The rise and fall of American growth
Anybody in the e/acc space would love this book.
The crux of the argument is that the american standard of living shot up massively between 1870-1970 thanks to one-time innovations whose importance is hard to replicate. Innovations since then have largely been in the realm of information and communincation.
things i found interesting:
In 1870, only 2% of homes had running water. By 1940, 94% did.W
"In Chicago, everywhere a streetcar replaced a horsecar line, property value went up 30-100%"
on the invention of the newspaper, Britain regulated content and imposed taxation. America did not. Consequently, the price in America was 5x lower, an advertisement cost 30x less, and penetration was 9x higher.
on the invention of the telegraph:
- created in 1844, within 2 years there were 9 companies that had laid 2,000 miles of wire
- its impossible to see how technology benefits society in advance: the telegram eliminated middle men reliant on information mismatches, meant markets could execute trades within 2 minutes and made the expansion of the US rail system possible via just single track providing $1bln by 1890
- "whenever science achieves a victory, a rivet is loosened from the chain of the oppressed"
in 1900, 18% of people died before their 18th birthday, now one has to set the threshold to 62 years of age to reach an 18% mortality.
financial innovations like life insurance greatly improved the standard of living of american widows. life insurance companies became a forced saving instrument and were incentivised to make people live longer, so began educational campaigns on "tuberculosis, care of children, flies and filth..."
the Sears Roebuck catalog, first published in 1888, grew from 80 pages to over 1,000 by 1908.
in 1900, the average American worked 10 hours a day, 6 days a week. By 1940, it was down to 8 hours a day, 5 days a week, largely due to labor movements and increased productivity.
the introduction of the Model T Ford in 1908 priced at $ 825 made car ownership possible for middle-class Americans. By 1924, the price had dropped to $ 260
The rapid spread of assembly line manufacturing was made possible by Ford's deliberate policy of openness that led to the diffusion of the new techniques throughout american manufacturing.
In 1930, only 10% of rural homes had electricity. By 1945, 90% did, thanks to the Rural Electrification Act which provided federal loans to build the necessary infrastructure
the standardisation under Hoover of sizes of nuts, bolts and countless components made possible the scaling up of american manufacturing and enabled the massive arsenal of weapons produced between 1940-1945
higher hourly wages imposed by the new deal forced firms to improve productivity, helping to explain the explosion of productivity in WW2
in 1942, building a ship took 8 months. by the end of the war it took four days, thanks to suggestions from 250 colleagues. A ford b-24 bomber plant manufactured 75 a month in Feb 1943, reaching 430 a month in Aug 1944.
black families in 1960s Chicago were systematically denied access to mortgage financing, denying them the possibility of building equity
growth slowed from 2.8% a year from 1920-1970, to 0.6% in the next fifty years