Reviews of "The Great Stagnation"

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Conservatives (including libertarians) require a constant flow of crisis stories to justify their preferred policies. Books like "The Road to Serfdom", "The Bell Curve" and now "The Great Stagnation" follow a long tradition of scare mongering. They are pseudo-academic: they have no peer review, they are addressed to the general public, and their foundations in data and modeling range from lacking to pathetic. They are designed to permit the worst sorts of confirmation bias: supporters of the book position can see commies in every woodpile. And a few years after publication, nobody takes them seriously.

"The Great Stagnation" is a classic example that employs lying with statistics. Tyler Cowen claims that our innovation is stagnating because median GDP/capita is not increasing the way it used to. But mean GDP/capita has been increasing steadily. The difference is because increases in GDP over the past 30 years have gone almost exclusively to the rich.

It is disgusting that Tyler relies on a trick that we teach students about in grade school (the difference between mean, median, and mode), and even more disgusting that so many people have considered his claims seriously instead of denouncing the trick. Why would he do this? Simple class warfare tactics: if you convince people that wealth is not there, instead of being redistributed to the rich, they will not be able to fight back.

Paul Krugman, a few months later, describes what Tyler's doing in Oligarchy, American Style. "Whenever growing income disparities threaten to come into focus, a reliable set of defenders tries to bring back the blur. [...] So what you need to know is that all of these claims are basically attempts to obscure the stark reality: We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only." Tyler's position at the George Mason University Economics Department is controlled by the billionaire Koch brothers, and he is producing exactly what they would want to distract from income inequality.

Amusingly, "The Great Stagnation" is a revival of Alvin Hansen's old idea of "secular stagnation", which said that "... the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth...." This was stated in the 30's, just before the record-breaking postwar boom.

One critic ("name99") writes:

The real problem is that (as far as I can tell) Cowen is incapable, or uninterested in, distinguishing between
  • rising technology and knowledge
  • rising gross national income
  • rising median income
  • world and US incomes
He slips between different versions of these at different times, which makes it hard to argue with him and makes the whole enterprise come across as very much something written to justify a pre-existing set of preferred policies.

There are many positive reviews from Cowen's fellow travelers and reviewers who do not see through the trick. Those are omitted from this list because they are generally foolish or also deceptive. Besides, this is the CRITIQUES Of Libertarianism web site.

Links

There Is No Great Stagnation, Only Great Redistribution [More...]
Kindred Winecoff points out that Cowen is lying with statistics by median family income instead of GDP per capita.
Great Stagnation or Big Shift? The Answer Matters [More...]
John Hagel points out that we created the middle class by ensuring productivity improvements benefitted workers. He suggests that we do this again.
Is technological progress a thing of the past [More...]
"Some authors, however, have suggested that product and process innovation are running out of steam [...] The answer is short and simple: we ain’t seen nothin’ yet, the best is still to come."
The End of Low Hanging Fruit? [More...]
The authors point out that Tyler Cowen ignores the importance of incentives to innovation, which come from inclusive (not extractive) institutions.
Tyler Cowen’s The Great Stagnation: Government Spending Section [More...]
Steve Roth identifies what he thinks is Tyler saying things where he knows better. Lying with statistics, in other words.