This is a wonderful mini-book reflecting on the slowing pace of technological process, how US economic growth has changed as a result, and what that means for the next 30 years. Cowen's thesis--that much of the growth from 1940-'75 came from "low-hanging fruit" and will not easily be duplicated--makes a lot of sense to me, as does his assertion that further improving educational attainment will be worthwhile but very hard. As usual, Cowen is at his best not at developing revolutionary ideas but in putting ideas together in a new, interesting, thought-provoking, and meaningful ways, that make you think about old issues differently.
He raises interesting points about the productivity growth of the last 30 years: that, really, neither labor nor capital has gotten much richer, so maybe productivity didn't improve that much after all?; and that much of the productivity gains in recent years have come from producing the same amount (or close to it) with fewer people, rather than doing more with the same workforce.
And his thesis about economic growth being perhaps overstated...due to fast growth in sectors--education, health care, government--where expenditures are valued at cost rather than reflecting a market price...rings very true to me. He points out that schools today have MUCH better facilities than they did 40 years ago, and all of that shows up in published GDP numbers--but what is the true benefit of such? Or of highways, unnecessary doctor visits, etc.
His writing about the Internet, and its effect on GDP, also is insightful and important. That is, quality of life has improved in meaningful ways that are destructive to GDP: using wikipedia instead of buying a dictionary, posting on Internet bulletin boards rather than paying to go to the dance hall, etc. Certainly I would spend more than $20/month on movie theaters/rentals if Netflix weren't available. But it is, so I almost never go to the theater, and spend less on rentals than I would have 10 years ago. The immense value--if unmeasured--of the Internet means that GDP/income may be less relevant to quality of life than they used to be. However, our fiscal obligations can't be funded with improved quality of life, so reconciling a slower pace of economic growth with liabilities will be very difficult--especially given that, at present, we don't even really acknowledge the underlying problem. Cowen raises an interesting contrast with Europe, which--perhaps due to WWII--doesn't have the same experience with all their wants being fulfilled.
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Kyungmo Cho
His thought is simple and repeated without solutions. We ...
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There are no low-hanging fruit....
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