Thursday, July 25, 2013

Blip or streak?

Lancaster journalist and blogger Gil Smart, via Facebook, points us to “The Blip,” a New York Magazine feature on pessimistic economist Robert Gordon. As the article details at length, Gordon believes the broad-based and sustained economic growth that modern Americans consider normal was actually a one-time piece of good fortune that is basically over. “Fascinating piece,” Smart says, and I agree.

Awhile back, Gil and I traded emails on the topic of American decline and its inevitability or lack thereof. Gil at least provisionally endorses the notion that America has reached “peak prosperity,” and that going forward we’ll have to get used to the idea of constraints on growth, of limits. Given Americans’ sense of what they’re entitled to by virtue of living in “the greatest country on Earth,” he expects the adjustment process to be … well, let’s just say, if you thought the past few years have been ugly, you ain’t seen nothing yet.

I rarely find myself taking the less pessimistic side in a debate, but I see enough causes for hope to be at least agnostic on this topic. The world is very big, very messy and very complicated, and there is never a shortage of reasons to think we’re doomed. On the other hand, if you look around, there are always a few reasons to think we might muddle through, too.

I remember the existential threats of yesteryear: the oil shock of the 1970s, the standoff with the Soviet Union, the advent of Japan as a manufacturing titan. Each time, pundits confidently predicted the end of the United States’ status as a world power. In a few years, you were given to understand, the average American would be reduced to biting the heads off rats for basic sustenance. Yet here we are in 2013 – not in great shape, certainly, but most of us are still having sandwiches or salads for lunch, not rat sushi.

There’s no doubt we face immense challenges over the next couple of decades. Nevertheless, here are a few reasons I think we can hold off on the sackcloth and ashes:
  • Our economic engine isn’t broken: Growth cooled a bit after the 1950s and 1960s, but it hasn’t stalled – it just feels that way, because the rich have been soaking up most of the income gains. Post-recession, U.S. GDP quickly returned to growing at about the rate it had previously – which is truly remarkable, given our ongoing high unemployment and other headwinds, and quite encouraging.
  • New sources of economic growth are coming online: Amazing things are happening in biotech, nanotech, artificial intelligence and robotics … developments straight out of science fiction. And as per Kevin Drum’s illustration of how geometric rates of change work, we can expect much of this stuff to thunder into the mainstream economy over the next couple of decades. If we manage it properly, it will do a world of good.
  •  Solar energy could become practical: This is kind of an adjunct to point No. 2, but if trends in solar prices continue, we may be able to wean ourselves off fossil fuels at last and avert the worst consequences of global warming. Affordable clean energy is the holy grail of sustainable 21st-century growth.
  • The rest of the world has problems, too: China’s cheap labor isn’t inexhaustible, its governance isn’t that great, and it faces terrible environmental challenges and resource constraints. Europe’s demographics are far worse than ours. The Middle East is ruled by despots, has radical Islam to contend with and is as dependent on selling oil as we are on buying it. And so on.
To counterbalance those factors, here are a few of those “immense challenges” I mentioned:
  • For too many Americans, the link between work and economic security has been broken. College costs, health insurance costs and the erosion of stable employment and pension systems have left vast swaths of the middle class scrambling not to lose ground, let alone to advance.
  • We have a predatory financial system that extracts tribute from the real economy with impunity. These folks got away with murder in 2008, and they’re still around.
  • We are afflicted with a reactionary political movement hell-bent on making us dumber, sicker and poorer. There is such a thing as reasonable conservatism, but this is not it. In the second decade of the 21st century, a First World country should not be debating whether evolution is true, applauding the premature death of the uninsured, or suppressing the vote. Not that I'd give the Left straight A's either, mind you. We need better governance. 
  • Global warming may not be solvable after all. If any of the worst-case scenarios turn out to be true, all the robotics in the world won’t make much difference.
So, it’s going to be tough going these next few decades. Point No. 4, in particular, worries me. Nevertheless, I think it’s at least conceivable that, despite everything, when 2050 rolls around we’ll find ourselves somewhat richer, healthier and saner than we are today. And if we’ve managed to avoid ecological catastrophe, too, we might even make it to 2100.

Guess we’ll see, won’t we?

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