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The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World, 70)

Robert J. Gordon · 2 HN comments
HN Books has aggregated all Hacker News stories and comments that mention "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World, 70)" by Robert J. Gordon.
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Amazon Summary
How America's high standard of living came to be and why future growth is under threat In the century after the Civil War, an economic revolution improved the American standard of living in ways previously unimaginable. Electric lighting, indoor plumbing, motor vehicles, air travel, and television transformed households and workplaces. But has that era of unprecedented growth come to an end? Weaving together a vivid narrative, historical anecdotes, and economic analysis, The Rise and Fall of American Growth challenges the view that economic growth will continue unabated, and demonstrates that the life-altering scale of innovations between 1870 and 1970 cannot be repeated. Robert Gordon contends that the nation's productivity growth will be further held back by the headwinds of rising inequality, stagnating education, an aging population, and the rising debt of college students and the federal government, and that we must find new solutions. A critical voice in the most pressing debates of our time, The Rise and Fall of American Growth is at once a tribute to a century of radical change and a harbinger of tougher times to come.
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The so-called Great Stagnation, the lack of big technology breakthroughs since 1970, the stagnation in physics, the stagnation of wages, the slower rate of growth of productivity, the lack of automation, the political paralysis that has lead to 50 years of under-funded infrastructure, all of these things combine to make a pretty good case against techno-optimism. Many people found it natural to be techno-optimists in 1930, for obvious reasons, given what they had just lived through. But nowadays techno-optimism is a matter of pure faith, like a religion.

The best book on this subject is "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War" by Robert J. Gordon.

https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...

nkohari
I've heard this argument before, but it's incredibly hard for me to buy it. The 50 years since 1970 have brought us the personal computer, the internet, and the mobile phone, each of which has entirely reshaped the world. That's just from the perspective of the average person; there have also been huge leaps in manufacturing, energy, medicine, biotechnology, genetics, and so on.

Many of these problems are political/societal, and not technical: the stagnation of wages in particular. I would argue that instead of a lack of change being the problem, the issue is that society is still trying to desperately adapt to the increased rate of change that's happened during the last century.

simiones
While those things that you cite have been transformative, they are at best a minor part of everyone's lives. Standards of living have decreased in much of the US and EU even if today we have Netflix in our pockets. Vacations, home ownership, good food, participation in clubs, free time - these have all gone down for the majority of the population, even as they are more able to see their peers succeed (or seem to).
nkohari
It's awfully reductionist to describe the whole of personal computing, the internet, and mobile phones as "Netflix in your pocket".

I recognize that household income has stagnated and there's significant disparity in wealth. However, if you're going to claim that the median standard of living has decreased in most of the West over the last 50 years, you're going to need to cite some evidence.

It's shocking to see pushback on the transformative nature of modern computing on Hacker News of all places.

simiones
Looking at the inequality-adjusted human development index, the USA has seen a decrease in this measure between 2010 and now at least:

https://en.wikipedia.org/wiki/List_of_countries_by_inequalit...

nkohari
The USA and Spain are the only Western countries with decreases in their IHDI scores since 2010, and they are extremely small decreases.

This data effectively disproves the statement "Standards of living have decreased in much of the US and EU".

base698
Technopoly is a great book. It opens with this:

> Thamus inquired into the use of each of them, and as Theuth went through them expressed approval or disapproval, according as he judged Theuth’s claims to be well or ill founded. It would take too long to go through all that Thamus is reported to have said for and against each of Theuth’s inventions. But when it came to writing, Theuth declared, “Here is an accomplishment, my lord the King, which will improve both the wisdom and the memory of the Egyptians. I have discovered a sure receipt for memory and wisdom.” To this, Thamus replied, “Theuth, my paragon of inventors, the discoverer of an art is not the best judge of the good or harm which will accrue to those who practice it. So it is in this; you, who are the father of writing, have out of fondness for your off-spring attributed to it quite the opposite of its real function. Those who acquire it will cease to exercise their memory and become forgetful; they will rely on writing to bring things to their remembrance by external signs instead of by their own internal resources. What you have discovered is a receipt for recollection, not for memory. And as for wisdom, your pupils will have the reputation for it without the reality: they will receive a quantity of information without proper instruction, and in consequence be thought very knowledgeable when they are for the most part quite ignorant. And because they are filled with the conceit of wisdom instead of real wisdom they will be a burden to society.”

lkrubner
The rate of technological growth has slowed down by any measure that historians and economists know how to use. The book does a much better job making this argument than I can in this short Hacker News comment, but here is a summary of the argument that I recently wrote:

