Things I associate with the Great Stagnation

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com

I’ll come back to this blog post, and add to this repeatedly, as the years go, and also subtract from it repeatedly. The collection of trends that I associate with the Great Stagnation is still a bit vague. I’m sure I will refine it over time. Also, my perspective here is mostly from the USA, though I know the same trends were active in all Western nations, give or take 5 years.

When did the Great Stagnation start? There is no easy answer. For all Western nations, things began to slowly unravel after the mid 60s, and there was open talk of crisis by the mid 70s. In the USA, if one had to pick one year, then the date would obviously be 1973, which is when male wages began to decline. In the USA, there were economic problems building up by the late 1950s.

So here are some of the ideas that I associate with the Great Stagnation, in no particular order:

1.) The world is overpopulated. This is one of the few ideas that was truly global. In China, Deng Xiaoping implemented the One Child Policy. In the West, in 1972, Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, William W. Behrens III published the book “The Limits To Growth” which basically put old Malthusian arguments into modern form.

My sense is that the population issue and the environmental are 2 separate issues. Different political constitutions might allow us to deal with our current environmental problems, which would then allow a new era of population growth. I’m sure the world could support 30 billion humans, but not with today’s political structures.

2.) Failed states — the great European empires fell apart during the 1940s, 1950s and 1960s. By the 1970s much of the world was free. And then new governments were shockingly bad. 3rd World governments were incompetent and corrupt. Many territories failed to establish successful states.

3.) The collapse of the Left — by the 1950s there was talk of the Left being in retreat, for different reasons in each country. The Cold War put pressure on Left parities everywhere. The Left achieved a final burst of militancy in the mid 60s, which lead to some surprising electoral victories in Germany and France and elsewhere. But after the early 1960s, every Western nation shifted to the Right and the so-called Left parties became parties of the center, with no vision of any alternative to market based economies controlled by privately held pools of capital.

4.) Dictatorships collapsed — in Spain and Eastern Europe, dictatorship collapsed. Mostly it seemed like the economic crisis killed them — these nations could no longer afford dictatorship. I’m curious why dictatorship worked so well during the Great Depression (when the Soviet Union expanded from 8% of world GDP to 18% of world GDP) but was unable to handle the Great Stagnation.

5.) The Great Asian Surge — there was a stretch from the mid-1700s to 1932 when the fastest growing developed country was in the West. That changed in 1932 when Japan emerged as the fastest growing developed country. The rest of Asia remained desperately poor and weak until the Great Stagnation. Then Korea, Hong Kong, Taiwan and Singapore surged forward, followed by many of the nations in the area (Malaysia, Indonesia, Vietnam) and then finally the astounding rise of China.

6.) The authorities can not be trusted — in the old system you might distrust the capitalists or the workers, or some racial group, but there was always some elite faction that was trusted. That changed.

7.) Medicine makes everything worse — the change from 1954 to 1980 is amazing. Jonas Salk was one of the last heroes of the old system. His vaccine for polio came at a time when the public still believed that progress was inevitable and everything was going to get better and better. But there were elements, religious on the right and counter-cultural elsewise, that distrusted modern medicine. Their doubts were stripped of political militancy but eventually became mainstream.

8.) Vaccines are evil — related to the growing distrust of medicine.

9.) The food is poisoned — there were legitimate concerns about the strontium 90 left in the ground after the era of atmospheric tests of nuclear bombs, conducted by the USA and the Soviet Union. There were also concerns about pesticides and insecticides. There were also older concerns about the filthy conditions at food processing plants, which took on a new urgency.

10.) Small Is Beautiful — E. F. Schumacher’s magazine had the tag line “Against Moscow and Washington, not because they are wrong, but because they are too big.” Schumacher was certainly correct about the current environmental issues, and he was correct that there was a problem with current political institutions. I don’t believe the answer is “make big small”. But he is an example of the left-libertarianism of the era, which is part of the collapse of the old Left movements.

Related themes: pseudo-libertarianism; bureaucracy is bad.

11.) Bureaucracy is bad — when Max Weber wrote of bureaucracy in 1922, he regarded it as the height of civilization, an expression of the specialization of labor that modern society needed. But during the Great Stagnation, attitudes shifted against bureaucracy. Suddenly it was seen as a bad thing, inefficient and wasteful. An interesting transitional character is the great business writer Peter Drucker, who started his career admiring General Motors, but who turned around completely and became the advocate of the entrepreneur.

