Russ Roberts

Tyler Cowen on The Complacent Class

EconTalk Episode with Tyler Cowen
Hosted by Russ Roberts
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For the People, By the People ... Blame the Millennials...

Complacent%20Class.jpg Author and economist Tyler Cowen of George Mason University talks with EconTalk host Russ Roberts about his book, The Complacent Class. Cowen argues that the United States has become complacent and the result is a loss of dynamism in the economy and in American life, generally. Cowen provides a rich mix of data, speculation, and creativity in support of his claims.

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0:33

Intro. [Recording date: March 2 8, 2017.]

Russ Roberts: Tyler's latest book is The Complacent Class: The Self-Defeating Quest for the American Dream, which is our topic for today.... What do you mean by 'the complacent class?'

Tyler Cowen: That something is wrong in America and there is less urgency about solving that problem than[?] ever before. And in some critical regards, social change has slowed down. We are less innovative, less mobile, and more segregated. That would be the nutshell version. I could give you some examples.

Russ Roberts: So, to me--and this is my only, the intellectual problem I have with the book. Of course, I have quibbles here and there; there are a lot of fascinating ideas in it. But, to me, your definition of complacency is more a description of statis, a case of a reduction in dynamism. Which certainly you write about a lot in the book. But I don't sense the distinction between a less dynamic, more stable economy and a complacent one. So, tease that out a little bit for us.

Tyler Cowen: The rate of productivity growth in the United States has had periods of being higher and lower in American history. In a lot of the late 19th century it's not even clear according to the numbers that our rate of productivity growth was always so high. Yet American society was not complacent. We had a frontier mentality, an immigrant mentality; we were very likely to move across state lines; we were willing to accept a lot of risk. And that in turn helped us later on, get the rate of productivity growth up higher. But I see today it's a culture where younger people are more willing to keep on living with their parents, less interested in buying a car, more likely to aspire to being on Disability as a kind of future, and less interested in, you know, protests and social change than, say, they were in the 1960s or in the 1970s. Those to me are all signs of complacency.

Russ Roberts: So, one argument against that, which you make in the book--I don't think you agree with it--but part of this is sort of the result of the fact that life's pretty good; we're richer than we used to be. And one could view this as what economists call an income effect--meaning something we want more of as we get wealthier, and certainly as we get wealthier one of the things we want more of is safety. We want more stability. Is that part of the answer? Or the explanation?

Tyler Cowen: That is part of what drives complacency. But I don't think the choice to be more complacent is welfare maximizing for society as a whole. So, there's an external social benefit to risk taking, both in a lot of economic models and in my argument. A way of looking at our current problems is that everyone slows down change, in the longer run someone has to pay the bills; and we're not doing a very good job of that, I would say.

Russ Roberts: Well, some of that's politics. We'll come to that.

Tyler Cowen: Oh, of course. But politics reflects us.

Russ Roberts: No, no, no; I'm agreeing with you. But what interests me about your central thesis of the book is that in many ways it's a cultural claim that could be explained partly by economic factors. But you are mainly talking about what's happened to America culture over the last 40 or 50 years. Is that accurate?

Tyler Cowen: That's right. I view this as starting, really, in the very late 1970s, early 1980s, when people decided the risks and volatility of the 1960s and 1970s were simply too much. And largely they were right, but we've gone too far in the opposite direction.

4:44

Russ Roberts: So, to give you an anecdote--and your book is a mix of lots of data, but also lots of anecdotes and interesting speculation--I think about my father, who was born in Memphis, Tennessee in 1930. His father was a peddler, and I think my dad had a very strong desire to not be a peddler and to get out of Memphis. And he became the first person in his family to get a college degree--ended up getting a Master's Degree, even; and got out of Memphis very shortly after I was born--when I was 1 year old. You point out that one of the ways that this complacency manifests itself is less physical mobility in the United States. Talk about what we know about that, that fits in.

Tyler Cowen: Yeah. The rate of moving across state lines is down about 50% from its 20th century peak from 1948 to 1971, insofar as we have the data. So, people are just staying put more often. Some of that is a kind of complacency. Some of it is simply it's a pain in the neck to move. I haven't moved myself in a long time, and I'm glad that I haven't. The net result of that socially is, labor markets become less flexible; we become more locked into jobs; the economy changes more slowly. And it affects the entire mentality of the United States. We no longer think of ourselves as such a pioneer nation. What we do is make our places nicer. We don't transform them in radical ways--build new infrastructure. A lot of aspects of our society actually are in decline. Just try taking the train up to New York City.

Russ Roberts: Yeah, I have. Many times. It's a bit of a crapshoot.

Tyler Cowen: You take it because the plane flight is even worse, right?

Russ Roberts: Yeah, exactly. I take it because the delay of loading and security is more pleasant. But then the ride itself is a mixed bag. Sometimes it's more pleasant on the plane; but often the train is more pleasant. I like getting up and walking around; and it's a little more comfortable seat, etc., etc., etc. But, there are some surprises that you perceive, as you point out, or imply, that are unexpected in terms of arrival, delay, etc.

Tyler Cowen: It's stunning to me: The trip is probably worse than it was 50 years ago.

Russ Roberts: But there's WiFi! But it's really bad WiFi. It's a little better. I don't know. There's probably less leather in the seats, on average. Now, you mention this in the book of course because it's an important economic factor in a lot of different areas: but, one of the things that's made that mobility--the physical mobility we're talking about--less pronounced is various restrictions on the supply of housing, zoning, and so on--

Tyler Cowen: And occupational licensing. Yeah.

Russ Roberts: Well, I want to come back to that. But I want to talk about housing in particular. It's really attractive for young people to live in vibrant cities like New York, Washington, Boston, San Francisco; and it's incredibly expensive. And it's not just the fact that the demand is high because it's nice to live there. The restrictions on supply have made the rents dramatically higher. How much of that is part of the problem?

Tyler Cowen: I don't think we have a way of measuring that empirically, how much of the problem it's explaining. I think it's most likely the single most important factor. And the complacency is the general social notion that as long as we're "making our cities nicer," that there's not some long run consequence to all of this, and we can more or less ignore that and feel good about the fact that Washington, D.C. is a more gentrified place than it was, say, 10 or 15 years ago. And of course also much more expensive.

Russ Roberts: Yeah. You mentioned occupational licensure. You mention it in the book but you don't talk about it much. Why is it important? What's changed?

Tyler Cowen: I don't think it's one of the most important factors. I think it's a significant factor. So, as more and more people have service sector jobs and in general as our economy ossifies and becomes more ruled by special interest groups operating through government, a higher percentage of jobs are covered by licenses; and transferring or getting a license from one state to another--[?] not to be assured--there's some consortia and the like. And this means people who have licenses are less likely to move across state lines. You'll notice the rate of moving, like across counties within a state, is not really down very much. It's really longer-distance moves that have declined, not short-distance moves.

9:33

Russ Roberts: While I was reading your book I thought about the aftermath of the housing boom in places like Las Vegas and other so-called Sand States--Arizona and elsewhere, parts of Southern California. And a rather large number of folks were put out of work when that boom ended. Millions of construction workers. Millions of manufacturing workers around the same time were also out of work, due to of course a variety of factors--automation and foreign trade. And I find it interesting that we as a profession haven't used that as a remarkably--as far as I know; tell me if I'm wrong--a remarkably interesting experiment. Here are these folks who have been making a very good living in these fields for their skillsets; and all of a sudden they are confronted with the fact that, 1). Their job is gone, and 2). It might not come back for a long time, if at all. And: What did they do? Did they just stay in Nevada? Did they migrate to other states for other types of construction, manufacturing jobs? I don't think we took advantage of that. Maybe sociologists have.

Tyler Cowen: I agree. That's under study. One kind of thing that goes on: there may be a kind of Prisoners' Dilemma problem. So, everyone says, 'Well, let the other people leave.' You think, 'Well, maybe jobs will come back.' You may expect not as many jobs will come back. So you'd like to be the one who stays; the other people leave and you apply for that new, smaller number of jobs and get something without having to move away. But if everyone feels that way, then no one leaves; and mobility ends up that it's stuck. I suspect that's an issue. It's hard to prove.

Russ Roberts: Yeah. It's hard to sustain that without some kind of safety net or other alternative ways to keep food on the table, since this didn't take 6 months, but it's a multi-year phenomenon. It's hard to--lots of migrations--

Tyler Cowen: Spouses who work.

Russ Roberts: Yeah, true.

Tyler Cowen: There's some of that. There's savings. There's black- and gray-market labor; driving Uber. There's things you can do that may not be great for your future but will enable you to keep on eating, in addition to steady unemployment insurance and welfare.

11:43

Russ Roberts: So, you know that--and this is an interesting observation: I've moved a lot more than you have, I suspect. I've lived in maybe 10 different places growing up and as an adult. And, I was born in the South; I went back to the South a lot as a kid and a teenager, and as an adult. And when I was going back to the South in, say, 1962, having lived in Moses Lake, Washington, it was pretty obvious that the South was really different. And you point out that those differences--somewhat for the better, of course, but for whatever conclusion you might want to draw, a lot of the differences between the different regions of the country have homogenized. They've gone away. Why is that? Why do you think that is? And how does that fit in with your thesis?

Tyler Cowen: I think different parts of America have become more homogeneous, in part because we're more of a service-sector economy. And service-sector jobs are often a bit the same everywhere. Not in Silicon Valley. But if you look at the economy of Columbus, Ohio, Denver, Colorado, many parts of northern Virginia or where you live in Maryland, there's a sense of, you know, retail and health care and personal services and some business services. And the sameness--those tend to be sectors that have low rates of productivity growth. So you're not going to move from one part of the country to another, say, to work in a Starbucks, most likely. You might have some other reason for wanting to move. But it's not like the automobile sector in Detroit where people move to Detroit to get those jobs. Or, mining during the California Gold Rush. Again, Silicon Valley would be the exception. But most of this country is not like that any more and it doesn't drive much labor mobility.

Russ Roberts: Well, as you point out, I live in Montgomery County in Maryland, and it's actually the case that even though the mix of stores in my brother and sister's town in Memphis, Tennessee that I mentioned, are roughly the same as the ones we have here. Their malls actually look better. Because their zoning, and I think county restrictions are that it's easier to start new stuff. And so the architecture of those service providers is newer, and it looks better. That's the only heterogeneity that you kind of get. It's not particularly attractive: as you point out, architecture is kind of an unexciting period in American history. But, it's a little more aesthetic compared to the older stuff that's here in Montgomery County.

