Robert Gordon’s sequel paper on the great stagnation

You will find his NBER paper here, in which he responds to critics and outlines his core argument that U.S. growth is doomed to be slow and subpar for a long time to come.  There is no point in summarizing this already-familiar debate, so let’s cut straight to the chase:

1. I agree with a great deal of this paper, to say the least, especially when it is compared to previous mainstream opinion on these topics.  My favorite parts are his discussions of how multi-faceted were the waves of earlier progress starting in the 19th century, compared to some of the more recent and weaker tech revolutions.  That said, in some key ways this piece falls short of meeting the standards of reasoned argumentation.

2. The single biggest question is how much the United States will be able to draw upon innovation from other countries, over the next say 40 years.  Gordon doesn’t discuss this in a serious way.  The rest of his paper simply lists a bunch of pessimistic factors (valid worries, I might add) and then declares he can’t think of anything else that might turn them around.  Maybe that should shift your “p,” but one’s own failure to imagine shouldn’t imply a very firm conclusion about impossibilities.

3. There is a key passage on p.26: “My forecast of 1.3 percent annual total-economy productivity growth in the future does not require any foresight beyond suggesting that the past 40 years are a more relevant benchmark of feasible productivity growth than the 80 years of before 1972.”  Fair enough, but how about looking at the last 120 years or last 120,000 years for that matter?  The overall pattern is lots of pauses, followed by eventual new bursts of progress.  That’s no proof of a future subsequent burst of progress, but so far history is not on the side of the long-term tech pessimists.  It may be on the side of the short-term tech pessimists, at least for a while.  Gordon, in 2003, wrote rather wisely: “But is it possible to be so sure which decades into the past are relevant for predictions…”

4. Gordon doesn’t know much about the literature on driverless vehicles and their potential, and yet he escalates his rhetoric to the point of giving the reader the impression that he approaches the entire question of tech progress with simple irritation: “This category of future progress is demoted to last place because it offers benefits that are so minor [compared to cars]…”

5. Advances in the biosciences are dismissed in two short paragraphs.  For sure, I am myself somewhat in tune with the pessimistic perspective here.  I think these advances were way over-promised and still may take longer than people think.  Still, Gordon doesn’t offer any argument.  His first sentence of that brief section says it all: “Future advances in medicine related to the genome have already proved to be disappointing.”  This is a simple confusion of past and future tense.

6. Gordon significantly underestimates already existing advances in software, automation, robotics and related technologies.

7. Gordon still fails to credit the originators of the growth slowdown idea, as applied to contemporary times, namely Michael Mandel and Peter Thiel.  The first sentence of his paper reads: “A controversy about the future of U.S. economic growth was ignited by my paper released in late summer 2012.”  I would add, perhaps with a bit of peevishness, that a lot of the actual debate was kicked off by my own The Great Stagnation, published in January of 2011 and which was covered and commented on extensively.  (And which by the way was dedicated to Mandel and Thiel, as well as citing them.)  And if I did not credit Gordon more aggressively at that time, it is because I was all too well aware of his 2003 essay, “Exploding Productivity Growth,” the contents of which I do not need to relate any further but if you wish read at the link.

Gordon would do well to reflect a little more deeply on how and why he has changed his mind over the last ten years and what this implies for when a bit more agnosticism would be appropriate.

Addendum: I agree with Kevin Drum.  Matt Yglesias comments too.


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