Book Review: The Great Changes Of The United States In The Past Century

By Zheng Lei

? ? ? The process of economic development follows a certain cyclical law. The first mover has the first mover advantage, while the latter has the latter advantage. We can avoid learning from the past and find a shortcut from the footprints of the successful. This is the value of studying national economic history. In 1869, the first railway across the American mainland was completed, which is a dividing line in the history of American people's living standards《 The rise and fall of American growth is a masterpiece of Robert Gordon, a famous economic historian, who analyzes the process of American economic and social development in the past 150 years. Through careful observation of all social strata and people's life, he portrayed a real portrait of the United States in the century with rich and detailed data, which provided a convincing case for the theory of conbo cycle.

The rapid development of the United States, described by the author, began in 1870. Modern network facilities were first popularized in cities, thanks to the radical changes in information, communication and entertainment between 1870 and 1940. The author points out that the change from 1900 to 1940 is much greater than that from 1940 to the present. The living standard of Americans has tripled in these 70 years.

A new conbo cycle is certainly driven by science and technology, but a large number of technological inventions that have changed American social life come from the scientific creation of the second industrial revolution in Europe. For example, Benz developed a four stroke engine in 1886 and successfully completed the two-stroke engine experiment in 1879. In the 10 years between 1900 and 1910, this innovation was transferred from Germany to the United States. Ford invented the assembly line production technology. As of 1930, in only 20 years, cars entered most American families. At that time, there were many applications and inventions like this "standing on the shoulders of giants" in the United States. For example, the telephone was successfully tested in Boston in 1876, Edison invented the light bulb in 1879, and the first commercial radio station appeared in 1920. By 1940, the percentage of American households owning refrigerators suddenly rose to 44%.

From electrification to the emergence of motor vehicles, they all concentrated in the period of 1900-1940. Technological change is the ultimate force to promote real wages. With the explosive growth of manufacturing productivity in 1920s, the period from 1910 to 1940 became the fastest period of real wage growth in the United States, with the growth rate of 1 percentage point higher than that of 1870-1910. We can roughly regard these 30 years as the first rising period of America's economic development. By 1940, as disposable income soared, people could buy luxury goods that were considered out of reach 50 years ago.

After the war, the United States formulated a national science and technology policy, actively transformed military technology into civilian use, ushered in the "baby boom", and trained a large number of college students. These measures played an important role in the sustained and rapid growth of per capita output in the United States from 1940 to 1970. The author thinks that the innovation and capital accumulation of private enterprises in air conditioning, interstate highway, commercial air transportation and television are the main reasons for the economic growth in this stage. The period from 1920 to 1950 was the fastest growth period of total factor productivity in the United States, covering the rising period and platform period of the first KangBo cycle, and then the downward period of about 30 years. From the data given in the book, we can see that the total factor productivity of the United States from 1970 to 1980 was only equivalent to the growth rate of the first decade of the 20th century, and the decline was very obvious. The disappointing performance of per capita output growth began in the mid-1960s, and also reflects the weakening of the productivity stimulus of the inventions of the second industrial revolution.

The second conbo cycle in the United States was driven by the third industrial revolution with ICT as the engine from 1995 to 2004. We can roughly calculate from the 1980s to the 1990s, from which we can infer that this wave of rise and plateau will last until 2010-2020. Through comparison, the author thinks that the third industrial revolution has little influence on economic growth. The third industrial revolution restored the trend of productivity growth to an annual average of 2.05%. However, after 2004, the impetus of ICT related innovation to productivity growth gradually disappeared, only 0.6% by the end of 2014, marking the end of the second boom cycle in the United States. The author believes that even though the contribution of computers and the Internet to the economic growth of the United States is increasing, the innovation of most economic activities has not accelerated, and even many aspects are slowing down. The proportion of innovation economy is relatively small (in 2014, the total expenditure of American enterprises and households on information and communication technology hardware and software only accounted for 7% of the total economy), The negative growth of corporate investment between 2000 and 2005 cannot make up for the slowdown in other aspects.

The change of American economy enlightens us that the actual economic operation is not as simple as the theoretical model. Although the United States developed rapidly in the era of market economy described as "laissez faire", the federal government and local governments still provided direct support. Economic growth is closely related to the quantity and quality of population, capital investment and technological innovation. These will be restricted and influenced by social factors such as population growth, the gap between the rich and the poor, and institutional improvement. Now we have arrived at an important node in the historical cycle - the era of digital economy has arrived. The application scenarios of the new generation of information technology in the real economy are very rich. Whether we can seize the opportunity of new technology innovation and become the trendsetter of a new wave of KangBo cycle depends on whether a country or region has enough investment in the digital economy and whether the application scope in the real economy is broad enough.

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