Tyler Cowen: It's also a sameness of outlook. You can go to Arlington, Virginia, Ann Arbor, Michigan, Santa Monica, California; and something about how people think feels the same, how they vote, whom they've decided to live next to, how they date. And it's not that all of America is like that. But the fact that people are clustering more by political ideology I think is unhealthy and is giving us much worse governance than used to be the case.

14:55

Russ Roberts: Now, some of the complacency that you talk about comes from the fact that we're older, as a population. I looked up the data. The median age in the United States has risen steadily since 1970, from 28 to 37 in 2010. That's actually an enormous increase.

Tyler Cowen: More to come.

Russ Roberts: Yeah. There's more to come. It's the Baby Boomer population aging; and then people living longer--when they do get older, dying later on average. How much of that is part of our--you talk about the lack of innovation. How much of that is just due to aging?

Tyler Cowen: I think some. But if you look at Millennials as a generation, they, in some critical regard seem to be less dynamic. I'm not suggesting any kind of moral flaw in them--

Russ Roberts: You curmudgeon--

Tyler Cowen: But a lot of them have grown up in a slow economy. They have higher student debt. Their opportunities have not been so great, and I think that's shifted their cultural outlook. They are used to an American government that fails at major tasks. So, whereas I grew up with the space program, which put a man on the moon, maybe they grew up with the second Iraq War or the Financial Crisis; and I think that shapes their outlook. And they are pretty young. So I don't think it's only a matter that we're older as a nation, though of course that's true.

Russ Roberts: You talked about, mentioned earlier about lack of interest in cars; you document that in the book, about how unexcited teenagers are today about, say, getting their license, compared to a generation ago. And I think that's true. Of course, some of what's going on under the surface is more dynamic. You know, it's one thing to say, 'Teenagers just want to sit at home,' or live longer at home. But of course, as you point out in the book, the car of 1970 is today's computer app or today's smartphone. Which is a way of expressing oneself. It's the way to meet other people. Is some of the apparent complacency we are talking about and lack of dynamism just harder to notice?

Tyler Cowen: Well, so many of the tech innovations encourage leisure at home. So, Amazon will ship you all kinds of things. You can watch so many movies and TV shows on Netflix. The idea of cocooning has become easier, more comfortable, more fun. Obviously that's a pleasure. We all experience it. But when that comes at the expense of, you know, actually productivity gains in firms, and people moving around, developing an actual dynamic mentality, you know, the research of Raj Chetty--one of the things I think it shows is that you can't deny that the physical and geographic spaces you live in, where you are, matters. How you are growing up; the people you are interacting with face to face. And I think in all those areas we are not making huge progress. And we so often are using information technology to slow down change rather than to accelerate it.

Russ Roberts: I want to use you as an example--or maybe me--to take this point a little further. So, you--on the surface, Tyler Cowen is stuck in a rut. He is still at George Mason. He's been there forever. He's still living in Fairfax--or wherever you live: I apologize; I don't know exactly.

Tyler Cowen: I used to live in Falls Church. I don't say I'm not changing here.

Russ Roberts: Okay. So, on the surface, though: You're the same professor; and we know professors are risk-averse: they don't take chances; not innovators. And yet, you've done incredible innovation. You started a blog that's one of the most popular, top 3 probably economics blogs, Marginal Revolution. You have an online university: a set of videos which you're creating. You do podcasts like I do, Conversations with Tyler. True, some of them are in person, in front of an audience. But I think a lot of what we are actually doing--I'm just wondering if some of the ways that we observe economic activity in America is not capturing the dynamism that's actually there.

Tyler Cowen: There's two different points in that. One is how you and I should think about our own lives. I would just say, within academia we are the exceptions, and the overwhelming trend I see is people who get tenure--my goodness, they have tenure and they don't take additional risks. And I'm pretty sure you agree with me on that.

Russ Roberts: I think I do.

Tyler Cowen: And I think overall academics are among the most complacent of the complacent groups in American society.

Russ Roberts: Fair enough.

Tyler Cowen: The second is how to measure the gains from the Internet. And there are now a few papers which I've written about in the book and in some columns which try to measure those gains and look at: Do they overturn the notion of the productivity crisis? And they don't. Those gains simply aren't large enough to restore productivity numbers to where they used to be. So, it's wonderful--

Russ Roberts: You are talking about the unmeasured parts of the Internet, or the unpaid-for parts, etc. Right?

Tyler Cowen: Correct. And a lot of it of course is paid for and it's in GDP (Gross Domestic Product). But there are some unpaid-for parts. And those just don't seem large enough in value to restore productivity gains to where they used to be. And I think just if you look at how are people in this country reacting to the new world they live in, whether it's how they are voting or polarization or the opioids crisis, the behavior of men in the workforce, the decline in the number of Mexican immigrants who want to come here--there's a lot of other non-CPI (Consumer Product Index) requiring data that to me suggests we are not improving the world at the rate we used to, and that's a big form of complacency.

20:35

Russ Roberts: It's hard to understand why that is. I know there are a lot of different theories, and I'll let you share what you think are some of the more plausible ones. But, you think about--and there's a big question today: It appears that college graduates don't have as great a future as they once had. And yet, if you major in a STEM (Science, technology, engineering and mathematics) field, it seems to me that--an of course that's a small proportion; it's not a majority. But if you major in a STEM field, it seems like the world is going to be your oyster. There's going to be an enormous amount of opportunity for you. So, how much of this--going back to one of your earlier books, The Average Is Over, is a mix of people who have tremendous opportunity and others who just are going to struggle to be part of any of that economic growth?

Tyler Cowen: Well, I agree. If you are a person who today is hell-bent on creating opportunity--possibly you are even an immigrant--you are very good with information technology, that group of people is extremely non-complacent in America today. It's just that it's a fairly small minority and it doesn't describe the nation as a whole. Because [?] we're having more specialization and noncomplacency; and I think that's politically and also sociologically dangerous. We're relying on fewer and fewer people to be noncomplacent--a kind of free riding occurring.

Russ Roberts: You mentioned the opioid crisis. It's come up quite a bit recently on various programs--with Sam Quinones and Tom Wainwright and Angus Deaton. It's a large phenomenon--that, and the heroin problem. Let's just call it--I think of it as the escape problem. How do you understand it?

Tyler Cowen: Some of it I think is regionally economic development in this country, it's not even as it used to be. There's less catch up from poorer regions. Which used to approach the per capita levels of the better-off regions, and now, you know, the Rust Belt is not catching up to Silicon Valley. And I don't think it will any time soon. So there's something about technology that encourages clustering and more geographic specialization and face-to-face. So you have dying areas. Offensive politics isn't doing much for people--or I think you and I would largely agree. And then, some drugs are better and more potent than before--not better for you, but they, you know, give you a more intense high. They are easier to get. Prescription practices it seems to me need to be revised significantly both in terms of how they are legally regulated but also the voluntary institutions. And to me what's striking is, you know, the drug of the 1980s was cocaine, which riles people up. And a lot of the recent drugs--the opioids and also some marijuana--they are drugs that put you to sleep. And people want that kind of escape. And they are not drugs that make you violent: that's obviously in some ways a good thing. But precisely for that reason they can in some ways destroy you more easily. You're simply there in a corner and you are less of a social problem in the short run. And so it continues.

Russ Roberts: So, if I were doing so really cheap armchair psychology, which we're all somewhat prone to: Taking the long, long view one might be tempted to think about Brave New World here a little bit--Aldous Huxley's book--and the drug Soma. Is it possible as religion becomes less important to people, less attractive, as work becomes harder to find, that even the comforts of the Internet are not as much as a solace? And that we're heading toward a really not-so-attractive future?

Tyler Cowen: For many people, but not all. I think it's important that you mention religion. True belief and sincere participation in religion is a significant bulwark against, say, becoming an opioid addict, or even having big problems in the labor. And it gives you a social network and people to look after you. This country is becoming less religious. I feel overall that's to its detriment. I say that as a non-religious person myself. I think that's yet another factor.

25:01

Russ Roberts: You mention monopoly power as part of the challenge that there's less churn and dynamism in the market for firms. What's the evidence that that's real? And why would it be important, if it is?

Tyler Cowen: I tried to word that carefully in the book. Concentration indices are up now as we both know those can be misleading. You can have potential competition in an area, and I think due largely to the Internet we do have more potential competition today. There's more globalization. It's funny to me the people who on the one hand complain, 'Well, the Chinese are competing against us too much' are then saying on the other hand, 'Well, there's much more monopoly.' Like, those can both be true at the same time. But you need to be very careful as to what exactly is going on. I think a lot of the increase in concentration ratios is coming from one of two factors. One is just bad law, bad regulation. So, the health care sector. It's much more concentrated. Probably a lot of that is just regulations are so high for hospitals, for insurers. There are bigger economies of scale. That might not be the only reason. But I think it's a big one. The other thing going on in concentration indices is I do think, for more or less purely market reasons, retailing is more concentrated. There are more and bigger chains. There is less turnover. I don't view that as a major social problem. But I think it's a symptom, a more general sense of our economy just even changing that much any more. And the chains are mostly winning out because they have better customer service. Probably they have better product selection. But again in the longer run, I do think there's some social cost in terms of less entry, less disruption, less product innovation. Again, not a big problem in my view. But it's not my ideal for the America economy, where like chains last forever.

Russ Roberts: Yeah. I'm with you on that. I wonder a lot about that regulatory burden. Let's talk about that for a minute. Just to make the argument clear, it's really at the heart of the root of the Bootlegger and Baptist argument, of Bruce Yandle: that firms will often support regulation, painting themselves as in favor of safety, or whatever it is, but knowing at the same time that they'll profit from it. And they'll profit from it because their smaller competitors won't be able to absorb the compliance costs. This appears to be happening in the financial sector right now in the aftermath of Dodd-Frank. And, that argument--I find it deeply appealing, partly because--I'm not a big fan of regulation, per se. I'm not anti-regulation literally, but I'm a skeptic of. And I also like it because it's kind of cool--it's kind of contrary and clever--it's a cool, hidden insight. But I wonder also if it's true. It's very hard to quantify. It's true there are a lot more pages in the Federal Register. But, is it genuinely harder to, in new areas, start a business, thrive, etc.? Do we know much about that?

