PDF Summary:The Rise and Fall of American Growth, by Robert J. Gordon

The Rise and Fall of American Growth by Robert J. Gordon provides an insightful look into the remarkable advancements that transformed the lives of everyday Americans between 1870 and 1940. From innovations in transportation like the railroad and automobile, to household conveniences like electricity and indoor plumbing, Gordon examines how technology and government policies drastically improved living standards.

In addition to this dramatic industrial progress, Gordon discusses the slowdown of growth after 1970 due to factors like demographic shifts, rising inequality, and declining education outcomes. He explores how obstacles may affect future progress, suggesting that benefits of the digital age have been limited mainly to information and technology sectors, rather than widespread economic gains.

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Gordon describes the central role of improved sanitation infrastructure in driving down mortality rates. In 1870, the infrastructure for treating water and handling sewage and waste was largely inadequate in many American cities. Waterborne diseases such as typhoid had a particularly devastating effect in urban settings. From the late 1800s until the 1930s, the quality of life in cities was greatly enhanced and the risk of illness was markedly reduced, thanks to a variety of advancements such as a better understanding of disease transmission, major improvements in water purification, a growth in public awareness about hygiene, and more public investment in health infrastructure.

Advancements in patient care and treatment outcomes have been significantly bolstered by the refinement of medical procedures, the introduction of pain management through anesthesia, and the adoption of sterile techniques.

Gordon examines the transformation of hospitals from places once feared for their potential to spread lethal infections in the 1870s to modern sanctuaries of cleanliness, now frequented for their healing and rehabilitation capabilities. The significant shift in medical practices can be attributed to the acknowledgment of germs as the cause of diseases, the introduction of sterile techniques, and the development of pain control in surgical procedures. Prior to the introduction of anesthesia, the excruciating pain limited surgeons to carrying out primarily amputations rather than more intricate operations. Contemporary observers would naturally find the stench from unclean operating rooms abhorrent, often leading to a high incidence of infection. The field, previously considered gloomy and unskilled, underwent a significant change in a short span of time as the use of ether for anesthesia was introduced and an increased emphasis on hygiene was established, driven by the understanding of germs and the implementation of practices aimed at preventing infection.

Enhanced employment prospects

Gordon thoroughly details how labor evolved from the arduous conditions of 1870 to the significantly improved work environments by 1940, emphasizing the crucial urban industrial centers that are essential to his analysis. The nature of jobs underwent a transformation, moving away from sectors such as agriculture and extraction, towards industries offering higher-paying administrative and specialized roles that are less reliant on physical exertion. Nevertheless, the uncertainty and fear of unemployment, particularly during the depression years, remained a serious impediment to enhancing working conditions, a responsibility that the government progressively assumed from World War I through the New Deal programs and beyond, by implementing safeguards for worker wellbeing.

The transition to a forty-hour workweek signifies a substantial transformation.

The book provides an in-depth analysis of how the standard workweek evolved from a typical duration of sixty hours to the current norm of forty hours. Working hours began to decrease before the 1920s and this shift was solidified during the Great Depression when New Deal policies aimed to boost worker efficiency and spread employment more broadly due to the high joblessness of the era. In the latter part of the 19th century, workers faced fluctuations in employment stability due to broad economic fluctuations and occasional changes within specific industries or firms. Workers at the Chicago stockyards began their shifts not knowing how long they would be working.

Technological progress has reduced the reliance on manual labor across sectors such as agriculture, resource extraction, and manufacturing.

Gordon examines the evolution of work, detailing the shift from the physically demanding tasks common in the late 19th century to the repetitive manual work that became more common after the 1920s, culminating in a select few enjoying the comfort of air-conditioned office positions. In the early 1870s, most American farming practices had not yet adopted the use of animal labor. Farmers toiled in the fields, manually hoeing and steering plows with the help of equine animals, be they horses or mules. During the last years of the 19th century, there was a shift from traditional farming methods to those augmented by the use of horses and, to a smaller degree, machinery powered by steam. The arrival of the tractor during the early 20th century markedly altered the agricultural scene of that era. The advent of electrically powered machinery improved factory operations and strengthened safety protocols, resulting in fewer disruptions caused by workplace incidents.

Heightened oversight in regulations resulted in fewer incidents at the workplace.

