A New Economy of Knowledge

Abstract

<div class="buynow"><a title="Back issue of Monthly Review, April 2016 (Volume 67, Number 11)" href="http://monthlyreview.org/product/mr-067-11-2016-04/">buy this issue</a></div>The March/April 2016 issue of <em>Foreign Affairs</em>, published by the Council on Foreign Relations, is devoted in large part to the topic of economic stagnation. The editorial by Jonathan Tepperman, the journal's managing editor, declares: "Today, with China slumping, energy prices collapsing, and nervous consumers sitting on their hands, growth has ground to a halt almost everywhere, and economists, investors, and ordinary citizens are starting to confront a grim new reality: the world is stuck in the slow lane and nobody seems to know what to do about it." This is followed by eight articles on stagnation, only one of which, however—"The Age of Secular Stagnation" by Lawrence H. Summers—is, in our opinion, of any real importance.… Summers heavily criticizes those like Robert J. Gordon, in <em>The Rise and Fall of American Growth</em> (2016), who attribute stagnation to supply-side "headwinds"…blocking productivity growth.… Likewise Summers dispatches those like Kenneth Rogoff who see stagnation as merely the product of a debt supercycle associated with periodic financial crises.… Despite such sharp criticisms of other mainstream interpretations of stagnation, Summers's own analysis can be faulted for being superficial and vague, lacking historical concreteness.… In fact, the current mainstream debate on secular stagnation is so superficial and circumspect that one cannot help but wonder whether the main protagonists—figures like Summers, Gordon, Paul Krugman, and Tyler Cowen—are not deliberately tiptoeing around the matter, worried that if they get too close or make too much noise they might awaken some sleeping giant (the working class?) as in the days of the Great Depression and the New Deal.<p class="mrlink"><p class="mrpurchaselink"><a href="http://monthlyreview.org/index/volume-67-number-11" title="Vol. 67, No. 11: April 2016" target="_self">Click here to purchase a PDF version of this article at the <em>Monthly Review</em> website.</a></p>