The so-called Great Stagnation, the lack of big technology breakthroughs since 1970, the stagnation in physics, the stagnation of wages, the slower rate of growth of productivity, the lack of automation, the political paralysis that has lead to 50 years of under-funded infrastructure, all of these things combine to make a pretty good case against techno-optimism. Many people found it natural to be techno-optimists in 1930, for obvious reasons, given what they had just lived through. But nowadays techno-optimism is a matter of pure faith, like a religion.

The best book on this subject is "The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War" by Robert J. Gordon.

https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...

Lots of people make that argument, but when asked "What are we under counting?" no one's been able to come up with a story that remains consistent when applied to multiple industries. Computers got much, much faster, but everything else stagnated.

It's fairly easy to measure how much money is produced per employee. That number grew 3% to 4% a year for most of the 20th Century, till 1973, when it collapsed. Since then it's average 1.5% a year (again, with a few good years in the 1990s, and with some up and down wobbles during the Great Recession).

The central fact is the big push towards automation in the 1930s and 1940s and 1950s simply had a bigger impact than the kind of breakthroughs we've had in the last 40 years.

The automation of the telephone systems, and the removal of all the women who worked as operators, was huge in the 1940s and 1950s (and a fantastic boost to the computer industry). The later boom in multiplexing made capital investments more profitable, but did not increase the amount of money made per employee.

The introduction of the modern combine tractors on USA farms lead to a fantastic increase in agricultural productivity in the 1930s and 1940s and 1950s and 1960s, and nothing since then has had a similar effect on agricultural productivity.

The introduction of digging robots transformed the coal industry in the 1930s and 1940s and 1950s. Mountain top clearance was another huge change in how the work was done. Nothing since the 1960s has had anything like a similar impact. In fact, the opposite is true, increased environmental protections have, if anything, decreased productivity in that sector, or at least slowed the increase.

And on and on.

The transformations in the early to mid 20th Century were huge. The more recent transformations have been small. The Great Boom gave way to the Great Stagnation.

Check out:

The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War

https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...

My personal picks as I continue to try to understand global economic trends since the 1980's through the prism of the 2008-crash:

The Global Minotaur: America, Europe and the Future of the Global Economy by Yanis Varoufakis [1]

The Price of Inequality: How Today's Divided Society Endangers Our Future By Stiglitz, Joseph E. [2]

The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War by Robert J. Gordon [3]

1. https://www.amazon.com/Global-Minotaur-America-Economic-Cont...

2. https://www.amazon.com/Price-Inequality-Divided-Society-Enda...

3. https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...

I'm reading two books right now. The Rise and Fall of American Growth [1] by Robert Gordon and The Grapes of Wrath [2] by John Steinbeck. They complement each other, and this post, very well.

I would recommend Gordon's book as an objective overview of the astonishing growth in economic and quality of life terms from 1870-1970. It's not as thoroughly researched as I expected it to be, and the prose is somewhat clunky, but it's a good lesson in the history of technology that we take for granted nonetheless.

Steinbeck's tale of the banks/landowners displacing poor, rural farming families is also extremely pertinent in light of this post. Car dealers extract value from the fleeing, unnecessariat farmers in "Grapes", while insurance companies/debtors prisons extract value from the unnecessariat rural poor chronicled in this post. The promised land of "Grapes" (California) continues to be successful today, with the coasts accreting a large portion of the nation's wealth. It's also just a beautifully written and thoroughly considered (to the point of seeming spontaneous) piece of art.

I am waiting for the next paradigm shifting technology with bated breath.

[1] http://www.amazon.com/Rise-Fall-American-Growth-Princeton/dp...

[2] http://www.amazon.com/Grapes-Wrath-John-Steinbeck/dp/0143039...

The author of that NBER paper recently published a book that goes into the same topic in more depth[0]. It's definitely worth reading.

0: http://www.amazon.com/The-Rise-Fall-American-Growth/dp/06911...

The world economy slowed in 1973. No one really knows why. Some books focus on the effects in the USA, some focus elsewhere. In the West this has been "The Great Stagnation" whereas in several countries in Asia this has been "The Great Bounce Back" as formerly wealthy civilizations, such as China, recovered some of the ground they lost in the 1800s.

Sad to say, I'm not aware of any books that tell the whole international story.

For the USA, there have been an abundance of books and articles showing the decline of the middle class:

http://billmoyers.com/2015/01/26/middle-class/

Tyler Cowen came up with the phrase Great Stagnation:

http://www.amazon.com/Great-Stagnation-America-Low-Hanging-E...

Some writers treat this as a political issue:

http://www.amazon.com/Boiling-Point-Republicans-Middle-Class...

Some writers focus on long-term factors that have little to do with politics. Robert Gordon got good reviews for his historical analysis of the specialness of the 2nd Industrial Revolution 1860-1940, and why the current era is not as robust:

http://www.amazon.com/The-Rise-Fall-American-Growth/dp/06911...