A generation ago Daniel Boorstin’s fascinating trilogy on the American experience enraptured me. The author, the Librarian of Congress, shared charming stories and impeccable history. Yet the introduction had the most profound idea.
Boorstin said much of America’s greatness happened at what he called the verges, the intersection of borders and cultures. When the Venn diagrams overlap people consider alternatives. Different ideas and practices emerge. Bad ideas die while improvements multiply.
Boorstin’s work inspired me to stretch beyond my comfort level. That’s a good idea whether you’re trying to get your 10,000 hours of deliberate practice or to do very slightly better in the gym each week. Continuous improvement, a thousand little gains accumulate over time. It was a profound and lasting impact.
I expected Boorstin’s trilogy to be a great read. I wasn’t disappointed. I didn’t expect it to change my perspective, but it did.
Tyler Cowen’s engaging book, Average is Over: Powering America beyond the Age of Great Stagnation, was a similar experience. Most readers of this blog have an interest in investment, real estate, or how America works. I wondered if Cowen’s 2013 volume could help identify cities with superior investment potential. It did. Far more important was a more nuanced perspective on how America has changed in the last 30 years.
The author is a professor at George Mason University. He wrote the New York Times bestseller, The Great Stagnation.
Average is Over has three major sections: the hyper-meritocracy, what games are teaching us, and the new world of work. About 80% of the good ideas are in four chapters.
The Recent Economic History of American Households
The first two chapters cover the recent economic history of American households. It describes how the top 20% have improved relative to inflation since 2000. Income for the rest of the population lagged inflation.
Cowen points out that Americans who work with artificial intelligence, who can leverage computer power, are doing significantly better than most other Americans. The economic status of Americans who don’t work well with artificial intelligence has been steadily slipping since about 2000. Machines are doing jobs that our grandparents or our parents did.
Peter Drucker defined knowledge workers as “high-level workers who apply theoretical and analytical knowledge.” Those who work in technology, science, medicine, and similar places, are relatively more highly paid than in previous generations. Cowen thinks marketing will become the seminal skill of the next generation, an astounding prediction from an academic
What We Can Learn from Games
The second section “what we can learn from games” is fundamental and comes from a novel perspective. The author is a superb chess player. In fact, when he was fifteen, he became the youngest-ever New Jersey chess champion. Chess is the thinking person’s game
When Cowen wrote the book the best chess was played by people aided by computers. Computers can do massive calculation, without emotion, but can’t perceive errors which humans recognize. That set of strengths and weaknesses is important beyond the chessboard, in fields like interpreting murky x-rays. The people who leverage computing power are out distancing the bulk of the population.
The New World of Work
The book’s third section, “New World of Work,” the “So What” section, is a troubling read. Here are some of Cowen’s key points.
In 2013 the American government was spending a dollar for every $0.60 that it took in. That’s unsustainable. It would’ve been necessary to eliminate Social Security, Medicare, and Medicaid to balance the budget. Cowen thought that was unlikely then.
America, like rest of industrial world is aging. By 2030 19% of Americans will be 65 or older. So, the percentage of government resources required for Social Security, Medicare and Medicaid will increase for at least another generation.
In 2013 the more highly affluent, educated households on the coasts were concerned about income inequality. That group, the 19% of households just below the top 1% income, wanted the top 1%, to pay significantly higher taxes. Those in the 2%- 20% group might be willing to pay very slightly more taxes, if the super-rich paid substantially higher taxes. But, even if the top 1% gave all their income to the government, that would not balance the budget.
Today, eight years he wrote the book, Cowen’s perception seems valid. Unsurprisingly, the educator believes that educational choices are extremely important in determining the economic winners and losers for the foreseeable future. He believes that a person’s educational choices influence their economic future more than gender, politics, or race.
Work teams were becoming increasingly important. The habits and attitudes which made for conscientiousness, cooperation, and reliability favor women and people with good social skills. Likewise, organizations have recognized that disruptive and high drama employees are too costly to retain. Men without degrees, single moms, and other subgroups are more disadvantaged by this second reality.
Cowen thought it was inevitable that seniors would be increasingly squeezed. He expected an increase in the trend of lower income families, especially seniors, leaving coastal states for lower cost states. Predictably, states with lower taxes have less impressive education and other government services.
Why Average is Over is Worth Your Time
You’ll think while and after you read. That is good