This NYT article is on the "Upshot," which is more of an op-ed forum regarding policy and economics. George Mason University professor of economics Tyler Cowen authors this piece, and argues that the economy will not be returning back to its normal state of growth (I say mildly, because he doesn't thoroughly defend his claim).
However, Cowen still presents an interesting point of view contra to the two most popular viewpoints. The two leading viewpoints are:
1. That "observed deficiencies — like slow growth in real wages and the overall economy, persistently low interest rates and low levels of labor participation — are merely temporary. In this view, these problems will dwindle after manageable problems like high levels of public or household debt have been reduced."
2. That "we made the mistake of letting the last recession linger too long, allowing some of its features to become entrenched. That analysis suggests that if we correct past policy errors, whatever they may have been, an underlying normality will re-emerge."
Cowen's view, then, (somewhat similar to Wolf's) is that "the recession was a learning experience that we haven’t fully absorbed. From this perspective, the radical and sudden changes of the financial crisis were early indicators of deep fragility and dysfunctionality." Further, Cowen believes that we're in the midst of a "Great Reset" (i.e., gradual collapse of economic system) rather than emerging from the "Great Recession" relatively unscathed. He primarily cites decreasing wages to support his argument, although I wish he included more evidence.
Although it's still probably too soon for anyone to a have an unwavering stance on this issue, what are y'alls thoughts on this? One commenter best summed my underdeveloped opinion, as they said all past economic systems (i.e., hunter/gatherer, tribalism, Roman slavery, and feudalism, etc.) have risen and fallen. Capitalism certainly did have its rise some time ago, so we certainly could be witnessing it's gradual collapse.
Thoughts?
Personally, I'm a bit skeptical of this being a "Great Reset." While capitalism has some issues, namely inequality, that need to be addressed, I still believe it is best of what exists and is feasible. Capitalism with some form of regulation would help get rid of the inherent instability that some people see. I find that to be a much better alternative to a socialistic society where everything is public and we suffer from something like the tragedy of the commons.
ReplyDeleteI agree that the Great Recession has been a learning experience for all involved and that there is some fragility and dysfunctionality within our financial system. However, I cannot buy into the "Great Reset" concept, especially not without more information to back it up.Capitalism does have its issues, and yes, past economic systems have all risen and fallen, but I believe that is because there was a better future insight. Where would economies turn after capitalism? I cannot see capitalism fully disappearing, but I can see a few changes, adjustments, and regulations making it work better for economies throughout the world.
ReplyDeleteI have to agree with Nolan and Veronica that this is a bit far out for me to agree with. His outlook seems really pessimistic, like you say Alex. I do not see this as the fall of Capitalism, simply because past economic systems have come and gone. To say that damage is somewhat irreversible and public policy will do nothing is wrong. Maybe I am a little more optimistic than I should be, but this is not right.
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