Eyes, Shoulders, Knees, and Toes: Rebutting Robert Gordon’s ‘The Rise and Fall of American Growth’

The television series The Six Million Dollar Man follows the adventures of Steve Austin, a former pilot rebuilt from a crash using futuristic, high-tech “bionic parts and implants.” Neither of us is an undercover agent, but we can see and read without cheaters, use formerly injured shoulders, and walk using knees and feet whose natural joints have failed. We are not alone in enjoying quality-of-life improvements. Take, for instance, the veteran who, after losing his vision and hearing, turned his passion for confections into a thriving business with the help of cochlear implants or the double amputee who now works at the same prosthetics center that helped her regain her ability to walk.

Today, the average American enjoys better health care than Captain Steve Austin could dream of in the 1970s. Even if modern medicine doesn’t turn us into superheroes, it improves the quality and quantity of countless years of life. This idea, however, runs counter to the thesis of Robert Gordon’s The Rise and Fall of American Growth. Gordon posits that gains in the American standard of living have slowed in the modern era compared to those between the Industrial Revolution and World War II.

Gordon observes that the “Great Inventions” of the late 1800s were a boon to the average American, especially those in agriculture, manufacturing, and the household. We agree. We disagree, however, with his conclusion that innovation in America is now lethargic and hampered by inequality, plateaus in educational attainment, and an aging population. His prescriptions for preventing economic stagnation hold merit: reduce regulatory burden, remove barriers to entry into the market and labor force, and improve the education system.

But we take issue with Gordon’s notion that today’s standard-of-living improvements do not benefit the average American as much as improvements of the day benefited those in bygone eras, and we are not alone in our criticism. The United States is wealthy enough for most of its citizens to demand and receive so-called luxuries like improved air quality, better health care technology, and personal transportation. In contrast to Gordon’s argument that rising income inequality leads the way in explaining lower standard of living growth, household inequality within our relatively wealthy system is a symptom of the penalties low-income earners face for seeking wage increases, the rewards cronies capture from governments at every level, and our tendencies to marry those similar to us. The world would not be perfectly equal or free from want if we could remove these constraints, but blaming middling technological progress for slower growth rates in real wages and the overall economy only adds to a misleading portrayal of reality. 

Gordon also fails to address Paul Romer’s Nobel-prize-winning new growth theory. New ideas, innovations, and progress in technology play a limited role in Rise and Fall. Gordon focuses on manufacturing numbers and outputs over time that fail to capture the gains from, for example, the eradication of polio or smallpox. We will never fault someone for being unable to see the future, such as Gordon’s passages about the limits of AI, but we prefer a more optimistic view of progress in human flourishing. 

In contrast to Gordon, Marian Tupy and Gale Pooley argue in Superabundance that we have become better off as a result of becoming time-rich. We are wealthier now, not because we earn more but because we trade less of our time for goods. The real “superabundance” comes not from ample money or wealth but ample leisure time. Tupy and Pooley found that workers’ purchasing power in 2018 was two and half times greater than in 1980–not because workers earn more, but because goods cost less. The average time price of 50 basic commodities, for example, fell 71.6 percent since 1980. They document several commodity groupings from the World Bank and the Fraser Institute for different time periods with similar results. Airfares, DNA sequencing, and a litany of finished goods all require significantly less than half the time to acquire in the US since 1970.

Tupy and Pooley argue that a growing population is an important factor in lowering costs, which Romer points to as a key component of endogenous growth theory. More humans means more specialization, which increases the likelihood of new discoveries and innovation. 

Predicting the future of technology is a foolish and futile errand. We do not set out to guess the future of technological progress, but we are confident in humanity’s collective imagination and ingenuity. Hopefully, the progress we have experienced is only the beginning, and time-rich future generations should benefit from better joints, better jobs, and better lives than we could ever dream up or write down.

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