BY JAMES PETHOKOUKIS
Just before Independence Day, the Congressional Budget Office released its updated 10-year economic forecast. Basically, it shows a 5 percent bump in real GDP next year before settling into 2 percent growth mode for the rest of the decade. Back to the new normal.
But can we do better than that? I think so. One reason may be the pandemic. Yes, it has dealt a terrible blow to the economy, ending the expansion and forcing a mini-depression. Possible long-term impacts that could drag on growth include a disruption to schooling, great societal risk version, loss of worker skills, higher debt, and greater skepticism toward the benefits of an open economy.
There may be some economic good as well, however, if this catastrophe leads us to invest more in science research and health infrastructure, as well as recognizing the need for a regulatory reset to boost innovation. Of course, all of this assumes faster economic growth is desirable. But, bizarrely, this is not a universally-held belief these days. It’s not even difficult to find plenty of examples of folks worrying a lot about the downsides to growth — or even flat-out rejecting the idea that growth is good.
Not difficult to find at all, really. Tech titans musing about robot taxes or killer AI. Andrew Yang warning of the Great Trucker Riots of the 2020s. Essays about driverless cars destroying the “mythopoeic heart of America.” San Francisco creating an Office of Emerging Technology that would give or withhold permission before entrepreneurs release their products into the wild. A 2017 Pew Research poll finding strong majorities of us expect AI and advanced robotics to create empty, jobless lives in an increasingly unequal society. On the left, scarcity-driven environmentalists rage at “fairy tales of eternal economic growth.” On the right, reactionary nationalist populists fear genetic tinkering by our rootless tech overloads will lead to a posthuman-led, one-world government. And on both sides, plenty of economic nostalgia.
Of course, that we can even debate whether economic growth and technological progress are good things is something inconceivable for most of humanity’s existence. (“Progress isn’t natural,” is how economist Joel Mokyr puts it.) Yet even when we learned enough about how the world works to change and manipulate it — to disrupt the status quo — stasis had its defenders.
And it still does today. So many historical examples of this in the great 2019 book, “The Technology Trap.” Economist Carl Benedikt Frey tells how the Emperor Tiberius executed rather than rewarded a man who had invented unbreakable glass, ”fearing the possibility of angry workmen rebelling.” Queen Elizabeth I declined to grant a patent to the inventor of the stocking-frame knitting machine, worrying that the invention would bring her subject to “ruin by depriving them of employment, thus making them beggars.” The guilds of preindustrial Europe played a key role in making sure Europe stayed preindustrial by blocking new technologies. Indeed, had “Britain been a liberal democracy, the case of the Luddites would surely have been much less hopeless,” Frey writes.
The reason the Luddites weren’t successful is that government sided with the innovators and disruptors, a rare occurrence for much of history. But modern politicians have a great advantage over their predecessors of old: They have seen the tremendous impact of technological progress on living standards. Yet their views aren’t the only that matter. The people have to agree, or at least enough of them, that progress is good even if also unsettling sometimes. This isn’t 19th century Britain. But despite America’s famous embrace of new gadgets, love of sci-fi, and pride in Apollo, maybe we don’t agree, or at least not enough of us, and too many actually kinda sorta support the stasists and stagnationists. Settling for slow growth would be powerful evidence of just that.