Source: NYTimes, Jan 2016
Robert J. Gordon, a distinguished macroeconomist and economic historian at Northwestern, has been arguing for a long time against the techno-optimism that saturates our culture, with its constant assertion that we’re in the midst of revolutionary change. … , he has argued that the I.T. revolution is less important than any one of the five Great Inventions that powered economic growth from 1870 to 1970: electricity, urban sanitation, chemicals and pharmaceuticals, the internal combustion engine and modern communication.
he points out that genuinely major innovations normally bring about big changes in business practices, in what workplaces look like and how they function.
WSJ, Jan 2016
Mr. Gordon lists several <policies> at the end of his book, some conventional and others less so. They include:
1. Make the earned-income tax credit (a bonus paid by the government to low-wage workers) more comprehensive and generous, a complement to raising the minimum wage. The earned-income tax credit, most economists agree, encourages work.
2. Reduce the share of Americans who are in prison, which is costly, disproportionately hurts the poor, and has long-lasting negative effects on former prisoners and their families. Also, legalize drug use to save money on enforcement, raise tax revenue, and eliminate the negative consequence a criminal record has on employment.
3. Shift financing of K-12 schooling from local property taxes to statewide revenue sources to reduce inequality and improve outcomes. Shift college financing from loans to income-contingent repayment administered through the income tax system, which is what Australia does.
4. Roll back regulations that hurt the economy and the less affluent, including copyright and patent laws (which have gone too far), occupational licensing (which is a barrier to entry and employment), and zoning and land-use regulations (which boost housing costs).
5. Reform immigration laws to encourage high-skilled workers, including those trained at U.S. graduate schools.
Foreign Affairs, Jan 2016
predicting future productivity rates is always difficult; at any moment, new technologies could transform the U.S. economy, upending old forecasts. Even scholars as accomplished as Gordon have limited foresight.
Ultimately, Gordon’s argument for why productivity won’t grow quickly in the future is simply that he can’t think of what might create those gains. Yet it seems obvious that no single individual, not even the most talented entrepreneur, can predict much of the future in this way.
many past advances came as complete surprises. Although the advents of automobiles, spaceships, and robots were widely anticipated, few foretold the arrival of x-rays, radio, lasers, superconductors, nuclear energy, quantum mechanics, or transistors. No one knows what the transistor of the future will be, but we should be careful not to infer too much from our own limited imaginations.