Tyler Cowen: Yeah. At Mercatus, we've compiled a data base of regulations where we analyze them linguistically and we try to see what you can learn from that. I think the overall picture is complicated. So, longstanding sectors typically are becoming much more regulated--too regulated, I would say, in almost all cases. The good news is that there are some newer sectors such as Information Technology (IT) and parts of the Internet which are not that regulated at all. So, describing that picture in terms of averages or even medians is probably not an accurate way to look at it. But I think the significant fact here is simple: Longstanding sectors are stultifying. You see this in big pharma--there was talk of Donald Trump appointing a fairly radical deregulator to head the FDA (Food and Drug Administration). The big pharma companies were not pushing for this. If anything they were worried. They wanted an establishment pick. So, I see a good deal of anecdotal evidence that this problem is getting worse. Not really having any new banks--since like Dodd-Frank's there's one new Amish bank somewhere that's very small. So, we're shutting down too many parts of our economy. And it can even be the case--each one of those decisions can feel like the right thing to do, but again, the end result is you get lower rates of economic growth; and compounded, the long-term results of that is just a disaster.

Russ Roberts: You're somewhat--you make the point that our perception of the innovation nature of our economy is exaggerated and incorrect--that innovation has slowed down, even with the Internet. And you picked on Elon Musk as an example of someone who has held out, an extraordinary innovator, and yet his ideas may not have any viability. The Hyperloop seems like a long shot, as you point out.

Tyler Cowen: And they need big subsidies, it seems, too; even that may not be enough.

Russ Roberts: Yeah. Which is not good. But, if you had to ask me who are the Thomas Edisons of our era, I don't--he's probably not the right figure to use. But you like to point out that the transformation of life from 1900-1950 or 1960 or 1970 is much greater than how much life has been transformed in recent decades. And if I had to pick a figure who was transformational, I would pick Jeff Bezos. And I would pick Steve Jobs. And they have changed our lives in extraordinary ways. Now, there might be some negative effects, like the fact that--and I don't have one of these, but you can have a button next to your washing machine that you can push to bring Tide to your house via Amazon. I agree--that's remarkable; it's not that exciting. But so many aspects of Amazon and so many aspects of the Apple transformation of the phone, music, the computer, have really changed--certainly your life and mine in just extraordinary ways, in terms of access to information, books, facts, ideas. Life has changed a lot. So, when you talk about complacency, one of my problems is--again, going back to my dad--again, people in their 80s, people in their 70s, and somewhat even me, someone in his 60s--life is changing so fast, it's hard to keep up with being able to turn everything on and keep it charged. It's a hugely different life than we had 25 years ago. And I see lots of change. Do you disagree?

Tyler Cowen: Well, I think Bezos and Jobs are good picks, but I would say in the earlier part of the 20th century you had figures like that in literally every part of the American economy, and right now it's only in a few areas. And if you just [?] measure simple variables--what's the consumer surplus from having an Internet connection?--it actually doesn't seem extraordinarily large. If the price goes up, people do less of it more or less at normal rates. And I think it's striking that you mention the two of us as examples. I have a much earlier book called The Age of the Infovore, where I argue that for people who are obsessed with information, like the two of us arguably are, life is indeed much, much better. And this is all, you know, a fantastic revolution. But, that's actually not most people. It's possible the median American did not read a single book last year. There's a lot of watching of cable TV; and a lot of lives haven't changed that much, and maybe phased substitutes in for what used to be Network TV, and that's an improvement.

Russ Roberts: Small.

Tyler Cowen: But I think you are extrapolating too much from our lives, people we know--the so-called coastal elites. And in this country, the number of people who think their lives will not be better than that of their parents seems to be rising, considerably.

Russ Roberts: Well, it's an excellent point. And it would certainly also apply to our listeners right now. Most of them--most of you out there--

Tyler Cowen: Infovores: why are they listening to us? [?]

Russ Roberts: We're probably in this same group. I wish it were larger--more numerous, that is. I don't want you to get larger. And we of course have our many, many fine episodes on weight loss that many of you have benefited from.

33:54

Russ Roberts: But it's certainly true that it is most fun for the infovore. Again, this is a record for most references to my dad: My dad, on his iPad, which wasn't easy for him to use, at 86, but he listens to the Limelighters, which is a group I bet you know, Tyler--

Tyler Cowen: Of course--

Russ Roberts: But most of our listeners will not know. A folk group of the 1960s. He listens to opera. His world is so rich musically now because of the Internet. And those of us sitting in front of our TVs--the TV we're watching is a lot better. The screen is better; the show is better. Netflix and others, HBO (Home Box Office) have transformed visual TV, television. It's just an amazing thing. But where I'll agree with you is that maybe I exaggerate day-to-day life, because I have too much leisure. Too much time to spend as an infovore surfing that virtual world.

Tyler Cowen: Yeah. I agree television is much better. But I think it's striking that music and movies are almost certainly worse. What's happened with music is that people can listen so easily to the best of the past, the amount of attention paid, royalties paid to currently-created music is falling. And what I find remarkable is I can listen to music from the, say, early to mid-1990s--say, Alanis Morissette. And if that same music came out today, I wouldn't know it was 20, 25 years old. It sounds the same. There's not that much innovation. So I think we need to ask ourselves if information technology is in every way, so dynamic, so wonderful, why is our music sounding the same and not really going anywhere? If you are in 1967 and you heard music--I mean, even from five years earlier--forget about 20--it would have sounded quite different and archaic. I think movies also--hard to prove, it's a subjective evaluation--but obviously much worse. There are [?] franchises that rely too much of CGI (computer-generated imagery). They have worse performances, worse dialog, and are not, close, say, to the Hollywood masterpieces of the 1970s. So, you know, again: TV is much better. I would readily grant that. But if you are only getting 1 out of 3, and then we're thinking this is all so wonderful--I think we should be more skeptical there.

Russ Roberts: Well, audio is better. Because we have podcasts.

Tyler Cowen: Oh, sure.

Russ Roberts: That's a joke. But it's sort of true.

Tyler Cowen: No--but it's true. It's a true joke.

Russ Roberts: Right. It was meant to amuse, but there was truth behind it.

Tyler Cowen: Learning is much better for those who love learning. Right?

Russ Roberts: Yeah. For sure.

Tyler Cowen: And that's probably your father, too.

Russ Roberts: Yeah, for sure. I'm going to push back a little bit on the movie thing. I do think that a lot of the things--we don't call them movies, but serials like House of Cards, Sherlock,--

Tyler Cowen: That's television. Television is better. But, movies? They're worse.

Russ Roberts: Yeah, well, they kind of merged together, I would argue. But maybe that's a distinction worth making.

37:03

Russ Roberts: There's a strange part of your book, which I enjoyed a lot, where you sort of complain, but certainly observe that we don't riot as much as we did in the 1960s and 1970s. And there's a theme in that section that that's not necessarily a good thing. So, talk about that change--and I thought you had some great insights into policing in there. Talk about why that's changed and what it portends.

Tyler Cowen: Well, I don't favor rioting. I've also never done it myself. But that said, the fact that it is so much less frequent I think we should think critically about and not just cite as a completely positive thing. We have bureaucratized protest in this country. Like most other things, it's much harder to get the necessarily permits and clearances. You can be shut down at any time for national security reasons. There are more bureaucracies you need to go through. Strictly on the private side, it's much more a matter of having PR (public relations) consultants and people managing your event than it used to be. So, the fixed costs are higher; the law is tougher; the regulations are more onerous. And I wouldn't call that I direct restriction on freedom of speech, but I don't think it's an entirely positive thing, either. And the police in turn have learned a great deal. They make sure demonstrations don't get out of control. They have better surveillance, communications; they apply management technique. For the most part--Ferguson was an exception--they defuse trouble before it gets started. And there's been this overall pacification of our culture which on any given day, week, or month is [?] to be preferred. But, in the longer run it means we lose our ability to course-correct. Again, I just want people to think more critically about this.

Russ Roberts: Let's go back to something we were talking about a minute ago because I want to hear you talk about this piece of it. You write very beautifully about your childhood and young adulthood, and then the present, and how you were straddling two worlds and how you appreciate that; and how young people today--they are in one world. Talk about what you were referring to there.

Tyler Cowen: Well, you and I, we belong to what I think will be seen as a unique generation. We grew up without having an Internet, so we had to learn how to look for used books, how to track down scholars, how to make personal contacts in a particular way, how to use a library--in the old fashioned sense: one had to browse the shelves for books. The only book you might have in the house might be a great classic, Tocqueville, and you would read it for the 5th or 6th time and study it in depth, because you couldn't go browse your Twitter feed. Now, that had big advantages, and also big disadvantages. But then when we're in, you know, more or less our 30s, we're still young enough to adapt to this new Internet world, where there's blogs, there's Twitter, there's search, there's reading small bits of things. So many things are searchable; it's so email people and contact them. You can watch the speakers you love on YouTube and so on. And, the ability to have both of those worlds of learning I feel is quite special. And it's actually one of the greatest blessings of my life that most people my age don't appreciate; and those who are either too old or too young to have bridged those two areas, I feel they are missing something quite significant. By the way, I think it was Ben Casnocha who first made the point to me, so I would credit Ben--who I believe I do in a footnote. He said, 'You're so lucky, Tyler.' I said, 'What do you mean?' And then he explained this to me. And Ben is young--he's, I think not even 30.

Russ Roberts: Yes. But why do you--you're not much of a curmudgeon. I try not to be one. I think as you get older you drift inevitably toward curmudgeonliness. But what would be the argument that, let's say, a young person would--how would you convince a young person that they missed something? Most of them would think you are crazy. Why would you want to go wander in a library or use a map, or, you know?

Tyler Cowen: I don't think those young people do think I'm crazy. And I talk to young people all the time. And I often make this point to them. And I don't think I know of any case of any one who has failed to grasp it. Maybe they hadn't understood it to begin with, but when I say it, the response is a kind of astonished recognition, is what I find.

Russ Roberts: Well, say it again. Say it again. We're talking about nostalgia for 1990, right now, is what we're talking about, right? This pre-internet era.

Tyler Cowen: [?] but before.

Russ Roberts: No, I know. But that's how recently--

Tyler Cowen: But even before the 1990s, really.

Russ Roberts: Sure, of course. But there's a certain strangeness to how--go ahead.

