The Great Stagnation

WE WALKED ON THE MOON, AND THEN WHAT? WHY, IN THE MIDST OF CRISIS,

AMERICA HAS THE CHANCE TO INNOVATE LIKE NEVER BEFORE

Renowned economist Tyler Cowen declares that the American economy has had it relatively easy since the seventeenth century, becoming increasingly complacent over the last four decades. Instead of pushing for continual innovation, we, as a nation, have enjoyed the low-hanging fruit of free land, a plentitude of cheap labor, and new technologies. Unfortunately, that fruit has just about run out. In THE GREAT STAGNATION, Tyler Cowen explains why America is perfectly capable of reaching higher branches-we just need the determination necessary for innovation.

The 1969 moon landing is often considered the symbolic beginning of today's modern technological era. But in THE GREAT STAGNATION, Cowen provocatively turns this notion on its head: Neil Armstrong's jaunt on the moon is "more properly seen as the culmination of some older technological developments," Cowen writes. After all, "What did the moon landing lead to in terms of our everyday standard of living?"

THE GREAT STAGNATION points out that many of our most recent innovations represent private-rather than public-goods, which do little to alter our overall standard of living. Google, Facebook, eBay, and Twitter may represent online behemoths, but they only account for about 40,000 jobs. Even the iPod, a cultural phenomenon, has created a modest 13,920 jobs in the U.S.

Can we fix things and reverse this stagnation?

Cowen believes we can and, in THE GREAT STAGNATION, outlines how, with the help of a wealthier and more populous world, more consumers exist for innovation. The Internet also shows promise as a revenue generator and as a place for scientific learning to take off with no geographical constraints. By raising the social status of scientists, facilitating healthy and constructive political debate, and keeping realistic expectations about the rate of progress, America can fix its problems. "Reason and science have never been more important," says Cowen-and there has never been a better opportunity to start something new and different.

In a time of great economic uncertainty, THE GREAT STAGNATION is an illuminating and provocative treatise on how the U.S. can find its way back to prosperity.

About the Author:

Tyler Cowen, professor of economics at George Mason University, is the author of The Age of the Infovore and Discover Your Inner Economist. He co-blogs at Marginalrevolution.com, one of the world's most influential economics blogs, and is a regular contributor to The New York Times, Money, Wall Street Journal, The Washington Post, and Slate, among many other print and digital media outlets.

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