Tuesday, July 23, 2013

Optimistic about a pessimistic outlook

Robert Gordon is a 72-year-old economist at Northwestern University and he believes that America is in a permanent state of economic decline. According to an article outlining Gordon's view, before 1750 economic growth was virtually imperceptible in the world. Then an industrial revolution began in England in 1750. It was followed by a second industrial revolution beginning in 1870 based largely in the United States. By  the 1950s economic growth was so rapid and seemingly automatic that the average American would roughly double his or her parents' standard of living. 

By the late sixties or early seventies this growth rate slowed. Up until recently virtually all economists were not bothered by the deceleration-just a blip. But Gordon thinks the blip was 1750 until now. Since nothing like the the back-to-back industrial revolutions of 1750 and 1870 ever happened before in human history, there is no reason to conclude that any such phenomenon will happen again.

But what about computers, the Internet, and mobile phone technology? Aren't these innovations evidence that we can expect the innovations and the growth to continue? Not according to Gordon (and others). Example: Our kitchens are largely unchanged in the last 50 years. Go back fifty years before that and there was no refrigeration, only blocks of ice, and no gas stove, just piles of wood. With the growth of the population in the United States, Gordon says that we need innovations eight times more important than what we've had before and there appears to be nothing like that on the horizon.

Is he right? I'm no economist. I don't know. But the article indicates that Larry Summers, former Treasury Secretary, is impressed with Gordon's work. Ben Bernanke, the Federal Reserve chair, delivered a commencement address this spring in which he considered the implications of a paper written by Gordon which suggests that if Bernanke doesn't embrace Gordon's conclusions he at least doesn't dismiss them. 

But what if Gordon is right? To paraphrase a line from Jack Nicholson, what if this is as good as it gets, economically speaking? What if we have reached the top of the economic development hill and it is a permanent slide downhill from here? 

When I read the article I was a bit disturbed at first. But then a ray of light brightened my darkened spirit. Could it be that slower economic growth could spawn greater spiritual growth? 

If there are fewer next new things to anticipate then might we place more hope in God? If there is less new gadgetry to capture our attention then might we devote more attention to the Lord? If we have fewer chances to gain fulfillment from the next thing our money can buy then might might we seek more fulfillment through the Holy Spirit? If we are forced to expend less energy propping up the American Dream then might we devote more energy to the mission of our Lord?

I'm a Star Trek fan. Maybe someone will invent warp engine technology in the next few years thereby kick starting economic growth for a few more centuries. If not, maybe a decline in economic growth might give way to a different type of growth that we desperately need. Maybe there's reason for a degree of optimism about Gordon's pessimistic view.