The wonkish end of the American political blogosphere is having a great deal of fun dissecting Tyler Cowen’s new e-book The Great Stagnation. Thanks to the wonders of the combination of intellectual property law and stupid geographic restrictions, it’s very, very difficult to get a copy here , but from the various reviews floating around, and Cowen’s piece in the NYT, it seems that the guts of the argument is that technological innovation has plateaued:
Most well-off countries have experienced income growth slowdowns since the early 1970s, so it would seem that a single cause is transcending national borders: the reaching of a technological plateau. The numbers suggest that for almost 40 years, we’ve had near-universal dissemination of the major innovations stemming from the Industrial Revolution, many of which combined efficient machines with potent fossil fuels. Today, no huge improvement for the automobile or airplane is in sight, and the major struggle is to limit their pollution, not to vastly improve their capabilities.
As some of the more perceptive comments on blogs have pointed out, the big hit to American living standards over the past 40 years has not been the lack of growth; it’s been that virtually all of that growth has been siphoned-off to a very small minority of people.
But leaving that aside for the moment, it’s remarkable to me how much support this “innovation has slowed down” has received, and just how shallow the arguments made in its support have been.
It’s undoubtedly true that we’ve picked a lot of the low-hanging fruit of technological innovation; you can only eliminate most childhood diseases, motorize transport, and invent instant global communication once. But the idea that you can look at a 1950s kitchen and a 2011 kitchen and assume that, because they look the same, our society has stopped innovating, is classic not seeing the forest for the trees kind of stuff.
The biggest difference between my grandparents’ kitchens and my own isn’t the appliances in them. It’s the fact it sits unused on a regular basis, because I can afford to pay other people to use their kitchens to prepare food for me on a far more regular basis than they could.