Growth is good. That was the first and was sufficient for the last statement of the book.
Unwilling to let perfectly fine statements stand by themselves, the foreword goes on to explain what that means, and why they think that is true. Not just growth in the general sense, but economic growth specifically. Not just good in the general sense, but ethically good, from multiple philosophical frameworks. Not just ‘is’ in a general sense, but ‘is’ in a way that connects words!
Tyler Cowen himself is an excellent economics professor. He also authors the blog Marginal Revolution, which is a very good place to find sane analysis of important events in the world, along with links to other well written pieces. His podcast, Conversations with Tyler, is worth the listen, and branches from Cowen’s usual focus on economics to culture as well.
On the book itself, the subtitle gives more clues to the subject of the book, certainly more so than the title. “A vision for a society of free, prosperous, and responsible individuals” sounds like the sequel to Atlas Shrugged at worst, but a very nice place to live at best. The nice part about this book is, purely on the author’s credentials, I doubt that I am going to hear the rant of a person who read a book on philosophy. That benefit of the doubt is important, as the subject of what society should do gets tackled by almost everyone at some point, so we are dealing with a very crowded field.
Tyler comes at the idea from a rather libertarian perspective. His core values for the book are prosperity and individual liberty, which do not sound so bad at all. Who doesn’t want wealth, and the ability to do as you please? He claims the existence of an objective right and wrong, rather than a relative right and relative wrong. He also doses us with a reminder to not devolve into “us vs them” thinking, remain skeptical of panaceas and other forms of common logical fallacies which are so common in the minefield of societal goals. Most entertaining, he sets up thought experiments where the solution obviously presents itself, in a way that direct argumentation does not.
We need to read these philosophical underpinnings because Tyler then presents controversial society-wide problems, along with his proposed solutions which should inspire us to act differently, if all goes well.
In Search of A Free Lunch
Tyler introduces the concept of a mythical Crusonia plant, which is a crop that creates more and more each harvest. The point here is that decisions with tradeoffs are hard, but we should prefer choices which give us more and more over time instead of choices which give us one pay off. Everyday examples of this kind of choice are hard, because nothing is a true perpetual motion machine. However, there is a clear tradeoff between eating your crop seeds and planting your crops so you get more food later. The idea being, you get more of a free lunch by choosing an option which has a greater payoff in total rather than picking the soonest possible payoff. Education could qualify here, assuming the education that you get is actually useful to you in the future. One very hard part of figuring out which decisions will have very long term payoffs is that knowing for sure what the future holds is very hard. I think that is a good reason why picking the short term payoff is usually easier, and seems to be picked more often. The hardest example here is Chernobyl. Should we occasionally have a Chernobyl event so safety in nuclear power plants becomes more important? The short term payoff of not doing that is positive, in that we continue to produce energy, but if we prevent two other meltdowns from happening, then Chernobyl was actually a good thing, and ultimately leads to more energy production later.
The difference between short term and long term payoffs becomes obvious in sustainable compared to non-sustainable economic growth. The Soviet Union famously had growth rates of 10% or more in the 1950s, but they did so by consuming larger and larger quantities of raw materials as inputs to their factories. This becomes a problem if you run out of resources, and find that your economy collapses shortly after, resulting in misery and poverty (Not that U.S. could tell at the time. The 1950s were intense!). Therefore, we cannot only pursue breakneck economic growth at the cost of sustained growth, and indeed not even at the cost of all leisure time. This is an extremely difficult tradeoff. Certain people seem to enjoy working 16 hour days in perpetuity, while others become miserable doing the same. Our growth rate would certainly be higher if everyone was working during all of their waking hours, but we might eventually touch on the nebulous concept of burnout. We are again left trying to predict the future results of current actions, looking at the tradeoff between working extremely hard and risking burnout, and taking more leisure time but potentially missing out on higher sustainable economic growth. Personally, I don’t think I have ever experienced burnout. At worst, I remember working a full time job, and taking calculus, proofs, and data structures classes. I don’t think I could have worked any harder than that without sleeping less, but I don’t remember hating the idea of working even at its worst. I believe other people when they say that they are burned out, and I do not think pushing them to keep working would necessarily be good. Knowing this point is important because the long term growth rate is partially composed of human labor.
