Tyler Cowen’s latest book — The Complacent Class: The Self-Defeating Quest for the American Dream — follows up The Great Stagnation and Average is Over as the third in a trilogy about what’s gone wrong in America that has caused, in Tyler’s summation, wages to stagnate, infrastructure to decay, entrepreneurship to slow, and in general a large swath of Americans to fall behind in the modern economy.
Lengthier reviews already published elsewhere, so I’ll offer just three impressions of this provocative book written by a good friend.
First, reading it was reminder number 6,238 that I live in an exceptionally privileged life. I’m doing fine and almost everyone I know is doing just fine. The economy around me is booming. I travel almost exclusively to parts of the world where everyone is doing fine. That I find myself in this position is due almost entirely to luck and good fortune; what responsibilities I and my fellow lottery winners have to those handed a harder set of cards is one of the most important moral questions I grapple with.
Second, the habits of mind and action that Tyler says contribute to the complacency of so many Americans are the same habits we write about in The Start-up of You — except we extoll the positive version of them, of course! Tyler talks about risk aversion; we talk about how to take intelligent risk. If you want solutions, at the individual level, to some of the diagnoses in The Complacent Class…then read The Start-up of You!
Third, there’s an ambiguity in language on the topic of entrepreneurship that pops up in this book and other books and articles that study economic data. Tyler cites data — and points to this 538 piece summarizing the data — showing that fewer people are starting companies. Even the tech sector has fewer startups today! Entrepreneurship is slowing down, it seems? Well, maybe. Venture capital is pouring into startups. If there were fewer and fewer companies being started, why is there more and more venture capital being invested in startups? I think the issue here is the definition of “startup” and “high tech.” High level economic data tend to look at “new business formation” to draw conclusions about “entrepreneurship” and they define “startup” as any sort of new venture. Even “high tech” is broader than the specific niche that Silicon Valley is famous for and that venture capital chases: software and hardware startups financed and run in such a way as to one day achieve massive scale. This sort of entrepreneurship — the sort parodied on HBO’s Silicon Valley, glorified on Shark Tank, and written about in the popular press — is thriving, even if, in general, fewer Americans are starting “new businesses.” Of course, this doesn’t detract from the broader point that a lot of Americans are facing stagnant careers and a lot of once-stable industries are no longer reliable sources of prosperity.