Tyler Cowen: Social media can distract you and keep you busy and keep you too tied up with fairly short or even sometimes superficial messages. There's something addictive about it. Though they're nonetheless very powerful tools for learning and connecting. We should agree with that. And we may even think the new world is better on net. But there is something from the old world when you didn't have that, that you had to master other ways and styles of learning. And if you can put that together with the new approaches, that's just very powerful. And people I tell this point to, generally they get it. And I think the younger people get it all the more, because they lived a downside of the tech world more directly.

Russ Roberts: I agree with that. We've talked on here a number of times about how--people are aware of this challenge--we could call it an addiction to Twitter or to Facebook or to your phone.

Tyler Cowen: Or to your podcasts.

Russ Roberts: Yeah. Well, they don't come out often enough. I guess you could listen more than once, think of this--

Tyler Cowen: Go to Liberty Fund conferences--I know you do all the time--and if you look at probably the smartest, most incisive, insightful commentators; and then just ask yourself, like, 'On average are those people spending more or less time on social media than the other participants?' We know the answer. I think there's something to that.

Russ Roberts: My view on this is that, you know, I keep the Jewish Sabbath, so I'm guaranteed a 25-hour window every week without electronic devices. Which I'm grateful for, for many, many reasons. But that's one of them. And I think--I'm not suggesting that more people are going to become more religious Jews. But I do think there will be some cultural pressure to find ways to detach oneself from devices and the Internet, going forward. Do you agree?

Tyler Cowen: Yes, I do. I already have people writing me declaring their intention to "quit Twitter." As if it were a drug. We'll see if they do. But that they're even thinking about it--

Russ Roberts: Yeah. I think about it myself. It's not so much for me an addiction as the snark factor occasionally wears me down. One of the reasons I stick with it is I think I should be able to get over that. But it's not so easy.

Tyler Cowen: You also raised a demographics question in what you said. So, I find in my own life I was most pessimistic as a teenager, in the 1970s, when I really thought the world was falling apart. And, maybe in a way it was. And then over the next two decades I became much more optimistic. I think my optimism peaked in the mid- to late 1990s. And I think since then, not in absolutely terms--I know all the numbers on poverty reduction and life expectancy that you do. But, if you just ask the question today, 'Do more people believe in freedom than in the 1990s?' I think the answer is 'No.' I think that's extremely important; and I think we should be more pessimistic in some significant ways.

Russ Roberts: Yeah, what's happened to me--I think I developed a reputation as an optimist, somewhere--certainly my own self-image had that as my character. And the financial crisis was a jarring realization that I'd been overly optimistic.

Tyler Cowen: It was 9/11 for me.

Russ Roberts: Yeah, that, too. I remember after the anthrax scare wondering if we'd ever be able to have commerce again across international borders and state lines, and how incredibly destructive that would be. That turned out not to be a worry that was real. But, it of course could happen again, things like that. But what I find interesting--the financial crisis was a big jar of my worldview of optimism, thinking processes would just work out better. And then, in the last 5 years what's happened--and I don't know if this is what I consume or if it's real; I can't tell yet and maybe it's too early--this feeling that I'm doing fine, and other people aren't. Which is, I think, where the rest of the world was over the last 25 years. I don't know if that's a media-generated problem or whether it's real. But I think we'll get more information on it going forward.

Tyler Cowen: I find Russia, Turkey, some aspects of China, Syria to be very, very troubling. There you have countries which ought to be become more free, at least by my views of the 1990s; and they're becoming less free. And I don't think we really have a perfectly good explanation for why.

Russ Roberts: Well, I was thinking about people in the Rust Belt; but I'll add that, too.

Tyler Cowen: Well, sure. They are much better off than people in Syria.

Russ Roberts: Of course. But offsetting that is this unbelievable revolution that you and I read about--you perceive it because you travel, but the transformation of life in China over the last 25 years is a wonderful thing. And mainly really, really good; and a source of some optimism.

Tyler Cowen: But surely we all have some fear, even if it's not our modal forecast? There are some features of the world today that look a bit too much like 1910 for comfort. Where living standards are rising but some cultural foundations are eroding, some ideas are getting worse. Attachment to liberty is dwindling. And what's the long-run sustainability of that? I don't think any of us know. But I think our level of concern there should be rising.

Russ Roberts: Well, I think what makes you an interesting thinker, Tyler, is that even though you are trained as an economist, you don't think it's all about money and you don't think it's all about markets. They are important, of course. But I think some listener would say, '1910? What was wrong about 1910?' Well, it was 4 years before 1914, which was an upheaval, of the First World War, which was an upheaval which changed everything. Led to WWII. It's--culture matters. And the perception of who we are and our identity matters. And I think it's something you do very well.

Tyler Cowen: Keep in mind, a lot of my earliest economic research was on the economics of culture, and that's always stuck with me. It seems to me still a missing element in most economic models. Including narrowly-based macro.

Russ Roberts: Yeah, for sure.

48:10

Russ Roberts: Speaking of culture, you write about architecture and fashion. Which, again, most economists don't. You argue they've become more stable. What do you mean and why do you think that is?

Tyler Cowen: In the United States I think contemporary architecture is only very rarely good. There are a certain number of trendy, expensive buildings; one may or may not like them, but at least they are an attempt to do something ambitious.

Russ Roberts: They grab your attention.

Tyler Cowen: Yes. And again, opinions may vary but at the very least I admire the ambition. I find it striking the extent to which we've used our wealth to build more structures, and hardly any of them are as nice as, say, an old-style Georgian home as you would see in London, when people were much, much poorer. I don't mean a little poorer. You know, they were many multiples of times poorer. And yet many of them lived in nicer buildings, and we don't seem to care. It seems to me interiors are vastly improved with every generation, including ours compared to 30 years ago; and obviously to some extent that's what people value. If you have a theory or what's wrong with the world is that people are getting too good at leisure at home and not good enough at interfacing physically, geographically with everyone else, and then you see the way that architecture is evolving: that interiors just are better every year. And next year your sort of main, mediocre, ugly, and not even worth looking at--that to me is at least an interesting parallel.

Russ Roberts: And maybe you know about this. I don't; I wouldn't be surprised if you do. Obviously a college campus, many college campuses, are designed to evoke the college campuses of, really 16th, 15th century England. Some do it well. Some don't. And of course there are many exceptions. There are beautiful campuses that don't do that. But it seems to me that a lot of what we do is imitate the past. And certainly one of the things that we do, as you point out, is we don't do anything radically different. But is there any measure of that? I don't mean empirically. Do you have any intuitive feel that we just have a nostalgia for the past and continue to build buildings that look something like they used to?

Tyler Cowen: I think it's a running out of ideas, a sense that in architecture everything has been done; that even shock value has lost its shock value. And if I--when I visit universities, colleges, which I do all the time, there are hardly any new ones which I consider attractive at all. Somewhere like UBC (University of British Columbia) in Canada--that's stunning. But it's more the site than necessarily what they have built. And furthermore, that's Canada. So, even our universities with main endowments, they don't look better than historical buildings. So, there's something about the older notion of culture--kind of the visual, the physical, the regional--that we can't do very well any more. Same, you could argue, about public sculpture. Or even just go to Alexandria, Virginia and look at some of the 18th century homes. People still live in them. They are less practical, but the notion that they really do look nicer than something built last year--maybe back then per capita income was, what? $200 a year? Hard to measure, right?

Russ Roberts: Less.

Tyler Cowen: But that to me--we don't think enough about. Probably less. When it comes to culture, it's much easier to have negative progress than when it comes to purely material goods. And maybe that's a problem for the sustainability of our world.

Russ Roberts: Talk about fashion and how casualness has emerged; and the role that signaling plays in how we dress.

Tyler Cowen: Well, being a casual person myself, I'm very glad being casual is in vogue, and probably will stay in vogue. But what I find striking is societies with a lot of upward mobility often tend to have strict dress codes. So you see this today with Mormons, at Mormon businesses. You see it in Japan in its heyday years--you know, the businessman or journeyman suit, they more or less all looked the same. There's something about upward mobility where actually clothing is not that casual and one is being more formal in trying to impress; and that is a [?]. But the thing about being casual is it actually makes it harder for people to prove themselves. So, Bill Gates goes to a meeting and he may show up dressed very casually; but he's still Bill Gates--either everyone knows or if you really needed to, you could Google him. So there's a code of casual that's actually very difficult for, say, people from other cultures in America to master or demonstrate that's actually made signaling harder. Just that right way of looking casual is in a funny way more conformist than like the blue suit and tie, which you could do and then innovate around and try to climb to the top. So I find this disturbing, the more I think about it.

Russ Roberts: I think you're in a small group there, but it's interesting about being, finding it disturbing, but it's an interesting observation. And as you point out, most of us are pretty happy about the trend overall. But it is interesting how that's happened. It's not obvious to me how or why that has happened. Any thoughts on that? Maybe you just gave them. I'm not sure.

Tyler Cowen: Your father may have told you stories about how men were expected to wear ties. Sometimes even sitting at home and expected to wear hats. So, I think there's something about formality and hierarchy that actually can make mobility more possible. That's a politically incorrect thing to say. But the notion that like all ideas are tolerated, that everything is equally valuable and you can sort of wear any kind of clothes you want provided you somehow feel like you could be living in downtown San Francisco, I think that's a very alluring but very dangerous cultural move we've made. The places where you see it at its most extreme are exactly the places where it's hardest for other people to move in--you know, get a cheap apartment or flat and work their way up. And that to me is no coincidence. It's enforced by building restrictions. You go to a Silicon Valley party, people show up in their shorts or flip-flops; and maybe they earn a lot of money. And that's actually part of the problem. It's a very counterintuitive view, but I think the more one goes around the world looking at it this way, the more it makes sense.

Russ Roberts: Yeah, I like your point that there's real art to looking good casually. I don't know if that agrees or disagrees with the rest of the thesis. But I do think it's--instead of getting a very highly tailored and expensive suit, now you have to know exactly how to match your tee-shirt with your running shoes in a way that doesn't make you look the wrong kind of geek or whatever it is.

Tyler Cowen: Yes, so say you are an immigrant to this country and you show up at a workplace and they tell you, 'Look, put on a blue suit jacket and a tie, and burgundy shoes.' I mean, don't you feel immense relief at that, actually?