Despite the uncertainty on how to grow Crusonia plants, Tyler gives excellent examples of why we should strive for growth. The past was really terrible and not at all idyllic, despite how we might romanticize it. Tyler walks through many interesting examples of precisely how bad things really were, but I think the most moving was “...life expectancy in Western Europe was roughly forty years of age, and food took up fifty to seventy-five percent of a typical family budget. The typical diet in eighteenth-century France had about the same energy value as that of Rwanda in 1965” (34). This is a remarkable consequence of growth. Would you rather have been born in France or Rwanda? It is our moral failing that we can produce arbitrarily large amounts of food today, and people still starve, but our world would be better still if Rwanda had simply been growing at a high enough rate to produce cheap food for itself.
Finally, Tyler touches on the most cursed area of science: happiness research. I call it cursed because happiness seems insanely illusive, and many things that we immensely value have very little benefit to happiness. Tyler cites many studies in support of his point that growth could positively affect happiness due to knock on effects of being less likely to be crippled by disease or accident, and envy is not that bad, given that you can still enjoy better products in a high growth society. The problem is that for each of his studies that he cites, another study can be cited showing that poorer countries are happier than richer countries. I think that going to happiness research is a mistake to prove a point, because happiness never seems to change enough to justify action.
As an aside, I could not find the origin of the term Crusonia. Tyler got the phrase from Frank Knight, a 20th century economist. The problem in the book is that Tyler says that the idea comes from a novel called Robinson Crusoe Island, published in 1954. However, this citation dates back to 1944, so somebody has their dates mixed up. Until I read the original Robinson Crusoe Island novel, we can safely assume that the Crusonia plant comes from Harry Potter.
Comparing Desires for Apples And Oranges
How do we compare different desires? If two people want an apple, but you only have one, how do you pick which person becomes better off if they get an apple? This is a classic aggregation problem, and gets at another protest to economic growth. How do we truly know which option to take, if the tradeoffs on different people’s preferences cannot actually be measured? Tyler takes the approach that choosing the option which is more likely to result in long term economic growth is far better. Choosing higher economic growth will result in the tradeoff disappearing, as everyone can more of what they want. In the apple example, suppose you chose to plant an apple tree instead of giving the apple to either person. In a few years, both people would be able to enjoy far more apples than the original tradeoff implied, so Tyler thinks we should prefer the growth option, and satisfy everyone’s preferences later rather than take a tradeoff today.
I think this can often be easier when the games that we play are not necessarily zero sum. We cheated in the apple example by making more apples, and economic growth allows us to cheat competitive games in the same way. Perhaps the most important point here is to move towards situations where you have the option to pick growth, and away from games with finite resources.
Economic growth seems to allow us to escape poverty, misery, and even bad competition, but Tyler introduces the constraint of ‘Don’t violate human rights’. He is mostly talking about negative liberties, or the idea that you cannot stab, torture, kill or otherwise abuse another person. Imagining an example where torture increases the long term growth rate is difficult, but stealing or even compelling people to do things is much easier. Microsoft has a fairly high rate of return, while poor people have low rates of return on their money. Should we therefore steal from the poor and give the money to Microsoft, so that we get a higher rate of return on money? (probably not).
I am all for respecting human rights. Killing and stealing for the sake of economic growth seems really bad, even if the benefits of long term growth would outweigh the costs. There is still something repugnant about harming someone in order to achieve a goal, and you immediately are back to a zero sum game of stating that the overall pleasure of other people is worth harming someone. Since solving these kinds of harm/benefit problems does not seem to be possible, we would need to avoid doing that in the first place. I am still interested in seeing an example where killing someone actually improved the growth rate. No real events come to mind, and judging the benefits of killing someone is gruesome work.
Time, and Other Illusions
Tyler thinks we should value the future just as much as the present. In one of the weirder thought experiments on the internet, he argues about relativistic astronauts. If we built a rocket that was going to approach the speed of light, the astronauts in time would have their sense of time slowed relative to ours. A normal trip in their time would be eons in ours. Should we build landing gear on that rocket ship? After all, we will never experience any sort of benefit or harm from knowing that a rocket will explode millions of years in the future. In order to answer yes, which seems to be more sane than no, we would have to have no discount rate on the value of future lives over our own. Apart from space ships, Tyler gives more grounded examples as well. On average, regions which were prosperous even as far as 2,000 years ago are more likely to be prosperous today. This presents a problem. Clearly, we cannot go back in time to pay our ancestors to work harder and make good choices, but we very much benefit from them having done so (or not done so).
