Innovation, you call that innovation!

The rise and fall of American growth
Paul Krugman

Back in the 1960s there was a briefly popular wave of 'futurism', of books and articles attempting to predict the changes ahead. One of the best-known, and certainly the most detailed, of these works was Herman Kahn and Anthony J. Wiener’s The Year 2000 (1967), which offered, among other things, a systematic list of technological innovations Kahn and Wiener considered 'very likely in the last third of the 20th century.'

Unfortunately, the two authors were mostly wrong. They didn’t miss much, foreseeing developments that recognizably correspond to all the main elements of the information technology revolution, including smartphones and the Internet. But a majority of their predicted innovations (“individual flying platforms”) hadn’t arrived by 2000 — and still haven’t arrived, a decade and a half later.

The truth is that if you step back from the headlines about the latest gadget, it becomes obvious that we’ve made much less progress since 1970 — and experienced much less alteration in the fundamentals of life — than almost anyone expected. Why?

Robert J. Gordon, a distinguished macro­economist and economic historian at Northwestern, has been arguing for a long time against the techno-optimism that saturates our culture, with its constant assertion that we’re in the midst of revolutionary change.

Starting at the height of the dot-com frenzy, Gordon has repeatedly called for perspective: Developments in information and communication technology, he has insisted, just don’t measure up to past achievements.

Specifically, he has argued that the I.T. revolution is less important than any one of the five Great Inventions that powered economic growth from 1870 to 1970: electricity, urban sanitation, chemicals and pharmaceuticals, the internal combustion engine and modern communication.

In The Rise and Fall of American Growth, Gordon doubles down on that theme, declaring that the kind of rapid economic growth we still consider our due, and expect to continue forever, was in fact a one-time-only event.

Read the rest of this review.

Suggested citation
Krugman, Paul, 'Innovation, you call that innovation!', Evatt Journal, Vol. 15, No. 1, February 2016.<http://evatt.org.au/news/innovation-you-call-innovation.html>