Remarkable Reading #13: THE COMPLACENT CLASS - The Self Defeating Quest For The American Dream By Tyler Cowen and CONSUMPTIONOMICS: Asia's Role in Reshaping Capitalism and Saving the Planet

The aim of this section Remarkable Reading is pay a tribute to the books that taught, share trends & insights into where our world in the 21st century is heading in a technology enabled world, and ask the right questions.

Bolded and italics quotes and references do not belong to myself  and belong directly to the author.  The focus is to share valuable insights and teachings from the book to win business for the authors.

The Two Trends I’ve focussed on here are:

1. America’s role in the 21st Century and a reflection on the 20th Century
2. The rise of Asian Capitalism and its role in reshaping our planet

Carrying on further from my earlier post about America <>, Tyler Cowen’s THE COMPLACENT CLASS: The Self Defeating Quest For The American Dream  is a conversant, aware and experienced book about America’s role in the 21st Century.  Cowen has a fluid writing style that makes the complicated seem easy.  It is vital for the world economy to remain strong, steady and strengthened that America makes the right moves, even if it means a slight shift away from it’s current modus operandi.

Here are the top take-out from THE COMPLACENT CLASS: The Self Defeating Quest For The American Dream:

Page 4 - “Recent income data indicates that a core of about 15 to 20 percent of the American population is doing extraordinarily, in terms of both income and social indicators, such as happiness and health outcomes.  There is an ongoing collapse of the middle class, as is often reported in the media, but the underreported upside is that some of the middle-class is graduating into the upper class. The bad news, however, is that the accompanying structures are not ultimately sustainable for the broader majority of the population. As overall social and economic dynamism declines and various forms of lock-in increase, it becomes harder to finance and maintain the superstructure that keeps stability and all of its comforts in place.”

Page 6 - “The forces behind the rise of the complacent classes are quite general.  For better or worse, the truth is that peace sand high incomes tend to drain the restlessness out of people.  For all the revolutionary changes in information technology as of late, big parts of our lives are staying the same.  These days Americans are less likely to switch jobs, less likely to move around the country, and, on a given day, less likely to go outside the house at all”

Page 48 - “The elections of President Obama was supposed to herald a new era of race relations. The optimistic vision often seems to be true, especially if you inhabit the suburbs and spend a lot of time running after ethnic food and studying immigration as I do. But in some key regards that progress never quite came to fruition, including for black-white relations and sometimes, especially for black-white relations.  When it comes to the residential and education worlds, America just hasn’t gotten that much better at mixing socioeconomic groups, and that is yet another part of just how set in its ways the country has become. In reality, the country is aging, and this matters for the degree of mixing.”

Page 74 - “If it feels to you like start-ups are on a rising pace, this is probably because many of today’s most impressive new ventures are highly visible consumer-oriented companies such as Uber and Airbnb, and also they receive a lot of media hype.  You tap on your smartphone, and all of a sudden a vehicle appears at your door, ready to do your bidding.  That’s pretty cool and it gives consumers a feeling of extraordinary power.  But those impressions distract our attention from a more general slowdown in economic activity, including in the arena of start-ups.  Not only are there fewer start-up’s, but a smaller percentage of them are succeeding”

Page 86 - “The ultimate measure of technological progress is not the number of fancy gadgets we own but rather how much better our lives are.  That is what we really care about, not the gadgets per se, not the patents, and not the productivity statistics.  To the extent that new and useful good sand services are being brought to the market, this should be reflected in a general rise in living standards.  But once again, there is some disappointing news, as the income of the median or typical American household is down since 2000, and unless wage gains are very strong in the next few years, this country essentially will have gone twenty years with wage stagnation or near-wage stagnation for median earners”

Page 144 - “The United States, of course, has a fully mature economy that lies on what economists call “the technological frontier” - that is, we can’t just grow by borrowing from advanced nations because in terms of technology aren’t any.  America cannot grow at 10 percent a year, no matter what policies the country adopts, or even 5 percent a year.  Nonetheless, just as previous generations saw America through the lens of Europe and European culture, so will forthcoming generations understand America through the lens of China, and, to a lesser extent, the other major emerging economies, such as India”

Page 146 - “In the 1990s, it was a common view that with all of our new technologies - most of all the internet - income mobility would rise, including in the United States.  The idea was that universal access to the internet would make it possible for more people to rise to riches, perhaps by lowering the cost of marketing new products, starting new businesses, or marketing themselves in new and unusual ways”

Chandan Nair’s CONSUMPTIONOMICS: Asia’s Role in Reshaping Capitalism and Saving The Planet  is a very timely, thoroughly researched, and well questioning book about the role of Asia in the Twenty First Century and it’s relationship with the West, and the wider world.  In order to maintain a strong economy, it is absolutely critical that we maintain a seamless transactional and knowledge sharing relationship that benefits all parties.

