THE RISE AND FALL OF AMERICAN GROWTH
The US Standard of Living Since the Civil War
Robert J Gordon
Princeton University Press
762 pages (illustrated); price: $39.95
The two authors were mostly wrong. If you step back from the headlines about the latest gadget, it becomes obvious that we've made much less progress since 1970 - and experienced much less alteration in the fundamentals of life - than almost anyone expected.
Robert J Gordon, a distinguished macroeconomist and economic historian at Northwestern University, has been arguing against the techno-optimism that saturates our culture. Starting at the height of the dot-com frenzy, he has repeatedly called for perspective: developments in information and communication technology just don't measure up to past achievements. He has argued that the IT revolution is less important than any one of the five Great Inventions that powered economic growth from 1870 to 1970: electricity, urban sanitation, chemicals and pharmaceuticals, the internal combustion engine and modern communication.
In The Rise and Fall of American Growth, Mr Gordon doubles down on that theme, declaring that the kind of rapid economic growth we still consider our due, and expect to continue forever, was in fact a one-time-only event.
Is he right? My answer is a definite maybe. But whether or not you end up agreeing with Mr Gordon's thesis, this is a book well worth reading - a magisterial combination of deep technological history, vivid portraits of daily life over the past six generations and careful economic analysis.
Indeed, almost half the book is devoted to changes that took place before World War II. I was fascinated by Mr Gordon's account of the changes wrought by his Great Inventions. As he says, "Except in the rural South, daily life for every American changed beyond recognition between 1870 and 1940." Electric lights replaced candles and whale oil, flush toilets replaced outhouses, cars and electric trains replaced horses.
Backbreaking toil both in the workplace and in the home was for the most part replaced by far less onerous employment. This is a point all too often missed by economists, who tend to think only about how much purchasing power people have, not about what they have to do to get it, and Mr Gordon does an important service by reminding us that the conditions under which men and women labour are as important as the amount they get paid. Why is it important to study this transformation? Mainly, Mr Gordon suggests - although these are my words, not his - to provide a baseline. What happened between 1870 and 1940, he argues, and I would agree, is what real transformation looks like. Any claims about current progress need to be compared with that baseline to see how they measure up.
And it's hard not to agree with him that nothing that has happened since is remotely comparable. Urban life in America on the eve of World War II was already recognisably modern; you or I could walk into a 1940s apartment, with its indoor plumbing, gas range, electric lights, refrigerator and telephone, and we'd find it basically functional. We'd be annoyed at the lack of television and Internet - but not horrified or disgusted.
What happened over the next 30 years was that the further maturing of the Great Inventions led to rapidly rising incomes and a spread of that modern lifestyle to the nation as a whole. But then everything slowed down. And Mr Gordon argues that the slowdown is likely to be permanent: But is Mr Gordon just from the wrong generation, unable to fully appreciate the wonders of the latest technology? I suspect that things like social media make a bigger positive difference to people's lives than he acknowledges. But he makes two really good points that throw quite a lot of cold water on the claims of techno-optimists.
First, he points out that genuinely major innovations normally bring about big changes in business practices, in what workplaces look like and how they function. And there were some changes along those lines between the mid-1990s and the mid-2000s - but not much since.
Second, one of the major arguments of techno-optimists is that official measures of economic growth understate the real extent of progress, because they don't fully account for the benefits of truly new goods. Mr Gordon concedes this point, but notes that it was always thus - and that the understatement of progress was probably bigger during the great pre-War transformation than it is today.
So what does this say about the future? Mr Gordon suggests that the future is all too likely to be marked by stagnant living standards for most Americans, because the effects of slowing technological progress will be reinforced by a set of "headwinds": rising inequality, a plateau in education levels, an aging population and more.
It's a shocking prediction for a society whose self-image, arguably its very identity, is bound up with the expectation of constant progress. And you have to wonder about the social and political consequences of another generation of stagnation or decline in working-class incomes.
Of course, Mr Gordon could be wrong: Maybe we're on the cusp of truly transformative change, say from artificial intelligence or radical progress in biology. But he makes a powerful case. Perhaps the future isn't what it used to be.
