The Wisdom of Steve Miller

I'll just repeat what I said at CP in response to Steve's comment: "What Steve Miller said."

I think this is exactly right.

It seems like there are a lot of criticisms of Cowen of the sort, "Hey, look at all this cool technology. There's no stagnation."

But aside from Cowen's poorly chosen title, it doesn't really address his arguments.

and consumption-biased technological change stay my hand.

I totally agree with this. My consumption has vastly grown in the past few years, and all it's cost me is a high-speed internet connection. Of course, this makes the libertarian critique Boettke makes still fairly sound. A lot of the Internet is a gift economy, so it can't be taxed. By transferring growth from sales to gifts, the growing sectors of the economy are much harder to tax than before.

I think its a stretch to call the referenced stagnation 'slight'. A reduction of more than half a procent in long term growth makes all the difference in covering up the hubris in government offloading of costs on the future voter, or running hard into the walls drawn up by 'slightly' off extrapolations made decades ago.

And there is no reason to believe this stagnation is anywhere near over. There is nothing like the next steam-engine around the corner (and no, the volt is not the next steamengine; just the steamengine 4.37b). We reaped the lowhanging fruit of lowering the costs of transport such as to integrate the world into one economy. We lowered the cost of sharing information to the point that we are now broadcasting all our toilet visits into the world on twitter. Those are real and tremendous advantages, but aside from an incremental improvement here and there, whats next?

Unless biotech takes off with serious applications in the near future, i expect the developed nations to struggle to hold on to their wealth, rather than bounce back to vindicate the exponential extrapolations that have passed so well for wisdom for the past generations.