Ep. 282 – Tyler Cowen: What the Future Holds: Stagnation or Innovation?

We’ve become too comfortable. We’re innovating less and watching Netflix more.

When I think of a “complacent class,” (a group of people who don’t care to move forward or move at all), I think of this: Americans soaking high wages off the backs of more aggressive global economies. I picture us eating delivered food, never moving, only using the remote. And having drones deliver everything we need.

I had to ask Tyler Cowen about this. He’s a personal computer that’s going to answer all my economic questions.

He knows all about the “complacent class.” Because he wrote the book on it.

It’s called, “The Complacent Class: The Self-Defeating Quest for the American Dream”.

“Look at it this way,” he said. “We’ve had these incredible advances in the late 19th and early 20th centuries. We take fossil fuels and powerful machines and combine them to do everything you can imagine (cars, airplanes, electricity, radios, televisions). We’ve had incredible booms spread to the middle class. Spread to the poor. We’ve done that. Now we’re waiting for the next wave of big things.”

I have an idea of what the next big wave could be… I’ve written about it before. And I’ve interviewed the experts. But I wanted to know, will we be successful?

“We’re kind of running a race,” Tyler said. “Will the next wave of innovations and productivity come before our debts do us in? Right now to me, it’s looking like the answers no.”

What Tyler said next scared me.

“America is losing its dynamism.”

But Tyler makes two distinctions here. The future is built on A) Innovation and B) PRODUCTIVITY. It’s the persistence to do.

I still feel we’re trying to hit the frontier. We’re exploring space. Improving biotech. Creating countless innovations.

But is this progress coming from is only the 1%? Are the rest of us just sitting around? Waiting for the benefits?

I wanted to hear the worst case scenario. I don’t know why. Maybe sometimes fear pulls me in. It’s like following a narrow path of light in a dark cave. I'm not interested in the dark. I'm following the light.

But what he said next is a scary thought to consider…

“The worst case scenario is that America’s allies realize we cannot make good on all of our commitments. So they start fighting more amongst themselves. Trusting us less. Maybe building their own nuclear weapons. The fiscal position of the United States government becomes more and more cramped. We stop being credible. The quality of our governance continues to decline. And, both internationally and at home, we have a mess with warfare and partial collapse of international order. And here we have a return of something like the 1970s with high unemployment, high inflation and stagflation,” Tyler says.

So then what is our future? What can we depend on?

In this podcast, I ask Tyler and he shows me how we can create a dynamic future… How we can keep reaching for the frontier.

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