© The New York Times News Service, 2016
The US Standard of Living Since the Civil War
Robert J Gordon
Princeton University Press
762 pages (illustrated); price: $39.95
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Back in the 1960s there was a briefly popular wave of "futurism," of books and articles attempting to predict the changes ahead. One of the best-known was Herman Kahn and Anthony J Wiener's The Year 2000 (1967), which offered a systematic list of technological innovations "very likely in the last third of the 20th century."
The two authors were mostly wrong. If you step back from the headlines about the latest gadget, it becomes obvious that we've made much less progress since 1970 - and experienced much less alteration in the fundamentals of life - than almost anyone expected.
Robert J Gordon, a distinguished macroeconomist and economic historian at Northwestern University, has been arguing against the techno-optimism that saturates our culture. Starting at the height of the dot-com frenzy, he has repeatedly called for perspective: developments in information and communication technology just don't measure up to past achievements. He has argued that the IT revolution is less important than any one of the five Great Inventions that powered economic growth from 1870 to 1970: electricity, urban sanitation, chemicals and pharmaceuticals, the internal combustion engine and modern communication.
In The Rise and Fall of American Growth, Mr Gordon doubles down on that theme, declaring that the kind of rapid economic growth we still consider our due, and expect to continue forever, was in fact a one-time-only event.
Is he right? My answer is a definite maybe. But whether or not you end up agreeing with Mr Gordon's thesis, this is a book well worth reading - a magisterial combination of deep technological history, vivid portraits of daily life over the past six generations and careful economic analysis.
Indeed, almost half the book is devoted to changes that took place before World War II. I was fascinated by Mr Gordon's account of the changes wrought by his Great Inventions. As he says, "Except in the rural South, daily life for every American changed beyond recognition between 1870 and 1940." Electric lights replaced candles and whale oil, flush toilets replaced outhouses, cars and electric trains replaced horses.
Backbreaking toil both in the workplace and in the home was for the most part replaced by far less onerous employment. This is a point all too often missed by economists, who tend to think only about how much purchasing power people have, not about what they have to do to get it, and Mr Gordon does an important service by reminding us that the conditions under which men and women labour are as important as the amount they get paid. Why is it important to study this transformation? Mainly, Mr Gordon suggests - although these are my words, not his - to provide a baseline. What happened between 1870 and 1940, he argues, and I would agree, is what real transformation looks like. Any claims about current progress need to be compared with that baseline to see how they measure up.
And it's hard not to agree with him that nothing that has happened since is remotely comparable. Urban life in America on the eve of World War II was already recognisably modern; you or I could walk into a 1940s apartment, with its indoor plumbing, gas range, electric lights, refrigerator and telephone, and we'd find it basically functional. We'd be annoyed at the lack of television and Internet - but not horrified or disgusted.
What happened over the next 30 years was that the further maturing of the Great Inventions led to rapidly rising incomes and a spread of that modern lifestyle to the nation as a whole. But then everything slowed down. And Mr Gordon argues that the slowdown is likely to be permanent: But is Mr Gordon just from the wrong generation, unable to fully appreciate the wonders of the latest technology? I suspect that things like social media make a bigger positive difference to people's lives than he acknowledges. But he makes two really good points that throw quite a lot of cold water on the claims of techno-optimists.
First, he points out that genuinely major innovations normally bring about big changes in business practices, in what workplaces look like and how they function. And there were some changes along those lines between the mid-1990s and the mid-2000s - but not much since.
Second, one of the major arguments of techno-optimists is that official measures of economic growth understate the real extent of progress, because they don't fully account for the benefits of truly new goods. Mr Gordon concedes this point, but notes that it was always thus - and that the understatement of progress was probably bigger during the great pre-War transformation than it is today.
So what does this say about the future? Mr Gordon suggests that the future is all too likely to be marked by stagnant living standards for most Americans, because the effects of slowing technological progress will be reinforced by a set of "headwinds": rising inequality, a plateau in education levels, an aging population and more.
It's a shocking prediction for a society whose self-image, arguably its very identity, is bound up with the expectation of constant progress. And you have to wonder about the social and political consequences of another generation of stagnation or decline in working-class incomes.
Of course, Mr Gordon could be wrong: Maybe we're on the cusp of truly transformative change, say from artificial intelligence or radical progress in biology. But he makes a powerful case. Perhaps the future isn't what it used to be.
© The New York Times News Service, 2016