U.S. Growth in the Future

I am reading various books and articles concerning future predictions of the U.S. and other countries because of the Homo Demi Sapiens book on which I am presently working. I have just finished reading The Rise and Fall of American Growth, subtitled The U.S. Standard of Living Since the Civil War (see recommended books), and loved it, although it is a heavy book, both in weight and in content. The author, Robert Gordon, is an economics professor at Northwestern University, with a deep interest in history, in this case the history of technology and related effects.

He makes two major points in the book: one being that simple measures such as GNP do not adequately describe the effects of technological developments, and the other being that the time period 1870 through 1970, and in particular 1920 through 1970, may be unique in the U.S. as far as growth is concerned.

He includes improvement in the quality of life in his measure of growth, as well as economic data. He particularly addresses a number of what he calls “great” inventions that happened in the 19^th and early 20^th centuries, such as electrical light and power, internal combustion engines, the germ theory of medicine, wireless communication, and water, gas, electrical telephone and rail and highway networks. He feels that these inventions and developments, and the resulting exploitation of them, ranging from urbanization to rapid and affordable instant communication and rapid travel to household appliances and mass production rapidly changed the U.S. in remarkable and positive ways, ranging from urbanization, to much longer life expectancy, to education and entertainment.

But he thinks that the huge growth resulting from this activity is unusual, and perhaps is beginning to return to a lower, and more normal rate of growth. This is a rather unpopular view in the U.S., and quite different than the one present candidates for office are promising if they are elected. We fully expect to return to the high rate of growth we attained in the period 1920 to 1970. There are still areas in which great change is happening rapidly, the obvious one being information, communication, and entertainment as a result of digital technology, but Gordon offers a large amount of data and arguments that even this is slowing down, that such activities are allowing us to do things much more rapidly and cheaply than we could before, but we could do them, and information, communication, and entertainment are only a small part of the many factors that define our standard of living.

He finishes the book by specifically pointing out four factors that slow down growth—increased inequality, inadequate education, demographics, and repaying debt— and suggests what we have to do to combat them. But he clearly does not think that we will ever reach the rate and revolutionary effects of the growth that occurred in the period which he discusses in the book.

I found the book very thought provoking, and tend to believe many of the author’s arguments, even though I have been involved in technology (even “high” technology, whatever that means) all of my adult life. But although I am a great fan of Star Wars movies, I don’t think they predict where we are going (I hope).  I think we will figure out how to overcome the obstacles to growth that Gordon identifies to some extent and to help people displaced by digital devices to provide better and more satisfying lives. And too much growth and change can be unsettling to a large and growing population.  Finally according to Gordon, part of our stimulus to rapid growth during the 20^th century was due to recovery from the great depression and the spurt in production and recovery during and after World War II. That was a hard way to grow!