Friday, August 9, 2013

Waking Up from the American Dream

     We Baby Boomers have been around for a while. We've experienced the post-war boom of the 1950s and 60s, the malaise of the 1970s, the prosperity of the 1980s and '90s, and then ... whatever we've had since 2000. I'd like to get your reaction to a recent line of thinking, one that theorizes that the American Century, the era of American exceptionalism, the entire American Dream, is over and done with.

     The most recent article I saw on the subject was "The Blip" by Benjamin Wallace-Wells in last week's New York Magazine.

     Here's the theory.

     For most of human history, up until the industrial revolution in the 1700s, life for the vast majority of people in the world hadn't changed. The lifestyle for most of humankind in the mid-1700s was not much different from their lifestyle in Roman times.

     With industrialization -- the introduction of plows and mills and roads and canals -- economic growth sped up, improving life for many people, at least in Europe and America. Then just as the industrial revolution was reaching its limits, a second industrial revolution came along in the form of steam engines, electricity, and the mass production that brought us cars and airplanes and TVs and all the comforts of home.

     But at some point around 1970 the effects of the second industrial revolution began to taper off -- at least in that frontier of well-being called America. Ever since, we have begun to revert back to the stagnation that preceded the industrial revolution, as evidenced by the average after-inflation wages of the typical American worker, which have gone nowhere in the last 40 years.

     Yes, so the theory goes, the computer and the internet have brought more advances to civilization, perhaps even a third revolution. But this information revolution is not on the order of the telephone or the railroad, and the economic effects have been nowhere near as great or as long lasting.

     What if the economic difficulties of recent decades are not the result of an energy crisis or a bursting housing bubble or the aging of the Baby Boomers, what if they are a harbinger a much more "normal" path of human progress, the one that existed for most of human history prior to 1750? What if the industrial revolution was not the wave of the future, but an aberration, a "blip" in the arc of history?

     Robert Gordon of Northwestern University is one who professes this view. He set out his ideas in a 2012 paper Is U. S. Economic Growth Over? asserting that our greatest innovations are behind us, and predicting a dark future of "epochal decline in growth from the U. S. record of the last 150 years."

     Some of his ideas have been seconded by other academics, from M.I.T. and elsewhere, agreeing that Gordon's economic evidence is "quite reasonable" and that people should begin to realize that the innovations of today will probably not transform the world to the extent that previous innovations have. In other words, we have nothing to look forward to but lower economic growth, fewer opportunities for our children, and a more spartan existence for all of us.

     From my own perspective, it's hard to argue with Gordon's theory. When you look at the Baby Boomers who have been laid off in their 50s, with little or no chance for another job; when you look at the employment opportunities available to our college graduates -- many of them taking jobs for which no college degree is required -- and when you look at ... well, just look at Detroit, and a bunch of other hollowed-out industrial cities.

     Yet many of these same academics don't go quite as far as Gordon. They point out that it's impossible to foresee what innovations will come along in the future. Who in 1970 imagined cell phones and laptop computers? So how can we imagine what will lead us forward in 2030 or 2040?

     Many futurists see progress being made on the energy front, as we invent new technologies that will allow us to power our future without destroying our environment. Others see opportunity in the medical field, as we develop cures for cancer and Alzheimer's disease, and map out our genetic codes.

     We have gone through uncertain days in our past. And it seems one of the great things about our current form of democratic capitalism is that it tends to be self-correcting. When energy becomes scarce, for example, people go to work developing new sources of power, from windmills to fracking, and they invent electric cars -- and the internet which allows people to communicate without getting into their cars at all.

     Then look at the problems brought about by globalization and the resulting decline of American manufacturing. It's not a pretty sight. But, taking the long view, how much resentment can you really feel for the workers in Asia who have taken our jobs -- and thereby avoided starvation and climbed out of abject poverty? At least to some extent, our pain is their gain. We make less money, and find it more difficult to buy SUVs and make our mortgage payments. But they are finally able to move out of their mud huts and buy food for their children.

