What we talk about when we talk about stagnation


Comment: Have we run out of good ideas? Maybe we're just having the wrong argument

20th March 2015
By Stian Westlake

Since the 2008 financial crisis, there's been a wave of worry that technological progress has slowed down. High-profile proponents of the Great Stagnation include Silicon Valley svengali Peter Thiel, blogging economist superstar Tyler Cowen and distinguished economic historian Robert Gordon. The subject has also piqued the curiosity of economic heavyweights concerned about a wider economic slowdown, including Paul Krugman, Larry Summers and Martin Wolf. As a result, the Great Stagnation debate has, unlike most innovation research, reached a wide audience, spawning New York Times bestsellers and TED talks: the two must-have accessories for any modern Big Idea. But the strange thing about all this discussion is that none of it seems to have cast much light on whether or not the phenomenon is actually happening.

Indeed, perhaps 'debate' is too grand a word for the hand-waving in which pundits responding to Gordon and Cowen have indulged, trying to work out whether a great external innovation shock has occurred. In the absence of real data (and let's be clear: it is almost impossible to prove whether innovation is slowing down), normally credible commentators have indulged in everything from dodgy thought experiments to factually incorrect speculation about kitchenware.

Even careful contributions from luminaries like Joel Mokyr (who argued against a slowdown) have felt surprisingly general and not terribly compelling. Indeed, one of the most fact-based contributions came from Bill Janeway, who drew on historical examples to argue that it is too early to say.

Yet although no one has much evidence as to whether or not a technological slowdown is happening, people seem surprisingly sure of their opinions and keen to discuss the subject. No knock-down arguments, but plenty of conviction. What gives?

Philip Tetlock, the expert on experts, pointed out that pundits are more likely to express unwarranted confidence when opining on subjects dear to their hearts or related to their vested interests. Surely that's partly what's at stake here?

For a start, the idea of technological stagnation provides welcome support for particular political opinions. For advocates of free markets, a mysterious technological stagnation provides a convenient rationale for a downturn that others have blamed on unfettered financial capitalism: don't blame the banks, blame the technology gods for forsaking us. Cowen's book argues interestingly that the technological slowdown actually contributed to the financial crisis, as investors denied access to real innovation turned to financial innovation to get the returns they craved.

The Great Stagnation debate has reached a wide audience, spawning New York Times bestsellers and TED talks: the two must-have accessories for any modern Big Idea

Peter Thiel more pointedly highlights the 'ideological conflation' between social and technological progress that blinds people to the 'difference between the election of a black president and the creation of cheap solar energy'. I do not doubt that Cowen and Thiel are utterly genuine in their beliefs about technological stagnation. But it’s clear that their version of the stagnation thesis contains attractive political talking points for the right, whether it be diverting blame for the state of the modern economy, or criticising what are seen in the US at least as left-wing causes.

And it's not just the right. Michael Hanlon's thoughtful Aeon article on stagnation suggests that innovation may have slowed down since the 70s precisely because society was becoming more right-wing. Rising inequality and a growing hostility to state investment in technology sapped our will and our ability to innovate. Fortunately, increasing state intervention and reducing inequality were two things the left was already planning to achieve. But the Great Stagnation certainly provides an appealingly cosmic rationale for them.

Political comfort is not the only thing people get from the technological stagnation narrative. The Economist's Ryan Avent made the intuitive point that at times of technological upheaval, people find themselves drawn to talking about technology more. Whether or not today's upheavals are as great as those of the post-war decades, or the 20s and 30s, or the 1880s, it's plain to see that they feel significant for the sort of educated people who write op-eds for a living.

Even if Bob Gordon is right that the computer is a nugatory technology compared to the steam engine, it is certainly not trifling for journalists, authors and the educated, who disproportionately consume information. (Tyler Cowen's excellent The Age of the Infovore is an extended meditation on the unusual impact of the IT revolution on brainy people.) It's not hard to visualise the technological stagnation debate – obsessed as it is with discussing how much technology is really affecting us – as a bunch of digitally disrupted pundits huddling round the campfire, talking out their technological anxieties for psychic comfort.

There's one final motivation that may lie behind the fascination with technological stagnation. Douglas Adams famously pointed out the affinity people have with the technologies invented in their youth. It's also no secret that the world's pundit class skews sharply towards the older male. So when I read middle-aged male commentators arguing that technological progress was more potent and thrusting in the old days, I can't help thinking there's a little bit of Freud at work alongside the economics.

So by all means, let's try to understand the pace of technological change, and try our best to accelerate it if we can. But to the extent that the tech stagnation debate is actually a disguised debate about something else, I’d be grateful if we could give it a rest.


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