Sunday, January 3, 2010

a cosmotarian view of the Aughts

In his Economic View column for the New York Times today, Tyler Cowen ably makes the case that the last decade was largely good for the world over all, whether or not it was good for America.

Choice bits:
One lesson from all of this is that steady economic growth is an underreported news story — and to our own detriment. As human beings, we are prone to focus on very dramatic, visible events, such as confrontations with political enemies or the personal qualities of leaders, whether good or bad. We turn information about politics and economics into stories of good guys versus bad guys and identify progress with the triumph of the good guys. In the process, it’s easy to neglect the underlying forces that improve life in small, hard-to-observe ways, culminating in important changes.
It might be pleasant to boast that America is — or should be — a world leader in every area, but the practical reality is that if some other country solves the problem of green energy, so much the better for us.

The subtler point is that a wealthier China, India, Brazil and Indonesia will lead to more customers for new innovations, thereby producing greater rewards for successful entrepreneurs, no matter where they live. There are so many improvements in cellphones these days because there are so many cellphone customers in so many countries.

To put it bluntly, if the United States takes one step back and the rest of the world takes two steps forward, even in purely selfish terms we should consider accepting the trade-off, if only for the longer run. Most of us gain from the wealth and creativity of other countries, even if we can’t always feel like the top dog.
Cowen links to Alex Tabarrok's TED talk, which always deserves a rewatch.

I want to beat people over their heads with this. There's no fundamental reason for America--or any one nation or people--to occupy some dominant place in the world. To think otherwise is to betray a misunderstanding of the positive-sum dynamics of the globalizing world. I will hate to see America lose its preeminence in the world because it's bound to do so in a ham-fisted, blundering way, hurting others in its decline. Observe America's behavior in the last decade. America's inevitable, relative decline could instead be part of the peaceful, cooperative rise of populous developing nations. If Americans want to avoid an absolute decline, they should adopt a more cosmopolitan worldview instead of wringing their hands over decades of self-injury.

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