     Obviously, this is an overgeneralization. But it is a trend. And yet, on a day to day basis, it's hard to see the silver lining behind the clouds. The current reality is that for the majority of people today, the American Dream has become an illusion. The U.S today places among countries with the highest inequity and lowest social mobility in the developed world. And even college graduates have trouble finding a decent job.

     I don't know. Maybe it's just like my mother said. Despite all the academic mumbo jumbo, it really just depends on which side of the bed you get out of in the morning.


rosaria williams said...

This is a global issue, actually,couched in Western garb. Westeners have seen a slow down of their economic growth because the rest of the world is willing to do the same work for a fraction of the cost. We have no trouble shopping at Walmart and Costco, paying less for goods that are now made in other parts of the world, and can't understand how it is that we can no longer find jobs in manufacturing here in our back yard.

Innovations may solve some of our dilemmas, but innovations cost money and just the way Apple moved its manufacturing sources to avoid taxes, the new innovators will shop around. So, while supply and demand played a big role in the past, now we have to add another concept: super greed!

Yes, it took centuries for the average worker to win the right to a decent wage and living conditions, and it will take another century to "retool" our conscience to accept fewer profits for ourselves to see our civilization grow globally to a better standard of living.

Money may buy us things. But our greed will also condemn others to a life of destitution. And destitution always leads to hate and destruction.

It turns out that we have exported our "way of life" and there is no turning back.

Linda Myers said...

We can do with less. Happiness is an inside job. I guess I'm feeling unsympathetic today. If all we have to make us happy is things, woe unto us.

Stephen Hayes said...

Great post. I've been lamenting the decline of America for some time. We need leaders of opposing parties who care more about the country as a whole than they do about personal ideologies. Washington is fiddling while our future is burning.

Anonymous said...

My husband a union worker his whole life the last two years he worked he was treated like crap, he was forced to leave a decent paying job with great benefits cause the youngins were total ass----! He was the last to get a union penion and benefits in 1978 when we came out west! I worked the federal govt. always was in a union and I made them give me jobs that paid well, I fought long and hard, those jobs are not anymore the hospital system I worked for no longer has any union people oh, my goodness..I specifically do not shop Walmart, don't have a Costco card too expensive shop the store my husband retired from and the other union store in our county..If we don't support people and their work environments what the you know what..It is getting worse, many college graduates cannot find any jobs and must move in with their parents, never to marry and have kids, it is shameful..I am compassionate but what about our country, if companies hire people to work like hell for little money what can one expect, it happens in the USA look at poor California, you cannot buy a home there anymore and they prison guards far better than public school teachers, what is wrong with that! love your blog get a big kick out of it!

Warren Lieberman said...

I am pedaling as fast as I can to keep from floating back.

Anonymous said...

My opinion -

We (the people of the industrialized world) need to recognize that people only need so much stuff - and only need to do so many things. This being (to me, at least) obvious, it seems stupid to expect all of us to have decent-paying, productive jobs. There just is not that much that needs to be done! As such, I'm wondering why we insist that everyone be employed? Having an interesting, moderately-well-paid job, I would have been willing to pay into a fund to support other people who could not/didn't care to find employment. By their not working, perhaps, I was allowed the privilege of spending my time doing something at which I was good and which I found interesting.

As a species, we are too greedy. Hooey on anyone who says that those who don't work shouldn't be supported. That is just plain near-sighted. I want everyone around me to be well groomed, educated, and interestingly occupied. They are so much more pleasant to be around.
Cop Car

DJan said...

I am retired from a job I loved, although it began to get old long before I left it. Three months after I retired, the entire department I worked for was gone. This was in early 2008. I got out just before it got really bad. And now, in retirement, I read about the decline of our country and feel it's mostly caused by our insulation from the rest of the world. You raise some very provocative questions here. I'm not sure if we will ever return to our former greatness, but maybe that's not a bad thing.

Olga said...

