This post is part of a series of articles I’m writing based on the book “
The Rise and Fall of American Growth” by Robert J. Gordon.
The book tells the compelling story of societal and technological progress over hundred years starting 1870 to 1970. As major discoveries and technologies such as electricity and the combustion engine made their way into products, as homes got access to clear water, sewages, heating, refrigerations and many other appliances, as the health great improved new scientific and medical discoveries, a recognizable picture of the modern world emerged by the 1940s.
As I read this book, I found that the best way of showing Gordon’s thesis was through a compilation of its various figures and tables. I have therefore took the time to annotate them and list them below in the same order as they appear in the book, so that you could look at them in their whole and better visualize how transformative the hundreds years since 1870 have been. The author also argues that the main impact of the revolution ended by the 1970s, and the so-called 3rd revolution in ICT (Information and Communication technologies) has had an underwhelming effect on our economy, and only so during the 1994-2004 decade.
This selection of pictures is from the first 9 chapters of the book. Click on any picture to see this in
slideshow mode. I would great appreciate any comments you would have on these.
This post is a work in progress.
previous post on the references contained in the book.
Three metrics of progress first show how midcentury 1920-1970 compares to the one before and after.
During the mid-century, A large portion of Productivity or Output per hours, has come in the form of TFP, the best measure of innovation we have.
Here we see the changes in demographics at 3 key dates: the size of the population, a breakdown amongst race, age, and fertility rates.
See how much was spent on what across the same 3 key years. In 1869 the main expenses were on the essentials of life (food, shelter, and cloth) but this changed in significant ways as the years passed.
Where did Americans work? 46% owned farms or worked in one back in 1870, a ratio that dropped to 1.1% in 2009. See the corresponding changes for the occupational and service professionals.
One of the interesting fact about the century is that the amount of calories consumed has not changed much over the period, as the diet became much more diverse and the lifestyle changed. There is an uptick in the last 30years which may reflect the growing rate of obesity in American society.
Here is a more precise view of the budget of certain working class families in the three decades started 1890s
Another interesting look at what people ate in 3 key dates. Notice the drop in beef and pork and the rise of chicken and turkey consumption. Also diet became more diverse and contained more vegetables and fruits and regregiration technologies made transportation of these items possibles and refrigerators at home became widespread
Another interesting fact is the drop in the height of people in the period 1870-1910 before the rate went back up in the 2nd World War and after. This trend is not completely explained
We see in this development the growing amount of dollar spend on clothing as people had more money to spend and women in particular starting shopping rather than making cloth at home
Compared to 1967, we see an increase in food consumed together with a decrease in pounds of food
One of the most interesting graph in the book, showing the rate of adoption of technologies that connected the home to the city: water, electricity, heating, and toilets
Look at how quickly these technologies were adopted: Autos, radios, refrigerators, washing machines. This picture epitomizes the rapid move into the modern world, allowing faster transportation, faster communication, and safer food. For example, 90% of people had a radio in their home within a 20year period (1920-1940)
What were the living conditions in this period? Here we see the difference between urban and rural and the boom in construction that happened in the period 1890-1930
Interestingly, more than 20% of home owners had boarder in the early days. This greatly changed as people got to own their own home and provide for their privacy
In 1940, how large were the differences between urban and rural homes? Pretty large!
The model T had the perfect combination of price and quality that lead to the immense adoption of automobile in society. The exponential growth in highway miles build starts off the decade this car was introduced and contrasted to the railroad miles which peaked in that decade and then fell.
How fast were the mode of transport? This table compares how long it took to go between different cities over 4 time periods. Find the fastest!
One of the most interesting table in this book compares different car models 6 different years. Notice the model T of 1923, a truly revolutionary product which changed transportation and transformed the american city.
This graph tracks the amount miles travelled total and per person.
Here we see how the car price for the model T draftily fell as quality improved, a feature at the core of the auto revolution.
Here we see the rate of adoption of cars, by looking at the number of registration. By the mid 1920, more than 90% of the household had a car, and the ratio went up to 1.5 in the 70 before bettering down. Notice the increase in the ownership of trucks. What could have triggered that?
Here we see the car taking over the train as a preferred mode of transport. Already by 1910, people travelled more miles by car than train and the train continued.
This picture captures the trend in printed material: newspapers, books, and magazines. Newspapers dominated until WW2, after which we see a sharp drop in circulation and a fast growth of books per household. Does that seem right?
The most surprising fact about this table is the growth of literacy rate among the black and other category. In an 80 year span, the rate went up from 20% to 88% two decades before the civil rights movement of the 60s.
How did people communicate? This picture shows the number of phone calls and telegraph per household. When the phone was developed, how easy was it to just pick up and dial someone!
