There is discussion among the current economic chattering classes about a book by Tyler Cowen.
Cowen advances the thesis that the last five years of dismal economic growth or no real economic growth is the byproduct of a new era. This is an era of long-term slow growth.
Friends have asked me my opinion about the Cowen hypothesis.
Part of Cowen’s hypothesis goes back to the 1930s and associates 2008 with the financial crash 80 years earlier. Part of his thesis is that a financial crash does serious damage to the economy. More serious than the run-of-the-mill business cycles. He also argues that we have reached the end of a period of high productivity and low international competition.
I go back over two hundred years to the two revolutions that created the current environment. One was in America. A revolution to release the energies and genius of individuals. The other was in France to murder members of the existing royal hierarchy and replace it with Leftist tyranny.
These two revolutions have been battling each other for two centuries. The French model reached its apex in 1952 when it was adopted by all of Europe, China, India, Africa, Latin America and had been operating for decades in the Soviet Union.
The American model has been slowly combating its domestic French version (the Democrat-Union Party) since its inception. And still is.
It is my belief that the American model based on individual motivation has been slowly gathering steam. While still in the shackles of the French model it has never-the-less produced the incredible productive output we saw from 1980 to 2008.
Globally the same thing has happened. The American model began to outperform the French tyrannical model in the 1960’s .There has been a synthesis of the global and domestic American model for several decades resulting in dramatic increases in productivity, output and well being.
I do not believe we have begun to see the genuine productive benefits of the American pro-commerce individual model. For the past five years it has been suppressed by the French revolutionary model which Tyler Cowen sees as permanent in the form of suppressed growth.
I see this coming to an end soon. We will then throw off the hydraulic brakes of French tyranny and enter an era of domestic and global innovation and economic expansion.