12.) The death of marriage — the rise of no-fault divorce undermined the permanence of marriage, and therefore its importance.

13.) The end of official support for heterosexuality — several trends converge here: women having children out of wedlock, and marriage for gay men and lesbians. In the early 1990s, in the USA, President Bush pushed through a law that cracked down on “deadbeat dads” — fathers who did not pay their child support. Factions on the Right were outraged. This was the death of marriage. Money from men, a privilege which had, for thousands of years, been reserved to married women, was now being extended to unmarried women. Therefore, what was the point of getting married? I agree with the right-wingers that this signals the end of official support for the system that had been in place for thousands of years. To me this seems similar to religious tolerance: for thousands of years the government felt that it had to defend one official religion, and then in 1600s religious tolerance spread through Europe, as governments began allowing multiple religions. In our own era, we are seeing governments allow multiple sexualities.

Related themes: The death of marriage

14.) Flexible exchange rates — the Bretton Woods system formed in 1944, and lasted till 1971, at which point President Nixon (in the USA) unilaterally devalued the dollar.

15.) Multiculturalism — before the Great Stagnation, all Western nations had strong racial and religious identities (white and Christian). Since the 1970s, all such countries have somewhat redefined themselves as cosmopolitan multi-racial, multi-religious polities. The English speaking nations seem to have gone further than the other Western countries.

16.) The expansion of the English language — English emerges as the international language of business and culture.

17.) The end of the special success of the English speaking nations — from the mid 1700s to the 1970s the English speaking countries ran the world. Then the system comes to an end, and the English speaking nations do worse than other countries.

18.) The collapse in productivity rates — starting in the USA, the growth of productivity slows. There is a small, temporary uptick in the late 1990s, but there is no return to the sustained growth that held for decades before the 1970s.

19.) New Age spirituality — there was a sudden collapse in the willingness of different sects to insist on the importance of their sects differences. Very few Methodists take seriously the need to avoid alcohol, very few Catholics follow Church teachings on contraceptives. What arose was a new kind of polytheism. Large numbers of people began borrowing spiritual practices from all over the world. Hinduism and Buddhism were mixed with old Christian ideas, which were then combined with Native American ideas. Yoga was imported, though later stripped of its spiritual element. Meditation was imported but then largely stripped of its spiritual element.

20.) The spread of computer networks — a host of proprietary computer network technologies sprung up during the 1970s. These became more and more important till the 1990s, when they are wiped out by the Internet. TCP was announced in 1973 and finalized in 1978. The Internet Protocol is separated from TCP in February of 1978. It spread through the USA university system during the 1980s. It was rolled out to the general public during the 1990s.

To me, this is the biggest surprise of all: that information could be made inexpensively available to the entire world, and that this should coincide with a long term world wide economic slow down. I would have predicted the opposite. The Internet has done absolutely nothing to boost economic growth. This forces me to reconsider everything I thought I knew about economic growth.

21.) The demographic transition goes global — related to concerns about over population. The demographic transition begins in the West in the 1850s and has largely run its course by the 1970s, with Western nations increasingly having birth rates below the replacement rate. But after 1970, the demographic transition spread to all nations.

22.) The relative collapse of Latin America — I suppose this is related to the changing importance of agricultural products. In the year 1900 several nations in Latin America had standards of living that were on par with Europe. Argentina was the 12th wealthiest nation in the world. Even as late as 1965, Peru and Japan had almost the same per capita incomes. But then Latin American collapsed.

23.) Energy becomes expensive — the price of energy goes up and down, and there have been episodes of low prices, but from 1859 to 1970 the price of energy was going down, but for 40 years after 1970 the trend was either up or neutral.

24.) The environmental crisis becomes overwhelming — global warming is a concern for humans, but the acidification of the oceans threatens all life on Earth.

25.) Detente — the great rivalry between the USA and the Soviet Union comes to an end. This ends thousands of years of Great Power conflicts among the Western powers. On the Rhine, we have now had the longest stretch of peace since the first clash between Roman legions and Germanic tribes. When the Great Stagnation ends, the one thing we can all be reasonably nostalgic about is the peace.

