America's 'Complacent Class': How Self-Segregation Is Leading To Stagnation

Mar 2, 2017
Originally published on March 3, 2017 12:53 pm

In a new book, The Complacent Class, economist Tyler Cowen argues that the United States is standing still.

People have grown more risk averse and are reluctant to switch jobs or move to another state, he says, and the desire to innovate — to grow and change — has gone away.

In an interview with NPR's Rachel Martin, Cowen says he's worried that more and more communities are self-segregating — by income, education or race.

"We're making decisions that are rational and even pleasurable from an individual point of view, but when everyone in society behaves this way — to cement in their own security, their own mobility — social mobility as a whole goes down, inequality goes up, many measures of segregation go up," he says. "And ultimately a bill for this comes due."


Interview Highlights

On how self-segregation leads to complacency

If you live in Arlington, Va., and if you move to Ann Arbor, Mich., or even Santa Monica, Calif., those places are more alike than ever before. But most importantly, segregation by income has gone up in virtually every part of this country. So wealthier people tend to live together more than before and so do poorer people. And this is bad for the country as a whole and we see a version of this in the last election where so many people are shocked by the candidate who actually won.

On what this complacency means

[I]f you cease being challenged and you think your way of life is the only way, ultimately that way will become weak, it will be subject to less improvement, you will enter a kind of bubble and continually be surprised by the challenges the outside world keeps on throwing at you. But you're not very well-equipped intellectually to handle them.

On the fact that median male wage was higher in 1969 than it is today

It is truly a shocking fact. Now you could argue the measurements are not perfect, that's true, but that even the numbers can come out that way. So many of the advances in our economy have come from women working more, working harder, getting more educated. That's great. But when it comes to males, something has very badly gone wrong.

I think we have switched to a service-sector economy — most jobs are now service sector. That's bad for some percentage of men. Jobs require more and more that you be skilled in information technology. That's great for the top 1 percent, 10 percent, 15 percent. Not so great for the median or the bottom third for males.

On why he writes in his book: "The biggest story of the last 15 years, both nationally and globally, is the growing likelihood that a cyclical model of history will hold rather than a model of ongoing progress."

In the 1990s, pretty much everything seemed to be going in the right direction. More countries were democratic, more countries were becoming free. Lately we see China, Russia, Turkey moving back in a much more authoritarian direction, significant parts of the Middle East up in flames. The forward march of progress is not the main story today.

The risk of an unraveling of the basic liberal globalized world order has been going up for some number of years now and only now do we see it with Brexit and the election of Trump. We need to take this risk very seriously.

On why he feels optimistic and not unsettled

I think of the '80s and '90s as very calm, smooth optimistic decades. But when you think back to our broader history — the Civil War, the Great Depression, the Vietnam War, Richard Nixon trying to undermine the Constitution — those are all terrible, deeply unpleasant events, but we did get through them. And I think viewed in a longer-run perspective, this country will recapture its dynamism. I think innovations that have been restricted to the tech sector will move through most of our economy.

At some point real wages will go up quite a bit more again. My hope is the current political mood is something we're getting out of our system rather than a permanent change. So ultimately I would bet on optimism, but I think those big bumps in the road, they're not distant. Right now we're just at them.

NPR associate editor Reena Advani contributed to this report.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

RACHEL MARTIN, HOST:

As Americans, we are bound by a collective identity. We see ourselves as independent change makers. We invent things. And we can reinvent ourselves. But that innovation, that desire to keep changing has gone away. That's the central argument of Tyler Cowen's new book - America is standing still. And it's not a good thing.

The book is called "The Complacent Class: The Self-Defeating Quest For The American Dream." Cowen says people have grown more risk averse, reluctant to switch jobs or to move to another state. And he told me that he's worried more and more communities are self-segregating, whether it be by income, education or race.

TYLER COWEN: We're making decisions that are rational and even pleasurable from an individual point of view. But when everyone in society behaves this way to cement in their own security, their own mobility, social mobility as a whole goes down. Inequality goes up. Many measures of segregation go up. And ultimately, a bill for this comes due.

MARTIN: You spend a few chapters in the book talking about the different levels of segregation and how that has lent itself to the complacency we've seen. A couple things - we don't move across state lines anymore. And if we do, we're moving to neighborhoods where everyone looks like us. Draw the connection there to complacency.

COWEN: That's right. So if you live in Arlington, Va., and if you moved to Ann Arbor, Mich., or even Santa Monica, Calif., those places are more alike than ever before. But most importantly, segregation by income has gone up in virtually every part of this country.

