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I read a very interesting article this afternoon by Thomas Edsall in the New York Times:

No More Industrial Revolutions?

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.

snip

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.

No More Industrial Revolutions?

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.

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.

NY Times: The Self-Destruction of the 1 Percent

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.

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.

 

No More Industrial Revolutions?

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.

Solidarity.

Originally posted to TomP on Mon Oct 15, 2012 at 11:29 AM PDT.

Also republished by Income Inequality Kos and ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Great message, Tom (7+ / 0-)
    Defeating Romney is necessary, but not sufficient.  
    We cannot be satisfied with just defeating Romney. We must also defeat a system that creates people like Romney and allows him to get away with tax-dodging and we must defeat a system that creates entities like Bain Capital that pursues vulture capitalism.

    Romney is just the symptom.

    •  Romney is the logical product of 30+ years of (4+ / 0-)

      developments dating back to Reagan's time.  Those developments are far more disturbing and far more consequential than the political fortunes of Thurston Howell, III and his running mate Eddie Munster.  

      I'm not sure where to even begin at this point.  Certainly, a political system that resembles a special interest auction far more than anything envisoned by the Founders is essential.  Labor getting back up off the canvas is, too.  Accepting that the US doesn't have a Manifest Destiny to control events on the other side of the planet is a third essential concept.

      We're killing our planet, yet the issue isn't even on the radar in this campaign.  Instead, how much to cut so-called "entitlements" (rather than earned benefits) is the topic du jour.  Cutting corporate tax rates is also taken as a given.

      The gap between our political system and the reality experienced by this country's citizens widens w/ each election cycle.

      Some men see things as they are and ask why. I dream of things that never were and ask why not?

      by RFK Lives on Mon Oct 15, 2012 at 12:22:22 PM PDT

      [ Parent ]

  •  Industrial,train,car, computer revs. unpredictable (4+ / 0-)
    Recommended by:
    TomP, SethRightmer, semiot, MGross

    and the next great revolution is itself just as unpredictable

    and will radically change everything in ways we can not fathom

    •  Progress is done, the end of history, blah blah (5+ / 0-)

      Class warfare is real. The cycle of meritocracy inevitably leading to elitism and societal failure has been repeated dozens, if not hundreds of times in human history. Sure, I buy that.

      But progress is not over, and history hasn't ended. This is one of those perennial cliches, dumb ideas that keep popping up. Along with "kids these days suck," it is probably one of the oldest memes humanity has. And for most of the same, smug, "My generation has done everything worth doing and you kids are worthless" reasons. Whenever I hear these memes, I think of an old man fading into irrelevance while ranting against the new and strange world he doesn't understand.

      Yeah, fusion power and/or ultra-cheap solar will never be invented, or if they are, truly cheap and abundant energy won't change society at all.

      Artificial intelligence is a pipe dream, only lovingly God-crafted carbon can house a consciousness. But even if we did invent human level AI, how could that change anything?

      Curing cancer won't change anything at all. Medical technology will never advance to the point where we could double human lifespans, or more, and even if it did, why, I'd hardly call that a "revolution."  The steam engine, now that was a revolution!

      We certainly won't be mining asteroids for raw resources, or leaving the planet at all for that matter. Nope, from here on out everything is going to remain just as I remember it from my childhood.

      Just off the top of my head I can think of dozens of truly earth shaking revolutions, right on our doorstep.

      •  i like the first part of seth's comment (1+ / 0-)
        Recommended by:
        TomP

        and would add that seeing the shift in commercial msm to showing interracial couples and children, and seeing teenagers all over, in the cities and the countryside, not differentiating other kids because of race, color, ethnicity

        such new unprejudging mindsets, along with the certain but unknown new technology, needs only the masses to make it known to the self identified elites that we won't send our children to make their wars any more

        to achieve something like a healthy planet

  •  Our country has been on the decline (2+ / 0-)
    Recommended by:
    TomP, semiot

    and you can pretty much trace that decline through our space program. Yes, Virginia, we did land men on the moon and we have manned the space station and we have sent out probes into the outer and inner limits of our little solar system. And we have had great ingenuity in building a machine that can analyze rocks and take pictures and move around on a planet like mars.

