The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War is a book by economist Robert J. Gordon that provides a comprehensive analysis of the economic growth and technological progress in the United States from the late 19th century to the present day. The book examines the factors that contributed to the rapid economic growth and rising living standards in the early 20th century, as well as the challenges and limitations that have slowed down growth in more recent decades. Gordon argues that the U.S. economy has experienced a "great leap forward" followed by a period of "sluggish growth" and suggests that future economic growth may be more modest than in the past.
Chapter 2 Is The Book The Rise And Fall Of American Growth recommended for reading?The Rise and Fall of American Growth by Robert J. Gordon is widely praised as an important and informative book on economic history and trends in the United States. It provides a thorough analysis of the factors that contributed to the rapid growth of the American economy in the 19th and early 20th centuries, as well as the challenges and limitations facing the country in the modern era.
Many readers appreciate Gordon's in-depth research and data-driven approach to examining long-term economic trends. However, some critics argue that the book is overly pessimistic about the future prospects for economic growth in the United States.
Overall, The Rise and Fall of American Growth is considered a valuable and thought-provoking read for anyone interested in understanding the historical forces shaping the American economy.
Chapter 3 The Book The Rise And Fall Of American Growth SummaryThe Rise and Fall of American Growth by Robert J. Gordon examines the factors that drove the unprecedented economic growth in the United States between 1870 and 1970, and the subsequent slowdown in growth since then. Gordon argues that the period of rapid growth was fueled by a series of technological advancements, such as electricity, the internal combustion engine, and indoor plumbing, which transformed daily life and boosted productivity.
However, Gordon contends that the pace of innovation has slowed in recent decades, leading to a stagnation in economic growth. He points to the limitations of new technologies like the internet and smartphones, which have failed to have the same transformative impact on society as earlier innovations. Gordon also highlights the impact of demographic changes, rising inequality, and the challenges of measuring technological progress on the economy.
Overall, The Rise and Fall of American Growth offers a thought-provoking analysis of the drivers of economic growth in the US and raises important questions about the future of innovation and productivity.
Chapter 4 Meet the Writer of The Book The Rise And Fall Of American GrowthThe author of the book "The Rise and Fall of American Growth" is Robert J. Gordon. The book was released in January 2016.
Robert J. Gordon has also written other books such as "Productivity Growth, Inflation, and Unemployment: The Collected Essays of Robert J. Gordon" and "Macroeconomics". However, "The Rise and Fall of American Growth" is considered one of his best works in terms of editions and popularity. It has received critical acclaim and has been widely recognized as an important contribution to the field of economic history.
Chapter 5 The Book The Rise And Fall Of American Growth Meaning & Theme The Book The Rise And Fall Of American Growth Meaning"The Rise and Fall of American Growth" by Robert J. Gordon is a book that examines the period of rapid economic growth and technological innovation in the United States between 1870 and 1940, and argues that this period was a unique and exceptional time in American history. Gordon argues that the innovations and advancements made during this period, such as electrification, the automobile, and indoor plumbing, had a profound and lasting impact on American society and the economy.
However, Gordon also argues that since the 1970s, the rate of economic growth in the United States has slowed significantly, and he attributes this slowdown to a number of factors, including the waning impact of technology on productivity, the decline of manufacturing industries, and the rising cost of healthcare and education.
Overall, "The Rise and Fall of American Growth" provides a comprehensive analysis of American economic history and offers insights into the challenges and opportunities facing the country in the 21st century.
The Book The Rise And Fall Of American Growth ThemeThe main theme of The Rise And Fall Of American Growth is the examination of factors that have driven economic growth and technological progress in the United States over the past century, as well as the challenges that the country faces in continuing to experience sustained growth in the future. The book explores how innovations in technology, education, infrastructure, and other key areas have propelled economic growth and improved living standards for Americans, but also highlights the potential limits and obstacles that may hinder future progress. Overall, the book provides a comprehensive analysis of the complex relationship between innovation, productivity, and economic growth in the United States, and offers insights into the factors that have shaped the country's past growth and may influence its future trajectory.