26.) Civil Rights spread — the Great Stagnation has some similarities to the Really Great Stagnation of 1650 to 1750. Both have seen a conservative backlash combined with the spread of civil rights. Back then, religious toleration was the issue people fought and died for. In our era, the rights have been about racial minorities and women gaining recognition as legitimate actors in modern society.

27.) The crisis in physics — the Really Great Stagnation of 1650 to 1750 had Isaac Newton and the Scientific Revolution. So far the Great Stagnation has lacked that level of innovation. Physics, in particular, has been stuck and unable to move forward.

28.) Women become autonomous — related to the death of marriage. There are more single women so there are more women who automatically see themselves outside of marriage. More so, even married women increasingly have identies that they maintain despite being married.

29.) Men become autonomous — with marriage rates falling, there are more men who live without marrying.

30.) Secular stagnation — worldwide growth rates have collapsed, so the world is awash in an excess of savings. No one seems to know what to do with this money. There is no political support for something ambitious, like going to Mars.

31.) De-urbanization — at least for awhile, the racially dominant middle class tried to get away from the cities. This trend may or may not have reversed.

32.) A misogynist backlash — Especially in the English speaking countries, from the 1930s to late 1980s, the idea of women working had widespread support, sometimes from elite factions, other times from working class movements who recognized that working class families could not afford to have women at home. After 2000 women’s participation in the economy began to decline. After the early 1990s the opposition to female autonomy becomes more militant.

33.) Increasing wealth inequality — mostly in the English speaking countries, after 1980 wealth begins to concentrate. All Western nations are somewhat effected, but especially the USA.

34.) the decline of labor unions — after the early 1960s, in all Western nations, but especially in the English speaking countries, labor unions declined.

35.) increasingly organized anti-science movements — for centuries, resistance to Science was mostly a religious concern. During the Great Stagnation, secular organizations emerged that denied large parts of commonly accepted scientific theory: Darwin was wrong about evolution, the Earth is not warming, there is no mass extinction, evolution proves the superiority of males, modern physics has proved the existence of God.

Related: vaccines don’t work, doctors don’t know how to find the paracites in our bodies, health officials lie about the poison in our food.

36.) Intelligent aliens have visited Earth — again, this has mostly played out in the English speaking countries, but some people feel strongly that intelligent alien life regularly visits Earth.

37.) Science stops growing — most Western nations saw exponential growth of their University systems during the Post War Boom. This stopped. In particular, the minting of new scientists stopped.

38.) Public support for space exploration declined — in the USA, for many decades, the public favored most forms of modernization (exceptions would include racial attitudes in the South) including an excitement for reaching the stars. However, after the early 1960s, support for space travel declined. In the USA the Apollo program was defunded in the early 1970s. Nothing replaced it.

39.) Male participation in the economy declines — in the USA, male participation in the economy peaks in the 1950s and then goes into long term decline. At first the only groups effected are the African Americans. By the 1970s, even the white working class is effected. During the recession of 1982, the news magazines declare “This is the first white collar recession”.

40.) Pseudo-libertarianism — there were several political movements that expressed anti-tax and anti-government sentiments. Sometimes these were combined with pro-entrepreneurial arguments. Although the state remains a huge part of the economy, one could say it is weakened because it no longer has the public supporting its expansion.

41.) The disappearance of small businesses — especially in the USA, there was consolidation of businesses.

42.) The death of the family farm — small farms had been dying since the 1930s but they really disappeared in the 1970s and 1980s. What remained was large corporate farms.

43.) The decline in new business formation — http://www.brookings.edu/~/media/research/files/papers/2014/05/declining%20business%20dynamism%20litan/declining_business_dynamism_hathaway_litan.pdf

44.) The emergence of an exciting rhetoric for entrepreneurs — despite the decline in entrepreneurial activity, the rhetoric about entrepreneurs became much more exciting. Entrepreneurs are now described as revolutionary figures. They take the place that political figures took for 100 years, and military figures took for most of human history.

