Through an e-mailed link, I came across a very interesting and thought-provoking article titled ‘The Blip‘. The author asks simply, “What if everything we’ve come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course?”
I don’t agree with all of his points, but he provides enough evidence to back up his arguments that I find myself thinking long and hard about them. I haven’t come to a final conclusion yet, but I’m intrigued enough that I’d be grateful for your feedback.
Here’s an extract to whet your appetite.
Gordon has two predictions to offer, the first of which is about the near future. For at least the next fifteen years or so, Gordon argues, our economy will grow at less than half the rate it has averaged since the late-nineteenth century because of a set of structural headwinds that Gordon believes will be even more severe than most other economists do: the aging of the American population; the stagnation in educational achievement; the fiscal tightening to fix our public and private debt; the costs of health care and energy; the pressures of globalization and growing inequality.
. . .
He believes we can no longer expect to double our standard of living in one generation; it will now take at least two … If Gordon is right, then for all but the wealthiest one percent of Americans, the rate of improvement in the standard of living—year over year, and generation after generation—will be no faster than it was during the dark ages.
Gordon’s second prediction is almost literary in its scope. The forces of the second industrial revolution, he believes, were so powerful and so unique that they will not be repeated. The consequences of that breakthrough took a century to be fully realized, and as the internal combustion engine gave rise to the car and eventually the airplane, and electricity to radio and the telephone and then mass media, they came to rearrange social forces and transform everyday lives.
. . .
The classic example of the scale of these transformations is Paul Krugman’s description of his kitchen: The modern kitchen, absent a few surface improvements, is the same one that existed half a century ago. But go back half a century before that, and you are talking about no refrigeration, just huge blocks of ice in a box, and no gas-fired stove, just piles of wood. If you take this perspective, it is no wonder that the productivity gains have diminished since the early seventies. The social transformations brought by computers and the Internet cannot match any of this.
. . .
The whole of American cultural memory, the period since World War II, has taken place within the greatest expansion of opportunity in the history of human civilization. Perhaps it isn’t that our success is a product of the way we structured our society. The shape of our society may be far more conditional, a consequence of our success. Embedded in Gordon’s data is an inquiry into entitlement: How much do we owe, culturally and politically, to this singular experience of economic growth, and what will happen if it goes away?
There’s much more at the link. Very interesting and highly recommended reading.
I don’t know whether the author is right or not, and I find myself with visceral objections to some of his points. On the other hand, he makes a strong case. If you’d care to click over there and read the whole article, I’d value your input. Let us know your reactions in Comments.