Tyler Cowen: Economics trumps politics.
John Carney: Politics trumps economics, especially in a modern democratic state like the US.
John Carney is right. Tyler Cowen is spouting ideology (as usual).
What Cowen describes is a situation in which America is ripe for a political and social revolution. You can keep some of the people down most of the time, you can keep most of the people down some of the time, but you can't keep most of the people down most of the time. Not in the United States.
Far more likely, long before we ever get to Cowen's ugly world, people will decide that there are better ways of taking care of themselves than submitting to a economy that only has room to keep the top 10 percent comfortable. That could mean hugely redistributive taxes. It could mean some form of economic protectionism. Or perhaps some Very New Deal we haven't yet conceived. Even if these are in fact economically destructive, I think many people would prefer to live in a society that is poorer overall but in which the middle-classes and lower-classes aren't impoverished.
Capitalism has been the most successful program of the modern era. It has improved the lives of millions. If Cowen is right and it's next phase is widespread lowering of the standards of living for most Americans, it's days are numbered.CNBC NetNet
Will underachievers have to eat more beans?
John Carney | Senior Editor
Tyler Cowen's new book is Average Is Over. "Average" usually implies mean, when median and mode are more significant socially, politically and economically, especially when the distribution isn't normal, with most of the bell indicating the middle class and the tails the rich and poor. As the middle class slips into poverty, inequality rises, and more people fall behind, as Cowen projects, this eventually has social and political consequences in addition to economic. Cowen seems to think that tacos and gadgets are going to be the new bread and circuses. John Carney doubts it, and so do I. Get ready for the revolution.
This is chiefly about the US and by implication the developed world, But it is also the trend globally as the ultra-rich increase proportionately and emerging nations fall at the Lewis turning point to generate a solid middle class, the result being a have and have-not world. I don't think that this is viable, either, and if it is the outcome of neoliberal capitalism, so much the worse for that system. It cannot survive socially and politically as the level of collective consciousness rises worldwide.