Here’s a letter to the New York Times:
David Brooks appropriately devotes today’s column to my GMU Econ colleague Tyler Cowen’s important new book The Great Stagnation (“The Experience Economy,” Feb. 15). Mr. Brooks offers the intriguing hypothesis that what accounts for the relatively ‘stagnant’ measured economic growth since the mid-1970s isn’t so much the absence of remaining “low-hanging fruit” (as Tyler argues) but, instead, a shift to less-materialist values.
I have a different hypothesis: what has stagnated isn’t the economy but, rather, economists’ and statisticians’ capacity to measure economic activity and its contribution to human well-being.
As Mr. Brooks notes, Americans today demand more unique and nuanced experiences. Unfortunately, though, the economic value of experiences – unlike that of more corn, more cows, and more cars – is difficult to measure using mid-20th century national-income-accounting categories. But we are demanding these experiences not because we’re becoming less materialistic or less wealthy. We’re demanding these experiences precisely because, rather than stagnating, our economy and our wealth continue to grow so impressively that they are outstripping last-century’s economic categories and measurement techniques.
Donald J. Boudreaux