Cowen Seeing Weak Growth Makes ‘Great Stagnation’ Hotly Debated Bestseller
Tyler Cowen sits with a cranberry juice and a pile of books he no longer intends to read. He’s at Harry’s Tap Room, near the Air France ticket counter in the main terminal of Dulles International Airport, on his way to São Paulo.
Two days ago he e-mailed me his 27-book reading list for the trip and I vowed to keep up with it. Already, before he boards, he has assembled a pile of discards.
“Unger. I’d say I browsed it. I looked at every page,” he says. “There’s nothing wrong with the book. It’s a good book to stir up leftists.” Roberto Mangabeira Unger’s “The Left Alternative” falls with a thud to the table.
Cowen, 49, has round features, a hesitant posture, and an unconcerned haircut. He handles each book as he ticks it off his list. “This I discarded. It appeared to get a good review, but there’s no framework, just scattered vignettes. I looked at 20, 30 pages.” Sarah Vowell’s “Unfamiliar Fishes,” thud.
Cowen’s first rule of reading is as follows: You need not finish. He takes up books with great hope and no mercy, and when he is done -- sometimes after five minutes -- he abandons them in public, an act he calls a “liberation.”
In January, Dutton published Cowen’s e-book, “The Great Stagnation.” It has shown up twice on the New York Times’ e- book bestseller list. Dutton, a Penguin imprint, will release a hardcover edition on June 9, Bloomberg Businessweek reports in its May 30 issue.
David Brooks has called it “the most debated nonfiction book so far this year” and leaned on it for a column in the Times. “In terms of framing the dialogue,” wrote Kelly Evans for the Wall Street Journal, “Tyler Cowen may well turn out to be this decade’s Thomas Friedman.” The year is young, but among wonks the book has reached that most coveted of states: It must be responded to.
Cowen thought it was too long for a magazine article and too short for a book, so he suggested that the publisher offer it only as an e-book. The work is priced on Amazon.com at $3.99 for 15,000 words. Cowen gets the sense that Dutton humored him, both on the format and the content.
“In a way [neglect] was a bonus,” he says. “If this were like the second coming of Harry Potter, everyone would have had an idea about how it should be written.” Now most reviews point first to the road it paved as an e-book before moving on to the importance of Cowen’s ideas.
“The Great Stagnation” runs through three centuries’ worth of what Cowen calls the “low-hanging fruit” of economic growth: free land, technological breakthroughs, and smart kids waiting to be educated. For developed economies, he argues, none of these remains to be plucked. Yet America, Europe, and Japan have built political and social institutions on the assumption of endless growth. Cowen summarizes the financial crisis in eight words: “We thought we were richer than we were.”
Can’t Be Fixed
It’s not that he disagrees with any of the better-known explanations for the crisis -- easy credit, flawed ratings. It’s that he sees a more fundamental problem, one that can’t be fixed with regulation, bailouts, or tax cuts.
Cowen thinks that now that America has used up the frontier, educated all of the farm kids, and built a couple of cars for every family, we might be done growing for awhile. “The Great Stagnation” is a short work, simply written. It avoids any but the most basic discussion of economics, yet also brushes lightly over all of modern history; behind simplicity in style and argument lies a lifetime of intensely productive reading.
Tyler Cowen has read what’s listed in Harold Bloom’s “The Western Canon,” though not, he concedes, every single last one of the Icelandic sagas. He rereads what you probably haven’t heard of, like Anton Chekhov’s “Sakhalin Island.”
For the Brazil trip, in case he runs out of new books, he has also brought Neal Stephenson’s 1,100-page “Cryptonomicon,” which he has already read. Fiction slows him down, he says, which makes packing easier. He carries a Kindle but reads paper when he can; he says he’s invested too much time on the rhythm of how the eye tracks the page. Several people have told me the same story about Cowen: They have watched him read, and he scans a page as others might scan a headline.
He has a PhD in economics from Harvard University and holds the Holbert C. Harris Chair of Economics at George Mason University in Fairfax, Virginia, where he’s taught since 1989. He runs the university’s Mercatus Center, a libertarian think tank, and has published 15 books and over 60 academic articles. In May the American Institute for Economic Research asked academic economists to name their favorite economists under 60. Cowen ranked 16th, only five thinkers behind Ben S. Bernanke, the current chairman of the Federal Reserve.
Cowen is still best known for the blog he shares with Alex Tabarrok, “Marginal Revolution.” The same survey listed Cowen and Tabarrok’s blog as the second-most popular on economics. Greg Mankiw’s eponymous blog at Harvard just edged it out; both picked up far more votes than Paul Krugman’s New York Times blog “Conscience of a Liberal,” which ranked third, or “Freakonomics,” at fifth. That’s among economists.
According to Compete.com, “Marginal Revolution” gets more unique visitors than any other blog in the AIER survey’s list, except for Krugman’s and “Freakonomics,” both hosted by the New York Times. Cowen and Tabarrok, who also teaches economics at George Mason, started the blog in 2003. There were few economics blogs at the time, and Cowen thought the two might have a comparative advantage; they had collaborated on papers since 1990, and have together published an introductory textbook on economics (as have two of the other top five economics bloggers).
