This house believes that we have eaten all the low-hanging fruit - Rebuttal speeches

Second proposing speech
Yes the occidental world is going through a great stagnation. It seems that both parties agreed on this fact. The first proposing speaker wisely proved the point using USA’s PNB figures and the first opposing speaker ended his speech suggesting us to wait for the next revolutionary discovery to see growth.

The second important idea of Cowen’s book is that economic growth is strongly dependent on technology breakthroughs. Of course, without incremental innovations no company would survive. It is impossible nowadays to make good margins by selling the same product for years. Incremental innovations are a good way for companies to stay in the game but, they are on a macro-scale incapable of pooling consumption. They are not part of the low hanging fruits: they require lot of efforts and won’t yield large gains. It has been proven that economic growth relies only on revolutionary innovation such as engines or electricity. […]

by RF

Second opposing speech
I will try in this speech to explain why the “we have eaten all the low-hanging fruit” thesis as exposed in Tyler Cowen’s book is wrong and by multiple ways biased. I will not return in detail over Tyler Cowen’s reasoning (it was done in the first opposing speech) but I will put the focus on some points that are highlighted by T. Cowen and with which I do not agree at all. […]

by JE

Yes the occidental world is going through a great stagnation. It seems that both parties agreed on this fact. The first proposing speaker wisely proved the point using USA’s PNB figures and the first opposing speaker ended his speech suggesting us to wait for the next revolutionary discovery to see growth.

The second important idea of Cowen’s book is that economic growth is strongly dependent on technology breakthroughs. Of course, without incremental innovations no company would survive. It is impossible nowadays to make good margins by selling the same product for years. Incremental innovations are a good way for companies to stay in the game but, they are on a macro-scale incapable of pooling consumption. They are not part of the low hanging fruits: they require lot of efforts and won’t yield large gains. It has been proven that economic growth relies only on revolutionary innovation such as engines or electricity. 

Finally, Cowen’s argumentation becomes controversial when he says that since the 50’s no low hanging fruit were left and none have sprouted. Indeed computer science and internet are unquestionably revolutionary innovations but let me prove you that they are not promises of growth.  

Regarding internet, this technology has dramatically changed our habits but as Cowen’s write it “is more geared to private goods than to public goods”. Google and Facebook who are the most famous internet companies are making all their revenues with advertising which is a B2B business. For private use everything is free on the internet. Why is that a problem? Because growth is directly linked to consumption and consumption is itself linked to the existence of not free product. One can argue that internet will improve marketing thus consumption. However a better marketing won’t ever be as powerful to boost the economy as were all the inventions brought by electricity. That’s why internet is part of the high-hanging fruit: requires lot of effort and won’t yield large gains.

Computer science is now also a high-hanging fruit, a lot of incremental innovation can be made but at great cost and with low yields. They are the one saving USA from recession but are not able to bring the growth America’s once knew. The most tragic fact concerning this innovation is that most of the benefit of it goes to developing countries. The iPhone 4 (one of the best technology available on the market) is manufactured in China.

It is now time to focus on high-hanging fruits which are our future: sustainable energies, services for person and incremental innovations.

RF

Second opposing speech
I will try in this speech to explain why the “we have eaten all the low-hanging fruit” thesis as exposed in Tyler Cowen’s book is wrong and by multiple ways biased. I will not return in detail over Tyler Cowen’s reasoning (it was done in the first opposing speech) but I will put the focus on some points that are highlighted by T. Cowen and with which I do not agree at all.

First of all, the statement “we have eaten all the low-hanging fruit” is shifted from the original statement by T. Cowen: “America has eaten all the low-hanging fruit”. This changes everything about the context if we take the we in a worldwide approach. Moreover, it drives the statement in disagreement with T. Cowen himself. As he writes in his book, there are two sources of growth: breakthrough innovation and mimetic innovation. America may not be following either of these paths for the moment but other countries like China or India are currently walking their ways through the second for sure. So let’s forget about a worldwide we, and focus on a more precise one. I assume the statement can be reshaped in: THBT fully developed countries (America, Western Europe) have eaten all the low-hanging fruit.

In this narrower context T. Cowen thesis can be discussed. He explains in his whole book that America has already achieved every easiest breakthrough in matter of: education, technology or land. In fact, the very concept of low-hanging fruit is based on this word “easy”. He gives the reader some examples like how people are nowadays well educated and how nearly half of all young people now go to college. And this is what he calls low-hanging fruit. It is true that it may seem easy now that this is done but look back at the past and you will see how huge the educational gap between now and some centuries ago is. Everything is easy when it is done and I thing T. Cowen underestimate how high his low-hanging fruits were…

Then, even the title of T. Cowen’s book “The great stagnation” is controversial. If this a technological stagnation then what about genetic science? This very new field has changed a lot of perspectives in biology or future health care and there is a lot more of these new scientific fields that are blooming (spatial distant exploration for example). Moreover, if this is an economic stagnation, is a 2.9% GPD growth really a stagnation? Surely we are not living a prosperity era like a few decades ago but our standard of living are globally improving.  T. Cowen may feel it like a stagnation from a purely America focused point of view but with a somehow larger point of view this is certainly not a stagnation.

To conclude, I will return on the first point I exposed. In our modern world we cannot speak of a country without considering its impact on the foreign countries and their impacts on it. Developed countries may have achieve great things in the past inside their own borders but now the great things they achieve are outside by helping other countries developing themselves. Is this really a low-hanging fruit?

JE