The Rise And Fall Of American Growth – Best Days Are Not Behind Us via Bill Gates, Gates Notes
I generally read books that I expect to enjoy. But based on reviews I had seen, I was prepared to be more frustrated than fascinated by Robert Gordon’s new book, The Rise and Fall of American Growth. So you can imagine my surprise when I discovered how much I liked it.
Most reviews have focused on the “fall” indicated in the title: the last hundred pages or so, in which Gordon predicts that the future won’t live up to the past in terms of economic growth. I strongly disagree with him on that point, as I discuss below. But I did find his historical analysis, which makes up the bulk of the book, utterly fascinating. (And, at 743 pages, the book has a lot of bulk. Gordon’s two-part piece in Bloomberg View is a helpful summary for anyone who won’t get through the whole thing.)
Themes for the next decade: Cannabis, 5G, and EVs
Gordon paints a vivid picture of the years between 1870 and 1970, a century of unprecedented growth in the United States. This was the century that brought us the great inventions that fundamentally changed our standard of living—inventions like the electrical grid, indoor plumbing, automobiles, and antibiotics.
Gordon does a phenomenal job illustrating just how different life was in 1870 than it was in 1970, through both an economic analysis and engaging narrative descriptions.
Consider that in 1870, most homes were lit by candles and whale oil lamps. To use the bathroom, your choice was an outhouse or a chamber pot. Your world was confined to the distance your horse could travel. You would spend long hours of your short life doing backbreaking labor, owning only two changes of clothes, and eating a whole lot of pork and grain mush.
By 1970, homes—and people—became, to use Gordon’s term, networked. The advent of electricity, cars, indoor plumbing, and telephones meant that people were more connected than ever, dramatically improving quality of life and increasing productivity to previously unseen levels.
What really amazed me was not the speed of innovation but the speed of adoption. In 1910, there were 2.3 motor vehicle registrations for every 100 households. By 1930, there were eighty-nine.
In its impact on the standard of living, the arrival of the automobile was rivaled only by the commercialization of electricity. It’s hard for many of us to imagine living in the dim, smelly, and smoky dwellings of 1870, washing clothes by hand, heating irons on a gas or wood stove, and eating only food that didn’t require refrigeration. By 1970, you could walk into most houses and see a refrigerator, an iron, a washing machine. It would look pretty much the same as any house you’d walk into today, with a couple notable exceptions like the microwave (and color schemes with a lot less harvest gold).
I found Gordon’s historical analysis eye-opening. And that’s why I think the attention that reviewers have paid to his predictions for the future, which make up only two chapters, distracts from the impact of the book.
Read the full article here.
The Rise and Fall of American Growth – Description
A New York Times Bestseller
In the century after the Civil War, an economic revolution improved the American standard of living in ways previously unimaginable. Electric lighting, indoor plumbing, home appliances, motor vehicles, air travel, air conditioning, and television transformed households and workplaces. With medical advances, life expectancy between 1870 and 1970 grew from forty-five to seventy-two years. Weaving together a vivid narrative, historical anecdotes, and economic analysis, The Rise and Fall of American Growth provides an in-depth account of this momentous era. But has that era of unprecedented growth come to an end?
Gordon challenges the view that economic growth can or will continue unabated, and he demonstrates that the life-altering scale of innovations between 1870 and 1970 can’t be repeated. He contends that the nation’s productivity growth, which has already slowed to a crawl, will be further held back by the vexing headwinds of rising inequality, stagnating education, an aging population, and the rising debt of college students and the federal government. Gordon warns that the younger generation may be the first in American history that fails to exceed their parents’ standard of living, and that rather than depend on the great advances of the past, we must find new solutions to overcome the challenges facing us.
A critical voice in the debates over economic stagnation, 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.
The Rise and Fall of American Growth – Review
“[An] authoritative examination of innovation through the ages.”–Neil Irwin, New York Times
“[T]his 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. . . . This book will challenge your views about the future; it will definitely transform how you see the past.”–Paul Krugman, New York Times Book Review
“The biggest challenge for studies of long-run growth is measuring not income but prices. We have records of how much money people earned in 1870 and of the sales of goods and services. But how should we compare an 1870 dollar with a 2015 dollar? We are so used to using a standard Consumer Price Index inflation adjustment that we forget the reckless assumptions needed to compare currency values across a century-and-a-half divide. . . . [The Rise and Fall of American Growth] is full of wonder for the miraculous things that America has accomplished.”–Edward Glaeser, Wall Street Journal
“Mr. Gordon uses exhaustive historic data to buttress his thesis.”–Greg Ip, Wall Street Journal
“A masterful study to be read and reread by anyone interested in today’s political economy.”—Kirkus
“[A]n essential read for anyone interested not only in US economic history but also American economic prospects . . . a tremendous achievement.”–Diane Coyle, Enlightened Economist
“Normally, these kinds of big-think books end with a whimper, as the author totally fails to identify solutions to the problem he is writing about. But Gordon’s conclusion offers some admirably definitive policy advice.”–Matthew Yglesias, Vox
“Magnificent. . . . Even if history changes direction, and Mr. Gordon’s rise-and-fall thesis proves to be wrong, this book will survive as a superb reconstruction of material life in America in the heyday of industrial capitalism.”—The Economist
“Every presidential candidate should be asked what policies he or she would offer to increase the pace of U.S. productivity growth and to narrow the widening gap between winners and losers in the economy. Bob Gordon’s list is a good place to start.”–David Wessel, WSJ.com’s Think Tank blog
“[W]hat may be the year’s most important book on economics has already been published. . . . What Gordon has provided is not a rejection of technology but a sobering reminder of its limits.”–Robert Samuelson, Washington Post
“Robert Gordon’s The Rise and Fall of American Growth is an extraordinary work of economic scholarship. . . . Moreover, this is one of the rare economics books that is on the one hand deeply analytical . . . And on the other a pleasure to read. . . . [A] landmark work.”–Lawrence Summers, Prospect
“Ambitious. . . . The hefty tome, minutely detailed yet dauntingly broad in scope, offers a lively portrayal of the evolution of American living standards since the Civil War.”–Eduardo Porter, New York Times
“Two years ago a huge book on economics took the world by storm. Thomas Piketty’s Capital in the Twenty-First Century . . . became a surprise bestseller. . . . Robert Gordon’s tome on American economic growth stretches to 768 pages and its central message is arguably more important.”–David Smith, Sunday Times
“A landmark new book.”–Gavin Kelly, The Guardian
“Looking ahead, judging presidents by policies rather than outcomes may be all the more important. In a new book, The Rise and Fall of American Growth, the economist Robert Gordon argues that we are in the midst of an era of meager technological change. Yes, we now have smartphones and Twitter, but previous generations introduced electric lighting, indoor plumbing and the internal combustion engine. In Mr. Gordon’s view, technological change is just not what it used to be, and we had better get used to slower growth in productivity and incomes.”–N. Gregory Mankiw, New York Times