“Well we’re living here in Allentown … And they’re closing all the factories down.”
— from “Allentown,” as recorded by Billy Joel
Tyler Cowen, an economics professor at George Mason University, has authored a fascinating new book, “The Complacent Class.”
Cowen contends in an interview with the Wall Street Journal that Americans have become economically complacent. We don’t move across state lines in search of opportunity as much as we once did. Cowen asserts that, in spite of selfdriving cars and voice recognition technology, the pace of overall innovation is down, and we have actually become risk averse, both economically and socially.
Cowen espouses that a major cause for the lack of innovation is the outsourcing of manufacturing jobs. Because so few Americans now work in an industrial or factory setting, the traditional inventor’s support system of company time, access to equipment and a team of colleagues rarely exists anymore.
There are merits to Cowen’s arguments, but innovation in an advanced economy like ours doesn’t look the same on paper as it used to.
Was Steve Jobs complacent because he never really left California on his way to become a remarkable inventor? No way. Bill Gates also stayed close to home while creating his operating system, but the term “lazy” and the name Bill Gates seldom appear in the same sentence. Our country continues to churn out innovators with incredible creative talent year after year.
Granted, today’s titans of industry might not tinker on a factory floor like Lee Iacocca once did or travel the country signing franchisees like Ray Kroc.
But modern entrepreneurs are dealing with a very different economy than the business icons of a previous generation.
One factor I believe economists underestimate is that up until the opening of relations with China in the early ‘70s, the United States controlled an incredible percentage of the world’s functional manufacturing plants, accessible energy deposits and arable farmland. This combination of resources made us extremely powerful on the world economic stage after European industrial production was devastated by WWII.
We’re not complacent, neither collectively nor individually; we’re just dealing with a new global economic order.
Many jobs now allow one to work from home in a virtual capacity and don’t require movement across state lines.
We’re also learning how to deal with a declining number of brick and mortar outlets and increased online sales, just as we’ve been forced to learn to adapt to foreign competition in manufacturing.
Millennials came of age in a terrible job market, many with burdensome student loan debt. It’s unrealistic to expect them to buy houses and cars and move across the country at the same rate Americans did in the 1950’s. Economic times change, and we’re all attempting to roll with the punches.
Margaret R. McDowell, ChFC®, AIF®, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850.608.6121 – www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.