Tyler Cowen: Great Stagnation

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pages: 140 words: 42,194

Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals by Tyler Cowen

agricultural Revolution, behavioural economics, Berlin Wall, Branko Milanovic, butterfly effect, conceptual framework, Daniel Kahneman / Amos Tversky, Fall of the Berlin Wall, framing effect, hedonic treadmill, impulse control, Peter Singer: altruism, rent-seeking, Robert Solow, social discount rate, Steven Pinker, The Wealth of Nations by Adam Smith, trade route, transaction costs, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, zero-sum game

Special thanks go to my agent, Teresa Hartnett, to Brianna Wolfson for her work on the publishing side, to Tyler Thompson and Kevin Wong for the design of the book, to Rebecca Hiscott for editing, and to Patrick Collison for his interest in publishing this book with Stripe. Biography Tyler Cowen is a Holbert L. Harris Professor at George Mason University and Director of the Mercatus Center. He received his PhD in economics from Harvard University in 1987. His book The Great Stagnation: How America Ate the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better was a New York Times best seller. He was recently named in an Economist poll as one of the most influential economists of the last decade, and several years ago Bloomberg Businessweek dubbed him “America’s Hottest Economist.”

Wealthier societies are more stable, offer better living standards, produce better medicines, and ensure greater autonomy, greater fulfillment, and more sources of fun. If we want to sustain our trends of growth, and the overwhelmingly positive outcomes for societies that come with it, every individual must become more concerned with the welfare of those around us. So, how do we proceed? Tyler Cowen, in a culmination of twenty years of thinking and research, provides a roadmap for moving forward. In this new book, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals, Cowen argues that our reason and common sense can help free us of the faulty ideas that hold us back as people and as a society.

He also cowrites a blog at marginalrevolution.com, runs a podcast series called “Conversations with Tyler,” and has cofounded an online economics education project, mruniversity.com. His most recently published book was The Complacent Class: The Self-Defeating Quest for the American Dream. Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals © 2018 Tyler Cowen All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any other information storage and retrieval system, without prior permission in writing from the publisher. Published in the United States of America by Stripe Press / Stripe Matter Inc.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

Amazon Mechanical Turk, behavioural economics, Black Swan, brain emulation, Brownian motion, business cycle, Cass Sunstein, Charles Babbage, choice architecture, complexity theory, computer age, computer vision, computerized trading, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, driverless car, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, Higgs boson, income inequality, industrial robot, informal economy, Isaac Newton, Johannes Kepler, John Markoff, Ken Thompson, Khan Academy, labor-force participation, Loebner Prize, low interest rates, low skilled workers, machine readable, manufacturing employment, Mark Zuckerberg, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, off-the-grid, P = NP, P vs NP, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

ALSO BY TYLER COWEN An Economist Gets Lunch The Great Stagnation The Age of the Infovore Discover Your Inner Economist DUTTON Published by the Penguin Group Penguin Group (USA) Inc., 375 Hudson Street, New York, New York 10014, USA USA | Canada | UK | Ireland | Australia | New Zealand | India | South Africa | China Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England For more information about the Penguin Group visit penguin.com. Copyright © 2013 by Tyler Cowen All rights reserved. No part of this book may be reproduced, scanned, or distributed in any printed or electronic form without permission.

Please do not participate in or encourage piracy of copyrighted materials in violation of the author’s rights. Purchase only authorized editions. REGISTERED TRADEMARK—MARCA REGISTRADA LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Cowen, Tyler. Average is over : powering America beyond the age of the great stagnation / Tyler Cowen. pages cm Includes bibliographical references and index. ISBN 978-0-698-13816-2 1. Economic forecasting—United States. 2. United States—Economic conditions—2009- 3. United States—Economic policy—2009- I. Title. HC106.84.C69 2013 330.973—dc23 2013016255 While the author has made every effort to provide accurate telephone numbers, Internet addresses, and other contact information at the time of publication, neither the publisher nor the author assumes any responsibility for errors or for changes that occur after publication.

On how much of the US economy comes from China, see Galina Hale and Bart Hobijn, “The U.S. Content of ‘Made in China’,” Federal Reserve Board of San Francisco Economic Letter, August 8, 2011. For an overview of the research on the connection between immigration and offshoring, see Tyler Cowen, “How Immigrants Create More Jobs,” The New York Times, October 30, 2010. On the importance of economic clustering, see the blog post by Noah Smith, “Great Stagnation . . . or Great Relocation?”, http://noahpinionblog.blogspot.com/2011/09 /great-stagnationor-great-relocation.html. On how cities are diverging, see Sabrina Tavernise, “A Gap in College Graduates Leaves Some Cities Behind,” The New York Times, May 30, 2012.


Human Frontiers: The Future of Big Ideas in an Age of Small Thinking by Michael Bhaskar

"Margaret Hamilton" Apollo, 3D printing, additive manufacturing, AI winter, Albert Einstein, algorithmic trading, AlphaGo, Anthropocene, artificial general intelligence, augmented reality, autonomous vehicles, backpropagation, barriers to entry, basic income, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, Bletchley Park, blockchain, Boeing 747, brain emulation, Brexit referendum, call centre, carbon tax, charter city, citizen journalism, Claude Shannon: information theory, Clayton Christensen, clean tech, clean water, cognitive load, Columbian Exchange, coronavirus, cosmic microwave background, COVID-19, creative destruction, CRISPR, crony capitalism, cyber-physical system, dark matter, David Graeber, deep learning, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, demographic dividend, Deng Xiaoping, deplatforming, discovery of penicillin, disruptive innovation, Donald Trump, double entry bookkeeping, Easter island, Edward Jenner, Edward Lorenz: Chaos theory, Elon Musk, en.wikipedia.org, endogenous growth, energy security, energy transition, epigenetics, Eratosthenes, Ernest Rutherford, Eroom's law, fail fast, false flag, Fellow of the Royal Society, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, germ theory of disease, glass ceiling, global pandemic, Goodhart's law, Google Glasses, Google X / Alphabet X, GPT-3, Haber-Bosch Process, hedonic treadmill, Herman Kahn, Higgs boson, hive mind, hype cycle, Hyperloop, Ignaz Semmelweis: hand washing, Innovator's Dilemma, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of the printing press, invention of the steam engine, invention of the telegraph, invisible hand, Isaac Newton, ITER tokamak, James Watt: steam engine, James Webb Space Telescope, Jeff Bezos, jimmy wales, job automation, Johannes Kepler, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Large Hadron Collider, liberation theology, lockdown, lone genius, loss aversion, Louis Pasteur, Mark Zuckerberg, Martin Wolf, megacity, megastructure, Menlo Park, Minecraft, minimum viable product, mittelstand, Modern Monetary Theory, Mont Pelerin Society, Murray Gell-Mann, Mustafa Suleyman, natural language processing, Neal Stephenson, nuclear winter, nudge unit, oil shale / tar sands, open economy, OpenAI, opioid epidemic / opioid crisis, PageRank, patent troll, Peter Thiel, plutocrats, post scarcity, post-truth, precautionary principle, public intellectual, publish or perish, purchasing power parity, quantum entanglement, Ray Kurzweil, remote working, rent-seeking, Republic of Letters, Richard Feynman, Robert Gordon, Robert Solow, secular stagnation, shareholder value, Silicon Valley, Silicon Valley ideology, Simon Kuznets, skunkworks, Slavoj Žižek, sovereign wealth fund, spinning jenny, statistical model, stem cell, Steve Jobs, Stuart Kauffman, synthetic biology, techlash, TED Talk, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, TikTok, total factor productivity, transcontinental railway, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, We wanted flying cars, instead we got 140 characters, When a measure becomes a target, X Prize, Y Combinator

From quantum biology, nanotechnology and exoplanet astronomy to nudge unit governance, blockchain and virtual worlds, surely this is a uniquely fecund moment when the frontier is expanding at a record and still accelerating pace. Mounting evidence suggests the opposite. A lively debate is calling into question these dominant assumptions about our place in history and the default nature of progress. As much as anyone, the economist Tyler Cowen rang the alarm when he called the present, particularly in the West, the Great Stagnation. So let's call it the Great Stagnation Debate. Nicholas Negroponte believes we exist amid a ‘Big Idea Famine’. Others see not so much an innovation machine as an ‘Innovation Illusion’. The economist Robert Gordon talks about the ‘fall of growth’, while the physicist Lee Smolin talks about a science no longer capable of revolutionary thought.

And Jones and his colleagues aren't alone among economists. Evidence is mounting from across the field. * Economists are increasingly sceptical about claims that we live in an age of radical innovation. High-profile names like Lawrence Summers, Robert Gordon and Tyler Cowen elaborate the idea of ‘secular stagnation’, citing that strange slowing of Western economies despite a surface-level technological abundance. Cowen's ‘Great Stagnation’ is exactly what you'd expect if research productivity were to decline at 5.1 per cent a year.51 Prior to the 1970s, living standards doubled every couple of decades. Median wages have since been roughly flat. Median income doubled between 1947 and 1973, but in real terms grew only 22 per cent in the period 1973 to 2004.52 If the postwar growth rate had continued, by 2010 the median US family income would have been $90,000.

Productivity growth has been much slower over the 3IR than before. Since 1970, Total Factor Productivity (TFP), the key measure of how technology boosts growth, has grown at only a third of the pace achieved between 1920 and 1970, leaving us fully 73 per cent behind the postwar trend.17 In the words of Tyler Cowen and Ben Southwood: ‘TFP growth probably is the best contender for how to measure scientific progress. And overall TFP measures do show declines in the rate of innovativeness, expressed as a percentage of GDP.’ 18 In short, it appears that recent ideas have failed to have the same impact as those of the earlier generation.


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Restarting the Future: How to Fix the Intangible Economy by Jonathan Haskel, Stian Westlake

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Andrei Shleifer, Big Tech, Black Lives Matter, book value, Boris Johnson, Brexit referendum, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Charles Lindbergh, charter city, cloud computing, cognitive bias, cognitive load, congestion charging, coronavirus, corporate governance, COVID-19, creative destruction, cryptocurrency, David Graeber, decarbonisation, Diane Coyle, Dominic Cummings, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, equity risk premium, Erik Brynjolfsson, Estimating the Reproducibility of Psychological Science, facts on the ground, financial innovation, Francis Fukuyama: the end of history, future of work, general purpose technology, gentrification, Goodhart's law, green new deal, housing crisis, income inequality, index fund, indoor plumbing, industrial cluster, inflation targeting, intangible asset, interchangeable parts, invisible hand, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, knowledge worker, lockdown, low interest rates, low skilled workers, Marc Andreessen, market design, Martin Wolf, megacity, mittelstand, new economy, Occupy movement, oil shock, patent troll, Peter Thiel, Phillips curve, postindustrial economy, pre–internet, price discrimination, quantitative easing, QWERTY keyboard, remote working, rent-seeking, replication crisis, risk/return, Robert Gordon, Robert Metcalfe, Robert Shiller, Ronald Coase, Sam Peltzman, Second Machine Age, secular stagnation, shareholder value, Silicon Valley, six sigma, skeuomorphism, social distancing, superstar cities, the built environment, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, urban planning, We wanted flying cars, instead we got 140 characters, work culture , X Prize, Y2K

Once the gods favoured us, but their favour has now been withdrawn, and we find it difficult to restore the golden age of prosperity. Some economic explanations for the current productivity downturn pin the blame on exogenous events. The influential narratives of growth slowdown by Tyler Cowen (The Great Stagnation) and Robert Gordon (The Rise and Fall of American Growth) fit into this time-honoured tradition.23 Both argue that a range of headwinds meant that growth, both from technological progress and from human factors such as improvements in education, had slowed down; Gordon in particular remains pessimistic that it will speed up again in the future.

FIXING OUR CHANGED ECONOMY     119 4    “The Progress of Science and Useful Arts”: Reforming Public Investment and Intellectual Property     121 5    Financial Architecture: Finance and Monetary Policy in an Intangibles-Rich Economy     148 6    Making Cities Work Better     183 7    Reducing Dysfunctional Competition     211 Conclusion: Restarting the Future     240 Notes     263 References     279 Index     297 FIGURES AND TABLES Figures   1.1  Output per Capita Relative to Prefinancial Crisis Trends   1.2  Tobin’s Q in the United States   1.3  Growth by Income Group in the World, 1980–2016   1.4  Performance Gaps   1.5  Average Global Markup, 2000–2015   1.6  Interest Rates since 1980, Advanced Countries   1.7  Growth in the Frontier Economies since 1300   1.8  Estimated Markups Excluding Cost of Goods Sold (United States, Firms in Compustat)   1.9  US Investment Rates, 1977–2017 1.10  Tangible and Intangible Investment, Major Developed Economies 1.11  Intangible Investment: Actual Growth versus Trend Growth (Trend from 1997–2007) 1.12  Capital Service Growth Trends   2.1  TFP and Intangible Capital Services Growth   2.2  Rates of Return in the United States with and without Intangibles   2.3  Evolution of Concentration (Share of Top Eight Firms) by Intangible Intensity   2.4  Evolution of Productivity Dispersion by Intangible Intensity   3.1  Ambrogio Lorenzetti, The Effects of Good Governance on Siena and Its Territory, Public Palace, Siena   4.1  The Tabarrok Curve   5.1  Yields on Safe Assets and Capital, 1995–2015   5.2  Intangible Intensity and the Return on Capital Spread   6.1  Percentage Intending to Use Increased Home Working as a Permanent Business Model   6.2  Net Percentage Expecting Increased Home Working as Permanent versus Net Percentage Reporting Increased Productivity from Home Working   7.1  Top Eight Industry Concentration since 2002: Share of Top Eight Firms in Industry Sales in Thirteen Developed Countries   7.2  Profit Shares Inside and Outside the United States   C.1  Providing Centralised Goods: The Constraint   C.2  How Intangibles Affect the Trade-Off Tables   1.1  Sources of per Capita Growth in the Euro Area, the United Kingdom, and the United States   3.1  Conditions Needed for Exchange and Types of Institutions That Support Them   3.2  Exchange and Types of Institutions PREFACE AND ACKNOWLEDGMENTS This book has its origins in the thought-provoking conversations we had after the publication of Capitalism without Capital: The Rise of the Intangible Economy in 2017. We are very grateful for the insightful and generous comments we received from Martin Brassell, Stephen Cecchetti, Tyler Cowen, Diane Coyle, Chris Dillow, Daniel Finkelstein, Martin Fleming, Rana Foroohar, Bill Gates, John Harris, Constance Hunter, Richard Jones, John Kay, William Kerr, Saul Klein, Arnold Kling, Baruch Lev, Yuval Levin, Ehsan Masood, George Molloan, Ataman Ozyilidirim, Robert Peston, Reihan Salam, Michael Saunders, Dan Sichel, David Smith, Tom Sutcliffe, Bart Van Ark, Callum Williams, Martin Wolf, and many others.

In addition, in recent years economists have documented an increase in the markup between prices and marginal costs that firms appear to be earning (figure 1.5).13 This work is nicely summarised in an excellent book, The Great Reversal, by the economist Thomas Philippon.14 At the level of individual workers, the data show signs of declining dynamism. Contrary to popular myths about job-hopping millennials, younger workers change employers significantly less frequently than previous generations did. They are also less likely to move from one city to another for work. Economist Tyler Cowen describes these tendencies as symptoms of an emerging “complacent class” that is “working harder than ever to postpone change.”15 FIGURE 1.5: Average Global Markup, 2000–2015. Source: Diez, Fan, and Villegas-Sanchez 2019. But there’s something incongruous here. If you present the average worker or manager with evidence that markets are becoming less competitive and workers more complacent, they will respond with something ranging from surprise to disbelief.


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A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, AlphaGo, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, Big Tech, blue-collar work, Boston Dynamics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, driverless car, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, financial innovation, flying shuttle, Ford Model T, fulfillment center, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Kevin Roose, Khan Academy, Kickstarter, Larry Ellison, low skilled workers, lump of labour, machine translation, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, tacit knowledge, technological solutionism, TED Talk, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

Andy Haldane, “Labour’s Share,” speech at the Trades Union Congress, London, 12 November 2015; Richard Partington, “More Regular Work Wanted by Almost Half Those on Zero-Hours,” Guardian, 3 October 2018. 40.  Quoted in Friedman, “Born to Be Free.” 41.  Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013), p. 23. 42.  Lowrey, Give People Money, p. 15. 7. STRUCTURAL TECHNOLOGICAL UNEMPLOYMENT   1.  Chris Hughes, Fair Shot: Rethinking Inequality and How We Earn (London: Bloomsbury, 2018), p. 82.   2.  The argument of this chapter runs through my doctorate, Susskind, “Technology and Employment.”

Indeed, the upheaval and distress caused by technological change eventually contributed to the case for the welfare state, perhaps the most radical invention of the twentieth century. None of what has been said about displaced workers eventually finding new jobs feels like cause for celebration. To paraphrase the economist Tyler Cowen, perhaps the future will be like the past—and that is why we ought not to be optimistic about the future of work.24 Figure 1.2: The Unemployment Rate in Britain, 1760–190023 Nor is it the case, at a quick glance, that those who worried there might actually be less work in the future were completely wrong.

In rich corners of cities like London and New York it is possible to find odd economic ecosystems full of strange but reasonably well-paid roles that rely almost entirely on the patronage of the most prosperous in society: bespoke spoon carvers and children’s playdate consultants, elite personal trainers and star yoga instructors, craft chocolatiers and artisanal cheesemakers. The economist Tyler Cowen put it well when he imagined that “making high earners feel better in just about every part of their lives will be a major source of job growth in the future.”41 What is emerging is not just an economic division, where some earn much more than others, but a status division as well, between those who are rich and those who serve them.


Tyler Cowen - Stubborn Attachments A Vision for a Society of Free, Prosperous, and Responsible Individuals by Meg Patrick

agricultural Revolution, behavioural economics, Berlin Wall, conceptual framework, Fall of the Berlin Wall, framing effect, hedonic treadmill, impulse control, Peter Singer: altruism, rent-seeking, Robert Solow, social discount rate, The Wealth of Nations by Adam Smith, total factor productivity, trade route, transaction costs, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, zero-sum game

Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals By Tyler Cowen In my new essay, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals, I ask questions about social philosophy for the future of our world. Why do we prefer one choice over another? To what extent do we have good reasons for such preferences? Exactly which choices should we make? Short reads are available for Medium readers, or read the whole thing, or find a full download of the essay at this pdf or pdf without images for Kindle. — Tyler Cowen, Mercatus Center at George Mason University, 3434 Washington Blvd, Arlington, VA 22201, tcowen@gmu.edu.

Just as the present appears remarkable from the vantage point of the past, the future, at least provided growth continues, will offer comparable advances, including perhaps greater life expectancies, cures for debilitating diseases, and cognitive enhancements. Billions of people will have much better and longer lives. Many features of modern life might someday seem as backward as we now regard the large number of women who died in childbirth for lack of proper care. I have myself written of “the great stagnation” as a growth slowdown which overtook the Western world, starting in about 1973. It is a failure of imagination, however, to believe that human progress has run its course. The more plausible view is that progress is unevenly bunched, we have been in a slow period as of late, various new developments are percolating, and we should do our best to help them along.


pages: 76 words: 20,238

The Great Stagnation by Tyler Cowen

Asian financial crisis, Bernie Madoff, Black Monday: stock market crash in 1987, confounding variable, en.wikipedia.org, endogenous growth, financial innovation, Flynn Effect, income inequality, indoor plumbing, life extension, liquidity trap, Long Term Capital Management, Mark Zuckerberg, meta-analysis, Peter Thiel, RAND corporation, Savings and loan crisis, school choice, scientific management, Tyler Cowen, Tyler Cowen: Great Stagnation, urban renewal

.); Penguin Books Ltd, 80 Strand, London WC2R 0RL, England; Penguin Ireland, 25 St Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd); Penguin Group (Australia), 250 Camberwell Road, Camberwell, Victoria 3124, Australia (a division of Pearson Australia Group Pty Ltd); Penguin Books India Pvt Ltd, 11 Community Centre, Panchsheel Park, New Delhi—110 017, India; Penguin Group (NZ), 67 Apollo Drive, Rosedale, North Shore 0632, New Zealand (a division of Pearson New Zealand Ltd); Penguin Books (South Africa) (Pty) Ltd, 24 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England Published by Dutton, a member of Penguin Group (USA) Inc. First printing, February 2011 Copyright © 2010 by Tyler Cowen All rights reserved <Dutton logo> REGISTERED TRADEMARK—MARCA REGISTRADA eISBN : 978-1-101-50225-9 Chart on page 14 reprinted from Technological Forecasting and Social Change, Vol 72/Issue 8, Jonathan Huebner, “A possible declining trend for worldwide innovation,” Copyright (October, 2005), with permission from Elsevier.

On job creation and the iPod, see Greg Linden, Jason Dedrick, and Kenneth L. Kraemer, “Innovation and Job Creation in a Global Economy: The Case of Apple’s iPod,” 2008, available at http://pcic.merage.uci.edu/papers/2009/InnovationAndJobCreation.pdf. Chapter 4 The Government of Low-Hanging Fruit On who pays how much of the tax burden, see Tyler Cowen and Alex Tabarrok, Modern Principles: Macroeconomics, New York: Worth Publishers, 2009, ch. 16, p. 340. The historian S. E. Finer first suggested that technology was behind the rise of big government, though he did not consider this claim in the context of public-choice issues. See S. E. Finer, The History of Government from the Earliest Times, Oxford: Oxford University Press, 1997.

Valuable new ideas have become quite scarce, and so the small number of people who hold the rights to new ideas—whether it be the useful Facebook or the more dubious forms of mortgage-backed securities—earned higher relative returns than in earlier periods. The “rise in income inequality” and the “slowdown in ideas production” are two ways of describing the same phenomenon, namely that current innovation is more geared to private goods than to public goods. If one sentence were to sum up the mechanism driving the Great Stagnation, it is this: Recent and current innovation is more geared to private goods than to public goods. That simple observation ties together the three major macroeconomic events of our time: growing income inequality, stagnant median income, and, as we will see in chapter five, the financial crisis.


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Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

Abraham Maslow, Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business cycle, business process, call centre, combinatorial explosion, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, driverless car, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, general purpose technology, hiring and firing, income inequality, intangible asset, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, Loebner Prize, low skilled workers, machine translation, minimum wage unemployment, patent troll, pattern recognition, Paul Samuelson, Ray Kurzweil, rising living standards, Robert Gordon, Robert Solow, self-driving car, shareholder value, Skype, the long tail, too big to fail, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, wealth creators, winner-take-all economy, zero-sum game

What America has been experiencing since 2007, in short, is another case of the business cycle in action, albeit a particularly painful one. A second explanation for current hard times sees stagnation, not cyclicality, in action. Stagnation in this context means a long-term decline in America’s ability to innovate and increase productivity. Economist Tyler Cowen articulates this view in his 2010 book, The Great Stagnation: We are failing to understand why we are failing. All of these problems have a single, little noticed root cause: We have been living off low-hanging fruit for at least three hundred years. … Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there.

On balance, the official productivity data likely underestimate the true improvements of our living standards over time. Stagnant Median Income In contrast to labor productivity, median family income has risen only slowly since the 1970s (Figure 3.2) once the effects of inflation are taken into account. As discussed in Chapter 1, Tyler Cowen and others point to this fact as evidence of economy-wide stagnation. In some ways, Cowen understates his case. If you zoom in on the past decade and focus on working-age households, real median income has actually fallen from $60,746 to $55,821. This is the first decade to see declining median income since the figures were first compiled.