Russ Roberts: Yeah, of course. Yeah, for sure.

Tyler Cowen: Whatever else might be thrown at you. And that's really just the point right there. And once you get that intuition, just apply that logic more broadly.

55:44

Russ Roberts: You mentioned de Tocqueville a few minutes ago as might be being your only library book. But you spent quite a bit of time on him in your book. Talk about what he meant by pantheism and how you see it relating to transcendence and the current situation in America.

Tyler Cowen: Tocqueville's notion of pantheism, I'm not sure I understand. And I haven't read Tocqueville in the original French. But at least, as I read him, Tocqueville as a theorist saw America was headed in a direction of greater complacency, much greater mediocrity--noting, and indeed insisting that mediocrity is greatly underrated or undervalued. Like, a mediocre life is a wonderful thing to have. But nonetheless markers of social status would ossify, and through a kind of indirectly enforced conformity change in this country would slow down. And de Tocqueville arguably was the first theorist of the complacent class. And I try to give him full credit for that. I think it's remarkable how much of that he saw in advance. Now, he calls it pantheism, by which he does not seem to mean the Spinoza notion of identifying God with the material universe. For him, I think it's a way of thinking about how idolatry works in this new society--that people copy each other to an extreme degree. In a way he's the forerunner of Rene Girard in his passages still.

Russ Roberts: What's the concept of transcendence and why is that important?

Tyler Cowen: Transcendence gives us something beyond ourselves to aspire to, gives us external standards. It gives us a kind of hierarchy or rigidity, even if we use it just to rebel against. And that's very useful. You know, another group in American life that I view as not very complacent, and that would be Mormons: They have a robust middle class, high income growth, a lot of mobility; very good social indicators. There's a new Megan McArdle piece on this on Bloomberg today. And they're also the group--they have a lot of hierarchies in various ways yet in other ways are highly egalitarian. Very entrepreneurial and dynamic. Very religious, of course. And I think there are lessons in the Mormon experience, too.

Russ Roberts: You also have some praise for immigrants and the dynamism that they had.

Tyler Cowen: You know, I think immigrants are more neurotic than average. And that's very useful. You actually want a country in some ways filled with neurotics or partial neurotics. They are driven or they are motivated. And immigrants have so often in the past refreshed this country's dynamism. They are doing it now again to some extent, to the extent that's happening. And, life as an immigrant is extremely uncomfortable. I think those of us who are not immigrants forget that. My wife was not only an immigrant, but a refugee from Soviet Russia. And when she came here, it was a long, long time before she fit in again or knew how things worked, or, you know, started her second career. It's very difficult. And we now have this view like people born here shouldn't have to go through something like that. That, again, is another way of framing this complacency. Immigrants rarely think that. They all know they are in for big adjustments. And even if they don't know it at first, it hits them over the head.

Russ Roberts: You say something, which I found really provocative in the book about politics. You say, "Elections these days often seem more about who is to blame than who is to govern." What do you mean?

Tyler Cowen: Well, Trump has turned out to be the master of that. You know, I wrote that sentence when I had no inkling Trump would win. But if you look at his tweet stream, it's remarkable how much he's still blaming Hillary Clinton for this, that, and the other. He now likes to blame Paul Ryan. I'm not saying there's nothing you can blame those people for. But, look: He's President. Actually, one might expect he takes responsibility for governing and getting something done. But he's rather obviously wallowing in blame. And the two parties blame each other. So, the Republicans vote to repeal Obamacare, what, 60 times or so? And then they get in power; and it doesn't seem they can do it? What does that tell you about complacency? Most parts of the Budget, the two parties for all of their symbolic differences are very much in agreement about, and probably even Obamacare will not fundamentally change or go away. That to me is an underappreciated truth. It's been pointed out before. But I don't think we've really internalized how much of a stronghold that has over what happens or doesn't happen in this country.

1:00:19

Russ Roberts: In the last part of the book, you speculate that maybe there's some deeper trends going on that are going to hit us in the face. I just wonder about the obvious observation that whatever is happening here seems to be happening elsewhere: Brexit seems something like the Trump phenomenon; populism seems on the rise. How much of this is cultural, versus financial/economic?

Tyler Cowen: I don't think we know, but I tend to lean toward cultural explanations. I find it interesting to look at the countries that don't seem to be so populist or so alt-right right now, and two of those would be Ireland and Spain. So, what characterizes Ireland and Spain? Again, this is highly casual empiricism, if you would even call it that. They are both Catholic countries. Ireland has a recent history--the two Irelands--of conflict. So I think the notion of violence is fresh in their minds, and they take it seriously, in a good way. Which I find reassuring. But in another way I find it worrying. Spain has an experience of Fascism that is not so distant. And their Civil War, although it was a long time ago, if you walk into any Spanish bookstore, it's amazing how much it dominates the titles that are there, put out on display on prominent tables. So that Spain and Ireland are inoculated from recent trends to me is evidence for a kind of cyclical theory: that if you haven't had certain bad things for a while, you forget how bad they are; and they tend to come back. Germany also seems fairly inoculated. Maybe that's still an open question. France, we'll see soon enough. But to look at the cross-sectional variations: countries where populist alt-right movements don't get off the ground, it tends to be places that still remember their troubles.

Russ Roberts: Well, let's close with this idea of the cyclical nature of history. I think there was, as you point out in the book, the excitement over this so-called Great Moderation; excitement over the end of history, the fall of the Soviet Union. That induced a lot of optimism in most of us. It looked like the outside world, from the United States, the trouble spots after the fall of Communism, that that was going to get better. We seem to have figured out how to keep the economy on an even keel--I'm saying that while I'm smiling in a dark way, because we obviously didn't. And, you speculate, thoughtfully, on alternative ways of thinking about history, and how just the fact that we are thinking about those ways is going to affect how things turn out. Sort of a little bit of a Heisenberg Uncertainty Principle there. Talk about that. Not the Heisenberg Uncertainty Principle, but about the role of cyclical forces in history, perhaps.

Tyler Cowen: Well, I'm still an optimist. There's more human capital or talent in the world today than ever before. But increasingly I think the bumps along the path will be much bigger than I had thought. I think the financial crisis could prove to just be a warm-up act. I think the notion that you could have developed countries with very reasonable economic policies that see declining wages for decades on end is a reality. If you look at somewhere like Greece and Portugal--now, Greece has terrible policies. Portugal has not great policy; but they are not like Greece. It's simply the case in those countries the equilibrium is for wages to keep on declining. And that was not really part of mental toolbox, say, 20 years ago. I thought you needed very bad policy for that to happen. And I don't necessarily agree with Steven Pinker that the world will just get more and more peaceful. I think as memories of conflict recede, a). it becomes more thinkable, and b). the rogues out there are more and more willing to take advantage of the complacent. Israel, to me, is a very interesting country. I don't think they are complacent at all, because they understand so readily that their survival depends on them not making many mistakes. And not many parts of the world have that understanding right now. And that actually is one of my worries.

Russ Roberts: I assume you tie that into Israel's innovative economy, then.

Tyler Cowen: Very much so. It makes them perfectly geared to be innovators, because they know it's innovate or die. Singapore is more like Israel than many people realize. Their security situation, while it's fine now, it doesn't have Israel's history of the more recent wars. But they correctly consider themselves to be extremely vulnerable and that they can't count on us forever. And they, too, are extremely noncomplacent about their future. They all think, 'Look, we may not be here 50 years from now. We cannot afford to make too many mistakes.' In this country, it seems to me--and the United Kingdom--we're pretty much at the opposite point of view.

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COMMENTS (37 to date)
Per Kurowski writes:

“a culture where younger people are more willing to keep on living with their parents”

And bank regulators cooperate with such complacency by for instance risk weighing the financing of the “safe” houses in which younger persons can live with their parents with 35%, while assigning a 100% weight to the financing of the “risky” SMEs that could give younger people a better hope of finding jobs that would allow them to be able to buy houses.

http://subprimeregulations.blogspot.com/2016/12/must-one-go-on-hunger-strike-to-have.html

rhhardin writes:

I started wearing casual dress in a STEM job precisely to avoid upward mobility, as suggested in _The Peter Principle_.

You can defeat being promoted to your level of incompetence by screwing up in ways that don't actually matter, casual dress being one way.

Perhaps this no longer works and that's why nothing is growing. Everybody's incompetent.

D writes:

Tyler Cowen: What's happened with music is that people can listen so easily to the best of the past, the amount of attention paid, royalties paid to currently-created music is falling. And what I find remarkable is I can listen to music from the, say, early to mid-1990s--say, Alanis Morissette. And if that same music came out today, I wouldn't know it was 20, 25 years old. It sounds the same.

Seems your wondering why music, a product of musicians, is struggling yet unlike 30 yrs ago you now have the ability to listen to any music for free. So, how do you think artists can flourish when they don't get paid?
There are many musicians cutting an innovative path today. I would encourage monetary support of those people, as the public believes they should work for free!? How would you feel if your book was downloaded for free?
Alanis M. Would sound 20 yrs old to those with ears. If your expanding your musical education by the direction of radio Disney, iTunes top hits, Pandora, and spotify then your expansion of musical growth is slow to static. Mostly they play entertainers not artists, there is a difference.

Timothy Cotterman writes:

Thanks for the Limelighters :)

JonB writes:

Discussion of opioid crisis exemplifies Macro speculation without Micro foundations. THC, opioids, and stimulants are quite different medically. Absent good micro foundations, the response is similar to
A. Something must be done (opioid crisis)
B. Here is something (more controls of prescribers)
C. This must be done

Interested parties might review our work "An online survey of patients' experience since rescheduling of hydrocodone: the first 100 days" Pain Medicine 2015. Unintended consequences abound even with very simple and obvious regulatory responses to restrict supply, i.e. 2.3% of pain patients turned to street sources for pain control.

The causal density for the opioid crisis is very deep, including an aging population, good faith professional guidelines in 2000-2010 emphasizing minimizing bleeding risks from ibuprofen and the like relative to perceived safety of opioids, aggressive marketing from Pharma, government restrictions on a single provider's ability to provide the most effective treatment for opioid abuse (no more than 30 patients can be on buprenorphine) resulting in massive supply shortages, etc.

If this is a serious topic, would encourage continued micro-level discussions similar to the recent episode on heroin marketing.

Miller writes:

Wow! I don't even know where to begin!

