The Economic History Podcast The Rise and Fall of American Growth, 1870-2010
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Nov 30, 2023 Prof. Robert Gordon discusses U.S. growth since the Civil War, contrasting technological breakthroughs in different periods. The chapter explores the factors behind increased productivity in American history. The differences between the late 19th and 20th centuries are highlighted, as well as the impact of technology on productivity. The potential of artificial intelligence to boost productivity is explored, and obstacles to future economic growth in the U.S. are discussed.
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Everyday Improvements That GDP Misses
- In 1870 roughly half the US population worked on farms and lacked electricity, indoor plumbing, and mechanized tools.
- These nonmarket improvements — light, running water, cleaner streets — massively raised living standards but rarely show up in GDP.
Most Big Inventions Were One-Time Leaps
- Many breakthrough inventions were 'one-time' advances that delivered step-change benefits but cannot be repeated (e.g., electric light, automobiles, jet planes).
- Once those low-hanging, transformative inventions are exploited, subsequent gains tend to be incremental efficiency improvements rather than new leaps.
Three Productivity Eras In U.S. History
- US productivity growth occurred in three phases: ~1.5% (1870–1920), ~3% (1920–1970), then ~1.5% (post-1970).
- The 1920–1970 surge reflects delayed exploitation of prior inventions and public investments that are hard to replicate.