Americans have a lover’s faith in technology. And no wonder: for much of American history, technological innovation has lifted millions out of poverty, giving birth to new industries that require vast armies of workers.
True, many businesses have fallen by the wayside in the process, but those job losses were usually compensated by the opportunities created by new industries. The buggy whip business was devastated by the automobile, but car companies required many times more workers than the buggy shops, so this “creative destruction” was a net positive for the economy. Railways, the telephone, refrigeration, and air travel are only some of the technological advances that drove median household incomes and national GDP steadily upward for generations.
In his penetrating new book The Great Stagnation, economist Tyler Cowen warns that this may have been a temporary and anomalous phenomenon. Cowen calls the period from roughly the early 19th to the mid-20th centuries the era of “low hanging fruit.” According to Cowen, technological advances in this period were relatively easy to produce and exploit, resulting in a staggering explosion of living standards.