Tyler Cowen's The Great Stagnation argues that we (Americans) have gathered the low-hanging fruit (free land, the easy technological breakthroughs and educating the undeducated) and are now in for a slowdown. Moreover, our measurements are badly flawed and often misleading. To be sure, all the econ textbooks enumerate the many flaws and limits of GDP accounting and measurement is always tricky. But the problem of misimpressions will only get worse. We got a lot of very cool stuff for free on the internet, but this does not show up in GDP.
But GDP is not a plausible bottom line. How about long life?Cowen discusses health care and shows that we Americans spend a lot but do not get commensurate payoffs. Longevity is up, but our numbers do not match our expenditures.
But this is also a measurement artifact. National data aggregate over all the people who smoke, take drugs, avoid exercise and consume all the wrong foods. The actual payoff from modern medical science is that we can now choose the possibility of greater longevity than our ancestor could. Every life expectancy calculator asks all the obvious lifestyle questions.
The real payoff to Cowen's argument comes near the end of his book when he writes about the current economic woes and asks how so many mistakes could have been made by so many people. His answer: "We thought we were richer then we were." If so, it's best to take his story seriously. On the heels of the democratization of lxury and the democratization of temptation there is now the democratization of hubris.