Gordon has meticulously quantified improvements in workplace safety, particularly in industrial settings. The late 1800s witnessed a rapid population growth and a substantial influx of immigrants, which created substantial hazards for workers. Workplace incidents often led to significant fatalities, especially because of the widespread dangerous environments in many production sites and the risks linked to working on the railways. Government oversight expanded, starting with state-required programs for worker compensation and developing into federal job safety regulations, coupled with corporate efforts to minimize accidents and injuries, played a role in creating a safer workplace for workers, despite ongoing substantial hazards.

The focus of the government on enhancing transportation, bolstering public welfare initiatives, and implementing other crucial policy actions significantly drove economic expansion.

This book suggests that the transformative alterations in everyday experiences, primarily occurring between 1870 and 1940, were mainly a result of the courage, creativity, and financial commitments of private enterprises in a range of innovative and incremental advancements. The central government was instrumental in nurturing an advanced and efficient economic landscape. The accomplishment was realized by combining government funding for improvements in transportation, health, and education sectors, the creation and expansion of regulatory agencies to protect people from harmful business practices, and the encouragement of innovation, particularly under the auspices of the national patent office.

The Homestead Act of 1862, a pivotal piece of legislation, allowed farmers to claim 160 acres of land in the Midwest at no cost, while the Morrill Act, enacted concurrently with the onset of the Civil War, facilitated the creation of state universities across the nation, funded through the proceeds from lands designated by the federal government to support the universities and advance agricultural research stations.

Government initiatives and funding that promoted the expansion of railway networks.

The author highlights the crucial role played by the federal government in nurturing the development of an extensive national railroad system by providing financial and functional assistance. Congress passed multiple legislations to foster the development of the vast western territories by allocating large areas of land to railroad companies, which in turn funded the construction of tracks and associated infrastructure through the sales of this land. This intervention was successful in promoting the rapid expansion of the railroad system, bringing a rapid reduction in transport costs, and establishing a foundation for the post-Civil War economic boom.

Public investment in sanitation infrastructure improving hygiene and reducing mortality

Government investment played a crucial role in improving the overall health of the populace. In the 1800s and the beginning of the 1900s, the swift growth of cities led to a recognition by municipal leaders of the prevalence of diseases transmitted through water, prompting them to invest in the improvement of water treatment, sewage systems, and the initiation of garbage collection services. The improvement of city sanitation, along with a deeper understanding of how diseases spread, significantly improved urban cleanliness, resulting in a marked reduction in both mortality and the frequency of sickness.

Laws like the Homestead Act were instrumental in encouraging westward expansion and the progression of agricultural techniques.

Gordon examines the set of laws collectively referred to as the Homestead Acts, instrumental in driving the westward movement and enhancing agricultural development across the United States. In 1862, the government initiated a program that allocated plots of land, each encompassing 160 acres, from its vast land reserves to any citizen willing to farm the land and commit to its improvement over a period of five years. The allure of untapped territories significantly motivated numerous people to move in a westerly direction, which substantially contributed to the expansion of agricultural methods in America. While the Homestead Act primarily spurred economic growth and opened up opportunities, it also faced numerous obstacles such as harsh weather and fraudulent schemes. Many settlers were unable to overcome the severe weather and challenging conditions of the Great Plains, leading them to abandon their lands in the face of unyielding droughts, hailstorms, and locust swarms. Speculators also took advantage of the program.

The establishment of colleges through the allocation of land by the government significantly expanded access to higher education.

The 1862 Morrill Act was instrumental in founding land-grant colleges, crucial to the United States' economic transformation and growth, largely due to substantial government participation. The law designated state territories to establish and sustain universities that emphasized the provision of practical skills, with a particular emphasis on education related to agriculture. The creation of these entities, supported by public investment in research and educational programs, played a pivotal role in advancing farm efficiency, broadening access to education, and promoting the extensive dissemination of technological progress.

The establishment of the Food and Drug Administration bolstered public health by overseeing and ensuring the integrity of food products.

The author highlights how the introduction of the Pure Food and Drug Act in 1906 set the stage for the creation of a nationwide standardized system for ensuring the safety of food. Amid growing worries about food safety and widespread disapproval of cruel practices in meat production, the legislation prohibited the interstate distribution of contaminated and misbranded food products, establishing the foundation for the formation of the Food and Drug Administration (FDA) to oversee these rules. In the years that followed, there was an ongoing transformation in procedures monitored by the FDA, shaped by a growing awareness of the importance of food safety and cleanliness.

