Remember, America's Poor Are Richer Than Most of the World

This post is part of our forum on Don Peck's September story, "Can the Middle Class Be Saved?"

Here are my thoughts in closing:

1. It is already clear that our willingness to "sacrifice" to solve various problems is quite limited.  For better or worse, I don't expect that to change.  Just take a look at the climate change debate.  The cap-and-trade bill postponed higher energy prices for twenty years and still it failed when the Democrats controlled Congress and the presidency.

2. A lot of the problems with American poverty are sociological, not economic per se.  The American poor are still much wealthier than most people in the world and much wealthier than a lot of very happy people in poorer countries.  We can hope that social innovation makes poverty less of a problem, even if we don't soon get the "rising tide lifts all boats" economy that we are hoping for.  This is sometimes considered a rude point to make, but some simple behavioral improvements, and a modicum of common sense, would make a lot of American poverty much less worse.

3. I am very focused on what the next technological breakthroughs will be, whether we are talking genome-based medicine, artificial intelligence, effective on-line education, or whatever.  The optimistic scenarios, in my view, involve such technologies having broader social and economic payoffs.

I don't put much stock in solutions which try to replicate some aspect of our past and reproduce it.  I don't always disagree with such ideas per se, rather I don't think it is where we are headed.  We need to look for new, positive-sum solutions, based on social and technological innovations.

Our problems aren't going away soon, but I am cautiously optimistic.  We have the hope of someday trading them in for bigger and grander problems, at a higher level of absolute achievement for our civilization.

Presented by

Tyler Cowen

Economics professor at George Mason University and author of The Great Stagnation. More

Tyler Cowen is Professor of Economics at George Mason University and Director of the Mercatus Cente and author of The Great Stagnation. He blogs at Marginal Revolution.

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