Here are the top take-out’s from CONSUMPTIONOMICS: Asia’s Role in Reshaping Capitalism and Saving The Planet.

PREFACE,Page 11 - “The form of this book took a while to emerge.  At its heart lies a discussion about the re-emergence of Asia as economic power, and the dilemma this poses it itself and the world.  But as I shared tentative outlines with a few friends, I was often told to make sure what I  said could not  be attacked or dismissed as anti-West rant”

Page 16 - “Rejection will be an important part of this - a critical first step.  But rejection alone is not enough. We need to rethink policies, and political action, about how we define growth, wealth creation, what we can do and own, and how we should work and live.  We must question the assumptions that everyone in Asia should aspire to own a car, live and work in air-conditioned surroundings, and consume food and goods shipped from every corner of the world.  We must do all this in order to come up with something new”

Page 18 - “More often than not, my discussions relate to the region’s two giants China and India.  Because of this scale, decisions and actions in these countries will affect the world in ways that those taken in most others will not.  But other countries have vital roles”

Page 19 - “The timescale maybe slightly different, but the questions people there will have to face will be the same as those now being raised in China, India, and other Asian countries - whether adopting the Western consumption driven model of growth can in any way aid their development, or whether it will have precisely the same impact as in Asia, eroding the possibilities of a flourishing future.  Asians cannot have it all, and nor can the people of Africa.”

Page 35 - “Many leading economists and pro-globalization advocates simply refuse to accept that economic development model of the twentieth century is based on excluding environmental and social costs; that this model only more or less worked when only a relatively small proportion of the population were using it; and by more or less we mean excluding long-term damage to the world’s environment that we are now having to confront”

Page 36 - “Paradoxically, the societies best placed to challenge and change the consumption-driven model are in Asia.  The very size of the region's population, while apparently promising most for this model’s continuation, in reality contains the seeds of its demise.  This is because no matter how technologically advanced or financially innovative humans become, our well-being and everything needed to sustain our societies depends on the productivity of natural systems.  Asia, because of the scale of its populations, will run into the question of how to maintain the productivity of these systems in ways that nowhere else will.  Indeed because of rapid rate of growth of China and India, it will occur far and faster than almost anyone has yet recognized, driven by the adoption of consumption-driven capitalism.  The biggest lie of all, there, is that consumption-driven capitalism can deliver wealth to all.  In Asia it can only deliver short-term wealth to a minority; in the long term, it can only deliver misery to all.  

In my view, the only key way the West could work with Asia is to understand on a case-by-case basis a working model for working with each country within Asia, rather than assuming “one size fits all”. If it takes the time to comprehend and understand Asia better, and recognize that the United States of America is not about forcing its values on others, and has always been a terrific teacher to other countries. It will be a beneficial era for the US as it will continue to further strengthen the mutual alliance reap rewards from the co-operative brotherhood.

Page 43 - “Asia stands at the threshold of consumption.  Across China, India and southeast Asia, hundreds  of millions of people are buying mobile phones and refrigerators, eating in McDonald’s and KFC and drinking Coke and Pepsi.  But these are just the advance troops. Over the next decade and beyond, they will be joined by two to three billion more consumers, buying motorbikes and cars, upgrading to iPhones and high-definition TVs and moving to cities where they can buy their own homes”

Page 44 - “At the start of the nineteenth century, Asia accounted for over half of the world’s economic output.  Over the next 150 years,  its share plummeted as Europe and America rode the industrial revolution.  In 1950, it accounted for just 18 percent.  But now it is back.  Driven first by Japan, then China and now also by India, by 2025 Asia should have half of world output, and by 2050 it will be back to its eighteenth-century heights of around 55 percent”

Page 63 - “Perhaps the biggest fan of the market’s ability to solve environmental problems is Thomas Friedman, the New York Times columnist, who having preached the benefits of globalization in The World is Flat, now puts his faith in the same force of self interest to save the world from climate change:

“The only engine big enough to impact Mother Nature is Father Greed: the Market. Only a market, shaped by regulations and incentives to stimulate massive innovation in clean, emission-free power sources can make a dent in global warming”

And who better to power that greed than the mother of all consumers, the United States:

“An Earth Race led by America -built on markets, economic competition, national self-interest and strategic advantage is much more self-sustaining way to reduce carbon emissions than a festival of voluntary, nonbinding commitments at a UN conference. Let the Earth Race begin”

You can follow Tyler Cowen on Twitter here, visit his website here, and buy a copy of THE COMPLACENT CLASS: THE SELF-DEFEATING QUEST FOR THE AMERICAN DREAM here.

You can visit the CONSUMPTIONOMICS website here, visit his Wikipedia page here and purchase a copy of CONSUMPTIONOMICS: Asia's Role in Reshaping Capitalism and Saving the Planet here.

Thank you,

Praz aka Prashant

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