AMERICA'S ECONOMIC GOWTH AND DECLINE

Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (Princeton & Oxford: Princeton U. Press, 2015) ("This is a book about the rise and fall of American economic growth since the Civil War. It has long been recognized that economic growth is not steady or continuous. There was no economic growth over the eight centuries between the fall of the Roman Empire and the Middle Ages. Historical research has shown that real output per person in Britain between 1300 and 1700 barely doubled in four centuries, in contrast to the experience of Americans in the twentieth century who enjoyed a doubling every 32 years. Research conducted half a century ago concluded that American growth was steady but relatively slow until 1920, when it began to take off. Scholars struggled for decades to identify the factors that caused productively growth to decline significantly after 1970 [Note: this was when the oldest of the baby-boomers turned twenty-five.] What has been missing is a comprehensive and unified explanation of why productively growth was so fast between 1920 and 1970 and so slow thereafter. This book contributes to resolving one of the most fundamental questions your American economic history." Id. at ix. "Our central thesis is that some inventions are more important than others, and that the revolutionary century after the Civil War was made possible by a unique clustering, in the late nineteenth century, of what we will call the 'Great Inventions'." "This leads directly to the second big idea: that economic growth since 1970 has been simultaneously dazzling and disappointing. This paradox is resolved when we recognize that advances since 1970 have tended to be channeled into a narrow sphere of human activity having to do with entertainment, communications, and the collection and processing of information. For the rest of what humans care about--food, clothing, shelter, transportation, health, and working conditions both inside and outside the home--progress slowed down after the 1970, both qualitatively and quantitatively. . . . The third big idea . . . Our chronicle of the rise in the American standard of living over the past 150 years rests heavily on the history of innovations, great and small alike. However, any consideration of U.S. economic progress in the future must look beyond innovation to contemplate the headwinds that are blowing like a gale to slow down the vessel of progress. Chief among these headwinds is the rise of inequality that since 1970 has steadily directed an ever larger share of the fruits of the American growth machine to the top of the income distribution. Id. at 2. "The stagnation of American educational attainment is best measured by the diminishing pace of improvement for those cohorts twenty-five years apart. The real advance came between those born in 1925 (now aged 90), who received on average 10.9 years of schooling, and those baby-boomers born in 1950 (now aged 65), who received 13.2 years. Jump ahead another twenty-five years to those born in 1975 (now aged 40), and attainment crept up only from 13.2 to 13.0 years. The slowing advance of educational attainment is one of the underlying causes of the slowing rate of productivity growth since 1970." Id. at 513. June Carbone and Naomi Cahn: "The American family is changing--and the changes guarantee that inequality will be greater in the next generation. For the first time, America's children will almost certainly not be as well educated, healthy, or wealthy as their parents." Peter Thiel: "We wanted flying cars, instead we got 140 characters.").