I'll just say that you're dead, dead wrong. Why do you think socialism and anarchism are making a comeback? Our generation wants to innovate badly, yet the market is sometimes what's getting in the way.

And frankly, I don't even like cars. I just DON'T. Can't stand them. I would rather not own one. How is that a sign that our generation is deficient? Is that a sign of lack of progress? I think your paradigm is just flat-out backwards. Not trying to be rude, but market fundamentalism and the cult of GDP isn't everyone's cup of tea.

And last I checked, you can't eat music, so I don't care how it's made, or even if it's made at all, honestly.

Daniel D writes:

When I heard Cowen talk about complacency and the attitude of not moving and avoiding taking risks, I thought about this Washington Post article.

Soft, smooth and steady: How Xanax turned American music into pill-pop

Also drugs and music are about playing it save. About staying where we are, hoping things will turn out OK and that big changes will not be necessary.

Jerm writes:

Aww...I really want to like Tyler Cowen. But some parts of this talk really brought out some (previous econTalk-emphasized) lessons about biases. And not in the good way.

First off, for him to say that music hasn't changed in 20 years...that's more indicative to the complacency of Tyler Cowen than it is of the larger culture. Is Alanis Morrissette indistinguishable from Skrillex? From Chance the Rapper? From Beyonce? The state of the music industry is actually a good example of the LACK of complacency in today's society. The established way of creating pop music and superstars has been turned upside down, and yet there is still a tsunami of people who are trying to make it work. They can be on the cutting edge of what is cool, they can create a throwback sound from 30 years ago (like Carly Rae jepsen, let's say), or they can go even further back and mash it all together (Postmodern Jukebox). They can make it big on YouTube. They can go their whole career without ever releasing a proper album. It's such a new world, and Tyler Cowen is stuck on Alanis Morrissette. I bet she would call that ironic.

And ugh, comparing the entire corpus of today's movies to the classics that stood the test of time...that's almost the litmus test of curmudgeonliness, isn't it? Disney has made almost 100 animated movies, and Kubo & The Two Strings is better than most of them. There are a ton of great films outside of the Hollywood blockbusters released every year, and they are easier to find and see than ever. 20 years ago, much of America would not be able to find something like The Lobster or Swiss Army Man. I saw both of them on Amazon Prime.

Jerm writes:

Miller, you need to lust after a car. Or, in order to keep the auto industry from getting complacent, you should be lusting after two cars. That'll keep us productive.

According to this line of reasoning, it's probably more alarming that today's youth just don't care enough about owning a horse.

This could have been such an interesting topic. Because it's not just about the desire for status through car ownership, it's also about the cultural response to whether or not someone owns a car (or horse). A larger percentage of my students don't drive...that's easy to see. But they also aren't impressed by cars like we used to be. They don't see car (or apartment) ownership as a useful social marker. Is this because a young person with a car is likelier to have gotten it from his parents than earned it himself? Or because home ownership is so far out of reach that it no longer lines up with its traditional place in adulthood?

And most interestingly, what types of social markers have replaced "the car" and "moving out from the parent's house" in today's society.

But today was not a day for an interesting conversation. Maybe next time.

Cowboy Prof writes:

It is interesting that near the end of the podcast that Tyler (prompted by Russ) brings up de Tocqueville, and then points out that de Tocqueville was the first one to see the seeds of complacency. Roughly two hundred years then pass, and now we've finally identified that we are in the complacent years!

I wonder if Tyler has ever thought about whether he is the victim of a historical biases?

Allow me to bring this up in reference to music, which other people have done above, but with a different slant. It is common today to hear that church music is so bad and bland, not like the great hymns of the past. However, when you go back and track the hymnals of the past 150 years, about 75% of the hymns in one edition of the hymnal do not make it into the next edition (usually printed about a decade or so later). In other words, 75% of the hymns in 1880 were boring, bland, and uninspired. But we only remember the 25% that survive. I lived in the '60s and '70s and can assure you that there were many unmemorable songs back then as there are today.

Likewise with religion. It was common throughout history to hear that religion and organized churches were stagnant and that nobody was attending services anymore. This was said in the 1660s, 1750s, 1810s, late 1800s, 1920s, late 1940s, 1960s, etc. Each time it was usually those that were in the non-productive denominations that said such thing, and then we experienced some sort of great awakening or renewal.

Peter Gordon writes:

Re your complaints about air travel, agreed. But the democratization of luxury means that many more people now fly who in the past could not afford air travel. People who might have gone by Greyhound bus can now fly coach. There is a bright side.

Dan writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Miller writes:

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Matt writes:

On clothing formality and social mobility:
Could it be that less formality is a symptom rather than a cause of less social mobility? It seems the world is so thoroughly sorted along IQ and socioeconomic lines that we no longer need fashion to differentiate us because we simply don't need differentiation. We have matched with people like us so well that signals are less necessary.

Simon writes:

Sorry but what? Music hasn't changed in the past twenty years?

This is absurd. Look at James Blake, Cigarettes After Sex, Lizzo, FKA Twigs, Skream, The xx, Mating Ritual, Gorillaz, Röyksopp, Mura Masa, Crystal Castles, deadmau5, CHVRCHES. I'm barely even scratching the surface.

This honestly comes across as petulant "Get off my lawn!" It detracts from everything else Tyler Cowen says. Which, to be fair, he has some good points. But wow, for a music aficionado, he completely loses any momentum he had up until that point.

Do yourself a favor, Tyler, and start listening to NPR's All Songs Considered or something. Expand your musical horizons. Sure, pop songs have the same four chords as they always do, but it's a downright disservice to musicians to insinuate that they've been twiddling their thumbs for the past two decades.

Miller writes:

Allow me to offer a slightly more though-out response from earlier. I didn't have that much time to type. And by the way, I appreciate the response, Jerm. Also, sorry if I was a little caustic. I just get a little edgy when I hear economists and the media driving the narrative for our entire culture for us. Economists are our philosophical leaders in this country and a lot of people listen to you guys. You should be a little more self-aware, in my opinion.

Countries and states ARE innovating these days, but it assuredly isn't just in the direction of flying cars and buying more stuff. Check out the most recent podcast from Chuck Marohn's Strong Towns, entititled, 'Human Transit'. Turns out that America is trying to go back in time with public transportation! How is that innovation, you ask? Well, turns out that too much of anything is bad news, including cars. It has turned our country into a congested automobile slum and well, it used to be argued that cars = FREEDOM, which, if you think about it, it's nice to be able to go wherever you want to go in the entire country, but being trapped in a little metal cage is not exactly my personal idea of freedom. And this all costs a lot of money and fuel to run to boot, is warming the planet, etc.
I have fantasies every time I drive of leaving the US to escape this reality. I guess I'm a failed American; I didn't catch the vision of car utopianism.

Of course, the momentum is still strongly in favor of this, thanks to the big automakers. But I would prefer not to spend my life working to buy stuff I don't really need and then maintaining it all. I am a committed minimalist and New Urbanist. How does this fit in though with economists' view of progress? It probably doesn't for most of them. It results a contracted gross domestic product. The horror! This is the problem domain to economists, because they spend their days thinking about money and the market. You spend your time around ducks, everything looks and sounds like a duck.

I would love more innovation in a lot of ways, but I don't need a toilet that is connected the internet. Innovation is stopping for GOOD REASON. Many Americans already have most of what they need. I also don't need a quantum-processor in my tablet, don't need nor want a flying car, a McMansion with expensive paintings and a grand piano; I don't need to earn 200,000 dollars a year, nor 50 more kinds of energy drinks to choose from in the market. I don't need to have computer in my brain and I don't actually desire to upload my brain to the cloud and live vicariously through a robot. Is this a problem? Wall Street thinks it is. They hope that 'genuine' economic growth will arise from virtual reality headsets and the US will stumble its way successfully to its next crisis, hopefully postponed just a little. I actually heard a guy on Wall Street refer to the American economy as the 'United Consumption Machine/Engine'. And yes, I have heard them make this very argument about virtual reality too!

I am 30 years old. I want less stuff, and more time to live an interesting life. I also want to work for free to accomplish more interesting societal goals. The market doesn't motivate me very much. And the argument that you all keep making that it is harder to be upwardly mobile is true but its premise is wrong. It assumes that everyone even WANTS to be upwardly mobile. I don't want to make it into the top eschelon in the slightest. I do want to be good at what I do and I want a stable income and to live in strong communities. My father wants to be rich because he's in debt, but I would be dismayed if he did that by creating a product that nobody even needs. That is his calculation though, to maybe create a fad in the market and then live happily ever after. The US is full of people that are trying to metaphorically eat candy and pretend that it's a well-balanced meal.

I really like the guest, I heard him on the Free Thoughts podcast not even a few days ago. If he motivates more people to aspire to even 'something', then he gets points. But I don't think that Mars or flying cars are the answer. I know he didn't claim that. But sometimes I genuinely get concerned about the direction economists are pushing our society in. I just don't think that the problem domain has actually been framed correctly, so of course the solutions would be wrong as well. And of course you would get people that are complacent, a lot of the solutions that economists offer are genuinely NOT INTERESTING to me. I simply have failed to be inspired. At least our country had the moon to go to in the past, now we have the homogenous goal of going to college and buying a plot of land in suburbia at x and y coordinate to hopefully live at until you die. Wow, that really does make me complacent, I would rather do anything other than that. Please spare me the misery.

Right now, I have the goal of being a developer and to get out of debt. As soon as I do that, I am determined to stay out of debt and eventually live a life free of mandatory obligations insomuch as possible. I would even prefer to live off the grid for a while. My father affectionately calls me Theodore, (after the Unabomber). Apparently, he was against society and technology and preferred to homestead instead. I'm not nearly as extreme, but I don't share a boundless optimism for societal techno-fixes either.

Anyway, thanks for the podcast!

Kevin writes:

Others have already made many of my points.

On music: other responses are correct - there is too much new innovative music to even consider this seriously. From 21 pilots to AJR to Sia to Ryn Weaver to The Japanese House to Of Monsters and Men to Austra to Chainsmokers to POLICA to Blondfire to London Grammar....you get the idea.

On opioid: Please, heaven help us, keep more "common sense" regulations away from doctors and patients. Doctors already have to look over their shoulder and worry every time they write a prescription that someone will decide it was too much and send them to jail.

On concentration in medicine: Medical laws and regulations have been actively favoring concentration into larger and larger organizations for several years. See Accountable Care Organizations.