Progress has been unevenly distributed, resulting in a growing gap between the wealthy and the poor, with certain regions experiencing swift transformations while others have witnessed a slowdown.

Gordon argues that although the third industrial revolution, associated with the digital age, has led to uneven benefits across various economic sectors and a slowdown in productivity growth compared to the previous century, it is crucial to recognize the significant transformations this era has brought about in the ways we acquire and exchange information. The third industrial revolution primarily enhanced the consumer experience, particularly in entertainment through television and digital media, unlike the second industrial revolution which brought about a broader spectrum of advancements including significant changes in food and clothing production and distribution, the modernization of homes, a transportation overhaul from interurban railways to the advent of cars, a communications metamorphosis, a revolution in leisure beginning with cinema, improvements in public health and medical practices that combated contagious diseases, and the shortening of the average workweek from sixty to forty hours.

The pace of innovation and technological progress slowed down after 1970, with the notable exception of developments in information and communication technology.

Enthusiasm for technology notwithstanding, numerous facets of human life have seen a slowdown in the pace of transformation. Despite advancements in fuel safety and efficiency for cars and planes over the last forty years, the fundamental operation of these modes of transport has largely stayed the same. The only significant development in clothing since 1970 has been the introduction of non-iron synthetic materials. The devices we use in our homes currently would appear quite typical in a 1950s kitchen setting. Food, now less likely to be contaminated or adulterated, continues to be fundamentally unchanged. Despite escalating expenses and complexities in healthcare, the core methods of addressing cancer and heart disease have not changed significantly in recent times, which has resulted in a slowdown in the enhancement of life expectancy.

Advancements in technology are driving substantial transformations in our methods of entertainment, communication, and the management and dissemination of information.

Gordon recognizes that, unlike in some other realms of the economy, rapid progress continues in entertainment, communications and digital technology. The shift from black-and-white TV to a vibrant array of color broadcasts marked a considerable transformation, expanding from the few network options available in the 1950s to the wide selection provided by modern cable and satellite services. The introduction of video cassette recorders transformed the viewing habits of television audiences by allowing them to choose their preferred viewing times for their favorite programs. Smartphones have become ubiquitous, and the growth in internet and mobile phone access has revolutionized our communication methods. Mobile phones transformed into multifunctional compact gadgets enabling people to engage in voice conversations, send emails, texts, and surf the internet.

The growing income gap has led to the top 1% capturing a larger share of economic gains, whereas the earnings of the lower 90% have not seen significant growth.

Gordon suggests that while the U.S. has seen continuous advancements in living standards, these benefits have not been uniformly shared across various societal segments. The income of the top 1 percent has seen a significant increase, while the economic progress for the majority of people has stayed relatively static. He suggests that the growing gap in wealth has multiple origins, including the expansion of global trade, the progression of automated technologies, the diminishing influence of labor unions, and the declining purchasing power of the minimum wage.

Certain metropolitan regions are thriving, while a number of others are facing increasing challenges due to widening disparities in geographical and social aspects.

Since the 1970s, there has been an unprecedented shift in the societal landscape of the United States, characterized by a degree of regional disparity not previously witnessed. Major cities across the United States experienced significant growth, leading to higher average incomes, increased property values, and greater municipal tax revenues, while other regions faced population decreases, the shutdown of nearby businesses, and educational institutions failing to meet academic benchmarks. Technological advancements and global economic forces have led to a significant reduction in manufacturing employment, deeply affecting regions commonly referred to as the Rust Belt.

Education plays a dual role in both driving progress forward and intensifying inequalities.

Gordon emphasizes the crucial role that education plays in propelling advancement and creating inequalities. In the 20th century, the United States saw a significant improvement in educational standards, which was instrumental in developing a workforce that grew progressively more efficient, skilled in adopting new technologies, and capable of managing complex tasks. Progress in the field of education has slowed down lately. In comparison to most developed countries, the United States has a lower percentage of young individuals completing high school, and there is no longer an upward trend in college graduation rates. He argues that there has been a decline in the standard of education. The circumstances are a result of inadequate public investment in education, a growing gap in the allocation of educational assets between wealthy and poor regions, and a failure to adapt to the changing global economic environment.

