
Paul Krugman Reviews ‘The Rise and Fall of American Growth’ by Robert J. Gordon - dismal2
http://www.nytimes.com/2016/01/31/books/review/the-powers-that-were.html
======
petra
If instead of talking about progress , we start to talk about change, things
may look quite different than Gordon's view:

We live in a surveillance society(both governmental and commercial). We are
glued to screens, having much less human interactions than before(and some
psychologists think it greatly harms our empathy). Boredom is non existent.
Something like addiction is everywhere. The variety and quality of our media
and maybe experiences in general(think foodie culture) have greatly improved.
For many jobs , the rate of learning, and the demand for creativity have
greatly improved.

Of course this is good and bad.

And as for business: Business today looks totally different than before the
internet.

So yes, the internet is a life changing technology if you look deeply. And
there are many other life changing technologies in the work.

As for gdp growth - well isn't it more complex than - great new technology ->
a lot of growth ?

~~~
dredmorbius
Economists define growth as increase in GDP -- either nationally or per
capita. Gordon's premise is that this is nearing an end for the United States,
if not over.

There are numerous ways you can respond to this.

1\. You can look to alternative measures of growth. Ecologists and
anthropologists use the principle of total energy throughput. Seems that's
starting to trail off as well.

2\. You can look at re-allocating the fruits of the economy. The popular name
for this would be "re-distribution", if it were popular, though generally in
the US it isn't. That speaks to one of many reasons growth is popular: it
allows offering (or perhaps only promising) more pie, by growing the pie,
rather than reducing the share given any one person or group. That's _also_
presented problems of late.

3\. You can advocate for "virtual growth". More arts, more movies, more music,
more creative activities. We're entering a post-scarcity period of abundance.
This poses problems of price-discovery given zero-marginal-cost goods, which
gets you back to distribution of purchasing power, and of how high up Maslow's
Pyramid you can base the foundations of your economy.

More to the point, change, for its own sake, isn't progress. Re-shaking a
salt-and-pepper mix may change the distribution. It's unlikely to re-sort it.

~~~
branchless
GDP growth is "more money". Money is created when people borrow against land.
Most borrowing is against land. The boomers+ have stopped borrowing because
they are going to die soon. Ergo end of "growth".

GDP is a very bad thing. Also 10% of GDP is "imputed rent" \- the rent you
would pay to yourself for your home if you were to rent it out. _Ten percent_.
Yet again all tied into land lending/prices.

~~~
dredmorbius
Incorrect. More money => inflation[1].

GDP growth is _more total overall spending, plus certain adjustments, in real,
constant currency units_. That is, inflation adjusted.

The problems around GDP tend to be that:

1\. It discounts nonfinacialised quality-of-life improvements.

2\. It neglects the negative costs of financialised quality-of-life
_detriments_.

I believe that the Wikipedia article links to several alternative measures of
GDP. I find Herman Daly's discussion of these pretty good, or you might check
to see what the WorldWatch Institute's come up with, to name another likely
source.

________________________________

Notes:

1\. So, you might ask, what of QE, why all this money and no inflation? Good
question, and people are pursuing that. My theory is that a) the money's
largely gone to banks and large institutional investors, b) see Robert Gordon,
there's a long term secular decline in growth, so they're looking for
_alternative_ investments, resulting in c) Gee, stock markets and housing have
been going gangbusters, but isn't that just asset price inflation, i.e.,
inflation on Stuff Rich People Buy? Seems fairly likely, particularly if you
plot the Dow or S&P 500 average against the Fed's balance sheet (proxy for
money supply / QE. Head over to the St. Louis Fed's FRED plotting toy[2] to
see for yourself.\

2\. It's actually a pretty cool toy. The sort of thing you might imagine a
megolomanic conspiracy controlling the global money supply to come up with.[3]

3\. I kid, I kid. It's the lizard-men.

~~~
branchless
We've had rampant land price inflation which is not correctly reflected in the
stats. GDP uses a deflator and that deflator doesn't reflect land prices,
therefore printing through land doesn't show up fully.

~~~
dredmorbius
Quite possibly. I'd amended my post prior to your reply, addressing this in
part.

------
woodandsteel
I find the idea that we are not going to see any more life-changing
technological advances quite unpersuasive. New technology usually comes from
scientific advances, and science in many fields is advancing rapidly.

I can think of at least four radical technological changes that might flow
from new science, ones that would make people of the future look back in
horror at at how we live today.

1) Ways of curing or eliminating the main health problems we have today, such
as cancer, diabetes, heart disease, and infectious diseases

2) Doubling the human life span

3) Greatly increasing the intelligence of the average person

4) Establishing mass colonies in space and moving much of the population
there.

I'm sure HN readers can think of other plausible advances.