In 1880 John D. Rockefeller “The day of combination is here to stay. Individualism has gone, never to return.” When I was a child, I was taught this in school. In fact, to get a good grade, I had to put this on my history test: “The era of the entrepreneur ended in the 1880s, and was replaced by the corporation, which is the era we live in now.” None of my teachers thought that entrepreneurs would stage a comeback, even though they were staging a comeback at that time. But at that time, entrepreneurs were seen as hippies who were rebelling against the Establishment. They were seen as a fad that would die out. And, for sure, there is less new business formation in the USA than ever before, so in some sense the conventional wisdom was correct. But in terms of rhetoric, the entrepreneur has made an incredible return, which no one foresaw, except for the hippies.

45.) Unchanging fashion — changing fashions was an important part of the Western experience from the end of the Dark Ages till the Great Stagnation. Fernand Braudel writes about Dutch visits to Japan, during the 1600s, and how the Japanese were amazed that Dutch styles changed over the course of 30 years. But modern styles emerged in the West during the 1960s and have not changed since. Clothes have stayed about the same, hair styles have stayed about the same, music has stayed about the same. This is a remarkable change for the West.

46.) The decline of rail — relative to cars and trucks that travel on public roads, rail travel declined.

47.) Informality — for decades the English speaking nations have had a reputation for informality, but that trend became exaggerated. It became common for people to meet and use their first names when introducing themselves. Some of this informality has begun to spread to other Western nations. De-emphasizing the last name could be related to the decline of marriage?

48.) Casualness — the need for formal dress at work declined. When I was in Sweden I saw a large man with dyed hair and several tatoos and a nose ring and several ear rings, wearing a t-shirt about his favorite band. He came to the apartment of the friend I was staying with. The man turned out to be the mailman, an official representative of the government of Sweden. In the USA “business casual” has replaced all former forms of formal dress at work.

49.) the decline of traditional religion — attendance at Sunday Mass peaked in the USA during the 1950s and has since declined dramatically.

50.) The emergence of intellectual property — an important new form of property emerged, as copyright became much more important to how the economy worked. Patents were expanded. This has become a modern Enclosure movement.

51.) The centrality of television — other forms of leisure gave way to television, at least from 1960 to 2010. Television displaced the movie theater, which is where people used to go to see both the news and also entertainment. The trend toward television may have changed slightly with the emergence of films on the Internet.

52.) The importance of sports — watching sports games has replaced religion as the main activity that holds family and friends together. In the USA, there is a special importance to watching college games. If a husband and wife attended the same university, rooting for the school team becomes a binding activity for the family similar to the role that going to church used to play.

53.) Deindustrialization — Western nations lost industrial jobs to Asian nations.

54.) The decline of the fine arts — elite focus on the arts might still exist but holds less power to influence all of society.

55.) The rise of popular arts — pop arts, including all graphic design and industrial design, including magazines and posters and video games and movies and more, have become more important.

56.) The improvement of the food supply — when I was in Krakow a Polish friend complained that it was difficult to get fresh avocados. But we did get avocados. And that is a remarkable change compared to 20 years ago. Westerners who visited Prague in the early 1990s complained about the lack of vegetables. In the USA, it is now possible to find organic food almost everywhere.

57.) The sexual revolution — there remains a debate about whether there was a “revolution” or an “evolution”. The definition matters. If “sexual revolution” is defined in terms of premarital sex, then according to Kinsey, the biggest change in sexual habit was with the cohort born in the year 1900, who came of age just after World War 1. If we instead focus on gay and lesbian sex, there was clearly a revolution of openness and experimentation, starting in the 1960s.

58.) Education attainment has stagnated — after a century of increasing graduation rates from high school, the rate began to stagnate. College education continued up for a while, and then it too began to stagnate.

59.) The triumph of the music of the English speaking nations — for 300 years the German-speaking nations defined the limits of Western music. The form of music production was the orchestra of 30 to 40 musicians. Between 1920 and 1960 Germany lost its influence. This was perhaps related to the decline of fine arts and the rise of pop arts. Since 1960 worldwide music styles have been dominated by the music that comes out of the English speaking nations. In this form, music is produced by bands of 1 to 5 people, helped by numerous song writers, and producers who edit the mixing of the sound.

The present constantly revises the meaning of the past, so I’ll update this list later, both to add and subtract, and especially to redefine. I’ll post all changes below, rather than change what I’ve written above.

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