Sunday, 2 September 2012

Toilet Humour

There should be no surprise that the passing of Neil Armstrong has seen an upsurge in the techo-pessimism meme, as well as the more general fears that America is in decline. The publication of Robert Gordon's paper, "Is U.S. Economic Growth Over? Faltering Innovation Confronts The Six Headwinds", has provided the coincidental occasion, however it is interesting to note that while some media reports crowbarred the Apollo programme in as an example of modern decline, most focused on his provocative thought experiment that seeks to prove that the inventions of the last decade are small beer compared to running water and indoor toilets, a variation on Ha-Joon Chang's washing machine riff. Gordon's proposition is that you'd happily surrender your netbook to avoid reverting to a netty. But before we explore the s-bend of innovation, a last thought on Armstrong & co's achievement ...

The title of Gordon's paper packs three assumptions: first, the focus on the US and the implicit fear that it may have had its "turn in the sun"; second, the belief that economic growth is sputtering because of faltering innovation; and third, the belief that there are structural "headwinds" that will make matters worse. Despite the gloomy tone, this is still an essentially optimistic American perspective, encapsulating exceptionalism (it's still all about the US) and the belief that the situation can be remedied ("if we can just sort out those goddamn headwinds ...")

Gordon's fundamental premise is that there were three industrial revolutions: 1750-1830 saw steam engines, cotton spinning and railways; 1870-1900 saw electricity, the internal combustion engine, central heating, air-con and indoor plumbing; and 1960-1990 saw computers and the Internet. He believes that the second was the most impactful and that the third lost momentum as productivity gains weren't sustained beyond the 1980s and post-2000 development focused on entertainment and communication devices. He also follows the idea, popularised by Joel Mokyr and others, that innovation is a process punctuated by macroinventions followed by long tails of microinventions, or the dynamic between what (discovery) and how (invention). In effect, he is arguing that the second revolution, whose breakthroughs were not fully exploited till the 1960s, was an exception in human endeavour and that subsequent macroinventions will not have as profound an effect on the economy or the median standard of living.

He picks a dubious example to highlight this: "The audacious idea that economic growth was a one-time-only event has no better illustration than transport speed. Until 1830 the speed of passenger and freight traffic was limited by that of "the hoof and the sail" and increased steadily until the introduction of the Boeing 707 in 1958. Since then there has been no change in speed at all and in fact airplanes fly slower now than in 1958 because of the need to conserve fuel." He completely ignores Concorde, but you get the point. Since 1958 the revolution in transport has been the extension of flying to the majority of the population in the developed world and a significant minority elsewhere. It's about quantity not quality. (As an aside, he wistfully mentions the Jetsons as well).

The US-specific "headwinds" Gordon lists are: the end of the "dividend" of the 50s/60s baby-boom (more male workers and more women moving into the labour market) and the increase in retirees; rising income inequality (which means growth for the majority is much lower than the average); "factor price equalization" due to globalisation and the Internet (i.e. global convergence of labour costs, which means wage repression in advanced economies); cost inflation in higher education and poor secondary student performance; the burden of environmental regulations and taxes (which he assumes China will sidestep); and the overhang of consumer and government debt. These choices reflect certain prejudices (e.g. anti-debt, with the emphasis on public debt), though he has tried to be politically even-handed. Some is just silly. Though increasing education costs are a problem, we shouldn't forget that vastly more kids are securing further education now than ever before, while relative performance reflects the system as much as innate intelligence, as this year's English GCSE results have proven.  

He assumes that the faster spread and earlier petering-out of the inventions of the third industrial revolution, compared to the second, is indicative of the relative weakness of the more recent surge. In fact, the cycle of penetration of innovations has always accelerated, for two reasons. First, the more developed a society is in terms of technology, the more opportunities will exist to marry an invention with the existing base. The effect is cumulative. This can perversely result in us belittling inventions because they are more likely to appear as adaptations or step-changes rather than unprecedented novelties. Thus the steam engine was sui generis, while the internal combustion engine was initially seen as just a better engine. Second, better communication, and more developed institutions for the dissemination of technology (government, education, large businesses, civil society etc), make each successive wave easier to propagate. This is a triumph of exploitation, not proof that the inventions lack stamina. 

It's also worth bearing in mind that that the tail of microinventions following the macroinvention breakthroughs in computing and communications in the 60s and 70s may have some way to run yet. The first and second industrial revolutions (in Gordon's scheme) had different durations (80 and 30 years respectively), but they appear to have had a similar length tail of 70 years. That implies that the current tail may well stretch to 2060, though I personally suspect there will be another macroinvention surge well before that. Gordon quotes Robert Solow's 1987 paradox, "We can see the computers everywhere except in the productivity statistics", but he fails to challenge Solow's assumption that an IBM mainframe was a sort of robot, capable of replacing human workers. Computers improve individual human productivity, they don't substitute for people, any more than abacuses did.

This points to Gordon's fundamental beef, which is that recent innovations have not replaced labour: "Attention in the past decade has focused not on labor-saving innovation, but rather on a succession of entertainment and communication devices that do the same things as we could do before, but now in smaller and more convenient packages. ... These innovations were enthusiastically adopted, but they provided new opportunities for consumption on the job and in leisure hours rather than a continuation of the historical tradition of replacing human labor with machines". There's a strong whiff of protestant distate for all this wired jollification, but there is also a failure to consider that the non-appearance of androids (and the coincident appearance of new white-collar jobs) may actually have been a willed outcome.

Gordon doesn't consider the possibility that we humans were better prepared during revolution number 3 (having learnt lessons in revolutions 1 and 2) to channel/direct/sabotage the course of development to meet wider social and economic objectives. He is also guilty of historical simplification, claiming that prior to 1750 growth was negligible for millenia. In fact, there were periods of rapid technological advance in the past, notably in China and the Roman Empire in the first century AD. This included printing, concrete, central heating, the compass, flush toilets and indoor plumbing. The point to remember was that these were elite goods, while the achievement of the second of Gordon's revolutions was to provide such benefits for ordinary people, though this took a century to achieve extensive penetration (I first experienced central heating in the 70s, while I last used a shared outside toilet, in Leeds, in the early 80s).

His focus on the benefits of running water and indoor toilets is rather American. As a Brit, I wouldn't for a moment suggest that these weren't major advances, improving public health as well as delivering real comfort, however there is no doubting our (how I shall I put it) more relaxed attitude. Compare a British pub toilet (mens) to an American diner restroom and you'll see what I mean. Americans are distinctly more anal (there's no other word for it) than Europeans when it comes to toilet hygiene. We've developed a taste for central heating (two millenia after the hypocaust first appeared in Britain), but we see air-conditioning as something for offices or Mediterranean holiday villas. This obviously reflects our more temperate climes, so you can forgive a citizen of Chicago or Minneapolis for being a little more sensitive about HVAC. Of course, American pessimism may just reflect the realisation that even in the area of toilet technology, they have now been surpassed by the Japanese.

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