The Rise and Fall of American Growth

For those of us concerned about socioeconomic trends and their consequences, The Rise and Fall of American Growth is one of the most important books we’ll see in 2016. This blog post is the first in a series that will touch on the issues the book covers: inequality, economic growth, and poverty, among others.

 

Northwestern University economics professor Robert Gordon’s new book argues that the heyday of American economic growth is past and gone. The Rise and Fall of American Growth (Princeton University Press, 2016) opens with a jolt as Gordon summarizes his argument in the first five pages of the introduction, best represented by this line from page 1: “The economic revolution of 1870 to 1970 was unique in human history, unrepeatable because so many of its achievements could only happen once.” Gordon call this one-hundred year period – the Second Industrial Revolution its starting point – the “special century.” The light bulb and the harnessing of electricity, indoor plumbing, the telephone, the automobile and the assembly line, the airplane, and the plethora of appliances (washers, dryers and others) combined to give this period a rate of economic growth previously unseen in the history of the world. And, Gordon argues in the subsequent 783 pages of his tome, the economic growth of the special century will not be seen again in terms of scale and influence upon quality of life. And let us not forget that the incredible economic growth of this special century was primarily fueled by relatively cheap and readily available crude oil.

gordon bookGordon gives the reader historical context for his argument, stating that “there was virtually no economic growth for millennia until 1770, only slow growth in the transition century before 1870, remarkably rapid growth in the century ending 1970, and slower growth since then” (p. 2). China and India have experienced rapid economic growth in the last two decades, but as Gordon outlines, their rates of growth will reach their inevitable limits and begin to slow down, just as we’ve seen in the United States. As a matter of fact, the rates of economic growth in China for 2014 and 2015 (by GDP) are the two slowest of the past twenty-five years.

Yes, our smart phones can take amazing photos and help us navigate our way to a great Thai restaurant when visiting a new city, but a larger context needs to be understood. Gordon says the economic growth since the 1970s comes from a narrower sphere of human activity – entertainment, information, and communications. The advances in these three arenas in the past few years are incredible and greatly appreciated, but they pale in comparison to the advancements of the special century. Back in the day new sewing machines and first-time plumbing in households significantly increased living standards, creating values and efficiencies theretofore unknown. In our day, ditching our flip phones for smart phones is a desired advancement, but it doesn’t register as a major increase in quality of life. emoticon

We can agree with Gordon’s assessment that economic growth since 1970 has been both “dazzling and disappointing.” Smart phones, iPods, and 55 inch flat screen HD TVs rock our worlds, but current innovation and economic activity do not measure up comparably to what was accomplished in generations past. Globalization’s pull of manufacturing jobs away from the US and its accompanying suppression of wages in the US (and equalization of wages worldwide) makes for a forecast unheard of since the close of the nineteenth century: a majority of the youngest Americans now entering the work market will not better their parents in earnings and living standards.

Gordon warns that the headwinds of inequality, blowing steadily since the 1980s, have also significantly impeded the American vessel of progress. An oversized portion of the proceeds of recent American growth – unlike the case in recent past generations – has been distributed to the upper echelon. Gordon states unequivocally that any consideration of US economic growth in the future must deal with the issue and problem of inequality.

According to Gordon, “economic growth is not a steady process that creates economic advance at a regular pace, century after century” (p. 2). With no guarantee that economic markers simply improve for subsequent generations ipso facto, we understand there to be a lot of work to do maintain an egalitarian society. Part of this understanding includes the following realizations: the economic pie is not infinite, but limited; economic returns need to be considered as to their bearing upon social outcomes; and, that neither energy reserves nor waste sinks are unlimited.

I’ll have more posts to come on Gordon’s excellent and timely work.

 

This blog and website are representative of the views expressed in my book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. Distributed by ACTA Publications (Chicago), JaLBM is available on Amazon as a paperback and an ebook. It’s also available on Nook and iBooks/iTunes, and at the website of Blue Ocotillo Publishing.

isbn 9780991532827

If you’re a member of a faith community – Christian, Jewish, Muslim, Buddhist, or other – consider a book study series of Just a Little Bit More. The full-length book (257 pgs.) is intended for engaged readers, whereas the Summary Version and Study Guide (52 pgs.) is intended for readers desiring a quick overview of the work. It also contains discussion questions at the end of all eight chapter summaries.

Readers of both books can join together for study, conversation, and subsequent action in support of the common good.

The Spanish version of the Summary Version and Study Guide will be available in September 2016. ¡Que Bueno!

¡El librito de JaLBM – llamado Solo un Poco Más saldrá este Septiembre de 2016!

 

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2 Comments

Filed under Commentary

2 responses to “The Rise and Fall of American Growth

  1. Arlin Buyert

    Excellent Tim! Arlin

  2. Pingback: Equal Pay for Women and Good Ol’ Cheap Labor | Just a Little Bit More - Book Blog

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