Ethics@Work: Stagnation or solution?

The economy may stop growing, but not the spirit.

By ASHER MEIR
Economist Tyler Cowen recently published a short ebook called The Great Stagnation.
Cowen points out that median income in the US has been stagnating in recent decades, and concludes that the period of rapid growth we have seen for the past few hundred years is coming to an end.
He explains that we have already eaten the “low-hanging fruit,” sources of growth that are easy to exploit. When only six percent of teenagers graduate high school as was true in the US in 1900, it is easy to increase productivity by improving education – you just have to provide the same good to the other 94% of youngsters.
Nowadays the rate is close to 80%; the ones who are left are those who probably will not benefit much from a high school education, certainly not as much as the millions of geniuses who were among the uneducated in 1900.
Cowen also thinks that lifechanging technologies are pretty much in the past; you can only invent the internal combustion engine or electric grids once. Inventions currently being contemplated will not have nearly the same impact on our standard of living, even if they are successfully realized.
Cowen views this prospect as a bit depressing, as evidenced by the title of his book. But another, greater economist foresaw the same outcome eighty years ago, and he found it exhilarating.
In 1930, John Maynard Keynes gave a speech on “Economic Possibilities for our Grandchildren,” in which he attempted to guess what the following one hundred years of economic development would be like. We have already experienced eighty of those years, so we can form a pretty good judgment of how accurate Keynes was.
Keynes begins by reviewing the amazing technological advancement of the century preceding his speech, what Cowen sees as the golden age of low-hanging fruit. He concludes that “mankind is solving its economic problem,” adding that “a point may soon be reached, much sooner perhaps than we are all of us aware of, when these [absolute] needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes.”
Both authors are describing the same phenomenon: an end to the era of low-hanging fruit, a time when our basic needs are readily satisfied with the existing technologies and a moderate work week, while far-reaching economic growth is not anticipated – in the sense of predicted or in the sense of looked forward to.
Cowen views this as the twilight of an era of hope, but Keynes views it as the dawning of an era of promise.
He states, with near-messianic overtones: “Thus, for the first time since his creation, man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well... The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples who can keep alive, and cultivate into a fuller perfection, the art of life itself, and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.”
While Cowen’s conclusions are the subject of much discussion and even controversy, there is certainly a great chance that economic standards of living for our grandchildren will be very similar to our own.
In Cowen’s terms, this is stagnation.
For Keynes, it means that our grandchildren will be freed from defining thriving and stagnation in economic terms. Instead of producing more and more, slow technological advance and investment will enable us to work less and less; as Keynes states, “three hours a day is quite enough to satisfy the old Adam [who, according to biblical sources, was burdened with the obligation to work for his sustenance] in most of us.”
The rest of the day, Keynes theorizes, will be devoted to “the arts of life.” It is interesting to point out that Maimonides also envisioned an idealized “normal” workday as one in which three hours are devoted to work and the rest devoted to the pursuit of wisdom.
We may hope that if Cowen’s conclusions are realized, then Keynes’s vision will likewise come to pass, and a period of economic stagnation will serve as the spur for an era of spiritual and cultural flourishing.