THere is so much to think about here.
I don't believe that industrializaion and all the material wealth it added was entirely a good thing. My particular interest is the food industry. Sure we have access to all kinds of food stuff. How much of it is real food? How much of it is actually healthy nutrition?

Douglas said...

Great post, Tom. I might have a minor quibble, here and there, with it but that's because I am an irascible PITA who has a too grand view of himself.

We still don't have (and are unlikely to ever get) those flying cars... said...

I don't agree with the premise the US as exceptional is over and done. I know some leftists have suggested this, but they also claim to be progressives. Are they now telling us they are progressing towards failure?

Yes, the world is different, and most of us are more educated than our parents were. This means we understand more than they did. And it behooves us to use this knowledge wisely.

What is different today is that we can now see that everyone thinks they are exceptional. We can also see that our brand of democracy may not fit everyone in the world.

Some times in the past have been far worse. Read a little history about Lincoln and the US Civil War to find out how bleak things have looked in the past and then recovered. History moves in cycles.

Perhaps appreciating the individuality of others and our place in the higher order is the key. Dianne

Anonymous said...

As always, you can look at the donut or the hole. This article focuses on the whole. To say anything is 'forever' seems like a fruitless hypothesis.

Anonymous said...

CBS 60 Minutes said it right. This is why USA will always be #1 and China will NEVER be a super power. Ever:

Regardless of any decline, America is a fantastic place to live. It's beautiful and magnificent. America lost it's way when it idolized materialism over human beings. I think our current decline is doing us a world of good. I think we are finally waking up to what is important in our lives: democracy, life, liberty and the pursuit of happiness through friendships, neighbors and family. NOT owning the biggest, baddest, largest house on the block!
The American Dream is alive and well. Please don't ever forget that. We are the most wonderful people on the planet: kind and good!

Anonymous said...

I would never ever live in other countries, our only child flew and stayed in many European countries, the middle east, she came back and said women were not treated well even with stacks of money in Doha and Dubai, they wanted to get our of those countries and live in the USA..She said sure it is nice for a few who own all the oil in the world the immigrants who build those tall buildings that is a hell on earth...The temperatures of 80 to 100 daily blue skies and sunshine is another story...We live where it is inclement weather all year long, but we do have lush mountains, valleys, rivers full of Salmon & other species..a coast that is lovely and now that global warming is here, it is temperate most of the year..I would never live in those countries many mention on your blog, they don't have any freedoms, no work whatsoever and they don't care about any environmental concerns whatsoever and for women it is not good at all..USA all the way even with it's problems, both my parents came from Europe and never looked back, loved all that the country (became naturalized citizens) gave to them, felt blessed..I say some are greedy but most people do what they can each day to live a decent life with little money!!!!!!!!!!!!

Laura Lee Carter aka the Midlife Crisis Queen said...

Great question and post Tom!
I see the decline of the United States as being caused by something as simple as the traditional cycle I learned about first in Chinese history.
The first generation is hard working and accumulates wealth. The next is spoiled and has no appreciation of thrift and hard work and therefore proceeds to waste all the accumulated wealth of their parents. And so it goes in a continuous cycle.
Which generation are you?

Anonymous said...

I just read an article about who pays the employees the least etc. Apple, Walmart or MacDonalds! MacDonalds pays the least amount per hour, Walmart has no health plans for 90 percent of their employees, but what an eye opener Apple gets the most tax benefits per employee before they pay them at all..No wonder Steve Jobs could live like a King, too bad he never believed in Medicine in our country, those who knew him, stated emphatically he thought he could thru alternative medicine beat Pancreatic Cancer, if he had had an operation when they caught the cancer, he would be alive today, guess he fought for 7 full years for nothing, he was a brilliant man but human like we all are but a GOD no! Plus shrewd and cunning with his employees, I have never understood the fascination and worshiping of this individual, he was a tough man to work with and really only a human man not a GOD, no matter what others may state!!!!!!!!!!!!!!!!!!!!!