Tuesday, February 15, 2011

America's Economic Plateau

An interesting column by David Brooks, who looks at Tyler Cowen’s e-book, “The Great Stagnation." The article points out how our relative wealth is changing our values and our economy, turning it into one that doesn't create as many jobs.
But his evidence can also be used to tell a related story. It could be that the nature of technological change isn’t causing the slowdown but a shift in values. It could be that in an industrial economy people develop a materialist mind-set and believe that improving their income is the same thing as improving their quality of life. But in an affluent information-driven world, people embrace the postmaterialist mind-set. They realize they can improve their quality of life without actually producing more wealth.
In other words, as Cowen makes clear, many of this era’s technological breakthroughs produce enormous happiness gains, but surprisingly little additional economic activity. Read the whole thing at NYT