This is a “what if” interview from the World Economic Forum’s Risk Response Network. To view the rest of the series, click here. As the U.S. stands at the brink of the fiscal cliff, the narratives of decline are legion. The World Economic Forum, in collaboration with TIME, spoke with Tyler Cowen, a professor of economics at George Mason University and author of The Great Stagnation, on the economic history underlying the current dysfunction. He warns that innovation in the U.S. has reached a plateau and a long period of stagnation awaits. What makes you think America’s golden age of innovation is in the past? I was born in 1962. When you think back to the world of my childhood, in the Sixties and Seventies, it’s not that different from the world of today, in many ways. The experience of driving a car or flying a plane hasn’t changed much. A person from that time would be able to use a modern kitchen without thinking twice. Computers represent a big difference in our daily lives, but that’s just one dynamic sector. In contrast, if you think back to the period from 1900 to 1950, everything changed, in the United States as in Western Europe: people moved off the farms, people got electricity, people got running water, people got antibiotics, people got automobiles, planes started flying, radios and televisions appeared in ordinary homes. There were huge advances in just about every sector, and we’re not keeping up with that now. We had this unprecedented burst of progress and it’s really hard to have a comparably impressive second act. How has this played out in the economy? Well, since the recession ended in 2009, median income has actually gone down by about five to six per cent, which is not a good sign. Over the longer term, median income now is about where it was in the late Nineties, so that’s more than a lost decade in terms of progress in living standards. Interestingly, there’s a gender split. Median male wages were actually![]()
