Since the late '90s much of Tyler Cowen's work has looked at the economics of culture.
He consumes art and music at the rate he does books, but unlike most critics he doesn't sniff that markets have either ruined culture or brought it low. In 2002 he published Creative Destruction, which argues that globalization created much of the art and music we might consider "native." Reggae in Jamaica, for example, borrowed from commercial rhythm and blues broadcasts that drifted over the water from New Orleans and Miami. The fur trade and the metal knife helped create the totem poles of the Northwestern American Indians. But the book also introduces the idea of a distinct "ethos" in creative cultures, which Cowen admits is hard to define for an economist. And Creative Destruction points out that the global markets that spur innovations in art can also, eventually, build a demand that discourages further changes.
"I write books to solve problems for myself," he says, "to figure things out. Things bug me, in a Lieutenant Columbo sort of way." He began work on The Great Stagnation by wondering why growth rates for median wages were failing to keep up with either those for the highest earners or with gross domestic product. Economists on the left have called this trend "income inequality" and blamed it on policy; economists on the right have maintained either that it's not a problem or that it's being measured wrong and doesn't exist in the first place. Cowen had been skeptical himself, but saw too many bits of evidence to ignore: sports salaries, data on executive compensation, the gulf between J.K. Rowling's fortune and what other authors make.
Then the financial crisis happened.
"For something so fundamental to have gone wrong," he says, "my intuition and the evidence suggest that there's something wrong with the real economy as well." Maybe the two were related, he thought: What if the financial system took on so much debt because most of us assumed that growth was eternal? Cowen says he has no grand plans when he begins to write, just what he refers to as myopia. What looks strategic from the outside is just Cowen refusing to let something go.
In January, Dutton published Cowen's e-book, The Great Stagnation. It has shown up twice on the New York Times' e-book bestseller list. Dutton, a Penguin imprint, will release a hardcover edition on June 9. David Brooks has called it "the most debated nonfiction book so far this year" and leaned on it for a column in the Times. "In terms of framing the dialogue," wrote Kelly Evans for the Wall Street Journal, "Tyler Cowen may well turn out to be this decade's Thomas Friedman." The year is young, but among wonks the book has reached that most coveted of states: It must be responded to.
Cowen thought it was too long for a magazine article and too short for a book, so he suggested that the publisher offer it only as an e-book. The work is priced on Amazon.com at $3.99 for 15,000 words.
The Great Stagnation runs through three centuries' worth of what Cowen calls the "low-hanging fruit" of economic growth: free land, technological breakthroughs, and smart kids waiting to be educated. For developed economies, he argues, none of these remains to be plucked. Yet America, Europe, and Japan have built political and social institutions on the assumption of endless growth. Cowen summarizes the financial crisis in eight words: "We thought we were richer than we were."
It's not that he disagrees with any of the better-known explanations for the crisis—easy credit, flawed ratings—it's that he sees a more fundamental problem, one that can't be fixed with regulation, bailouts, or tax cuts. Cowen thinks that now that America has used up the frontier, educated all of the farm kids, and built a couple of cars for every family, we might be done growing for awhile. The Great Stagnation is a short work, simply written. It avoids any but the most basic discussion of economics, yet also brushes lightly over all of modern history; behind simplicity in style and argument lies a lifetime of intensely productive reading.
Source: Bloomberg BusinessWeek, May 30, 2011
Tyler Cowen: Creative Destruction: How Globalization Is Changing the World's Cultures
Tyler Cowen: The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History,Got Sick, and Will (Eventually) Feel Better:A Penguin eSpecial from Dutton
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