Blame the Millennials

EconTalk Extra
by Amy Willis
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Tyler Cowen on The Complacent ... Cass Sunstein on #Republic...

complacent.jpg This week, EconTalk host Russ Roberts welcomed back economist, author, and blogger Tyler Cowen of George Mason University. The subject was Cowen's newest book, The Complacent Class: The Self-Defeating Quest for the American Dream. In it, Cowen argues that Americans have become less innovative, less geographically mobile, and more segregated due to a cultural shift toward complacency. And yes, he thinks Millennials are particularly afflicted with complacency.

Have Americans- especially Millennials- become addicted to a soma-like state of leisure? What's needed to get folks out of their parents' basements and designing beautiful new buildings and making movies great again? As always, we'd like to hear your thoughts on this week's conversation.

1. How does Cowen define "complacency" in his book, and how does he argue it's affecting the US economy? Why does Roberts suggest it may instead be an income effect, and why does Cowen think it's not?

2. What does Cowen mean when he says, "immigrants are more neurotic than average, and that's a good thing?" Is Cowen making a Caplan-esque case for open borders? How so (or not)?

3. While Cowen is adamant that he's not in favor of rioting, its relative paucity today is still cause for concern. Why does he think this, and what does this suggest about the future prospects for freedom?

4. Despite his concerns about complacency, Cowen maintains he's an optimist. How about you? How valid do you find Cowen's hypothesis? If Americans are indeed too complacent, what is to be done? If Cowen's wrong (or his claim at least exaggerated) what additional evidence would you bring to the discussion?

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COMMENTS (6 to date)
Per Kurowski writes:

It is even worse than Tyler Cowen exposes.

Nothing as complacent as regulations that imposed risk weighted capital requirements on banks that de facto told them… don’t you dare lend to the riskier future… you just keep making huge returns on equity on refinancing the safer past.

http://teawithft.blogspot.com/2009/10/please-free-us-from-imprudent-risk.html

Doug writes:

I think Cowen's argument has merit, however Im not convinced there is a cause and effect relationship between geographic mobility and complacency with any specific generation, think of the agrarian past with multigenerational families living in the same household, this was the norm. Nevertheless it would be informative to take a deeper look into the statistics to confirm or dispute common assumptions. I think the current income inequality is a contributing factor, the places with the most dynamic economies rapidly become unaffordable for newcomers. This changes the risk to reward calculus, if you cannot start off with a high compensation job, you need to spend all your spare time commuting from an affordable place to live. Ive done that for my whole career, If I wanted to sacrifice saving into my 401K, I could have lived less than hour away from work. Im a highly educated boomer whos career has been in stall mode for the past two decades, every option was the same menu, just a different restaurant. My experience in chasing better situations was an exercise in futility, a lot of energy expended w/o any tangible results. At one point, I realized it wasn't all about me, my responsibility was to provide for my family. They were not better served in any way by my efforts to improve my career trajectory. On the other hand I wonder what the impact of a professional military service has, in the past a significant portion of the population participated in the services and this exposed them to a lot of moving around, maybe this experience translated into some greater willingness to strike out again, or removed the ties to the home geography?

Alex writes:

Good discussion, but hard to buy 'complacency' is the reason people don't move to more productive areas when exactly those people (who would benefit the most, outside of metropolitan areas) just voted for Trump and Sanders.

And opiods are pain relief, not really to put you to sleep. Distinction relevant because they also relieve mental pain/distress.

Patrick writes:

Russ. Thanks for the great episodes all these years. This is the first I found myself getting frustrated after listening. I understand where Cowen comes from, but feel it is extremely biased. It comes across like to worn-out story of 'these kids today, it was way better back then'. It's so easy for a Boomer to make the Millennial the punching bag, just like every older generation has done to the younger generation before. The idea of saying we are less innovative doesn't hold water, in my opinion, when you look at the unbelievable change our world has seen in the last decade around technology and innovation. We have seen more innovation and life-changing growth than almost any period in history. I fear people live in nostalgia too much, that somehow the world was always better when we were young. He also talked about how music hasn't evolved, which again feels anecdotal. Sure, there are some bands that play similar music as the past (there are still bands today playing big band music), but you can't tell me that EDM music wouldn't make people from 20 years ago raise their eyebrows. Not defending it as good music, but to just say music is all the same seems like a cheap shot. As far as lack of geography change, I'd say a lot of it is due to the fact that moving isn't as much of a requirement anymore. Transportation is more accessible and easier than ever, not to mention technology allows for people across the country to connect without having to be in the same place anymore. This line of thinking in general I fear causes more divide and less understanding.

Anyway, just my thoughts as an 'older millennial'. Thanks for the great content, and even these episodes I disagree with give me time to reflect and challenge my own beliefs, which is always a positive in my book. Thanks Russ!

Arde writes:

Question 1.
Cowen defines complacency as reduced willingness to take risk, to innovate and to change. He argues that it affects negatively the US economy because it slows down productivity growth. Roberts suggests that it can be an income effect because this is what the theory predicts. As income goes up, the demand for luxury goods (and it seems reasonable to assume that "safety" is a luxury good") also goes up. Cowen thinks that it is a cultural shift. There was too much turbulence in the 60-70ties and as a result people value safety more.
It can be difficult to entangle both effects, but I tend to agree more with Roberts' view. This pattern – increases of income brings about higher demand for security – is not only specific to the US. For example there is evidence that the children of the immigrants are not as "neurotic" as their parents were. People in China worry that the younger generation is not as hardworking as their parents were and so on.
I don't share Cowen's view that this is so bad thing. If people want to live less dynamic life and are willing to accommodate less innovation/less growth, what's wrong with that? If that is the equilibrium, result of interaction of preferences of many people, so let it be. If people feel that the income is reduced too much as a result of their complacency, they will accommodate and become more neurotic, and the economy will end up on a new equilibrium.
As a European, I find Americans sometimes too neurotic. Ok, Americans have bigger cars and houses and Americans on average are more innovative, but as a downside they (on average) seem to be more stressed, so much focused on work and career. Americans don't find so much time to enjoy long discussions in a restaurant with friends, take less holidays, travel less, go less to operas/theatres etc. GDP is important, but this is not the only things we care about.

Arde writes:

I wonder if Cowen provides data in his book to back-up his claim that there is less rioting nowadays. I had a quick look in Wikipedia and this claim does not seem to be true.
Number of incidence of civil unrest in the US by decade: 60s -50; 70s -31; 80s -8; 90s-11; 00s-15; 2010-2017 -31.
https://en.wikipedia.org/wiki/List_of_incidents_of_civil_unrest_in_the_United_States

The current decade has already had 31 incidents. The number of incidents is more than in 70s, 80s, 90s, 00s. Only 60s had more incidents, but the decade is not over yet, it is possible that by the end of it there will be even more riots than in 60s.

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