The Rise and Fall of American Growth

The Rise and Fall of American Growth (2016) by Robert Gordon is an economics ‘blockbuster’. It’s a best seller and is getting a lot of deserved attention. It’s a remarkable book. The book addresses the idea of secular stagnation with a huge amount of research and detail that is descriptive, evocative and backed by data. It’s long, it’s heavy but it’s a rewarding read.

Gordon’s thesis is that the century between 1870 and 1970 was special and that the rates of growth seen at that time are something that was exceptional, rather than the rule. Gordon shows that it was really a ‘Golden Century’. Gordon says that there have been three technological or industrial revolutions, the first in the coming of steam, the second the invention of the internal combustion engine and the electrification of cities and the third being the information and communication revolution. He shows in the book that the second was the biggest transformation for people. He also points out that houses became networked into three great networks at the same, those of electricity, water coming in and sewerage going out.

Gordon points out that life expectancy went dramatically and the related child mortality plummeted mainly due to the dramatically improved health primarily driven by fresh, clean water coming in and sewerage going out. He points out that as well as making people richer the economic effects of this change were even greater than is shown in the data. He points out that the common critique that GDP doesn’t measure the utility of vastly greater access to information is small compared to the fact that GDP didn’t measure the improvement of not having 1 in 5 or more of your children dying and the dramatic improvement in maternal mortality.

The data presented on the rise of cars, declines in mortality, the changes in education, the adoption of phones, fridges, washing machines and many other things is just fascinating. I don’t think I’ve ever made as many notes in an ebook before.

It’s hard not to agree with Gordon’s main point that growth is likely to be slower in the future than it was in the Golden Century. It’s worth noting that this level of growth will still be very high by historical standards. However, at the end of the book he puts forward the idea that some policies that he suggests would do a great deal to restore growth to higher levels and fails to make much of a case for these policies. They seem to be far more policies that he likes for perhaps other reasons rather than because he really believes they will increase growth.

The book’s title does show a rather big but understandable omission for this history of growth. It is that of the US rather than the world although Europe is sometimes included in some areas. China’s recent explosive growth is not mentioned, nor the impact it has had on the US. The effect of the probable slowing of Chinese growth and the effects of the creation of another enormous economy are not explored.

The book could definitely be somewhat shorter. It does drag. However, it’s definitely not a case of a book that would be an excellent novella being stretched to 750 pages. It’s more that it would be better if shorter.

The Rise and Fall of American Growth is an excellent and important book. For people who disagree with the thesis it provides a very thorough exposition of why many people think along these lines. The book also provides a plethora of fascinating facts, anecdotes and data.

 

 

 

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