by wasoxygen

This is a harrowing image. Plenty of authenticity there, and the virtue of hard toil. I would pay someone a hundred bucks to do that with a floor sander, then pay another hundred bucks to sign up for a trail race where I could break a sweat among living hardwoods.

Robert Gordon has written a magnificent book on the economic history of the United States over the last one and a half centuries. His study focuses on what he calls the “special century” from 1870 to 1970—in which living standards increased more rapidly than at any time before or after. The book is without peer ... concluding with a provocative hypothesis that the future is unlikely to bring anything approaching the economic gains of the earlier period.

And Alexander wept, for there were no new utiles to gather.

Rate of growth is always greatest when you start. "Fastest growing economy" is a badge that the developing nations pass around. If by 1970 people in the U.S. already had most of the good stuff that there is to be had in life, we should be willing to give thanks and hope to see the feat replicated elsewhere.

Living standards, as measured by GDP per capita or real wages, accelerated after 1870.

If you have to choose a single measure, this might be the best you can do. But GDP leaves out a lot. A $600 smartphone that does what $10,000 of equipment used to do possibly depresses GDP. Strawberries sold at $3 per pound instead of $5 due to improved efficiency depresses GDP.

Gordon emphasizes that the period since 1970 has been less special. He argues that the pace of innovation has slowed since 1970 (a point that will surprise many people), and furthermore that the gains from technological improvement have been shared less broadly (a point that is widely appreciated and true).

I am curious about this pace of innovation measure. Is it patents per year? Count of new medical interventions? Startups founded? Quantity of products with distinct SKUs available for under an hour's median wage within a five minute walk of the typical home?

If "the gains" means "the smartphones" or "the strawberries" it is clearly false that they are not broadly shared. If the gains are the dollars given in exchange for the tangible gains, then yes, you can find some pockets of high concentration in the accounts of people who are especially efficient and determined to provide smartphones and strawberries. The chief charm of the market is that the people who now have strawberries don't want the dollars back; they prefer the strawberries.

A central aspect of Gordon’s thesis is that the conventional measures of economic growth omit some of the largest gains in living standards and therefore underestimate economic progress. A point that is little appreciated is that the standard measures of economic progress do not include gains in health and life expectancy. Nor do they include the impact of revolutionary technological improvements such as the introduction of electricity or telephones or automobiles. Most of the book is devoted to describing many of history’s crucial technological revolutions, which in Gordon’s view took place in the special century. Moreover, he argues that the innovations of today are much narrower and contribute much less to improvements in living standards than did the innovations of the special century.

It would have been very hard to foresee the improvements made during the special century, and there may yet be incredible advances to come. But I am open to the idea that the biggest gains, the pruning of low-hanging rotten fruit like polio and violence and hard manual labor, have already been made. "We have mostly resolved most of the biggest problems" is a sign of success; it is an indication of progress that the issues getting attention today are less a matter of life-and-death and more about incremental improvement in life quality.

Gordon’s book is both physically and intellectually weighty ... it weighs as much as a small dog.

It is priced to match. I've added it to my wish list, where it will likely stay a while.

The first chapter summarizes the major arguments succinctly and should be studied carefully. Here is the basic thesis:

The century of revolution in the United States after the Civil War was economic, not political, freeing households from an unremitting daily grind of painful manual labor, household drudgery, darkness, isolation, and early death. Only one hundred years later, daily life had changed beyond recognition. Manual outdoor jobs were replaced by work in air-conditioned environments, housework was increasingly performed by electric appliances, darkness was replaced by light, and isolation was replaced not just by travel, but also by color television images bringing the world into the living room…. The economic revolution of 1870 to 1970 was unique in human history, unrepeatable because so many of its achievements could happen only once.

I love this summary. My only objection is that "unrepeatable" sounds like a bad thing. We have been inoculated against the washboard, and we never need a booster shot. Let's hope that the rest of the world can enjoy this same transformation, and that it will take much less than one hundred years.

The rest of the review expands on this wonderful thesis, with the important illustration (from oil lamps to LEDs) of how welfare measures like GDP underestimate economic improvement and overlook health gains.

My only gripe (aside from the obligatory hand-wringing over inequality) is that the reviewer indulges in the all-too-common habit of portraying a reduction in the rate of growth similarly to reduction in absolute value. He perceives the difference clearly:

...Gordon moves up a derivative. In other words, he is not predicting that living standards in the US will decline; rather he views it as likely that the growth rate of living standards will decline from its very rapid pace in the special century.

Parents do not despair on seeing that their healthy teenager is no longer growing as rapidly as she did during previous years. Exponential growth is great when you start small, but after thousands of years of static misery, following a century of rapid progress with a sustained low level of growth is not a terrible thing.

But the reviewer uses language that is hard to square with the idea of continuing improvement.

the US faces major “headwinds” that will continue to drag down living standards relative to underlying productivity growth.

That's a bit mumbly, and he really wants to provide some balance so he doesn't get shamed as a complete cornucopian, so he invokes the all-powerful evil golem to justify some pessimism.

If inequality continues to grow, this might lead to declining incomes of the bottom part of the distribution—and therefore to true Spenglerian decline. I emphasize that these forecasts are highly speculative...