The stagnation argument doesn’t ignore the Great Recession, but also doesn’t believe that it’s the principle cause of the current slow recovery and high joblessness. These woes have a more fundamental source: a slowdown in the kinds of powerful new ideas that drive economic progress. This slowdown pre-dates the Great Recession. In The Great Stagnation, in fact, Cowen maintained that it’s been going on since the 1970s, when U.S. productivity growth slowed and the median income of American families stopped rising as quickly as it had in the past. Cowen, Phelps, and other “stagnationists” hold that only higher rates of innovation and technical progress will lift the economy out of its current doldrums.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, Big Tech, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, currency risk, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, driverless car, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, financial engineering, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, general purpose technology, gig economy, global supply chain, global value chain, heat death of the universe, hydraulic fracturing, income inequality, independent contractor, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low interest rates, low skilled workers, lump of labour, Lyft, machine translation, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Robert Solow, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, tacit knowledge, TaskRabbit, tech billionaire, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, warehouse robotics, working-age population

In 1965 Gordon Moore, a co-founder of Intel, reckoned his industry could double the number of transistors in an integrated circuit roughly once every two years, and that this doubling would likely continue.7 This astonishing pace of progress has been maintained for most of the last half-century, changing computing from something done at great expense by house-sized machines to something done all the time in tiny devices which now rest in the pockets of about 30 per cent of the world’s population. This slice of history played out during a period that economist Tyler Cowen, of George Mason University, has labelled the ‘Great Stagnation’.8 A half-century of extraordinary gains in computing power somehow did not return humanity to the days of dizzying economic and social change of the nineteenth century. In 1987 the Nobel Prize-winning economist Robert Solow mused, in a piece pooh-poohing the prospect of a looming technological transformation, that the evidence for the revolutionary power of computers simply wasn’t there.

Techno-optimists, such as venture capitalist Marc Andreessen,22 lampoon the worriers as luddites and point to rising employment around the world as proof that their fears are overblown, while many left-leaning thinkers continue to blame globalization and the erosion of worker bargaining power, rather than robots, for stagnant pay and rising inequality in rich countries. Some writers, like Brynjolfsson and McAfee, and also Tyler Cowen, whose 2013 book, Average is Over,23 speculates about America’s economic future, anticipate a future in which broad economic and social change occurs incrementally, and in which sensible policy reforms (to education, for example) can make a technologically induced decline in the need for labour easier for households to manage.

Most importantly, I am indebted to Zanny Minton Beddoes, without whose confidence and trust I would not have found myself in this position, and whose brilliance has made me a better thinker and writer. The ideas in the book were also shaped by years of debate and discussion with fellow economics writers and bloggers. I am especially grateful to Tyler Cowen, Matthew Yglesias, Karl Smith, Steve Randy Waldman and Brad DeLong, whose blogs have been a trusted sound-board off which I could bounce ideas. The book itself has been moulded by many hands. The text was immeasurably improved thanks to comments on early drafts from David Schleicher and Soumaya Keynes, and it was a great pleasure to work with Anna Hervé, who helped shape and polish the text.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic management, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, bond market vigilante , business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Charles Babbage, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, data science, debt deflation, deep learning, deskilling, digital divide, disruptive innovation, diversified portfolio, driverless car, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Ford Model T, Fractional reserve banking, Freestyle chess, full employment, general purpose technology, Geoffrey Hinton, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, Kiva Systems, knowledge worker, labor-force participation, large language model, liquidity trap, low interest rates, low skilled workers, low-wage service sector, Lyft, machine readable, machine translation, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, post scarcity, precision agriculture, price mechanism, public intellectual, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Robert Solow, Rodney Brooks, Salesforce, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, the long tail, Thomas L Friedman, too big to fail, Tragedy of the Commons, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, women in the workforce

If innovation is the primary driver of prosperity, then perhaps stagnant incomes imply that the problem is the rate at which new inventions and ideas are being generated, rather than the impact of technology on the working and middle classes. Maybe computers aren’t really all that important, and the slow rate of progress on a broader front is what matters most. Several economists have made this case. Tyler Cowen, an economist at George Mason University, proposed in his 2011 book The Great Stagnation that the US economy has run into a temporary plateau after consuming all the low-hanging fruit of accessible innovation, free land, and underutilized human talent. Robert J. Gordon of Northwestern University is even more pessimistic, arguing in a 2012 paper that economic growth in the United States, hampered by a slow pace of innovation and a number of “headwinds”—including excessive debt, an aging population, and shortfalls in our educational system—may essentially be over.1 In order to gain some insight into the factors that influence the pace of innovation, we may find it useful to think in terms of the historical path that nearly all technologies follow.

As noted in the Introduction, the table shows peak weekly wages of about $341 in 1973 and $295 in December 2012, measured in 1984 dollars. I have adjusted these to 2013 dollars using the Bureau of Labor Statistics’ inflation calculator at http://www.bls.gov/data/inflation_calculator.htm. 12. On median household incomes versus per capita GDP, see Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011), p. 15, and Lane Kenworthy, “Slow Income Growth for Middle America,” September 3, 2008, http://lanekenworthy.net/2008/09/03/slow-income-growth-for-middle-america/.

pagewanted=all. 53. Eric Mack, “Google Has a ‘Near Perfect’ Universal Translator—for Portuguese, at Least,” CNET News, July 28, 2013, http://news.cnet.com/8301–17938_105–57595825–1/google-has-a-near-perfect-universal-translator-for-portuguese-at-least/. 54. Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013), p. 79. 55. John Markoff, “Armies of Expensive Lawyers, Replaced by Cheaper Software,” New York Times, March 4, 2011, http://www.nytimes.com/2011/03/05/science/05legal.html. 56. Arin Greenwood, “Attorney at Blah,” Washington City Paper, November 8, 2007, http://www.washingtoncitypaper.com/articles/34054/attorney-at-blah. 57.


pages: 223 words: 58,732

The Retreat of Western Liberalism by Edward Luce

"World Economic Forum" Davos, 3D printing, affirmative action, Airbnb, Alan Greenspan, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, bread and circuses, Bretton Woods, Brexit referendum, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, disinformation, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, driverless car, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Evgeny Morozov, fake news, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, gentrification, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, illegal immigration, imperial preference, income inequality, independent contractor, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, Les Trente Glorieuses, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meritocracy, microaggression, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, opioid epidemic / opioid crisis, Peace of Westphalia, Peter Thiel, plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

The peak age of high growth and disruptive technology is behind us. Forget the power of the iPhone. Stop exulting about Google’s driverless car. Such wonders pale beside the changes felt by earlier generations. They are unlikely to be matched by our age. Gordon’s thesis is not entirely new. Tyler Cowen made a similar argument with his sparkling monograph The Great Stagnation (ironically first published as an ebook). Nor is it as counterintuitive as it sounds to our app-crowded, WiFi-saturated twenty-first-century brains. Gordon points out that for most of history, growth was absent. Between the fall of the Roman Empire and the Middle Ages there was basically none.

America’s per-capita rate of triadic patent applications – those that are filed in the US, Europe and Japan, which screens out the frivolous ones – has fallen by a quarter since 2000.25 The fastest-growing units in the big Western companies are the legal and public relations departments. Big companies devote the bulk of their earnings to buying back shares and boosting dividend payments. They no longer invest anything like what they used to in research and development. The future loses out. Tyler Cowen, who is perhaps the most lateral-thinking economist I know, talks of the rise of America’s ‘complacent classes’ – the creep of a risk-averse and conformist mindset. In a supposed age of hyper-individualism, eccentricity is penalised. Software screens out job applicants before they have a chance to show their faces.

The number of unoccupied apartments in New York rose by almost three-quarters at the turn of the century to thirty-four thousand in 2011.49 London has witnessed similar growth. The new residents then lock in their gains by restricting land use, which keeps values high. Richard Florida calls them the ‘new urban Luddites’, who exploit an ‘enormous and complex thicket of zoning laws and other land use regulations’ to keep the others out. Tyler Cowen has coined a new acronym to replace Nimbys (Not in My Backyard): Bananas (Build Absolutely Nothing Anywhere Near Anything).50 Such risk aversion breeds its own failure. So deeply rooted is gentrification that Richard Florida has now modified his widely acclaimed thesis about the rise of the creative classes.


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Big Business: A Love Letter to an American Anti-Hero by Tyler Cowen

"Friedman doctrine" OR "shareholder theory", 23andMe, Affordable Care Act / Obamacare, augmented reality, barriers to entry, Bernie Sanders, Big Tech, bitcoin, blockchain, Bretton Woods, cloud computing, cognitive dissonance, company town, compensation consultant, corporate governance, corporate social responsibility, correlation coefficient, creative destruction, crony capitalism, cryptocurrency, dark matter, David Brooks, David Graeber, don't be evil, Donald Trump, driverless car, Elon Musk, employer provided health coverage, experimental economics, Fairchild Semiconductor, fake news, Filter Bubble, financial innovation, financial intermediation, gentrification, Glass-Steagall Act, global reserve currency, global supply chain, Google Glasses, income inequality, Internet of things, invisible hand, Jeff Bezos, junk bonds, late fees, Mark Zuckerberg, mobile money, money market fund, mortgage debt, Network effects, new economy, Nicholas Carr, obamacare, offshore financial centre, passive investing, payday loans, peer-to-peer lending, Peter Thiel, pre–internet, price discrimination, profit maximization, profit motive, RAND corporation, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, Ronald Coase, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Nature of the Firm, Tim Cook: Apple, too big to fail, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, ultimatum game, WikiLeaks, women in the workforce, World Values Survey, Y Combinator

Treasury See also T-bills venture capital American innovation and Verizon Vietnam War voice recording Volkswagen wages Walgreens Walmart Warren, Elizabeth Waze wealth management Wells Fargo WhatsApp whistleblowers Wi-Fi-enabled technology WikiLeaks Williamson, Oliver Wilson, David work altruism and economic oppression exploitation flow and human relationships and non-pay-related benefits potential burden of satisfaction of sexual harassment and stress and studies “work as a safe haven” effect work hours workplace freedom WolframAlpha World Bank World Trade Organization World Values Survey World War I World War II X-rays Yahoo YouTube Zak, Paul J. Zawadzki, Matthew J. Zingales, Luigi zombie banks Zuckerberg, Mark See also Facebook ALSO BY TYLER COWEN The Complacent Class Average Is Over The Great Stagnation An Economist Gets Lunch The Age of the Infovore Discover Your Inner Economist ABOUT THE AUTHOR TYLER COWEN, Ph.D., holds the Holbert L. Harris Chair in Economics at George Mason University. He is the author of a number of explanatory books and textbooks, including The Complacent Class, as well as the most-read economics blog worldwide, marginalrevolution.com.

Appendix: What Is a Firm, Anyway, and Why Do So Many Workers End Up So Frustrated? Acknowledgments Notes Selected Bibliography Index Also By Tyler Cowen About the Author Copyright BIG BUSINESS. Copyright © 2019 by Tyler Cowen. All rights reserved. For information, address St. Martin’s Press, 175 Fifth Avenue, New York, N.Y. 10010. www.stmartins.com Cover photograph of city © Predrag Vuckovic / Getty Images The Library of Congress has cataloged the print edition as follows: Names: Cowen, Tyler, author. Title: Big business: a love letter to an American anti-hero / Tyler Cowen. Description: New York: St. Martin’s Press, [2019] | Includes bibliographical references and index.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, Boston Dynamics, British Empire, business cycle, business intelligence, business process, call centre, carbon tax, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, congestion pricing, corporate governance, cotton gin, creative destruction, crowdsourcing, data science, David Ricardo: comparative advantage, digital map, driverless car, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, Fairchild Semiconductor, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, general purpose technology, global village, GPS: selective availability, Hans Moravec, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, Jevons paradox, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, Kiva Systems, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, One Laptop per Child (OLPC), pattern recognition, Paul Samuelson, payday loans, post-work, power law, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Robert Solow, Rodney Brooks, Ronald Reagan, search costs, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, the Cathedral and the Bazaar, the long tail, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, warehouse robotics, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

All that remained after 1970 were second-round improvements, such as developing short-haul regional jets, extending the original interstate highway network with suburban ring roads, and converting residential America from window unit air conditioners to central air conditioning.5 Gordon is far from alone in this view. In his 2011 book The Great Stagnation, economist Tyler Cowen is definitive about the source of America’s economic woes: We are failing to understand why we are failing. All of these problems have a single, little noticed root cause: We have been living off low-hanging fruit for at least three hundred years. . . . Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there.

Joseph Alois Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process (Philadelphia, NJ: Porcupine Press, 1982), p. 86. 4. Robert J. Gordon, Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds, Working Paper (National Bureau of Economic Research, August 2012), http://www.nber.org/papers/w18315. 5. Ibid. 6. Tyler Cowen, The Great Stagnation: How America Ate All the Low-hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). 7. Gavin Wright, “Review of Helpman (1998),” Journal of Economic Literature 38 (March 2000): 161–62. 8. Boyan Jovanovic and Peter L. Rousseau, “General Purpose Technologies,” in Handbook of Economic Growth, ed.

Those benefits start small while the technology is immature and not widely used, grow to be quite big as the GPT improves and propagates, then taper off as the improvement—and especially the propagation—die down. When multiple GPTs appear at the same time, or in a steady sequence, we sustain high rates of growth over a long period. But if there’s a big gap between major innovations, economic growth will eventually peter out. We’ll call this the ‘innovation-as-fruit’ view of things, in honor of Tyler Cowen’s imagery of all the low-hanging fruit being picked. In this perspective, coming up with an innovation is like growing fruit, and exploiting an innovation is like eating the fruit over time. Another school of thought, though, holds that the true work of innovation is not coming up with something big and new, but instead recombining things that already exist.


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The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

affirmative action, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, assortative mating, behavioural economics, Bernie Sanders, bike sharing, Black Lives Matter, Black Swan, business climate, business cycle, circulation of elites, classic study, clean water, David Graeber, declining real wages, deindustrialization, desegregation, digital divide, Donald Trump, driverless car, drone strike, East Village, Elon Musk, Ferguson, Missouri, Francis Fukuyama: the end of history, gentrification, gig economy, Google Glasses, Hyman Minsky, Hyperloop, income inequality, intangible asset, Internet of things, inventory management, knowledge worker, labor-force participation, low interest rates, low skilled workers, Marc Andreessen, Mark Zuckerberg, medical residency, meta-analysis, obamacare, offshore financial centre, Paradox of Choice, Paul Samuelson, Peter Thiel, public intellectual, purchasing power parity, Richard Florida, security theater, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, South China Sea, Steven Pinker, Stuxnet, The Great Moderation, The Rise and Fall of American Growth, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, Vilfredo Pareto, working-age population, World Values Survey

See also crime wages and collectibles and gender and living standards and matching and mobility and outsourcing and productivity Wang, Ben Wang Wenyin War on Drugs Warner, Michael Washington, DC Watts riots Weather Underground Wikipedia YouTube. See also social media Zuckerberg, Mark ALSO BY TYLER COWEN Average Is Over The Great Stagnation An Economist Gets Lunch The Age of the Infovore Discover Your Inner Economist ABOUT THE AUTHOR TYLER COWEN (Ph.D.) holds the Holbert C. Harris chair in economics at George Mason University. He is the author of a number of textbooks and other thought-provoking works and writes the most-read economics blog worldwide, marginalrevolution.com.

Why Americans Stopped Rioting and Legalized Marijuana 7. How a Dynamic Society Looks and Feels 8. Political Stagnation, the Dwindling of True Democracy, and Alexis de Tocqueville as Prophet of Our Time 9. The Return of Chaos, and Why the Complacent Class Cannot Hold Notes References Index Also by Tyler Cowen About the Author Copyright THE COMPLACENT CLASS. Copyright © 2017 by Tyler Cowen. All rights reserved. Printed in the United States of America. For information, address St. Martin’s Press, 175 Fifth Avenue, New York, N.Y. 10010. www.stmartins.com Cover photographs: American flag © Photoline/Shutterstock; deflated ballon © Jeff Wasserman/Shutterstock.

Ultimately America decided it didn’t want a redo of all the turmoil of the 1960s and 1970s, and it did what was needed to stop that from happening. This added social stasis came roughly at the same time as a slowdown in the rate of technological progress, starting in the 1970s, as I outlined in my earlier book, The Great Stagnation. In 1973, the oil price shock and then some bad policy decisions hurt the American economy a great deal. The American government eventually repaired most of the policy mistakes, such as excess inflation, but since that time innovation and productivity growth have been relatively slow, and only the tech sector has been truly dynamic.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

"World Economic Forum" Davos, Alan Greenspan, autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, driverless car, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Ford Model T, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, low skilled workers, means of production, megacity, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, public intellectual, radical decentralization, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Rutger Bregman, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, TED Talk, telemarketer, The future is already here, The Future of Employment, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

“Leeds Woollen Workers Petition, 1786,” Modern History Sourcebook. http://www.fordham.edu/halsall/mod/1786machines.asp 33. Quoted in: Robert Skidelsky, “Death to Machines?” Project Syndicate (February 21, 2014). http://www.project-syndicate.org/commentary/robert-skidelsky-revisits-the-luddites--claim-that-automation-depresses-real-wages 34. Tyler Cowen, Average is Over. Powering America Beyond the Age of the Great Stagnation (2013), p. 23. 35. Tyler Cowen, The Great Stagnation, p. 172. 36. Quoted in: Daron Acemoglu and James A. Robinson, Why Nations Fail. The Origins of Power, Prosperity and Poverty (2012), p. 226. 37. Thomas Piketty, “Save capitalism from the capitalists by taxing wealth,” The Financial Times (March 28, 2014). http://www.ft.com/intl/cms/s/0/decdd76e-b50e-11e3-a746-00144feabdc0.html-axzz44qTtjlZN 5 The End of Poverty 1.

Inequality will continue to increase and everybody who hasn’t managed to learn a skill that machines cannot or will not be able to master will be sidelined. “Making high earners feel better in just about every part of their lives will be a major source of job growth in the future,” writes the American economist Tyler Cowen.34 Though the lower classes might have access to new amenities like cheap solar power and free Wi-Fi, the gap between them and the ultra-rich will be wider than ever. Beyond that, the rich and well-educated will continue to close ranks even as peripheral villages and towns grow more impoverished.

Heidi Shierholz, “Immigration and Wages: Methodological advancements confirm modest gains for native workers,” Economic Policy Institute (February 4, 2010). http://epi.3cdn.net/7de74e-e0cd834d87d4_a3m6ba9j0.pdf Also see: Gianmarco I.P. Ottaviano and Giovanni Peri, “Rethinking the Effect of Immigration on Wages.” http://www.nber.org/papers/w12497 39. Frederic Docquiera, Caglar Ozden, and Giovanni Peri, “The Wage Effects of Immigration and Emigration,” OECD (December 20, 2010). http://www.oecd.org/els/47326474.pdf 40. Tyler Cowen, Average is Over (2013) p. 169. 41. Corrado Giulietti, Martin Guzi, Martin Kahanec, and Klaus F. Zimmermann, “Unemployment Benefits and Immigration: Evidence from the EU,” Institute for the Study of Labor (October 2011). http://ftp.iza.org/dp6075.pdf On the U.S., see: Leighton Ku and Brian Bruen, “The Use of Public Assistance Benefits by Citizens and Non-citizen Immigrants in the United States,” Cato Institute (February 19, 2013). http://object.cato.org/sites/cato.org/files/pubs/pdf/workingpaper-13_1.pdf 42.


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Overcomplicated: Technology at the Limits of Comprehension by Samuel Arbesman

algorithmic trading, Anthropocene, Anton Chekhov, Apple II, Benoit Mandelbrot, Boeing 747, Chekhov's gun, citation needed, combinatorial explosion, Computing Machinery and Intelligence, Danny Hillis, data science, David Brooks, digital map, discovery of the americas, driverless car, en.wikipedia.org, Erik Brynjolfsson, Flash crash, friendly AI, game design, Google X / Alphabet X, Googley, Hans Moravec, HyperCard, Ian Bogost, Inbox Zero, Isaac Newton, iterative process, Kevin Kelly, machine translation, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, mandelbrot fractal, Minecraft, Neal Stephenson, Netflix Prize, Nicholas Carr, Nick Bostrom, Parkinson's law, power law, Ray Kurzweil, recommendation engine, Richard Feynman, Richard Feynman: Challenger O-ring, Second Machine Age, self-driving car, SimCity, software studies, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, Stewart Brand, superintelligent machines, synthetic biology, systems thinking, the long tail, Therac-25, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, Y2K

In the realm of logistics: Steven Rosenbush and Laura Stevens, “At UPS, the Algorithm Is the Driver,” The Wall Street Journal, February 16, 2015, http://www.wsj.com/articles/at-ups-the-Algorithm-is-the-driver-1424136536. On the blog Marginal Revolution, Alex Tabarrok refers to this kind of intelligence as “opaque intelligence.” http://marginalrevolution.com/marginal revolution/2015/02/opaque-intelligence.html. the economist Tyler Cowen noted: Tyler Cowen, Average Is Over: Powering America beyond the Age of the Great Stagnation (New York: Dutton, 2013), 72. “both praised and panned”: Feng-Hsiung Hsu, Behind Deep Blue: Building the Computer That Defeated the World Chess Champion (Princeton, NJ: Princeton University Press, 2002). “slow, tortuous reading”: Flood and Goodenough, “Contract as Automaton.”

And in chess, a realm where computers are more powerful than humans and are able to win via pathways that the human mind can’t always see, the machines’ characteristic game choices are known as “computer moves”—the moves that a human would rarely make, the ones that are ugly but still get results. As the economist Tyler Cowen noted in his book Average Is Over, these types of moves often seem wrong, but they are very effective. When IBM’s Deep Blue was playing Garry Kasparov, it made a move so strange that it “was both praised and panned by different commentators,” according to one of Deep Blue’s builders. In fact, this highly odd but potentially brilliant move was eventually found to be due to a bug.

This play—tweaking a simulation of technological failure and seeing how it responds—can provide a greater comfort with large and unwieldy systems and can help us as we move forward through this world of increasingly complicated technology. We also need interpreters of what’s going on in these systems, a bit like TV meteorologists. Near the end of Average Is Over, the economist Tyler Cowen speculates about this new breed of future interpreters. He says they “will hone their skills of seeking out, absorbing, and evaluating this information. . . . They will be translators of the truths coming out of our networks of machines. . . . At least for a while, they will be the only people left who will have a clear notion of what is going on.”


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An Economist Gets Lunch: New Rules for Everyday Foodies by Tyler Cowen

agricultural Revolution, behavioural economics, big-box store, business climate, carbon footprint, carbon tax, cognitive bias, creative destruction, cross-subsidies, East Village, en.wikipedia.org, food miles, gentrification, guest worker program, haute cuisine, illegal immigration, informal economy, iterative process, mass immigration, oil shale / tar sands, out of africa, pattern recognition, Peter Singer: altruism, price discrimination, refrigerator car, tacit knowledge, The Wealth of Nations by Adam Smith, Tyler Cowen, Tyler Cowen: Great Stagnation, Upton Sinclair, winner-take-all economy, women in the workforce

AN ECONOMIST GETS LUNCH ALSO BY TYLER COWEN The Great Stagnation The Age of the Infovore Discover Your Inner Economist T Y L E R C O W E N A N E C O N O M I S T G E T S L U N C H New Rules for Everyday Foodies DUTTON DUTTON Published by Penguin Group (USA) Inc. 375 Hudson Street, New York, New York 10014, U.S.A. Penguin Group (Canada), 90 Eglinton Avenue East, Suite 700, Toronto, Ontario M4P 2Y3, Canada (a division of Pearson Penguin Canada Inc.); Penguin Books Ltd, 80 Strand, London WC2R 0RL, England; Penguin Ireland, 25 St. Stephen’s Green, Dublin 2, Ireland (a division of Penguin Books Ltd); Penguin Group (Australia), 250 Camberwell Road, Camberwell, Victoria 3124, Australia (a division of Pearson Australia Group Pty Ltd); Penguin Books India Pvt Ltd, 11 Community Centre, Panchsheel Park, New Delhi–110 017, India; Penguin Group (NZ), 67 Apollo Drive, Rosedale, Auckland 0632, New Zealand (a division of Pearson New Zealand Ltd); Penguin Books (South Africa) (Pty) Ltd, 24 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa Penguin Books Ltd, Registered Offices: 80 Strand, London WC2R 0RL, England Published by Dutton, a member of Penguin Group (USA) Inc.

