Is Our Economic Future Behind Us?
With the global economy yet to recover from the 2008 economic crisis, concern about the future – especially of the advanced economies – is intensifying. But, with scientific progress surging forward, there is plenty of reason to believe that technological advances will continue to surpass our wildest dreams – and drive growth.
CHICAGO – With the global economy yet to recover from the 2008 economic crisis, concern about the future – especially of the advanced economies – is intensifying. My Northwestern University colleague Robert J. Gordon captures the sentiment of many economists, arguing in his recent book The Rise and Fall of American Growth that the enormous productivity-enhancing innovations of the last century and a half cannot be equaled. If true, advanced economies should expect slow growth and stagnation in the coming years. But will the future really be so bleak?
Probably not. In fact, pessimism has reigned over economists’ outlooks for centuries. In 1830, the British Whig historian Thomas Macaulay observed that, “[i]n every age, everybody knows that up to his own time, progressive improvement has been taking place; nobody seems to reckon on any improvement in the next generation.” Why, he asked, do people expect “nothing but deterioration”?
Soon, Macaulay’s perspective was vindicated by the dawn of the railway age. Transformative advances in steel, chemicals, electricity, and engineering soon followed.