An article in the New York Times this week by David Brooks draws on learnings from Tyler Cowen’s e-book “The Great Stagnation”.
In it, Cowen argues that in the US in recent years (and much of it can be transposed to Western Europe too), we are increasingly craving a better quality of life through experiences rather than the materialism of the past:
“It could be that the nature of technological change isn’t causing the slowdown but a shift in values. It could be that in an industrial economy people develop a materialist mind-set and believe that improving their income is the same thing as improving their quality of life. But in an affluent information-driven world, people embrace the postmaterialist mind-set. They realize they can improve their quality of life without actually producing more wealth.”
Rotten at the core?
The argument goes that we have spent so much of the last century making money out of ‘low hanging fruit’ – new ideas, educational gains and technological developments – and that much of this has now stagnated.
Whereas countries like India and China are happy to take existing ideas and create value out of them by altering things like production processes, in the west, we are more obsessed by creating new ideas, but there is often little economic value in them.
These new ideas aren’t generating the wealth they once used to. For example, take education. With more and more people going to University, it makes ‘easy gains’ difficult to come by.
And, after the second world war, technology changed dramatically with for example, homes transforming themselves with a whole range of gadgets and gizmos. But since the 70s or 80s, this rate of advancement has changed. Our homes look remarkably similar today.
The “free world”
And the great technological development of our age – the internet – is built on a different ‘experience’ economy, where much is free and experiential:
“Most of the products are produced by people working for free. They cost nothing to consume. They don’t even create many jobs. As Cowen notes in his book, the automobile industry produced millions of jobs, but Facebook employs about 2,000, Twitter 300 and eBay about 17,000. It takes only 14,000 employees to make and sell iPods, but that device also eliminates jobs for those people who make and distribute CDs, potentially leading to net job losses.”
So we are all much happier in our post-material world where we can have new experiences online (for example) reading blogs and communicating on Facebook and Twitter for nothing, but our economy suffers as we shun the materialism that made the Western world.
The underlying questions in all of this are whether it can continue and if it is a change for good or bad…
picture credit
Danny Whatmough
I’ve been pretty quiet on here over the last few months. This is due to a number of reasons including the merger between Wildfire and EML which was announced this week. You can read the press release, the blog post from new MD Richard Parker and the coverage in PR Week.