Starting the New Year off on an upbeat note: We’ve highlighted the warnings economist Robert Gordon has raised about potential limits to US productivity and how that could doom us to stagnation without end. On the bright side, the Economist’s Free Exchange blog warns us that it would be a mistake to discount the potential benefit of new technologies (e.g., 3-d printing) too quickly. Gains from innovation take a long time to ripen:
Consider the automobile, for instance. Back in the late 19th century, it would have been easy to dismiss the potential importance of the car. Cars weren’t very good, for one thing. But more importantly, it wasn’t at all clear how they might be of much advantage. Cities were dense places, with tangles of streets crowded by pedestrians and horse-drawn wagons and omnibuses. Cars were expensive and offered little in the way of travel-time advantages. Petrol was very expensive in real terms, and there was no infrastructure available to deliver it to would-be drivers. It was hard to see a market for cars outside of the realm of playthings for the rich.But the world changed. Traffic laws changed. Road construction changed and exploded, ultimately prioritising automobile traffic above all other modes. . . .
You can read the full post here.