In his posts, Cowen often serves as a kind of agony aunt for intellectuals. On May 9 a reader asked about the best books on American history and culture written by foreigners. Cowen suggested Vladimir Nabokov and Ayn Rand and linked to a two- year-old list of fiction in the Wall Street Journal.
In the same week he summarized a book on the origins of World War I, recommended the Chinese food in the basement of the Golden Mall in Queens, N.Y., and asked his readers to name the best pop album that never caught on. Cowen blogs like he reads: prolifically and about pretty much everything.
At the bar at Dulles, he produces David Goldfield’s “America Aflame,” a three-inch-thick hardback on the Civil War. He pats it like an obedient dog and urges me to open a page at random and read a paragraph. “It’s clear,” he says, “it’s about stuff.” When we’re done eating, he offers me a plastic bag filled with the books he’s liberated, tells me that reading is the handmaiden of travel, and heads for security.
When Tyler Cowen was 15, he became the New Jersey Open Chess Champion, at the time the youngest ever. At around the same age, he began reading seriously in the social sciences; he preferred philosophy. By 16 he had reached a chess rating of 2350, which today would put him close to the top 100 in the U.S. Shortly thereafter he gave up chess and philosophy for the same reason: little stability and poor benefits.
He’d been reading economics, though. He figured that economists were supposed to publish, and by age 19 he had placed two papers in respected journals. As a PhD candidate at Harvard, he published in the “Journal of Political Economy” and the “American Economic Review.”
“They were weird, strange pieces,” he says, “but still in good journals, top journals. That cemented my view that I could, you know, somehow fit in somewhere.” I ask him what he was like, what made him doubt he could fit in.
“I was like I am now.”
“You’ve always been like that?”
“Always. Age 3. Whatever.”
“What did you do at age 3?”
“Read a lot of books.”
Unafraid of Silence
Cowen speaks in short, declarative sentences that follow each other like steps in a proof. When the proof ends, he is not afraid of silence. In a man with straighter shoulders this might come off as overconfident, but Cowen also listens generously. He says “yes” like a Scandinavian, with a cautious intake of breath, as if to say that you are so often right that it would be rude to spend too much time on it.
And he’s funny. In April, I sat in on a seminar he teaches on literature and law that puts 10 students at a conference table, each with a pile of books. (George Mason’s law school needed someone to teach the class, so he volunteered outside of his department.) Cowen got laughs, and not tentative chuckles either. He got class-stoppers out of “Bartleby, the Scrivener” and Edgar Allan Poe.
“He asks the right questions,” says Megan J. McArdle, “which is a gift.” McArdle, a friend of Cowen’s who writes about economics for the Atlantic, offers a story from a conference.
An economist had complained about the pharmaceutical company “cheerleaders” who visit doctors’ offices to promote prescription drugs, and suggested that the government fund drug research.
“Yes,” said Cowen. “But what do you do with the cheerleaders? They provide a function, they get into doctors’ offices and make doctors listen. Will the government have to hire cheerleaders?” Cowen refuses to scold. He begins his analyses by assuming that if a market, or a person, behaves in a certain way, moral failure is the least likely explanation. Bryan Caplan, a colleague at George Mason, gushes about Cowen’s fundamental decency and civility. He also says that other economists avoid challenging him directly for fear of being made to look a fool. “When I criticize him in public,” says Caplan, “I get covert high fives.”
Biotechnology in Africa
Three days after leaving for Brazil, Cowen e-mails that he has liberated “America Aflame” on a plane. “Contrary to expectations,” he writes, “it turned out to be pretty boring.” He has finished “Starved for Science” -- a plea to allow biotechnology into Africa -- and moved on to Alexander Solzhenitsyn’s “In the First Circle.” His wife had recommended it. Her grandfather had spent 17 years in a Soviet prison camp. “Very, very good,” writes Cowen.
Since the late 1990s much of Cowen’s work has looked at the economics of culture. He consumes art and music at the rate he does books, but unlike most critics he doesn’t sniff that markets have either ruined culture or brought it low.
In 2002 he published “Creative Destruction,” which argues that globalization created much of the art and music we might consider “native.” Reggae in Jamaica, for example, borrowed from commercial rhythm and blues broadcasts that drifted over the water from New Orleans and Miami. The fur trade and the metal knife helped create the totem poles of the Northwestern American Indians.
But the book also introduces the idea of a distinct “ethos” in creative cultures, which Cowen admits is hard to define for an economist. And “Creative Destruction” points out that the global markets that spur innovations in art can also, eventually, build a demand that discourages further changes. Tyler Cowen is a pragmatic kind of libertarian: He’s for free markets, but he doesn’t get all huffy about it.
“I write books to solve problems for myself,” he says, “to figure things out. Things bug me, in a Lieutenant Columbo sort of way.”