    But pretty much we are done. Other countries are going to pass us by. Other countries are going to explore inner and outer regions. Our education system is in failure mode. Almost all of our political systems are in that same mode. We have a people who have no political will to make changes but who would very much like for us to end these endless wars thank you very much (but don't worry about them getting out and protesting either.)

    We are done. All of our systems are now geared to keep us down, not to bring us up (what systems are working at all.) All of our systems are no longer geared to protect us or to follow the constitutional model at all. We have been bought out, if not by companies like Bain then by the financial, insurance, and energy companies and by the scoopers in the MIC. We are looking at huge attempts to manipulate the votes by out and out theft (pulling people off the rolls wholesale for no reason at all other than the suspicion that they might vote dem), repression (voter id, making the hours shorter and the lines longer and intimidation) and out right fraud (some rethug was bragging about voting in two states! and some scam is occurring with absentee ballots.)

    And there is little political will to change that as far as I can see.

    American Television is a vast sea of stupid. -xxdr zombiexx

    by glitterscale on Mon Oct 15, 2012 at 12:01:31 PM PDT

    •  So what would happen... (0+ / 0-)

      if the CONCEPT of nationhood became irrelevant?

      These rants, snark or not, that reference our national efforts give me a pain.  Rigid political organization is only a phase.

      -6.12 -4.87 Nobody votes for the lesser of evils. We vote AGAINST the GREATER of evils.

      by jestbill on Mon Oct 15, 2012 at 02:09:31 PM PDT

      [ Parent ]

  •  ALT-E revolution is before us, like it or not (5+ / 0-)

    The limitations of fossil fuels will force us into an Alternative energy revolution.  The potential is there to for the U.S. to have a massive boom

    If we fail to start the ALT-E revolution, we will be forced into the Global Warming revolution, which will make us wish we had austerity.

  •  Great diary, and I agree that (5+ / 0-)

    "the political threat to their status and comfort would come from rising popular demand for policies of income redistribution."

    I think we need to build a strong movement to demand policies of income redistribution. As they said in the Sixties, Jobs or Income NOW.

    The president's much-needed but comparatively small potatoes American Jobs Act is great but we need so much more. As states destroy hundreds of thousands of good government jobs, we should be going in the other direction.

    I propose a new economic philosophy of Rise Up Economics: tax the 1% and give to the 99% to stimulate the economy, address economic inequality, and change work as we know it.

    Besides the basics of making it easier to join a union and a big jobs program, Rise Up Economics would include two new ideas for earned income security:

    1) Make the Earned Income Tax Credit a middle class program that rewards work.
    2) Allow workers to earn some basic income after working and paying taxes for 5 years. Working people would earn a small basic income of $500 a month after 5 years, and every 5 years that would go up until folks earned $1,000 a month after 20 years of working. Instead of all-or-nothing pensions where you don't get anything until you stop working, this would provide income security during your working years.

    The extra income from the expanded EITC and the basic income would allow folks to work less and live more, or invest the money and retire early. It blunts the rough edges of capitalism while keeping the good things, like freedom and free enterprise.

    "Imagine all the people, sharing all the world." --John Lennon Follow me on Twitter @riseupeconomics

    by RiseUpEconomics on Mon Oct 15, 2012 at 12:04:31 PM PDT

  •  Perhaps innovation will be in what Economy means. (4+ / 0-)

    And we just need a great alternate-energy innovation. Maybe along the lines of getting cold fusion to work consistently, or in batteries coupled with widespread use of the Kinetic Energies palette.

    Then all the expenditure, direct and indirect, connected with fossil fuels will get freed up and that's where growth comes in. For a generation or two. Then we'll be more or less back to "how do we grow from here?" as a new homeostasis sets in.

    But here's a misconception I'd like to see disappear.

    Capitalism is based on constant economic growth, but what happens if it ends?
    Not really. The Capitalist theory and ethic demands constant economic growth, but Capitalism is truly based on plunder and nothing else.

    The earth being more or less fully scoped out, there are no new populations to go and enslave, hook on opium, etc.; perhaps a few new resource centers in the emerging Arctic; but basically nobody and nothing left to plunder but the existing populations.

    Hence, globalization, stratification, and debt-slavery. The inevitability of interest (growth)-based-economies is you can only make profit from the hide of the populace at some point. And that point is right about now.

    It's in the arrangement of Economics, not in the fantastical perpetual growth machine, that we have to look for innovation. Seeking viability over profit. That doesn't come with the way political power is done currently.


