‘The Great Stagnation’, by T. Cowen

I had the chance of reading Tyler Cowen’s ‘The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better’. The title is a bit of a mouthful (for which good reason I shortened it to ‘The Great Stagnation’ in the title) but the ideas presented in this short book (short and cheap, let me say; also note-worthily first published on the Kindle Direct Publishing  meaning as an e-book) are very interesting and thought-provoking.

More skilled and informed people have written reviews of this book describing them in great detail (a few noteworthy ones: the Economist’s Economics blog‘s and the National Review Online’s Reihan Salam’s) so I will try not to re-write one. Suffice to say that the book presents a new(er) view on how we should think of the 2008 Recession as well as of the general decline in the growth rates that has been a prominent feature of the last thirty-fourty years in most Western countries.  This era has been termed by Mr Cowen as the Great Stagnation and a short summary of this period stands as follows:

If one sentence were to sum up the mechanism driving the Great Stagnation, it is this: Recent and current innovation is more geared to private good than to public goods. That simple observation ties together the three major macroeconomic events of our time: growing income inequality, stagnant median income, and […] the financial crisis.

This view is further described through defining the ways the Western world and the US in particular have driven their growth for most of the 19th and 20th centuries, extending these to the growth of government (as per cent of GDP) and lastly explaining the financial crisis. The given explanation and reasoning for the financial crisis sounds (at its most basic level) as follows:

… there are truly dozens of reasoned, persuasive, articulate explanations. But let’s place them in a broader context. How did we make so many bad mistakes at the same time, all pointing in more or less the same direction?

Here’s the eight-word answer: We thought we were richer than we were.

And he continues with a description of how this overconfidence actually brought about disastrous results.  As part of the problem that we are facing today he brings that the decision-makers, politicians, cannot think long-term since they are more interested in the next re-election and whether they’ll get their seat back or not than in issues which could profit the country in a score of years (might be worth thinking whether this aspect makes the authoritarian Chinese or Singaporean models better suited; and how the Australian governments of the 80’s and 90’s managed to push through reforms which have established the continent as one of the so-to-say winners of this recent Recession). Here’s the exact words of Mr Cowen:

It is easy to see why politicians might wish to allow or encourage this kind of risk taking. Many politicians have time horizons of only two, four, or six years, if that. The short-run gains in consumption were evident, everyone seemed happy, and after all, most of our congressmen get reelected. Why shut down the game?

The book does offer a solution (or close enough to one). What he does suggest us to do, mostly to boost our innovation to get us all back on the track (innovation drives growth, especially if we can manage to cross the new technological barrier as we’ve previously done), is to support science. Namely, as he says:

Raise the social status of scientists. […] We shouldn’t trust individual scientists uncritically, but we should respect the scientific enterprise in general at a much higher level.

‘Survivor’s Quest’, T. Zahn

Ah, the wonders of science-fiction. I yesterday (by now, the day before yesterday) finished a wonderful (rephrase: another wonderful) book by Timothy Zahn, this one being named ‘Survivor’s Quest’. I guess it made a lot more sense given that I’m rather well versed in the Expanded Universe (disclosure: ‘Survivor’s Quest’ is part of Star Wars Expanded Universe //one of several hundred books there//, and takes place quite a bit of time after any of the movies) but also since I’ve read the so-to-say prequel ‘Outbound Flight’ (also by T. Zahn).

I can’t really tell what fascinated me most about this book, except for the fact that it had some really deep moments — these insights into people, why they act, and how people might be better of acting; and yet Zahn did not disappoint with action or logic (unless you, the reader, are one of the people who kindly says that science-fiction by itself defies logic etc etc and therefore should not be read).

One of his greatest achievements for the EU has been the inclusion of a wonderful species named the Chiss. The who, what and why are rather irrelevant, but this books brings up a few new Chiss characters (previously 95% of the interaction with the by-now-deceased Grand Admiral Thrawn) and they illustrate a beauty which many species (either imaginary or real) lack: a love of tactical thinking, or at least that is how it seems to be portrayed.

I’ll bring out a quote illustrating the Chiss:

“It is completely and purely a matter of honor and morality. The Chiss are never to be the aggressor people. We cannot and will not make war against any until and unless we have been attacked. That has been our law for a thousand years, [Master Skywalker], and we will not bend from it.”

I believe this displays what I wished to convey earlier on: and what humans, in this case, certainly are not — principles die too easily for us.

Somehow Zahn also manages to include a number of references to correct military behavior (e.g. nearly every EU book of his beginning with an Imperial Star Destroyer in space and a few notions of proper naval etiquette).

And a few other quotes for the conclusion:

“… it would be the height of arrogance and pride to risk their lives, not to mention the lives of our companions, by insisting on amateur leadership when a professional is standing by. Don’t you agree?”


“Past thoughts are irrelevant to the realities of the present.”

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