Boudreaux to NYT on Brooks on Cowen on The Great Stagnation
I can’t resist quoting my colleague Don Boudreaux latest letter to the editor verbatim:
To the Editor:
David Brooks appropriately devotes today’s column to my GMU Econ colleague Tyler Cowen’s important new book “The Great Stagnation” (“The Experience Economy,” Feb. 15). Mr. Brooks offers the intriguing hypothesis that what accounts for the relatively ‘stagnant’ measured economic growth since the mid-1970s isn’t so much the absence of remaining “low-hanging fruit” (as Tyler argues) but, instead, a shift to less materialist values.
I have a different hypothesis: what has stagnated isn’t the economy but, rather, economists’ and statisticians’ capacity to measure economic activity and its contribution to human well-being.
As Mr. Brooks notes, Americans today demand more unique and nuanced experiences. Unfortunately, though, the economic value of experiences – unlike that of more corn, more cows, and more cars – is difficult to measure using mid-20th century national-income-accounting categories. But we are demanding these experiences NOT because we’re becoming less materialistic or less wealthy. We’re demanding these experiences precisely because, rather than stagnating, our economy and our wealth continue to grow so impressively that they are outstripping last-century’s economic categories and measurement techniques.
Donald J. Boudreaux
Professor of Economics
George Mason University
Think about it this way: If economic statistics arose in medieval times, we would have measured well-being in something like pounds of grain per capita. Around 1900, these ossified medieval statistics would probably have revealed a Great Stagnation – followed, I suspect, by actual decline due to the growing diversity of the American diet.
P.S. If you know of actual historical data on grain per capita, please share.