IdeaFestival 2014 #9: Average Is Over: Powering America Beyond the Age of the Great Stagnation – Tyler Cowen, Marginal Revolution

Average is Over

Tyler Cowen

Friday, October 3, 2014, 9-10am, Kentucky Center

 

George Mason University economist and author Tyler Cowen explains why being satisfied with “pretty good” in today’s innovation-driven, hyper-competitive world can quickly become a fast track to irrelevance.

@tylercowen

Marginal Revolution blog

Tyler Cowen is the Holbert L. Harris Professor of Economics at George Mason University and General Director of the Mercatus Center. He received his PhD in economics from Harvard University in 1987. His book The Great Stagnation: How America Ate the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better was a New York Times best-seller. He was recently named in an Economist poll as one of the most influential economists of the last decade and last year Bloomberg BusinessWeek dubbed him “America’s Hottest Economist.” Foreign Policy Magazine named him as one of its “Top 100 Global Thinkers” of 2011. He co-writes a blog Marginal Revolution and has recently inaugurated an on-line education project, MRUniversity.

Key ideas

  • average is over = winner-take-all market
  • how to be/make yourself relevant/do well: the future belong to the thick-skinned, techies, persuasive, conscientious
  • labor’s falling share, capital’s rising share – today’s US in one picture
  • the new normal: part of a longer trend, especially the last 15 years: declining wages (stagnating in Germany = success?)
  • the Great Recession does not feel like it’s over for most people
  • 10-20% of Americans are doing very well and increasingly better
  • the global intelligentsia loves ideas and access exponentially grows, and they feel they are better off
  • IT & automation drives global economy: we are only globalizing because we have IT: use IT to leverage and sell to global markets – are you riding that wave or are you competing against it — who are the winners, and who are the losers (global political economy)
  • emerging global middle class – BRICS
  • not much progress in transportation technology – Concorde — progress in the material world of ‘stuff’ has slowed down / not step change: cars, kitchens vs ICT — most progress has stopped: very uneven technological ‘progress’ — those who ride the high-tech wave benefit the most
  • comment: diminishing returns from technological ‘progress’
  • key question: Working with or against tech & globalization?
  • 20% of US population will benefit to the point of becoming millionaires (?) – 80/20 world
  • 14% of Singaporeans are millionaires by wealth (not income), not counting real estate
  • labor force participation rate is falling – fewer people are working
  • more people are getting jobs, but more people are also giving up looking for jobs – they are not counted as unemployed
  • male earners 18-40 have been the biggest losers; they have lost the most – manufacturing, physical strength
  • socioeconomic gender gap
  • education is no panacea
  • high school graduation rates peaked in the late 1960s – has been stagnating around 70% for over 4 decades
  • How to do well:
  • Do not overly focus on technical skills and quantitative methods
  • rather: intelligent application of the humanities through marketing and persuasion – interpersonal skills; 4 Cs — excellent/honors education
  • Talent development: specialization + 4Cs + experience
  • start doing things that you computers cannot do
  • new service sector jobs: millionaire personal tutors in Asia: motivate children; online education; healthcare; carpentry
  • measuring value, measuring you: 60% of employers check credit scores of applicants
  • we tend to react more negatively about negative things than positively to positive things
  • depression will increase, because more and more people will not make it to the top
  • the future belong to the thick-skinned, techies, persuasive, conscientious

Comments

  • globalization as last phase of modernization
  • modernization as functional differentiation: the global economy/system thrives on growing, not shrinking differences
  • technological determinism?
  • what about diminishing returns from technological innovation?
  • some manufacturing is coming back but not the manufacturing jobs – automation, IT
  • big tech breakthroughs: driverless cars work already; drones (already commercial drone deliveries in Germany)
  • the future of education is learning how to learn, lifelong learning, retraining
  • growing middle-class incomes: scarce mineral resources & growing global demand, especially from Asia: unconventional fuels: fracking, tar sands: Western North Dakota, Alberta, Western Australia, Peru

 

 

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