American Economic Review: Papers & Proceedings 2016, 106(5): 52–56
http://dx.doi.org/10.1257/aer.p20161069
Critiquing Robert J. Gordon’s The Rise and Fall of
American Growth
A Century of Growth and Improvement†
By Benjamin M. Friedman*
Most books about American exceptionalism
begin at the beginning, that is, with the initial
English settlement of North America in the early
seventeenth century. For reasons of data avail-
ability, Robert J. Gordon’s monumental history
of how technology has improved American liv-
ing standards begins in the nineteenth century,
just after the conclusion of the Civil War. But his
story follows in the long tradition of American
exceptionalism nonetheless.
As Gordon makes clear at the outset, the
center of his narrative is what he portrays as an
exceptional period of time, more specifically
an exceptional century. His primary claim is
that “The economic revolution of 1870 to 1970
was unique in human history,” and he calls this
period a “special century” for the way in which
the “unique clustering” of “Great Inventions”
that these years brought to bear on the lives of
ordinary citizens “free[d] households from an
unremitting daily grind of painful manual labor,
household drudgery, darkness, isolation, and
early death” (pp. 1, 2). The result, he argues,
was “a singular interval of rapid growth that will
not be repeated” (p. 3). But the exceptionalism
that he claims applies not just in time, but space:
“the designation of the century between 1870
and 1970 as the special epoch applies only to
the United States, the nation which has carved
out the technological frontier for all developed
nations” during this period and since (p. 3).
* Department of Economics, Harvard University, Littauer
Center 127, Cambridge, MA 02138 (e-mail: bfriedman@
harvard.edu).
† 
Go to http://dx.doi.org/10.1257/aer.p20161069 to visit
the article page for additional materials and author disclo-
sure statement.
52
No doubt the comparison that Gordon had in
mind in undertaking this massive achievement
(764 pages) was Robert Aaron Gordon’s classic
Business Fluctuations, first published in 1952
(687 pages in the second edition). But in its his-
torical sweep, its combination of national scope
with the fine detail of the daily lives of ordinary
people, and above all its continual assumption
of the specialness of the United States, Robert J.
Gordon’s book more appropriately calls to mind
the pioneering treatments of the new nation’s
extraordinariness such as George Bancroft’s
History of the United States of America, pub-
lished in ten volumes beginning in 1834 and
finally revised by the author not until well into
Gordon’s “special century.”
In light of Gordon’s emphasis on the role of
“inventions” in enabling the improvement of
living standards that he chronicles, this assump-
tion of American specialness is apt. Today,
economists everywhere understand the central-
ity of technological progress, broadly defined,
in driving economic growth. It was not always
so. Adam Smith, for example, displayed little
awareness of the contribution of technological
advance to economic growth despite his living at
the time, and in the place, of the First Industrial
Revolution. (The most immediate indication
that Smith missed what was happening around
him is that the example he chose in the Wealth
of Nations to illustrate how division of labor
enhances productivity was a “pin”, i.e., nail,
factory, rather than something to do with textile
production.) As late as the 1820s, although most
people presumably understood that they were
living better than their parents and grandparents
had a ­ half-century before, most still thought
of the experienced improvement as simply the
upswing of yet another “long wave.” Not until
the 1830s did people widely recognize that these
VOL. 106 NO. 5 a century of growth and improvement
gains were here to stay, and moreover, that more
were to come.
And it was no coincidence that this awareness
of the prospect of economic advance continuing
on indefinitely, together with a recognition of the
central role of ongoing technical progress under-
lying it, first emerged in America. The first clear
expression of this idea (of which I am aware)
in the economics literature came from Francis
Wayland. In The Elements of Political Economy,
which became the ­best-selling economics text in
America before the Civil War, Wayland (1837,
p. 53) acknowledged the enormous progress of
recent decades and went on to conclude, “If it be
asked, how far may this increased productive-
ness of human industry be carried, we answer,
it is impossible to tell, unless we can ascertain
how great are the blessings which God has in
reserve for man.” Making explicit the link to
technical progress, he continued, “Who can esti-
mate the benefits conferred on man by the mag-
net, or by steam, or by the printing press? And
what reason have we to assume that the gifts of
God are exhausted, or that there are not yet other
and more excellent natural agents to be discov-
ered, or other modes of using those which we
are already acquainted with, that shall produce
even more surprising results than any which we
have yet witnessed?”