So wealthier people tend to live together more than before, and so do poorer people. And this is bad for the country as a whole. And we see a version of this in the last election, where so many people are shocked by the candidate who actually won.

MARTIN: What happens when we live in communities where we are not challenged or where we're just reaffirming our own biases all the time?

COWEN: Well, we become complacent. Many of those biases are true, I might add. But if you ceased being challenged, and you think your way of life is the only way, ultimately that way will become weak. It will be subject to less improvement. You will enter a kind of bubble and continually be surprised by the challenges the outside world keeps on throwing at you. But you're not very well-equipped intellectually to handle them.

MARTIN: One stat that jumped out at me when you think about complacency and how our economy has stagnated - wages. We've heard for a long time how wages are stagnant. But the median male wage, you write, was higher in 1969 than it is today. That is remarkable.

COWEN: It is truly a shocking fact. Now, you could argue the measurements are not perfect. That's true. But that even the numbers can come out that way. So many of the advances in our economy have come from women working more, working harder, getting more educated. That's great. But when it comes to males, something has very badly gone wrong.

I think we have switched to a service sector economy. Most jobs are now service sector. That's bad for some percentage of men. Jobs require more and more that you be skilled in information technology. That's great for the top 1 percent, 10 percent, 15 percent, not so great for the median or the bottom third of males.

MARTIN: So this narrative has caught hold after Donald Trump's victory, that men, in particular white men, have not seen the kind of wage increases. And that's led to a severe feeling of disenfranchisement from the system. But you write, as you illustrate with a statistic, this has been happening for a long time. So why is this only now coming home to roost?

COWEN: I think what we had done in the previous decade was take on a lot of debt to try to cover up fairly stagnant standards of living. And that can work for a while. We also have improved our country in other ways. We've made it more tolerant. We've made it safer. Those are good things.

So life in some critical ways feels better. And those are real feelings. But at the same time, if you let slip the dynamism of your society and your economy, eventually that will come back to pinch or bite you really pretty badly.

MARTIN: You write at the end of the book, and you put it in bold, actually twice, this sentiment. And I'm going to quote now from the book. "The biggest story of the last 15 years, both nationally and globally, is the growing likelihood that a cyclical model of history will hold, rather than a model of ongoing progress."

So what does that mean? I mean, what's the cycle we're living through, and where are we at in it?

COWEN: In the 1990s, pretty much everything seemed to be going in the right direction. More countries were democratic. More countries were becoming free. Lately, we see China, Russia, Turkey moving back in a much more authoritarian direction, significant parts of the Middle East up in flames. The forward march of progress is not the main story today.

MARTIN: When you talk about these big historic cycles, these are cycles that include the rise and fall of empires. Is that what we're witnessing?

COWEN: I would say the risk of an unraveling of the basic liberal globalized world order has been going up for some number of years now. And only now do we see it with Brexit and the election of Trump. We need to take this risk very seriously.

MARTIN: Donald Trump, if anything, was a rejection of the status quo. The people who supported him are the people you're writing about who said, we've been living in this stasis. And so we want to break the system. We want to break the status quo.

COWEN: But keep in mind, the rejection of the status quo was not for a bold, bright, optimistic, daring future. So much of the rhetoric of the Trump campaign - the inauguration speech, the convention speech - it's been deeply pessimistic. It's been deeply backward-looking. It's about wanting to go back to an America of the Eisenhower era, attitudes toward race and foreign alliances and foreign trade. I don't think it really is dynamism. I think it's another form of actually a disguised complacency.

MARTIN: So how do you sleep at night after writing this book? I mean, this is grim stuff we're talking about right now.

COWEN: I'm actually an optimist. And I think some of this has to do with age. So I think of the '80s and '90s as very calm, smooth, optimistic decades. But when you think back to our broader history, you know, the Civil War, the Great Depression, the Vietnam War, Richard Nixon trying to undermine the Constitution. Those are all terrible, deeply unpleasant events. But we did get through them.

And I think viewed in a longer run perspective, this country will recapture its dynamism. I think innovations that have been restricted to the tech sector will move through most of our economy. At some point, real wages will go up quite a bit more again. My hope is the current political mood is something we're getting out of our system, rather than a permanent change. So ultimately, I would bet on optimism. But I think those big bumps in the road, they're not distant. Right now, we're just at them.

MARTIN: Thanks so much for talking with us.

COWEN: My pleasure. Thank you.

MARTIN: Tyler Cowen's new book is called "The Complacent Class."

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