Is slow growth a crisis of values?

Is slow growth a crisis of values?

I recently had a stimulating lunch with Edmund Phelps, Columbia professor and Nobel laureate in economics. His book Mass Flourishing, which I am reading with great interest, argues that the decline in growth and entrepreneurial zeal that we’ve witnessed in recent years in the US, the UK, France, Italy and several other developed countries isn’t about secular stagnation, financialisation or any number of other popular and somewhat technocratic theories. He argues that it’s about values.

Phelps believes that people in these countries have much less opportunity than they used to for individualistic rewards. That might seem counter-intuitive, since in many ways one could argue, as the New York Times columnist David Brooks often does, that such nations are more individualistic than ever before. But Phelps defines individualism not as a selfish impulse, but more as the 19th century idea of being able to carve out one’s own path in the world, to take chances and seize opportunities. People who live in such societies are able to be creative, find thrill in the unknown and feel that they have agency over their own lives.

Phelps argues that the decline of innovation in Europe and America comes not from a lack of profitable investment opportunities, or a lack of public sector involvement in them, but from a decline in the modern values that sparked the desire to innovate in the first place — he’d include in that list vitalism. “Do Americans love to compete as much as in the decades from, say, the 1850s to the mid-1960s?” he asks. “Or are they fixed on the tweets coming in by the hour?” I think we know the answer to that question.

© Getty

Phelps also notes a rising dread of uncertainty, and an inwardness that is reflected in our arts. “Where are the Horatio Alger stories? Where are the young people asking the Horace Greeleys in what direction to go? I am shocked that young Americans report in opinion surveys that they want to remain in their hometown, live close to their friends or even continue to live at home! This is a portrait of America that is almost unrecognisable to me. Certainly it is not the nation that Norman Rockwell painted and Willa Cather wrote about.”

I’d have to agree. I find myself much more drawn these days to novels written by emerging market writers who focus on Big Themes (the best one I’ve read recently is Rohinton Mistry’s A Fine Balance, a page turning, Dickens-esque look at the struggle between the traditional and the modern in India in the 1970s) rather than the painfully self-aware, abstract, siloed identity reflections that seem to dominate the work of young American authors. Ed, would you agree, and which fiction writers inspire you these days?

One fascinating titbit from my lunch with Phelps — he’s met several times in recent years with top-tier Chinese policymakers to discuss how to foster individualism and creativity, and was recently invited to join a task force on the topic in China (Beijing is implementing some of the recommendations around creating small business vibrancy that Phelps advocates). Mass Flourishing is being updated with data to support some of Phelps’ ideas around values as a driver of growth; I’m watching to see where he thinks the next group of innovation nations will be.

Recommended reading

  • This piece in Vanity Fair by the wonderful writer Kurt Anderson from 2012 is a really smart reflection of exactly what Phelps argues. Perhaps the speed of change in technology and the economy has degraded values, and thus art? I often find myself thinking about this piece in any case, and I wish Anderson would pick the topic back up in a longer work.

  • My friend Megan Daum writes eloquently in Medium about the joys of spacing out, why it’s good for creativity, and why younger people need more of it. Reminded me of my youth in the 1990s. It also reminded me of the difference between Europe, where I think there’s still more room to space out (particularly in August) and the US.

  • And in the FT, I read Henry Mance’s take on whether privacy is dead with great interest. It reflects some of the themes I’ll cover in my own upcoming book, Don’t Be Evil, which will be published by Crown in the US and Penguin in the UK on November 5 (yes, this is a shameless personal plug, but hey, this is my newsletter!).

Edward Luce responds

It’s funny you mention Mistry’s A Fine Balance. It was one of the first novels I read when I moved to India for the FT in 2001 (a few weeks before 9/11 which diverted me to Pakistan and Afghanistan for the next six months). Anyway, Mistry’s book is beautiful and utterly bleak. Precisely because it was so well grounded in reality (Indira’s emergency, forced sterilisations, callousness towards India’s slum-dwellers etc) it sent me into a gloom that took a while to wear off. So do please read something more chirpy before your next holiday, Rana. 

In those days I used to read two novels a week. Now I read almost entirely non-fiction. That isn’t because I have gone off it but because there is so much volume to keep up with. It takes about three to four hours a day to keep up with the news and longer form journalism. And yet you still, somehow, find yourself behind. Besides, truth is stranger than fiction nowadays. So if you, or any Swampian readers, can recommend a compelling novel or two — something that will reach parts of my brain and soul that lie dormant — I would be immensely grateful. I have a fortnight’s holiday starting soon.

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