In Tyler Cowen’s The Great Stagnation, he points to three main types of low-hanging fruit that helped drive America’s earlier economic growth but are now drying up:
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.
Yet while real limiting factors may have caused free land and powerful new technologies to start disappearing over the past 40 years, the only thing that has made “lots of immigrant labor” go away is our political choice to let in less immigrants. I think Tyler is wrong to largely neglect more and better immigration as a way to reverse our Great Stagnation. One could argue that changing opinions about immigration is very difficult, but so too is his crusade to raise the status of scientists, one of his main recommendations for stagnation reversal. Read this quote from his book, for instance, and you decide whether it could just as easily apply to immigration:
That’s going to be hard to achieve, but it’s not a question of lacking the resources. We simply need to will it, and change our collective attitudes, for it to happen. It’s a potential free lunch sitting right in front of us.
I’ve sort of made this point somewhat before, but I think it bears repeating, especially given our current political debates. If Tyler is right, and lots of immigrant labor was one of the most important drivers of our early growth, and a crucial low-hanging fruit, then our subsequent Great Stagnation should be regarded, at least in part, as a choice.

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Monday ~ June 27th, 2011 at 7:59 pm
Lord
While better immigration is possible, American does not have the advantage it used to have from being sparsely populated. Its population is only in line with its resources anymore. More, but not better, immigration will result in greater gdp but less gdp per capita.
Tuesday ~ June 28th, 2011 at 8:56 am
Nick Bradley
I disagree; America is still sparsely populated. Ever been to a major midwestern city? Many of their urban cores are totally hollowed out, and immigrants could easily take up residence there — or displace others in different cities that end up moving to the midwest.
And while GDP per capita will go down with low-skill migration due to mere changes in the distribution, the prospects for a non-dropout native worker will probably go up. After a generation or two, the children of low-skill immigrants reach the income earning levels of the general population.
And the addition of skilled migrants will increase total per capita GDP.
Wednesday ~ June 29th, 2011 at 9:02 am
Lord
It is not a matter of how many bodies one can fit into physical space but of whether resources are more abundant here than elsewhere. They are certainly more abundant than China and India, but how many Americans want to live there? They are also much less abundant than the countries that are doing well these days, resource exporters from oil exporters to Canada, Australia, and New Zealand. America is really only average these days among industrial nations and lowering gdp per capita makes it more difficult to make the investments necessary to sustain any advantage and make any advancement.
Monday ~ June 27th, 2011 at 9:34 pm
Stagnation from insufficient immigration | the-peripatetic
[...] Stagnation from insufficient immigration Posted on 06/27/2011 by theperipatetic1 Choosing to Stagnate [...]
Tuesday ~ June 28th, 2011 at 8:21 am
wallygold
To say that the new technology of the last 40 years isn’t powerful seems unimaginative and narrow-minded to me.
Today’s technology facilitates significantly more efficient collaboration than that of any other era. Just off the top of my head, I would think this would magnify all the benefits that come with living with cities.
Tuesday ~ June 28th, 2011 at 8:57 am
Nick Bradley
I agree, but it doesn’t show up in GDP — the IT revolution makes it possible to completely eliminate certain economic activities.
This is a problem with GDP accounting, not the technology.
Tuesday ~ June 28th, 2011 at 9:43 am
Gepap
How does Immigration work with Cowen’s points though – as far as I know, his book is about how we have been stagnating since the 1970′s. Between the early 1920′s and the mid -1960′s the spiggot of immigration had been shut by discriminatiory immigration laws. The relaxing of these laws and the modern growth in immigration, which has increased the number of foreign born Americans to levels not seen since the early 20th century, has coincided with this supposed stagnation, or at least, an stagnation in wages and income for the bulk of the American people. (and as an immigrant myself, no, I have no problem with immigration, just pointing out the timeline).
Friday ~ July 1st, 2011 at 12:41 pm
Mark A. Sadowski
I have to second Gepap. Cowen’s claims are completely inconsistent. He refers specifically to total factor productivity (TFP) growth.
TFP was especially fast during 1920-1973 precisely when immigration was tightly restricted and the percentage of foreign born plunged from 14% to 5%. Since the Great Stagnation began and the rate of TFP growth collapsed the percentage of foreign born has soared back up to 13%.
Similarly his claims about land don’t match up either. The frontier is commonly reckoned to have closed by 1890 and yet with the exception of the 1880s the rate of TFP growth was low to nonexistent prior to 1890.
Friday ~ July 8th, 2011 at 4:11 am
Emerging markets are low hanging fruit
[...] post by Adam Ozimek a few weeks ago got me thinking about The Great Stagnation over again: In Tyler Cowen’s The Great [...]