Is human progress slowing down?
One economist says there's no guarantee that growth and innovation will continue indefinitely.
Krugman was referring to a thesis by Northwestern University economist Robert J. Gordon arguing that the progress made in the past 250 years is so dramatic and unique that it may never be duplicated. In a paper published in August, Gordon notes that economic advancements occur in fits and starts. He mentions three distinct industrial revolutions: steam and railroads from 1750 to 1830; electricity, running water and petroleum from 1830 to 1870; and the Web and mobile phone revolution of 1960 to the present. The last of these revolutions arguably is the least dramatic in terms of technological change.
"There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely," according to a paper Gordon published earlier this year.
In other words, nothing lasts forever.
Krugman, a Nobel laureate, said Gordon's thesis was interesting even though he doesn't agree with it. He notes that high-speed computing and voice-recognition software have much improved in recent years, and could spur rapid productivity growth and overall economic growth.
"It’s all too easy to make the case that most Americans will be left behind, because smart machines will end up devaluing the contribution of workers, including highly skilled workers whose skills suddenly become redundant," he wrote. "The point is that there’s good reason to believe that the conventional wisdom embodied in long-run budget projections -- projections that shape almost every aspect of current policy discussion -- is all wrong."
Voice-recognition software and similar technologies are vastly better than they used to be and will continue to improve. Moreover, just because the pace of human innovation has slowed recently doesn't necessarily mean that it might speed up again.
As Nate Silver noted in "The Signal and the Noise," economists are terrible about forecasting the future. While Gordon and Krugman may be correct in their historical analysis, as every investor knows, past performance is no guarantee of future returns. This is especially true when considering grand theories that attempt to predict future decades of human activity through statistical calculations in a spread sheet.
--Follow Jonathan Berr on Twitter @jdberr
More from Money Now
- Are gas prices about to take off?
- The market's winners and losers of 2012
- Should stranded adventurers pay for own rescue?
One reason America did so well right after WWII is that when workers were needed for jobs building aircraft, instruments, bombs, guns, radar systems, ships, communication devices etc., all a person needed was the motivation to apply; they picked up many crucial skills that ran over into private industry post war, and were far better qualified with extensive OJT instead of sheepskins.
I'm very pessimistic for the growth and innovation in the USA. Will the youth of today be able to replace prior generations for sustainable future growth and innovation ? I believe our education system is woefully inadequate. I have observed the basic skills of reading, writing, and arithmetic of the youth of today. It is pathetic !
There have been some improvements here and there, and a slow spread of innovative items into the Chinese, Indian, Middle Eastern and African hinterlands, but major change has been agonizingly slow because capital, education and political awareness are spread so unevenly. The Facebook Web may be the opium of the masses even more than religion.
Incentive, imagination, and independence fuel innovation and thus growth. Regulation, regimentation, and disincentive fuel stagnation.
The place of dreams that the U.S. once was is no more.
The core seed of growth is capital which results from that produced above that consumed and consequently saved. Collectively, the U. S is a broke nation, propping up a failing economy through monetary trickery and skewing economic data in a way to serve political agendas.
I am a believer in the model outlined in Harry Dents book, THE GREAT DEPRESSION AHEAD, which uses demographics to support declining spending in the economy due to a very large segment of the pouplation moving past peak spending years and into savings, if not onto Social Security and Medicare rolls. There is no way to stimulate this segment to spend. They are through buying high end cars, jewelry, lake houses, furniture, expensive dinners out, etc.. The government smply makes the problem worse by propping up the economy with entitlement spending, and pork projects, borrowing the money, and ultomately stalling the inevitable while creating bubbles in the market leading to collapses like we saw in 08.
In my opinion, our only hope is to revive manufacturing in this country to make products for export to mega markets like India, China, Brazil, and emerging countries. Taxes, government policy, regulations, unions, a declining educational system all conspire unwittingly to drive the smart money overseas to build plants near these markets and train a willing workforce with a better education. The dumbing down of our educational system to accomodate minorties, immigrants, protect teacher unions is slowly but surely creating a large segment of the workforce marginally trainable, therefore relagated to low skill low wage futures-or to just add to the entitlement class that is already growing ar an alarming rate. The chinese go to school 6 days a week, 52 weeks a year, save upwards of 30% of their income. The U. S over the long term will continue to fall behind if we continue to allow things to continue as they are currently. I didnt even mention India which far exceeds even China i their focus on educational excellence- and not studies in ancient poetry and other worthless degrees for which there is no demand or market value.
These people, and there are more of them than you think, are headed for a career in fast foods or government assistance.
I am not optimistic as the solutions to our problems are painful and politically unpopular.
I would not look to information technology to lead a surge in global growth, it has matured and will now grow at a slower rate than in the nineties when it expanded the global economy by 10%.