First printing, April 2012 1 3 5 7 9 10 8 6 4 2 Copyright © 2012 by Tyler Cowen All rights reserved. No part of this book may be reproduced, scanned, or distributed in any printed or electronic form without permission. Please do not participate in or encourage piracy of copyrighted materials in violation of the author’s rights. Purchase only authorized editions. REGISTERED TRADEMARK—MARCA REGISTRADA LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Cowen, Tyler. An economist gets lunch : new rules for everyday foodies / Tyler Cowen. p. cm. Includes bibliographical references and index. ISBN: 978-1-101-56166-9 1.

New Mexico foods are more likely to use fresh green chilies and green tomatillo sauces. Pork is the preferred meat, not beef. Mexican food from California uses more produce, as befits the diversified agriculture of the state. Avocados, sour cream, and Spanish olives are especially common. See Tyler Cowen, Creative Destruction: How Globalization is Changing the World’s Cultures (Princeton: Princeton University Press), 2002, chapter four, for information on the differential spread of television across the United States and Europe. For the figures on working women, see Martha Hahn Sugar, When Mothers Work, Who Pays?


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The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

"Friedman doctrine" OR "shareholder theory", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Abraham Maslow, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, AOL-Time Warner, asset allocation, business cycle, business process, carbon tax, Carl Icahn, Cass Sunstein, centre right, choice architecture, classic study, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, Evgeny Morozov, factory automation, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, game design, Glass-Steagall Act, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, insecure affluence, invisible hand, It's morning again in America, job automation, John Markoff, Joseph Schumpeter, junk bonds, knowledge worker, late fees, Long Term Capital Management, loss aversion, low interest rates, low skilled workers, mass immigration, Michael Shellenberger, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, stock buybacks, technological determinism, technological solutionism, technoutopianism, Ted Nordhaus, the built environment, the long tail, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, value engineering, Walter Mischel, winner-take-all economy

Some of this can be laid to historical timing: world-changing breakthroughs are a lot harder to come by these days in part because the easy ones have already been made. In times past, we were able to get massive increases in productivity by eliminating large and obvious inefficiencies—moving from animal-powered farming to mechanization, for instance, or switching from manure to synthetic fertilizers. But as George Mason University economist Tyler Cowen has argued, most of that “low-hanging fruit” has all been picked and eaten, and today it’s simply much harder, and more costly, to achieve similarly epoch-defining breakthroughs. But it’s not just that innovation has gotten harder. One can also make the case that, under the financialized business models that emerged with the Impulse Society, the way we pursue innovation has gotten weaker.

The other, larger wing of the legal profession will be a sort of mass-production, Walmart model that digitally processes hundreds of thousands of simple cases, like uncontested divorce or mortgage contracts. This two-tier market is the pattern that some economists foresee for the entire job market. The scenario is most graphically laid out by Tyler Cowen, the economist, in his recent book Average Is Over. In Cowen’s version of the future, the top 15 percent of the workforce will be made up of what he calls “hyperproductives”—individuals who are extremely bright and who either know how to use the latest technologies or know how to manage other hyperproductives, and for whom each new generation of corporate efficiencies will mean an ever-larger slice of the pie.

Given the huge development costs these medical technologies will require, and the industry’s ever-more-intense need for prompt returns, it’s not so hard to imagine a medical future that looks an awful lot like the medical present—that is, where more and more of the truly life-altering benefits of innovation flow to the part of the market that can most afford them. Even if we managed to enact a single-payer system, we’d still be looking at a health culture very much along the lines of Tyler Cowen’s bifurcated, end-of-average society, where the wealthy get not only better health care but also more access to the sorts of innovations that are likely to dramatically extend life spans. What will society look like in thirty years, when Cowen’s hyperproductives are not only wealthier than everyone else, but living much longer?


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The Gated City (Kindle Single) by Ryan Avent

big-box store, carbon footprint, company town, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, restrictive zoning, Silicon Valley, tacit knowledge, Thorstein Veblen, transit-oriented development, Tyler Cowen, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

This adjustment process takes a while. And while it continues, incomes for many American workers will stagnate, prices for many basic resources will rise, and growth may slow. Ultimately everyone will be better off, but during the transition period some people will be made worse off. - The low-hanging fruit is gone. Economist Tyler Cowen argues that the rich world rode a wave of low-hanging fruit to prosperity in the years between the onset of the Industrial Revolution and the chaotic 1970s. Lots of empty land was put to use. Uneducated populations became highly educated. And centuries of revolutionary technological innovations were exploited to their fullest.

Wolff, Edward, “Spillovers, Linkages, and Productivity Growth in the US Economy, 1958 to 2007”, NBER Working Paper No. 16864, March 2011. Wright, Gavin, “The Economic Revolution in the American South”, Journal of Economic Perspectives, Volume 1, Issue 1, Summer 1987. ACKNOWLEDGMENTS I could not have done this alone. I am indebted to Zanny Minton-Beddoes for her patience, encouragement, and insight. Tyler Cowen has been a constant source of inspiration and an indispensible resource. I offer sincere thanks to Matthew Yglesias for being a kindred intellectual spirit and a partner in competitive cooperation. I am grateful to Rachel Horwood for her indefatigable research efforts. And I would like to thank and dedicate this book to my wife, Lisa, without whom it, and much else besides, would not have been possible

Bleakley, Hoyt and Jeffrey Lin, “Portage: Path Dependence and Increasing Returns in U.S. History”, Federal Reserve Bank of Philadelphia Working Paper No. 10-27, August 20, 2010. Ciccone, Antonio and Robert Hall, “Productivity and the Density of Economic Activity”, American Economic Review, Vol. 86, No. 1, March 1996. Cowen, Tyler, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, Dutton, January 25, 2011. Davies, Phil, “Sizing Up Job Creation”, Federal Reserve Bank of Minneapolis, September 2010. Davis, Morris, Jonas Fisher, and Toni Whited, “Productivity and Employment Density: New Estimates and Macroeconomic Implications”, November 2007.


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With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don't Pay Enough by Peter Barnes

adjacent possible, Alfred Russel Wallace, banks create money, basic income, Buckminster Fuller, carbon tax, collective bargaining, computerized trading, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, diversified portfolio, driverless car, en.wikipedia.org, Fractional reserve banking, full employment, Glass-Steagall Act, hydraulic fracturing, income inequality, It's morning again in America, Jaron Lanier, Jevons paradox, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land reform, Mark Zuckerberg, Money creation, Network effects, oil shale / tar sands, Paul Samuelson, power law, profit maximization, quantitative easing, rent-seeking, Ronald Coase, Ronald Reagan, Silicon Valley, sovereign wealth fund, Stuart Kauffman, the map is not the territory, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Upton Sinclair, Vilfredo Pareto, wealth creators, winner-take-all economy

Edwin Amenta, When Movements Matter: The Townsend Plan and the Rise of Social Security (Princeton, NJ: Princeton University Press, 2006). 22. Nicholas Lemann, “When the earth moved: What happened to the environmental movement?” New Yorker, April 15, 2013. 23. Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013), 229—30 (Kindle Edition). Appendix: The Dividend Potential of Co-owned Wealth 1. Assumes 95 percent of US residents are eligible for Social Security and a 2013 population of 316 million; http://www.census.gov/population/foreign/data/acs2003.html. 2.

IN THE PAST, EACH GENERATION of Americans believed it would live better than the one that came before it. That’s what we meant by “progress.” But though we continue to advance in technological ways, we’re no longer progressing in intergenerational betterment. That part of the American dream has died. Perhaps it can’t be saved, and we should just accept that fact. That’s what economist Tyler Cowen argues in his 2013 book, Average Is Over. Twenty-first-century America will be “much more unfair and much less equal,” he says. About ten percent of Americans will be wealthy while the rest grow increasingly poor. Aid from government will be inadequate, and millions will live in shantytowns like those in Mexico and Brazil.


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Why Liberalism Failed by Patrick J. Deneen

classic study, David Brooks, Donald Trump, en.wikipedia.org, Francis Fukuyama: the end of history, income inequality, intentional community, Lewis Mumford, mortgage debt, Nicholas Carr, plutocrats, price mechanism, rolling blackouts, Ronald Reagan, shared worldview, Steven Levy, the scientific method, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, women in the workforce, zero-sum game

Wendell Berry, “Faustian Economics: Hell Hath No Limits,” Harper’s, May 2008, 37–38. CHAPTER 6. THE NEW ARISTOCRACY 1. Murray, Coming Apart. 2. Locke, Second Treatise of Government, 23, 26. 3. F. A. Hayek, The Constitution of Liberty, ed. Ronald Hamowy (Chicago: University of Chicago Press, 2011), 96. 4. Ibid., 95–96. 5. Tyler Cowen, Average Is Over: Powering America Past the Age of the Great Stagnation (New York: Dutton, 2013), 258. 6. Ibid. 7. John Stuart Mill, On Liberty, in Gray, On Liberty and Other Essays, 12–13. 8. Ibid., 65. 9. Ibid., 67. 10. Ibid., 68. 11. Ibid., 72. 12. Edmund Burke, Reflections on the Revolution in France, ed. J. G. A. Pocock (Indianapolis: Hackett, 1987), 76. 13.

This recognition has led to a return of Locke’s basic wager that a system that provided material comfort, no matter the vastness of inequality and absent likely prospects of growth and mobility between classes, would nevertheless satisfy most members of society. The most recent muse of Lockean liberalism is the economist Tyler Cowen, whose book Average Is Over echoes the basic contours of Locke’s argument. While noting that liberalism and market capitalism perpetuate titanic and permanent forms of inequality that might have made dukes and earls of old blush, Cowen argues that we are at the end of a unique period in American history, a time of widespread belief in relative equality and shared civic fate, and entering an age in which we will effectively see the creation of two separate nations.

Cavanaugh, William T. “‘Killing for the Telephone Company’: Why the Nation-State Is Not the Keeper of the Common Good.” In Migrations of the Holy: God, State, and the Political Meaning of the Church. Grand Rapids, MI: Eerdmans, 2011. Cowen, Tyler. Average Is Over: Powering America Past the Age of the Great Stagnation. New York: Dutton, 2013. Crawford, Matthew. Shop Class as Soul Craft: An Inquiry into the Value of Work. New York: Penguin, 2010. Croly, Herbert. The Promise of American Life. 1909; Cambridge: Harvard University Press, 1965. Deneen, Patrick. “Against Great Books: Questioning our Approach to the Western Canon.”


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The Economic Singularity: Artificial Intelligence and the Death of Capitalism by Calum Chace

"World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, AI winter, Airbnb, AlphaGo, Alvin Toffler, Amazon Robotics, Andy Rubin, artificial general intelligence, augmented reality, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Boston Dynamics, bread and circuses, call centre, Chris Urmson, congestion charging, credit crunch, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, digital divide, Douglas Engelbart, Dr. Strangelove, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Fairchild Semiconductor, Flynn Effect, full employment, future of work, Future Shock, gender pay gap, Geoffrey Hinton, gig economy, Google Glasses, Google X / Alphabet X, Hans Moravec, Herman Kahn, hype cycle, ImageNet competition, income inequality, industrial robot, Internet of things, invention of the telephone, invisible hand, James Watt: steam engine, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, Kiva Systems, knowledge worker, lifelogging, lump of labour, Lyft, machine translation, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Milgram experiment, Narrative Science, natural language processing, Neil Armstrong, new economy, Nick Bostrom, Occupy movement, Oculus Rift, OpenAI, PageRank, pattern recognition, post scarcity, post-industrial society, post-work, precariat, prediction markets, QWERTY keyboard, railway mania, RAND corporation, Ray Kurzweil, RFID, Rodney Brooks, Sam Altman, Satoshi Nakamoto, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, SoftBank, software is eating the world, speech recognition, Stephen Hawking, Steve Jobs, TaskRabbit, technological singularity, TED Talk, The future is already here, The Future of Employment, Thomas Malthus, transaction costs, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, universal basic income, Vernor Vinge, warehouse automation, warehouse robotics, working-age population, Y Combinator, young professional

He argues that prediction markets give us a financial stake in being accurate when we make forecasts, rather than just trying to look good to our peers. Tyler Cowen A professor at George Mason University and co-author of an extremely popular blog, Tyler Cowen was New Jersey's youngest ever chess champion. He is a man with prodigiously broad knowledge and interests, and although he proposes some key ideas forcefully, there is always some nuance, and he dislikes simplistic and modish solutions. In two recent books, “the Great Stagnation” (2011) and “Average is Over” (2014), he paints a picture of America's future which is slightly depressing, but not apocalyptic.

Humans can undermine the game of a computer by throwing in some surprise moves which don't make much sense in the short term, or by deploying an intuitive strategy. Matches between humans working with computers are called advanced chess, or centaur chess. Kasparov himself initiated the first high-level centaur chess competition in Leon, in Spain, in 1998, and competitions have been held there regularly ever since. Tyler Cowen (one of the sceptics about machine automation that we met in chapter 3.3) explores this form of chess extensively in his book, “Average is Over”. Some people believe this phenomenon of humans teaming up with computers to form centaurs is a metaphor for how we can avoid most jobs being automated by machine intelligence.

They think that capitalism should be defended and retained, but they sound less confident about what will happen in the medium term. They argue for an overhaul of the US education system, but they don’t sound convinced that will be enough, and they speculate that a negative income tax may eventually become necessary. Tyler Cowen, whom we encountered in chapter 3.3 as the author of “Average is Over”, is certainly not breezy in his assessment of the outlook, nor is he tentative. He is confident that UBI will not be needed, and he does not expect riots. But his prognosis is lugubrious. He foresees 10-15% of the population being extremely wealthy, and the rest getting by on incomes which are stagnant at best, but putting up with it because many of them are too old to riot, and they are pacified by the excellent cheap entertainment that technology provides.


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The Internet Is Not the Answer by Andrew Keen

"World Economic Forum" Davos, 3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, AOL-Time Warner, augmented reality, Bay Area Rapid Transit, Berlin Wall, Big Tech, bitcoin, Black Swan, Bob Geldof, Boston Dynamics, Burning Man, Cass Sunstein, Charles Babbage, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, data science, David Brooks, decentralized internet, DeepMind, digital capitalism, disintermediation, disruptive innovation, Donald Davies, Downton Abbey, Dr. Strangelove, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fail fast, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, fulfillment center, full employment, future of work, gentrification, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, holacracy, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, John Perry Barlow, Joi Ito, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kevin Roose, Kickstarter, Kiva Systems, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Mary Meeker, Metcalfe’s law, military-industrial complex, move fast and break things, Nate Silver, Neil Armstrong, Nelson Mandela, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Panopticon Jeremy Bentham, Patri Friedman, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, plutocrats, Potemkin village, power law, precariat, pre–internet, printed gun, Project Xanadu, RAND corporation, Ray Kurzweil, reality distortion field, ride hailing / ride sharing, Robert Metcalfe, Robert Solow, San Francisco homelessness, scientific management, Second Machine Age, self-driving car, sharing economy, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, subscription business, TaskRabbit, tech bro, tech worker, TechCrunch disrupt, Ted Nelson, telemarketer, The future is already here, The Future of Employment, the long tail, the medium is the message, the new new thing, Thomas L Friedman, Travis Kalanick, Twitter Arab Spring, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, urban planning, Vannevar Bush, warehouse robotics, Whole Earth Catalog, WikiLeaks, winner-take-all economy, work culture , working poor, Y Combinator

Solow, “We’d Better Watch Out,” New York Times Book Review, July 12, 1987. 74 Timothy Noah, The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It (New York: Bloomsbury, 2012), p. 7. 75 Eduardo Porter, “Tech Leaps, Job Losses and Rising Inequality,” New York Times, April 15, 2014. 76 Loukas Karabarbounis and Brent Neiman, “The Global Decline of Labor Share,” Quarterly Journal of Economics, 2014. 77 Thomas B. Edsall, “The Downward Ramp,” New York Times, June 10, 2014. 78 Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013), p. 53. 79 Ibid., p. 229. 80 Ibid., pp. 198–200. 81 Joel Kotkin, “California’s New Feudalism Benefits a Few at the Expense of the Multitude,” Daily Beast, October 5, 2013. 82 Paul Krugman, “Sympathy for the Luddites,” New York Times, June 13, 2013, nytimes.com/2013/06/14/opinion/krugman-sympathy-for-the-luddites.html?

Bradford DeLong has suggested that the more central a role information technology plays in traditionally skillful professions like law or medicine, the fewer jobs there might be.75 Loukas Karabarbounis and Brent Neiman, two economists from the University of Chicago’s business school, have found that since the mid-1970s, the relative amount of income going to workers has been in decline around the world.76 Meanwhile the research of three Canadian economists, Paul Beaudry, David Green, and Benjamin Sand, found a similarly steep decline of midlevel jobs—a depressing development that MIT’s David Autor, Northeastern University’s Andrew Sum, and the president of the Economic Policy Institute, Larry Mishel, have also discovered with their research.77 Many others share this concern about the destructive impact of technology on the “golden age” of labor. The George Mason University economist Tyler Cowen, in his 2013 book, Average Is Over, concurs, arguing that today’s big economic “divide” is between those whose skills “complement the computer” and those whose don’t. Cowan underlines the “stunning truth” that wages for men, over the last forty years, have fallen by 28%.78 He describes the divide in what he calls this new “hyper-meritocracy” as being between “billionaires” like the Battery member Sean Parker and the homeless “beggars” on the streets of San Francisco, and sees an economy in which “10 to 15 percent of the citizenry is extremely wealthy and has fantastically comfortable and stimulating lives.”79 Supporting many of Frank and Cook’s theses in their Winner-Take-All Society, Cowen suggests that the network lends itself to a superstar economy of “charismatic” teachers, lawyers, doctors, and other “prodigies” who will have feudal retinues of followers working for them.80 But, Cowen reassures us, there will be lots of jobs for “maids, chauffeurs and gardeners” who can “serve” wealthy entrepreneurs like his fellow chess enthusiast Peter Thiel.

In our digital age, the personal is the economic. And there’s nothing liberating about it at all. Just as the Kodak tragedy decimated the economic heart of Rochester, so the Internet is destroying our old industrial economy—transforming what was once a relatively egalitarian system into a winner-take-all economy of what Tyler Cowen calls “billionaires and beggars.” Rather than just a city, it’s a whole economy that is losing its center. For all Silicon Valley’s claims that the Internet has created more equal opportunity and distribution of wealth, the new economy actually resembles a donut—with a gaping hole in the middle where, in the old industrial system, millions of workers were once paid to manufacture valuable products.


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The Half-Life of Facts: Why Everything We Know Has an Expiration Date by Samuel Arbesman

Albert Einstein, Alfred Russel Wallace, Amazon Mechanical Turk, Andrew Wiles, Apollo 11, bioinformatics, British Empire, Cesare Marchetti: Marchetti’s constant, Charles Babbage, Chelsea Manning, Clayton Christensen, cognitive bias, cognitive dissonance, conceptual framework, data science, David Brooks, demographic transition, double entry bookkeeping, double helix, Galaxy Zoo, Gregor Mendel, guest worker program, Gödel, Escher, Bach, Ignaz Semmelweis: hand washing, index fund, invention of movable type, Isaac Newton, John Harrison: Longitude, Kevin Kelly, language acquisition, Large Hadron Collider, life extension, Marc Andreessen, meta-analysis, Milgram experiment, National Debt Clock, Nicholas Carr, P = NP, p-value, Paul Erdős, Pluto: dwarf planet, power law, publication bias, randomized controlled trial, Richard Feynman, Rodney Brooks, scientific worldview, SimCity, social contagion, social graph, social web, systematic bias, text mining, the long tail, the scientific method, the strength of weak ties, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Tyler Cowen, Tyler Cowen: Great Stagnation

[The Half-Life of Facts] does what popular science should do—both engages and entertains.” —Kirkus Reviews “A fascinating and necessary look at the pace of human knowledge.” —Maria Popova, Brain Pickings “What does it mean to live in a world drowning in facts? Consider The Half-Life of Facts the new go-to book on the evolution of science and technology.” —Tyler Cowen, professor of economics, George Mason University, author of An Economist Gets Lunch “The Half-Life of Facts is fun and fascinating, filled with wide-ranging stories and subtle insights about how facts are born, dance their dance, and die. In today’s world where knowledge often changes faster than we do, Sam Arbesman’s new book is essential reading.”

For example, the sizes of asteroids discovered annually get 2.5 percent smaller each year. In the first few years, the ease of discovery drops off quickly; after early researchers pick the low-hanging fruit, it continues to “decay” for a long time, becoming slightly harder without ever quite becoming impossible. There is even a similarity in one view of medicine. As Tyler Cowen, an economist at George Mason University, has noted, if you tally the number of major advances, or definitive moments, in modern medicine (as chronicled by James Le Fanu) in each decade of the middle of the twentieth century, you get an eventual decline: “In the 1940s there are six such moments, seven moments in the 1950s, six moments in the 1960s, a moment in 1970 and 1971 each, and from 1973 [to] 1998, a twenty-five-year period, there are only seven moments in total.”

PLoS Computational Biology 7, no. 6 (June 2011): e1002072. 22 the sizes of asteroids discovered annually: More precisely, the dates used were for multi-opposition observations, required for a high level of accuracy of computing orbits. The date of discovery is a less stringent threshold when it comes to asteroids, so this analysis simply uses a more stringent criterion. 23 “In the 1940s there are six such moments”: Cowen, Tyler. “The Great Stagnation in Medicine.” Marginal Revolution, 2011. www.marginalrevolution.com/marginalrevolution/2011/02/the-great-stagnation-in-medicine.xhtml. 23 a Swedish medical student named Ivar Sandström: Carney, J. Aidan. “The Glandulae Parathyroideae of Ivar Sandström: Contributions from Two Continents.” American Journal of Surgical Pathology 20, no. 9 (1996): 1123–44. 24 if you uttered the statement: Price.


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Arbitrary Lines: How Zoning Broke the American City and How to Fix It by M. Nolan Gray

Albert Einstein, barriers to entry, Black Lives Matter, car-free, carbon footprint, City Beautiful movement, clean water, confounding variable, COVID-19, desegregation, Donald Shoup, Edward Glaeser, Elisha Otis, game design, garden city movement, gentrification, George Floyd, global pandemic, Home mortgage interest deduction, housing crisis, industrial cluster, Jane Jacobs, job-hopping, land bank, lone genius, mass immigration, McMansion, mortgage tax deduction, Overton Window, parking minimums, restrictive zoning, rewilding, San Francisco homelessness, scientific management, Silicon Valley, SimCity, starchitect, streetcar suburb, superstar cities, The Death and Life of Great American Cities, transit-oriented development, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, urban renewal, War on Poverty

Emily Badger, “Covid Didn’t Kill Cities. Why Was That Prophecy So Alluring?” New York Times, July 12, 2021, https://www.nytimes.com/2021/07/12/upshot/covid-cities-predictions-wrong.html. 18. For a comprehensive treatment of the issue of US economic stagnation, the reader is encouraged to see Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (Boston: Dutton, 2011). Real wage growth data from the Bureau of Labor Statistics. For more on the productivity slowdown, see Robert J. Godon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” NBER Working Paper Series (August 2012).

On the contrary, as part II argues, despite its seemingly limited scope, zoning has had a destructive effect on cities, which is why we should abolish it. Acknowledgments Like any work worthy of your time, this book is the result of many minds—I simply have the honor of putting my name on the cover. In late 2019, I sent Tyler Cowen a grant proposal setting out my plan to spend 2020 cranking out blog posts and writing research papers. Since I knew he was interested in moonshot ideas, I tacked on one or two lines about a peculiar little book critiquing an obscure area of policy. Within forty-eight hours, I was on the phone with Tyler sketching out the contours of the book you now hold in your hands.

