John Nye: belief

Transcript context

…If you think more generally about 19th century economic growth, the numbers we have for GDP growth — they often don’t appear impressive. Is it that growth actually was slow, the numbers are wrong, the big effect was simply getting more people into the country? How do you interpret the 19th century American episode — slavery aside — the growth of the rest of the country? I think American growth was quite impressive. I mean, 2.5 percent averaged over a century or a century and a half is quite a lot of growth, in fact, especially if you take into account the standard biases and the way in which GDP does things. Moreover, I think there was slow growth in the sense that you were integrating a large, very poor population, both domestically and through immigration, and all these things contributed to what looks like slow growth. But it’s not really slow growth by historical standards, and I don’t think that’s a surprise at all. Moreover, we tend to overvalue the ways in which the First Industrial Revolution transformed things. Most of the big growth boosts come in the second half of the 19th century in what people call the Second Industrial Revolution. If you look at the statistics for the First Industrial Revolution, there’s no evidence that the workers’ living standards dramatically improved till about the ’40s or ’50s — I mean the 1840s or 1850s. If you, say, date the Industrial Revolution to 1760, what you observe is very slow growth in England. Fast in comparison to what had happened in previous centuries, but slow in to what happens today, and even slower for the working classes. You only see this acceleration that we think of as modern economic growth in the Western states, in particular Britain, France, the US, and Germany, starting in the 1850s and ’60s or so. What spurs that second wave? Is that fossil fuels or something else?…

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