Why the future will disappoint

Gordon says two calamities — the Depression and World War II — fueled the postwar boom: The Depression, by speeding unionization (hence rising real wages and declining work hours), and the war, by high-pressure “productivity-enhancing learning” that, for example, manufactured a bomber an hour at Michigan’s Willow Run plant. But the classic modernization trek from rural conditions into sanitized urban life and the entry of women into the workforce were vast, unrepeatable advances. Today the inflation-adjusted median wage of American males is lower than in 1969; median household income is lower than when this century began. If the growth rate since 1970 had matched that of 1920-1970, instead of being one-third of it, per capita GDP in 2014 would have been $97,300 instead of $50,600.

America’s entitlement state is buckling beneath the pressure of an aging population retiring into Social Security and Medicare during chronically slow economic growth. Gordon doubts the “techno-optimists” who think exotic developments — robots, artificial intelligence, etc. — can match what such by-now-banal developments as electricity and the internal combustion engine accomplished. There is, however, no reason to expect that medical advances have been exhausted. And there are many reasons to believe that the rapid expansion of regulatory, redistributive government, which can be reformed, has contributed to — it certainly has coincided with — the onset of (relative) economic anemia.