~~~
rayiner
Increases in life span due to medical technology have been rapidly plateauing
as the low-hanging fruit is picked. Medical technology has yet to make any
impact on human intelligence. And physics has been brutally unyielding in
making space colonization impractical for close to a century now.

That is not to say they'll never happen, but rather that those things are so
out in the horizon as to be beyond the dividing line between prediction and
speculation.

~~~
gregrata
So the parent said "in space" \- doesn't mean another star.

~~~
dredmorbius
Space is hard enough. Charlie Stross, "High Frontier Redux"
[http://www.antipope.org/charlie/blog-
static/2007/06/the_high...](http://www.antipope.org/charlie/blog-
static/2007/06/the_high_frontier_redux.html)

As Charlie points out, he makes a living fanatasising about this stuff. But
it's hard:

 _Optimistic projects suggest that it should be possible, with the low cost
rockets currently under development, to maintain a Lunar presence for a
transportation cost of roughly $15,000 per kilogram. Some extreme projections
suggest that if the cost can be cut to roughly triple the cost of fuel and
oxidizer (meaning, the spacecraft concerned will be both largely reusable and
very cheap) then we might even get as low as $165 /kilogram to the lunar
surface. At that price, sending a 100Kg astronaut to Moon Base One looks as if
it ought to cost not much more than a first-class return air fare from the UK
to New Zealand ... except that such a price estimate is hogwash. We primates
have certain failure modes, and one of them that must not be underestimated is
our tendency to irreversibly malfunction when exposed to climactic extremes of
temperature, pressure, and partial pressure of oxygen. While the amount of
oxygen, water, and food a human consumes per day doesn't sound all that
serious — it probably totals roughly ten kilograms, if you economize and
recycle the washing-up water — the amount of parasitic weight you need to keep
the monkey from blowing out is measured in tons. A Russian Orlan-M space suit
(which, some would say, is better than anything NASA has come up with over the
years — take heed of the pre-breathe time requirements!) weighs 112 kilograms,
which pretty much puts a floor on our infrastructure requirements. An actual
habitat would need to mass a whole lot more. Even at $165/kilogram, that's
going to add up to a very hefty excess baggage charge on that notional first
class air fare to New Zealand — and I think the $165/kg figure is in any case
highly unrealistic; even the authors of the article I cited thought $2000/kg
was a bit more reasonable._

 _Whichever way you cut it, sending a single tourist to the moon is going to
cost not less than $50,000 — and a more realistic figure, for a mature
reusable, cheap, rocket-based lunar transport cycle is more like $1M. And that
's before you factor in the price of bringing them back ..._

------
dredmorbius
It's interesting to see this, particularly given Krugman's history. His
graduate advisor was William Nordhaus, who'd written a strong (and among the
more reputable) criticism of _Limits to Growth_ , published in 1972. Krugman's
written on that, as well as Gordon's earlier published paper on economic
growth.

The technological argument's a strong one, and many others have pointed it
out. Vaclav Smil suggests the single decade of the 1880s was the most
profoundly inventive in history (though fire, speech, ag, and writing are
strong contenders for influence). Robert Ayres has several papers on
technological waves, there's W. Brian Arthur of Stanford / Santa Fe Institute
(itself a fascinating research centre), and Kevin Kelley's _What Technology
Wants_.

Krugman mentioned one of the futurist books of the 1960s. There was rather a
burst of them, going back a decade or so. Charles Galton Darwin's _The Next
Million Years_ (1952), Harrison Brown, et al's more modest _The Next Hundred
Years_ (1957), Meadows et al, _Limits to Growth_ , Ehrlich's _The Population
Bomb_ , Richard Meier's _Science and Economic Development_ (1955, 1965). Some
agreement, some disagreement, and interesting insights, as with all technical
debugging processes, on what they got right and what was wrong.

I've been in and around the tech world for over four decades, and have come to
an appreciation of what is possible (the world in a tablet on my lap with
full-day battery capacity and WiFi Internet -- though many of those
publications require SciHub or BooksXX to access), and what isn't -- 2001's
_Discover_ , T.A. Heppenheimer's colonies in space, and the solar powersats
they were to have built, lunar colonies, mass drivers, and even simply high
speed rail networks within North America, have all failed rather spectacularly
to emerge.