Chapter 6 Various Alternate Resources- Book review by The New York Times - https://www.nytimes.com/2016/01/31/books/review/the-rise-and-fall-of-american-growth-by-robert-j-gordon.html
- Interview with author Robert J. Gordon on NPR - https://www.npr.org/2016/01/28/463694554/economist-robert-gordon-says-the-best-is-past-it-may-be-time-to-change-the-narrativ
- Summary of key points from The Rise and Fall of American Growth on Vox - https://www.vox.com/2016/2/11/10957962/productivity-gordon
- Analysis of the book's implications for future economic growth on Forbes - https://www.forbes.com/sites/jimhenry/2016/01/18/the-end-of-american-exceptionalism-the-rise-and-fall-of-american-growth-by-robert-j-gordon/#351580a4479d
- Author interview on The Wall Street Journal - https://www.wsj.com/articles/what-a-lot-of-numbers-tell-us-about-the-u-s-economy-1449047996
- Book review on The Washington Post - https://www.washingtonpost.com/news/wonk/wp/2016/02/04/something-pretty-worrisome-is-happening-to-the-u-s-economy-robert-gordon-wants-you-to-know-about-it/
- Analysis of the book's impact on policy-making on Bloomberg - https://www.bloomberg.com/news/articles/2016-02-02/measuring-the-future-america-s-prospects-have-never-been-dimmer
- Lecture by Robert J. Gordon on The Rise and Fall of American Growth at the Cato Institute - https://www.cato.org/multimedia/events/rise-fall-american-growth
- Discussion on the book's findings on economic inequality on The Guardian - https://www.theguardian.com/business/2016/aug/17/unfettered-capitalism-inequality-growing-america-robert-gordon
- Podcast episode featuring a discussion on The Rise and Fall of American Growth on the Brookings Institution - https://www.brookings.edu/blog/brookings-now/2016/02/29/audio-books-podcast-the-rise-and-fall-of-american-growth/
The Book The Rise And Fall Of American Growth quotes as follows:
- "The foundation for the growth of the American economy in the 20th century was laid by a unique combination of powerful forces."
- "The rapid pace of technological innovation in the early 20th century led to a surge in productivity growth, fueling the economic expansion of the United States."
- "The rise of mass production techniques and the development of new industries transformed the American economy and society in the early 20th century."
- "The Great Depression and World War II led to a temporary slowdown in economic growth, but the post-war period saw a resurgence of technological innovation and economic expansion."
- "The period from 1870 to 1970, often referred to as the 'special century,' was a time of unprecedented economic growth and technological progress in the United States."
- "The rise of the automobile, electricity, and other transformative technologies revolutionized American industry and society in the early 20th century."
- "The decline in productivity growth since the 1970s has raised concerns about the future of the American economy and the ability of technology to continue driving economic growth."
- "The information technology revolution of the late 20th century has had a significant impact on the American economy, but its effects have been more limited than those of earlier technological revolutions."
- "The challenges facing the American economy in the 21st century, including rising inequality and slowing productivity growth, require new solutions and approaches to economic policy."
- "The rise and fall of American growth has been shaped by a complex interplay of technological innovation, economic policy, and societal factors, and understanding these dynamics is crucial for shaping the future of the American economy."
- "Capital in the Twenty-First Century" by Thomas Piketty - This book explores the dynamics of income inequality and the accumulation of wealth in modern societies, providing valuable insights into economic growth and distribution.
- "The Great Transformation" by Karl Polanyi - A classic work of economic history, this book examines the rise of capitalism and the social transformations that accompanied it, shedding light on the broader context of economic growth.
- "The Wealth of Nations" by Adam Smith - Considered a foundational text in the field of economics, this book offers important theories on the nature of wealth creation and the role of markets in driving economic progress.
- "The Worldly Philosophers" by Robert L. Heilbroner - This engaging overview of the lives and ideas of influential economic thinkers provides a historical perspective on economic growth and development.
- "Why Nations Fail" by Daron Acemoglu and James A. Robinson - This book explores the role of institutions in shaping economic outcomes, offering a compelling argument for the importance of inclusive political and economic systems in promoting sustained growth.
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[00:00:21] Regarding the debate on economic growth there has always been two sides.
[00:00:26] Some people say that we are now in an era of rapid growth characterized by informatization, digitalization, big data, 5G, etc. and our potential is unlimited.
[00:00:38] Others say that the earth is only so big, and resources are limited.
[00:00:42] Not only that but people are also living longer, so unlimited development is not realistic.
[00:00:48] Both arguments have their plaudits, but what does the future really hold? Is growth accelerating or decelerating?
[00:00:56] The Rise and Fall of American Growth has the answers.
[00:00:59] This book follows the American Economic Growth Path, examining various reasons why growth has passed through stages of acceleration and deceleration.
[00:01:09] It summarizes America's economic journey from 1870 to 2015 from an economic and sociological perspective.
[00:01:17] The book divides the America's economic journey into three phases, the special century, the miracle of the Great Leap and a phase characterized by decelerated growth during the modern computer age.