Peter Drucker has argued that the 60 years leading up to 1914 were the most innovative years in human history. A person born in 1860 and dying in 1940 would live through the first lightbulb, the first power plant, the first power grid, the first electrified city, the first electric street cars, the first combustion engine, the first cars and trucks, the first telephones and then the growth of the telephone networks to include every household, the first great oil boom, the first submarines and the exploration of the underwater seas, the development of germ theory, the sterilization of the hospitals and so the first safe surgeries, combined with the first true anesthesias, the first airplanes, the first radio as telegram and then in 1920 the ability of radio to carry the human voice, the invention of the television, the first sulfa drugs followed by the invention of the first true antibiotics, the first plastics, the invention of textiles made of plastics (nylon), and so much more than I can list. A person born in 1860 and dying in 1940 was born during one epoch of the human race and died in a completely different one, much more so than any person born in any other year. The best and most recent book on this subject is "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War” by Robert J. Gordon.

[ Also, you write about "personal computer, the internet, and the mobile phone" as three separate inventions, but it's really just 2: computers and better multi-plexing, and even the multi-plexing is because computers got better. ]

Lots of people make that argument, but when asked "What are we under counting?" no one's been able to come up with a story that remains consistent when applied to multiple industries. Computers got much, much faster, but everything else stagnated.

It's fairly easy to measure how much money is produced per employee. That number grew 3% to 4% a year for most of the 20th Century, till 1973, when it collapsed. Since then it's average 1.5% a year (again, with a few good years in the 1990s, and with some up and down wobbles during the Great Recession).

The central fact is the big push towards automation in the 1930s and 1940s and 1950s simply had a bigger impact than the kind of breakthroughs we've had in the last 40 years.

The automation of the telephone systems, and the removal of all the women who worked as operators, was huge in the 1940s and 1950s (and a fantastic boost to the computer industry). The later boom in multiplexing made capital investments more profitable, but did not increase the amount of money made per employee.

The introduction of the modern combine tractors on USA farms lead to a fantastic increase in agricultural productivity in the 1930s and 1940s and 1950s and 1960s, and nothing since then has had a similar effect on agricultural productivity.

The introduction of digging robots transformed the coal industry in the 1930s and 1940s and 1950s. Mountain top clearance was another huge change in how the work was done. Nothing since the 1960s has had anything like a similar impact. In fact, the opposite is true, increased environmental protections have, if anything, decreased productivity in that sector, or at least slowed the increase.

And on and on.

The transformations in the early to mid 20th Century were huge. The more recent transformations have been small. The Great Boom gave way to the Great Stagnation.

Check out:

The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War

https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...

nostrademons
What's the starting time for that series? Early 1900s (say WW1), or back in the 1800s?

I've got an alternate explanation for the grandparent: the economy is undergoing a phase change from an industrial economy to an information economy, which will bring with it different assumptions about what an economy is. A future historian looking back on us from a century later will see steady growth in whatever metric they measure the economy in (likely volume of data produced) since about the 1970s. The fact that large sectors of the economy have shown negative productivity growth will drop out of the history books, because neither these non-software industries nor productivity as a concept will seem important to this historian.

I'm basing this on a thought experiment: what does the last major phase change in the economy (from largely subsistence-based agriculture to industrialization) look like now, and how do the metrics by which we judge it differ. The concept of productivity is basically nonsensical in a pre-industrial agricultural society - crop yields, of course, depend upon the wind, rain, and weather, and why would we expect them to increase in any non-random fashion? But real agricultural wages (likely a good proxy for productivity) skyrocketed between 1790 and 1810, and then declined by 20% [1, p 20] between then and 1850. To a farmer (that's most of society back then), their plight wouldn't look all that different from today's factory workers: the generation that came of age in 1850 did significantly worse than that of 1810. There was a bit of a bump when mechanized agriculture and meatpacking came out in the early 1900s, but this trend largely continued into the 1930s, at which point we basically stopped talking about small family farmers and got agribusiness instead.

But do we consider the 1800s a time of low productivity? No. We associate them now with the first and second industrial revolutions, which dramatically changed society and hugely increased productivity. "Industry" initially meant "the textile industry", because that was the first area that mass-production techniques were applied to. Over time these techniques spread until they took over the whole economy, at which point we could start measuring the economy by metrics like "productivity" that assume that innovation and capital can allow an individual worker to produce more than they could before. Former metrics like crop yields become an afterthought: as long as they're "enough", who cares?

If you start the clock at 1910 or even at 1870, you're looking only at the portion of history where the industrial economy is the economy. To get a better analogy to current conditions, you have to go back, before the Civil War, when the nascent industrial revolution is causing the collapse of plantations, slavery, seamstresses, tailors, whalers, and small farmers.

[1] http://old.econ.ucdavis.edu/faculty/gclark/papers/farm_wages...

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