Economist Tyler Cowen says Americans have lost their drive

Economy

By Christopher Booker and Connie Kargbo

CHRISTOPHER BOOKER: Economist Tyler Cowen thinks Americans, from the Millennials to the Baby Boomers, have lost their spark.

TYLER COWEN: Every available measure we have of productivity in this country shows that innovation is slowing down. And furthermore, real wages show the same thing. So there's people who sell to global markets and become very rich. They're doing great. But the average American, and you see this in our politics, does not feel they are so much better off and they do not really expect their children will be much better off than they are.

CHRISTOPHER BOOKER: In his new book, The Complacent Class: The Self-Defeating Quest for the American dream, Cowen argues the US, founded on risk and built on innovation, has lost the dynamism that set it apart from the rest of the world.

TYLER COWEN: What really drove this book was a number of trips to China that I did and I thought, "Well, today, China is really our peer and rival, so let's write about America from the point of view of China. How does all this look to the Chinese?" And indeed, large numbers of Chinese people I spoke to who had visited this country, "Oh, the wonderful blue skies. Everything is so nice. But, you know, it's calm and a little sleepy. And you're not ambitious like we are."

CHRISTOPHER BOOKER: While some of America's most influential companies like Apple, Google, and Facebook project the image of a country on the move, Cowen views Silicon Valley as America's outlier. And data shows the notion that America remains the home of growth and change, is wrong.

One example of stagnation — the interstate migration rate declined 51 percent between the 1970s and 2013.

Another sign is job lock. In 1998, 44 percent of American workers had held the same job for five or more years. By 2014, 51 percent did.

And look at young entrepreneurs. The share of Americans under 30 who own a business has fallen by more than half since the 1980s.

TYLER COWEN: Startups as a percentage of overall business activity have been declining since the 1980s. There's also more concentration and more monopoly of some sort in the American economy, especially at the retail level. Not all of that is bad. But when you add them all up and think about how it's shaping our overall mentality about what we expect from the future, that's where I fear that we're– setting our sights far too low. And we don't have the American oomph that we had throughout much of the 20th century.

CHRISTOPHER BOOKER: Cowen says this increased complacency and taking fewer risks has caused Americans to grow averse to conflict and this has a cost.

TYLER COWEN: We do have a lot of innovations coming out of Silicon Valley. Netflix and Amazon. I use them myself. But to a large part, they improve our leisure time, not our productivity. They make it easier to stay at home rather than to go out and challenge the world. And for each individual, they may improve happiness or contentment. But when done collectively, there's a problem, as we become less dynamic, less challenging in building of our physical environment. So I would say the complacent class are all of those Americans who do not see this as any kind of urgent problem. And that's virtually all of us.

CHRISTOPHER BOOKER: Because we're happy with our Netflix, we're happy with our Uber transportation systems, we're happy with all these developments?

TYLER COWEN: Yes, but keep in mind, at the same time, we're unhappy with other things. So slow or zero wage growth, or some people are unhappy about various politicians having been elected. And what's hard for people to grasp is that what they're happy about and what they're unhappy about, those are actually two sides of the same coin. And that's why complacency is dangerous. To think, you know, in the 1960s, for all of the problems of that era, we put a man on the moon in basically seven years starting from scratch. Today, we can debate issues for seven years and not really get anywhere.

CHRISTOPHER BOOKER: Amidst all that social protest and upheaval, we still achieved this unbelievable feat.

TYLER COWEN: And those are, again, two sides of the same coin, that the chaos and the dynamism have some connection. It's not that riots are a good thing, that's the wrong reading. But rather, to understand the costs of trying to remove all of the risks from our lives.

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