’t and never do. Russ Roberts uses the idea that it is becoming difficult to keep all our devices even turned on and charged as an example against the idea of stagnation. I think it is supportive of it.
I think it is possible that contrarians actually lack some gene that blinds us to certain hallucinations of mainstreamers.
I listen to every interview of Tyler that I come across. Russ’ and Ezra Klein’s have been my favorites. The A16z interview was the worst.
I find people who badmouth Cowen for being a little moderate to be unreflective. How many progressives probably heard him in an interview with Ezra Klein? More than zero!
My gosh, the guy has to survive in academia. We (can certainly disagree, but) should be sending him and David Brooks care packages. I disagree almost always, but David Brooks might as well be Terraforming Mars.
“younger people more likely….. to aspire to being on Disability as a kind of future.”
I would hope this is misspoken.
I cannot imagine where he could possibly come up with this idea, let alone the facts to back it up.
I find Cowen often uses words with the correct denotation, but incorrect connotations, for unnecessary provocation. The word “complacency” itself is a good example. It has connotations of satisfaction which are really unwarranted with his thesis.
In this case, “aspire” is the wrong word, and I think he means something closer to “being on Disability is the best future they can foresee for themselves”. Something more tragic than “being on Disability is something admirable”, which is what “aspire” implies.
And that is what I thought.
At the same time, there is more than a little bit of “hey, kid! Get off my lawn.”
I do not think there can be any reasonable person in the US today who does not believe that it is much more difficult to build a life in the US today than it was when I was a teen in the 60’s.
Just one example:
I went to a very good state university. I could work 500 hours a year at minimum wage and pay tuition for one year.
I have a grand nephew now in that school. He would have to work more than 2500 hours a year at minimum wage to pay tuition for one year.
In my opinion, that is a tragedy.
“Aspire to” is important because it casts dumb rednecks as lazy bums, unlike hard working immigrants (who have higher poverty rates and consume more government services per capita, so there goes that idea).
Well, one viewpoint is that education is a good thing and for the good of individuals and society as a whole, we should subsidize public universities and encourage young people to get a college education. That’s an old fashioned liberal notion.
Suppose instead your viewpoint is that too darned many kids go to college in the first place, that most of them don’t learn anything useful there but become pretentious liberal snobs, and that ordinary taxpayers shouldn’t be stuck with paying the bills for such scum. That’s the MODERN viewpoint.
Ah, the let them eat cake meme.
This is not even that provocative. What do tou think the difference if you asked 7 year olds and 18 year olds? 18 year Olds today vs 20 years ago? If the differences of such a survey aren’t zero then you actually agree with him.
But if you are trying not to agree you will likely succeed.
Intergenerational poverty where no one works or aspires to, either, is a real phenomenon.
1. Just Ordered the paperback to complement my old, worn out copy. People, it also makes a great gift.
2. While I’m only halfway through my copy of The Complacent Class, I really don’t think it makes sense to posit a connection between “prevailing mentalities” as a fundamental driver of “productivity growth”. At least, not one that would rise to the level an Economic Law such that it’s reasonable to apply it to explain comparisons between technological periods as different as the late 19th century and today. Frankly, I think Cowen is hoping that a certain segment of the audience he is hoping to influence will fail to carefully scrutinize the claims that seem to be pointing in that direction, and thus jump to the conclusion that the current stagnation can be overcome, and therefore lots of productivity growth ‘unlocked’, if only they were willing to … well … implement Libertarian policies that have been stuck on the runway forever because of the long-entrenched state of our political conflicts. Er, I mean, ‘Complacency’.
3. Let’s think about labor productivity growth. For any particular marketable output, we’re talking about the average decrease in the number of man-hours needed to produce a given quantity. When an economy is capital-rich and has low real interest rates, like ours does, then if new processes aren’t discovered or invented, productivity will stagnate when every laborer is already augmented with the optimal amount of capital. In the long-run, only constant technological progress in a sector can keep productivity growth rising at perpetually high levels. When aggregating across the whole economy, only perpetual improvement in the efficiency of production of every laborer will result in continuous increases in average productivity.
4. The trouble is that we’ve had so much productivity growth in agriculture and manufacturing that a small percent of the population can produce all the stuff everyone else can afford, and so most of the domestic labor force has been displaced to service sectors. Modern IT-enabled capital tools are increasingly substitutes for labor instead of complements, and under realistic conditions, and this necessarily causes a redistribution of the labor force into tasks that have lower rates of labor productivity growth. Increasingly, the jobs that will be occupy most people’s time in developed countries are the ones that can’t be automated or outsourced and rely on economies of agglomeration. Those jobs are thus by their very nature exclusively human tasks that can only be performed at human speeds. They are “Baumol cost disease” jobs and can’t be sped up, and so can’t show any real labor productivity growth. As more and more people shift into Baumol-jobs, the average labor productivity growth rate must slow. None of that has much to do with mentality or cultural sentiment or Complacency. So, sure, there are certainly some really big gains that could be unlocked with better political institutions and economic policies, but even in those policies were implemented, they would probably be experienced as short-term windfalls that eventually just reach another stagnating equilibrium, rather than the recipe for sustained higher growth rates.
I think Cowen is hoping that a certain segment of the audience he is hoping to influence will fail to carefully scrutinize the claims that seem to be pointing in that direction, and thus jump to the conclusion that the current stagnation can be overcome, and therefore lots of productivity growth ‘unlocked’, if only they were willing to … well … implement Libertarian policies that have been stuck on the runway forever because of the long-entrenched state of our political conflicts. Er, I mean, ‘Complacency’.
Well, that or, less ambitiously, maybe just dissuade some people from idolizing French and Scandinavian economic policies so much. Young educated progressives who think Bernie Sanders is just great great great and nod their heads in agreement whenever he says we need to be more like Denmark or Sweden, for example.
Does this qualify as the Straussian reading of the book?
Robin Hanson put it well about a year ago in his Reddit Ask Me Anything session for Age of Em:
There are a lot of personal and professional advantages to having both that kind of reputation (and even the esoteric meta-reputation Robin highlights here, of wanting to cultivate a certain public persona).
For one thing, it makes him a more credible emissary from libertarian-land to the progressives, maintaining enough goodwill with them that he can occassionally push back against their more dangerous economic claims and proposals without being declared a fascist enemy.
But another one of those advantages is having ones ideas be as invulnerable to direct critical attack as the fog is to the shot of an arrow. It must also be somewhat amusing to him to watch so many people try to infer the secret, mysterious Straussian meaning of his works, and of course getting countless different ‘obvious’ answers. Sometimes he writes things that are frankly really off base, but unlike 99% of authors, he can get away with it with a kind of benefit of the doubt that he must really mean something else, because otherwise some odd statement would stick out like a sore thumb.
Well, in here I am a progressive.
And I think the man is a cretin.
Yeah, but he says enough insightful, intelligent stuff to make the “he must mean something else” thing seem plausible, though, because I agree, he does write stuff that seems way off base on a somewhat regular basis.
“So, sure, there are certainly some really big gains that could be unlocked with better political institutions and economic policies, but even in those policies were implemented, they would probably be experienced as short-term windfalls that eventually just reach another stagnating equilibrium, rather than the recipe for sustained higher growth rates.”
Think about it like the Roman Empire. Rome solves for the best possible political/social equilibrium at human speeds. That seems great compared to what came before or after. People in 100AD are a lot richer then people in 600AD. They aren’t an order of magnitude richer though. Everything is still done at human speeds.
I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain.
John Adams
What would one expect once the grandchildren were freed to pursue “recreation” as their vocation? A complacent class?