- Hardcover: 784 pages
- Publisher: Princeton University Press; 1 edition (15 November 2015)
- Language: English
- ISBN-10: 0691147728
- ISBN-13: 978-0691147727
- Product Dimensions: 16.5 x 5.1 x 24.1 cm
- Boxed-product Weight: 1.3 Kg
- Customer Reviews: 231 customer ratings
- Amazon Bestsellers Rank: 145,501 in Books (See Top 100 in Books)
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The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War Hardcover – 15 Nov 2015
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From the Back Cover
"The story of our standard of living is a vital part of American history and is well told in this fascinating book. Gordon provides colorful details and striking statistics about how the way we live has changed, and he asks whether we will live happily ever after. His answer will surprise you and challenge conventional assumptions about the future of economic growth. This book is a landmark--there is nothing else like it." --Robert Solow, Nobel Laureate in Economics
"A towering achievement that will utterly transform the debate on U.S. productivity and growth. Robert Gordon chronicles the stunning swiftness with which American lives have advanced since 1870, and raises profound questions about whether we have benefitted from one-offs that cannot be repeated. Combining eloquent description with forceful and clear economic analysis, Gordon's voice is gripping and compelling. This is economic history at its best."--Kenneth S. Rogoff, coauthor of This Time Is Different
"The Rise and Fall of American Growth is a tour de force with an immensely important bottom line. It is packed, page after page, with insights and facts that every reader will find fascinating and new. A profound book that also happens to be a marvelous read."--George Akerlof, Nobel Laureate in Economics
"Keynes dismissed concerns about economic trends by remarking that in the long run, we are all dead. Gordon turns this upside down by reminding us that we inherited somebody else's long run. If you care about the legacy we will leave future generations, read this richly detailed account of America's amazing century of growth."--Paul Romer, New York University
"Robert Gordon has written the book on wealth--how Americans made it and enjoyed it in the past. If we're going to create more wealth in the future instead of arguing about dividing a shrinking pie, we have to read and understand this book."--Peter Thiel, entrepreneur, investor, and author of Zero to One
"This book is as important as it is unsettling. Gordon makes a compelling case that the golden age of growth is over. Anyone concerned with our economic future needs to carefully consider his argument."--Lawrence Summers, Harvard University
"In The Rise and Fall of American Growth, Gordon looks at the evolution of consumption and the standard of living in the United States from the end of the Civil War to the present day. His work brims with the enthusiasm of discovery and is enriched by personal anecdotes and insights derived over a long and very productive career."--Alexander J. Field, Santa Clara University
"The Rise and Fall of American Growth makes use of economic history to argue that Americans should expect the rate of economic growth to be, on average, slower in the future than it has been in the recent past. Gordon is the most important exponent of the pessimistic view working today and this is an exceptional book."--Louis Cain, Loyola University Chicago
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Top international reviews
The years 1940 to 1970 were, if anything, even more spectacular. Wages increased even more as productivity boomed. Highways were built which enabled easy travel from all corners of the nation to all of the others. Driveways filled up with automobiles. Air travel became increasingly accessible to everyone, not just the financial elite. And on long hot humid summer days Americans could take refuge in their air conditioning.
Then, with the exception of a brief spurt between 1996 and 2004, the helter skelter growth slowed to an amble. A rust belt developed in areas previously frenetic with production of steel, cars and other goods. The ICT “revolution”, heralded as the bringer of new industrial and domestic advances on a par with those of electricity and the internal combustion engine, has so far failed to deliver in such a grand manner. There’s a limit to the extent to which cat videos and 140-character prattlings can improve the standard of living.
Robert J Gordon’s story of this great unfurling of the American dream is captivating in two ways: first in showing how the meteoric rise and subsequent plateauing (it’s overdramatic to characterise it as a fall, really) came about, using some of the same old sources, though in slightly different ways, maybe, and also drawing on resources such as back-issues of the Sears catalogue to trace the way in which American households advanced from home-made everything, including virtually all clothes, to the ability to order everything – clothes, white goods, musical instruments (the number of musicians who made their start on Sears catalogue instruments, which Gordon doesn’t go into, is phenomenal), and so on – via the postman.
But he also tracks how things have stagnated: with all of the waiting around at airports and all the other attendant hassles of flying it now takes longer by jet to fly New York-LA than it did in the day of propeller-driven aeroplanes, and with all the little extras, like paying for luggage to be carried and food on the flight, both of which used to be included in the fare, it’s more expensive too.
