The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World)

Category: Economics
Author: Robert J. Gordon
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by roymurdock   2018-02-19
As a 25 YO male this is an issue near and dear to me. IMO it all comes back to slow TFP [1] (total factor productivity) growth.

New technology is not (on aggregate) making us more productive, or growing the economy to the point where we need young, college educated men and women to learn productive new skills to sustain and grow our communities and the collective state and country level economy.

I went into the embedded industry to learn more about the people and companies that make all the things we take for granted or never think about as kids - cars, planes, industrial PLCs, oil rigs, pacemakers, insulin pumps, ATMs. Modern chip production, and what people have built from tiny MCUs and DSPs all the way up to the crazy beefy CPUs, GPUs, and FPGAs is as close to magic as I've found in the real world.

But the industry of "global infrastructure" - transportation of people and goods, war, healthcare, manufacturing, resource extraction, retail - as a whole is stagnant. Especially when compared to the golden century we are just coming out of, when our standard of living in developed nations jumped up exponentially due to distributed electricity, indoor plumbing, modern appliances, transistors, data transmission technology, internal combustion engines, and advances in chemical and medical technology (much of this accelerated by research into war technology). Economist Robert Gordon has studied this in detail here [2].

Video games are definitely a way to feel productive, achieve well-defined goals, and get a sense of accomplishment or progression that is often lacking in the workplace. But IMO in many cases they are a symptom of a larger issue, not a cause.

There are many forms of escapism, video games are just one that my generation is more accustomed to having grown up and made friends through social interactions over video games alongside traditional things like sports, clubs, parties, etc.

The growing need for escapism is IMO the larger issue.

[1] In economics TFP is a variable that attempts to capture the effect of technology and infrastructure on the production function. Since these effects are much too complex and indirect to calculate explicitly (how many more widgets can a factory produce because of the roads that allow their workers to drive into work from the suburbs?) it is imputed as a residual. https://www.amazon.com/Rise-Fall-American-Growth-Princeton/d...