Podcast Summary
Three Industrial Revolutions and their Impact on Productivity Growth: Economist Robert Gordon argues that the most recent industrial revolution, including computers and automation, may not yield the same level of productivity growth as previous industrial revolutions
While the U.S. president is often seen as having a significant impact on the economy, economist Robert Gordon argues that the U.S. has experienced three industrial revolutions, with the most recent one, including computers and automation, contributing less to productivity growth than previous ones. The first industrial revolution brought steam power and railroads, while the second was driven by mass production techniques and consumer durables. Gordon suggests that the current era of technological advancement may not yield the same level of productivity growth as previous periods. Despite the president's role in economic policy, the economy is influenced by a complex interplay of factors, and the pace of productivity growth may be influenced by broader technological and structural trends.
The Current Technological Era may not Match the Transformative Impact of Past Innovations: Economist Robert Gordon argues that newer technologies primarily make existing things more portable and flexible, while past innovations led to substantial improvements in productivity and quality of life.
While the computer revolution, represented by innovations like the iPhone, has significantly impacted our lives, it may not bring about the same transformative gains as previous technological advancements such as electricity, the internal combustion engine, and mass transportation. Economist Robert Gordon argues that these earlier innovations led to substantial improvements in productivity and quality of life, while newer technologies primarily make existing things more portable and flexible. However, it's important to note that not everyone shares this view, as some economists, like Tyler Cowan, believe that emerging technologies like artificial intelligence will lead to further growth and innovation. Overall, the discussion suggests that while the current technological era has undoubtedly brought about significant changes, it may not match the transformative impact of past innovations.
Shifting focus from growth to sustainability: Politicians may prioritize growth promises over sustainability, but it's crucial to consider the complexities and potential unintended consequences of economic policies.
While predictions about future economic growth are uncertain, it may be time to shift our focus from endless growth to sustainability. Politicians, however, are unlikely to make this a key message in their campaigns as promising a better economic future is a more popular and effective approach. Meanwhile, the Cobra Effect, or unintended consequences of well-intended policies, can also have significant impacts on economic issues. For instance, offering a cash bounty to get rid of a pest might seem like an effective solution, but it could lead to unintended consequences. Ultimately, it's essential to be aware of the complexities and potential pitfalls of economic policies and predictions.