Educational progress served as a crucial catalyst for the enhancement of productivity throughout the twentieth century.

The book details how the U.S. education system evolved from its basic origins in the late 1800s into a complex entity, leading to a post-World War II era where it was normal for many youths to complete their college education and for high school attendance to be a universal norm. This educational achievement was significantly influenced by initial private contributions and ongoing support from different levels of government, which dedicated funds to a variety of educational establishments, reflecting the ethos of the 1860s land-grant colleges created on land provided by the federal government, akin to the arrangements for settlers under the legislation that allowed private citizens to claim government land. The GI Bill greatly eased the path for returning service members to obtain higher education without incurring expenses, which played a role in the United States attaining the highest rates of college completion following World War II.

Declining educational outcomes and increasing global competition might impede prospective economic growth.

Gordon addresses the slowdown in educational progress post-1970, particularly in the context of earning bachelor's degrees. The author thoroughly examines the statistics to differentiate the achievements of the usual college-age group, those between 18 and 22, from a broader metric that includes the percentage of people between 25 and 29 years old who have completed their bachelor's degree. The OECD and other international organizations prefer a metric for comparing educational accomplishments globally that accounts for Americans who might have completed their higher education over a span of five or six years and includes individuals who attained their college qualifications at a more advanced age, up to 29 years old. The OECD data initially suggests a steady increase for recent graduates when measured by traditional standards, while a more thorough assessment reveals minimal or no recent advancement.

The rising costs of higher education and growing student debt are exacerbating inequalities and hindering social mobility.

The steady increase in the number of individuals obtaining four-year college degrees masks a divergent trend regarding economic reach, underscored by a tuition and fees surge by a factor of ten since the 1950s. The total amount of student loan debt has soared to an astonishing $1.2 trillion, exceeding the combined debt from credit cards and auto loans.

Since the 1970s, a range of obstacles including demographic changes and the handling of government budgets have played a role in the slowing pace of productivity improvement.

Gordon highlights the extended duration of reduced economic growth that the United States has endured over a considerable period. The passage delineates four principal obstacles: disparities in wealth distribution, obstacles in accessing education, shifts in the makeup of the population, and the financial obligations that the government must manage. Gordon suggests that these conflicting factors may serve as an impediment to future expansion, possibly reducing the increase in median disposable real income to an insignificant level. He evaluates how these elements might influence the future improvement of living conditions.

The influence of the technological advancements originating from the Second Industrial Revolution started to diminish as time progressed.

The author suggests that the rapid growth of the U.S. economy during the mid-20th century was largely due to the integration and utilization of major technological advances that originated from the Second Industrial Revolution, particularly in the areas of electrical power distribution and the proliferation of automobiles. The initial surge in productivity from embracing these technologies eventually waned because the rate of improvement slowed down and the benefits became less pronounced.

Advancements in productivity during the Third Industrial Revolution were primarily limited to the sectors of information technology, telecommunications, and media.

The expected significant impact of the digital revolution on America's total productivity has not been realized, despite its substantial transformation of American lifestyles and work practices. Gordon posits that the substantial improvements in efficiency associated with computers and the internet occurred primarily during a brief period in the late 1990s, marked by a surge in investment in ICT equipment and the adoption of novel business strategies. Recent advancements in digital technology appear to have hit a plateau, resulting in a slowdown of innovative progress.

As the baby-boom generation exits the workforce, there's a discernible reduction in the average number of hours each person works.

Gordon highlights the obstacles to U.S. economic growth, particularly the decline in labor force participation and the shift of the baby-boom generation into retirement. The integration of machinery into industrial roles, coupled with the shift of manufacturing to foreign locations, has led to a prolonged decline in workforce engagement over an extended period. The departure of the baby boomer generation significantly affects the labor market. The gradual transition of the substantial demographic group known as the baby boomers into retirement, which usually starts at 62 and ends around 70, allows for forecasts that suggest the per capita income growth rate will decrease by about 0.4 percentage points over the coming decade.

To address the ongoing government budget deficits, it may become necessary to either raise taxes or reduce spending on programs such as social security and healthcare.

