Tyler Cowen

Tyler Cowen's Gospel of Prosperity

The George Mason University economist and Marginal Revolution founder explains why a richer world is a better world.


Over the past 20 years, arguably no libertarian thinker has cut a broader or deeper intellectual swath across American public policy and culture than Tyler Cowen.

The 56-year-old New Jersey native holds the Holbert L. Harris Chair of Economics at George Mason University and acts as chairman and general director of the Mercatus Center, a think tank based at the school. Cowen also co-founded the popular economics blog Marginal Revolution and is a regular contributor to Bloomberg. He is the host of Conversations with Tyler, a podcast series that includes interviews with people as diverse as tennis pro Martina Navratilova, New York Times columnist Paul Krugman, and comedian Dave Barry, and he is the author of a shelf full of books, including 1998's In Praise of Commercial Culture, 2007's Discover Your Inner Economist, and 2017's The Complacent Class.

His work covers everything from the literal and figurative prices of fame to how globalization empowers Mexican folk artists to whether public funding for the arts has been more successful than most free marketers would grant. A recurring theme over the past decade is a fear that the West may have entered a period he calls "the great stagnation," in which technological innovation and economic growth have slowed even as risk taking and moonshot-type ventures are demonized or ignored altogether.

In October, Reason's Nick Gillespie spoke with Cowen about his latest book, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals (Stripe Press). The work is an unapologetically libertarian argument for what he calls long-term sustainable economic growth and, more importantly, for intellectual and cultural attitudes devoted to freedom and prosperity.

Reason: You write in your new book that we need to develop a tougher, a more dedicated, and indeed a more stubborn attachment to prosperity and freedom. What do you mean?

Cowen: I think of this book as my attempt to defend a free society and give it philosophical underpinnings. The world is moving away from classical liberal ideas, and that case needs to be made in a new and fresh and powerful and vital way.

How important is prosperity to the ideals of freedom?

Prosperity is central to most human values. A wealthier world helps you be more creative. It helps you choose a job or a spouse that you might want to have rather than someone you have to marry for, say, the money. It helps us pay our bills. It helps us take care of needier members of society. It just keeps us on track and gives us some ability to control our environment and not entirely be at the mercy of nature. I think prosperity, oddly, is still underrated.

What are the main things that are dragging prosperity down? How are we shooting ourselves in the foot?

Bad [elementary school] education would be a major problem. Lack of freedom to build in America's major cities would be another problem. Lack of fiscal responsibility—I don't think it's been a problem so far, but I think it will be over the next 10 or 15 years. In general, just not husbanding our resources very well or making good decisions on infrastructure or having enough interest in risk taking and science and building a bigger, bolder, brighter future.

In the book, you talk about pluralism and commonsense morality. Let's start with pluralism—what do you mean by that?

The general meaning of pluralism is simply that there are many values, but I deploy it quite specifically: It's the notion that a prosperous society does well on most of these values. For instance, the arts, or human caring, or cooperation, or civic society. Even if a person cares about something more than just money or more than just, say, libertarian rights, I think there's nonetheless a strong argument for a society, a polity, that will maximize the rate of economic growth subject to rights constraints.

Do you feel that we've moved away from pluralism in that sense?

Most people will accept pluralism if it's presented to them. The idea that there's a fairly simple formula for serving pluralism—that's where the controversy lies. The idea that economic growth over enough time is better for virtually everyone, we don't emphasize that enough. Again, I think when you present it to people, a lot of them agree. That's one of the main goals of my book. It's not front and center of most political discussions today. They're often about redistribution or this group's feelings were hurt or what are we going to do for some specific town in the Midwest? They're not about higher rates of economic growth for the country and the world.

Talk about commonsense morality.

That term comes from the British philosopher Henry Sidgwick. It's simply what ordinary, smart, well-meaning people will tell you if you ask, "How should I live my life?" They'll say, "Work hard, save some money, marry well, be good to family, cultivate your friends." All that's commonsense morality. My book defends that and also tries to argue that if more people followed it more strictly, that would in fact coincide with this call of maximizing sustainable economic growth.

Nobody really is against commonsense morality, are they? Where is it breaking down in American society?

Well, actual actions are mixed. If you look at aggregate social indicators for significant parts of America, they're getting worse. For highly educated people, it's clear that they're getting better. That's a good thing. But for too much of the nation, people seem to be moving away from commonsense morality.

"Even if a person cares about something more than just money…I think there's nonetheless a strong argument for a society, a polity, that will maximize the rate of economic growth."

You also write about "wealth plus." What does that mean?

Economists usually focus on [gross domestic product] as a measure of wealth. For a lot of purposes that's fine. "Wealth plus" says you need to think about people's leisure time, which is not counted in GDP. You need to think about the environment, which at least at times is not counted in GDP. Think of it as modified and improved GDP. For a lot of purposes it will behave in the same way.

What more do we need to be doing to take care of the environment?

Wealthier societies generally do a better job with the environment. This gets us back to pluralism. I do worry about carbon emissions, and there's an issue with biodiversity. I'm not sure how worried we should be about that, but I don't think we should simply ignore it.