In particular, this situation reminds me of the Cuban Missile Crisis, and other borderline catastrophes, during the Cold War. A hot war would have reduced civilization to rubble in a few days, killing most or all humans on Earth. We would be willing to pay a lot of money, or do anything else, in order to prevent a hot war, but we never got a vote in the matter because we were either not alive, or not one of the people who were deciding whether or not to start nuking. By allowing tensions to get so high, the USA and USSR were discounting the lives of those reading this very heavily, and if they had actually fired, that discount would have gone to 0. It is hard to make the same case for the future, because we do not know what is actually happening in the minds of our world leaders, and whether or not they are planning a war.
Apart from war, we enjoy a very high standard of living thanks to growth which started and mostly happened before we were born. We are much more able to affect the economic growth rate, however modestly, so working on that will provide a massive benefit to our descendants hundreds of years in the future. If we feel at all altruistic towards the future, we should therefore treat future lives with the same importance as present lives. Finally, it is possible that there will be many more people in the future than there are today, and many more to benefit from higher economic growth. We start to get into topics of existential risk, which would make all of this pointless, so assuming that nothing really bad happens, growth would be one of the most ethical things we can do.
The Common Sense Approach to Selling Your Baby
Philosophy can get weird. The problem with most ethical frameworks is that, somewhere in there, you eventually happen upon an idea which most people use. We do not follow that idea to its logical conclusion because that would be insane, although pinning down why is hard. For example, there are many starving babies which you could feed for not too much money. If you sold your baby, then you would be able to save many other babies, and the world is a better place...or something. Finding that logic appealing might mean you would really benefit from psychiatric help, or you are really into philosophy.
Tyler claims that his law of maximizing growth subsumes the need to give money to the poor. If helping the poor today will increase growth, then this would already be what we are doing. If doing so would not help with growth, then then we should not take that action. This can make us blanch. The problem with such an action is that helping people in the most dire poverty will probably not mean that they will go on to found massive corporations and contribute to growth. Do we owe anything to the people who will die young simply due to the circumstances in which they were born? This is a very difficult question to answer, especially if we have an obligation to future generations, whose suffering we cannot clearly see. Tyler does believe in adequate nutrition and education on the grounds that this will make society more stable and potentially give knowledge to people who will go on to cause economic growth. This mitigates the absolute tradeoff between today and tomorrow, but still causes issues for people who will most likely not be productive in the traditional economic sense.
This chapter is very much worth reading, as we implicitly make tradeoffs in the wellbeing of others every time we spend money. It helps to be more explicit in specifically what we should be doing, and why because then we will be more clear on what our own values are, and which sacrifices we are willing to make.
Butterflies and Hitler
As a result of very small actions, our future is drastically changing, moment by moment. This makes acting on the basis of economic growth and concern for the future immensely difficult. The Butterfly Effect made this idea famous, with the idea being that prediction in weather is so hard that a butterfly flapping its wings could eventually cause a hurricane. Likewise, if any one of Hitler’s ancestors had died, or made slightly different actions, Hitler never would have been born and we would not have seen the horrors of World War II and the Holocaust. Therefore, does anything matter. Things probably matter, and Tyler argues this by pointing out that we rarely need to consider what he calls the froth of uncertainty. Since all of our actions are likely to spawn butterfly effects, no matter what we do, as long as we respect human rights and attempt to increase growth, the large effects of our actions will on net drown out the smaller effects.
This is always hard to measure. How do you know that you are not currently causing something terrible to happen by accident? Since the future is uncertain, and we cannot usually check the future against the counterfactual exactly, literally measuring the results of our actions is impossible. I think that this is a very vague argument, which Tyler seems to be addressing only to stop a very nihilist critique of his work. We cannot stop affecting the world, and even doing nothing is a choice, so uncertainty over the future seems to be a pointless critique.
Finishing the Philosophical Conversation
So where does this book lead us? Tyler wants us to try for larger economic growth over very long time horizons, with the only caveat being that human rights are inviolate. What I always find confusing at the end is “So what?”. Tyler does an excellent job arguing for his case. If he is completely convincing, then we have ourselves a new political philosophy, one which values the future, charity, growth, and autonomy. We do not know with high certainty how to bring that philosophy into the real world, nor do we know exactly how this philosophy should affect many of our personal actions. What we do have is a very hopeful future, which we can work on bringing about in small ways, having had our common sense adjusted towards doing more good in a broader sense. I think throwing in with Tyler here is wise, as we do not know just how good life can get. We do know how bad life was, so our ultimate act of generosity would be to seek new ways of making sure the future is much better than the present.
See my review of Scientific Freedom: The Elixir of Civilization, a related book on how to consistently and easily cause growth to happen