The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better

Tyler Cowen

Book cover

This is really more of a long article than a book, but worth reading for anyone with an interest in applied, nonmathematical economic thinking. I certainly do not agree with all of Cowen’s arguments, but I think he makes some important points.

He argues that American prosperity and growth up to the mid twentieth century was due to capturing three forms of “low-hanging fruit”: free land, broadening education to a much wider group of people, and technological innovation. The first two are pretty indisputable, but it seems very odd to me to call technological innovation “low-hanging fruit”–after all, anything can look obvious, and Cowen does not make at all clear why innovation then was different from potential innovation now. Perhaps “use of non-renewable fuels” is a close correlate that I would accept.

I do appreciate Cowen’s focus on median income as the best measure of broadly shared prosperity (especially as compared to per-capita GDP). He also makes a persuasive argument that the increased dominance of health care, education, and government in our economy–none of which are consumed through a classically market-based mechanism–makes it increasingly difficult to measure economic outcomes.

In a sense this article frustrated me because it seemed to come extremely close to discussing very deep issues, but veered away at the last moment. For instance, Cowen talks about how the internet generates a fairly large amount of happiness/utility for people, but not a great deal of measurable economic output (for instance, He links this to the greater question of what the societal impact of a greater move away from materialism would look like, but doesn’t go very far with the idea. He also notes how access to this “cheap utility” is unequally distributed, but doesn’t go any further with that either. I guess I am just complaining that Cowen is not as radical as the thinkers I like to read best.

My Goodreads rating: 3 stars