The price of long distance phone calls quickly dropped in the first half of the century, both for east-west coast as well as international calls. The trend of price drop was much faster before the 1970s.
This picture zooms in on the diffusion of phonograph, radios, and telephones. Notice the speed with which this happened for radios and how telephone caught up.
Motion pictures were much more popular in the 30s and 40s. The mid 30s saw a peak of weakly attendance, where the number of attendance reach 70% of the population!
One of the goal of the book is to show the rapid improvement in the beginning of the century compared to today. Here we see how fast the rate of infant mortality dropped before the 40s, when hygiene greatly improved access to clean water at home, sewage system, and discoveries such as germ theory of disease.
Another way to see how important the progress of treating infant mortality improved in the 1900s compared to other age ranges.
The later part of the century focus on old age, and advances in healthcare systems and treatment of cardiovascular diseases, and chemotherapy, already available in the 70s. Also hip replacement surgery improved the quality of life for many older adults
Here we see that mortality before 1940 was in large part due to contagious diseases. Many scientific discoveries in vaccines together with the germ theory of disease help greatly reduce this.
“The development of antiseptics and anesthesia in the late 19century made hospitals a more acceptable place to go for medical cures”. The Number of beds peaked during WW2, after which the number of physician per person starting growing.
Much improvement in transportation security were made before the 70s as the mortality dropped from a peak of 125 fatalities per 1M person to less than 20 in 1970.
Homicide rates were lower in the post-war. However, there has recently been a sharp dropped since the late 1990s, a very good achievement in the long run.
Here we see the improvement in health as a share of consumer expenditures per Nordhaus calculations, comparing the period 1900-1950 to 1950-2000.
This is one of the most fascinating tables in the book. It goes in detail into the distribution of jobs in the US at 5 different dates (1870, 1910, 1940, 1970, 2009). What is most striking is the great shift that happen from blue collar jobs to which collars to service professional as the decades passed. This mean people worked in much safer and less arduous jobs today compared to the previous century and where their jobs are much more fulfilling than they once were.
Starting in the 40s and 50s, women join the workplace in great numbers, a one time revolution that has greatly chanced our society. The bulk of this happened by the 80s, after which the labor participation stagnated at a bit above 70%. Notice however the drop in men’s rate, a worrying trend.
This picture clearly reveals the improvement made in under age child labor. In all category, and especially in the range 14-15 male boy, the period 1880-1910 was pretty hard. As the school movement developed and high school became mandatory, the rates sharply dropped to the 10%. This is a major achievement for the quality of life of American children.
Before 1940, a much larger share of boys age 16-24 were in the workforce. In this picture, we see the drop of male rate from around 85% in 1910 dropping to 60% in the 60s and then falling further as the trend meet with the women rate. In large part, this is due to the increase in high school attendance, which allowed millions of young kids to get the skills that would make them productive in the post war economy.
For the older people age 65-74, social security has had a great effect on letting older workers get out on retirement much earlier. The drop is pretty drastic for men, from almost 90% of them working in the 1870s to about 20% in the 1990s. Since then, there has been a notable increase in the labor force participation.
Average weekly hours vs. hours per employee. The black lines shows production non-supervisorary workers excluding agricultural sector while the white line includes farm workers (the scale of the white line is relative to data from 1940). The post 1940 decline in the white line likely due to the drop in the number of people working in farms but also because we of the entry of women in the labor force. Longer vacation and sick days also pushed down the numbers.
It is quite interesting to compare the improvement in mechanization and its correlation with the amount of hours. The period 1919-1925 is quite different from the rest, at a time where electricity became the underlying force powering factories.
Before 1940, real GDP per hour was growing slower than hourly wages, as progressive era legislations and then new deal legislation got into effect, improving work conditions. The introduction of new technologies in factory also required a more skilled workforce, which lead to the rise in wages. Since the 1980s however, a gap has started forming again between the two, helping fuel the state of inequality we see today.
Average Annual Growth rates of real hourly compensation of production workers and real GDP per hour
This picture clearly shows the great revolution in education that was done by 1960s, where almost 76% of 17 years old graduated from high school.
ratio of Non structural debts and consumer expenditure over the GDP. The question is whether the availability of credit led to increase of consumption or the opposite? The crash in consumer credit happening in parallel with increase of expenditures seems to point to the opposite. The demand for new product was real, and credit facilitated the satisfaction of material needs.
Real estate mortgage bond was an innovation in the 1920s. Structure debt (for homes) was consistently 7x more than for non-structure.
In this picture, we see the investment in homes booming in the period 1920-1930, as american take up large amount of debt to buy homes
Another aspect of the 1920’s boom is the growth in life insurance bought by americans, showing how popular this kind of asset was. This asset was a vehicle for life savings, particularly during the great depression, which allowed widows and their children to benefit from the hardship they had to endure.