Gilles Duranton and Diego Puga, “Urban Growth and Its Aggregate Implications,” NBER Working Paper Series (December 2019), https://www.nber.org/system/files/working_papers/w26591/w26591.pdf. 25. Peter Ganong and Daniel W. Shoag, “Why Has Regional Income Convergence in the U.S. Declined?” NBER Working Paper Series (July 2017), https://www.nber.org/papers/w23609. 26. For a robust defense of growth, see Tyler Cowen, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals (San Francisco: Stripe Press, 2018). CHAPTER 5: APARTHEID BY ANOTHER NAME 1. Larry Buchanan, Quotrung Bui, and Jugal K. Patel, “Black Lives Matter May Be the Largest Movement in U.S. History,” New York Times, July 3, 2020, https://www.nytimes.com/interactive/2020/07/03/us/george-floyd-protests-crowd-size.html. 2.


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The Decadent Society: How We Became the Victims of Our Own Success by Ross Douthat

Affordable Care Act / Obamacare, AI winter, Apollo 13, Bernie Sanders, bitcoin, Black Lives Matter, Boeing 747, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, centre right, Charlie Hebdo massacre, charter city, crack epidemic, CRISPR, crowdsourcing, David Graeber, Deng Xiaoping, deplatforming, Donald Trump, driverless car, East Village, Easter island, Elon Musk, fake news, Flynn Effect, Francis Fukuyama: the end of history, Francisco Pizarro, ghettoisation, gig economy, Golden age of television, green new deal, Haight Ashbury, helicopter parent, hive mind, Hyperloop, immigration reform, informal economy, intentional community, Intergovernmental Panel on Climate Change (IPCC), Islamic Golden Age, Jeff Bezos, Jeremy Corbyn, Joan Didion, Kevin Kelly, Kickstarter, knowledge worker, life extension, low interest rates, mass immigration, mass incarceration, means of production, megacity, meritocracy, microaggression, move fast and break things, multiplanetary species, Neal Stephenson, Neil Armstrong, New Journalism, Nicholas Carr, Norman Mailer, obamacare, Oculus Rift, open borders, opioid epidemic / opioid crisis, out of africa, Panopticon Jeremy Bentham, Paris climate accords, peak TV, Peter Thiel, plutocrats, pre–internet, private spaceflight, QAnon, quantitative easing, radical life extension, rent-seeking, Robert Bork, Robert Gordon, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Snapchat, Snow Crash, Social Justice Warrior, social web, Steve Bannon, Steve Jobs, Steven Pinker, technoutopianism, TED Talk, the built environment, The Rise and Fall of American Growth, Tyler Cowen, Tyler Cowen: Great Stagnation, wage slave, WeWork, women in the workforce, Y2K

For all the many transatlantic differences, our basic economic experience is the same: persistent stagnation, chronic disappointment, and a growing conflict between the promise of progress and a reality where everything seems—surprisingly, depressingly—to stay the same. The Limits of Neoliberalism There is no shortage of theories to explain this “great stagnation” (to borrow a phrase from one of the theorizers, the George Mason University economist Tyler Cowen), and there is also no need to simply choose between them. Like most broad trends, the economic decadence of the developed world is overdetermined, and almost every serious attempt at explanation will contain some element of truth. The most politically appealing theories—the ones animating our populist and socialist insurgencies—tend to blame neoliberalism itself, claiming that the medicine for 1970s stagflation has proven to be poison in large doses.

Since the 2008 financial crisis and the Great Recession exposed almost a decade’s worth of Western growth as an illusion, a diverse cast of economists and political scientists and other figures on both the left and the right have begun to talk about stagnation and repetition and complacency and sclerosis as defining features of this Western age: Tyler Cowen and Robert Gordon, Thomas Piketty and Francis Fukuyama, David Graeber and Peter Thiel, and many others. This book is, in part, an attempt to synthesize their various perspectives into a compelling account of our situation. But it also weaves the social sciences together with observations on our intellectual climate, our popular culture, our religious moment, our technological pastimes, in the hopes of painting a fuller portrait of our decadence than you can get just looking at political science papers on institutional decay or an economic analysis of the declining rate of growth.

For the pessimists, the unusual features of the post-2007 landscape—the persistently low interest rates, the low rate of inflation, the disappointing rate of growth, the great fortunes parked in rent-seeking rather than risk-taking—are actually inevitabilities in a developed world where there just aren’t enough impressive enterprises to invest in; a developed world that inflates bubbles and then pops them (or invests in Theranos and then repents) because that’s all there is for capital to do; a developed world slowly growing accustomed to unexpected limits on its future possibilities. The most convincing theorists of limits include Cowen, in his 2011 book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, and his fellow economist Robert Gordon, in his magisterial 2016 work, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War. Both authors would agree with portions of the arguments I’ve just sketched about neoliberalism pushed too far or misapplied, and an economy stalled by inequality or captured by a self-dealing upper class.


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The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

air traffic controllers' union, Alan Greenspan, assortative mating, autonomous vehicles, Bear Stearns, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, carbon tax, collective bargaining, compensation consultant, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Ford Model T, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, independent contractor, industrial robot, invisible hand, It's morning again in America, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, proprietary trading, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, subprime mortgage crisis, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Brooks, The Battle: How the Fight Between Free Enterprise and Government Will Shape America’s Future (New York: Basic Books, 2010). Matthew Continetti, “About Inequality,” Weekly Standard, Nov. 14, 2011, at http://www.weeklystandard.com/articles/about-inequality_607779.html?page=1. Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). ———“The Inequality That Matters,” American Interest 6, no. 3 (Jan.–Feb. 2011), at http://www.the-american-interest.com/article.cfm?piece=907. Barbara Ehrenreich, Nickel and Dimed: On (Not) Getting By in America (New York: Metropolitan Books, 2001).

Morgan never had access to sulfa drugs or iPhones or fresh vegetables in wintertime. And the gap between Morgan’s quality of life and that of the typical American during his lifetime was in many important ways larger than the gap today between Bill Gates’s quality of life and that of the typical American. In Morgan’s day, as the George Mason economist Tyler Cowen puts it, “the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture.” But people do not experience life as an interesting moment in the evolution of human living standards.

Currently forty states provide funding to expand preschool education, though most limit enrollment to low-income families. Nationally, 27 percent of all four-year-olds are enrolled in pre-K programs. That’s roughly equivalent to the number of fourteen-to seventeen-year-olds that were enrolled in high school during the late teens of the previous century. This might be the pool of “smart, uneducated kids” that Tyler Cowen is looking for—“low-hanging fruit” from whom we can derive future productivity gains merely by putting them in school. Research on early education suggests the benefits could be considerable. A 2011 study by the Harvard economist Raj Chetty and five others (including Berkeley’s Emmanuel Saez) found that a one-percentile increase in scores on tests administered to Tennessee kindergarteners at the end of the school year was associated with a $94 increase in annual wages at age twenty-seven—and that’s after the numbers were adjusted to take into account variations in family background.


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Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

23andMe, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, Big Tech, book value, Brexit referendum, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, cloud computing, cognitive bias, computer age, congestion pricing, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial engineering, financial innovation, full employment, fundamental attribution error, future of work, gentrification, gigafactory, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, Jeremy Corbyn, job automation, Kanban, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low interest rates, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, Ocado, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, private spaceflight, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, sunk-cost fallacy, survivorship bias, tacit knowledge, tech billionaire, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, TSMC, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

This coincidence of very cheap borrowing and the apparent unwillingness of businesses to invest was what Larry Summers was talking about when he popularized the term “secular stagnation” in a 2013 lecture to the IMF.1 One immediate explanation for this weird mix of cheap money and low investment is simply that the demand for investment has fallen. In his 2011 bestseller The Great Stagnation, economist Tyler Cowen suggested that developed countries might have exhausted easy sources of good investments, such as settling new land or getting children to spend more years in education. Most memorably, he argued that technological progress might have slowed down, or, more specifically, that the economic benefit of new discoveries was less than had been the case in the past.

Paying for citizens to go to school for longer was, for much of twentieth century, an important way that governments increased productivity; the economists Claudia Goldin and Lawrence Katz documented the vital role of education in the economic growth of the United States, pointing out, for example, that while 62 percent of the 1930 US birth cohort graduated from high school, 85 percent of the 1975 cohort did (Goldin and Katz 2008). Robert Gordon and Tyler Cowen have argued that there are diminishing returns here—children and young people can only spend so long in school or college—and that this will prove to be a major brake on US economic growth in the future (Gordon 2016; Cowen 2011). Working out how to defy these diminishing returns has proved challenging.

University of Chicago Press. ———. 2009. “Intangible Capital and U.S. Economic Growth.” Review of Income and Wealth 55 (3): 661–85. Corrado, Carol A., M. O’Mahony, and Lea Samek. 2015. “Measuring Education Services as Intangible Social Infrastructure.” SPINTAN Working Paper Series, No. 19. Cowen, Tyler. 2011. The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. Penguin eSpecial from Dutton. CQ Researcher. 2016. “The Iron and Steel Industry.” http://library.cqpress.com/cqresearcher/document.php?id=cqresrre1930050100. Crawford, Rowena, Dave Innes, and Cormac O’Dea. 2016.


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The War on Normal People: The Truth About America's Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang

3D printing, Airbnb, assortative mating, augmented reality, autonomous vehicles, basic income, Bear Stearns, behavioural economics, Ben Horowitz, Bernie Sanders, call centre, corporate governance, cryptocurrency, data science, David Brooks, DeepMind, Donald Trump, Elon Musk, falling living standards, financial deregulation, financial engineering, full employment, future of work, global reserve currency, income inequality, Internet of things, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: technological unemployment, Khan Academy, labor-force participation, longitudinal study, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, megacity, meritocracy, Narrative Science, new economy, passive income, performance metric, post-work, quantitative easing, reserve currency, Richard Florida, ride hailing / ride sharing, risk tolerance, robo advisor, Ronald Reagan, Rutger Bregman, Sam Altman, San Francisco homelessness, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, single-payer health, Stephen Hawking, Steve Ballmer, supercomputer in your pocket, tech worker, technoutopianism, telemarketer, The future is already here, The Wealth of Nations by Adam Smith, traumatic brain injury, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, unemployed young men, universal basic income, urban renewal, warehouse robotics, white flight, winner-take-all economy, Y Combinator

…“a major metropolitan area run by armed teenagers with no access to jobs or healthy food”…: Matt Taibbi, “Apocalypse, New Jersey: A Dispatch from America’s Most Desperate Town,” Rolling Stone, December 11, 2013. … since 1970 the difference between the most and least educated U.S. cities has doubled…: Tyler Cowen, Average Is Over: Powering America beyond the Age of the Great Stagnation (New York: Penguin Books, 2013), pp. 172–173. Fifty-nine percent of American counties saw more businesses close than open…: “Dynamism in Retreat: Consequences for Regions, Markets and Workers,” Economic Innovation Group, February 2017. California, New York, and Massachusetts accounted for 75 percent of venture capital in 2016…: Richard Florida, “A Closer Look at the Geography of Venture Capital in the U.S.”

Relocating is a significant life change—moving away from friends and family requires significant courage, adaptability, and optimism. Imagine living somewhere where your best people always leave, where the purpose of excelling seems to be to head off to greener pastures. Over time it would be easy to develop a negative outlook. You might double down on pride and insularity. The economist Tyler Cowen observed that since 1970 the difference between the most and least educated U.S. cities has doubled in terms of average level of education—that is, more and more educated people are congregating in the same cities and leaving others. Business dynamism is now vastly unevenly distributed. Fifty-nine percent of American counties saw more businesses close than open between 2010 and 2014.

The Annual Time Use survey in 2014 indicated high levels of time spent “attending gambling establishments,” “tobacco and drug use,” “listening to the radio,” and “arts and crafts as a hobby,” with over 8 hours per day spent on “socializing, relaxing and leisure.” The same surveys showed lower likelihood of volunteering or attending religious services than for men in the workforce, despite having considerably more time. “Every society has a ‘bad men’ problem,” says Tyler Cowen, the economist and author of Average Is Over. He projects a future where a relative handful of high-productivity individuals create most of the value, while low-skilled people become preoccupied with cheap digital entertainment to stay happy and organize their lives. Games have come a long way since I was a kid, and they’re about to take yet another leap forward.


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The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alvin Toffler, American Society of Civil Engineers: Report Card, back-to-the-city movement, Bob Noyce, Boston Dynamics, California gold rush, Californian Ideology, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, classic study, Cornelius Vanderbilt, creative destruction, crony capitalism, David Graeber, degrowth, deindustrialization, do what you love, don't be evil, Downton Abbey, driverless car, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Future Shock, Gini coefficient, Google bus, Herman Kahn, housing crisis, income inequality, independent contractor, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kevin Roose, labor-force participation, Larry Ellison, Lewis Mumford, low interest rates, low-wage service sector, Marc Andreessen, Mark Zuckerberg, Mary Meeker, mass affluent, McJob, McMansion, medical bankruptcy, microapartment, Nate Silver, National Debt Clock, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, post-industrial society, public intellectual, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Solyndra, Steve Jobs, stock buybacks, tech worker, techlash, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, Tony Fadell, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, Virgin Galactic, War on Poverty, women in the workforce, working poor, young professional

Rich Morin and Seth Motel, “A Third of Americans Now Say They Are in the Lower Classes,” Pew Research Social & Demographic Trends, September 10, 2012, http://www.pewsocialtrends.org/2012/09/10/a-third-of-americans-now-say-they-are-in-the-lower-classes. 49. Brownstein, “Eclipsed.” 50. Tyler Cowen, Average is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013), pp. 23–24. 51. Ibid., p. 36; D. Robert Worley, “In Defense of Conservative Thought,” Huffington Post, September 18, 2012, http://www.huffingtonpost.com/d-robert-worley/conservatives-progressives_b_1879200.html. 52. Sustainable Silicon Valley (website), http://www.sustainablesv.org. 53.

The hardening of class lines, and the growing concentration of disposable income, sends signals through everything from the political economy to consumer culture. Many theorists, both on the right and the left, suggest the time has come to accept a more stratified, less permeable social order. Conservatives and libertarians, such as economist Tyler Cowen, argue that “average” intelligence and skills are no longer sufficient for social advance. Some 15 percent of the population may do very well, he argues, but the vast majority will have to accept limited prospects for themselves and their offspring. The prospect he lays out essentially recalls the hierarchies of the Middle Ages, or at best the Victorian era.

Blue-collar workers were described in major media as “bitter” and “psychologically scarred,” and even as an “endangered species.” Americans, noted one economist, suffered a “recession,” but those with blue collars endured a “depression.”26 This perspective extends across ideological lines. Libertarian economist Tyler Cowen suggests that an “average” skilled worker can expect to subsist on little but rice and beans in the future U.S. economy. If they choose to live on the East or West Coast, they may never be able to buy a house and will remain marginal renters for life.27 Left-leaning Slate in 2012 declared that manufacturing and construction jobs, sectors that powered the Yeomanry’s upward mobility in the past, “aren’t coming back.”28 Rather than a republic of Yeoman, we could end up instead, as one left-wing writer put it, living at the sufferance of our “robot overlords,” as well as those who program and manufacture them, likely using other robots to do so.29 Contempt for the middle orders is often barely concealed among those most comfortably ensconced in the emerging class order.


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Head, Hand, Heart: Why Intelligence Is Over-Rewarded, Manual Workers Matter, and Caregivers Deserve More Respect by David Goodhart

active measures, Airbnb, Albert Einstein, assortative mating, basic income, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Black Lives Matter, Boris Johnson, Branko Milanovic, Brexit referendum, British Empire, call centre, Cass Sunstein, central bank independence, centre right, computer age, corporate social responsibility, COVID-19, data science, David Attenborough, David Brooks, deglobalization, deindustrialization, delayed gratification, desegregation, deskilling, different worldview, Donald Trump, Elon Musk, emotional labour, Etonian, fail fast, Fall of the Berlin Wall, Flynn Effect, Frederick Winslow Taylor, future of work, gender pay gap, George Floyd, gig economy, glass ceiling, Glass-Steagall Act, Great Leap Forward, illegal immigration, income inequality, James Hargreaves, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, lockdown, longitudinal study, low skilled workers, Mark Zuckerberg, mass immigration, meritocracy, new economy, Nicholas Carr, oil shock, pattern recognition, Peter Thiel, pink-collar, post-industrial society, post-materialism, postindustrial economy, precariat, reshoring, Richard Florida, robotic process automation, scientific management, Scientific racism, Skype, social distancing, social intelligence, spinning jenny, Steven Pinker, superintelligent machines, TED Talk, The Bell Curve by Richard Herrnstein and Charles Murray, The Rise and Fall of American Growth, Thorstein Veblen, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, wages for housework, winner-take-all economy, women in the workforce, young professional

Total employment in the giant mobile phone, software and Internet companies which dominate global equity values is a minute drop in the global labour market. Facebook, with a market capitalization of $500 billion, employs just 25,000 people.45 Turner takes issue with Tyler Cowen’s book Average Is Over: Powering America Beyond the Age of the Great Stagnation in which he argues that rising income inequality is inevitable but will not lead to social revolt, because low earners will still enjoy adequate living standards as long as housing costs are kept low. Cowen imagines a future in which “say 10 to 15 per cent of the citizenry is extremely wealthy and has fantastically comfortable and stimulating lives” while “much of the rest of the country will have stagnant or maybe falling wages in dollar terms, but a lot more opportunities for cheap fun and cheap education” because of the free or near free services that the Internet makes available.46 The average citizen will not be able to afford to live well in the successful big cities… but will migrate to those parts of the United States, such as Texas, where plentiful land and easy zoning rules make housing affordable.

., Skills Shift: Automation and the Future of the Workforce, McKinsey Global Institute (MGI) Discussion Paper, May 2018. 40 Ibid. 41 Ibid. 42 “EY Transforms Its Recruitment Selection Process for Graduates, Undergraduates and School Leavers,” press release from Ernst and Young, August 3, 2015. 43 “EY: How to Excel in a Strengths-Based Graduate Interview,” Target Jobs, https://targetjobs.co.uk/employers/ey/ey-how-to-excel-in-a-strengths-based-graduate-interview-323859. 44 See UK High Pay Centre. 45 Adair Turner, Capitalism in the Age of Robots: Work, Income and Wealth in the 21st Century, Lecture given at the School of Advanced International Studies, John Hopkins University, April 10, 2018, 29. 46 Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013). Chapter Ten: Cognitive Diversity and the Future of Everything 1 David Brooks, Intelligence Squared lecture, October 20, 2015. 2 Iain McGilchrist, The Master and His Emissary: The Divided Brain and the Making of the Western World (New Haven, CT: Yale University Press, 2009). 3 Jonathan Rowson and Iain McGilchrist, Divided Brain, Divided World: Why the Best Part of Us Struggles to be Heard, RSA, February 2013, 4–5, https://www.thersa.org/globalassets/pdfs/blogs/rsa-divided-brain-divided-world.pdf. 4 Richard Layard, Can We Be Happier?

Cavendish, Camilla, Extra Time: 10 Lessons for an Ageing World (London: HarperCollins, 2019). Christodoulou, Daisy, Seven Myths About Education (London: Routledge, 2014). Collier, Paul, The Future of Capitalism: Facing the New Anxieties (London: Allen Lane, 2018). Cowen, Tyler, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013). Crawford, Matthew, The Case for Working with Your Hands: Or Why Office Work Is Bad for Us and Fixing Things Feels Good (London: Penguin, 2011). Deaton, Angus, “Why is Democratic Capitalism Failing So Many People?” The Tri-Nuffield Conference lecture (June 2019). Dench, Geoff (ed.), The Rise and Rise of Meritocracy (Oxford: Blackwell Publishing, 2006). ———.


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The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

Airbnb, Alan Greenspan, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, Blue Ocean Strategy, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, classic study, Clayton Christensen, Colonization of Mars, commoditize, commodity super cycle, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Dr. Strangelove, driverless car, Elon Musk, Erik Brynjolfsson, Fairchild Semiconductor, fear of failure, financial engineering, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, general purpose technology, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, Greenspan put, Herman Kahn, high net worth, hiring and firing, hockey-stick growth, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, low interest rates, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, middle-income trap, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, precautionary principle, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, subprime mortgage crisis, technological determinism, technological singularity, TED Talk, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, vertical integration, Yogi Berra

Much of the recent literature on corporate governance, business development, and strategy that we have read has felt like a copy of the original thought derived from the works of Peter Drucker, Michael Porter, Henry Minzberg, Philip Kotler, and Igor Ansoff. There are several thinkers today that can be put in the same category. If you get bored by all those who just repeat the conventional wisdom about the economy and how it evolves, pick any work from these economic thinkers and you will immediately be reinvigorated: David Autor, Tyler Cowen, Deirdre McCloskey, Malcolm Gladwell, David Graeber, Deepak Lal, Joel Mokyr, Matt Ridley, Richard Sennett, Robert Solow, Lawrence Summers, Peter Thiel, and Martin Wolf. Their works have contributed to our thinking for this book. Likewise, there are many successful investors and entrepreneurs whose thinking about innovation and business creation have inspired us.

Between 1995 and 2009, Europe’s labor productivity grew by just 1 percent annually.13 Figure 2.3 G7 labour productivity growth Like the United States, the other G7 countries seem to have exhausted the usual sources of productivity growth, especially the growth from the first (1760–1840) and second (1870–1970) industrial revolutions. That tallies with economist Tyler Cowen’s catchy summary of declining strength in the American economy, that it has “eaten all the low-hanging fruits of modern history and got sick.”14 Translated into economic prose, this means that new technologies do not create much economic growth, or at least are not making as large a contribution as in the past.

The actual rates of TFP growth in 2010–13 are smaller. 12.Gordon, “Is US Economic Growth Over?” offers a condensed version of Gordon’s productivity analysis. The full analysis of US living standards is in Gordon, The Rise and Fall of American Growth. 13.Gill and Raiser, Golden Growth, 12, fig. 5. 14.Cowen, The Great Stagnation. 15.OECD, “The Future of Productivity.” 16.Pellegrino and Zingales, “Diagnosing the Italian Disease.” 17.Altomonte et al., “Assessing Competitiveness.” 18.Navaretti et al., “The Global Operations of European Firms.” 19.Zingales, A Capitalism for the People, 5. 20.Leung and Rispoli, “The Distribution of Gross Domestic Product.” 21.Cardarelli and Lusinyan, “US Total Factor Productivity Slowdown.” 22.van der Marel, “The Importance of Complementary Policy.” 23.Cette, Fernald, and Mojon, “The Pre-Global-Financial-Crisis Slowdown.” 24.OECD, Skills Outlook 2013. 25.Base and Svioska, “Productivity Growth.” 26.McGowan and Andrews, “Labour Market Mismatch and Labour Productivity.” 27.Browne, “S&P 500 Firms Hoard Cash as CAPEX Declines.” 28.Krantz, “$194B!


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Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, antiwork, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, capitalist realism, carbon footprint, carbon tax, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deep learning, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Evgeny Morozov, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, general purpose technology, housing crisis, housing justice, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Kiva Systems, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, megaproject, minimum wage unemployment, Modern Monetary Theory, Mont Pelerin Society, Murray Bookchin, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, Overton Window, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-Fordism, post-work, postnationalism / post nation state, precariat, precautionary principle, price stability, profit motive, public intellectual, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, synthetic biology, tacit knowledge, technological determinism, the built environment, The Chicago School, The Future of Employment, the long tail, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, warehouse automation, We are all Keynesians now, We are the 99%, women in the workforce, working poor, working-age population

Faltering Innovation Confronts the Six Headwinds, Working Paper, National Bureau of Economic Research, August 2012, at nber.org; Lawrence Summers, ‘US Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound’, Business Economics 49: 2 (2014); Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011); Coen Teulings and Richard Baldwin, eds, Secular Stagnation: Facts, Causes and Cures (London: CEPR, 2014). 134.Cowen, Great Stagnation, pp. 47–8. 135.Thor Berger and Carl Benedikt Frey, Industrial Renewal in the 21st Century: Evidence from US Cities? (Oxford Martin School Working Paper, 2014). 136.Calculated based on data from: Bureau of Labor Statistics, ‘Table 1.

