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Tyler Cowen’s Future Shock: No More Average People
This article originally appeared in The Washington Examiner “This book is far from all good news.” So writes Tyler Cowen at the beginning of his latest book, “Average is Over: Powering America Beyond the Age of The Great Stagnation.” Cowen is an economist at George Mason University who is generally classified as libertarian and whose interests range far afield. His most recent books include “The Great Stagnation” and “An Economist Gets Lunch” (his advice: skip fancy downtown places, eat at restaurants attached to Pakistani-owned motels). In “The Great Stagnation,” he argued that productivity has been lagging because of lack of technological innovation. Information technology, he wrote, has produced nothing like the gains obtained from the steam engine, electricity and hydrocarbon chemistry In “Average Is Over,” he looks farther ahead to “a very surprising time,” when new technologies will lead us out of stagnation. But it will lead some of us out very much farther than others. Cowen minces no words on this. Those of us accustomed to the emollient language of politicians promising a bright future will be startled by Cowen’s frankness. The big winners in the economy he foresees will be those who can work with and harness machine intelligence and those who can manage and market such people. Such “hyperproductive” people, about 15 percent of the population, will be wealthier than ever before. Also doing well will be those providing them personal services. For jobs lower down on the ladder, there will be a premium on conscientiousness. That’s good for women and bad for men, who are more likely to do things their own way. Middle-level jobs, Cowen says, are on the way out. He argues that many of those laid off after the financial crisis were “zero marginal product” workers. They weren’t producing anything of value and employers won’t replace them. Upward mobility will still be possible, he says, thanks to machine-aided education, which can spot talent in unlikely places. But I think he overestimates how likely that will be. Assortative mating (people marrying similar people) and the considerable hereditability of intelligence means that many or most of those with the talents to get to the top will start out there. A fair society, ironically, may have less social mobility. How will this society handle the pending fiscal shortfall? Cowen’s prediction: by raising taxes a bit (but it’s hard to get more out of rich, clever people),… Read more…
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NPR Asks President Obama about Tyler Cowen’s “Average Is Over”
This article originally appeared in NPR The economist Tyler Cowen was on our program the other day. He’d written a book about income inequality. And he argued, based on his analysis, that it’s really inevitable, it’s going to get worse, and the thing for public officials to do is to adapt to it rather than try to change it. Well, I don’t accept that. America is, always [has] been, at its best when everybody who’s willing to work hard has a chance to succeed. There is no doubt that these trends are powerful and they’re global. I mean, we’re seeing the same trends in Scandinavian countries that historically were — prided themselves on great equality. We’ve seen it magnified in less developed countries and emerging markets. So these are global trends that we’re going to have to fight against. But if we are educating a workforce that has the skills they need to compete, if we have a tax system that is fair and not rewarding those who can afford high-priced accountants and lawyers, if we are rebuilding our infrastructure in this country, not only to make us more competitive but because those create jobs that can’t be exported, if we are increasing a minimum wage so that it is reflective of the same purchasing power that existed many years ago, if we’re creating more ladders of opportunity for people who are locked in neighborhoods that have been abandoned and small towns where factories have closed — if we do those things, then we can lessen the impact of these broader market forces. But what is true is that globalization and technology are a mixed bag. On the one hand, they create a situation in which consumer goods are cheap and they create a situation in which we can have access to goods and services that we would never have had before. On the other hand, it does create a situation in which a lot of the jobs that are created are at the very top, high-skilled, you know, creative work that can’t be replicated, or at the bottom, low-skilled jobs. What we don’t have are those jobs in the middle that we have to really focus on building, because we can outcompete anybody when we have smart policies. Read Entire Transcript
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Tyler Cowen on Inequality, the Future, and Average is Over
Tyler Cowen of George Mason University and blogger at Marginal Revolution talks with EconTalk host Russ Roberts about his latest book, Average is Over. Cowen takes a provocative look at how the growing power of artificial intelligence embodied in machines and technologies might change labor markets and the standard of living. He tries to predict which people and which skills will be complementary to smart machines and which people and which skills will struggle. Listen: Tyler Cowen on Inequality, the Future, and Average is Over
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The American Dream, RIP?
This article originally appeared in The Economist COULD America survive the end of the American Dream? The idea is unthinkable, say political leaders of right and left. Yet it is predicted in “Average is Over”, a bracing new book by Tyler Cowen, an economist. Mr Cowen is no stranger to controversy. In 2011 he galvanised Washington with “The Great Stagnation”, in which he argued that America has used up the low-hanging fruit of free land, abundant labour and new technologies. His new book suggests that the disruptive effects of automation and ever-cheaper computer power have only just begun to be felt. It describes a future largely stripped of middling jobs and broad prosperity. An elite 10-15% of Americans will have the brains and self-discipline to master tomorrow’s technology and extract profit from it, he speculates. They will enjoy great wealth and stimulating lives. Others will endure stagnant or even falling wages, as employers measure their output with “oppressive precision”. Some will thrive as service-providers to the rich. A few will claw their way into the elite (cheap online education will be a great leveller), bolstering the idea of a “hyper-meritocracy” at work: this “will make it easier to ignore those left behind”. Mr Cowen’s vision is neither warm nor fuzzy. In his future, mistakes and even mediocrity will be hard to hide: eg, an ever-expanding array of ratings will expose so-so doctors and also patients who do not take their medicines or otherwise spell trouble. Young men will struggle in a labour market that rewards conscientiousness over muscle. With incomes squeezed, many Americans will head to the sort of cheap, sun-baked sprawling exurbs that give the farmers’-market-and-bike-lanes set heartburn. Many will accept rotten public services in exchange for low taxes. This may sound a bit grim, but it reflects real-world trends: 60% of employers already check the credit ratings of job candidates; young male unemployment is high and migrants have been flooding to low-tax, low-service Texas for years. The left is sure that inequality is a recipe for riots. Mr Cowen doubts it. The have-nots will be too engrossed in video games to light real petrol bombs. An ageing population will be rather conservative, he thinks. There will be lots of Tea-Party sorts among the economically left-behind. Aid for the poor will be slashed but benefits for the old preserved. He does not fear protectionism, as most jobs that can… Read more…
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Tyler Cowen on the Middle Class
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Economist Tyler Cowen On The End Of Average
US inequality is hitting record highs again, we learned last week. Higher than Gatsby levels. The USA pins the needle for inequality globally. Higher than China. Higher than India. Americans have generally been unruffled by that, but then the 20th Century brought our greatest time of equality. In this century, says my guest economist Tyler Cowen, inequality will explode in the US. You’ll be rich or you’ll be Mexico-style poor. He’s OK with that. Nobel Prize-winning economist Joe Stiglitz is not. They’re both with us. Up next On Point: equality and inequality in America. Listen: Economist Tyler Cowen On The End Of Average
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Tyler Cowen Predicts an Imbalanced Economic Future