[00:01:29] The whole path is summarized in two words, Rise and Fall.
[00:01:34] The 100 years from 1870 to 1970 have been termed by the author as the special century, showcasing an unprecedented period of American growth.
[00:01:44] During this period, ordinary people's clothing, food, housing, transportation, entertainment, health, employment among other dimensions, experienced tremendous growth.
[00:01:55] The author calls the rapid growth of the American economy during this period the Rise.
[00:02:01] The Great Depression and World War II that took place during this period played a unique role in the economic growth.
[00:02:08] After 1970, with the advent of the Third Industrial Revolution, as computers became widespread, entertainment and telecommunication became universal.
[00:02:18] However, during this period there was surprisingly little evidence of economic growth due to technological progress.
[00:02:25] America's total factor productivity was growing at only a third of the previous period's rate, an incredibly slow pace that the author calls the fall.
[00:02:35] From a systematic analysis of technological innovation and social structure, the author was able to challenge conventional assumptions about economic growth, not only that but the conclusions are thought-provoking.
[00:02:47] This book provides both a detailed historical account as well as an in-depth economic and sociological analysis.
[00:02:54] It is both a tribute to civilizations' progress over the past 100 years and a prediction of the future.
[00:03:01] It is a remarkable chronicle of a century of American economic growth.
[00:03:06] The author of the book, Robert J. Gordon, received his PhD from the Massachusetts Institute of Technology in 1967.
[00:03:14] He has taught at Harvard University and the University of Chicago.
[00:03:19] He is now a professor of social sciences at Northwestern University.
[00:03:24] He is also an expert in economics, having published more than 100 academic papers focusing on social issues such as inflation, unemployment and productivity growth.
[00:03:35] His achievements in macroeconomics and his research on long-term economic growth have won him high praise.
[00:03:42] Next, we will break down his book into three parts.
[00:03:46] Part 1, Rapid Growth during the Special Century from 1870 to 1970.
[00:03:52] Part 2, Decelerated Growth during the Computer Age from 1970 to 2015.
[00:03:58] Part 3, Analysis of Reasons for the Decelerated Growth in the US.
[00:04:03] First of all, let's take a look at some of the revolutionary changes that have taken place in the lives of ordinary people in their homes and the environment around them over the last 100 years.
[00:04:15] In 1870, homes had no electric lights, no central heating, no running water, no bathrooms, and no indoor flush toilets.
[00:04:24] As open fires were used for heating and oil lamps for lighting, there were frequent fires.
[00:04:30] In 1871, one of the most devastating fires in human history, the Great Chicago Fire, erupted when a cow kicked over an oil lamp.
[00:04:39] The houses in the city were very crowded.
[00:04:42] Toilets were dirty, and about 20 people shared one flush toilet.
[00:04:47] Some houses even had no sewage systems which meant filthy waste was everywhere.
[00:04:52] In 1882, Thomas Edison built the first electric plant which allowed for electric lights in the house.
[00:04:59] That's when all the changes began.
[00:05:02] Many fully equipped residential facilities began to appear.
[00:05:06] Running water, sewage, electric lights, gas, central heating, etc. were gradually incorporated into homes.
[00:05:14] A network of pipes, wires and telephone lines were set up in every household.
[00:05:20] This was a revolutionary change.
[00:05:22] By 1970, 100% of households had had access to running water, indoor flush toilets, sewers, electric lights, telephones, refrigerators, and radios.
[00:05:34] About 80% had had access to central heating and washing machines.
[00:05:39] People's lives had changed a great deal in a few decades.
[00:05:43] These numbers alone may not be enough to give you a good sense of how much progress was made in American living conditions over this period.
[00:05:51] So, instead let's now take a look at one of the anecdotes given in the book.
[00:05:57] In 1959, the United States put on an exhibition in Moscow, which showed an ordinary American house with full kitchen facilities.
[00:06:05] President Richard Nixon and Soviet Communist Party Secretary Nikita Khrushchev visited the exhibition together.
[00:06:12] After viewing the new modern American mode of living, a Soviet journalist declared it in American hoax, saying that only millionaires could afford to live in such a Taj Mahal.
[00:06:23] Nixon retorted that ordinary Americans could afford it.
[00:06:26] This shows just how much the housing sector changed in the United States, enough in fact to shock the world.
[00:06:33] How has the way Americans travel changed over the last 100 years?
[00:06:38] In 1870, the United States already had trains, but in cities, horse-drawn carriages were still the main means of transport.
[00:06:46] The horses dumped thousands of tons of horse down on the streets.
[00:06:51] Sometimes the horse-dunked pile on the streets of New York is higher as 7 feet.
