On causation. Cowen blames overconfidence. "[R]ealtors" are not to blame because "[t]he financial crisis was not fundamentaly about the bursting othe real estate bubble" (706-17) Okay, but then, one thinks, those who used various chicanery to spin bad loans into huge profit for no socially beneficial purpose bear the bulk of the blame. Nope: "The financial crisis is not even fundamentally about mistakes in the banking sector, although such mistakes were made" (717-28). Note the passive voice. Well then who might be responsible oh most interesting of thinkers out there? "We were all, more or less, overconfident. It gets increasingly harder," he argues, "to escape the conclusion that many millions of people were complicit, whether intentionally or not." He then illuminates this, apparently inescapable, conclusion by recourse to a museum director planing building expansion(718-30 to 730-40). Innovative thinking indeed.
On condescension: The title is one example. His invocation of the "fun" of the internet working to limit a sober understanding of economies' general crappiness is another (746-57 to 757-67). This bit, from his conclusion, [t]hese days, you can read the latest scientific papers, whether or not you are based at Harvard or Princeton" (797-808) ignores the fact that disseminating the latest findings in all manner of disciplines predates Jstor. Darnton's work on the Encyclopedia is one example; Francis Bacon's Novum Organon published by Society For The Diffusion Of Useful Knowledge, which yet another example of making cutting edge thought available to the masses, another. It is also an example that leads to a discussion of his use or, more precisely, abuse of history.
On roads and their history. He makes much of the notion of "core" versus "optional" state functions. Using the example of investments on infrastructure, he argues that [w]e're valuing dollars spent on highway extensions as if they were worth as much as the dollars we spent on building the core roads that link major cities" (267-78 to 278-88). This characterization of the roads in American history is misleading in two ways. In the first instance, he ignores the origins of the Good Road Movement, which arose from a combination of commercial and leisure interests. Cyclists intent on increasing the pleasures of live had long advocated for improved roads while agricultural and extractive commercial interests wanted to ease the movement from productive to markets. Railroads already connected "major" cities, the Interstate system came rather later and its designers had rather more in mind than linking major cities. Does this really matter, you might ask. Well, yes. The push for good roads was as much about pleasure as commerce and trying to reading the former out of the equation transforms state infrastructure investment into an activity solely dedicated to matters economic, which conveniently ignores the fact that there is more to life than making money.
The Central Theme or Metaphor: Cowen makes much of his notion of the fact that
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. Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are more bare than we would like to think. That's it. That is what has gone wrong.(60-71)He accepts that some of this stuff was "not completely new"; however, he insists they "expanded rapidly" in the period under consideration effectively "tying together the world economy." Although there was a "somewhat longer time frame, agriculture" underwent a similar process. What was, he suggests, "fundamentally new to human history" was the "gains . . . from playing out the idea of advanced machines combined with powerful fossil fuels" (81-81).
And to be clear, when he discusses low-hanging fruit he doesn't mean the fruits you ate first:
Have you ever walked into a cherry orchard? There are plenty of cherries right there for the picking. Imagine a tropical island where the citrus and banannas hang from trees. Low-hanging literal fruit-- you don't even have to cook the stuff (60-71).It's helpful to ask if we didn't have to cook the stuff that, literally and metaphorically, hung so low. Take, as one example, access to America's wide-open lands. If you ignore the long history of the "Age of Exploration" or, if you want to consider things from the opposite perspective, the "Age of Conquest" leading up to the seizure of lands from the pre-existing inhabitants, then yes easy peasy. Did you know that over 50% of the conquistadors perished either during the trip over or on first landing?[2] Or that the technological changes, financial support, and religious justification of the Portuguese expansion and colonization came from the state? It's true.The longer time frame for the agricultural sector? Depending on how you want to think about it, agricultural revolution's time frame is rather longer.
You can do the same thing for each and every low-hanging fruit Cowen mentions. They didn't just appear all of sudden when needed for the economic exploitation of this or that resource but rather they came about through the intersection of state and society seeking to improve the condition of men even on this earth and individuals more concerned with lining their own pockets then anything else. The American Transcontinental railroad is a nearly perfect example of the inter-mixture of state, society, cupidity, and charity, in is ancient meaning. What I think Cowen actually means is if you ignore the actual history of the picking of the fruit, it hung very low indeed.
On the state of technological breakthroughs he argues that "[t]he period from 1880 to 1945 brought numerous major technological advances into our lives"; he then lists the usual suspects and argues that "life [now] in broad material terms isn't so different from what it was in 1953" (81-91).[1] His pessimism on the future of innovation relies, in part, on the work of Charles I. Jones, who "has 'disassembled' American economic growth into component parts" and "[l]ooking at 1950-1993. . . found that 80 percent of the growth . . . came from he application of previously discovered ideas . . . with heavy additional investment in education and research, in a manner that cannot be easily repeated for the future" (177-88). Cowen also reproduces the work of Jonathan Huebner which shows that current rates of "innovation" are nearly medieval (188-93); Huebner suggests that we will out do the medievals in our lack of inventiveness by 2024.
It would be nice to know why we can't repeat investments in education and research. It would also be nice to know why figuring out how to use the technology we have right now to improve the conditions of humanity without regard to ever expanding profits is, apparently, off the table.
This brings me to Cowen's cure for what ails us. He argues that one "favorable trend" is his expectation that "[o]ver time, we can expect" China and India "to assume a greater role as innovators" and that "their manufacturing and services efforts" will "free up a lot of our time and energy for innovation." He is, of course, unclear as to why the Chinese and Indians will be able to that which he has ruled out for us; although, to be fair, Cowen waves his hands toward markets.(787-96 to 797-808) Secondly, the "internet may do more for revenue generation in the future." (ibid.) See, the way out of the current bubble induced crises is a new bubble. He likes the various market-based solutions to the "crisis" in America's educational system, despite the evidence that they don't work. (808-19). And, improve the "status" of science by adopting "one point that Ayn Rand . . . got right, namely that we should all revere creators and scientific innovators (830-42 to 841-52). Want a better economy? All Hail John Galt lest Galt go.
Taken in the round, this is a remarkable passive response to the current malaise for such an interesting thinker; given that the take-away seems to be that we can't do much except wait for the system that failed so spectacularly to fix itself except train ourselves to revere our Galtian overlords.
[1] This last has set off a enormously contentious discussion of kitchen utensils.
[2] Here some stuff on one of them, Cabaza de Vaca, who is actually worth googling.
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