Although Gordon’s narrative starts a third of
a century later, his emphasis echoes Wayland in
attributing “increased productiveness” to dis-
coveries and inventions: in Wayland’s case mag-
netism (and therefore electricity), steam (and
therefore engines for production as well as the
­then-still-new railroad), and the printing press.
Gordon’s list of “Great Inventions” put to use
between 1870 and 1970 likewise includes elec-
trification, steam power, and railroads, along
with the internal combustion engine, powered
air flight, a host of drugs and medical proce-
dures, and such household basics as running
water, central heating, and indoor sanitation.
But Gordon’s assessment of future prospects
differs sharply. “Before the discovery of these
agents,” Wayland wrote, “the most vivid imag-
ination could never have conceived of the ben-
efits which they have already conferred upon
society. There is no reason to suppose that we
are now more capable of fathoming the good-
ness of God, than our ancestors were, three
or four hundred years ago” (pp. 53–54). By
1870, when Gordon’s “special century” began,
53
vivid ­imaginations were more plentiful. In his
Thanksgiving Day sermon that year, Henry
Ward Beecher, perhaps the nation’s best known
preacher of the era, told his congregation, “The
future fortunes of America will be fabulous. … I
look forward into that ‘golden’ future, literally,
which is opening before us. And marvel whether
the most poetic dreams of growing wealth may
not fall short of the reality” (Beecher 1870, p.
211).
The central argument of Gordon’s book is that
Wayland and Beecher, looking forward on the
eve of the “special century,” got it right; but that
the same optimism applied to the future as seen
from today would be mistaken. The era of new
inventions and discoveries not conceivable in
advance, even to the most vivid imagination, and
of a consequent increase in wealth exceeding the
most poetic dreams, is over.
I.  Not Just More, but Different
Economics is a quantitative discipline.
Modern analytic investigation of economic
growth traditionally frames the matter within
one or another mathematical model in which
“growth” simply means more: more output,
more consumption, presumably more of every-
thing (except labor per worker). The fact that
actual economic advance normally means pro-
ducing and consuming different things requires
cumbersome technical apparatus, of one form or
another, and is therefore a matter most often left
implicit.
A primary strength of Gordon’s achieve-
ment is that qualitative change is central to his
narrative. Indeed, the implicit tension between
economists’ usual rendering and what he has in
mind first shows up on the book’s cover. The title
refers to American growth; the subtitle points to
the US standard of living. Early on (Table 2–2,
pp. 38–39), he emphasizes that almost 60 per-
cent of American consumption today consists of
goods and services “invented or largely devel-
oped after 1869.”
Part of what enables Gordon to integrate this
qualitative change in citizens’ living standards
with the more familiar quantitative examination
of the economy’s growth record is the exper-
tise, evident in many of his prior works as well,
that he brings to bear in deploying the often
awkward technical machinery required for this
analysis, such as price indexes adjusted for both
54 AEA PAPERS AND PROCEEDINGS
product quality change and the introduction of
new products. But even more important for the
book’s overall impact—and especially in light
of the emphasis on “Great Inventions” and their
fruits—is Gordon’s reliance on historical narra-
tive that frees him from the constraints of the
more familiar analytical models.
Gordon exploits this freedom to organize his
narrative not in the usual chronological format
but by aspects of economic activity—still mean-
ing, however, what people produced and either
consumed or used as intermediate production
inputs: chapters on food and clothing; on the
physical environment of homes; on transporta-
tion; on communication; on health and mortal-
ity; on working conditions; and on entertainment
and other ways of deploying leisure. One imme-
diately apparent advantage of this approach
is the opportunity it opens for the richness of
detail that characterizes the entire book: build-
ing elevators, Mason jars, canned meat, sewing
machines, refrigerators, ­ X-rays, color televi-
sions, cell phones, and thousands of other exam-
ples that make Gordon’s a story about everyday
life. But more fundamentally, addressing the
evolution of economic life over a century and
a half in this way also makes clearer why what
happened mattered to those who lived through
it. Although one would never guess from the
usual literature of economic growth, most peo-
ple actually do not form their attitude toward
the economy in which they live by studying
the national income statistics. What matters
to them is how they live, and (as Adam Smith
insightfully emphasized) whether they are get-
ting ahead.
