Robert Gordon’s new paper casts doubt on our impending technological utopia:
This time Gordon takes aim at the so-called techno-optimists, such as the authors of the new book “The Second Machine Age,” [Erik Brynjolffson and Andrew McAfee,] who claim that technological growth is accelerating.
Gordon disagrees, saying that we shouldn’t expect technology to dramatically improve economic performance over the coming half-century. In fact, he argues that the productivity slowdown began long ago, in essence because the wide availability of computers or cell phones still is not nearly as transformative for society as electricity or cars have been.
While real U.S. gross domestic product grew at an average of 2 percent pear year, Gordon estimates the pace will be much slower over the next 50 years. That’s because the economy faces four key headwinds: the retirement of the baby boomer generation; stagnating educational attainment; inequality; and rising national debt. Together, he argues, these trends will deplete — and have already begun to deplete — the pool of educated workers with higher incomes to spend, dampening growth.
Cowen agrees with much of what Gordon says but criticizes the paper’s short-sightedness:
There is a key passage on p.26: “My forecast of 1.3 percent annual total-economy productivity growth in the future does not require any foresight beyond suggesting that the past 40 years are a more relevant benchmark of feasible productivity growth than the 80 years of before 1972.” Fair enough, but how about looking at the last 120 years or last 120,000 years for that matter? The overall pattern is lots of pauses, followed by eventual new bursts of progress. That’s no proof of a future subsequent burst of progress, but so far history is not on the side of the long-term tech pessimists. It may be on the side of the short-term tech pessimists, at least for a while.
Drum is less charitable:
This is an embarrassingly bad argument. I can somehow imagine a circa-1870 version of Gordon arguing that all this folderol about electricity is ridiculous. Why, we’ve been studying electricity for over a century, and what do we have to show for it? Some clunky batteries, the telegraph, a few arc lamps with limited use, and a steady supply of techno-optimist inventors who keep telling us that any day now they’ll invent a practical generator that will replace steam engines and change the world. Don’t believe it, folks.
Yglesias points out that predicting the technological future is a fool’s errand:
[M]ore computing power will be added during the next two-to-three-year doubling cycle than has been added in the entire history of computing. And then that’s going to happen again. Unless you think about it in the correct exponential terms, you’re going to massively underrate the likely gains in the future. As it happens, I agree with Gordon that self-checkout technology is not incredibly promising but that’s because it addresses an uninteresting problem. What if you could automate grocery delivery? Or what if “the Internet of things” let you just put a bunch of stuff in your bag, walk out of the store, and then automatically have the cost tallied up and charged to your credit card? That’d be cool.
Matthew Klein compares Gordon’s vision of the future with that of the “techno-optimists”. His bottom line:
It’s hard to make the case that the ability to share the results of personality quizzes on social networks is a significant boon to humanity, but only a fool would deny the potential of driverless cars to improve the lives of commuters, to say nothing of the tens of thousands of lives that might be saved from traffic accidents.
The truth is that no matter who is right, growth of a few percent in gross domestic product each year can produce amazing progress after enough years. Instead of worrying about these long-run issues, which may never materialize, maybe we should ask our economists to focus on the problems that need fixing today.
Millions of people now have a printing press, reference library, school, and computer all at their fingertips. The number of them who do the things that the authors of this piece want people to do fits comfortably in a rounding error. When books ceased to be hand-copied by monks in monasteries, books stopped being the purview of the aristocratic and clerical elite, and yet most of the world’s population remained illiterate for hundreds of years. When televisions became ubiquitous, people wrote breathless pieces arguing that they would give all students the same skills as those taught in the most expensive schools, and yet the vast inequalities in our education system only deepened. And since I was in high school, we’ve been cramming internet-enabled computers into our places of learning, and arguing against evidence that the inevitable result would be the rapid democratization of knowledge and creation. We have seen nothing of the kind, and we have no satisfactory reason to believe that this will change in the coming days ahead. It’s great that you can go on Wikipedia and use it write your own blog. Most people are not doing even that, and that is a far cry from the absurd revolutionary utopianism of this piece and hundreds more like it.