If you blame government regulation, welfare and unions forAmerica's economic lethargy, Tyler Cowen is not the economist foryou.
If you think Wall Street, NAFTA and corporate greed are theculprits, Cowen is not the economist for you, either.
But if you're open to explanations beyond ideological talkingpoints, then you might be interested in what Cowen has to say aboutwhy the economy is flat and robust growth is unlikely any time soon.
Cowen, an academic, New York Times contributor and author of theblog Marginal Revolution, frames our predicament within a historicalcontext, calling the era from the mid-1970s to the present "theGreat Stagnation."
He doesn't think things such as credit default swaps or deficitspending, as problematic as those practices might be, are the rootcauses of today's economic woes. Rather, he points to a deeper, morestubborn trend that's held sway for three decades: a profound andongoing slump in technological innovation.
Speaking at Franklin & Marshall College recently, Cowen said theincreasing reach of the Internet and the explosion in electronics,from the BlackBerry to iPads, have created a false perception thatwe're living in a highly innovative time.
But while it's true consumers have access to a dazzling array ofgizmos, those devices pale in significance to the innovations thatdramatically improved living standards for our grandparents.
Cowen noted that when his grandmother was born in 1905, manyAmericans farmed, worked six or seven days a week and saw manychildren die in infancy.
Cowen's grandmother, however, would live to see remarkableimprovements in livings standards as innovation followed innovation -the development of penicillin, television, flush toilets, aviation,air conditioning, nuclear fission and on and on - through the firsthalf of the 20th century.
But in more recent decades, breakthroughs capable of significanthuman uplift have been fewer and less dramatic. Medical technologyis a case in point.
"We are healthier than people 40 years ago," Cowen said. "We havebetter painkillers. We have better approaches to cancer. We havebetter forms of heart surgery."
But the pace of improvement in life expectancy is a differentstory. Americans experienced a 0.72 percent per year increase from1900 to 1950, but only a 0.24 percent increase from 1950 to 1995.
"People do live longer ... but progress is slowing down," Cowensaid.
The revolution in antibiotics, vaccines and public health werethe low-hanging fruit innovators harvested to ease suffering andextend life, and now improvements are incremental and harder toachieve.
Same goes for other industries and technologies. Cars haveairbags today and their tires last longer, but a car's basicfunction has not changed since its invention or been usurped bybetter technology.
"We're at a technological plateau," Cowen said, and one result isstagnation in median family income, which climbed, in constantdollars, from $25,000 in 1947 to $50,000 in 1975, and has been stuckthere ever since.
How long until the next wave of innovation hits - cold fusionanyone? - is anyone's guess. Cowen is optimistic we'll rise from thetrough of lackluster economic performance at some point.
But what we can do in the meantime, he advised, is be a nationthat invests in science and education, the fertile soil from whichinnovation sprouts.
jhawkes@lnpnews.com
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