Monday, May 7, 2012

"The Great Stagnation": A Book Report

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

Tyler Cowen seems to be fairly bright economist. When I picked up this slim book, a 2011 NYT bestseller, at the library, I expected to read an exploration of some thoughts I've been having about collapse capitalism. My thoughts along those lines are superficially similar in that I view most of American exceptionalism as the product of mostly luck - free land (taken from the aborginals), free labor (exploited from immigrants and slaves - both the chattel and debt peonage kind), free reign (provided, for the longest time, you were white and male), and free protection (in the form of two vast isolative oceans).

I've always thought probably the worst modern thing that happened to America was the collapse of the Soviet Union - in that we learned all the wrong lessons from it, resulting in a form of triumphalism that made us hugely overconfident, swaggeringly arrogant, and dangerously risk-seeking.

And Cowen, in a classic removed academic way, places a lot of the blame for the current malaise upon over confidence, but...

But, for all his talk of low-hanging fruit, and after reading 1493, I expected something more from Cowen's book. I expected him to recognize the biggest, juiciest, lowest hangingest fruit of them all was the conquest of the New World. That's really everything. Everything.

Consider this brief counterfactual. Picture Eurasia as seen, for the longest time, from it's real center of gravity, which I would place, give or take, around Persia. That area, and the weighted portions of civilization in India, China and central Asia, for the past 10,000 years, is where all the important shit happened. At the margins, off to the Far West, was Europe - a shitty little cultural backwater marginally and sparsely inhabited by a climate challenged group of slow fucking learners.

So, here's the counterfactual. The New World never existed. You sail west, you die. Columbus, Ponce de Leon, Balboa, they all disappear, and finally people give up on the Atlantic. What happens?  No Spanish empire. No silver. No trade with China. Vastly More importantly, no potatoes. No cod fishing. No population growth in the northern reaches of Europe. No Dutch trading empire, no English trading empire. No Industrial Revolution. At least, not from Europe. The soils of Europe, always on the verge of depletion, receive no guano from South America. The population of Europe never explodes. Europe stays where it has always been, a marginal land, a backwards people.

This is not to say the Industrial Revolution doesn't take place. It just doesn't happen with the usual white male triumphalism involved. No loss , but certainly no betterment either, all the world's peoples being the shits that they are.

But I digress. To borrow from the somewhat dated vernacular, the conquest of the New World is the shiznit.

So, I start reading The Great Stagnation, and within a few pages, I realize this Cowen guy belongs to the neoliberal sect of the libertarian religion. Oh, fucking great. Which means, quite naturally, I will be subjected to many assertions with no evidence. Or rather, with cherry-picked evidence*, as religionists are wont to do.

It doesn't mean I stopped reading. But I did start skimming.

Cowen's main piece of evidence for the technological slowdown is a study done by Jonathon Hueber, in 2005. Hueber himself uses a lot of arbitrary evidence to back up his claim. This link has a great many issues with Hueber's conclusions. I have to agree. There is no evidence of a drop in innovation. On the other hand, there is a great deal of evidence for financial and political mismanagement of technologies, but Cowen doesn't really want to explore that in any embarrassing detail, perhaps because it would involve a critique of his own opinions.

With the final realization of many of the dreams of Eric Drexler's "Engines of Creation", with the very close finishing touches on mass-production of nanomaterials, such as graphene, silicene, metamaterials, amorphous materials, ceramics, exotic composites, etc. suggest that the Golden Age of Materials Science v 2.0, is here. The fact that the financial industries have pulled away a lot of talent from the STEM areas suggests we would be 10-20 years ahead of where we are had that talent not been wasted in the banking sector.

In short, I don't buy Cowen's arguments.

*Notice that Cowen, in the link, shows a chart to back up his argument for a technological plateau and a slowdown which is not entirely honestly presented, much the same way global warming deniers show only that part of the data that does not show warming. But in this link, with a more comprehensive chart, you can see that Cowens' downslide is actually the mid-90's bubble anomaly presented as business as usual.


  1. Don't forget World War II. Every place that had an economy lost it in the war, except us.

    I don't try often, but I've never been able to make sense out of American exceptionalism. It seems like an artefact of the right-wing think tanks that have to say something to earn their keep.

    1. You're right. It's amazing how exceptional you can be when your infrastructure isn't rubble and burnt timber, and your labor market isn't living hand to mouth on roots and gravel.