Venture Capital and high-tech startups have proved spectacularly incapable of
addressing (or even identifying) Big Problems. It's questionable whether they
can even address funding for necessary technical infrastructure development on
the free software foundations from which they're built (a VC is exploring that
possibility now).

More troubling for me, many of the models we use to understand, or attempt to
predict, our reality strike me as quite flawed. Economics itself not the least
among them.

~~~
mercer
> More troubling for me, many of the models we use to understand, or attempt
> to predict, our reality strike me as quite flawed. Economics itself not the
> least among them.

What troubles me more is that there are plenty of useful and 'proven' models
that we don't even use in practice. From the way we approach crime and
addiction to group dynamics, from the power of advertising/propaganda to
education, there's plenty of stuff we _know_ pretty well, and yet don't
implement.

I've eschewed a career in academia, as well as one in politics, but I wouldn't
mind dedicating at least part of my life to figuring out how to optimize the
process of bringing the more solid discoveries into the 'real world'. I'm just
not entirely sure where to start.

On a smaller level, I notice this disconnect in the personal lives of my
friends as well as my own. We know quite a bit about how willpower works, for
example, and how important habit formation is, and yet for the most part this
knowledge only barely trickles down into our lives. Most changes seem to just
sort of happen as I age, if at all, and that usually feels too slow and too
late.

After a few decades of living and noticing this in myself and others time and
time again, I've been trying to address the issue at its roots through
mindfulness, habit formation, and some degree of organized group effort. And
while it definitely seems to work, it feels a bit too small as a goal.

------
underbluewaters
This shouldn't be a radical hypothesis, that there are physical limits to
human technological advancement. It's a convenient solution to the Fermi
Paradox.

~~~
lkrubner
I wish your comment had been upvoted more.

------
jhbadger
While things like flush toilets and electricity might be technically more
important, I think Krugman is really underestimating how amazing the modern
world is. I'm in my 40s and I certainly remember how hard it was to learn
something prior to the mid-1990s. You had to go to a library or bookshop and
hope they'd have a book that would have the info you needed. If it was
obscure, probably not. Now we can have the info on basically anything that's
known in seconds.

------
erikpukinskis
The biggest misconception people have about contemporary history is that
computers have already "happened". We haven't even finished setting up the
network yet. We're in the equivalent of the day you move into your new house
and are just unpacking and playing with the new surroundings. We haven't even
seen 1% of the change computers will orchestrate.

------
jqm
The massive and rapid dissemination of knowledge the internet has provided
will produce vast and unknowable changes over the next several generations. I
believe it may be ultimately a considerably larger change than the industrial
revolution. Knowledge changes everything.

(Of course then there's Facebook so maybe I'm being overly optimistic.

~~~
mercer
)

(Sorry. This is possibly my first truly useless comment. I blame my recent
forays into Clojure territory.)

~~~
jqm
What do you mean? That comment _was_ useful.

We can't have unclosed parentheses or the compiler will throw an error.

------
nickbauman
The invention of the washing machine has had more of a disruptive social
impact than the invention of the Internet.

~~~
erikpukinskis
That's absurd. The effects of the heightened awareness the Internet has
sustained are immeasurable and omnipresent. The washing machine just tells a
cleaner story.

SMS+social feeds have created an entirely new way of knowing which is
unbounded by space or fixed infrastructure.

------
cushychicken
I'm reasonably sure that robots (starting with self-driving cars) and genetic
medicine are going to prove this gentleman very, very wrong. Self-driving cars
by themselves have enough power to shape the petroleum economy in a single
stroke. Once it's affordable enough for everywhere to have on demand car
service a la Uber, gasoline will start to become a massive commodity, traded
like steel or coal, not a consumer product. This will have an enormous impact
on the petroleum industry. I'd hypothesize that it will spawn another
innovation in batteries and clean energy, because no overlord of a fleet of
autonomous cars is going to want to pay the recurring cost of gasoline.

~~~
entee
Genetic medicine is a tough problem. CRISPR isn't a panacea, and if I had to
place bets, it's primarily going to massively accelerate basic biological
research rather than itself be a clinical tool except in certain limited
contexts.

It's pretty easy to edit a genome, just shoot some radiation at it. It's a lot
harder to do it precisely, and though CRISPR is a huge step in that direction,
it's not likely that in 10 years you'll be able to walk into a doctor's office
and they'll CRISPR that nagging genetic imperfection out of you.

