thanks, sharing with our list as well,<br><br>Michel<br><br><div class="gmail_quote">On Mon, Apr 4, 2011 at 10:07 PM, James Quilligan <span dir="ltr"><<a href="mailto:jbquilligan@comcast.net">jbquilligan@comcast.net</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin: 0pt 0pt 0pt 0.8ex; border-left: 1px solid rgb(204, 204, 204); padding-left: 1ex;"><div style="word-wrap: break-word;"><div style="overflow: hidden; color: rgb(0, 0, 0); background-color: transparent; text-align: left; text-decoration: none; border: medium none;">
<br>... looks like an interesting book</div><div><h1>The spectre of a jobless online world</h1><p>Review by James Crabtree
</p><p>Published: April 4 2011 02:56 | Last updated: April 4 2011 02:56</p></div><div><div><p><span>The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better</span>, by Tyler Cowen, <i>Penguin eSpecial, RRP �2.30/$3.99</i></p>
<p>Battered
by recession and menaced by China, the US hungers for explanations of
its relative economic decline. Tyler Cowen, an economist and blogger,
has provided one: that the country has run out of technological juice.</p><p>Where
many believe innovation keeps growth ticking along, Cowen posits a
world of �periodic technological plateaus, and right now we are sitting
on top of one�. As a result, America increasingly resembles Japan:
ageing, stagnant, overgoverned and waiting for a technological burst to
get the motor going again.</p><p>This provocative thesis is one reason <i><a title="Penguin website: download The Great Stagnation" href="http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781101502242,00.html" target="_blank">The Great Stagnation</a> </i>is
the most discussed economics book of the year. Another stems from its
format. Inspired by Marginal Revolution, the must-bookmark blog for
economics nerds that he publishes, Cowen released the book only in
electronic form. This ensured a timely arrival just as the US was
emerging from financial meltdown and looking for answers.</p><p>Cheap to
download and quick to read, its brevity also has much to recommend it.
�Big idea� books too often spread an article�s worth of insight over
hundreds of pages of padded-out prose. Cowen cannot be accused of the
same mistake. Instead, <i>The Great Stagnation</i> is a true pamphlet for the modern age: more insightful, urgent and challenging than most publications many times its length. </p><p>That
said, there are problems with the story it tells. The first concerns
the route by which one might expect the internet to filter into higher
productivity and growth. Cowen�s contention is that the �low-hanging
fruit� of land, education and technology that once powered US growth
have all been picked. Cheap land has been used up. There are fewer
�smart, uneducated kids� to send to school. And the internet, in
particular, has disappointed relative to innovations such as electricity
and the railways. </p><p>Cowen is no Luddite: as one might expect of a
blogger, he thinks life is more fun and interesting with the internet
around. But he worries that today�s �web activities do not generate jobs
and revenues at the rate of past technological innovations�. </p><p>This
may well be correct. Facebook and Twitter are not obviously
productivity-enhancing tools � as their users can all too easily attest.
But this is the reason few economists look to them in particular, and
consumer technology in general, as a main explanation of how technology
alters patterns of growth. </p><p>Instead, most growth theorists look
instead at how the internet diffuses through organisations. At first
this effect was seen only in a few sectors, most obviously among
super-efficient retailers such as <b><a href="http://markets.ft.com/tearsheets/performance.asp?s=us:WMT" target="_blank">Wal-Mart</a></b> and <b><a href="http://markets.ft.com/tearsheets/performance.asp?s=uk:TSCO" target="_blank">Tesco</a></b>,
which used the web to reshape their logistics systems. But now other
industries have reworked themselves too, and the evidence suggests they
have also become more productive, boosting economic growth overall. </p><p>But
this process takes time, rather than arriving in one big bang as Cowen
seems to expect. The coming of electricity did not boost growth by
giving workers light. Rather, it did so in much the same way as the
internet today: by allowing production to be arranged in new ways.
Indeed, economist Paul David has shown that productivity took close to a
generation to rise after electricity�s arrival, when most of the
machines in US manufacturing began to use it. Much the same is likely to
be true of the internet.</p><p>The real problem, however, comes when
Cowen links his argument about a technological plateau to the
predicament of the US labour market. Here, his analysis is unarguable:
wages are stagnant, job growth is anaemic and the very wealthy have won
the largest share of recent economic gains. But to blame this on too
little technological innovation, rather than too much, seems to get the
problem the wrong way round. </p><p>What ails the US job market is not
the result of technological churn alone, though that is a big
contributor. Automation, the reconfiguration of industries, and
technologies that allow jobs to be moved overseas: all have contributed
to an �hourglass� labour market with a prosperous top, pinched middle
and struggling bottom. In short, the structure of the US economy changed
hugely in the past 20 years: the problem is too little has been done to
help those left behind. </p><p>At one point, Cowen quotes Peter Thiel, a
co-founder of Ebay, as saying that �people don�t want to believe
technology is broken�. In fact, the more likely problem is that
technology works too well. America may be suffering from a great
stagnation, but but in spite of his stimulating and engaging analysis,
it seems unlikely that it is happening for the reasons Mr Cowen
suggests.</p></div></div></div></blockquote></div><br><br clear="all"><br>-- <br>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a>� - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br>
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