Source: MIT Tech Review, Apr 2016
In a three-month period at the end of 1879, Thomas Edison tested the first practical electric lightbulb, Karl Benz invented a workable internal-combustion engine, and a British-American inventor named David Edward Hughes transmitted a wireless signal over a few hundred meters. These were just a few of the remarkable breakthroughs that Northwestern University economist Robert J. Gordon tells us led to a “special century” between 1870 and 1970, a period of unprecedented economic growth and improvements in health and standard of living for many Americans
The explosion of inventions and resulting economic progress that happened during the special century are unlikely to be seen again, Gordon argues in a new book, The Rise and Fall of American Growth. Life at the beginning of the 100-year period was characterized by “household drudgery, darkness, isolation, and early death,” he writes.
By 1970, American lives had totally changed. “The economic revolution of 1870 to 1970 was unique in human history, unrepeatable because so many of its achievements could happen only once,” he writes.
Between 1920 and 1970, American total factor productivity grew by 1.89 percent a year, according to Gordon. From 1970 to 1994 it crept along at 0.57 percent. Then things get really interesting. From 1994 to 2004 it jumped back to 1.03 percent. This was the great boost from information technology—specifically, computers combined with the Internet—and the ensuing improvements in how we work. But the IT revolution was short-lived, argues Gordon. Today’s smartphones and social media? He is not overly impressed.
Indeed, from 2004 to 2014, total factor productivity fell back to 0.4 percent. And there, he concludes, we are likely to remain, with technology progressing at a rather sluggish pace and confining us to disappointing long-term economic growth.