CRISPR is a DNA nuclease, it cuts both strands of DNA at a site that is very
precisely (though not perfectly) governed by an RNA template. If you cut both
strands of a living thing's DNA, that's a Very Bad Thing for that organism. In
fact, that's why it evolved, as a tool for bacteria to combat viruses.

CRISPR based tools depend on reassembling that DNA properly, ideally with the
desired alteration (inserting or deleting other pieces of DNA at the cut
site). This works well if you have the opportunity to try a whole bunch of
cells, and then can figure out which ones have the desired DNA modification.

In an R&D context, that's an easy bar to clear, but in the clinic that means
you're somewhat limited to things you can take out of the person, modify,
multiply, and put back in the person. Often that means blood cells right now,
but could eventually be adult stem cells. A huge advance to be sure, but many
many diseases can't be addressed this way.

~~~
cushychicken
CRISPR is just one of the recent trends in genetic research that gives me hope
for the future. You make valid points about its difficulty, but I see that as
an area of science in which humanity is just barely starting to scratch the
surface.

------
kristianp
These are possibilities for great growth, if the technology can be developed.
The first 3 are 50-100 years away though.

1) Asteroid mining and construction in space.

2) Nanotube or other materials technology enabling space elevators or
Skyhooks, or other [https://en.wikipedia.org/wiki/Non-
rocket_spacelaunch](https://en.wikipedia.org/wiki/Non-rocket_spacelaunch)

3) Fusion through alternatives to tokomaks

4) Self driving, electric cars

5) AI and robotics

6) Micro Black holes as power sources (ok this one's 500-1000 years away)

------
tn13
I see bureaucracy and government control of education is primary speed
breakers in the human potential in the coming decade.

The way I see it human creativity is expanding at rapid rate than ever thanks
to advancement in technology. The government is however slow, rigid, corrupt
and unwilling to relent. This is a clash that is going to define the coming
decade or so. If the government wins, I am pretty sure there wont be any
improvement in an Average American's life.

One has to look at countries like India which were totally government
controlled upto 90s. From 1950s to 1990s India barely changed. Everyone
remained poor. Some minor reforms led to explosive growth.

In USA I see the trend as opposite. We have a government that is focused on
intangible and dubious goals such as climate change while hurting people with
ridiculous regulation.

~~~
woodandsteel
I don't know about government regulation in general, but what happened in this
country from Reagan on was the extensive New Deal regulations of the financial
industry were taken down, piece by piece.

------
api
I've thought for years that fundamental technological innovation basically
stopped around 1970, and that almost everything since then has been refinement
and broadening existing technology.

I've observed a similar thing in areas like film: most of today's films are
reboots, rehashes, and remakes or at least are exploring themes and plot
templates already laid down. Musical innovation lasted longer but seems to
have effectively stagnated since the late 1990s. I haven't heard anything in a
long time that doesn't just riff on something pioneered before the year 2000.

There are pockets here and there: films like Primer and Upstream Color,
experimental electronic music, deep learning. But none of these things are
quite as dramatic as, say, the film 2001, Pink Floyd or Kraftwerk, or the
integrated circuit.

There's objective evidence of something "breaking" around that time in
economics, too. Wage growth basically stopped shortly after 1970:
[http://si.wsj.net/public/resources/images/BN-
HY153_realwa_G_...](http://si.wsj.net/public/resources/images/BN-
HY153_realwa_G_20150417085212.jpg)

I've wondered if future historians might not look back at ~1970 as the end of
the enlightenment and the beginning of the next dark age.

But _what happened_?

I haven't got a clue. Explanations I've toyed around with include things like:

\- Philosophy: the 1970s saw the rise of both religious fundamentalism and its
secular "Skeptic" counterpart -- dogmatic, fundamentalist ideologies that
assert that we already know everything and there is nothing new to discover.
When I go back before 1970 I'm often struck by the boldness and fearlessness
of scientists and other intellectuals back then. The rise of "new age"
thinking, which is also hostile to reason and enlightenment ideas, might also
play a role. It seems like since 1970 people have become either total woo-woo
new-age flakes (no rigor) or closed-minded fundamentalists (no creativity or
imagination). Before that time it seems like you had more who were both
rigorous and visionary.

\- Economics: did we "cancel progress" by shifting from a progressive economic
system that invested in the future to a conservative one that only invests in
the present? Or was the decoupling of wages from productivity the _actual root
cause_ of the rest of the apparent stagnation?

\- Psychological: did we experience "future shock" and double down on retro
and nostalgia? This sort of fits in with what I discuss under philosophy.