[00:06:56] Dead horses were sometimes left on the street for days before they were disposed of.
[00:07:01] The strong, acrid smell drew swarms of flies which exacerbate the spread of disease.
[00:07:06] The appearance of the automobile changed all that.
[00:07:10] The automobile was first invented in Europe, but developed fast in the United States.
[00:07:16] The speed at which automobiles was spreading in the United States was astonishing.
[00:07:21] In 1900, there were only 8,000 cars registered in the US.
[00:07:26] By 1929, the number had soared to 23 million.
[00:07:30] By 1970, almost every family had two cars.
[00:07:35] Quite quickly the automobile was able to replace the horse-drawn carriage, which was a significant progress.
[00:07:42] No more feeding the horses a quarter of the agricultural output, no more requiring huge amounts of manpower to dispose of horse-dunk, not to mention the cleaner roads and environment.
[00:07:53] The fast automobile development was manifested in its exponentially improved comfort, safety and economic efficiency.
[00:08:01] Not only this but America's road and highway systems were on the rise as well.
[00:08:06] Short and medium distance travel became effortless, people could choose when they wanted to travel.
[00:08:12] More changes in American travel were on the way.
[00:08:15] The United States commissioned its first commercial airliner in 1936.
[00:08:20] At first, it was mostly used by celebrities and the wealthy, however, between 1940 and 1950, the average annual airfare ticket price fell by 8.1%,
[00:08:32] while the average annual miles traveled rose by 20.5%.
[00:08:36] After 1953, with the emergence of large piston planes and jets, air travel became increasingly popular.
[00:08:44] What was once a luxury was now commonplace.
[00:08:47] Since 1960, the trend has continued to this day with most Americans flying between once and twice a year, sometimes more.
[00:08:55] In just a few decades, people's means of travel changed from horse-drawn carriages to automobiles and airplanes.
[00:09:02] This highlights the rapid growth of the special century.
[00:09:06] Next, let's turn our attention to the society and look at some of the breakthroughs in public health and social security.
[00:09:13] Statistics show that between 1870–1880, infant mortality rate was around 20%.
[00:09:21] However, by 1970 it had dropped to around 2%.
[00:09:25] Life expectancy for white males was around 48 years in 1900, but had risen to 63 years by 1940.
[00:09:33] What was the main reason for the decline in mortality?
[00:09:36] According to Gordon, the main driver of the decline in mortality was the control of infectious diseases.
[00:09:43] The rapid expansion of the city's health infrastructure, in particular the implementation of tap water and sewers, contributed significantly to the decline of infectious diseases.
[00:09:53] As mentioned previously, the shift from horses to motor vehicles meant the streets became cleaner, which also positively impacted people's health.
[00:10:02] The development of biomedicine technology meant more and more pathogenic organisms were being discovered.
[00:10:09] The causes, and accordingly the treatment of diseases such as tuberculosis, dysentery, pneumonia, typhoid and scarlet fever were also discovered further reducing the mortality rate.
[00:10:21] The transformation and gradual improvement of hospital functions also played a crucial role in reducing the mortality rate.
[00:10:28] In 1870, hospitals were not regarded as sacred places of healing, but as dumps for the poor and repositories of dirt and infectious diseases.
[00:10:38] It was not until 1920 that the hospital was gradually transformed into an institution similar to a modern hospital.
[00:10:45] Subsequently, the United States public health situation improved rapidly, and medical and biological research also made significant breakthroughs.
[00:10:55] Medical innovation was also making strides, especially with the discovery of penicillin during World War II.
[00:11:02] It proved to be the nemesis of diseases and bacteria and allowed medical treatment to make significant progress.
[00:11:09] With improved medical care, life expectancy rose, and there was a massive change in social security.
[00:11:16] In 1935, the Social Security Act was enacted. Workers who reached retirement age were able to receive a pension from the government.
[00:11:25] The concept of retirement is now a pillar of modern society that back then it was unprecedented.
[00:11:31] In short, there was an amazing progress within the family unit and society at large over a 100-year period.
[00:11:39] But what were the main reasons for this rapid growth? The author provides an in-depth analysis.
[00:11:45] After 1870, the second industrial revolution emerged and mankind entered the age of electricity.
[00:11:52] It is also evident from the changes we have discussed that all progress can be directly attributed to great inventions.
[00:11:59] The housing revolution appeared because of electricity and electric light.
[00:12:04] Similarly, the automobile replaced the horse-drawn carriage because of the internal combustion engine.
