The Great Divergence

Inequality and Tyler Cowen’s Toilet
New books dissected over email.
April 25 2012 11:00 AM

The Great Divergence

VIEW ALL ENTRIES

What about Tyler Cowen’s toilet?

A toilet.
A toilet.

Jupiterimages

Tim,

I’ve always been very taken with this Dean Baker point you allude to about asymmetrical globalization. His argument is basically that we’ve thrown manufacturing workers into competition with a global industrial base, but higher-skilled professions seem magically immune to the power of globalization. More immigration of trained professionals into the United States seems like an idea with a pretty broad intellectual coalition behind it. Needless to say, in its current format, Congress doesn’t seem likely to take major action on anything at all, but if something good were to come out of divided government I’d hope it to be something on this front.  

Meanwhile, I don’t have an elegant pivot but I did want to address this business with Tyler Cowen and the toilet. His idea is that if we had more brand-new, broadly beneficial inventions, then we’d have more equality.

Advertisement

This seems backwards to me. After all, it’s not that nobody told the poor Indians how to build a toilet. The people are just too poor! In the United States, things aren’t nearly that bleak, but would-be entrepreneurs are surely aware that decades of stagnation in wages puts real limits on how much new stuff American workers can afford to buy. That hasn’t been a barrier to innovation in the computer sector, where Moore’s Law puts new products on a rapidly declining price trajectory. But where’s the percentage in inventing new workhorse household appliances if nobody’s going to be able to afford to buy them? So instead people have been dreaming up new financial products to sell to rich investors.

The Great Divergence, by Timothy Noah.
The Great Divergence, by Timothy Noah.

When you have broad-based prosperity, people try to dream up new things to sell to the mass market. But rich people’s appetite for stuff gets satiated long before they run out of money. So when all the income gains accrue to a narrow elite, innovation comes in the form not of new toilets but of new financial products the rich can stash their excess wealth in.

Matt

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Culturebox

The Ebola Story

How our minds build narratives out of disaster.

The Budget Disaster That Completely Sabotaged the WHO’s Response to Ebola

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

The Shooting Tragedies That Forged Canada’s Gun Politics

A Highly Unscientific Ranking of Crazy-Old German Beers

Education

Welcome to 13th Grade!

Some high schools are offering a fifth year. That’s a great idea.

Culturebox

The Actual World

“Mount Thoreau” and the naming of things in the wilderness.

Want Kids to Delay Sex? Let Planned Parenthood Teach Them Sex Ed.

Would You Trust Walmart to Provide Your Health Care? (You Should.)

  News & Politics
Politics
Oct. 22 2014 9:42 PM Landslide Landrieu Can the Louisiana Democrat use the powers of incumbency to save herself one more time?
  Business
Continuously Operating
Oct. 22 2014 2:38 PM Crack Open an Old One A highly unscientific evaluation of Germany’s oldest breweries.
  Life
Gentleman Scholar
Oct. 22 2014 5:54 PM May I Offer to Sharpen My Friends’ Knives? Or would that be rude?
  Double X
The XX Factor
Oct. 22 2014 4:27 PM Three Ways Your Text Messages Change After You Get Married
  Slate Plus
Tv Club
Oct. 22 2014 5:27 PM The Slate Walking Dead Podcast A spoiler-filled discussion of Episodes 1 and 2.
  Arts
Culturebox
Oct. 22 2014 11:54 PM The Actual World “Mount Thoreau” and the naming of things in the wilderness.
  Technology
Future Tense
Oct. 22 2014 5:33 PM One More Reason Not to Use PowerPoint: It’s The Gateway for a Serious Windows Vulnerability
  Health & Science
Wild Things
Oct. 22 2014 2:42 PM Orcas, Via Drone, for the First Time Ever
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.