Here’s David Henderson on the increasing weakness of GDP (and, hence, of per-capita GDP) to serve as a measure of economic well-being. And do pay special attention to the spot-on-correct quotation at that David offers from James Surowiecki.
And speaking of innovation, I missed this October 21, 2013 essay in the Washington Post by James Bessen. (I thank reporter Simon Blum for sending to me a link to this fine essay.) In this essay, Bessen challenges a core prediction of my colleague Tyler Cowen’s latest book, Average Is Over. Here’s a slice from Bessen’s piece:
But is the bleak world depicted by “Average Is Over” really around the corner? There are good reasons to be skeptical. People have been predicting that technology will kill the middle class since Karl Marx. They have generally been wrong. True, middle class wages do stagnate sometimes, as has been the case for the last couple of decades. But over the long run, technology has made large numbers of ordinary workers relatively wealthy. Thanks to technology, the average wage in the United States today is over 10 times what it was 200 years ago, after adjusting for changes in the cost of living. Given the poor track record of these past predictions, there are strong reasons to be skeptical about Cowen’s forecast.
Here’s George Will on how the hubris of the ‘man of system’ now occupying the Oval Office is exposing that man to be the mere mortal that so many of that man’s fawning followers so wish him not to be.
Matt Yglesias falls for the argument that increased trade with foreigners has “immiserated” American workers – but Bryan Riley, quite wisely, does not. (Here’s a quick test for the soundness of someone’s economic instincts: ask him or her if, over the long run, a group of people are likely to be made poorer or richer by having increased access to a larger quantity of desirable goods and services at lower and lower prices. Those whose economic instincts tell them that the need to pay dearly for the satisfaction of human wants is itself the mainspring of human economic well-being are naturally led to believe that greater access to desirable goods and services makes people poorer. These people flunk the test. In contrast, those whose economic instincts tell them that the need to pay dearly for the satisfaction of human wants is a regrettable symptom of the reality of scarcity applaud whenever scarcity becomes less and, hence, makes the symptoms diminish in severity. These people pass the test. Matt Yglesias – like so many people – fails the test because he mistakes a symptom [the willingness to sacrifice large amounts of resources] of a regrettable economic reality [scarcity, for which people are willing to pay much to deal with] for a blessing.)
Reason’s Ron Bailey says that if you’re worried about the climate, end subsidies! (I add only that even if you’re not worried about the climate, you should still press to end subsidies.)