Brian Arthur, The Nature of Technology: What It Is and How It Evolves (London: Penguin, 2009). 10.Tony Smith, ‘Red Innovation’, Jacobin 17 (2015), p. 75. 11.Mariana Mazzucato, Erik Brynjolfsson and Michael Osborne, ‘Robot Panel’, presented at the FT Camp Alphaville, London, 15 July 2014, available at youtube.com. 12.Michael Hanlon, ‘The Golden Quarter’, Aeon Magazine, 3 December 2014, at aeon.co; Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011), p. 13. 13.This is one of the primary conclusions of Mariana Mazzucato’s important book The Entrepreneurial State: Debunking Public vs. Private Sector Myths (London: Anthem, 2013). 14.For a lengthy analysis of how Apple cynically deployed state-developed technologies to build the iPhone, see ibid., Chapter 5. 15.The fact that so many megaprojects continue to go ahead despite their history of cost overruns and lack of profitability is deemed a paradox by one study: Bent Flyvbjerg, Nils Bruzelius and Werner Rothengatter, Megaprojects and Risk: An Anatomy of Ambition (Cambridge: Cambridge University Press, 2003), pp. 3–5. 16.André Gorz, Paths to Paradise: On the Liberation from Work, transl.


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Rule of the Robots: How Artificial Intelligence Will Transform Everything by Martin Ford

AI winter, Airbnb, algorithmic bias, algorithmic trading, Alignment Problem, AlphaGo, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, Automated Insights, autonomous vehicles, backpropagation, basic income, Big Tech, big-box store, call centre, carbon footprint, Chris Urmson, Claude Shannon: information theory, clean water, cloud computing, commoditize, computer age, computer vision, Computing Machinery and Intelligence, coronavirus, correlation does not imply causation, COVID-19, crowdsourcing, data is the new oil, data science, deep learning, deepfake, DeepMind, Demis Hassabis, deskilling, disruptive innovation, Donald Trump, Elon Musk, factory automation, fake news, fulfillment center, full employment, future of work, general purpose technology, Geoffrey Hinton, George Floyd, gig economy, Gini coefficient, global pandemic, Googley, GPT-3, high-speed rail, hype cycle, ImageNet competition, income inequality, independent contractor, industrial robot, informal economy, information retrieval, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jeff Bezos, job automation, John Markoff, Kiva Systems, knowledge worker, labor-force participation, Law of Accelerating Returns, license plate recognition, low interest rates, low-wage service sector, Lyft, machine readable, machine translation, Mark Zuckerberg, Mitch Kapor, natural language processing, Nick Bostrom, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, Ocado, OpenAI, opioid epidemic / opioid crisis, passive income, pattern recognition, Peter Thiel, Phillips curve, post scarcity, public intellectual, Ray Kurzweil, recommendation engine, remote working, RFID, ride hailing / ride sharing, Robert Gordon, Rodney Brooks, Rubik’s Cube, Sam Altman, self-driving car, Silicon Valley, Silicon Valley startup, social distancing, SoftBank, South of Market, San Francisco, special economic zone, speech recognition, stealth mode startup, Stephen Hawking, superintelligent machines, TED Talk, The Future of Employment, The Rise and Fall of American Growth, the scientific method, Turing machine, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y Combinator

The fact that all the remarkable progress in computing and the internet does not, by itself, measure up to the expectation that the kind of broad-based progress seen in earlier decades would continue unabated is captured in Peter Thiel’s famous quip that “we were promised flying cars and instead we got 140 characters.” The argument that we have been living in an age of relative stagnation—even as information technology has continued to accelerate—has been articulated at length by the economists Tyler Cowen, who published his book The Great Stagnation in 2011,64 and Robert Gordon, who sketches out a very pessimistic future for the United States in his 2016 book The Rise and Fall of American Growth.65 A key argument in both books is that the low-hanging fruit of technological innovation had been largely harvested by roughly the 1970s.

Darrell Etherington, “Waymo has now driven 10 billion autonomous miles in simulation,” TechCrunch, July 10, 2019, techcrunch.com/2019/07/10/waymo-has-now-driven-10-billion-autonomous-miles-in-simulation/. 62. Waymo website, accessed May 20, 2020, waymo.com/. 63. Ray Kurzweil, “The Law of Accelerating Returns,” Kurzweil Library Blog, March 7, 2001, www.kurzweilai.net/the-law-of-accelerating-returns. 64. Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, Dutton, 2011. 65. Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War, Princeton University Press, 2016. 66. Nicholas Bloom, Charles I.


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In Our Own Image: Savior or Destroyer? The History and Future of Artificial Intelligence by George Zarkadakis

3D printing, Ada Lovelace, agricultural Revolution, Airbnb, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, animal electricity, anthropic principle, Asperger Syndrome, autonomous vehicles, barriers to entry, battle of ideas, Berlin Wall, bioinformatics, Bletchley Park, British Empire, business process, carbon-based life, cellular automata, Charles Babbage, Claude Shannon: information theory, combinatorial explosion, complexity theory, Computing Machinery and Intelligence, continuous integration, Conway's Game of Life, cosmological principle, dark matter, data science, deep learning, DeepMind, dematerialisation, double helix, Douglas Hofstadter, driverless car, Edward Snowden, epigenetics, Flash crash, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, index card, industrial robot, intentional community, Internet of things, invention of agriculture, invention of the steam engine, invisible hand, Isaac Newton, Jacquard loom, Jacques de Vaucanson, James Watt: steam engine, job automation, John von Neumann, Joseph-Marie Jacquard, Kickstarter, liberal capitalism, lifelogging, machine translation, millennium bug, mirror neurons, Moravec's paradox, natural language processing, Nick Bostrom, Norbert Wiener, off grid, On the Economy of Machinery and Manufactures, packet switching, pattern recognition, Paul Erdős, Plato's cave, post-industrial society, power law, precautionary principle, prediction markets, Ray Kurzweil, Recombinant DNA, Rodney Brooks, Second Machine Age, self-driving car, seminal paper, Silicon Valley, social intelligence, speech recognition, stem cell, Stephen Hawking, Steven Pinker, Strategic Defense Initiative, strong AI, Stuart Kauffman, synthetic biology, systems thinking, technological singularity, The Coming Technological Singularity, The Future of Employment, the scientific method, theory of mind, Turing complete, Turing machine, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, Vernor Vinge, Von Neumann architecture, Watson beat the top human players on Jeopardy!, Y2K

Unlike the previous machine age of the first Industrial Revolution, the next one will not threaten manual blue-collar jobs, but those of highly paid, expert, white-collar workers. Doctors, lawyers, engineers, accountants, managers, designers, architects, are forecasted to become victims of computer automation. According to American economist Tyler Cowen, in the near future only an elite 10–15 per cent of the working population will have the intellectual capacity to master tomorrow’s AI technology, and that will make them very rich indeed.16 The rest of us will have to make do with low incomes and rather unfulfilling lives, or – at best – work as service providers to the rich.

This latter category of intelligent machines may in fact prove to be the majority, if not the rule. They will exhibit reclusive types of behaviour similar to some of those we presently associate with autism.24 These behaviours could be the result of social selection. In his book Average Is Over, Tyler Cowen argues that success in the twenty-first century is already becoming synonymous with the ability to work with computers. My personal experience within the IT industry and Internet start-ups has been that the most brilliant programmers are often very shy of other people and social interaction. Science and technology have become so competitive nowadays that success in these professions most often comes to those exhibiting high IQs and maximum dedication to the lab or the computer terminal.

Indeed, there may come a time when intelligent computers will be seen as the solution to all of humanity’s problems, including how to better govern ourselves. The end of liberty Most of the ideas, or warnings, offered today about the future effects of Artificial Intelligence point to the labour market. Several economists, such as Tyler Cowen, have argued that AI will cost many white-collar jobs. However, their analysis assumes that all other things will remain more or less equal, for instance our political system of parliamentary representation, or our free economies of prices mostly regulated by markets. But this is not necessarily so.


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Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel

Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, break the buck, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, carried interest, central bank independence, cognitive dissonance, compound rate of return, computer age, computerized trading, corporate governance, correlation coefficient, Credit Default Swap, currency risk, Daniel Kahneman / Amos Tversky, Deng Xiaoping, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Financial Instability Hypothesis, fixed income, Flash crash, forward guidance, fundamental attribution error, Glass-Steagall Act, housing crisis, Hyman Minsky, implied volatility, income inequality, index arbitrage, index fund, indoor plumbing, inflation targeting, invention of the printing press, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, London Interbank Offered Rate, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Minsky moment, Money creation, money market fund, mortgage debt, Myron Scholes, new economy, Northern Rock, oil shock, passive investing, Paul Samuelson, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Gordon, Robert Shiller, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, stocks for the long run, survivorship bias, technology bubble, The Great Moderation, the payments system, The Wisdom of Crowds, transaction costs, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uptick rule, Vanguard fund

Except for the top 1 percent of the income distribution, Gordon predicts the vast majority of the U.S. population will experience growth of only 0.5 percent per year, less than one-quarter the long-term average. Others have echoed Professor Gordon’s pessimism and complain that discoveries today have not changed people’s lives as fundamentally as they did a century ago. Tyler Cowen, an economist at George Mason University and author of The Great Stagnation, has voiced his belief that the developed world is on a technological plateau and that all the low-hanging fruit has already been discovered.13 Indeed, look at Table 4-1. It shows the most important life-changing inventions of the past 100 years. Those that took place in the first half of that period appear far more important than those of the second half in transforming the life of the average individual.14 TABLE 4-1 Life-Changing Inventions of the Past 100 Years There are some in Silicon Valley who also believe that the United States is in a downtrend.

Robert Gordon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts Six Headwinds,” NBER #18315, August 2012. For a rejoinder, see the response by John Cochrane of the University of Chicago in his blog at http://johnhcochrane.blogspot.com/2012/08/gordon-on-growth.html. 13. Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, New York: Dutton Adult, 2011. 14. These are not the dates when these items were discovered but when they became operational or widespread in the general population in the United States and most other advanced economies. 15.

Treasury bonds in, 23 Great Financial Crisis. See Financial crisis of 2008 Great Moderation, 23–24, 37 Great Recession crisis of 2008 and, 23 deflation in, 41 forecasting, 238 GDP in, 40 government budget deficits in, 57 Great Depression vs., 39–46, 56 real estate market in, 45 shareholder value in, 153 Great Stagnation ,69 Greenspan, Alan in 2008 financial crisis, 30–31, 36 on “irrational exuberance,” 14, 162 on rising stock market, 164 Greenwood Associates, 366 Gross, Bill, 16, 69 Gross domestic product (GDP). See GDP (gross domestic product) Gruber, Martin, 364 Gulf of Tonkin, 253–254 Guttenberg, Johannes, 70 Hall, Robert E., 232–233 Hamilton, Alexander, 91 Hamilton, William, 312 Harding, President Warren, 247 Hassett, Kevin, 16 Healthcare sector, 121–125, 205 Hedge funds, 17 Hedging against risk, 220–221, 282 Henry, Patrick, 75 HFTs (High-frequency traders), 297 High-frequency traders (HFTs), 297 Himmelberg, Charles, 29 Hiroshima, 253 History of aggregation bias, 161 of bond yields, 164–166 of book values, 166–168 of CAPE ratios, 162–164 of corporate profits, 166 of earnings yield, 159–162 of earnings yields, 164–166 of equity, 3–19 expectations and, 374 of Federal Reserve, 164–166, 213–214 of fundamentally weighted indexation, 371–372 of GDP, 166 of inflation, 209–210 of operating earnings, 150–152 of price/earnings ratios, 159–160 of profit margins, 168–169 of S&P 500, 119–120, 145–146 of stock market valuation, 157–169 of stock volatility, 300–303 of stocks as investments, 7–10 of tax code, 141–142 Holding on to losing trades, 347–349 Holding periods, 101–102 Holiday effect.


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Stuffocation by James Wallman

3D printing, Abraham Maslow, Adam Curtis, Airbnb, Alvin Toffler, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, commoditize, creative destruction, crowdsourcing, David Brooks, Fall of the Berlin Wall, Future Shock, Great Leap Forward, happiness index / gross national happiness, hedonic treadmill, high net worth, income inequality, Intergovernmental Panel on Climate Change (IPCC), James Hargreaves, Joseph Schumpeter, Kitchen Debate, Martin Wolf, mass immigration, McMansion, means of production, Nate Silver, Occupy movement, Paul Samuelson, planned obsolescence, post-industrial society, post-materialism, public intellectual, retail therapy, Richard Florida, Richard Thaler, sharing economy, Silicon Valley, Simon Kuznets, Skype, spinning jenny, Streisand effect, The future is already here, The Signal and the Noise by Nate Silver, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Tyler Cowen, Tyler Cowen: Great Stagnation, World Values Survey, Zipcar

For the definitive text on consuming fewer materials, read Chris Goodall, “Peak Stuff”, Carbon Commentary, 2011. And read Chris Goodall, Sustainability (London: Hodder & Stoughton, 2012). Keep up with the latest news via Goodall’s excellent blog www.carboncommentary.com. This chapter was also informed by Tyler Cowen, The Great Stagnation (New York: Dutton, 2011), and Robert J Gordon, “Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds”, Centre for Economic Policy Research, September 2012. “In 2007, the average American bought almost twice as many items of clothing each year compared to 1991.

The tale of the average Palaeolithic woman comes from Geoffrey Miller, Spent: Sex, Evolution and the Secrets of Consumerism (New York: William Heinemann, 2009). For the rise of “clock-time” and what the Industrial Revolution did to our working week, read Benjamin Kline Hunnicutt’s works mentioned above. For more on threshold earners, see Tyler Cowen, “The Inequality That Matters”, The American Interest, January/February 2011. For an excellent deconstruction of that article, read political columnist Reihan Salam, “Threshold Earners and Gentleman Hackers”, National Review, 28 December 2010. “There is no sign of the ‘social snowball’ or ‘tipping point’ that would suggest that the medium chill is set to make the leap along the adoption curve.”


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Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

"Friedman doctrine" OR "shareholder theory", Airbnb, Akira Okazaki, antiwork, behavioural economics, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, classic study, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, critique of consumerism, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, do well by doing good, Donald Trump, double entry bookkeeping, electricity market, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, food desert, Ford Model T, fundamental attribution error, Garrett Hardin, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, Great Leap Forward, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, middle-income trap, military-industrial complex, Naomi Klein, new economy, Nick Bostrom, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, Pier Paolo Pasolini, pink-collar, plutocrats, positional goods, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, seminal paper, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, tacit knowledge, TED Talk, the Cathedral and the Bazaar, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, Tragedy of the Commons, transaction costs, transatlantic slave trade, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

My Department of Economics at UIC was amiable toward my mixing of the humanities with the mathematical social sciences. And the two other departments from which I also recently retired at UIC, of English and of Communication, let me gladly learn and gladly teach the human sciences. Joel Mokyr, as I said, and Robert Wuetherick gave me astoundingly detailed and useful comments on this volume. Tyler Cowen and Jack Goldstone made helpful suggestions at a late stage. Jonathan Feinstein and Gregory Clark participated in an illuminating electronic discussion of Bourgeois Dignity at Cato Unbound, a blog of the Cato Institute, as did Matt Ridley, who has been cordially encouraging in other ways as well.

Yet if on account of Adam Smith’s hoped-for “universal opulence which extends itself to the lowest ranks of the people” all have access to excellent education—which is a proper subject for social policy—and if the poor are so rich (because the Great Enrichment) that they too have fewer children, which is the case, then the tendency to rising variance will be attenuated.12 The economist Tyler Cowen reminds me, further, that “low” birth rates also include zero children, which would make lines die out—as indeed they often did, even in royal families, well nourished. Nonexistent children, such as those of Grand Duke of Florence Gian Gastone de’ Medici in 1737, can’t inherit either financial or human capital.

Modern competition is described as the fight of all against all, but at the same time it is the fight of all for all.13 8 Or from the Right and Middle And there are doubts from the right, too. Some students of the economy, such as Robert Gordon, Lawrence Summers, Erik Brynjolfsson, Andrew McFee, Edmund Phelps, Edward E. Gordon, Jeffrey Sachs, Laurence Kotlikoff, and Tyler Cowen, have argued recently that countries in the position of the United States, on the frontier of betterment, are facing a slowdown, with a skill shortage, and that technological unemployment will be the result.1 Maybe. The economists would acknowledge that in the past couple of centuries numerous other learned commentators have predicted similar slowdowns—such as the Keynesian economists in the late 1930s and the 1940s, confident in their theory of “stagnationism”—only to find their predictions once again falsified by the continuing Great Enrichment.2 The classical economists of the first three-quarters of the nineteenth century, Marx included, expected landlords, or in Marx’s case capitalists, to engorge the national product.


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Only Humans Need Apply: Winners and Losers in the Age of Smart Machines by Thomas H. Davenport, Julia Kirby

"World Economic Forum" Davos, AI winter, Amazon Robotics, Andy Kessler, Apollo Guidance Computer, artificial general intelligence, asset allocation, Automated Insights, autonomous vehicles, basic income, Baxter: Rethink Robotics, behavioural economics, business intelligence, business process, call centre, carbon-based life, Clayton Christensen, clockwork universe, commoditize, conceptual framework, content marketing, dark matter, data science, David Brooks, deep learning, deliberate practice, deskilling, digital map, disruptive innovation, Douglas Engelbart, driverless car, Edward Lloyd's coffeehouse, Elon Musk, Erik Brynjolfsson, estate planning, financial engineering, fixed income, flying shuttle, follow your passion, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, game design, general-purpose programming language, global pandemic, Google Glasses, Hans Lippershey, haute cuisine, income inequality, independent contractor, index fund, industrial robot, information retrieval, intermodal, Internet of things, inventory management, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joi Ito, Khan Academy, Kiva Systems, knowledge worker, labor-force participation, lifelogging, longitudinal study, loss aversion, machine translation, Mark Zuckerberg, Narrative Science, natural language processing, Nick Bostrom, Norbert Wiener, nuclear winter, off-the-grid, pattern recognition, performance metric, Peter Thiel, precariat, quantitative trading / quantitative finance, Ray Kurzweil, Richard Feynman, risk tolerance, Robert Shiller, robo advisor, robotic process automation, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, six sigma, Skype, social intelligence, speech recognition, spinning jenny, statistical model, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, superintelligent machines, supply-chain management, tacit knowledge, tech worker, TED Talk, the long tail, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, Works Progress Administration, Zipcar

John Maynard Keynes, Essays in Persuasion (New York: Norton, 1963), 358–73. 10. David H. Autor, “Polanyi’s Paradox and the Shape of Employment Growth,” prepared for the Federal Reserve Bank of Kansas City’s economic policy symposium on “Reevaluating Labor Market Dynamics,” September 3, 2014, http://economics.mit.edu/files/9835. 11. Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013). 12. CareerSearch, “Career Advice on How to Become an Insurance Underwriter,” http://www.careersearch.com/careers/real-estate-and-insurance/insurance-underwriter/. 13. Mike Batty and Alice Kroll, “Automated Life Underwriting: A Survey of Life Insurance Utilization of Automated Underwriting Systems,” prepared for the Society of Actuaries, 2009, file:///C:/Users/jkirby/Downloads/research-life-auto-underwriting.pdf. 14.

Learning from Freestyle Chess Several writers who touch on what we are calling mutual augmentation do so with reference to chess. It’s definitely a realm in which some humility on the part of humans is called for. In one-on-one matches, we know the best chess players are computers these days. Yet the trouncing isn’t so complete as you might have been led to believe. The economist Tyler Cowen (not surprisingly, a chess champion in his youth) and The Second Machine Age authors Erik Brynjolfsson and Andrew McAfee use the example of “freestyle chess,” in which human chess players are free to use as much help from computers as they wish.11 The two of us personally don’t play chess much (we like to get paid for thinking that hard), but we gather that under these rules, people often manage to beat the best programs.


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The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bear Stearns, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, financial engineering, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, independent contractor, job satisfaction, job-hopping, labor-force participation, low interest rates, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, Steve Bannon, stop buying avocado toast, TaskRabbit, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

Richard Florida, “Preface to the Original Edition,” in The Rise of the Creative Class, Revisited (New York: Basic Books, 2012). 32. Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: Norton, 2014). 33. Tyler Cowen, Average Is Over: Powering America Beyond the Age of the Great Stagnation (New York: Plume, 2013). 34. Paul Beaudry, David A. Green, and Benjamin M. Sand, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” National Bureau of Economic Research Working Paper No. 18901, March 2013. 35. Joseph G. Altonji, Lisa B. Kahn, and Jamin D.

More recently, Erik Brynjolfsson and Andrew McAfee’s influential 2014 book The Second Machine Age argued that the American economy inevitably will be characterized by a “bounty” of fabulous economic gains for workers and entrepreneurs with the right skills, but also a widening “spread” between those winners and the growing army of losers whose jobs will disappear under a tidal wave of technological change.32 That book won approving reviews or front-cover blurbs from public figures many Millennials have grown up respecting, such as New York Times columnist Thomas Friedman, Netscape founder Marc Andreessen, and someone whose job title is “chief maverick” at Wired magazine. Millennials to the Right end of the political spectrum who distrust those figures could instead turn to books like Average Is Over by free-market blogger and professor Tyler Cowen, who in 2013 presented a similar argument about the future of work, with a somewhat more dystopian twist: “I imagine a world where, say, 10 to 15 percent of the citizenry is extremely wealthy and has fantastically comfortable and stimulating lives, the equivalent of current-day millionaires, albeit with better health care.


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, barriers to entry, basic income, benefit corporation, business cycle, carbon tax, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, endogenous growth, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, Kenneth Arrow, labor-force participation, manufacturing employment, market bubble, minimum wage unemployment, new economy, off-the-grid, postindustrial economy, purchasing power parity, race to the bottom, rent-seeking, rising living standards, Robert Gordon, Robert Shiller, Ronald Reagan, school choice, shareholder value, sharing economy, Skype, Steve Jobs, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, universal basic income, War on Poverty, working poor, zero day

Moreover, even if productivity growth is sluggish in low-end services, it may, as Baumol himself points out, be rapid in other parts of the economy.44 Technological advance and improvements in work organization can yield leaps forward. The computer and communications revolutions already have generated considerable advance in manufacturing, finance, and an array of other services. They will soon do so in medicine, education, and elsewhere. In recent years, several analysts, including Robert Gordon and Tyler Cowen, have expressed pessimism about the likelihood of further productivity-enhancing innovations.45 The information technology revolution has largely run its course, they say, and in any case it never boosted productivity to the same degree as earlier innovations such as steam engines, railroads, electricity, the assembly line, indoor heating and air conditioning, running water, sewers, roads, and the internal combustion engine.

“Recent Trends in the Variability of Individual Earnings and Household Income.” Washington, DC. Congressional Budget Office (CBO). 2010. “Average Federal Tax Rates and Income, by Income Category, 1979–2007.” Washington, DC. CONSAD Research Corp. 2009. “An Analysis of Reasons for the Disparity in Wages Between Men and Women.” Pittsburgh. Cowen, Tyler. 2011. The Great Stagnation. New York: Penguin. Cox, W. Michael and Richard Alm. 1999. Myths of Rich and Poor. New York: Basic Books. Cramer, Reid and David Newville. 2009. “Children’s Savings Accounts.” Washington, DC: New America Foundation. Currie, Janet. 2006. The Invisible Safety Net. Princeton, NJ: Princeton University Press.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

Without America’s unwavering commitment to the Cold War, Joseph Stalin’s progeny might still be in power in Eastern Europe and perhaps much of Asia. Uncle Sam provided the arsenal of democracy that saved the twentieth century from ruin. This is a remarkable story. But it is also a story with a sting in the tail: today, productivity growth has all but stalled. Tyler Cowen has talked about a “great stagnation.” Lawrence Summers has revived Alvin Hansen’s phrase, “secular stagnation.” Robert Gordon’s study of the American economy since the Civil War is called The Rise and Fall of American Growth. America is being defeated by China and other rising powers in one industry after another.

