Human Capitalism: How Economic Growth Has Made Us Smarter--and More Unequal by Brink Lindsey. Loved the diagnostic theme of the book but disappointed with the remedy.
At the core of this book, then, is a claim about the relationship between economic development and cognitive development. Here’s the basic dynamic: economic growth breeds complexity, complexity imposes increasingly heavy demands on our mental capabilities, and people respond by making progressively greater investments in human capital. As a result, capitalism has morphed into “human capitalism”— a social system in which status and achievement hinge largely on possessing the right knowledge and skills.
Over the past generation, though, the structure of American society under human capitalism has grown increasingly lopsided. And that is because the relationship between economic development and cognitive development has broken down for large sections of the population. For those in the upper third or so of the socioeconomic scale, the virtuous circle continues: increasing complexity has led to greater investments in human capital and widening opportunities for putting those investments to productive use. The rest of America, though, is being left behind: human capital levels are stagnating, and so are economic prospects.
Lindsey starts out sounding like Charles Murray in Coming Apart but eventually refutes him:
He sees the cultural changes that have occurred since the 1960s as, quite simply, a decline in virtue— most directly on the part of the working class, but indirectly as well among members of the elite who, while thriving on their own, have abdicated moral leadership by failing to “preach what they practice.” 71 I’m afraid this approach doesn’t get us anywhere. The absolutist conceptions of morality that once kept the working class (and everybody else, too) on the straight and narrow were a cultural adaptation to material scarcity. As Inglehart has documented exhaustively, when scarcity abates, these absolutist conceptions lose their hold on people’s hearts and minds — not just in the United States but around the world. We may wish it were otherwise, but wishing won’t change things. There is simply no prospect for a return to the more authoritarian morality of yesteryear.
Getting ride of state license requirements for hair dressers will improve innovation is not very convincing case to expedite innovation although it might win many libertarian hearts:
In 1970, only about 10 percent of Americans worked in jobs subject to occupational licensing; today that figure stands at around 30 percent. Everybody is familiar with licensing requirements for doctors and lawyers. But similar requirements now apply in various states to librarians, upholsterers, massage therapists, cabinet makers, beekeepers, and fortune tellers. As of the early 1990s the Council of Governments estimated that more than eight hundred occupations were subject to licensing requirements in at least one state— a figure that has assuredly increased in the past two decades.
I still find Tyler Cowen's book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will(Eventually) Feel Better, the best one so far in this genre.
At the core of this book, then, is a claim about the relationship between economic development and cognitive development. Here’s the basic dynamic: economic growth breeds complexity, complexity imposes increasingly heavy demands on our mental capabilities, and people respond by making progressively greater investments in human capital. As a result, capitalism has morphed into “human capitalism”— a social system in which status and achievement hinge largely on possessing the right knowledge and skills.
Over the past generation, though, the structure of American society under human capitalism has grown increasingly lopsided. And that is because the relationship between economic development and cognitive development has broken down for large sections of the population. For those in the upper third or so of the socioeconomic scale, the virtuous circle continues: increasing complexity has led to greater investments in human capital and widening opportunities for putting those investments to productive use. The rest of America, though, is being left behind: human capital levels are stagnating, and so are economic prospects.
Lindsey starts out sounding like Charles Murray in Coming Apart but eventually refutes him:
He sees the cultural changes that have occurred since the 1960s as, quite simply, a decline in virtue— most directly on the part of the working class, but indirectly as well among members of the elite who, while thriving on their own, have abdicated moral leadership by failing to “preach what they practice.” 71 I’m afraid this approach doesn’t get us anywhere. The absolutist conceptions of morality that once kept the working class (and everybody else, too) on the straight and narrow were a cultural adaptation to material scarcity. As Inglehart has documented exhaustively, when scarcity abates, these absolutist conceptions lose their hold on people’s hearts and minds — not just in the United States but around the world. We may wish it were otherwise, but wishing won’t change things. There is simply no prospect for a return to the more authoritarian morality of yesteryear.
Getting ride of state license requirements for hair dressers will improve innovation is not very convincing case to expedite innovation although it might win many libertarian hearts:
In 1970, only about 10 percent of Americans worked in jobs subject to occupational licensing; today that figure stands at around 30 percent. Everybody is familiar with licensing requirements for doctors and lawyers. But similar requirements now apply in various states to librarians, upholsterers, massage therapists, cabinet makers, beekeepers, and fortune tellers. As of the early 1990s the Council of Governments estimated that more than eight hundred occupations were subject to licensing requirements in at least one state— a figure that has assuredly increased in the past two decades.
I still find Tyler Cowen's book The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will(Eventually) Feel Better, the best one so far in this genre.
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