[00:12:11] From the end of the 19th century to the beginning of the 20th century, numerous new inventions and new technologies were introduced.
[00:12:19] Two landmark inventions, the electric light and the internal combustion engine appeared just 10 weeks apart.
[00:12:26] Many household appliances such as the telephone, toilet, electric stove, electric fan, electric heater, the refrigerator, the washing machine, the electric iron, etc.
[00:12:38] were invented in this period. Common medical instruments, such as the stethoscope, blood pressure apparatus, the X-ray machine, electrocardiogram, etc., also joined the fray.
[00:12:51] It is not hard to see why these countless innovations promoted economic growth.
[00:12:56] However, over the course of the past 100 years, the pace of growth has been relatively uneven.
[00:13:03] The author outlines the average annual growth rate of total factor productivity in the United States for every decade for around 100 years.
[00:13:12] Total factor productivity is a measure of the rate of innovation and technological progress, reflecting how fast output is growing relative to labour and capital inputs.
[00:13:22] The data shows that growth accelerated from 1920 and doubled between 1940 and 1950.
[00:13:29] Hence, Gordon referred to the period between 1920 and 1950 as the Great Leap.
[00:13:35] So the question is, besides technological innovation, what else was driving economic growth? What contributed to the miracle of the Great Leap?
[00:13:45] Gordon provides a surprising answer, the Great Depression and World War II led directly to the Great Leap.
[00:13:51] You may wonder how the Great Depression, known for bankruptcies, high unemployment rates, and the collapse of the economy was able to boost economic growth.
[00:14:01] The answer lies in the fact that these were two sides of the same coin.
[00:14:06] Without the Great Depression, there would have been no new deal program, no National Industrial Recovery Act, and no Wagner Act.
[00:14:14] The National Industrial Recovery Act was a special act that was needed in a very special period.
[00:14:20] It included adjustments of industrial policies, construction of infrastructure and other projects which played a vital role in reviving the economy.
[00:14:30] The Wagner Act, also known as the National Labor Relations Act, allowed workers to organize labour unions and negotiate with management which drove up wages.
[00:14:40] Later, pro-labor laws such as the Social Security Act and the New Deal's Fair Labor Standards Act were introduced, both of which significantly raised labour costs.
[00:14:51] The increase in labour costs directly led to an increase in capital investment in equipment.
[00:14:56] The Great Depression led to job cuts, which created a passion for technological innovation and mechanical inventions.
[00:15:03] The level of automation and electrification increased.
[00:15:07] This can be illustrated by the book's data on the rapid increase in electricity consumption in the mechanical industry in the 1930s.
[00:15:16] In short, the Great Depression boosted productivity and thus boosted economic growth.
[00:15:21] What about World War II? The high-pressure environment of the war forced people to learn as they go and pushed equipment and people's abilities to the limit.
[00:15:31] During the war, all civilian enterprises were engaged in the production of military materials.
[00:15:37] Jewelers made fuses for shells, shoemakers made helmet parts, vacuum manufacturers made gas mask parts.
[00:15:44] The needs of wartime were limitless and incredibly pressing.
[00:15:48] To meet wartime demands, producers went to great lengths to increase productivity, and in turn became more efficient.
[00:15:56] When the Kaiser shipyards began production in 1942, it was supposed to take eight months to complete a ship, but in the end, it took only a few weeks.
[00:16:05] At its fastest, the whole ship was built in four days, from the prefabricated parts to the dock assembly.
[00:16:12] Initially, Ford produced 75 bombers a month, by 1944, production was at its peak at 432 a month, when every hour at one point.
[00:16:22] It was called the world's greatest room. Millions of parts and fasteners, a half-mile long production line, together created a feat unprecedented in the history of mass production.
[00:16:34] What's more interesting was that this almost insane rate of production increase continued well after the war ended.
[00:16:41] As life returned to normal, demand for all kinds of products increased, and manufacturers quickly turned to civilian production.
[00:16:49] After all, technological progress achieved during the war had set a new precedent and the pace of wartime production continued.
[00:16:57] This was one of the main reasons why labor productivity growth was faster and more pronounced between 1940 and 1950.
[00:17:05] Gordon even remarked that World War II saved the US economy from secular stagnation, and a hypothetical scenario of economic growth after 1939 that does not include the war looks dismal at best.
[00:17:19] That concludes the first part of this bookie. In this part, we introduced the unprecedented and revolutionary progress that the United States made in every aspect of family life and society between 1870 and 1970, during the so-called special century.
[00:17:35] The main drivers of economic growth and social development were technological innovations initiated by the second industrial revolution, the Great Depression and World War II.
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