Rogoff, This Time Is Different: Eight Centuries of Financial Folly (Princeton, NJ: Princeton University Press, 2011). Twelve. America’s Fading Dynamism 1. Deirdre Nansen McCloskey, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World (Chicago: University of Chicago Press, 2016), 500. 2. Tyler Cowen, The Complacent Class: The Self-Defeating Quest for the American Dream (New York: St. Martin’s Press, 2017). 25. Cowen’s book has been an invaluable source of data and references for this chapter. 3. Oscar Handlin and Lilian Handlin, Liberty in Expansion 1760–1850 (New York: Harper & Row, 1989), 13. 4.

The “easy money” critics are right to argue that a low federal funds rate (at only 1 percent between mid-2003 and mid-2004) lowered interest rates for ARMs. But originations of ARMs peaked two years before the peak in home prices. Market demand obviously did not need ARM financing to elevate home prices during the last two years of the expanding bubble. THE GREAT STAGNATION One reason the 2008 financial crisis did not develop into a Great Depression, as happened in the 1930s, was the superior quality of the official response. Policy makers were lucky to have the example of the 1930s to draw upon as well as a great deal of thought and experience since. They were also skilled enough to make the best of their advantages: the Federal Reserve and the Treasury worked together smoothly to respond to emerging problems quickly and concoct practical but innovative solutions.


pages: 121 words: 36,908

Four Futures: Life After Capitalism by Peter Frase

Aaron Swartz, Airbnb, Anthropocene, basic income, bitcoin, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, congestion pricing, cryptocurrency, deindustrialization, do what you love, Dogecoin, Donald Shoup, Edward Snowden, emotional labour, Erik Brynjolfsson, Ferguson, Missouri, fixed income, full employment, future of work, green new deal, Herbert Marcuse, high net worth, high-speed rail, income inequality, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), iterative process, Jevons paradox, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kim Stanley Robinson, litecoin, mass incarceration, means of production, military-industrial complex, Occupy movement, pattern recognition, peak oil, plutocrats, post-work, postindustrial economy, price mechanism, private military company, Ray Kurzweil, Robert Gordon, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart meter, TaskRabbit, technoutopianism, The future is already here, The Future of Employment, Thomas Malthus, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, Wall-E, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, Wolfgang Streeck

That’s a pace lower than at any time since the 1970s and half what was seen during the postwar boom years. This leads some to argue that the anecdotal accounts of great breakthroughs in robotics and computation are misleading, because they aren’t actually being translated into economic results. The economists Tyler Cowen and Robert Gordon are most closely associated with this view.15 Doug Henwood, of the Left Business Observer, makes a similar case from the Left.16 For more conservative economists like Cowen and Gordon, the problem is largely technical. The new technologies aren’t really all that great, at least from an economic perspective, compared to breakthroughs like electricity or the internal combustion engine.

,” Mother Jones, May/June 2013. 6Brynjolfsson and McAfee, The Second Machine Age, pp. 7–8. 7Frey and Osborne, “The Future of Employment.” 8Martin Ford, Rise of the Robots: Technology and the Threat of a Jobless Future, New York: Basic Books, 2015. 9Katie Drummond, “Clothes Will Sew Themselves in Darpa’s Sweat-Free Sweatshops,” Wired.com, June 6, 2012. 10Leanna Garfield, “These Warehouse Robots Can Boost Productivity by 800%,” TechInsider.io, February 26, 2016. 11Ilan Brat, “Robots Step into New Planting, Harvesting Roles,” Wall Street Journal, April 23, 2015. 12Shulamith Firestone, The Dialectic of Sex: The Case for Feminist Revolution, New York: Farrar, Straus and Giroux, 1970. 13Soraya Chemaly, “What Do Artificial Wombs Mean for Women?” Rewire.news, February 23, 2012. 14Drum, “Welcome Robot Overlords.” 15Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, New York: Penguin, 2011; Robert J. Gordon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” National Bureau of Economic Research Working Paper Series, Cambridge, MA: National Bureau of Economic Research, August 2012. 16Doug Henwood, “Workers: No Longer Needed?”


pages: 436 words: 98,538

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Albert Einstein, assortative mating, bank run, Berlin Wall, book value, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, Larry Ellison, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

Edward Lazear, “How Not to Prevent the Next Financial Meltdown,” Wall Street Journal, October 2, 2015, http://www.wsj.com/articles/how-not-to-pre vent-the-next-financial-meltdown-1443827426. 30. Conard, Unintended Consequences. 31. Robert Gordon, The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016). Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). 32. John Maynard Keynes, The Economic Consequences of Peace (New York: Harcourt, Brace and Howe, 1920). 33. Paul Krugman, “The Conscience of a Liberal: Stimulus Arithmetic (Wonkish but Important),” New York Times, January 6, 2009, http://krugman.blogs.ny times.com/2009/01/06/stimulus-arithmetic-wonkish-but-important. 34.

It’s an understatement to say that my business partner, Mitt Romney, winning the Republican nomination for president generated interest in my first book. That interest gave me a second career. The American Enterprise Institute’s stamp of approval and the endorsements of many top economists—Glenn Hubbard, Greg Mankiw, Tyler Cowen, Nouriel Roubini, Andrei Shliefer, and others—persuaded some skeptical readers and journalists to take a more thoughtful look at my work. My research assistant, Steve Bogden, ensured that I considered every relevant economic study. I doubt there is a person who has surveyed as much of the economic landscape as Steve.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Alan Greenspan, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Now he wants to build a Hyperloop – basically a solar-powered maglev train in a vacuum tube that would whisk passengers along at 760 miles (1,220 kilometres) an hour, three times faster than a high-speed train, and cost ten times less to build.705 Gloomsters argue that technological progress is grinding to a halt. The low-hanging fruit have all been picked, argues Tyler Cowen in The Great Stagnation.706 Nothing can ever compare to the great leap forward ushered in by electricity and other advances during the second wave of the Industrial Revolution between 1870 and 1900, such as cars, running water, petroleum and chemicals, claims Robert Gordon of Northwestern University.707 “Many of the original and spin-off inventions of IR #2 could happen only once – urbanisation, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.”

Interestingly, though, the highest enterprise rates are found among UK-born blacks (11.3 per cent). 699 http://startupmanifesto.eu/files/manifesto.pdf 700 http://www.economist.com/node/21559618 701 http://www.economist.com/node/17680631 702 http://www.eif.org/news_centre/publications/eif_-annual_report_2012.pdf 703 http://www.economist.com/news/finance-and-economics/21588384-stock-exchanges-are-courting-small-firms-never-capital-remedy 704 http://www.europecrowdfunding.org/2013/01/the-european-crowdfunding-network-on-euronews/ 705 http://www.bbc.co.uk/news/technology-23681266 706 Tyler Cowen, The Great Stagnation, Dutton: 2011 707 Robert J Gordon, “Is US Economic Growth Over? Faltering innovation confronts the six headwinds”, NBER working paper #18315, August 2012 708 http://www.economist.com/news/briefing/21569381-idea-innovation-and-new-technology-have-stopped-driving-growth-getting-increasing 709 http://www.voxeu.org/article/technological-progress-thing-past 710 Tools such as DNA sequencing machines and cell analysis through flow cytometry are revolutionising molecular microbiology.

Meanwhile, the British government is trying to inflate yet another housing bubble ahead of the election due in 2015. The UK’s recent burst of growth looks dangerously unsustainable: even though wages are still falling, debt-laden consumers are saving less and in some cases borrowing to spend more. It is not a pretty picture. The Great Stagnation Things aren’t just bad now. The future seems bleak too. Prominent economists talk of a “new normal” of permanently low growth, a “great stagnation” of innovation and even of the “end of growth” in the West altogether. (Others, on the contrary, think innovation is speeding ahead, but fear that humans will lose the “race against the machine” and that robots will steal people’s jobs.)


pages: 403 words: 87,035

The New Geography of Jobs by Enrico Moretti

assortative mating, Bill Gates: Altair 8800, business climate, call centre, classic study, clean tech, cloud computing, corporate raider, creative destruction, desegregation, Edward Glaeser, Fairchild Semiconductor, financial innovation, gentrification, global village, hiring and firing, income inequality, industrial cluster, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, knowledge economy, labor-force participation, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, medical residency, Menlo Park, new economy, peer-to-peer lending, Peter Thiel, Productivity paradox, Recombinant DNA, Richard Florida, Sand Hill Road, Shenzhen special economic zone , Silicon Valley, Skype, Solyndra, special economic zone, Startup school, Steve Jobs, Steve Wozniak, tech worker, thinkpad, Tyler Cowen, Tyler Cowen: Great Stagnation, Wall-E, Y Combinator, zero-sum game

A growing number of skeptics have questioned the importance of innovation for the American economy, arguing that the increase in jobs is not large enough to offset the losses in manufacturing. Intel’s former CEO Andy Grove has famously criticized America’s “misplaced faith in the power of startups to create U.S. jobs.” Tyler Cowen’s influential book The Great Stagnation argued that companies like Facebook or Twitter do not have many employees, because they rely on their users for most of the content and are simply too small to replace the titans of the past, like Ford and General Motors. But the picture that emerges from the data is more complex.

See United Kingdom Great Divergence, [>]–[>], [>]–[>] and cities as intellectual environments, [>] and forces of agglomeration, [>], [>]–[>] (see also Forces of agglomeration) as geography of inequality, [>]–[>] and charity, [>]–[>] and divorce rate, [>]–[>], [>] and labor-market size, [>]–[>] and life expectancy, [>]–[>] and magnification of differences, [>]–[>] and political participation, [>]–[>] in immigration quality, [>] reversal of in failing cities, [>] and “spatial mismatch,” [>] Great Migration (1920s), [>] Great Recession (2008–2010), [>], [>]–[>], [>], [>], [>], [>], [>], [>] Great Stagnation, The (Cowen), [>] Greece, PISA scores of, [>] Green R&D, [>], [>]. See also Clean-tech companies; Solar-panel industry Greenstone, Michael, [>] Greenville-Spartanburg, South Carolina, [>] Griffith, D. W., [>]–[>] Grove, Andy, [>] Hallock, Kevin, [>] Hanauer, Nick, [>] Hanson, Gordon, [>] Harlem, [>], [>] Health services, employment in, [>] Heckman, James, [>], [>] Henderson, Rebecca, [>] Hendrix, Jimi, [>], [>] Hewlett-Packard, [>], [>], [>] High-school dropout rate, [>]–[>] High-tech sector, [>] and academic stars, [>] and multiplier effect, [>], [>]–[>], [>] and outsourcing, [>] productivity in, [>] as self-magnifying, [>], [>], [>] in Silicon Valley, [>] See also Biotech industry; Innovation sector Hipsters, manufacturing, [>]–[>] Historical factors, in economic fate of cities, [>], [>]–[>] Hitchcock, Alfred, [>] Hollywood, [>]–[>] Homcy, Charles, [>] Honeywell, [>] Hong Kong, [>], [>] Honolulu, and cost of living, [>] Hospitals, [>] Houma-Thibadoux, Louisiana, [>] Houston, [>], [>], [>], [>], [>], [>], [>] Huawei (Chinese firm), [>] Hub SoMa, [>] HubSpot, [>] Human capital, [>], [>] and American century, [>]–[>] and economic-development policies, [>] externalities from, [>]–[>] (see also Knowledge spillovers) global competition for, [>] and good working conditions, [>]–[>] salaries, [>], [>] and immigration, [>]–[>] and innovation sector, [>] investment in, [>]–[>] under-investment in (U.S.), [>] and local prosperity, [>] in twenty-first century, [>] under-supply of (U.S.), [>] and U.S. math mediocrity, [>]–[>] U.S. policies to increase stock of through education, [>]–[>] (see also College education; Education) through immigration, [>], [>] Human Capital (Becker), [>]–[>] Human ecosystems, [>] Hungary, PISA scores of, [>] Hunt, Jennifer, [>], [>] IBM as advanced manufacturer, [>] in Austin, [>] and Cadence, [>], [>] and high-tech multiplier, [>] location of, [>] patents produced by, [>] Iceland, PISA scores of, [>] Ideas, diffusion of, [>]–[>].


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, Alan Greenspan, altcoin, Apple Newton, bank run, banking crisis, bitcoin, Bitcoin Ponzi scheme, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, Cody Wilson, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cross-border payments, cryptocurrency, David Graeber, decentralized internet, disinformation, disintermediation, Dogecoin, driverless car, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, Firefox, Flash crash, Ford Model T, Fractional reserve banking, Glass-Steagall Act, hacker house, Hacker News, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, off-the-grid, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, printed gun, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, Vitalik Buterin, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

., and Western Union Holding Inc. Andreessen Horowitz venture capitalist: Chris Dixon, phone interview with Michael J. Casey, June 25, 2014. Asked to describe the job market: Daniel Larimer, interviewed by Michael J. Casey, April 8, 2014. As Tyler Cowen noted in his book: Tyler Cowan, Average Is Over: Powering America Beyond the Age of the Great Stagnation (Dutton, 2013). Yale’s Robert Shiller: Joe Weisenthal, “Robert Shiller: Bitcoin Is an Amazing Example of a Bubble,” Business Insider, January 24, 2014, http://www.businessinsider.com/robert-shiller-bitcoin-2014-1#ixzz3Cmp0YFyx. New York University’s Nouriel Roubini: Erik Holm, “Nouriel Roubini: Bitcoin Is a ‘Ponzi Game,’” March 10, 2014, Wall Street Journal, MoneyBeat blog, http://blogs.wsj.com/moneybeat/2014/03/10/nouriel-roubini-bitcoin-is-a-ponzi-game/.

To subject their lives to such uncertainty is anathema to people who’ve expected a salaried job to last a lifetime and to provide security and permanence. People will have to figure out how to apply their particular skills to this Brave New World and, if they can’t apply them, how to rapidly acquire the right skills. As Tyler Cowen noted in his book Average Is Over, “The key questions will be: Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? Worst of all, are you competing against the computer?” Cowen’s thesis, which drew in part from the “work is over” theory, wasn’t a rosy one for Middle America.


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21 Lessons for the 21st Century by Yuval Noah Harari

"World Economic Forum" Davos, 1960s counterculture, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, algorithmic trading, augmented reality, autonomous vehicles, Ayatollah Khomeini, basic income, behavioural economics, Bernie Sanders, bitcoin, blockchain, Boris Johnson, Brexit referendum, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carbon-based life, Charlie Hebdo massacre, cognitive dissonance, computer age, computer vision, cryptocurrency, cuban missile crisis, decarbonisation, DeepMind, deglobalization, disinformation, Donald Trump, Dr. Strangelove, failed state, fake news, Filter Bubble, Francis Fukuyama: the end of history, Freestyle chess, gig economy, glass ceiling, Google Glasses, illegal immigration, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job automation, knowledge economy, liberation theology, Louis Pasteur, low skilled workers, Mahatma Gandhi, Mark Zuckerberg, mass immigration, means of production, Menlo Park, meta-analysis, Mohammed Bouazizi, mutually assured destruction, Naomi Klein, obamacare, pattern recognition, post-truth, post-work, purchasing power parity, race to the bottom, RAND corporation, restrictive zoning, Ronald Reagan, Rosa Parks, Scramble for Africa, self-driving car, Silicon Valley, Silicon Valley startup, TED Talk, transatlantic slave trade, trolley problem, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, Watson beat the top human players on Jeopardy!, zero-sum game

For a general survey of methods, see: Jose David Fernández and Francisco Vico, ‘AI Methods in Algorithmic Composition: A Comprehensive Survey’, Journal of Artificial Intelligence Research 48 (2013), 513–82. 12 Eric Topol, The Patient Will See You Now: The Future of Medicine is in Your Hands (New York: Basic Books, 2015); Robert Wachter, The Digital Doctor: Hope, Hype and Harm at the Dawn of Medicine’s Computer Age (New York: McGraw-Hill Education, 2015); Simon Parkin, ‘The Artificially Intelligent Doctor Will Hear You Now’, MIT Technology Review 9 March 2016; James Gallagher, ‘Artificial intelligence “as good as cancer doctors”’, BBC, 26 January 2017. 13 Kate Brannen, ‘Air Force’s lack of drone pilots reaching “crisis” levels’, Foreign Policy, 15 January 2015. 14 Tyler Cowen, Average is Over: Powering America Beyond the Age of the Great Stagnation (New York: Dutton, 2013); Brad Bush, ‘How combined human and computer intelligence will redefine jobs’, TechCrunch, 1 November 2016. 15 Ulrich Raulff, Farewell to the Horse: The Final Century of Our Relationship (London: Allen Lane, 2017); Gregory Clark, A Farewell to Alms: A Brief Economic History of the World (Princeton: Princeton University Press, 2008), 286; Margo DeMello, Animals and Society: An Introduction to Human-Animal Studies (New York: Columbia University Press, 2012), 197; Clay McShane and Joel Tarr, ‘The Decline of the Urban Horse in American Cities’, Journal of Transport History 24:2 (2003), 177–98. 16 Lawrence F.

., ‘Mastering Chess and Shogi by Self-Play with a General Reinforcement Learning Algorithm’, arXiv (2017), https://arxiv.org/pdf/1712.01815.pdf; see also Sarah Knapton, ‘Entire Human Chess Knowledge Learned and Surpassed by DeepMind’s AlphaZero in Four Hours’, Telegraph, 6 December 2017. 19 Cowen, Average is Over, op. cit.; Tyler Cowen, ‘What are humans still good for? The turning point in freestyle chess may be approaching’, Marginal Revolution, 5 November 2013. 20 Maddalaine Ansell, ‘Jobs for Life Are a Thing of the Past. Bring On Lifelong Learning’, Guardian, 31 May 2016. 21 Alex Williams, ‘Prozac Nation Is Now the United States of Xanax’, New York Times, 10 June 2017. 22 Simon Rippon, ‘Imposing Options on People in Poverty: The Harm of a Live Donor Organ Market’, Journal of Medical Ethics 40 (2014), 145–50; I.


pages: 596 words: 163,682

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disinformation, disruptive innovation, Donald Trump, driverless car, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, Glass-Steagall Act, global supply chain, Great Leap Forward, high net worth, household responsibility system, housing crisis, Ida Tarbell, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, Les Trente Glorieuses, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, Money creation, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, opioid epidemic / opioid crisis, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

CHAPTER 5: THE PRESSURE TO PROMISE 1. Tony Judt, Postwar: A History of Europe Science 1945 (New York: Penguin Books, 2005), 236. 2. Robert J. Gordon, The Rise and Decline of American Growth: The U.S. Standard of Living Since the Civil War (Princeton, NJ: Princeton University Press, 2016), 120. 3. See Tyler Cowen, The Great Stagnation: How America Ate All the Low-hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). 4. See Harold James, Europe Reborn, A History 1914–2000 (New York: Routledge, 2015), 231–33. 5. Markus K. Brunnermeier, Harold James, and Jean-Pierre Landau, The Euro and the Battle of Ideas (Princeton, NJ: Princeton University Press, 2018). 6.

With the frontier expanding more slowly, their growth also slowed. Most economists envisage growth for economies at the frontier as periods of path-breaking innovation (when the key innovations of the technological revolution emerge) followed by steady development and implementation until most of the gains from that innovation have been reaped. Tyler Cowen of George Mason University and Robert Gordon of Northwestern University argue that most of the possibilities of the Second Industrial Revolution had been exhausted by the end of the 1960s.22 For instance, the big innovation that made commercial air travel more attractive than travel by ocean liner was reasonably safe and fast jet planes with pressurized air cabins.

Judt, Postwar, 334. 21. Enoch Powell, “Rivers of Blood” (speech), Conservative Association meeting, Birmingham, UK, April 20, 1968, transcript, http://www.telegraph.co.uk/comment/3643823/Enoch-Powells-Rivers-of-Blood-speech.html. 22. Gordon, Rise and Decline of American Growth; Cowen, Great Stagnation. 23. Gordon, Rise and Decline of American Growth, 13. 24. Paul A. David, “The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox,” The American Economic Review 80, no. 2, (May, 1990): 355–61. 25. James, Europe Reborn, 390–91. 26. See Chad Syverson, “Challenges to Mismeasurement Explanations for the U.S.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, benefit corporation, Black Swan, blood diamond, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, company town, compensation consultant, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Glass-Steagall Act, Gordon Gekko, Greenspan put, hiring and firing, Ida Tarbell, income inequality, independent contractor, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, Money creation, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, Paul Volcker talking about ATMs, pension reform, performance metric, Pershing Square Capital Management, pirate software, plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, rolling blackouts, Ronald Reagan, Sand Hill Road, Savings and loan crisis, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, stock buybacks, subprime mortgage crisis, The Chicago School, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

Jensen, “Capitalism Isn’t Broken,” Wall Street Journal, March 29, 1996, A-10. 29 Norbert Häring, “Man As a Yardstick,” Handelsblatt, Aug. 19, 2010. 30 Charles Lane, “Obama’s Leaky Bucket,” Washington Post, Dec. 20, 2011. 31 Andrew G. Berg and Jonathan D. Ostry, “Equality and Efficiency: Is There a Trade-off Between the Two or Do They Go Hand in Hand,” Finance and Development, International Monetary Fund, Washington, September 2011. 32 David Brooks, “The Biggest Issue,” New York Times, July 29, 2008. See also Tyler Cowen, The Great Stagnation (New York: A Penguin Group e-Special from Dutton, 2011). 33 Claudia Goldin and Lawrence F. Katz, The Race Between Education and Technology (Cambridge, MA: Harvard University Press, 2008). 34 This includes: Alan Blinder, Edward N. Wolff, Deborah Reed, Daniel Cohen, Gordon Lafer, Frank Levy, and Peter Temin.

The effect of a minimum wage increase on the overall price level is likely to be small … small enough that they are far outweighed by fluctuations in prices for products such as gasoline and apparel.”69 CHAPTER 20 OFFSHORING AND THE APPLE PROBLEM “Manufacturing in America is in serious decline, with 40,000 factory closures and more than 4 million jobs lost over the last decade.”1 Manufacturing: A Better Future for America, Alliance for American Manufacturing, 2009 “We stood by as big American companies became global companies with no more loyalty or connection to the United States than a GPS device.”2 ROBERT REICH, Aftershock “The problem with that strategy is that for the past two decades we have allowed our industrial and technological base to deteriorate as talent and capital were grossly misallocated toward other sectors of the economy….”3 STEVEN PEARLSTEIN, Washington Post, September 2010 “American companies often save on costs by finding lower wages abroad, not by enhancing the abilities of American workers.”4 TYLER COWEN, George Mason University, August 2011 “These are the jobs that have created the Midwestern middle class for generations. Manufacturing jobs paid for college educations, including mine. They have been cut in half over the past two decades.”5 JEFFREY IMMELT, CEO, General Electric, December 2009 Lord Uxbridge was Wellington’s deputy commander as the combined forces arrayed against Napoleon fought desperately in Belgium against the fearsome French cuirassiers and cannoneers who had conquered Europe.

