Economist Robert Gordon says the Second Industrial Revolution was a one-time event

Historians in the News
tags: economic growth, GDP

Robert Gordon is an economist at Northwestern University and the author of a book called The Rise and Fall of American Growth. Think about that title for a moment. The rise — and fall — of American growth.  So Gordon’s view may be as dark as all those presidential candidates’ views. But while politicians generally look for easy villains — immigrants or China or Wall Street — Gordon takes a less, shall we say, hysterical view of things.  It is a view based on how innovation and inventions affect the economy, especially the inventions of the past few decades.

GORDON: The big debate is about how important these new inventions will be, how rapidly they will be  diffusing throughout the economy, and that’s where we get into some of the controversy that’s been caused by my book.

[MUSIC: Fine Prince,  “Log Lady” (from Lookout)]

Anyway, like I said, Gordon is an academic.

GORDON: I’m Stanley G. Harris Professor of the Social Sciences at Northwestern University.

DUBNER: “Professor of social sciences,” not professor of economics. Why is that?

GORDON: That sounds better. And it wasn’t my idea. I didn’t give myself that title. It was made up for me.  

DUBNER: So you’re not on the side an anthropologist and a psychologist and all of that?

GORDON: No, but I have gotten deeply into history.

Gordon does indeed go deep into history, examining the trajectory of economic growth over the last few millennia.

GORDON:  We had virtually no progress in human life between the Roman Empire and the late Middle Ages. Studies of England, where they have some of the best data and statistics, show that over 400 years between 1300 and 1700, economic  growth was only at a rate of 0.2 percent a year. And to put that into concrete terms, something growing that slowly, at 0.2 percent, requires 350 years to double.

Not only was growth extraordinarily slow, but even as new inventions came along — steam-powered railroads and a broader network of food distribution — they didn’t exactly transform society overnight.

GORDON:  One of the things that keyed my interest in the great inventions was a paperback book that I found in a bed and breakfast in Michigan, where guests were invited to leave books and pick them up. And so I picked up this book. It was a book by Otto Bettmann of the famous Bettmann photographic archives. And it was full of wonderful line drawings and cartoons of the horrors of railroad travel in the late 19th century with boilers that would blow up, of milk that was adulterated and mixed with water or chalk. The complete lack of protection of the quality of the foods. And so this set of horrors, of how terrible life was in the old days, led me naturally down the path of exploring what were the things that changed us and improved it.  

Gordon looked hard at what’s generally called the First Industrial Revolution, which began in the mid-18th century.

GORDON: When we had the invention of steam engines, steam ships, locomotives, factories making cotton fabrics, and then the telegraph. All of those things were invented in the century between 1770 and 1870. And they set the stage for the inventions that happened after 1870. 

And that’s when the Second Industrial Revolution would begin. We’ll get there. But first, as Gordon was saying about the stage-setting inventions of the First Industrial Revolution.

GORDON: One example of setting the stage was the telegraph, which was the single biggest invention in human history in shortening the time it took to communicate a fact or a piece of news. Before the telegraph, which was invented in 1844, the fastest that news could travel was by the speed of a horse or a sailing ship. And indeed, we have a famous example, of the Battle of New Orleans, won by Andrew Jackson in January 1815, which took place three weeks after the peace treaty was signed between Britain and the United States, ending the War of 1812. So after the telegraph, of course the human mind started imagining, “Well, what if we could find a way for people to talk over these wires instead of just sending dot-dot-dash-dashMorse codes?” And that dream was realized fairly promptly in 1876 by Alexander Graham Bell and his  competing inventor. Bell beat the competitor — whose name was Elisha Gray — Bell beat him to the U.S. Patent Office by about three hours. And if it had not been for that, we would have had the Gray telephone system instead of the Bell telephone system.

Read entire article at Freakonomics

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