Northwestern University's doomsaying economist heralds the death of American growth
New York magazine's Sex Issue on newsstands this week includes a decidedly unsexy must-read feature elucidating the increasingly prevalent theory that American economic growth may have run its course. If the mag's "one-paragraph memoirs" on public hook-ups are arousing readers, "The Blip" is a definite bonerkill.
Writer Benjamin Wallace-Wells keys in on the nation's leading doomsayer, who happens to live in Chicago's backyard. Northwestern University economist Robert Gordon is the author of a paper titled "Is U.S. Economic Growth Over?" that has caused a stir since its publication last August. In it, the 72-year-old Evanston resident basically predicts the death of the American Dream. Simply stated, one of Gordon's thoughts is this: The seeming inability of the U.S. economy to recover is no accident; it's the new normal, so get used to it.
"One recent afternoon, I met Gordon at his house, and we drove to lunch through Northwestern’s main campus," Wallace-Wells writes. "Around Gordon and me—bicycling across the quad, wandering half-drunk into the streets—were the members of the first American generation who would be no more educated than their parents. 'You look at the numbers, at how much more it costs now to get ahead—all the tutors, the college-prep courses, in some cases the private admissions consultants—and it is just astonishing,' Gordon said. What he was describing was a society where the general privilege of simply being American was once again losing out to the specific, inherited privilege of being born rich."
Gordon's prediction is twofold. One part concerns the near future: "He believes we can no longer expect to double our standard of living in one generation; it will now take at least two," writes Wallace-Wells. The common expectations that your children will attend college even if you haven’t, in other words, or will have twice as rich a life, in this view no longer look realistic. Some of these hopes are already outdated: The generation of Americans now in their twenties is the first to not be significantly better educated than their parents. 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." The piece looks at Mexican emigration, which has significantly decreased in part because it's easier for the poor to improve their station in Mexico than by crossing the border into the U.S.
Gordon takes a broader view in the other part of his theory: "The forces of the second industrial revolution, he believes, were so powerful and so unique that they will not be repeated," Wallace-Wells writes. "Women cannot be liberated from housework to join the labor force again, travel is not getting faster, cities are unlikely to get much more dense, and educational attainment has plateaued. 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."
Some of Gordon's economist colleagues are a little more optimistic about the future. Erik Brynjolfsson, who debated Gordon at a TED conference about the stagnation of the U.S. economy, sees our growing pains as the start of a "new machine age," a coming wave of innovation in which humans and tech coexisist in a roboticized society.
But Gordon isn't convinced. "I like to think of it this way,” he tells Wallace-Wells. “We need innovations that are eight times as important as those we had before.”