Economic Growth as Salvation

For those of us concerned about socioeconomic trends and their consequences, Robert Gordon’s The Rise and Fall of American Growth is one of the most important books we’ll see in 2016. This blog post is the fifth (and final) in a series that touches upon the issues the book covers: inequality, economic growth, and poverty, among others. Click on links for first, second, third, and fourth posts in series.

 

Wouldn’t it be great if the American economy regained the robust growth that it once had? And wouldn’t it be grand if that economic growth could, to quote Donald Trump, “make America great again”?

According to economist Robert Gordon, it’s not going to happen. Gordon, in The Rise and Fall of American Growth, has one major message that he wants to get across: The great inventions and innovations of the late nineteenth and early twentieth centuries that created the incredible economic growth that in turn drove the standard of living higher in the United States was “a revolution that could only happen once.”

The phenomenal economic growth experienced in this country from 1920-1970 was a perfect storm event that won’t be repeated. Neither a Trump nor Clinton presidency has the power to make an economic golden age return.

According to Gordon, here are the reasons why the economic revolution could only happen once:

*Relatively cheap and available energy stores. Oil became the fossil fuel of choice at the beginning of the twentieth century, fueling incredible economic growth. Today, 75 percent of world energy consumption is yet from fossil fuels. Gasoline is cheap currently, but it’s not as cheap as it used to be, and crude oil extraction is much more difficult than ever before.

*The advantages of America, post-World War I and II. The transfer of gold reserves from Europe to the US and the general lack of territorial devastation in the US helped create conditions for an economic boom.

*Worker productivity skyrockets. New Deal pro-labor regulations (the crucial standardization of the eight-hour workday along with increases in wages), the advent of air-conditioning and improved heating in workplaces, and “continuous learning by doing” forced upon the manufacturing sector during World War II all contributed positively toward productivity. As an example, Henry Ford’s mammoth B-24 bomber plant outside of Ypsilanti, Michigan initially produced seventy-five bombers per month in February 1943. By August 1944, the plant achieved its peak rate of production of 432 bombers per month.

*The plethora of subinventions made possible by electricity and the internal combustible engine. Air-conditioning has already been mentioned; additionally the following made for increased economic growth: public transportation, elevators, and all types of electric and machine tools.

*Widespread use of the assembly line in manufacturing. The nascent American automobile industry adapted the disassembly line from nineteenth century meat packers, and Henry Ford perfected the assembly line for production of his Model T in 1913. Modern commercial manufacturing was born.

*Standardization of manufacturing parts. Already begun in the nineteenth century with gun manufacturing, the standardization of parts allowed for interchangeability and afforded easier assembly and repair of machines. The standardization of seemingly mundane nuts, bolts, and screws in the 1920s was an enormous improvement for industrial efficiency.

*Education boom creates better workers. In 1900, only 10 percent of American youth finished high school. By 1940, the graduation rate rose above 50 percent of the first time ever. Today’s rate of 75 percent has held steady since the early 1970s. The post-WW II GI Bill helped swell American college and university rolls, further creating a more capable and highly skilled workforce.

*Construction of the national highway system. Started in earnest under President Eisenhower in the 1950s, and mostly completed by 1972, the US interstate highway system afforded more versatile and efficient transport for American businesses and consumers.

These revolutionary innovations and improvements, according to Gordon, could only happen once. Current and future innovations and improvements are not ruled out; they simply don’t and won’t have the impact on the rate of economic growth as did the revolutionary ones. The rate of economic growth in the US since 1980 is about 1.5 percent. During the 1960s and ’70s, the tail end of the boom, it averaged 3 percent. It’s time we replaced the term economic growth with the more appropriate term economic development, and its accompanying emphasis of quality over quantity.

Monarchs were the guardians of salvation – a strictly earthly variety for a chosen few – in ancient days. The church and its priests succeeded monarchs as the purveyors of salvation – mostly heavenly – during medieval ages. Since the Industrial Revolution, economic growth has brought, and delivered, salvation back to earth. Economic growth has provided food, clothing, housing, goods, and purposeful employment to millions, liberating many of these from poverty. It also has created a small class of economic elites whose financial holdings are historically gargantuan.

But how much is enough? The days of exponential economic growth are over. If we’d truly like to make America great again, future greatness will be determined more so by economic development that favors many, rather than a status-quo economic system (going on thirty-five years) that favors the elite.

 

 

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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