You Decide: Was change greater a century ago?

Dr. Mike Walden
North Carolina Cooperative Extension

Consider this picture. Your home has no electricity or indoor plumbing. This means no electronics or instant warm baths and showers, and “using the bathroom” means accessing an outdoor “outhouse.” Heat in your home is generated from a wood- or coal-burning stove, but unless you’re close by, most of your home is still freezing in the winter. Of course, there is no air-conditioning in the summer.

Getting water for cooking or bathing is a major chore, requiring eight to 10 daily trips to the outside source of the water (well or stream). An individual – usually a woman – carries the equivalent of 36 tons of water each year. Most people live in rural areas, and with no autos, households are isolated. Horses are the common mode of transportation. In cities, the constant manure produced by horses is an ongoing source of foul smells and breeding grounds for disease.

Entertainment is simple – by today’s standards – and infrequent. Vacations are non-existent. So, too, is retirement. Most people work until they physically can’t – or until they die.

This is the picture of average life a century ago as described in a fabulous new book titled The Rise and Fall of American Growth by economist Robert Gordon. As documented by Gordon, this tough life faced by our ancestors fortunately quickly improved. Between 1900 and 1950 the percentage of households having electricity rose from 0 percent to 90 percent, the percentage with access to an auto jumped from 0 percent to 75 percent, those with access to indoor plumbing increased from 15 percent to 70 percent, households using central heating improved from 0 percent to 50 percent, and households owning a radio went from zero to 100 percent!

In fact, the first half of the 20th century Gordon dubs the “golden age of innovation.” While inventions and improvements to our lives have continued since then, Gordon claims nothing compares to the dramatic gains in everyday life experienced in the 50 years between 1900 and 1950.

But what about all the new technology like computers, smartphones, DVDs and tablets developed in recent years? Aren’t they just as significant as the advancements made 100 years ago?

Actually, Gordon claims they’re nowhere close. He sees many of the recent technological breakthroughs focusing on entertainment and communication. While these devices have certainly increased our enjoyment of life, Gordon says they have not prompted the big shifts in the capabilities of the economy like the automobile, telephone, air flight, radio and television, and indoor plumbing.

In fact, some researchers have found modern technology may reduce our economy’s productivity. Studies show workers are spending significant amounts of work time engaged in social media activities and web-surfing for personal purposes, thereby taking away from their time spent on work tasks. Statistics show recent gains in worker productivity have been significantly below historical averages, which may be a factor behind the overall economy’s slow growth.

Gordon is also pessimistic about the future ability of the economy to deliver meaningful innovative advances. He worries about difficulties in improving educational results for a large segment of the population, income losses for those without college degrees, slow growth in the labor force, and federal fiscal challenges related to rising spending on retirees – spending that could otherwise to devoted to research and development of new technology.

However, the economist admits it is difficult – if not impossible – to predict future innovations that could induce big leaps in the economy. There are optimists who see inventions like 3-D manufacturing, nanotechnology, virtualization, and genomics as eventually leading to big gains in both economic production and the quality of life. However, as the recent Emerging Issues Forum at North Carolina State University suggested, many of these new technologies might lead to fewer – not more – jobs.

I see two important takeaways from Gordon’s impressive book. First, the inventions created 100 years ago were truly amazing, and although the versions of them we have today are better, much of what we now enjoy wouldn’t be here without the originals.

Second, we have relied on technological advances to provide gains in our standard of living in the last century. The future will be no different. This means applications of new technology will largely determine how much life improves in the decades ahead.

But there are two big questions. Will new inventions and innovations be as meaningful in the future as those in the past? Also, how will these inventions and innovations change our everyday lives? You decide.

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Dr. Mike Walden is a William Neal Reynolds Distinguished Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of North Carolina State University’s College of Agriculture and Life Sciences. He teaches and writes on personal finance, economic outlook and public policy. The College of Agriculture and Life Sciences communications unit provides his You Decide column every two weeks.

Previous columns are available at http://www.cals.ncsu.edu/agcomm/news-center/tag/you-decide

Related audio files are at http://www.cals.ncsu.edu/agcomm/news-center/category/economic-perspective

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