Wascher, Minimum Wages, 97. 69 Ibid., 248, 252. CHAPTER 20 1 “Manufacturing: A Better Future for America,” ed. Richard McCormack, Alliance for American Manufacturing, 2009. 2 Robert Reich, Aftershock, 56. 3 Steven Pearlstein, “The Bleak Truth About Unemployment,” Washington Post, Sept. 8, 2010. 4 Tyler Cowen, “The Sad Statistic That Trumps the Others,” New York Times, Aug. 21, 2011. 5 Jeffrey Immelt, “Renewing American Leadership,” General Electric, Dec. 9, 2009. 6 Max Hastings “The West’s Crisis of Honest Leaders,” Financial Times, Aug. 15, 2011. 7 “Public Says American Work Life Is Worsening, But Most Workers Remain Satisfied with Their Jobs,” Social Trends Project, Pew Research Center, September 2006. 8 “The Story so Far,” Economist, Jan. 19, 2013, 5. 9 Justin R.


pages: 550 words: 89,316

The Sum of Small Things: A Theory of the Aspirational Class by Elizabeth Currid-Halkett

assortative mating, back-to-the-land, barriers to entry, Bernie Sanders, biodiversity loss, BRICs, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, David Brooks, deindustrialization, Deng Xiaoping, discrete time, disruptive innovation, Downton Abbey, East Village, Edward Glaeser, en.wikipedia.org, Etonian, fixed-gear, food desert, Ford Model T, gentrification, Geoffrey West, Santa Fe Institute, income inequality, iterative process, knowledge economy, longitudinal study, Mason jar, means of production, NetJets, new economy, New Urbanism, plutocrats, post scarcity, post-industrial society, profit maximization, public intellectual, Richard Florida, selection bias, Sheryl Sandberg, Silicon Valley, systems thinking, tacit knowledge, The Design of Experiments, the High Line, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the long tail, the market place, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, Tony Hsieh, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, Veblen good, women in the workforce

The roots of this phenomenon can be traced to the dating market of urban centers (particularly as people marry like, rather than marrying “up” or “down,” a twenty-first-century trend economists term “assortative mating”23). Smart people want to be around other smart people not just for work, but also for friendships and romantic relationships, and over time that results in highly stratified hyper-educated affluent places where, as the economist Tyler Cowen remarked, “Money and talent become clustered in high-powered, two-earner families determined to do everything possible to advance the interests of their children.”24 The social and economic interplay of urban inhabitants enables and promotes cities as the ultimate sites of consumption. A sizable number of the people in today’s metropolis are more highly skilled and as a result more highly paid than most and they demand luxurious consumption options—whether art galleries, prestigious preschools, or cocktail bars.

Normal middle-class Americans have had their homes repossessed, their credit ratings slashed, and their ability to establish their identity through consumption almost entirely eradicated. We need to find a new way to live. These observations on America coincide with what is known by economists and policymakers as the Great Stagnation—the alarming finding that the median wage hasn’t grown since 1973, rising only by 10% in real terms over the past 37 years. In short, 90% of America hasn’t gained a penny over the past four decades. The numbers show it: Median income for the middle class dropped from $73,000 in 2000 to $69,500 in 2011, while median net worth of this household plummeted to $93,150, from almost $130,000 in 2000 and a high of $152,000 in 2008 (all figures are in 2011 dollars).17 Goods may be cheaper, but that doesn’t mean much if you don’t have a paycheck to cover them (and must rely on credit cards instead).

., 60 Gilt, 12 Glaeser, Ed, 152–53, 172 Glassell Park, 110–16 global cities, 17, 150, 181 globalization: cities affected by, 150–51; and clothing industry, 132–34; and conspicuous production, 134–37; deindustrialization as consequence of, 16; economic benefits of, 146; middle class arising from, 191–98, 232n33; middle class harmed by, 187; and service economy, 17 Golden, Janet, 91 Golden Gate Mothers Group, 88 Gonzalez, Marta, 159–60 Gothot Ideal, 114 Great Exhibition (London, 1851), 9 Great Recession, 14, 52, 69, 75, 168, 187, 189 Great Stagnation, 189 Greenfield, Jerry, 143–44 Greenfield, Karl Taro, 105 Greif, Mark, 104, 117, 125 Grindr, 173–74 habitus, 48, 95, 178, 224n20 Halfpapp, Elisabeth, 101 Handbury, Jessie, 156, 157 happiness, 182–83, 195 happiness-income paradox, 183 Harvey, Corky, 82, 83 health care, 72, 73f Heffetz, Ori, 35–36, 38, 41 hidden amenities, 157, 164, 172–75 hipsters, 57–58 Hispanics, consumption patterns of, 37 Holt, Douglas, 52, 53–54 home births, 93–94, 226n42 homeownership, 165–66 household furnishings, 169–70 housekeepers, 168 housework, 66 housing costs, 164–68, 187 Houston, 162, 165, 170, 172 Hsieh, Tony, 152 Hurst, Erik, 35 Hutchinson, T.


pages: 327 words: 88,121

The Vanishing Neighbor: The Transformation of American Community by Marc J. Dunkelman

Abraham Maslow, adjacent possible, Affordable Care Act / Obamacare, Albert Einstein, assortative mating, Berlin Wall, big-box store, blue-collar work, Bretton Woods, Broken windows theory, business cycle, call centre, clean water, company town, cuban missile crisis, dark matter, David Brooks, delayed gratification, different worldview, double helix, Downton Abbey, Dunbar number, Edward Jenner, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, gentrification, George Santayana, Gini coefficient, glass ceiling, global supply chain, global village, helicopter parent, if you build it, they will come, impulse control, income inequality, invention of movable type, Jane Jacobs, Khyber Pass, Lewis Mumford, Louis Pasteur, Marshall McLuhan, McMansion, Nate Silver, obamacare, Occupy movement, off-the-grid, Peter Thiel, post-industrial society, Richard Florida, rolodex, Saturday Night Live, Silicon Valley, Skype, social intelligence, Stanford marshmallow experiment, Steve Jobs, TED Talk, telemarketer, The Chicago School, The Death and Life of Great American Cities, the medium is the message, the strength of weak ties, Tyler Cowen, Tyler Cowen: Great Stagnation, urban decay, urban planning, Walter Mischel, War on Poverty, women in the workforce, World Values Survey, zero-sum game

By several estimates, American innovation has slowed of late, as massive investments in fields like green energy and pharmaceuticals have failed to produce the return that investments in information technology generated just a few decades ago.29 (Some of that analysis, we should note, predates the new development of “fracking.”) George Mason University economist Tyler Cowen recently argued that innovation in the United States has actually stagnated, noting that we’ve picked the low-hanging fruit of technologies produced by previous generations and are burning through the competitive advantages those breakthroughs bestowed on today’s economy.30 Peter Thiel, a cofounder of PayPal and a powerful figure in the world of venture capital, has sounded a similar alarm, arguing that whatever advances Silicon Valley has spurred of late have been cancelled out by America’s failure to make progress on other technological and scientific fronts.31 No fair assessment can blame the stagnation of American innovation entirely on the structure of American community.

.: Harvard University Press, 2009), 15–16. 26Safford, Why the Garden Club Couldn’t Save Youngstown, 22, 31–32, 63–68. 27Safford, Why the Garden Club Couldn’t Save Youngstown, 83, 92–95. 28Locke, Remaking the Italian Economy, 134. 29Michael Mandel, “The Failed Promise of Innovation in the U.S.,” Bloomberg Businessweek, June 3, 2009. 30Tyler Cowen, The Great Stagnation (New York: Dutton, 2011). 31http://news.cnet.com/8301-31921_3-20096067-281/peter-thiel-thinks-tech-innovation-has-stalled/. 32Edward Glaeser, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier (New York: Penguin Press, 2011). 33Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life (New York: Basic Books, 2002). 34Elsa Brenner, “In Westchester County, the Platinum Mile Is Reinvented, Again,” New York Times, January 3, 2012. 35Charles V.


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The Upswing: How America Came Together a Century Ago and How We Can Do It Again by Robert D. Putnam

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Alvin Toffler, Arthur Marwick, classic study, clean water, collective bargaining, correlation does not imply causation, David Brooks, demographic transition, desegregation, different worldview, Donald Trump, Edward Glaeser, en.wikipedia.org, equal pay for equal work, financial deregulation, gender pay gap, ghettoisation, Gordon Gekko, greed is good, Gunnar Myrdal, guns versus butter model, Herbert Marcuse, Ida Tarbell, immigration reform, income inequality, Kenneth Arrow, knowledge economy, labor-force participation, laissez-faire capitalism, low skilled workers, Mark Zuckerberg, market fundamentalism, mass immigration, mega-rich, meta-analysis, minimum wage unemployment, MITM: man-in-the-middle, obamacare, occupational segregation, open economy, opioid epidemic / opioid crisis, Overton Window, plutocrats, post-industrial society, Powell Memorandum, prosperity theology / prosperity gospel / gospel of success, public intellectual, road to serfdom, Robert Shiller, Ronald Reagan, Scientific racism, Second Machine Age, shareholder value, Silicon Valley, Steve Jobs, Steven Pinker, strikebreaker, The Rise and Fall of American Growth, The Spirit Level, trade liberalization, Travis Kalanick, Triangle Shirtwaist Factory, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, W. E. B. Du Bois, War on Poverty, white flight, women in the workforce, working poor, Works Progress Administration, yellow journalism

Uslaner and Mitchell Brown, “Inequality, Trust, and Civic Engagement,” American Politics Research 33, no. 6 (2005): 868–894, doi:10.1177/1532673X04271903; and Keith Payne, The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die (New York: Viking, 2017). 23 David Morris Potter, People of Plenty: Economic Abundance and the American Character (Chicago: University of Chicago Press, 1954). 24 See Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011); and John L. Campbell, American Discontent: The Rise of Donald Trump and Decline of the Golden Age (Oxford: Oxford University Press, 2018). For a sophisticated and thoroughly documented argument about the effects of technological innovation and productivity (1920–1970), see Robert J.

Some argue that affluence encourages a focus on “we,” whereas hard times produce a focus on “I.” In the midst of the postwar boom, a widely read book, People of Plenty by historian David Potter (1954), emphasized that material abundance was fundamental to the consumerist consensus in American society.23 More recently, Tyler Cowen has argued that economic dynamism before 1973 allowed for policies that promoted equality, and conversely, the post-1970s stagnation explains the trend toward inequality and political dysfunction. That stagnation has in turn been explained by the end of a long period (1880–1940) of high innovation and productivity growth.24 When people are affluent and satisfied, so the argument goes, they can afford to be more generous toward others.


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Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin

"Friedman doctrine" OR "shareholder theory", "there is no alternative" (TINA), 1960s counterculture, affirmative action, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Amazon Mechanical Turk, American Legislative Exchange Council, AOL-Time Warner, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, Big Tech, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, Cody Wilson, commoditize, content marketing, creative destruction, crony capitalism, crowdsourcing, data is the new oil, data science, David Brooks, David Graeber, decentralized internet, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, Fairchild Semiconductor, fake news, future of journalism, future of work, George Akerlof, George Gilder, Golden age of television, Google bus, Hacker Ethic, Herbert Marcuse, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jacob Silverman, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John Perry Barlow, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, Larry Ellison, life extension, Marc Andreessen, Mark Zuckerberg, Max Levchin, Menlo Park, Metcalfe’s law, military-industrial complex, Mother of all demos, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, PalmPilot, Paul Graham, paypal mafia, Peter Thiel, plutocrats, pre–internet, Ray Kurzweil, reality distortion field, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Ross Ulbricht, Sam Altman, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skinner box, smart grid, Snapchat, Social Justice Warrior, software is eating the world, Steve Bannon, Steve Jobs, Stewart Brand, tech billionaire, techno-determinism, technoutopianism, TED Talk, The Chicago School, the long tail, The Market for Lemons, The Rise and Fall of American Growth, Tim Cook: Apple, trade route, Tragedy of the Commons, transfer pricing, Travis Kalanick, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, vertical integration, We are as Gods, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, you are the product

Even Silicon Valley heroes such as Elon Musk and his Tesla car are merely producing what Christensen calls “performance-improving innovations [that] replace old products with new and better models. They generally create few jobs because they’re substitutive: When customers buy the new product, they usually don’t buy the old product.” While economists of such different political affiliations as Paul Krugman, Larry Summers, and Tyler Cowen all have written extensively about the cause of the joblessness and “secular stagnation” in the US economy that has endured since 2000, they never examine the role that monopoly capitalism might play in this crisis. If the rise of monopoly can be seen as a cause of economic stagnation, why has it endured?

Imagine Picasso having to persuade an executive at Pernod to support his earliest cubist paintings. Or a Coca-Cola marketer in Chicago listening to Louis Armstrong’s breakthrough “West End Blues” and wondering, “Will it help sell soda?” I think the growth of advertising in our time is symbolic of a deep crisis in capitalism. I have written earlier in this book of the great stagnation—the period since the early 1970s when median wages refused to rise even though productivity was rising dramatically. In the face of such wage stagnation, firms have to spend more money on marketing to get consumers to keep buying. As you wander down the supermarket aisle perusing endless varieties of detergent, all basically containing the same ingredients, the only distinguishing factor is the marketing pitch.


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Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity by Daron Acemoglu, Simon Johnson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 4chan, agricultural Revolution, AI winter, Airbnb, airline deregulation, algorithmic bias, algorithmic management, Alignment Problem, AlphaGo, An Inconvenient Truth, artificial general intelligence, augmented reality, basic income, Bellingcat, Bernie Sanders, Big Tech, Bletchley Park, blue-collar work, British Empire, carbon footprint, carbon tax, carried interest, centre right, Charles Babbage, ChatGPT, Clayton Christensen, clean water, cloud computing, collapse of Lehman Brothers, collective bargaining, computer age, Computer Lib, Computing Machinery and Intelligence, conceptual framework, contact tracing, Corn Laws, Cornelius Vanderbilt, coronavirus, corporate social responsibility, correlation does not imply causation, cotton gin, COVID-19, creative destruction, declining real wages, deep learning, DeepMind, deindustrialization, Demis Hassabis, Deng Xiaoping, deskilling, discovery of the americas, disinformation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Snowden, Elon Musk, en.wikipedia.org, energy transition, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, factory automation, facts on the ground, fake news, Filter Bubble, financial innovation, Ford Model T, Ford paid five dollars a day, fulfillment center, full employment, future of work, gender pay gap, general purpose technology, Geoffrey Hinton, global supply chain, Gordon Gekko, GPT-3, Grace Hopper, Hacker Ethic, Ida Tarbell, illegal immigration, income inequality, indoor plumbing, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Watt: steam engine, Jaron Lanier, Jeff Bezos, job automation, Johannes Kepler, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph-Marie Jacquard, Kenneth Arrow, Kevin Roose, Kickstarter, knowledge economy, labor-force participation, land reform, land tenure, Les Trente Glorieuses, low skilled workers, low-wage service sector, M-Pesa, manufacturing employment, Marc Andreessen, Mark Zuckerberg, megacity, mobile money, Mother of all demos, move fast and break things, natural language processing, Neolithic agricultural revolution, Norbert Wiener, NSO Group, offshore financial centre, OpenAI, PageRank, Panopticon Jeremy Bentham, paperclip maximiser, pattern recognition, Paul Graham, Peter Thiel, Productivity paradox, profit maximization, profit motive, QAnon, Ralph Nader, Ray Kurzweil, recommendation engine, ride hailing / ride sharing, Robert Bork, Robert Gordon, Robert Solow, robotic process automation, Ronald Reagan, scientific management, Second Machine Age, self-driving car, seminal paper, shareholder value, Sheryl Sandberg, Shoshana Zuboff, Silicon Valley, social intelligence, Social Responsibility of Business Is to Increase Its Profits, social web, South Sea Bubble, speech recognition, spice trade, statistical model, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, subscription business, Suez canal 1869, Suez crisis 1956, supply-chain management, surveillance capitalism, tacit knowledge, tech billionaire, technoutopianism, Ted Nelson, TED Talk, The Future of Employment, The Rise and Fall of American Growth, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, theory of mind, Thomas Malthus, too big to fail, total factor productivity, trade route, transatlantic slave trade, trickle-down economics, Turing machine, Turing test, Twitter Arab Spring, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, universal basic income, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, W. E. B. Du Bois, War on Poverty, WikiLeaks, wikimedia commons, working poor, working-age population

Moreover, measurement problems cannot account for the current productivity slowdown; industries with greater investment in digital technologies show neither differential productivity deceleration nor any evidence of faster quality improvements than those that are less digital. A few economists, such as Tyler Cowen and Robert Gordon, believe that this disappointing productivity performance reflects dwindling opportunities for revolutionary breakthroughs. In contrast to techno-optimists, they claim, the great innovations are behind us, and improvements from now on will be incremental, leading only to slow productivity growth.

See also Pethokoukis (2017b). Evidence that manufacturing industries investing more in digital technologies are not showing faster productivity growth or any evidence of more mismeasurement is from Acemoglu, Autor, Dorn, Hanson, and Price (2014). Robert Gordon’s views are in Gordon (2016). For Tyler Cowen’s views, see Cowen (2010). The discussion of Japanese robot adoption and later attempts to introduce flexibility is provided in Krzywdzinski (2021). On the Fremont plant before and after Toyota’s investments and comparisons to other US car manufacturers, see Shimada and MacDuffie (1986) and MacDuffie and Krafcik (1992).

Presidential Address Before the Fifteenth Annual Meeting of the Taylor Society, December 6, 1928. Bulletin of the Taylor Society 14, no. 1 (February): 2‒10. Corak, Miles. 2013. “Income Inequality, Equality of Opportunity, and Intergenerational Mobility.” Journal of Economic Perspectives 27, no. 3 (Summer): 79‒102. Cowen, Tyler. 2010. The Great Stagnation. New York: Dutton. CQ Researcher. 1945. “Automobiles in the Postwar Economy.” https://library.cqpress.com/cqresearcher/document.php?id=cqresrre1945 082100. Crafts, Nicholas F. R. 1977. “Industrial Revolution in England and France: Some Thoughts on the Question, Why Was England First?” Economic History Review 30, no. 3: 429‒441.


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Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia by Anthony M. Townsend

1960s counterculture, 4chan, A Pattern Language, Adam Curtis, air gap, Airbnb, Amazon Web Services, anti-communist, Apple II, Bay Area Rapid Transit, Big Tech, bike sharing, Boeing 747, Burning Man, business process, call centre, carbon footprint, charter city, chief data officer, clean tech, clean water, cloud computing, company town, computer age, congestion charging, congestion pricing, connected car, crack epidemic, crowdsourcing, DARPA: Urban Challenge, data acquisition, Deng Xiaoping, digital divide, digital map, Donald Davies, East Village, Edward Glaeser, Evgeny Morozov, food desert, game design, garden city movement, General Motors Futurama, gentrification, Geoffrey West, Santa Fe Institute, George Gilder, ghettoisation, global supply chain, Grace Hopper, Haight Ashbury, Hedy Lamarr / George Antheil, Herman Kahn, hive mind, Howard Rheingold, interchangeable parts, Internet Archive, Internet of things, Jacquard loom, Jane Jacobs, Jevons paradox, jitney, John Snow's cholera map, Joi Ito, Khan Academy, Kibera, Kickstarter, knowledge worker, Lewis Mumford, load shedding, lolcat, M-Pesa, machine readable, Mark Zuckerberg, megacity, megaproject, messenger bag, mobile money, mutually assured destruction, new economy, New Urbanism, Norbert Wiener, Occupy movement, off grid, One Laptop per Child (OLPC), openstreetmap, packet switching, PalmPilot, Panopticon Jeremy Bentham, Parag Khanna, patent troll, Pearl River Delta, place-making, planetary scale, popular electronics, power law, RFC: Request For Comment, RFID, ride hailing / ride sharing, Robert Gordon, scientific management, self-driving car, sharing economy, Shenzhen special economic zone , Silicon Valley, SimCity, Skype, smart cities, smart grid, smart meter, social graph, social software, social web, SpaceShipOne, special economic zone, Steve Jobs, Steve Wozniak, Stuxnet, supply-chain management, technoutopianism, Ted Kaczynski, telepresence, The Death and Life of Great American Cities, too big to fail, trade route, Twitter Arab Spring, Tyler Cowen, Tyler Cowen: Great Stagnation, undersea cable, Upton Sinclair, uranium enrichment, urban decay, urban planning, urban renewal, Vannevar Bush, working poor, working-age population, X Prize, Y2K, zero day, Zipcar

The origins and the economic importance of the Internet are part of a much larger debate about the nature of technological innovation and economic growth. The industrial revolution reshaped the material basis of society, introducing technologies and products we still use today. But there are widely differing views on just how that happened. Pessimists like economist Tyler Cowen believe that a handful of breakthrough innovations drove America’s economic engine over the last one hundred years. He sees the decline of productivity growth, the pace of improvement in output per unit of input (labor, capital, machinery), in the US economy as a sign that we have finally exhausted the stockpile of the breakthroughs of the late nineteenth and early twentieth century.

Life is better and we have more stuff, but the pace of change has slowed down compared to what people saw two or three generations ago.” Not only does Cowen argue that big breakthroughs are the true source of technological progress, he doesn’t see anything new in the pipeline of the same magnitude. The result, he concludes, is an inevitable “great stagnation.”36 Where Cowen sees scarcity, Google’s chief economist Hal Varian sees abundance. For Varian, the big breakthroughs of the industrial revolution happened only after, and only because of, a new substrate of interoperable technological components that were invented first. In a 2008 interview, he described this process of “combinatorial innovation”: “if you look historically, you’ll find periods in history where there would be the availability of . . . different component parts that innovators could combine or recombine to create new inventions.

., Patrick Geddes in India, 11. 32Quoted in Welter, Biopolis, 18. 33Nicolai Ouroussoff, “Outgrowing Jane Jacobs and Her New York, New York Times, April 30, 2006, http://www,nytimes.com/2006/04/30/weekinreview/30jacobs.html. 34Campanella, “Jane Jacobs and the Death and Life of American Planning.” 35Fareed Zakaria, “Special Address: At the Intersection of Globalization and Urbanization,” SmarterCities Forum, Rio de Janeiro, Brazil, November 9, 2011. 36Tyler Cowen, The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011), Kindle edition, location 93. 37“Hal Varian on How the Web Challenges Managers,” video interview with James Manyika, McKinsey & Co., last modified January 2009, http://www.mckinseyquarterly.com/Hal_Varian_on_how_the_Web_challenges_ managers_2286. 38Joi Ito, “The Internet, innovation and learning,” last modified December 5, 2011, http://joi.ito.com/weblog/2011/12/05/the-internet-in.html. 39Ito, “The Internet, innovation and learning.” 40Michael Hiltzik, “So, who really did invent the Internet?”


pages: 486 words: 150,849

Evil Geniuses: The Unmaking of America: A Recent History by Kurt Andersen

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, airport security, Alan Greenspan, always be closing, American ideology, American Legislative Exchange Council, An Inconvenient Truth, anti-communist, Apple's 1984 Super Bowl advert, artificial general intelligence, autonomous vehicles, basic income, Bear Stearns, Bernie Sanders, blue-collar work, Bonfire of the Vanities, bonus culture, Burning Man, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Cass Sunstein, centre right, computer age, contact tracing, coronavirus, corporate governance, corporate raider, cotton gin, COVID-19, creative destruction, Credit Default Swap, cryptocurrency, deep learning, DeepMind, deindustrialization, Donald Trump, Dr. Strangelove, Elon Musk, ending welfare as we know it, Erik Brynjolfsson, feminist movement, financial deregulation, financial innovation, Francis Fukuyama: the end of history, future of work, Future Shock, game design, General Motors Futurama, George Floyd, George Gilder, Gordon Gekko, greed is good, Herbert Marcuse, Herman Kahn, High speed trading, hive mind, income inequality, industrial robot, interchangeable parts, invisible hand, Isaac Newton, It's morning again in America, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jeff Bezos, jitney, Joan Didion, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kevin Roose, knowledge worker, lockdown, low skilled workers, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, Menlo Park, Naomi Klein, new economy, Norbert Wiener, Norman Mailer, obamacare, Overton Window, Peter Thiel, Picturephone, plutocrats, post-industrial society, Powell Memorandum, pre–internet, public intellectual, Ralph Nader, Right to Buy, road to serfdom, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Saturday Night Live, Seaside, Florida, Second Machine Age, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Stewart Brand, stock buybacks, strikebreaker, tech billionaire, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, union organizing, universal basic income, Unsafe at Any Speed, urban planning, urban renewal, very high income, wage slave, Wall-E, War on Poverty, We are all Keynesians now, Whole Earth Catalog, winner-take-all economy, women in the workforce, working poor, young professional, éminence grise

The outbreak of mass nostalgia in the 1970s that then developed into a general cultural listlessness, in other words, is comorbid with what happened to our political economy. One illness didn’t exactly cause the other illness, but each made the other more serious, and harder to cure. The economics professor (and author and blogger and podcaster) Tyler Cowen has written intelligently about our national stagnation and “the growing number of people in our society who accept, welcome, or even enforce a resistance to things new, different, or challenging.” He also thinks we reached a tipping point on this score in the 1990s. “Americans are in fact working much harder than before to postpone change,” he wrote in his 2017 book The Complacent Class, or to avoid it altogether, and this is true whether we’re talking about corporate competition, changing residences or jobs, or building things.