He began work on “The Great Stagnation” by wondering why growth rates for median wages were failing to keep up with either those for the highest earners or with gross domestic product. Economists on the left have called this trend “income inequality” and blamed it on policy; economists on the right have maintained either that it’s not a problem or that it’s being measured wrong and doesn’t exist in the first place. Cowen had been skeptical himself, but saw too many bits of evidence to ignore: sports salaries, data on executive compensation, the gulf between J.K. Rowling’s fortune and what other authors make.
Then the financial crisis happened.
“For something so fundamental to have gone wrong,” he says, “my intuition and the evidence suggest that there’s something wrong with the real economy as well.”
Maybe the two were related, he thought: What if the financial system took on so much debt because most of us assumed that growth was eternal? Cowen says he has no grand plans when he begins to write, just what he refers to as myopia. What looks strategic from the outside is just Cowen refusing to let something go.
In 2004 a reader of his blog suggested to him in an e-mail that he might be autistic. Offended at first, he applied himself to understanding the term, then decided he has what he calls an “autistic cognitive style,” then wrote a book about it, “Create Your Own Economy.” (Cowen never sought a professional diagnosis.)
He treats autism as he does the drug company cheerleaders, with neither pity nor celebration. It’s not that he denies that autism exists, rather he points out that there is some joy in obsession. He describes people with autism as “infovores” who are attracted to information -- the minutiae of train schedules. Or books. He mourns the coming end of big-box bookstores and the enchantment he felt circling the new release table. He goes to the public library twice a week, chasing after serendipity. He has no algorithm for finding a book. If he is intrigued, he buys. “When economists look at what other people call pathologies,” he says, “they see reason, they see specialization, they see intent. They see a lot of pleasure.”
A week after leaving for Brazil, Cowen e-mails that he is enjoying Steven Levy’s “In The Plex,” about Google. “We’ll see if it picks up in intensity,” he writes. “If it doesn’t, I’ll stop by the halfway point.” He has liberated two more books, spent a disappointing hour in an English-language bookstore, and found good material in Francis Fukuyama’s “The Origins of Political Order,” though he can’t yet see it coming together. He has started Mat Johnson’s novel “Pym,” and abandoned a biography of Otto von Bismarck at the 60 percent mark on his Kindle.
Ascent to Tenure
At Dulles, Cowen noted that most economists don’t read, at least not widely. Robert Frank agrees. Frank, who teaches economics at Cornell University, says the ascent to tenure leads young economists toward math and small questions. Universities hold on to only the leading figures in each academic sub- specialty.
“You want to climb to the top of a hill,” says Frank, “and it’s a lot easier to climb to the top of a small hill than a big broad one.”
In some ways, Cowen has skipped a step in the normal path of the economist from academy to celebrity, which may explain why three notable economists contacted about Cowen declined to comment. There’s an idea among academic economists that the privilege of writing a narrative argument must be earned through the hard work of modeling and econometrics.
“There is a view that what can’t be disproven isn’t science,” says Raghuram Rajan, a former director of research at the International Monetary Fund who now teaches at the University of Chicago Booth School of Business. He has published his own work for a general audience, most recently “Fault Lines,” on economic risks the financial crisis has yet to uncover.
Rajan doesn’t think that narrative economics is any less difficult than writing models. “I don’t see your having to prove yourself before moving on to something that is ‘less rigorous,’” he says. “Both are hard. Both are important.”
Tyler Cowen can do the math, but he works in narrative. “Economists talk of models,” he says. “Is a novel a model? What do you learn about society from novels? They’re false, but so are models.”
After Cowen gets back from Brazil, we meet at Eyo Restaurant & Sports Bar in Falls Church, Va., an Ethiopian place that sits in a strip mall underneath several housing towers. This is yet another of Cowen’s enthusiasms: searching for food, and recording it on “Tyler Cowen’s Ethnic Dining Guide,” another blog. He’s included rules on how to find a restaurant and how to order when you get there in a book, “Discover Your Inner Economist.”
For one: Order the strangest thing on the menu -- chances are the chef put the most work into it. And the best ethnic food, he writes, is prepared at strip malls. He orders for me, then asks whether I eat raw beef.
We talk about his department. For the last 15 years, Cowen has had a strong hand in new hires for George Mason. The school looks for economists who are undervalued elsewhere.
Cowen finds economists as he does books, by curiosity and faith in chance. When Caplan, then a graduate student, mailed Cowen a critique of one of his papers in 1994, Cowen began a correspondence and hired him in 1997. “I’ve been arguing with him since I met him,” says Caplan, “but he’s bent over backwards to help my career.”
Harvard or Massachusetts Institute of Technology, ranked first and second by U.S. News & World Report, wouldn’t need this strategy, but it’s starting to pay off at George Mason. The economists at GMU, he says, have been getting offers elsewhere and turning them down. They like each other too much. (Caplan has said this, too.)
“You get to talk about ideas the whole time,” says Cowen, “not about local politics or the real estate market, not about sports. You get to talk about ideas, from one second on to the end of the conversation.” He’s enough of a regular at Eyo for the waitress to volunteer, “We love him. We wish he’d come more often.”
When we’re done, I ask for the bill, and he gathers his stack: three paperbacks, four hard covers, and three stapled printouts.
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