The Complacent Class and the Philosophy of Tyler Cowen

Economic Complacency

-- Rate of Americans who are migrating across state lines plummeted by 51 percent from the levels of the 1950s and 1960s.

-- The share of Americans under 30 who own a business has fallen 65 percent since the 1980s.

-- The job reallocation rate — which measures employment turnover — is down by more than a quarter since 1990

-- Accounting for population growth, Americans create 25 percent fewer major international patents than in 1999.

Economic Stagnation

-- Service Sector almost 80% of the economy. Very low productivity growth.

-- Start ups down every decade since the 80s

-- Manufacturing Down

-- Index of regional specialization (max 1914, steady decline)

-- Regional catchup has stopped

-- Across firm inequality > Within firm

-- Licensing Regulation (lowers regional movement)

​

​

Housing Costs

-- Building restrictions are severe in the most productive areas

-- 1950s apartment: Average NYC apartment 530 inflation adjusted

-- Neighborhood where you grow up has a big effect on future income. Same for kindergarten. (See Raj Chety).

-- Housing prices have contributed to a return to de facto segregation.

​

Racial Segregation

-- New York City: Only 20% of schools had between 20 and 60% White students.

-- Southern “percentage of black students in majority-white schools”:

-- 43.5 percent peak in 1988

-- 23.2 percent in 2011

-- Lower than the integration level in 1968

Government

​

-- Only twenty per cent of federal spending is determined by actual political deliberation, a fraction that is expected to fall to just ten per cent by 2022.

-- After Iraq Congress no longer wants to hold high stakes war votes.

-- Transportation has arguably gotten slower. Transport infrastructure in decay.

-- Manhattan Project and Apollo (66 years after Wright Brothers)

-- Failed Project: Iraq and Middle East Peace

-- Golden Gate Bridge: 4 years. Empire State Building: 410 Days.

Matching People

-- Assortative Mating: Online Dating and Selective Colleges

-- Marriages matched on intelligence and education can lead to reduced inter-generational income mobility

-- Segregation leads to more political polarization

-- Losing side of the digital dive loses out in matching games

Mixed Blessings of Matching

-- Music: Spotify, Youtube >>> CDs/Records

-- Music Downsides:

-- People try less music outside their comfort zone

-- Contemporary music has less of a market

-- Cat and Dog Shelter match rates: ~20% in 2003 => 87% NYC, 93% SF

Lack of Social Radicalism

-- Vastly lower rates of protest

-- Courts have supported restrictions on protesters

-- During an eighteen-month period in 1971—1972, there were more than 2,500 domestic bombings reported, averaging out to more than five a day

-- LSD and Cocaine -> Marijuana and Opioids which put us to sleep

The Levy Can’t Hold: Did They Already Break?

-- Personal and government debt is very high.

-- Trust in institutions is low

-- Many people no longer believe they will have a better life than their parents

-- Tyler’s Predictions for the next 20-30 years:

-- Quite a bit like the 1960s and early 70s

-- Possibly a foreign war that becomes unpopular,

-- Very high amounts of protest and polarization.

-- Racial and segregation issues re-emerging.

We should push for sustainable economic growth, but not at the expense of inviolable human rights. --Growth Principle

Economic Growth

-- If society A grows at higher rate than society B eventually society A will have vastly more wealth.

-- Barring truly pathological distributions almost everyone in society A will eventually be better off than almost everyone in society B.

-- South Korea vs the Congo

-- Solow Model: The only long term driver of economic growth is technological progress.

-- Increasing Returns Model: Growth begets more growth, perhaps by increasing specialization or allowing more investment.

Time

-- Should we discount the welfare of future people relative to people today?

-- Would it be better for a person today to die early so that Cleopatra could have an extra strawberry?

-- If you exponentially discount at all then even trivial things today will be worth millions of future lives.

-- General Relativity -> Time is an illusion

-- Tyler does not discuss existential risk.

Aggregation

-- Arrow and other Impossibility Theorems

-- A Growing pie is easier to distribute. No one has to lose out.

-- Peter Thiel Point of View: The lack of growth is a large reason why politics have become so partisan and vicious.

Rules and Rights

-- How do you justify following rules from a utilitarian point of view.

-- Pluralism

-- Rights have to be semi-absolute or we would need to trade them off in exchange for increasing the growth rate.

-- It’s ok to compromise on rights to prevent truly extreme things like the destruction of the entire earth.

​

Radical Uncertainty

-- Butterfly Effect

-- Extremely small changes almost certainly change which sperm cells successfully fertilize an egg.

-- Uncertainty about the future implies we should focus on the biggest effects. Big effect sizes are most stable to perturbation.

Common Sense Morality

-- Work hard

-- Take care of our families

-- Live virtuous but self-centered lives

-- Giving to charity at the margins

-- Help out others on a periodic basis.

Defending Common Sense Morality

-- Utilitarianism: Extreme Self Sacrifice -> Growth trumps altruism. Moral uncertainty and pluralism.

-- Animal Rights -> Tyler is more receptive to mercy as opposed to Utilitarian arguments.

-- Repugnant Conclusion -> Tyler has no strong reply. He accepts perhaps the repugnant conclusion represents a different path to growing value over time.

Bringing It All Back Home

Questions

-- Why is it important we not be Complacent?

-- Economic Growth

-- But why is Tyler so pro travel and skeptical of matching?

-- Why so much discussion of Race and protest?

-- What exactly should we be Stubbornly Attached to?

-- Individual Right

-- Pro-growth Policies

-- We need stubborn attachments since it’s very tempting to deviate