Opposing Growth Projections

Lake Cachi Mirador, Costa Rica.

Opposing Growth Projections

Lake Arenal Mirador, Costa Rica.

Lake Arenal Mirador, Costa Rica.

The Rise and Fall of American Growth by Robert Gordon, an economist at Northwestern University, is premised upon a rather gloomy observation that this country’s most innovative years have given way to a lack of truly ground-breaking inventions. He argues that this trend has resulted in a long-term drag on economic growth. The real period of transformative innovations, states Gordon, occurred in the century between  1870 and 1970 when economic growth soared as a result of “epochal break-throughs” including electric light, indoor plumbing, the automobile, radio, telephone and air travel. He might have added television which crept into popularity at the close of that century.

According to Gordon, these innovations were directly responsible for raising wages and economic growth by increasing productivity (worker output per hour). Resultant increases in productivity translated into higher worker efficiency leading to higher wages without raising prices to customers. They proved to be a direct stimulus to the economy, whereas our new smart phones, digital advances and driverless cars have not had a similar effect. In fact, they reduce employment by electronic substitutions for human output. He cites a plateau in producing goods for basic human needs, and a similar plateau in transportation speeds. Robotic advances (bar-code scanning, credit card authorization, and ATM machines have displaced human workers — all prior to the last decade. It appears that we have reached a plateau in innovation.

During the past decade (2005-2015), the United States has suffered no increases in wages, growth and productivity. Gordon argues that any benefits flowing from future innovations will likely be offset by factors such as an aging population, widening income inequality and a leveling off of college graduation rates. Slower growth rates are the logical conclusion to his projected scenario.

“We are seeing Americans already getting used to slower growth. We have a younger generation where unprecedented numbers are still living at home. The age of marriage is going up. The age at which people set up their own households is going up.”

Concurrent with Gordon’s book is release of The End of Automobile Dependence: How Cities are Moving Beyond Car-Based Planning by Peter Newman and Jeffrey Kenworthy, a pair of authors renowned across the world as global transport experts. Newman is well-known in his native Australia for the rail revival of Perth. They previously have published comparative transportation data on world cities over the past five decades which they maintain now show signs of a decline in automobile use.

The first signs of a decline in automobile use are a consequence of many variables, the most representative being downward shifts in mode share and annual auto miles traveled. These data are supported by the resurgence of light rail and bus rapid transit lines, low emission cars, bike-sharing and car-sharing schemes. Other factors are market demand for denser forms of urbanism and emergence of transit-oriented design districts. They believe that continuing government regulations and response will lead to reduction of global greenhouse gas emissions by 2050 to a goal of less than 80 percent of the 1990 level.

The authors base their case on reduction of annual (per-capita metropolitan) travel by car to less than 75 percent. They state that “scores of European and Asian cities have already exceeded this goal, but United States and Australian metropolitan cities are 95 percent auto travel, and very low investment in other forms of urban mobility (e.g., biking and walking).

But the authors’ primary scale of reference is the somewhat complicated “decoupling premise”— decline in ecological intensity per unit of economic output. However, this measure is vigorously debated by experts in this field. British economist Tim Jackson (Prosperity Without Growth, 2009) argues that the 2050 goal is not achievable if it is based on the assumption of a perpetual increase in GDP. He concludes that “zero growth” is the only realistic basis for planetary survival.

In sum, the conclusion of “Urban Land” magazine reviewer Marin Zimmerman is that the projections from the exhaustive data presented by Newman and Kenworthy “fail to make a convincing case for long-term global stability.” The debate, however, has convinced this observer to author a book on this topic in 2016, to be entitled Le Corbusier, A 2050 New City. Further excerpts can be expected in future blogs.

Dr. David Forster Parker
March, 2016
For more information, contact Dr. David F. Parker
or go to our web site at www.parkerassociates.com

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