II.  A Special Century but not Homogeneous
What this d­ imension-by-dimension narrative
organization does not do, however, is readily
enable Gordon to distinguish how the pace of the
improvement he chronicles, or citizens’ aware-
ness of it and reactions to it, varied over time.
Gordon’s central claim is the specialness of the
century from 1870 to 1970. He is at pains to con-
trast this view to the nowadays familiar account
distinguishing essentially all of human history to
about 1800, during which there was little or no
improvement in living standards, from the era
of growth and improvement since then. The por-
trayal in his book is more granular: some advance
before 1870, then spectacular and unprecedented
MAY 2016
advance until 1970, and then a slower pace since
(which Gordon predicts will prove permanent).
There is no reason, however, for granularity
along this dimension to stop at distinguishing
the 1870–1970 interval from what came before
and after. Gordon of course acknowledges the
point, most evidently in assessing the special
character of the Great Depression of the 1930s
as well as of World War II and its immediate
aftermath (see, especially, ch. 16). But while
these two events may have been the most strik-
ing in the differences they presented—and, as
Gordon argues, following Field (2011), those
differences are interesting and important eco-
nomically—the remainder of the “special cen-
tury” was not homogeneous either.
What presumably matters for this purpose is
the span of time over which ordinary citizens
assess their economic ­well-being to determine
if they are “getting ahead.” And even that may
differ depending on the purpose for which they
are assessing it. Do people compare how they
are living now to how they lived last year? To
how they remember living ten years ago? To
how they think people lived 50 years earlier?
For purposes of gauging the impact of economic
growth or stagnation on the attitudes that shape
the social and political evolution of democratic
societies, the evidence suggests that what mat-
ters most is intergenerational comparisons: peo-
ple compare how they live to how their parents
lived, their opportunities to those their parents
had, how they are raising their children to what
they remember from their own childhood, and,
in time, their children’s opportunities to their
own. Gordon’s “special century” in America (on
average, he reports, a doubling in living stan-
dards every 32 years) naturally lends itself to
this kind of outlook. But the standard of living
did not advance uniformly, and the development
and character of American democracy did not
remain unchanged, over this period. None of this
is Gordon’s story, nor, in light of his narrative’s
grounding in technology and the specific goods
and services produced, is it meant to be.
III.  Looking Forward: Heterogeneity in a
Different Dimension
Gordon’s narrative also explicitly recog-
nizes that, even at any given point in time, the
American population did not (and does not) live
at a uniform standard. Life in the city d­ iffers
VOL. 106 NO. 5 a century of growth and improvement
from that on the farm. Geographic regions, espe-
cially the South in his period, differ from one
another. Most important, the rich are different
from the poor. And, since the end of the “spe-
cial century,” they are becoming increasingly
different. This widening inequality is a key
part of the basis for the pessimistic outlook he
offers for the future growth of American living
standards.
To recall, Gordon’s central claim is that what-
ever new advances occur will be insufficient to
replicate the impact of the “Great Inventions”
that propelled the special century’s unprece-
dented growth. But he points as well to “head-
winds” that—not permanently, but for long
enough to matter against the sweep of the his-
torical narrative he offers—will further retard
the growth of living standards for the average
citizen. Foremost among these, in his telling, is
widening economic inequality.
Widening inequality has already mattered
in just this way, as the incomes of the major-
ity of Americans have failed to keep pace with
the growth of aggregate output per capita. The
difference is not merely a matter of the recent
financial crisis. From 2000 to the p­ recrisis peak
in 2007, total output per capita rose on average
by 1.5 percent per annum in real terms; the real
median family income rose at just 0.1 percent per
annum. Combining the crisis and the subsequent
recovery, real output per capita in 2014 was 1.4
percent above that in 2007; real median family
income in 2014 was 4.9 percent below the 2007
level. (Some part of these differences, but only
a small part, is due to declining average family
size.) As is by now well-known, this widening of
inequality is mostly a matter of those at the very
top of the income distribution separating from the
rest. In short, most of the fruits of incremental
production now accrue to only a small part of the
population.
