Tuesday, February 20, 2018

Is This as Good as It Gets? A Review of Robert J. Gordon's "The Rise and Fall of American Growth"

          Robert J. Gordon’s The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War is an interesting read. I say that in spite of its length (652 pages of text), its numerous graphs, its repetitiveness, and Dr. Gordon’s writing style that, whenever possible, lets you know he is a Scholar with a capital “S,” and, by gosh, he knows and uses his Latin plurals even if doing so detracts from readability. (For example, insurance premiums become insurance premia. Technically correct, but a tad precious.)
          With that out of the way, Dr. Gordon, with the help of numerous research assistants, spent nearly a decade putting this book together, and he tells a history that, I suppose, should be obvious, but that I never considered.
          Dr. Gordon points out that from medieval times to about 1770 there was not much growth. Beginning about 1770 inventions here and there allowed slow growth, and beginning in 1870 (and lasting until about 1970) there was phenomenal growth caused by what he calls the “Great Inventions.”
          He describes what life was like in 1870. Both on the farm and in the cities family members bathed in a large tub in the kitchen (usually the only room with heat) after carrying cold water in pails from the outside and warming it over an open-hearth fireplace for which wood or coal would have to be brought into the house as well. This was such a chore that people bathed as seldom as once a month.
          Lighting would be a candle or an oil lamp, both of which were expensive and used frugally. Food was eaten in season. Winter vegetables were turnips, potatoes, and whatever else could be stored. The Mason jar was not invented until 1859, and only during the Civil War did canned meats become available. Shoes and men’s clothing could be purchased from stores, but women’s clothes were made at home (shades of Turkmenistan today, as I described in my trip report last year). Food and clothing were both expensive.
          Life for women without servants was pure drudgery. (And for those with servants, the servants’ life was drudgery.) Water had to be brought into the house for cooking and laundry (which was done on scrub boards and may only have been done every few months), human waste was disposed of in privies. Life for working men was not much better. On the farm, plowing, planting, and so on was done with horse and mule power. In cities, hours were long and pay was small. There was no retirement as we know it. Men worked until they couldn’t and hoped their kids could take care of them.
          Dr. Gordon says farm houses were generally of decent size, but of course they were dark at night and isolated. City tenements were crowded; many people would occupy each room—often each bed, and sometimes sleeping was done in shifts, especially if some occupants worked days and others worked nights. In smaller cities and towns most people lived in houses of varying size and quality, none of which yet had water or sewer connections.
          The horse was the main means of transport. In rural areas, people were pretty much limited to the area they could reach by horse over rutted dirt roads, so their world was pretty small indeed. An average horse would produce 20-50 pounds of manure and a gallon of urine daily. And that was one horse. The daily amount of manure in cities was 5-10 tons per square mile. Add to that the fact that horses in this kind of service didn’t live too long, and when they died, their carcasses were often left to lay in the streets for days. Between the manure and the carcasses, you can (possibly) imagine the hazards to human health that came with city life.
          All this began to change in 1870. The first transcontinental railroad was completed in 1869, followed quickly by others. Smaller cities built feeder routes to connect with these new railroads. People could easily (if expensively) travel for the first time. The first plunger-type indoor water closet was invented in 1875, after which the knowledge of drainage and venting procedures necessary to install the device and prevent sewer gasses from backing up into houses were developed as well as the idea of bringing water into the home via indoor plumbing.
          In 1879 Thomas Edison invented the light bulb, which made candles and oil superfluous as sources for light.
          Shopping was limited to local merchants and the occasional peddler. In 1859 the first A&P was founded. Others followed. Soon chain stores were available in most cities. Montgomery Ward introduced the catalog in 1872; Sears followed in 1894. Soon groceries, clothes, and a host of other products were available at lower prices. Local merchants at first had the advantage in that they would allow items to be bought on credit. When Montgomery Ward and Sears began offering credit, that advantage was lost. Many people—local merchants especially—objected to chain stores and catalogs, much as many people these days object to Walmart and other “big box” retailers, but it’s good to remember A&P and Montgomery Ward are history, and Sears is struggling. Nothing lasts forever.
          Karl Benz invented an internal combustion engine in 1879 and by 1886 had one mounted on a three-wheel chassis, eventually opening up individual transportation to the masses (with much thanks to Henry Ford, whose mass-produced Model T sold for $269 in 1926) and allowing for cities free of horse manure and carcasses.

          A personal note here: Many younger people who have no personal knowledge and very little historical knowledge of urban transportation condemn the automobile and are pushing for what they consider “public transit,” that is streetcars—the very streetcars our ancestors happily replaced with maneuverable and cheaper buses. I’m writing this during an ice storm here in Kansas City. Our streetcar is inoperable, as it is so often during bad weather, and buses are filling in for it. Buses are far cheaper than fixed rail transit and far more maneuverable. Buses, in other words, are for transportation. Streetcars are taxpayer-funded nostalgia. OK. Back to the 1870s.

          In 2002, a massive ice storm hit Kansas City. Many of us were without power for several days. (I was without electricity for ten days.) That experience helps me understand a little what life would have been like in 1870, but even then, I had indoor plumbing and access to transportation, so deprived as I felt for ten days, that was nothing compared to the deprivations of everyday life for everyone in 1870. Of course, they and none of their ancestors going back centuries realized their deprivation. It was everyday life for them. So much for the good old days!

          After discussing life as it was and the miraculous inventions that changed life for the better for everyone, Dr. Gordon points out that the days of life-altering miracles may be over. (And speaking of life-altering, his chapter on medicine is a must read.) Consider all the infrastructure brought about by the automobile, indoor plumbing, sewers, electricity, central heat, and so on, and you can see that, in addition to changing lives for the better, these inventions mandated a massive jobs program, which lifted many boats (and yachts). By 1940 the work was mainly done. By 1970 it was pretty much over. Dr. Gordon allows that computers and the internet have improved lives (mostly in the areas of communication and bargain hunting), but they’ve not required a massive jobs program to bring them to every home. They’ve not had a major impact on productivity with the exception of the years between 1994 and 2004.
          It’s often been stated that just about everything has declined since about 1973, from wage raises to productivity. This book explains why Dr. Gordon believes that to be the case. Further, Dr. Gordon doesn’t think we’ll see growth like we saw between 1870 and 1970 again. So it’s possible that we need to get used to living in the world we have and, other than bigger, better, and flatter TVs and smartphones and so on, not to anticipate much in the way of life changing innovation.

          Dr. Gordon concludes with some suggestions, which include making the income tax more progressive, including taxing dividends and capital gains the same as ordinary income, raising the minimum wage, expanding the earned income tax credit (I’d favor expanding it to a guaranteed basic income), reducing incarceration, legalizing and taxing drugs, universal preschool, immigration reform (especially for foreign-born graduates of U.S. universities), tax reform--including a carbon tax, and facing up to the fiscal reckoning.

          This book was published before the 2016 election. One of my takeaways from the book is that if this is as good as it gets, that may explain some of the disenchantment people who voted for Donald Trump felt when they went to the polls. In recent memory, each generation has had it better than the last. If Dr. Gordon is correct, we will need to remember that was true only for a century. Perhaps we can take comfort in the fact that even if this is as good as it gets, it’s infinitely better than it was for our ancestors in 1870.

© 2018 Larry Roth

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