Maybe the next phase will be based on extra-planetary travel -eg. establishing
a colony on Mars, etc.?
________________________________
From: Arthur Cordell <denar...@sympatico.ca>
To: ottawadissent...@yahoogroups.com; "'RE-DESIGNING WORK, INCOME DISTRIBUTION,
EDUCATION'" <futurework@lists.uwaterloo.ca>
Sent: Wednesday, July 31, 2013 8:56:44 PM
Subject: [Futurework] FW: Is economic growth a continuous process that will
persist forever?
Subject:FW: Is economic growth a continuous process that will persist forever?
ABSTRACT
This paper [written in August 2012 and 25 pages] raises basic questions about
the process of economic growth. It questions the assumption, nearly universal
since Solow’s seminal contributions of the 1950s, that economic growth is a
continuous process that will persist forever. There was virtually no growth
before 1750, and thus there is no guarantee that growth will continue
indefinitely. Rather, the paper suggests that the rapid progress made over the
past 250 years could well turn out to be a unique episode in human history. The
paper is only about the United States and views the future from 2007 while
pretending that the financial crisis did not happen. Its point of departure is
growth in per-capita real GDP in the frontier country since 1300, the U.K.
until 1906 and the U.S. afterwards. Growth in this frontier gradually
accelerated after 1750, reached a peak in the middle of the 20th century, and
has been slowing down since. The paper is about
“how much further could the frontier growth rate decline?”
The analysis links periods of slow and rapid growth to the timing of the three
industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to
1830; IR #2 (electricity, internal combustion engine, running water, indoor
toilets, communications, entertainment, chemicals, petroleum) from 1870 to
1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It
provides evidence that IR #2 was more important than the others and was largely
responsible for 80 years of relatively rapid productivity growth between 1890
and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning,
interstate highways) had run their course, productivity growth during 1972-96
was much slower than before. In contrast, IR #3 created only a short-lived
growth revival between 1996 and 2004. Many of the original and spin-off
inventions of IR #2 could happen only once – urbanization, transportation
speed, the freedom of females from the
drudgery of carrying tons of water per year, and the role of central heating
and air conditioning in achieving a year-round constant temperature.
Even if innovation were to continue into the future at the rate of the two
decades before 2007, the U.S. faces six headwinds that are in the process of
dragging long-term growth to half or less of the 1.9 percent annual rate
experienced between 1860 and 2007. These include demography, education,
inequality, globalization, energy/environment, and the overhang of consumer and
government debt. A provocative “exercise in subtraction” suggests that future
growth in consumption per capita for the bottom 99 percent of the income
distribution could fall below 0.5 percent per year for an extended period of
decades.
Robert J. Gordon
Department of Economics
Northwestern University Evanston,
IL 60208-2600
and NBER
r...@northwestern.edu
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