Gordon is not, however, blaming anyone or anything in particular. The problem is, he suggests, that all the good stuff has been done, and everything now is just new ways of doing those things (emails for letters, online orders for mail orders, incremental improvements in TV picture definition, DVDs or Netflix for videos or the cinema, and so on). Likewise with productivity: ICT may be able to achieve improvements, but the potential is nowhere near as striking as that for advances of previous industrial revolutions.
In his final chapter, then, he advances proposals not so much for kick-starting a productivity revival as for alleviating the fallout of its demise. Like Thomas Piketty, whom he makes a point of acknowledging and citing, he recognises the enormous chasm that has opened up between top and bottom of American society. In a particularly poignant chart he shows how between 1945 and 1975 – the years of the “great compression” - incomes advanced at similar rates across American society, and how since then the top 10% have continued to enjoy steady growth (those at the very top, as Piketty pointed out, have enjoyed obscene growth in their wealth in comparative terms) whilst those at the bottom have suffered ongoing contraction.
In all, I would rate this book, as a piece of economic history, almost on a par with the works of Landes (The Unbound Prometheus and The Wealth And Poverty Of Nations), as a research piece at least in the same ball park as Piketty’s Capital (yes, I have read it), and as a piece to dip into alongside Porter’s three best-known works (yep, I read them too; I didn’t just look at the pictures).
Nevertheless, like all of those publications, it also deserves, demands even, critical appraisal. For starters, I find the central thesis too alarmist, like the head of the US Patent Office at the turn of the 20th Century believing he could close it down as everything had already been invented. There are many reasons for guarded optimism. The Economist recently ran a Special Report outlining some of the many potential productivity improvements in Agriculture in the pipeline (if only we could get past the Frankenfoods pitchforks and torches in the dark mentality some of them may one day get used). Additive Manufacturing (3D Printing to most of us) has only just begun to find its role, so far in specific niches, but plenty of work is being done on breaking loose of that straitjacket. And who knows, somewhere within ICT there is that killer app like the motor car or electric lighting waiting to be found (I don’t think the so-called “internet of everything” is it, though; I don’t need my fridge to tell me I’m out of milk, thanks).
Secondly, Gordon appears to dismiss out of hand the role of government in revitalisation, but as Mariana Mazzucato and Carla Perez, among others, have pointed out, without government there would be no internet, no ICT revolution, no (shock horror) iPhone. In The Entrepreneurial State, Mazzucato advanced the idea that government could be doing far more for the development of alternative energy.
Furthermore, without the government-built network of Interstate Highways, what would Americans do with all those cars?
Thirdly, Gordon gives a very confusing account of the benefits of immigration. First he assigns responsibility to immigration for bringing down wages in some sectors, then seems to be saying that it is really only the wages of immigrants that are affected. He partly credits immigration control in the US after the second world war for rising wages, but makes no mention of the many Mexicans who moved, under the Programa Bracero, to the US during the period covered by that war and the one in Korea in order to fill in for the Americans serving in the armed forces, which saw the Mexican population in the US double to five million. And he proposes a points system for permitting immigrants to enter the US, making the classic economist’s mistake of commodifying people, in the belief that a price can be put on everything.
And finally, at least for this review, there is Gordon’s US-centricity, almost to the exception of everywhere else. One of the great strengths of Piketty’s work was that whilst it spoke of “Les Trente Glorieuses”, it did so in an international context. Gordon’s “Great Leap Forward” only applies to the US. There is nothing in Gordon about how improving economies in the rest of the world may benefit the US. The rest of the world more or less doesn’t exist in the bubble he constructs.
However, to reemphasise my earlier point, notwithstanding a few quibbles I consider this book to be of extraordinary value: a record of spectacular progress and how it was achieved, and a warning that, unless somebody brings more beer, the party’s over.
Robert Gordon and his team are to be congratulated on the amount of information they have gathered and put into a single book.
The Postscript at the end lists a number of policy changes that should be seriously considered going forward if we are to avoid the severe impact of protracted very low growth when a lot of people think we can keep on growing at a significant rate forever.
Not sure how we get the Politicians to understand that things need to change as it will take time and significant effort, something today's politicians do not understand
Sadly the book is the absolute opposite of today's off the cuff ( non measured fact based ) quick fix populist politics.
