Cowen is an economist at George Mason University. He achieved fifteen minutes of fame via an e-book, The Great Stagnation in 2011. The e-book created a buzz loud enough to grab the attention of a publisher with a printing press. Stagnation insinuated its way between hard covers, from where it continued to make the case that a low-wage, slow-growth economy is something that the world had better get used to. It’s the new normal.
Average is Over, evidently a hurried sequel to Stagnation, reprises Cowen’s message: Extreme income inequality is here to stay. We can't tax the rich, after all, because they have too many channels through which to transfer the burden to the middle class and the poor.
Cowen offers up education as a tool that sub-millionaires might use to elevate themselves economically, but such education as Cowen conceives of might more candidly be called instruction, or schooling, or obedience training. So, operating in a bimodal economy—one that concentrates wealth at the tippy top and diffuses poverty across the broad bottom of the barrel, with no middle between—how does the top dispose of the barrel bottom? Cowen seems to think that that’s a problem to be solved and that he has a solution:
“What if someone proposed that in a few parts of the United States, in the warmer states, some city neighborhoods would be set aside for cheap living?”Cowen describes the housing in these cheap zones as being modest but not ramshackle, and it all seems fuzzily commonsensical. But then,
“We also would build some makeshift structures there, similar to the better dwellings you might find in a Rio de Janeiro Favela. The quality of the water and electrical infrastructure might be low by American standards, though we could supplement the neighborhood with free municipal wireless (the future version of Marie Antoinette’s famous alleged phrase, “Let them watch internet!”) Hulu and other web-based TV services would replace more expensive cable connections for those residents. Then we would allow people to move there if they desired. In essence, we would be recreating a Mexico-like or Brazil-like environment in part the united States, although with some technological add-ons and most likely greater safety.”Ok, so let’s fill another flute with bubbly and kick back to get a good look at the great unwashed descend ever deeper into collective poverty. It’s a kind of spectator sport for the well heeled, really. Let’s anticipate this decline in quality of life and contain the newly impoverished in ghettos modeled after Brazilian slums. If we call these habitats for impoverished humanity camps maybe they’ll seem almost recreational. Maybe FEMA would do a good job running these camps, keeping everything orderly and responding to emergencies. They might even cook up a motivational slogan. Maybe something like Arbeit Macht Frei.
No one should find the favela prospect objectionable, Cowen opines, after all, “no one is being forced to live in these places. Some people might prefer to live there. I might prefer to live there if my income were low enough.” He goes on to remind readers that some neighborhoods deteriorate naturally into shantytowns: “The end result is no different from the deliberate shantytowns already discussed.”
Let that cute phrase rattle around inside your skull.
What a striking public policy objective. Cowen wants his manufactured ghettos to be modeled after Brazilian favelas. So, how is it going for the residents of those South American slums? Maybe not so good. Could be better.