\- Television: before the popularity of TV people read books and interacted
socially and kids played outside. TV is a passive medium that pulls people in
and then feeds them all the same information, and it takes time that people
might otherwise spend on interactive, social, and exploratory pursuits. Did TV
make us stupid? The generation who grew up watching TV started to enter the
workforce around 1970.

\- The War on Drugs: To what extent were the geniuses of the past "augmenting"
with over-the-counter amphetamines, easily obtainable psychedelics, etc.? I've
heard anecdotes but has anyone ever even asked this question in anything
approaching a rigorous way? Or is it too taboo? There was a general worldwide
crackdown on mind-altering substances around 1970. Perhaps the kind of crazy
creativity and extreme achievement we saw during the glory days is simply not
something the human mind tends to do in its natural state.

\- Slow Malthusian Collapse: was the "limits to growth" more or less correct,
but the effect is unfolding a lot slower than predicted and with strain and
collapse manifesting in less obvious ways?

\- Bureaucratization: Was there a shift during that time toward a more
bureaucratic academic and scientific community that is more hostile to
"maverick" thinkers and new ideas? Do today's researchers spend more time
sucking up to grant funding and tenure committees and making sure to walk the
straight and narrow to avoid being labeled "cranks" instead of really thinking
and investigating? Or do the systems for selecting for scientific careers
select good bureaucrats over geniuses? The same processes might be at work in
other areas, e.g. the takeover of music and film industries by "MBA thinking"
over people who actually care about art.

\- Educational System Decline: Did we over-bureaucratize or otherwise
compromise education somehow? Were older teaching methods better?

\- Demographics: We're having smaller families, which might affect both growth
and parenting styles (more "helicopter parenting"). Nothing obvious here but
who knows?

Shrug. But it is alarming to say the least.

Edit: here are some explanations I don't buy:

\- Political Correctness / Diversity: There's a wing of the right that thinks
that runaway equality and diversity ideology has some responsibility for this.
If that's true then why are some of today's most innovative places also left-
of-center culturally and why are the bastions of Red State America not centers
of innovation? At best I see no correlation in either direction.

\- Dysgenics: Even if "stupid people" are breeding more, genetic changes are
too slow to account for this. Then you have things like the Flynn Effect,
which argue the opposite. Again I see at best no correlation.

\- Lack of War: Was it all WWII? I personally don't buy it. WWI didn't result
in anything close to the postwar boom, and before that we had millennia of
running around and hacking each other up with swords without inventing any
integrated circuits or jet engines. Why didn't the Crusades or the endless
wars of late Rome lead to a technological explosion? Why didn't Genghis Khan
or the Aztecs land on the Moon?

~~~
TheOtherHobbes
Putting it _incredibly_ crudely - rich people started hoarding money, which
made everyone else feel financially and personally less safe.

It's still happening. The effects for most of the population are:

Less disposable income Less secure employment Fewer employment choices Less
free time away from work Increased debt _More anxiety_

None of the above are good for creativity or individual freedom. (They're not
really good for anything.) And more anxiety usually means less tolerance of
all kinds because the stakes for any bad decision are much higher.

In the 60s, universities were full of smart people with tenure, and the
mandate of a university was education and research.

In the 10s, universities are full of adjuncts on poverty wages, and the
mandate has become expansion and profit.

Wall St used to be under control. Now it's a place where physics PhDs - the
ones who could be working on quantum gravity and nanoengineering - go to die.

>The same processes might be at work in other areas, e.g. the takeover of
music and film industries by "MBA thinking" over people who actually care
about art.

I've heard it called the Capitalist Counter-Reformation - analogous to the
period of retrenchment and the reestablishment of regressive values and rigid
power structures after the freedom and heterodoxy of the early Renaissance.

We're basically living in the 16th century - not a happy time - but with
Internet. We have 21st century science, and 16th century politics and
economics, with aristocratic nation states instead of aristocratic city
states.

Hopefully we won't get The Inquisition. (I'd like to say I'm optimistic, but
it's hard.)

~~~
dredmorbius
The wealthy don't hoarde money _if they can find someting better to do with
it_.

There's research suggesting a long-term secular decline in returns to business
investment starting as early as the mid-1960s. I'd turned up research from the
oxymoronically named Deloitte Center for the Edge a couple of years ago,
something called the Shift Index.

That, shifts in tax code, generally declining labour power (weaker unions),
political shifts, particularly in the US, and oil/energy price hikes and
instability, as well as globalisation, all seem to have contributed.

------
oldmanjay
only a very old person would think you could take a modern youth away from the
Internet without horrifying them.

