George Osborne tried yesterday to reject the idea that we've fallen into secular stagnation. I'm not convinced.

He points to some "new advances in fundamental science" and says:

We cannot even imagine the advances in all areas of science - from genetics to materials - that high powered computing will make possible in the years ahead.

This is plausible; to some extent, technical progress is inherently unpredictable. But it poses the question which Osborne didn't answer: are such advances monetizable? Capitalists don't invest because there's potential new technology. They do so because they expect to make profits. I fear that one under-rated reason for stagnation is that capitalists have wised up to William Nordhaus's famous finding - cofirmed by the experience of the tech crash in the early 00s - that "only a miniscule fraction of the social returns from technological advances" accrue to companies.

There one massive fact that Osborne ignored yesterday - that business investment has trended down as a share of GDP for years. Granted, this could be temporarily reversed if there's a surge in animal spirits - stagnation is wholly consistent with the emergence of bubbles - but Osborne gave us no new reason to think it could be more sustainably reversed.

This matters because it's plausible that Osborne's denial of stagnation rests upon some cognitive biases:

- Bayesian conservatism. Tories, and especially those who spent their formative years in the 80s, believe that the private sector is a powerful, vigorous engine of growth. This belief can persist even after the evidence for it has weakened. There are many examples of good ideas outliving their truth and usefulness. Maybe confidence in the private sector's ability to grow is one*.

- The optimism bias. Politicians of all parties are selected for their tendency to look on the bright side - to exaggerate their chances of success in a risky career, and to over-estimate their ability to improve human affairs. Maybe Osborne's just conforming to this pattern.

- The halo effect. The question of whether we've entered an era of stagnation is an empirical one; we either have or haven't, whatever else you believe. However, it is associated with calls for fiscal easing. Perhaps Osborne's hostility to the latter colours his attitude to stagnation. Strictly speaking, there's no logical reason for this: one could argue - albeit at a push - that we're in stagnation but that looser fiscal policy is no answer.

Now, I don't say all this to claim that we are definitely in stagnation. Maybe we're not. Biased beliefs are sometimes right, after all. My problem is that if Osborne's arguments against stagnation are so skimpy, there'll be a suspicion that they are informed by cognitive biases rather than clear thinking.

* We must distinguish here between the idea that free markets promote static efficiency and the idea that they create growth. You can believe the former without the latter: David Ricardo, for example, did so.