It is rich in detail and well supported with evidence.
As a reader it is well written therefore it’s length was not an issue for me though it could be a consideration for some (it is a heavy book even in paperback form).
If I am going to say anything critical I would say a more ruthless editor could have made a difference and not lost any of the central message. Secondly I would point out that the policy prescriptions in the final chapter are a bit on the weak side and less sophisticated than the historical analysis that supports them.
It very heavy in this format though!
I thought that this was a tremendous book. Although its ostensible aim was to chart the declining marginal impact of technology on economic growth, what it mainly documented was the impact of technology in shaping all aspects of modern society. It made me appreciate anew all the technologies that we take for granted, and which make us the richest generation that have ever lived. Although the book was a dense 650 pages I thought that the time invested in reading it was amply rewarded.
In this book Robert J. Gordon aims to show that future economic growth will inevitably be lower than during the golden period between 1870 and 1970, due to the declining marginal return on new technology. He shows how in the period 1870 to 1940 key new inventions in the form of electricity, the internal combustion engine, and modern medicine led to massive changes in society that substantially raised worker participation rates and productivity levels. In the period from 1940 to 1970 there was a substantial increase in productivity that Gordon largely ascribes to the impact of the Second World War via massive capital investment, technological innovations, pent up demand from the Great Depression, and public education (the GI bill). Since 1970 economic growth rates have slowed, despite the ICT revolution, and he expects this trend to continue mainly because no new technologies can hope to transform society in the same way that the discoveries of the past 150 years have done.
I would highlight some broad themes:
• The effect of technology on society. What I enjoyed most about this book was how it documents in some detail how technology has completely transformed society over the past 150 years. For example, the car. When society was limited to horse transport a third of all arable land was required to produce fodder, cities could not be larger than a radius of around 3 miles because people could not physically commute further, and rural society was limited to a radius of a few miles. In Chicago alone 7,000 horse carcasses were carried away each year, and thousands of tonnes of manure and urine polluted the streets and were a source of pollution and disease. The book is full of revealing little details about how isolated, poor, short and unhealthy life was in 1870, and how much we take for granted now. One fact that has stuck in my mind is that a survey in the 1930’s found that “Americans would rather sell their refrigerators, bath tubs, telephones, and beds to make rent payments, than to part with the radio box that connected the outside world.” Prior to the radio rural communities were almost completely isolated from the outside world. The book was also very good in documenting how urban appliances such as the washing machine improved the lives of (mainly) women, and freed them to do more productive and enjoyable work.
• GDP understates economic growth. Although we are all aware of the limitations of the GDP calculation, I thought that Gordon made a very good case that GDP vastly underestimates the effects of technological change in that it does not account at all for the improvements in lifestyle afforded by new inventions. Thus, the GDP calculation calculates the increased quality and affordability of cars but not the impact on personal welfare of the car versus the horse.
• Demographics. I thought that Gordon failed to bring out the central role of demographic changes as a source of economic growth, and as a reason that future economic growth cannot match that of the past century. I would highlight three central trends, from low productivity agricultural work to higher productivity urban service and manufacturing sectors, increased longevity leading to longer labour force participation and increased female labour participation rates. In 1870 46% of workers were farmers or farm laborers; by 2009 this had fallen to 1%. In 1900 the life expectancy at birth for white rural males was 46 years, and for white urban males it was 39 years. By 2009 it was over 75 for both sets. In 1870 the percentage of working age women, 35 to 49 in the labour force was 21.1% rising to 76.1% in 2009. The shift to near full, healthy, long life, labour force participation in the high productivity urban economy as largely occurred. Little future economic growth can be expected from any of these trends.
• Inequality. I thought that this was the weakest part of the book. While we can all agree that inequality is a bad thing, Gordon failed to really make the case that inequality would hold back economic growth. There was no discussion on the marginal propensity to save/spend amongst the different classes of society, and therefore he did not discuss how high income inequality would lead to lower demand etc. Instead, he mainly talked about how the median member of society would suffer lower growth than the average member. I thought that this discussion all became rather vague and incoherent, and his recommendations for combating inequality were unconvincing (we all know what needs to be done it is getting the political will to actually do it).
An excellent book. However, it was better at documenting how technology has changed society than in discussing the case that economic growth rates must inevitably fall.
I have many expectations on this book