That’s probably because Cowen is a product and promoter of that turn—incubated as a student at George Mason University in the early 1980s just as the libertarian right turned it into a headquarters. He is now a George Mason professor and director of its Mercatus Center, the think tank created by Charles Koch, with whom he has a mutual admiration society.*1 Cowen correctly points to many symptoms of the disease he calls the Great Stagnation, but he’s evidently too ideologically blindered to specify all its causes and comorbidities or to recommend emergency treatment. His free-market faith obliges him to conclude that the only real problem is the slower rate of economic growth for most of the last half-century. Furthermore, he thinks the long American economic heyday from the late 1800s through the 1970s came to its natural conclusion because we’d picked and eaten all “the low-hanging fruit” that produced easy growth—cheap land, fossil fuels, new technologies, mass education.

Will we finally summon the will to stop this willful self-destruction? With our government in the corrupting grip of big business and the rich as it was more than a century ago, America—the land of the new, past master at meeting unprecedented challenges—would prefer not to. *1 Cowen dedicated his short 2011 book The Great Stagnation to Peter Thiel, who he calls “one of the greatest and most important public intellectuals of our entire time. Throughout the course of history, he will be recognized as such.” Thiel is the libertarian billionaire cofounder of PayPal who donated $1.25 million to the 2016 Trump campaign. *2 To his credit, in his 2018 book Stubborn Attachments, Cowen grants that his libertarianism is nondoctrinaire enough to allow that a few problems, such as the climate crisis, do require massive government action


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Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It) by Salim Ismail, Yuri van Geest

23andMe, 3D printing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, anti-fragile, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, behavioural economics, Ben Horowitz, bike sharing, bioinformatics, bitcoin, Black Swan, blockchain, Blue Ocean Strategy, book value, Burning Man, business intelligence, business process, call centre, chief data officer, Chris Wanstrath, circular economy, Clayton Christensen, clean water, cloud computing, cognitive bias, collaborative consumption, collaborative economy, commoditize, corporate social responsibility, cross-subsidies, crowdsourcing, cryptocurrency, dark matter, data science, Dean Kamen, deep learning, DeepMind, dematerialisation, discounted cash flows, disruptive innovation, distributed ledger, driverless car, Edward Snowden, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, fail fast, game design, gamification, Google Glasses, Google Hangouts, Google X / Alphabet X, gravity well, hiring and firing, holacracy, Hyperloop, industrial robot, Innovator's Dilemma, intangible asset, Internet of things, Iridium satellite, Isaac Newton, Jeff Bezos, Joi Ito, Kevin Kelly, Kickstarter, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, lifelogging, loose coupling, loss aversion, low earth orbit, Lyft, Marc Andreessen, Mark Zuckerberg, market design, Max Levchin, means of production, Michael Milken, minimum viable product, natural language processing, Netflix Prize, NetJets, Network effects, new economy, Oculus Rift, offshore financial centre, PageRank, pattern recognition, Paul Graham, paypal mafia, peer-to-peer, peer-to-peer model, Peter H. Diamandis: Planetary Resources, Peter Thiel, Planet Labs, prediction markets, profit motive, publish or perish, radical decentralization, Ray Kurzweil, recommendation engine, RFID, ride hailing / ride sharing, risk tolerance, Ronald Coase, Rutger Bregman, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, skunkworks, Skype, smart contracts, Snapchat, social software, software is eating the world, SpaceShipOne, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, Steve Jurvetson, subscription business, supply-chain management, synthetic biology, TaskRabbit, TED Talk, telepresence, telepresence robot, the long tail, Tony Hsieh, transaction costs, Travis Kalanick, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, urban planning, Virgin Galactic, WikiLeaks, winner-take-all economy, X Prize, Y Combinator, zero-sum game

So, in that sense, the rise of ExOs is a deepening of the specialization trend that started 10,000 years ago: only focus on those areas in which you are really outperforming. This not only maximizes profits, but in a world with pervasive digital reputational systems, also sets your image at the highest possible level, as author Tyler Cowen says in the title of his book: Average is Over. Airline operators used to build their own engines, an intricate and high-risk operation. Then GE and Rolls Royce, both experts in manufacturing engines, began offering leasing programs. Today, airlines pay for engines by the number of hours flown.

Great By Choice: Uncertainty, Chaos, and Luck - -Why Some Thrive Despite Them All. HarperBusiness. Cooper, B., & Vlaskovits, P. (2013). The Lean Entrepreneur: How Visionaries Create Products, Innovate with New Ventures, and Disrupt Markets. Wiley. Cowen, T. (2013). Average Is Over: Powering America Beyond the Age of the Great Stagnation. Dutton Adult. Cusumano, M. A. (2001). Strategic Thinking for the Next Economy. Jossey-Bass. Cusumano, M. A. (2010). Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Uncertain World. Oxford University Press. Davidow, W. H., & Malone, M. S. (1992). The Virtual Corporation: Structuring and Revitalizing the Corporation for the 21st Century.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"World Economic Forum" Davos, Adam Curtis, air traffic controllers' union, Alan Greenspan, AOL-Time Warner, banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, job polarisation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Larry Ellison, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, low skilled workers, manufacturing employment, market bubble, Martin Wolf, Mary Meeker, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, proprietary trading, Right to Buy, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

They also led to perverse business incentives. As it became easier to make big money through business strategies that were essentially unproductive, trading, investment and restructuring decisions changed in ways that often weakened the foundations of the economy. According to the American economist, Tyler Cowen, the author of the influential book, The Great Stagnation, the increased concentration at the top mattered because it had been largely generated within finance, encouraging banks to ‘take far too many risks and go way out on a limb, often in a correlated fashion.’ Over time, Cowen argues, the way the finance sector operates ‘corrodes productivity, because what the banks do bears almost no resemblance to a process of getting capital into the hands of those who can make most efficient use of it.


pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

air freight, Alan Greenspan, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, break the buck, Bretton Woods, business cycle, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, full employment, Glass-Steagall Act, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, Les Trente Glorieuses, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandatory minimum, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, very high income, winner-take-all economy, zero-sum game

But the other component of economic growth – rising productivity – is even more important than demography in determining the rate of growth over the long run. It is also the principal determinant of incomes per head. Nobody knows what will happen to productivity over the coming decades, but some well-informed people have put forward reasonable arguments that it must slow. Among these are Robert Gordon of Northwestern University and Tyler Cowen of George Mason University.34 An important reason why the pace of innovation might be slowing is that many opportunities have already been exploited: the population of the high-income countries is already highly educated and highly urbanized; the economy has already exploited the most readily available natural resources; people have already enjoyed the fruit of many life- and economy-transforming innovations, such as running water and sanitation, inoculation, electricity, chemicals, pharmaceuticals, the internal combustion engine, civil aviation, telephony, the computer and the internet.

See International Monetary Fund, Fiscal Adjustment in an Uncertain World, Fiscal Monitor, April 2013, Fig. 2, p. 6. 34. See Robert Gordon, ‘Is U. S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds’, National Bureau of Economic Research Working Paper No. 18315, August 2012, www.nber.org; TylerCowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (London: Dutton/Penguin, 2011). 35. Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies (New York and London: W.

‘Macroprudential Instruments and Frameworks: A Stocktaking of Issues and Experiences’, CGFS Papers No. 38, May 2010. http://www.bis.org/publ/cgfs38.pdf. Congressional Budget Office. ‘Trends in the Distribution of Household Incomes between 1979 and 2007’, October 2011. http://www.cbo.gov/sites/default/files/cbofiles/attachments/10-25-HouseholdIncome.pdf. Cowen, Tyler. The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). Crafts, Nicholas and Peter Fearndon. The Great Depression of the 1930s: Lessons for Today (Oxford: Oxford University Press, 2013). Croft, Jane, Kate Burgess and George Parker.


pages: 459 words: 103,153

Adapt: Why Success Always Starts With Failure by Tim Harford

An Inconvenient Truth, Andrew Wiles, banking crisis, Basel III, behavioural economics, Berlin Wall, Bernie Madoff, Black Swan, Boeing 747, business logic, car-free, carbon footprint, carbon tax, Cass Sunstein, charter city, Clayton Christensen, clean water, cloud computing, cognitive dissonance, complexity theory, corporate governance, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, Deep Water Horizon, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edmond Halley, en.wikipedia.org, Erik Brynjolfsson, experimental subject, Fall of the Berlin Wall, Fermat's Last Theorem, financial engineering, Firefox, food miles, Gerolamo Cardano, global supply chain, Great Leap Forward, Herman Kahn, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, Jarndyce and Jarndyce, John Harrison: Longitude, knowledge worker, loose coupling, Martin Wolf, mass immigration, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Netflix Prize, New Urbanism, Nick Leeson, PageRank, Piper Alpha, profit motive, Richard Florida, Richard Thaler, rolodex, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, South China Sea, SpaceShipOne, special economic zone, spectrum auction, Steve Jobs, supply-chain management, tacit knowledge, the market place, The Wisdom of Crowds, too big to fail, trade route, Tyler Cowen, Tyler Cowen: Great Stagnation, Virgin Galactic, web application, X Prize, zero-sum game

: McKinstry, Spitfire, p. 31. 88 ‘Freak machines’: McKinstry, Spitfire, p. 29. 89 England’s pride was intact: McKinstry, Spitfire, p. 32. 89 ‘The Battle of Britain was won by Chamberlain’: McKinstry, Spitfire, p.194. 89 One might think that there is no problem enouraging innovation: as this book was going to press, Tyler Cowen’s book The Great Stagnation (Dutton, 2011) appeared. Owen’s book offers further evidence of an innovation slowdown in addition to that presented here. 90 Even the design of niche cars: Chris Anderson, ‘In the next industrial revolution, atoms are the new bits’, Wired, February 2010, http://www.wired.com/magazine/2010/01/ff_newrevolution/ 90 ‘Failure for free’: Clay Shirky, Here Comes Everybody (London: Penguin, 2008). 90 US health secretary Margaret Heckler announced: http://www.pbs.org/newshour/bb/health/jan-june01/aids_6-27.html 92 The whole process has become harder: Benjamin F.


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Seventeen Contradictions and the End of Capitalism by David Harvey

accounting loophole / creative accounting, Alvin Toffler, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, Charles Babbage, classic study, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, company town, cotton gin, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, death from overwork, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, gentrification, global reserve currency, Great Leap Forward, Guggenheim Bilbao, Gunnar Myrdal, Herbert Marcuse, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, military-industrial complex, Money creation, Murray Bookchin, new economy, New Urbanism, Occupy movement, peak oil, phenotype, planned obsolescence, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, Savings and loan crisis, scientific management, short selling, Silicon Valley, special economic zone, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

Martin Wolf, an influential economist with the Financial Times, however, accepted much of what Gordon had to say and concluded that economic elites in the high-income world would welcome the future that Gordon described but everyone else would like it ‘vastly less. Get used to this. It will not change.’ Other contributions would be Tyler Cowen, The Great Stagnation: How America Ate all the Low-Hanging Fruit of Modern History, Got Sick and Will (Eventually) Feel Better, E-special from Dutton, 2011. All these arguments are, however, US-focused. 3. The Thelluson case is described in Hudson, The Bubble and Beyond. 4. Cited in Karl Marx, Capital, Volume 3, Harmondsworth, Penguin, p. 519. 5.


pages: 444 words: 117,770

The Coming Wave: Technology, Power, and the Twenty-First Century's Greatest Dilemma by Mustafa Suleyman

"World Economic Forum" Davos, 23andMe, 3D printing, active measures, Ada Lovelace, additive manufacturing, agricultural Revolution, AI winter, air gap, Airbnb, Alan Greenspan, algorithmic bias, Alignment Problem, AlphaGo, Alvin Toffler, Amazon Web Services, Anthropocene, artificial general intelligence, Asilomar, Asilomar Conference on Recombinant DNA, ASML, autonomous vehicles, backpropagation, barriers to entry, basic income, benefit corporation, Big Tech, biodiversity loss, bioinformatics, Bletchley Park, Blitzscaling, Boston Dynamics, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, ChatGPT, choice architecture, circular economy, classic study, clean tech, cloud computing, commoditize, computer vision, coronavirus, corporate governance, correlation does not imply causation, COVID-19, creative destruction, CRISPR, critical race theory, crowdsourcing, cryptocurrency, cuban missile crisis, data science, decarbonisation, deep learning, deepfake, DeepMind, deindustrialization, dematerialisation, Demis Hassabis, disinformation, drone strike, drop ship, dual-use technology, Easter island, Edward Snowden, effective altruism, energy transition, epigenetics, Erik Brynjolfsson, Ernest Rutherford, Extinction Rebellion, facts on the ground, failed state, Fairchild Semiconductor, fear of failure, flying shuttle, Ford Model T, future of work, general purpose technology, Geoffrey Hinton, global pandemic, GPT-3, GPT-4, hallucination problem, hive mind, hype cycle, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, Internet of things, invention of the wheel, job automation, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kickstarter, lab leak, large language model, Law of Accelerating Returns, Lewis Mumford, license plate recognition, lockdown, machine readable, Marc Andreessen, meta-analysis, microcredit, move 37, Mustafa Suleyman, mutually assured destruction, new economy, Nick Bostrom, Nikolai Kondratiev, off grid, OpenAI, paperclip maximiser, personalized medicine, Peter Thiel, planetary scale, plutocrats, precautionary principle, profit motive, prompt engineering, QAnon, quantum entanglement, ransomware, Ray Kurzweil, Recombinant DNA, Richard Feynman, Robert Gordon, Ronald Reagan, Sam Altman, Sand Hill Road, satellite internet, Silicon Valley, smart cities, South China Sea, space junk, SpaceX Starlink, stealth mode startup, stem cell, Stephen Fry, Steven Levy, strong AI, synthetic biology, tacit knowledge, tail risk, techlash, techno-determinism, technoutopianism, Ted Kaczynski, the long tail, The Rise and Fall of American Growth, Thomas Malthus, TikTok, TSMC, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, uranium enrichment, warehouse robotics, William MacAskill, working-age population, world market for maybe five computers, zero day

GO TO NOTE REFERENCE IN TEXT Should it hold, in ten years Azhar, Exponential, 249. GO TO NOTE REFERENCE IN TEXT Outside the weightless world of code See, for example, Michael Bhaskar, Human Frontiers: The Future of Big Ideas in an Age of Small Thinking (Cambridge, Mass.: MIT Press, 2021); Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011); and Robert Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (Princeton, N.J.: Princeton University Press, 2017), among many others.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, An Inconvenient Truth, Andrew Keen, basic income, battle of ideas, Black Lives Matter, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, classic study, clean water, cognitive bias, conceptual framework, critical race theory, David Brooks, deindustrialization, demographic transition, desegregation, disinformation, Donald Trump, en.wikipedia.org, Evgeny Morozov, fake news, Francis Fukuyama: the end of history, gentrification, German hyperinflation, gig economy, Gini coefficient, Herbert Marcuse, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, Jeremy Corbyn, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, microaggression, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, Rutger Bregman, secular stagnation, sharing economy, Steve Bannon, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

Federal Reserve Bank of Cleveland Working Paper no. 14–05, June 19, 2014, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2456813. 12. See Lawrence H. Summer, “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” Business Economics 49 (2014): 65–73; and Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better (New York: Dutton, 2011). For a nuanced discussion of the prospects of a convergence between countries like China, on the one hand, and North America as well as Western Europe, on the other, read Dani Rodrik, “The Future of Economic Convergence,” Jackson Hole Symposium of the Federal Reserve Bank of Kansas City, 2011, http://drodrik.scholar.harvard.edu/files/dani-rodrik/files/future-economic-convergence.pdf?


pages: 370 words: 129,096

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance

addicted to oil, Burning Man, clean tech, digital map, El Camino Real, Elon Musk, fail fast, Ford Model T, gigafactory, global supply chain, Great Leap Forward, high-speed rail, Hyperloop, industrial robot, Jeff Bezos, Kickstarter, Kwajalein Atoll, Larry Ellison, low earth orbit, Mark Zuckerberg, Mars Society, Maui Hawaii, Max Levchin, Menlo Park, Mercator projection, military-industrial complex, money market fund, multiplanetary species, off-the-grid, optical character recognition, orbital mechanics / astrodynamics, PalmPilot, paypal mafia, performance metric, Peter Thiel, pneumatic tube, pre–internet, risk tolerance, Ronald Reagan, Sand Hill Road, Scaled Composites, self-driving car, side project, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, Steve Jurvetson, technoutopianism, Tesla Model S, Tony Fadell, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, Virgin Galactic, We wanted flying cars, instead we got 140 characters, X Prize

One camp holds that SolarCity, Tesla, and SpaceX offer little in the way of real hope for an industry that could use some blockbuster innovations. For the other camp, Musk is the real deal and the brightest shining star of what they see as a coming revolution in technology. The economist Tyler Cowen—who has earned some measure of fame in recent years for his insightful writings about the state of the technology industry and his ideas on where it may go—falls into that first camp. In The Great Stagnation, Cowen bemoaned the lack of big technological advances and argued that the American economy has slowed and wages have been depressed as a result. “In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century, whether it be free land, lots of immigrant labor, or powerful new technologies,” he wrote.


pages: 828 words: 232,188

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamond, British Empire, centre right, classic study, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, Cornelius Vanderbilt, cotton gin, crony capitalism, Day of the Dead, deindustrialization, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, Great Leap Forward, Hernando de Soto, high-speed rail, Home mortgage interest deduction, household responsibility system, income inequality, information asymmetry, invention of the printing press, iterative process, Kickstarter, knowledge worker, labour management system, land reform, land tenure, life extension, low interest rates, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, Nelson Mandela, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, scientific management, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, subprime mortgage crisis, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Twitter Arab Spring, Tyler Cowen, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, work culture , World Values Survey, zero-sum game

We assume today that revolutionary new technologies equivalent to steam power and the internal combustion engine will continue to appear into the future. But the laws of physics do not guarantee such a result. It is entirely possible that the first 150 years of the Industrial Revolution captured what Tyler Cowen calls the “low-hanging fruit” of productivity advance, and that while future innovations will continue, the rate at which they improve human welfare will fall. Indeed, a number of laws of physics suggest that there might be hard limits on the carrying capacity of the planet to sustain growing populations at high standards of living.

American Economic Review 66(2):95–130. Cornford, James. 1963. “The Transformation of Conservatism in the Late Nineteenth Century.” Victorian Studies 7:35–66. Cortés Condé, Roberto. 2009. The Political Economy of Argentina in the Twentieth Century. New York: Cambridge University Press. Cowen, Tyler. 2011. The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. New York: Dutton. Cox, Gary. 2013. “The Power of the Purse and the Reversionary Budget.” Unpublished paper. Cox, Gary, Douglass North, and Barry Weingast. 2013. “The Violence Trap: A Political-Economic Approach to the Problem of Development.”


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

Congressional Budget Office. “Trends in the Distribution of Household Income Between 1979 and 2007.” October 2011. Cost, Jay. Spoiled Rotten: How the Politics of Patronage Corrupted the Once Noble Democratic Party and Now Threatens the American Republic. Broadside Books, 2012. Cowen, Tyler. The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. Dutton, 2011. Crowley, Roger. City of Fortune: How Venice Ruled the Seas. Random House, 2012. Diamond, Peter, and Emmanuel Saez. “The Case for a Progressive Tax: From Basic Research to Policy Recommendations.”


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, Bear Stearns, behavioural economics, Big Tech, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, data science, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, electricity market, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial intermediation, Ford Model T, Frederick Winslow Taylor, George Akerlof, gig economy, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, guns versus butter model, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Bogle, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, low interest rates, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, proprietary trading, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, TED Talk, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, Tragedy of the Commons, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, vertical integration, zero-sum game

Princeton, NJ: Princeton University Press, 2014. Clinton, Hillary Rodham. Hard Choices. New York: Simon & Schuster, 2014. Coates, John. The Hour between Dog and Wolf: Risk-taking, Gut Feelings and the Biology of Boom and Bust. New York: Penguin Press, 2012. Cowen, Tyler. Average Is Over: Powering America Beyond the Age of the Great Stagnation. New York: DUTTON / The Penguin Group, 2013. Das, Satyajit. Extreme Money: Masters of the Universe and the Cult of Risk. Upper Saddle River, NJ: FT Press, 2011. Davis, Gerald F. Managed by the Markets: How Finance Reshaped America. Oxford: Oxford University Press, 2009. Dobbs, Richard, James Manyika, and Jonathan Woetzel.


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, classic study, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial engineering, financial innovation, financial intermediation, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Glass-Steagall Act, Great Leap Forward, Hyman Minsky, inflation targeting, invisible hand, Japanese asset price bubble, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, no-fly zone, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Solow, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

Cooper, Russell and Andrew John (1988), ‘Coordinating Coordination Failures in Keynesian Models’, Quarterly Journal of Economics, Vol. 103, No. 3, pp. 441–63. Cowen, David, Richard Sylla and Robert Wright (2006), ‘Alexander Hamilton, Central Banker: Crisis Management During the U.S. Financial Panic of 1972’, Business History Review, Vol. 83, No. 1, pp. 61–86. Cowen, Tyler (2011), ‘The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better’, Penguin eSpecial. Crowe, Christopher and Ellen Meade (2007), ‘The Evolution of Central Bank Governance around the World’, Journal of Economic Perspectives, Vol. 21, No. 4, pp. 69–90. Davidsson, Johan Bo (2011), ‘An Analytical Overview of Labour Market Reforms Across the EU: Making Sense of the Variation’, European University Institute, mimeo.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, tacit knowledge, tech billionaire, The Future of Employment, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, work culture , working-age population

How Asia Works: Success and Failure in the World’s Most Dynamic Region. New York: Grove, 2013. Surowiecki, James. The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations. New York: Doubleday, 2004. Tilton, Andrew. “Still Wading Through ‘Great Stagnations.’ ” Goldman Sachs Global Investment Research, September 17, 2014. ——. “Growth Recovery and Trade Stagnation Evidence from New Data.” Goldman Sachs Global Investment Research, June 5, 2015. Vogel, Ezra. Japan as Number One: Lessons for America. New York: Harper & Row, 1979. “What Is the Trade Slowdown Telling Us?”


Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, behavioural economics, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial engineering, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, low interest rates, market fundamentalism, means of production, military-industrial complex, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, synthetic biology, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

The confidence that some economists have in the existence of the aforementioned two “free lunches” in today’s economies has made it possible to call for large increases in public spending both in the United States and in European countries, in the belief that these increases can be achieved at almost zero costs, while producing great benefits by injecting needed demand in economies facing “great stagnation.” In the early decades after World War II, major goals of economic theory and of the work of economists were, first, to look for and to identify areas in which private markets had failed, or could fail; and, second, to study ways in which governments could intervene and correct the market failures, through public spending, tax expenditures, or other ways.