Stagnation

Tyler Cowen’s book The Complacent Class challenged my thinking on a moral level that I had not expected. He argues in the book that it is morally imperative that we make efforts to increase global GDP and encourage economic productivity and development because it will raise living standards and improve people’s lives at a level that individual interventions cannot. After reading his book and listening to him discuss his ideas, I think he is correct, and I think his concerns about a lack of innovation and a general stagnation in the United States has a solid foundation.

 

In the book, Cowen writes about his main area of focus and consideration regarding progress and development. He writes, “The ultimate measure of technological progress is not the number of gadgets we own, but rather how much better are lives are.” Complacency, in Cowen’s view, doesn’t care if our lives are getting any better. Complacency says that what we have satisfices. We are not really maximizing our lives along any particular dimension, but we are generally content with the status quo, and not pushing new frontiers. To Cowen, this is a dangerous place to find ourselves.

 

“The income of the median or typical American household is down since 2000, and unless wage gains are very strong in the next few years,” writes Cowen, “this country essentially will have gone twenty years with wage stagnation or near wage stagnation for median earners.”

 

Stagnation might not just be bad, it might be a moral failure. If we can improve the standards of living for people across the globe, free up time, increase productivity and efficiency, we can help lift more people out of destitute poverty. Increases in technology can bring increases in living standards that help people get away from indoor wood-fire cooking, access healthy drinking water, and generally avoid unsanitary conditions that lead to preventable health conditions. Increasing productivity and global GDP might just be the best way to help reduce suffering across the planet.

 

The statistics on stagnation suggest that we are not moving forward but instead sitting where we are in a state of complacency. Stagnation likely describes part of the opioid crisis and the anti-immigrant sentiment that fuels right-wing government coalitions across the globe. Stagnation projects a fixed pie that we all get a small share of. Each slice is just enough for us to be content, but any dreams of enlarging the pie are gone. This is Cowen’s fear, and the statistics on wage stagnation seem to suggest that it is the reality we are facing in our country today, and that complacency could have dramatic impacts for global development and the lives of billions of people beyond the borders of the United States.

The Whole

The United States is an interesting place. We have become an incredibly wealthy nation and have done things to advance things like technology, living standards, and scientific knowledge in ways that have improved the entire globe. The achievements of the United States have come while we have simultaneously adopted a narrative of individuality and individual success. It is our freedom, our pursuit of capitalism and greatness, and our individual desires to achieve and become great that have pushed our country to what it is today.

 

At least, that is the story we tell ourselves. While this narrative has taken hold, we have also had countless people who have advocated not for just individual freedom and success, but for national unity and for a cohesive vision of our society. Individuals who have been willing to sacrifice their own self-interest for the welfare of others has also been part of our American story, but it is often forgotten or at least not celebrated in the way that ruthless capitalism is (think about all the books written about Steve Jobs). Forgetting the connections between us all, the degree to which some people do everything they can for others, and the importance of becoming one people across the country is not new.

 

In his book The Quartet, Joseph Ellis takes a critical look at the actions of four of our founding fathers to bring about the adoption of our current constitution following the Articles of Confederation. In my last post, I wrote about John Jay, a relatively unknown founding father, and someone who made decisions across his political career to drive forward the national interest rather than a personal or state interest. An example of his nation-first mindset is given in The Quartet surrounding the question of Vermont Statehood. The state of New York at one point included what is now Vermont, and most New Yorkers did not want to allow Vermont to become its own state. Jay, however, recognized that Vermont statehood would be good for the United States as a whole, even if it was not in the immediate interest of New York. “Despite pressure from the New York legislature,” Ellis writes, “he would not budge from his conviction that the whole needed to take precedence over the parts, the first clear expression of his national orientation.”

 

I don’t have a prescription for the perfect balance between individualism and group centered thought, but I think the United States would do well to better recognize our interdependence and to encourage more actions that made personal sacrifices for the good of national unity. There have been studies recently that demonstrate that greater income inequality, particularly between an extremely wealthy few and the masses can lead to political instability, which could be damaging for the country as a whole. At the same time, encouraging individual success and achievement is of crucial importance. As Tyler Cowen describes in his book The Complacent Class, achieving economic growth should be a top priority, as increased GDP will lead to increased living standards and compounding returns on development and advancement. Encouraging wealth building potential can help with GDP growth, but on its own and without recognition of the value of social cohesion, instability can erupt and dismantle economic progress and development. The policy implications and solutions are difficult to think through, but on an individual level I think we can all do more to better respect the whole and discount our own personal interests.