    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Mon Oct 15, 2012 at 12:11:36 PM PDT

  •  Artificial intelligence could be the next (2+ / 0-)
    Recommended by:
    TomP, Gooserock

    revolution.  Look at things like the Watson computer program winning Jeopardy, the self-driving cars like the one Google is working on, Siri, or the new industrial robot Baxter.

    The problem is, our society has no clue on how to handle such a situation if it really happens.  What happens if janitors or even auto mechanics are replaced by machines?  The theory in the past was that technology would create new jobs as fast as it eliminated old jobs.  But in the past, technology replaced muscle power.  Now technology is doing replacing people doing information processing, something which is new to history.

    "The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt." Bertrand Russell

    by Thutmose V on Mon Oct 15, 2012 at 12:12:49 PM PDT

    •  Yes, that innovation could (0+ / 0-)

      make things worse for many.

      I'm glad Barack Obama is our President.

      by TomP on Mon Oct 15, 2012 at 12:19:26 PM PDT

      [ Parent ]

      •  Or better (2+ / 0-)
        Recommended by:
        isabelle hayes, TomP

        Remember, true AI, if we ever invent it, will replace CEOs and all other executive officers. A human won't be able to keep up with a sleepless, no-family-having, number crunching machine. Companies that keep human CEOs will be out-competed by those that slash that multi-million dollar executive salary and hire an AI.

        At last, the executive class will find it's own jobs outsourced. So there will at least be that consolation, as we are rounded up by our machine overlords and sent to the reprocessing facilities: the CEOs will get to go too.

    •  Info Tech Has Always Been This Way. (1+ / 0-)
      Recommended by:
      TomP

      It's been automating problem-solving since it first appeared, and it's been taking away jobs for 30 years.

      You're right that there's no solution to this because we're now replacing humans for both labor and problem solving.

      Humans don't do anything else.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Mon Oct 15, 2012 at 12:27:25 PM PDT

      [ Parent ]

  •  We are supremely situated to ... (3+ / 0-)
    Recommended by:
    semiot, isabelle hayes, TomP

    ... benefit from the next number of technology revolutions because although we are training a lot of engineers for many countries, we're also training many for our own. And most importantly, in my opinion, is the fact that Americans are at the cutting edge of research in so many areas. Breakthroughs come through at the cutting edge, not making the next Hyundai or building another hydro-electric dam.

    The thesis that we have reached some kind of plateau for discoveries seems counter-intuitive to me. We have more people on Earth and more scientists studying more things right now than perhaps all other times in history combined. The fact that technologies keep changing each year seems to back up this premise.

    Finally, I agree, TomP, that we desperately need President Obama because Romney and Republicans would destroy what advantages we have with our university and research systems. Moreover, you need an educated country making a decent wage to afford the new technologies and build them.  

    I would tip you, but the man took away my tips.

    by Tortmaster on Mon Oct 15, 2012 at 01:25:09 PM PDT

  •  These predictions are made during every downturn, (3+ / 0-)
    Recommended by:
    semiot, isabelle hayes, TomP

    they always make the same predictions based on the same assumptions (we've reached our full technological potential), and they're always proven horribly wrong. Exhibit A: Alvin Hansen:

    In the late 1930s Hansen argued that "secular stagnation" had set in, so that the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth. ... [T]he sustained economic growth beginning in 1940 undercut Hansen's predictions and his stagnation model was forgotten.

    "In an individual, selfishness uglifies the soul; for the human species, selfishness is extinction." -Cloud Atlas, by David Mitchell

    by rigcath on Mon Oct 15, 2012 at 01:33:19 PM PDT

    •  True but for one teeny point: (1+ / 0-)
      Recommended by:
      TomP

      Global Climate Change.

      We're now limited by our strengths instead of by our weaknesses.

      The 'Next Big Thing(s)' will have to do with how we spend our time, not with how many tons of steel/plastic we buy.  

      Can we really all get rich cutting each others' hair?

