As the last person in the world to review Tyler Cowen’s The Great Stagnation everything I have to say will likely have been said already. You might say there is little low-hanging criticism fruit left. So I’ll keep it short.
I think Tyler is missing a lot in his solutions chapter, but that’s probably because his diagnosis directly implies so much about what we shouldn’t do policy-wise that simply convincing people that this part of argument is correct would already accomplish a lot in this vein. To the left he says that we cannot redistribute our way to growth, and to the right he says we can’t tax cut our way to it. Policy is what we do and what we don’t do, and if he could convince people that a) slow growth is a problem, and b) these policies aren’t solutions, then it would represent a huge and positive change-of-course. Going too far into policy recommendations beyond that runs the risk of distracting readers and critics from these key points.
That said, I don’t disagree much with his diagnosis, so despite understanding why he may have done so, I’m going to address some possible solutions I think he ignored. First and foremost is one of the key low-hanging fruits of yore: skilled immigration. If my count is correct, Tyler mentions immigration three times. Twice it comes in the form of what could be called his thesis statement:
“In a figurative sense, the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century, whether it be free land, lots of immigrant labor, or powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing, and we started pretending it was still there.”
That free land is no longer available is obvious, and Tyler spends a lot of the rest of the book discussing technology, but what about the “lots of immigrant labor” that was so important before? Tyler discusses the possibility for improvement here in passing in the section on education:
“I’m also heartened by how many students from foreign countries wish to study in the United States, if only they could get the visa.”
Our current immigration policies could do a lot more to encourage skilled immigration, and worldwide immigration restrictions and inefficient immigration policies are preventing human capital from moving towards in best and highest use, which reduces global economic growth. Why was our past immigration one of the top low-hanging fruit available but the possibility for more and better immigration today barely worth mentioning? I’m not sure if Tyler does not go into this because he is not optimistic that this represents low-hanging fruit, or, as I mentioned above, because he does not want to alienate the reader with unpopular proposals for reform.
Another major issue ignored is, as Matt Yglesias has pointed out, intellectual property law. Is this an issue that has limited ability to improve economic growth? Or, like I suggested above, is Tyler ignoring divisive issues in order to focus readers on his central arguments. One piece of evidence against this hypothesis is Tyler’s inclusion, as one of the trends that should make us optimistic, the fact that democrats are turning against teachers unions, and how that makes more K-12 reform possible. Perhaps this seemed like a much less divisive point when Tyler wrote the book then it does today. In the end I am left unsure whether Tyler’s omissions reflect his pessimism, or if he’s just being strategic.