An American Innovation Story
“ Population, when unchecked, increases in a geometrical ratio. Subsistence, increases only in an arithmetical ratio. … Man cannot live in the midst o plenty.”
Thomas Malthus, An Essay on the Principle of Population
“ How can the persuasive common sense embodied in the Malthusian theory be wrong? To be sure, in the short run an additional person … inevitably means a lower standard o living or everyone; every parent knows that. More consumers mean less o the fxed available stock o goods to be divided among more people. And a larger number o workers laboring with the same fxed current stock o capital implies that there will be less output per worker. The latter eect, known as ‘the law o diminishing returns,’ is the essence o Malthus’ theory as he frst set it out. But i the resources with which people work are not fxed over the period being analyzed, then the Malthusian logic o diminishing returns does not apply. And the plain act is that, given some time to adjust to shortages, the resource base does not remain fxed. People create more resources o all kinds.”
At the time o this writing, in autumn 2012, many Americans are expressing pessimism about thenation’s uture economic prospects. Te unemployment rate has remained stubbornly elevated.Economic growth rates have not bounced back as quickly as Americans would like given theseverity o the Great Recession.It’s not just ordinary Americans who are pessimistic about the present economy and its prospectsor the near uture. Several academics and intellectuals have argued that the United States aceschallenging and perhaps insurmountable headwinds.For example, economist yler Cowen o George Mason University has argued that the UnitedStates is undergoing a “Great Stagnation.”
Te entrepreneur and investor Peter Tiel claims thatwe are witnessing “Te End o the Future.”
Economist Robert Gordon has published a widely discussed paper asking, “Is U.S. Economic Growth Over?” He suggested that the answer is yes.
1 Malthus, Tomas.
An Essay on the Principle o Population
(Canada: McMaster University, 1798) <http://www.marx-ists.org/reerence/subject/economics/malthus/ch02.htm>2 Simon, Julian and Norman Myers.
Scarcity or Abundance? A Debate on the Environment
(W.W. Norton & Co., Inc.,1994). <http://www.juliansimon.org/writings/Norton/NORON09.txt>3 Cowen, yler.
Te Great Stagnation: How America Ate All Te Low-Hanging Fruit o Modern History, Got Sick, and Will (Eventually) Feel Better
(New York: Penguin, 2011).4 Tiel, Peter. “Te End o the Future.”
National Review Online
(2011).<http://www.nationalreview.com/articles/278758/end-uture-peter-thiel>5 Gordon Robert J. “Is U.S Economic Growth Over? Faltering Innovation Conronts the Six Headwinds.”
National Bureau o Economic Research