An economist named Robert Gordon thinks that the rapid growth the United States experienced from about 1870 to 1970 was just a blip resulting from the discovery of new inventions that will never be repeated again. As a result, he predicts that our future economic growth will never come close to the growth we experienced during most of the twentieth century. His prediction may be right, but not for the reasons he thinks.
Gordon’s argument, presented in detail in this 2012 paper, is that the inventions produced after 1870–electricity, telecommunications, powered flight, and automobility–were so profound that their effects will not be repeated again. They had far more of an impact on the economy than the previous, steam-driven industrial revolution because they affected more segments of that economy. And they had more of an impact than the later, computer-driven revolution, because people of 1870 were far less wealthy than we are today and so it didn’t take as much to add to their wealth.
Gordon is expressing a technology theory of economic growth that many, if not most, economists today do not support. If the technology theory were true, then the same technical innovations that made American wealthy should have made South Americans and Africans and Indians and Chinese and Russians wealthy at the same time. After all, there are really no secrets behind electric motors, internal combustion engines, and the shape of airplane wings that enable flight.