Suggesting voice recognition is somehow going to drive economic growth is laughably shallow and naive, spoken from absolute technological ignorance........let's remember Krugman has never done anything tangible within the economy his entire pathetic life!
The other big driver of wealth creation is reduction in the cost of doing work, energy being the leveraged component. Growth will continue to plod until we begin driving down energy costs significantly.......an impossibility with the current batch of political scum and usual environment obstructionists.
The recent UNALERT that drought in the Sahel threatens 15 million lives is a harbinger of things to come.In the next twenty years, global demand for fresh water will vastly outstrip reliable supply in many parts of the world. Thanks to population growth and agricultural intensification, humanity is drawing more heavily than ever on shared river basins and underground aquifers. Meanwhile, global warming is projected to exacerbate shortages in already water-stressed regions, even as it accelerates the rapid melting of glaciers and snow cover upon which a billion people depend for their ultimate source of water.
I think what we should do at this point is use the rest of our fresh water to wash the oil out of the Tar Sands in Canada.
Stupid people! The Divine One loves you enough to give you a beautiful prison to serve your time and you even try to destroy it. What a terrible destructive species you are. No wonder you are here.
I think that there's quite a gap in the ability to measure outcomes, based upon what presently exists. Specific examples include the following: (1) My company is working on a solution that will greatly increase computer security, which should save money for reliance on foreign oil, among other resources; (2) People have quite a bit of "junk", for lack of a better term. Think about 3-D printing and other technologies, to basically re-engineer, ones own self, present "junk" into something more useful. After these become more popular, another decrease in reliance upon foreign oil. So, companies will be forced into selling products better aimed at helping re-engineer what one already has, versus perhaps buying new products. Another possible outcome might be for more closely situated re-engineering hubs to sprout up across the US, which would help cover fixed cost coverage for manufacturing facilities in the US, without having to decrease the cost of labor in the US. As far as post-secondary re-education of those who've had difficulty with being unemployed and/or underemployed, I say that training people in re-engineering would be a fantastic long-term objective in training those presently having difficulty getting employed. Just think of the savings of trying to dispose of so much unused "junk", because those materials are re-engineered, not simply dumped into landfills.
Just think about the impact of the above two items on what have been a multitude of "trade deficits". Less use of foreign oil, less use of plastics, decreased reliance upon various resources, along with the cost of what has been "conveniently" disposing of unwanted or unneeded items.
Those who help re-engineer what presently exists, do a great service to our economy, in their skill, innovation, reducing what has been considered "waste", along with putting materials into a better state of utility.
Rather than government level political games and such, perhaps the private sector can take the lead role in helping steer our economy into more productive utilities. That does not seem to be a good fit for governmental entities.
Water or fresh water shortages, will or could have a profound effect on the World populations or food source productions....Has for Centuries, so I really don't see that changing quickly..
Although with Oceans supposedly and slowly rising...I guess the most logical operation would include desalinization processes.
But stealing fresh water sources to be delivered to arid areas is not the answer...
Unless there is an un-needed abundance, such as seasonal floods; Thus it should be stored or rerouted on a "temporary basis" ONLY.
ABS.....If it hadn't been for working, darkie, deadbeats like myself and Ms. Lilly; You might still be slithering around in the gutter, or in that dirty old box under the bridge....Yuk,yuk,yuk.
(borrowed from crazy,yuk,yuk.)
Have you pulled any money in lately, with the shell game you run on the corner ?? yuk,yuk.
Still renting your kids out for that "third world" money begging scheme..?? On TV.
And isn't that your Missus on the Weight Watchers Ad...You know, the Big'un ??
Although true about re-building a War machine...defpotec..
Employing thousands more, were housing, power and communication grids along with other infrastructure...
Then in the the mid/latter 50s and throughout the 60s we took on the mammouth project of the Interstate Highway Systems....A two fold agenda, of being able to move people and commerce.
Plus mobileing your War machine and troops.
Out of all that, a Middle Class was born....We need a rebirth now...Where/when do we start??
Exactly....The "low information content" at the touch of a finger tip...Being "accepted as updated absolute fact.".....It leaves a user in the state of an unbrained imbecile....And no reason to think for themselves or "question".
Like my grandaughter says about using her GPS "as long as she knows what State she's in, everything is fine."
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the Wednesday session on a mixed note with small caps displaying relative strength. The Nasdaq Composite (+0.5%) and Russell 2000 (+0.4%) registered modest gains, while the Dow Jones Industrial Average (-0.2%) and S&P 500 (+0.01%) underperformed.
Despite the mixed finish, the key indices traded higher across the board at the start of the session after the advance reading of second quarter GDP surpassed estimates (4.0% versus Briefing.com ... More
More Market News
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'