Dec 21, 2011

Martin Wolf on the "great stagnation"

Martin Wolf reviews the "Great Stagnation:" 
The future is not what it used to be. Nor is the present. This is the theme of The Great Stagnation by Tyler Cowen of George Mason University. This is an influential, albeit depressing, little book, first published on the internet.* Its theme is in its subtitle: “How America ate all the low-hanging fruit of modern history, got sick and will (eventually) feel better.” The book is a model of popular writing: lucid, brief and provocative. But is the argument also true? If so, what might it imply?
The good news:
Now consider the wider world. Here we can see good news and bad news. One bit of good news is that the great majority of human beings live in economies that are far indeed from the economic frontier. China’s real output per head is about a fifth of US levels and India’s less than a tenth. So improvements in education and adoption of already existing knowledge offer huge opportunities. The second bit of good news is that the potential for incorporating a far greater number of people in scientific discovery, invention and innovation is also huge. It may be ever harder to win new knowledge. But the resources devoted to this task can also be far greater than ever before.
Wolf does not mention the good news from Latin America, specially from Brazil (and Africa). As inequality might be increasing in the US, it might well be possible that it is decreasing in world as a whole. Cellphones and the internet might have a lot to do with it. We are heading slowly towards a more homogeneous world. 

No comments:

Post a Comment