"This book is far from all good news." So writes Tyler Cowen at the beginning of his latest book, "Average is Over: Powering America Beyond the Age of The Great Stagnation."
Cowen is an economist at George Mason University who is generally classified as libertarian and whose interests range far afield. His most recent books include "The Great Stagnation" and "An Economist Gets Lunch" (his advice: skip fancy downtown places, eat at restaurants attached to Pakistani-owned motels).
In "The Great Stagnation," he argued that productivity has been lagging because of lack of technological innovation. Information technology, he wrote, has produced nothing like the gains obtained from the steam engine, electricity and hydrocarbon chemistry.
In "Average is Over," he looks farther ahead to "a very surprising time," when new technologies will lead us out of stagnation. But it will lead some of us out very much farther than others.
Cowen minces no words on this. Those of us accustomed to the emollient language of politicians promising a bright future will be startled by Cowen's frankness.
The big winners in the economy he foresees will be those who can work with and harness machine intelligence and those who can manage and market such people.
Such "hyperproductive" people, about 15 percent of the population, will be wealthier than ever before. Also doing well will be those providing them personal services.
For jobs lower down on the ladder, there will be a premium on conscientiousness. That's good for women and bad for men, who are more likely to do things their own way.
Middle-level jobs, Cowen says, are on the way out. He argues that many of those laid off after the financial crisis were "zero marginal product" workers. They weren't producing anything of value and employers won't replace them.
Upward mobility will still be possible, he says, thanks to machine-aided education, which can spot talent in unlikely places. But I think he overestimates how likely that will be.
Assortative mating (people marrying similar people) and the considerable hereditability of intelligence means that many or most of those with the talents to get to the top will start out there. A fair society, ironically, may have less social mobility.
How will this society handle the pending fiscal shortfall? Cowen's prediction: by raising taxes a bit (but it's hard to get more out of rich, clever people), cutting Medicaid (the poor are a weak constituency), maintaining aid to the elderly (a strong constituency) and squeezing employees (by imposing mandates on employers that will reduce cash income).
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