A lot of libertarians chafe at anything that's related to improving the environment or paying for that. You also talk about wealth transfers as part of commonsense morality. How do you allow for economic freedom and prosperity and individual rights but also have transfers of wealth to people who need help?

I've seen numerous public health programs around the globe that have remedied, say, malnutrition in poor children. They help those societies grow at a more rapid clip, help them become closer to the rule of law and more democratic, and just make them nicer places. I don't feel we should condemn those. Quite to the contrary, we should applaud them. I don't believe in just tearing down wealthy people to give poor people more money, but it seems to me that some redistribution is a really good investment.

You say we're investing way too much in old people relative to young people. That's because old people vote. How do we flip the script so we're not talking about which class gets to vote itself more of other people's money?

I'm not sure it will flip it until we run out of money, which will happen. If we're in there with better ideas and the time comes where we need to flip that switch, I think there's some chance we do. No guarantees, of course.

In Stubborn Attachments you give a couple of shout-outs to Ayn Rand. You laud her for emphasizing the role of production in a good society, because a lot of people seem to take the productivity of modern society for granted.

In her book Capitalism: The Unknown Ideal, she makes this point quite clearly: The idea that wealth is the foundation for the creative individual human mind. Wealth gives creative independence. Wealth enables us to interact as freestanding, cooperative individuals. It may seem trivial to many [people], but still those are vastly underrated points in contemporary intellectual discourse.

Why do you think so many economists and philosophers just take for granted the idea that we will always have a lot of [material] stuff around us?

If you're an academic, you're not involved with producing it in a direct way. You like to play games with other people's money. I think it's a sickness of American society that we've forgotten where it comes from. Some of that itself comes from the fact that we are now wealthier than we used to be. But we need to relearn that.

We become wealthy. We take it for granted. Then we start pissing it away as a culture and as individuals.

Too many people are in bureaucratized jobs, so they think of the world as a big bureaucracy.

Besides Rand, who were your intellectual or cultural influences growing up?

I played a lot of chess early on. That was maybe the single biggest influence, because when you play chess and you lose, you have no excuses. You're always looking for feedback, and you tend not to blame other people.

In chess, most of your moves are wrong. We learn this by playing computers. You can be a world champion and most of your moves are [still] wrong. That's a very startling observation that we should take more seriously.

Cowen interviews investment strategist Cliff Asness in 2015. Donner Photos

I also played chess for money as a kid. Not enormous sums, but the idea that no one owed me a living and that you can support yourself, I learned early on.

It's not simply Donald Trump who is rejecting pluralism and asserting a certitude about what is right or what is good. That also happens among his opponents. Are we in a particularly brittle moment in American society?

It's certainly possible. I mean, you can think of [Barack] Obama like John Quincy Adams. He was very intellectual, very pro-government, very cosmopolitan. Come 1828, the nation rejects that and opts for Andrew Jackson. I think in 1828, few people really had a sense of what would be coming over the next 30, 40 years. I wonder if today is not another 1828 moment.

Well, that is certainly not a happy thought.

Is there a tripwire that we can watch out for where the politics gets to a point where it actually diminishes the ability of people to live their lives in America?

I guess my modal prediction, which I would be very cautious about, is not some new age of totalitarianism or fascism, but that the center doesn't hold in a lot of governments. They lunge at a lot of things in ill-conceived ways, and volatility and political risk go up for most people, and that makes our lives worse. The old Orwellian libertarian nightmare of this encroaching Big Brother, I don't think that's what we're seeing right now.

The rhetoric, in some ways, does not correspond to the reality. The reality is that governments spend most of their money on old people and can't perform a lot of basic functions and are dysfunctional. I don't quite think they're going to enslave us.

You're what Donald Trump would call pejoratively a "globalist," in that you believe in international order. You believe in the idea of open borders and a lot of transfer of goods and people and knowledge. What is the globalist answer to the nationalist or the populist who says you don't care about the people who are in your actual community? And how do pluralism and commonsense morality come into play?

I think globalism works better when more people pursue commonsense morality. Just one example: Look at Utah. The state is about half Mormon. Utah has quite an intact middle class and robust economic growth. It's pretty well-run. It's not that I think everyone should become a Mormon. I'm not a Mormon myself. But it does show there's a kind of moral cultural foundation for capitalism. It's not that I think everyone has to live a particular way, but you need some middle-class core in a society doing that, if only to support the people who really wish to deviate.

There's been more poverty alleviation in the last 20 years than any other time in human history ever, by a large amount. It is true, some of the middle class in this country has been hurt or has ceased to see income growth. We ought to acknowledge that. I think mainly it's been an era of incredible triumphs, but now we're seeing some backlash.

The world is growing richer. There is a global middle class that's emerging in a way that was unimaginable 20 or 25 years ago. Is the problem just a decline of America's fortunes relative to the rest of the world? Are we in a position like England and France after World War II where we don't quite want to admit that we're not the only thing on the block anymore?

America still is the world's No. 1 power and still has a lot of soft power and a great deal of influence. It's not like the British Empire that went from a quarter of the world to this quite small place, which is now even probably Brexiting from the European Union. We can be the world's No. 1 country for a long time to come, or at the very worst, No. 2 or 3.

This interview has been condensed and edited for style and clarity. For an audio version, subscribe to the Reason Podcast.