Many of the commenters are confusing consumption with productivity. Its easy to do since we often use GDP to capture both.

I think the increase in the regulatory state and size of government accounts for ALL the observable effects we see. However, given the cultural aspect of the podcast I will speculate on a few cultural changes that might make a society more complacent:

1. Its not religion that matters, its a belief in God and a higher power. As a believing people becomes non-believing they are going to culturally transition to an ennui of materialism and ease - see Europe.

2. Risks are, on average, taken by men. A society which teaches little boys to act like little girls, punishes them through many phases of their lives for being boys, is going to grind down some risk taking. The rise of feminism will correspond to a decrease in risk taking.

3. A decrease in moving long distances may in part be due to two income families. Now it is twice as hard for them to move because both must get jobs, they must both negotiate the direction of their careers.

4. Ambition and risk in men (the primary risk takers) is promoted by marriage and children. As marriage declines or happens later and later in life, we should expect to see decreases in productivity. We can debate why this is happening, but the data shows over the period Dr. Cowen is looking at, that it clearly did happen. Marriage and child bearing are declining, GDP rises because women enter the workforce, but on the margin risk taking is going to decrease.

Finally, I think the alt-right is a tiny tiny faction, but I think they represent something real - a growing dissatisfaction with a lot of elite thinking about modern life. Dr. Cowen and all of us might be in for interesting times.

Miller writes:

Ummmmm, the alt-right is pretty big right now. You have no further to look than the manosphere. It is not a small faction, not in the slightest. And yes, they are dissatisfied with the so-called elite.

Also, not entirely sure what you meant by stating that consumption is separate from productivity. It is a virtually meaningless statement in the face of climate change and peak oil projections. Just some more acadamese that allows the elite to continue with their program of shameless and mindless economic activity that they designed for us, all for their benefit of course, as documented in the Youtube video, 'Century of the Self'. That previous statement being facetious or not, or pure rhetoric, (I'll let you choose), the alt-right, or neo-reactionary movement, has deemed the 'elites' as the enemies, and yes, many of them consider Wall Street itself to be a con for the globalist wealthy elite and so on and so on. Look up some stuff on Wikipedia or something. It's actually pretty intriguing. At the intersection of the manosphere and the more head-strong writers in those forums, I think you would find more uptake than you would have previously believed. The Red Pill reddit forum nominally passed the 200,000 subscribers mark just recently. That's pretty big.

I would certainly hope that you would think that we are in for interesting times. It intrigued me not long ago to hear Russ respond to criticisms of economists by saying that 'this isn't the only thing we care about!' Apparently, economists have a perception problem among the general public these days who believe that economists care more about economic growth than human satisfaction in life and it is interesting that they are responding back. I just hope that the ball gets rolling already. I'm tired of the endless pontificating. I'm ready to innovate, personally. My next software project is a React native application for my phone called Coalition Builder. It will seek to combine like-minded people together to create change. Coming NOT to a market near you. It will be free.

Here's some trivia for you, decide if this is innovation or not:

1. Minimalism is rising very quickly in the US and will lead to less consumption and hence, less 'innovation'. Companies will probably not have enough consumer demand to justify research and development into phoneless phones, probably, whatever that means, (it sure sounds like innovation!). Innovation or not?
2. Awareness of climate change and willingness to do something about it is occurring and accelerating, including controlling macro economic trends through socialism-lite policies, which would best lead to less consumption overall as well. Innovation or not? (Depends who you ask)
3. Many people would rather enjoy a train ride across the country than take a plane, either due to having been to Europe, or out of concern for the carbon pollution of planes. Frankly, this would be a win for the planet and for fun-loving people the country over. Taking trains is fun! (No, you don't get your carbon-nanotube, electric airplanes in this scenario) Innovation or not?


OR.......

4. The big oil companies want to create giant switchgrass and leftover fast food fermentation plantations for alternative fuel schemes so that people can continue driving to Wal-Mart when they are bored or to Smith's to buy a single frozen burrito when they are hungry. Innovation or not?
5. Every single restaurant across the US only serves hamburgers through drive-through and no American ever cooks for themselves anymore. The planet continues to heat up due to irresponsible resource usage, putting the fate of our nation and the human species into the invisible hand of the market. But we have 100s of new restaurant chains that have been created with an even larger variety of new and exciting ways to eat cows. Better yet, you are chauffeured to your choice of restaurant every day and for every meal by a self-driving car and Siri sings love songs to you while taking pictures of you and posts it automatically to Twitter, Facebook and Instagram and you have a loyal army of 10,000 chatbots who literally breathlessly await your every post. Innovation or not?
6. Everyone lives alone in their own house with no one to talk to, no friends, and no life. But that was one heck of a construction boom! It was fun and GDP went way up! So who cares?
7. Amazon develops universal same-day delivery to every household in America by means of helicopters, so you don't have to wait to consume that product already! Market nirvana has all but arrived, with the final step being uploaded to Amazon's cloud service so you don't have to wait at all. All consumption is virtual and the perfection of the human race is complete. Capitalism has turned us into gods. 99 percent of the land mass has already been converted to roads and McMansions, there is a ratio of 3 cars to every 'human', and McDonald's has installed nano-replicators into every home and feeds you through a feeding tube to keep your body alive while you play Angry Birds in the 4th dimension with your brain waves. Innovation???????

But don't worry about making a decision any time soon! We're only consuming 19 million barrels of oil per day and the planet isn't actually heating up because science is a liberal conspiracy, so time is not of the essence. Turn on that blue light thingy you bought from Best Buy and stare at it long enough until your problems drift silently away.

Yours truly,
The 'free' market

Ryan writes:

Regarding mobility: My personal observation is that people do continue to move and relocate.

In the mid-2000s my spouse and I moved to Portland, OR from California, while around the same time the rest of my family moved to Missouri from California.

In Portland, OR most of the people I meet have internally migrated here. The changes here in the last 13 years have been vast and mostly due to new residents.

For my family in Missouri, most of the people they know are native residents, but there is a significant number of transplants there, including many people from California.

I agree with Kevin's point that dual incomes make it harder for families to move once they're established. Most of the movement into Portland seems to be done by people in their 20s.

https://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html

Paul Turner writes:

Cowen is clueless when it comes to music and movies. There's tons of musical innovation now and live music is better than ever as bands have to tour more to make a living.

Most 70s movies haven't aged at all well. You can't claim TV is better but movies aren't, it's all the same.

Dr. Duru writes:

I found this discussion interesting for speculating on various cultural drivers of that which ails America, but I had a hard time becoming convinced of a general, pervasive complacency. For example, I see the exact opposite of complacency in certain neighborhoods where citizens fear criminal elements as well as police heavy handedness. I don't see complacency in the people who voted for Trump scared to death of all sorts of things that suggest to them they are "losing the country." I don't see complacency in the way the country has risen to a razor's edge over the on-going threat of terrorism. I don't see complacency among the many people warning about global climate change. I could go on and on. It seems to me the lens of complacency has more to do with a nostalgia for a different age that reflects a particular value system that Cowen finds particularly appealing for himself. Reminds me of another podcast that was heavily nostalgic about a bygone era that was very selective in its perspective.

rovingbroker writes:

Bill Gates wears a tie in one of the last places you would expect to see one.
https://www.gatesnotes.com/Development/Indias-War-on-Human-Waste

The above is an example of technology used to effectively communicate and teach in a way that was impossible just a few decades ago.

[Broken email address fixed--Econlib Ed.]

Marc B writes:

All of the innovation in music in the last 10-15 years has been in hip-hop and dance music.

If Prof Cowen isn't listening to those genres, then that's on him. Same with the movies, he's got some nice rose-colored glasses there.

(Super annoying when someone is making a bunch of interesting points, then says something like this. Just....stop!)

Jesse C writes:

Miller -

I find a lot of today's younger (gen X) metropolitan people tend to fit your self-description. I'll make a generalization about them that lines up somewhat with Tyler Cowen's observations, but understand - I don't know you and I'm not suggesting the generalization applies to you.

Younger (20's-30's) big-city dwellers travel from large metro area to other large metro area, but rarely see the rural parts of the world. If they do, it's often out of the country and they seem to take away more as a "clinical tourist" than a human peer of the people they encounter. (It's like an academic experience to see how someone lives in rural Russia, e.g.) In my view, this group of people live in an ideological bubble, because when confronted with opposing opinions, they tend to freak out because they're not used to disagreement. It's the "snowflake" problem, really, and that's a result of the trends Tyler Cowen describes, IMO.

Anarchy and Socialism aren't making a comeback, those are old, old ideas from the late 19th and early 20th centuries! They're definitely not as popular as they used to be. Every generation of young people hears of these exciting ideas and thinks they're new. I guess it will always be this way.

Antonio writes:

I disagree with Cowan's statement that music is in anyway complacent. Spend a few minutes searching music press and you will find thousands of genres all doing new and innovative things. Something that seems to have failed to occur to Cowan is that economics professors might not be the kind of people that generally are hanging out with innovative musicians. When was the last time Cowan was invited to an after hours party to hear someone try out their latest songs? But that's the kind of social life that's necessary to be aware of what's innovative and not just what's bubbled to the top of the pond of pop music superficiality.

Greg G writes:

I know very little about music but I do know a little about history.

We have yet to have a generation that was so complacent it preferred the music of the previous generation to its own music. Judging from the comments, this isn't likely to be the first.

It seems to me that it's normal and even rational for people to become more complacent as life improves in many ways. It would be weird if that was the other way.

Even so, I'm a big Tyler Cowen fan and I enjoyed the podcast.

Rich Berger writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

jw writes:

Thoughts:

- Complacency is something that I have been wondering about and probably mentioned before. The basic tenet of economics is that human want is unbounded and economics is the science of allocating scarce resources to those unlimited wants. However, what if wants are limited?

It is not only convenient, but incredibly inexpensive now to curl up and cocoon with a big screen TV, an Xbox, and a Roku/FireTV/Chromecast for your Netflix and Hulu. And of course a PC for your FB/Google+/Instagram (someday I may have to actually try one of these to see what the fuss is about - nah).

- The unemployment rate is extremely low, but that is primarily due to much lower participation and the largest job growth areas being low paying waitresses and bartenders. Where does economic progress come from under these circumstances? The usual question remains, are generous welfare state benefits incentivizing this behavior?

