I read a very interesting article this afternoon by Thomas Edsall in the New York Times:
In it he refers to work done by Robert J. Gordon, an economist at Northwestern University.
In his widely discussed National Bureau of Economic Research paper, “Is U.S. Economic Growth Over?” Gordon predicts a dark future of “epochal decline in growth from the U.S. record of the last 150 years.” The greatest innovations, Gordon argues, are behind us, with little prospect for transformative change along the lines of the three previous industrial revolutions.No More Industrial Revolutions?
Taken in full, Gordon’s controversial N.B.E.R. paper challenges our belief that innovation and invention will continue to drive sustained expansion in the United States.
Capitalism is based on constant economic growth, but what happens if it ends?
I think it is at least equally as possible that there will be continued growth. Before the computer revolution there were similar doom-seeers, like the Club of Rome report in the 70s. Innovations we cannot yet imagine may occur. But if we get economic growth in a grossly stratified society, too many will suffer. If we have no economic growth in grossly stratified society, even more will suffer.
In fact, many believe that the economic stratification retards economic growth:
The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.NY Times: The Self-Destruction of the 1 Percent
That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction. And it is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.
You can see America’s creeping Serrata in the growing social and, especially, educational chasm between those at the top and everyone else. At the bottom and in the middle, American society is fraying, and the children of these struggling families are lagging the rest of the world at school.
Some economists take a nuanced view of Gordon's speculative work:
Lawrence Katz, an economist at Harvard, wrote to me that the Gordon essay “is a wise and thoughtful piece but a very, very speculative one. The historical evidence presented is quite reasonable.” Katz noted that projections of “what new ideas will be discovered and their potential impacts on economic growth” are “highly uncertain.” In the end, he said, “I am probably a bit more optimistic on the potential for innovation but I share Gordon’s worries about inequality and education and environmental issues.”No More Industrial Revolutions?
We'll have to live and find out the future, but what interests me is the analysis Edsall provides regarding Republicans and the right, many of whom seem to believe the thesis of economic decline:
While Gordon projects a future of exacerbating inequality (as an ever-increasing share of declining productivity growth goes to the top), the wealthy are acutely aware that the political threat to their status and comfort would come from rising popular demand for policies of income redistribution.No More Industrial Revolutions?
It is for this reason that the Republican Party is determined to protect the Bush tax cuts; to prevent tax hikes; to further cut domestic social spending; and, more broadly, to take a machete to the welfare state.
Insofar as Republicans prevail in their twin aims of cutting – or even eliminating – social spending, and maintaining or lowering tax rates, they will have succeeded in obstructing the restoration of social insurance programs in the future.
Affluent Republicans – the donor and policy base of the conservative movement — are on red alert. They want to protect and enhance their position in a future of diminished resources. What really provokes the ferocity with which the right currently fights for regressive tax and spending policies is a deeply pessimistic vision premised on a future of hard times. This vision has prompted the Republican Party to adopt a preemptive strategy that anticipates the end of growth and the onset of sustained austerity – a strategy to make sure that the size of their slice of the pie doesn’t get smaller as the pie shrinks.
Class war is already here and they have been engaging in a preemptive strikes.
Whether Gordon is right or not about the future, we need an end to the Great Economc Stratification. Defeating Romney is necessary, but not sufficient.
This war is upon us whether we want it or not.