Books: Tyler Cowen Offers a Much-Needed Defense of Economic Growth
In Stubborn Attachments, the economist Tyler Cowen offers a smartly argued defense of economic growth. In fact, the title itself is a reference to the idea we need a more “stubborn attachment” to prosperity and freedom.
Below are my top ten takeaways, with quotations ranging from free lunches and trickle-down economics to Adam Smith and Amartya Sen.
1. “[Adam] Smith held a straightforward, common sense approach to political economy. He understood that the benefits of cumulative growth were significant, especially with the passage of time. It is no accident that his economics treatise was entitled An Inquiry Into the Nature and Causes of the Wealth of Nations.”
2. Robert E. Lucas, Nobel Laureate in Economics, put the point succinctly: “Once one starts to think about [exponential] growth, it is hard to think about anything else.”
3. “The history of economic growth indicates that…growth alleviates misery, improves happiness and opportunity, and lengthens lives. Wealthier societies have better living standards, better medicines, and offer greater personal autonomy, greater fulfillment, and more sources of fun.”
4. “Ayn Rand is the one writer who has best understood the importance of production to moral theory…it is the work of capital, labor, and natural resources, driven by the creative individual mind, which undergird the achievements of our civilization.”
5. “Nobel Laureate Amartya Sen has promoted the idea of “capabilities” as, if not quite a substitute for economic growth, then an alternative focus. Sen points out that our positive opportunities in life often matter more than the amount of cash in our bank accounts."
6. “Milton Friedman used to argue that there is no such thing as a free lunch, but at some level this has to be false. The universe exists—who had to pay for it?...After all, planet Earth somehow evolved from a bunch of trilobites to trillions of dollars in GDP and a Louvre full of paintings.”
7. “In economics, there is at least one (hypothetical) example of a free lunch. Economist Frank Knight wrote of the Crusonia plant, a mythical, automatically growing crop which generates more output each period. If you lay the seeds, the plant just grows; you don’t have to water it or tend to it…the increasing returns model [compounding growth] suggests that there are lots and lots of Crusonia plants out there.
8. “Many people mock the term “trickle-down economics,” but most social benefits do take a trickle-down form. We should of course prefer a flood to a trickle, which brings us back to wishing to boost the sustainable growth rate as much as possible.
9. “New ideas are the product of human reason; it was Aristotle who defined man as the rational animal. A preoccupation with pursuing growth—or some modified version of the growth ideal—therefore means a preoccupation with ideas, a preoccupation with cultivating human reason, and a preoccupation with the notion that man should realize, perfect, and extend his nature as a generator of powerful ideas that can change the world.”
10. “We do have an obligation to work hard, save, invest, and fulfill our human potential, and we should take these obligations very seriously.”