      -6.12 -4.87 Nobody votes for the lesser of evils. We vote AGAINST the GREATER of evils.

      by jestbill on Mon Oct 15, 2012 at 02:25:47 PM PDT

      [ Parent ]

  •  Old News (4+ / 0-)
    Recommended by:
    FloridaSNMOM, semiot, isabelle hayes, TomP

    The "elites" figured this out waaaayyy back in the 1960's. With anti-discrimination laws on the books, and with the rise of the women's movement, America's permanent underclass was in danger of disappearing. If the industrial middle class kept its share of the wealth, then women and minorities could only increase their piece of the pie by taking from the wealthy. Thus the proliferation of well funded right wing groups and conservative think tanks with their attacks on equal pay legislation and affirmative action. As time went on, the simple racial "Southern strategy" of the early 60's evolved into the union busting, divide-and-conquer strategy of the 80's.

    With the likelihood of  a limited growth Japan-like situation in the near term, and the declining numbers of old angry white people, the "elites" have embarked on a full blown, scorched earth policy to undo not only the gains of the 60's, but to destroy the New Deal as well. If we don't stop them now, it's back to 1873 we go!

  •  There's a whole Wiki (2+ / 0-)
    Recommended by:
    semiot, TomP

    page of a collection of FAILED Predictions HERE. The end of economic growth/history etc. has lots of company.

    A few choice ones:
    "Radio has no future."
         1897, Lord Kelvin

    "With over fifteen types of foreign cars already on sale here, the Japanese auto industry isn’t likely to carve out a big share of the market for itself."
         Business Week, August 2, 1968.

    "A rocket will never be able to leave the Earth's atmosphere."
         New York Times, 1936.

    "There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will."
         Albert Einstein, 1932.

    "Louis Pasteur's theory of germs is ridiculous fiction."
         Pierre Pachet, British surgeon and Professor of    
            Physiology at Toulouse, 1872.

    "We don't like their sound, and guitar music is on the way out."
         Decca Records, when they rejected The Beatles, 1962.

    I'm skeptical of the prognosticating skills of humans.

    Shalom.

    "God has given wine to gladden the hearts of people." Psalm 104:15

    by WineRev on Mon Oct 15, 2012 at 02:27:18 PM PDT

  •  Kondratieff Long Waves (1+ / 0-)
    Recommended by:
    TomP

    Now is the time for all good humans to get in their garages and invent the future.

    Link

    Courage is contagious. - Daniel Ellsberg

    by semiot on Mon Oct 15, 2012 at 02:58:38 PM PDT

  •  Harold Meyerson on Gordon: "a real class war may.. (2+ / 0-)
    Recommended by:
    isabelle hayes, TomP

    be on its way

    -- Washington Post OpEd

    Suppose the growth of the U.S. economy slows to a trickle. I don’t mean in the next quarter or next year or even over the next decade. I mean from this time forth.
    ....
    If Gordon is right — and he makes a plausible, if arguable, case — then the very essence of American exceptionalism will be undone. The United States is the world’s only nation whose lifespan is coterminous with the Industrial Revolution: We were born when growth was born and have long considered it our birthright. More than any other country, we have depended on growth to ease our economic conflicts. America without growth will perforce be a different nation, in which class conflict will be more open, enduring — and necessary.
    ....
    America’s middle and working classes have historically waged many partially and indirectly redistributive battles, of course: when the Progressive Movement created the income tax, when the New Deal created Social Security and gave workers the right to organize, when the Great Society created Medicare and the current administration created Obamacare. Each of these victories was preceded by years of on-the-ground agitation...
    Turning the distribution of wealth and power into a zero-sum game would require such groups to focus more radically on a small number of big campaigns — scaling back finance, increasing tax progressivity, publicly funding elections, increasing social provision of such basic goods as education and health care, and leveling the playing field for workers seeking to organize. Given all the racial and cultural rifts that divide Americans, the emergence of a majoritarian redistributionist movement would be extraordinary. But given the slow growth and stagnating incomes of recent decades, even as the rich have claimed more and more of our wealth, the emergence of such a movement is long overdue.

    There's no such thing as a free market!

    by Albanius on Mon Oct 15, 2012 at 03:04:21 PM PDT

  •  education (0+ / 0-)

    The US could set itself up as THE PLACE TO GO for education

    Huge economy surrounds students

    IF we could only commit and improve it

    it could even be an online Ed IF we could only improve it

    Lots of $ being made on iPad apps for toddlers and pre school

    Let' bump it up through PhD

    Just a thought

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Tue Oct 16, 2012 at 12:21:21 PM PDT

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