- As discussed above and probably a factor in lower mobility is the increase in risk aversion (or is this just another comfort/complacency issue?)

- Per McCloskey, if the rise in productivity and living standards is somewhat or mostly due to the corresponding rise in the reputation of businessmen, so maybe the current malaise is due to constant political and media attacks on those same businessmen. In the old days, sociologists thought that people being exposed to thousands of murders on TV and in the movies was a major negative influence. Now, almost without exception, every one of the TV and movie drama killers is a greed motivated rich white businessman. There are no other politically correct bad guys (except zombies).

- I prefer the Adam Smith, US democracy, technology and carbon usage explanation for the incredible progress in the last 250 years. Is the incessant call for the increasing and wasteful use of resources on "green" initiatives also dampening progress? Or is it the long prophesied effect of the computer revolution finally reducing the need for energy? In any case, oil and coal usage have been flat to down for years, signalling a major change in the US. If energy use is related to productivity, we are in for a very low rate of increasing living standards for the foreseeable future.

- I am amazed that the music comment received most of the attention above. I also disagree that music is stagnant (although I am a big fan of the "oldies"). I do, however, agree that movies haven't progressed much. The effects and even some of the acting is better, but the plot lines are rarely original (there has been a huge increase in predictability due to the almost universal WWF based plot lines in action films). Maybe this is due to the unchanging human condition.

- Finally (and it wouldn't a jw post without it), no one knows what long term effects the activities of the US and world central banks have had on productivity, risk taking and living standards. I remain pessimistic that they are additive.

Kevin writes:

@Miller

The point about the difference between consumption and productivity may not have been stated as clear as intended. You see a conflict between minimalism and innovation - I was trying to say decreased consumption will decrease GDP but can allow for increases in efficiency and innovation whereby minimalism takes even less resources/energy etc to continue.

My millennial friends who went minimalist and traveled the country in an RV eventually decided buying a house and joining the hated suburbs made a lot more sense when their kids needed to enter school and have friends and community. Their minimalism was tested because they wanted their children in better schools, which our system connects to housing and they needed to buy a more expensive home than they preferred to get their kids into those schools. (If you want to make minimalism easier push hard for school choice reforms including homeschool and vouchers for private schools). Which feeds into many of my other points - millennials are getting married later so they take some normal steps later, but for those with children they unsurprisingly begin to follow a similar path to other generations.

Saying the alt right is big and I should look at the manosphere makes my argument. The manosphere is also tiny. A tiny faction of a tiny faction. Might grow, but still very small. 200,000 on reddedit? Thats roughly 1 in 10,000 people in America. Might grow - still tiny.

As Jesse C says, every generation hearing old ideas thinks they are amazing and often that they invented them. Most people are blown away when they read the Fountain Head but over time they might moderate their views with experience.

There is nothing good or bad about chosen minimalism. Its just another lifestyle. I don't think Cowen is confusing complacency for minimalism. If it takes over it makes little difference to others and may change the pace of innovation as you suggest. But the US is a small percent of the world population and my guess is a whole lot of the world in poverty wants to take a try at consumerism before returning to the “minimalism” they have been enjoying for generations.

N Georgak writes:

This is the most incisive episode bar none. Two micro-qualms:

About art: granted, music and video art may not innovate as much but entertainment has moved to gaming, where is more GDP and talent. The long-term consequences are still far off but gaming may be the gateway to the next large inovations.

Financial crises: This one was a biggie and could have been devastating but now that we handled it fairly well it only counts as a learning experience, not a big scary monster lurking around every corner.

jw writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Rich Berger writes:

Tyler did not answer Russ's question about why it is Complacency and not Stasis. The topic was raised early on, and never revisited.

The major problem with books and analyses like TC's is that the subject is really too large for human understanding. Yes, we can point to this measure or that measure, but in the end, TC's thesis is unprovable and unfalsifiable. Like history.

I am surprised that Tyler said that it was getting harder to protest or riot. Guess he must have missed the arson, looting and destruction attendant to the "Black Lives Matter" groups, or the anti-Trump demonstrations, with their broken windows and torched limousines.

One big anti-stasis force: President Donald J Trump. You can tell that is true by the mobilization of the visually the entire establishment against him, the media and the political class.

Nicolas Colaizzi writes:

lAs a frequent listener to your podcasts one of the fears I hear you commonly raise is that of the diminishing appreciation for the concept of freedom. Showing as you stated russ the inevitable slide to being a curmudgeon with age you both criticized ( it could have been Cowan doing this) the young for a nature of recurring that we respect everyones opinion but also for this diminished respect for freedom. the millennial criticism of freedom is that in a completely free state those who want to abuse freedom have the free will to do it.

On a more coherent note, Is it an intentional idea to have the comment box for each episode placed at the absolute bottom of the page, in an attempt to obfuscate choice to comment ? Personally I've meant to comment on many other episodes but have until today not thought to scroll all the way to the bottom of the page.

Todd Kreider writes:

I was disappointed that Russ Roberts didn't ask Tyler Cowen more about his productivity claim that we are in an unprecedented era of low productivity growth. Cowen has made this and similar claims in previous interviews but no one questions them despite that they are mostly incorrect.

Part of the problem is that he seems to be using labor productivity to mean "productivity" as everyone would naturally assume since the common usage among economists and journalists but then he stated on his blog that he was using Total Factor Productivity. Yet there as well, what he has said doesn't match the data.

For example Cowen has said there was a productivity boom in the mid 90s but not after that. He also told Ezra Klien: “We’ve had the internet — and productivity rates have been stagnant or falling."

Yet if you look at the TFP graph, you see steady gains in the 80s and somewhat larger increases from 1995 to 2005. Then TFP stagnates, drop during the recession and then recovers to increase at a very slow rate from 2011.

Yet TFP also hardly increased from 1966 to 1982 (na a 1.00 scale, 0.71 to 0.74), a 12 year period of stagnation, yet Cowen speaks highly of the 60s until 1973 as a period of dynamism.

https://fred.stlouisfed.org/series/RTFPNAUSA632NRUG

Consider labor productivity using the BLS from 1947:

(1947-1956) 2.8%
(1957-1966) 3.3%
(1967-1976) 2.3%
(1977-1986) 1.4%
(1987-1996) 1.5%,
(1997-2006) 2.8%
(2007-2016) 1.2%.

So the past ten years have been quite similar to the period from 1977 to 1996 but Cowen doesn't state it this way on interviews but instead says those periods were at least close to 2%.

Actually, strong productivity continued in a manner that the above divisions do not show: 2006 to 2010 grew at 2.0%, so strong growth from 1996 to 2010 - 15 years, not 5. However, the last five years, 2011 to 2016, have been unusually slow, averaging just 0.5%. That was likely to have been caused by the Great Recession and there is no reason to think this will last much longer.

Bogwood writes:

Stephen Gould wrote about the right wall phenomenon. His example was the right fielder catching 99% of fly balls, no more room for improvement. The right wall was the right side of the graph, approaching equilibrium for a particular phenomenon, not so much the right field wall.

It is part of the "low hanging fruit" principle which relates to the Law of Diminishing Returns.

This may partly explain the stasis in music, art and productivity.

Biophysical view would blame the absence of cheap energy for the productivity loss. But it is overdetermined.

Not having either allele for religiosity I am skeptical that it would add to economic solutions, but would settle for careful statistical studies. Is religion's civilizing influence worth the nuclear-armed religious Disneyland in the Middle East? Could the traditional sites be moved to a more neutral area like Greenland?


Trent writes:

An interesting discussion, but I'm surprised that there wasn't a question about the subtitle of the book - How does Prof. Cowen define 'The American Dream?' There's a huge difference between, say, a dream defined as a family of 4 with a 2-car garage, a picket fence, and a lifelong job vs. a dream defined as having the freedom and liberty to pursue whatever type of job/career/lifestyle/etc. that you desire. From the discussion, my guess is his thesis leans towards the former rather than the latter.

As for Prof. Cowen's argument, I don't see the emergence of complacency. Perhaps it's my own anecdotal experience, but I see things like:

* 4 Millennials in my/my wife's families who have graduated college within the past 3 years - all employed with good jobs, 1 already married & owns a house. And one more graduating next year who's already looking for a job (while working 2 part-time jobs while earning that degree).

* MLB teams competing vigorously against each other in the relatively new field of analytics - if a team doesn't continue to learn and innovate in this area, they most likely suffer a competitive disadvantage.

* Even healthcare continuing to innovate in the area of customer service with things like patient portals and telemedicine. And entrepreneurs are trying new things, like the Surgery Center of Oklahoma that only accepts cash payments and has transparent pricing.

Also, this has already been discussed in other posts, but I also disagree with the assertion that music hasn't changed in the last 15 years for many of the same reasons.

I realize that this was a podcast about the book, so Prof. Cowen's argument will be stronger within the book. At least in this podcast, I didn't find his argument anywhere close to convincing.

Henri Astier writes:

A fascinating conversation. The link between social mobility and strict dress standards is not a paradox. It was perhaps most eloquently illustrated by the French novelist Michel Houellebecq in his 1998 novel Les Particules Élémentaires (Atomised).

There is a passage in which the protagonist, a socially awkward middle-aged man, recalls his unhappy stay as a teenager with his hippie mother at a nudist commune. In this ultimate dress-down environment, insurmountable inequalities are literally laid bare. Here is my translation:

The vulvas of young women were accessible – sometimes less than a yard away; but Bruno fully understood that they remained closed to him: the other boys were taller, more tanned and stronger than he was. Many years later, Bruno came to realize that the petty-bourgeois world of office workers and middle managers was more tolerant, more welcoming and more open than the world of young rebels, embodied at the time by hippies. "I can dress up as a respectable manager and be accepted by them," Bruno liked to say. "All I need to do is buy a suit, a shirt and a tie at J.C. Penney - $150 for the whole lot during sales. Basically all I need to do is learn how to knot a tie (...) On the other hand, it would be useless to pose as a young rebel: I am not young enough, handsome enough, or cool enough. I am losing my hair, I tend to put on weight; and the older I am the more anxious and sensitive I get, the more signs of rejection and scorn affect me. In short, I am not natural enough, not animal enough. And this is an insurmountable flaw. Whatever I say, whatever I do, whatever I buy, I will never overcome this handicap, because it has all the brutality of a natural handicap."
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