Gordon sees this widening inequality,
together with other “headwinds” of presumably
more finite duration, as compounding the poor
growth prospects that he envisions on techno-
logical grounds. Because currently evolving
inventions will fail to match those that made the
“special century” special, growth of aggregate
output per capita will continue to fall short of the
­pre-1970 rate. And with widening inequality, the
increase in most Americans’ incomes and living
standards will fall shorter still. If he proves right,
prospects for American society and American
55
democracy are worrisome. Historically—not
always and everywhere, but most of the time and
in most places—rising living standards, broadly
shared in the population, have led to expansion of
opportunity and generosity, increased tolerance,
and stronger democracies. Stagnating incomes
have mostly resulted in the opposite (Friedman
2005). A high standard of living per se is no
guarantee against the perverse social, political,
and moral consequences of s­tagnation. And as
Alexander Gerschenkron (1943, p. 5) observed,
“even a long democratic history does not nec-
essarily immunize a country from becoming a
‘democracy without democrats’.”
But what if Gordon is wrong in this regard?
Some economists, most prominently Erik
Brynjolfsson and Andrew McAfee (2014),
point to the electronic revolution as the source
of unprecedented gains in productivity in the
­twenty-first century. Gordon labels such views
“­
techno-optimism,” acknowledging the tran-
sition from mainframe computers to isolated
personal computers to the Internet to smart
phones and tablets, but dismissing its impor-
tance on the ground that “its effect was felt in
a limited sphere of human activity” (p. 578).
No doubt some people said similar things when
railroads, and then motor cars, and then pow-
ered flight, first appeared—each was at first a
novelty, and used for transportation only by
the daring and the rich—and probably with the
introduction of many of Gordon’s other “Great
Inventions” too. Only time will tell whether
we are, as Francis Wayland put it, “more capa-
ble of fathoming the goodness of God than our
ancestors were.”
Even if the “­techno-optimists” turn out to be
right, however, concern for America’s foresee-
able future still seems warranted, albeit on dif-
ferent grounds. If the driverless cars and other
­human-free ways of carrying out economic tasks
that Brynjolfsson and McAfee (2014) envi-
sion do replace as much labor as they expect,
then demand for labor, in many of the jobs that
Gordon hails as having revolutionized—for the
better—the character of work over the “special
century” will fall sharply. In time, new applica-
tions for this released labor, perhaps producing
new goods and services also not yet envisioned,
will presumably emerge. The transition could
be a long one, however, easily long enough to
count even in a highly t­ ime-aggregated narrative
like Gordon’s. To be sure, if the reason for such
56 AEA PAPERS AND PROCEEDINGS
sharply depressed demand for labor is increased
productivity, in principle the society could
simply make do with a much shorter work-
­ Bancroft, George. 1882. History of the United
week, as Keynes (1930) famously predicted in
his “Grandchildren” essay nearly a century ago.
But no one now foresees a change in American
society’s ways of distributing income that
would allow those working Keynes’s ­15-hour
weeks to enjoy improvement in their living
standard anything like what Gordon’s “spe-
cial century” brought to the great mass of the
population.
IV.  Conclusion: Improvement and Increase
The language of Adam Smith’s day aspired
to “advance” and “improvement.” The lan-
guage of economics in the late twentieth and
early ­twenty-first centuries addresses “growth”
and “expansion.” Economics has made signif-
icant achievements in understanding the latter.
Despite numerous empirical studies of such
observable phenomena as patents and R&D
spending, the former largely remains a mystery.
Robert Gordon’s magnificent historical study
combines the quantitative analysis of growth
and expansion with the qualitative dimension
of advance and improvement. A major contri-
bution of Gordon’s rich and ­fine-grained exam-
ination of precisely what improvement in living
standards has meant, and why it has mattered
to ordinary citizens, may be to focus future
economic research on understanding better the
invention and discovery that make such progress
happen.
MAY 2016
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Brynjolfsson, Erik, and Andrew McAfee. 2014.
The Second Machine Age: Work, Progress, and
Prosperity in a Time of Brilliant Technologies.
New York: Norton.
Field, Alexander J. 2011. A Great Leap Forward:
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Friedman, Benjamin M. 2005. The Moral Con-
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Gerschenkron, Alexander. 1943. Bread and
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