Stubborn Attachments (Tyler Cowen)
Tyler Cowen, an academic economist, has written a philosophy book. Stubborn Attachments is a concise and forceful essay, essentially making the argument that our political goal overriding all others, should be economic growth. Some may recoil at such a seemingly crass and materialistic philosophy, particularly at a time when some environmentalists are calling for a cessation of growth, or at least for us to be growth-agnostic. The arguments however are persuasive, and merit serious consideration.
First some caveats. Cowen specifies 'economic growth plus' as opposed to GDP, wishing to include less easily-measured forms of wellbeing including leisure time. Secondly, policies shouldn't infringe on basic fundamental human rights. Thirdly, the emphasis is on sustainable growth, that is, spoiling the environment for increased GDP is ultimately self-defeating. The book goes into very little detail on these three points, which I found made the book refreshing and better at articulating his more contentious or original arguments; you know what he means in each case, and that is enough. For anyone left dissatisfied, Cowen has a blog with ample expansion on these topics.
Why prioritise economic growth? Cowen has three primary arguments. Firstly, growth solves or improves most human problems. It gives us longer life spans, better health, more food, for leisure time, more things to do with our leisure time, better housing, education and so on. We are always faced with the problem of choice, which modern economics suggests is not straightforward since our preferences are often not to our long term benefit. Growth solves this conundrum however - we may choose to eat a hamburger to the harm of our future selves, yet rich countries with obesity problems still have longer life expectancies and better healthcare for those making potentially 'bad' choices.
The second reason to prioritise growth is Cowen's argument that we should give equal (or at least more equal) moral priority to future human lives as we do present ones. If we don't discount the importance of the welfare of future generations, it is clear that decisions we make now that promote growth in the future will benefit millions or billions more people than shorter-term policy solutions. The author does not expect this to happen in any dramatic way, since politicians are often trying to get reelected in a couple of years time, but logically, morally and philosophically he argues, this is how we should act.
Finally, the magic of compounding is itself a persuasive argument to prioritise growth. An extra couple of percentage points of annual growth may appear trivial, but the nature of compounding means it leads to enormous differences over time. The Soviet Union's standard of living slipped compared to the west in just a few decades to illustrate this point; North & South Korea show an even starker result.
One weakness of Stubborn Attachments is the lack of specificity with regard to policies that will bring about such growth (arguably this is a general failing in the discipline of economics). An entire chapter is dedicated to the existence of radical uncertainty, and how one can conclude from our lack of knowledge of the future that smaller political battles can be set aside in favour of the bigger goal of growth, but there surely ought to be some general thrust of how Cowen's vision of the world differs from the current state of affairs. To be fair, there is the suggestion that sustainability over short-term growth measures make logical sense, but little else. Where the discussion on growth becomes more interesting is the chapter on redistribution.
Cowen argues that redistribution should be viewed always through the prism of long-term growth. So, if lower redistribution of resources in America allows for more immigration, then this should be considered. This utilitarian argument for growth leads to the possibility of redistributing wealth from the poor to the rich; if a wealthy person can achieve a return of 5% on capital but a poor person only 1% so the argument goes, it is worth giving resources to the better allocator, even if they only keep 3.5% of such returns. Cowen isn't seriously prescribing such a policy, but it is an interesting provocation.
The answer to this idea ties in with his discussion on the models of growth in current economic orthodoxy. If one subscribes to Robert Solow's model of growth, any redistribution resulting in lower growth will be a one-off short term stutter in growth trends. If however, you believe that growth is driven by the idea of increasing returns (Paul Romer's idea, but traceable back to Adam Smith), then any redistribution that harms growth will have larger long term effects and should be reconsidered. This is where I disagree with Cowen.
The whole idea of 'increasing returns' is that, once a useful idea comes into society (for example the concept of patents, or the electric lightbulb), the idea itself costs nothing to replicate, and thus its usefulness compounds. And so, the argument is that to redistribute (and take resources away from any potential new ideas) could slow growth in an unknowably-significant way. I would counter that in order to have great ideas for the future, people need to be freed from the strain of poverty, be that an absence of free time, a lack of resources to trial business ideas, or lack of resources to pursue education. And since genius comes from all corners of society, the more people having ideas the more likely are transformative discoveries. Just as in the argument to give resources to the rich man who can get a 5% return, no one knows what return on capital the poor person could achieve were they not in poverty. Poverty has what ergodicity economists might call an absorbing barrier.
It is worth noting that in a way, China has adopted the policy of prioritising economic growth over all others. As pointed out by Branco Milanovic, it's regional political leaders are given significant autonomy, with the key metric of performance (leading to promotion in the communist party) being economic growth. Leaving aside discussions of political freedom and the impact on the ways of life of Chinese citizens, it has certainly been successful by it's own metric. Of course, only once China catches up to those countries with the most advanced technology can such a policy be truly assessed on its own merit.
The above criticisms not withstanding, Stubborn Attachments is a wonderful book. It's depth and clarity of argument are reminiscent of the best kind of philosophy, a mixture of common-sense logical reasoning and abstract thought experiments. Most of all, it makes the argument for growth which is either taken for granted or dismissed without due consideration. For some, the pursuit of economic growth is lumped in with a general ill-feeling towards capitalism, or worse still finance; GDP being synonymous for self interest or the desire for money above all else. Most of all though, such an ideal suffers from a defect in our imaginations. Growth, or our increased wealth, is often viewed linearly - imagined as an extra car in the garage or an extra 5 inches on the TV. We cannot imagine new inventions because if we could, they would have been invented. An instructive method of visualising growth is to go backwards 200 years, and picturing whether one could live without subsequent advancements. Would you would be against going without sufficient calories, a life expectancy of forty, 20% infant mortality, no antibiotics, dentistry, or access to lighting after sunset? If so, consider making the same judgement on behalf of a descendent of yours 200 years from now. Or if you cannot sympathise with someone who is both wealthier than you and yet to be born, consider someone who currently lives in the Democratic Republic of Congo - zero growth for that person is not a matter of philosophy.