The author examines the economic difficulties that arise from persistent budget deficits, which have swelled to $18 trillion, exacerbated by recent tax cuts and a slow-growing economy. To handle the growing debt-to-GDP ratio, projected to rise after 2018 in the absence of policy changes, it is essential to increase tax income, slow down public expenditure, or foster a faster increase in the economy's actual output. The outlook for these alternatives is bleak, given that the potential for raising funds via increased taxation is limited due to the lack of growth in real wages, and political opposition impedes attempts to reduce Social Security benefits or other major federal spending, despite the clear increase in the financial needs for the elderly, which include Medicare and other obligatory programs, in the years ahead.

Societal challenges, including prevalent family instability and a significant incidence of imprisonment, hinder individuals' progress up the socioeconomic ladder.

Gordon examines numerous social and cultural factors that exacerbate inequality and reduce opportunities for individuals to ascend the social ladder. The decline in traditional family structures, characterized by a decrease in marital unions and an increase in single-parent-led households, significantly impacts the welfare of children, particularly those from economically disadvantaged families. The high number of imprisonments has had a profound impact on black and Hispanic men, perpetuating poverty and hindering their chances for economic progress. He argues that dissecting the complex effects of broad social changes on economic outcomes is a challenging task. The increase in households led by a single parent is not just a result of a decline in marriages but also reflects women's greater economic independence and their shift from traditional home roles to a significant role in the workforce.

Other Perspectives

• While technological and infrastructure progress from 1870 to 1940 did improve living conditions for many, it also led to environmental degradation and resource depletion that are now recognized as unsustainable.
• The shift from muscular power to machine power, while improving efficiency, also contributed to the decline of certain skills and trades, and the disconnection of people from the means of production.
• The introduction of electricity and other conveniences sometimes led to increased consumerism and a throwaway culture.
• Clean water and sewage systems, while reducing diseases, also led to the centralization of water resources, which can be problematic in cases of system failures or contamination.
• Central heating, though improving comfort, also increased energy consumption and reliance on fossil fuels.
• Advancements in transportation facilitated suburban sprawl and reliance on automobiles, contributing to environmental issues and the decline of public transportation systems.
• The introduction of telegraph and telephone, while revolutionizing communication, also began the erosion of privacy and the rise of surveillance capabilities.
• The phonograph and radio, along with influencing popular culture, also led to the homogenization of culture and the decline of local and folk traditions.
• Cinema's rise as a cultural influence also came with concerns about the monopolization of culture by certain groups and the spread of consumerist values.
• Pasteur's germ theory, while revolutionary, also led to an over-reliance on antibiotics and the rise of antibiotic-resistant strains of bacteria.
• Improved sanitation and medical advancements, while reducing certain diseases, sometimes overshadowed traditional health practices and knowledge.
• The transition to a forty-hour workweek was a significant improvement, but it also entrenched the five-day workweek, which some argue is not the most natural or productive schedule for all types of work.
• Technological progress in agriculture and manufacturing often came at the expense of small-scale producers and led to the concentration of economic power in large corporations.
• Government initiatives in transportation and education were crucial, but they also sometimes led to the displacement of indigenous populations and the undervaluing of non-Western forms of knowledge.
• The FDA's oversight of food products has been criticized for being influenced by large food and pharmaceutical corporations, potentially at the expense of consumer safety.
• The growing income gap and regional disparities are complex issues that some argue are exacerbated by government policies that favor the wealthy and large businesses.
• The dual role of education in driving progress and intensifying inequalities is acknowledged, but some argue that the education system itself needs reform to address its own inherent biases and to better serve diverse populations.
• The slowdown in productivity improvement since the 1970s is a concern, but some argue that productivity metrics do not capture all forms of valuable work, such as caregiving and other unpaid labor.
• The reduction in average work hours due to the baby-boom generation retiring is seen as a challenge, but others view it as an opportunity to redistribute work more equitably and to value leisure time more.
• Addressing government budget deficits through tax increases or spending reductions is a contentious issue, with some arguing for alternative approaches such as restructuring the economy to address wealth inequality.
• Societal challenges like family instability and high imprisonment rates are serious issues, but some argue that these are symptoms of broader systemic problems that require comprehensive social and economic reforms.