The age of great American productivity is over. So says economist Robert Gordon, author of The Rise and Fall of American Growth. Though his 784-page book has drawn equal parts praise and ire, among its new fans is Bill Gates. At least, for the first 80% of it.
Gordon’s book, released in January, chronicles American life and work, and the inventions that shaped them, from 1870 to the present. It struck a chord earlier this year with skeptics of Silicon Valley’s techno-utopianism and the promise of economic growth fueled by the internet.
Gates, an avid reader who frequently blogs about new books he likes, gives the book a ringing endorsement for its economic analysis and narrative. In a review posted yesterday, he wrote:
Most reviews have focused on the “fall” indicated in the title: the last hundred pages or so, in which Gordon predicts that the future won’t live up to the past in terms of economic growth. I strongly disagree with him on that point, as I discuss below. But I did find his historical analysis, which makes up the bulk of the book, utterly fascinating.
Gates writes of the speed of growth in the past century:
What really amazed me was not the speed of innovation but the speed of adoption. In 1910, there were 2.3 motor vehicle registrations for every 100 households. By 1930, there were eighty-nine.
But Gates disagrees with Gordon when he leaves history behind in favor of forecasts. Though the past century and a half has indeed been filled with inventions that were massive and can’t be replicated, that doesn’t mean that the innovations of the future will be trivial, Gates says:
Like other economists, Gordon uses something called Total Factor Productivity (TFP), which is meant to capture efficiency due to innovation. TFP is based on GDP but takes into account the hours we work and the equipment we use.
The truth is, while economic measurements like TFP can be useful for understanding the impact of a tractor or a refrigerator, they are much less useful for understanding the impact of Wikipedia or Airbnb.
Some other reviewers have come to similar conclusions as Gates, lauding Gordon for his deep research and historical acuity while essentially ignoring or writing off his argument in the last 200 pages. ”Whether or not you end up agreeing with Gordon’s thesis, this is a book well worth reading — a magisterial combination of deep technological history, vivid portraits of daily life over the past six generations and careful economic analysis,” wrote economist Paul Krugman in The New York Times. He added: “This book will challenge your views about the future; it will definitely transform how you see the past.”