A Randian Perspective on The Great Stagnation
Thu, 17 Feb 2011 17:09:33 GMT
1. Ayn Rand in her book Atlas Shrugged imagined that the productive classes (engineers, artisans, artists, and business men), the Atlas that carries the rest of the world, would move to a separate place of infinite freedom as the parasitic world collapses around them. This is not a bad metaphor of what much of the world was like between 1930-1989: from all over the world, the productive classes would move to the United States. It’s impossible to read a history of computers without noticing the huge number of Hungarian-born thinkers, the nuclear bomb was built with the help of many German-born jews (including Einstein, at least conceptually), &c. The US really had an imported elite.
2. Over the last few decades, the US became freer (huge gains for non-whites, women, and minorities, in general), but the rest of the world made even larger gains. The US barely makes the top 10 in the economic freedom index of the Heritage Foundation anymore (liberals that like to argue that the US should be more like Canada or Denmark should know that the Heritage Foundation agrees). Given the trend, it would not be surprising if the US continued to lose places in this ranking.
3. The reports of Americans themselves fleeing for freer jurisdictions are still anecdotal (there are queues to renounce American citizenship in Singapore and London). However, even if the talent traffic has not reversed, it slowed down. Atlas, when he shrugs, isn’t necessarily coming to the US anymore. He’s or moving to Toronto or Tallin or Sidney.
4. What I’m writing fits perfectly into the framework of The Great Stagnation: being freer that the USSR or Maoist China or the India of the License Raj (or even class-based Britain) was definitely low hanging fruit for the United States. That is now over. Still, I feel this as a rather more positive development than T. Cowen does: Atlas is now helping the really poor in the third world. A few weeks ago, the Atlantic had an article on the new global elite which cites a CEO stating that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade. I think this might have been meant as an indictment of this global elite (like the article as a whole), but (like the article as a whole) it rather endears me to it. Whereas Carnegie spent his fortune on perks for the already rich and in the richest country in the world, Gates spends his on helping the third world. (Ironically, I write these words sitting on the Carnegie Mellon campus, full of perks for the rich-to-be).
5. The expression catch up growth, while describing a real phenomenon, also reveals a complete lack of respect for the difficulty of solving many of the problems that hold poor countries back. These are often complex social and political problems and they require the entrepreneurial spirit, the tenacity, and the intelligence that would have gone into making kitchen gadgets a generation ago. It’s probably a win for the world.