Jun

8

 I find Tyler Cowen to be a very interesting, stimulating individual and am looking forward to his upcoming talk at the NYC Junto. I read his latest "The Great Stagnation" in preparation for the talk. It is a quick read, and well worth checking out. While I enjoyed it, I disagreed with many of his arguments put forth in it.

The premise distilled is that the US was in a unique spot in its younger days to take advantage of a large variety of low hanging fruit due to a variety of factors resulting in increased prosperity, and that since the mid 50s the pace of innovation has plummeted and the rate of return of technology has diminished greatly, requiring more and more dollars for less and less life altering discoveries. I take full blame for any misinterpretation in putting forth Tyler's arguments, but the above was my take away.

He references the work of Jonathan Huebner in attempting to quantify innovation rates, and put forth the argument that things are ugly from 1955 onwards. I believe there are major problems with Huebner's methodology despite a laudable effort, including a very subjective measurement of exactly what an innovation is by definition. He uses patent data also which while not without problems is at least measurable in some form compared to the other method he uses for counting innovations.

Here is one review of said work.

 Tyler also argues that "current innovation is more geared to private goods than to public goods…with only slight additional benefits to the majority of the population" and that "the basic material accoutrements of life (again, internet aside) haven't changed much since he was a kid."

I don't believe I am wearing a pair of rose colored glasses when I say that there has been tremendous amounts of innovation and technological progress since the 50s in the US with great benefits to large swaths of the population. The progress in integrated circuits and computers alone is absolutely amazing in my opinion. Materials science has also made great strides. Despite the BP mess, the oil and gas industry continues to innovate. These are just some areas I can think of right off the bat. There are many more, but I've got to call it a night soon.

I found the whole line of argument reminiscent of the perennial naysayer Paul Ehrlich.

I'm not sure if anyone else on the list has read the book yet, or has any opinions, but I'd be interested to hear what others think. I believe science and technology have delivered and will continue to deliver advances that improve our lot. I also believe there is plenty of innovation still happening and that will continue to happen which is a net positive to the majority of the population.


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