Essential Role of Fossil Fuels in Future Economic Growth

Deck: 

Essential in the 20th Century, and in the 21st

Fortnightly Magazine - September 2016
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In part I, "Unsung Role of Fossil Fuels in the Miracle of U.S. Growth," I noted that the recent book by Robert Gordon, The Rise and Fall of American Growth, has generated enormous controversy.1 Dr. Gordon's thesis is that the incredible technological innovations of the period from 1870 to 1920 were a one-time-in-history event that cannot be replicated.

According to Gordon, no other similar period in history has brought comparable progress. Or, more importantly, is likely to again. The U.S., and the world, should get used to annual productivity and growth rates of about one percent or less, instead of nearly three percent.

This is a huge difference. Further, he contends that there is little that governments can do in terms of monetary, fiscal, tax, or other policies to measurably change this. This is a pessimistic message with profound economic, social, and political implications.

The firestorm of debate Gordon has generated focuses on whether he is correct in concluding that the U.S. faces an inevitable future of anemic growth. However, a critical issue is not being discussed.

Nowhere in Gordon's entire 762-page book does he give credit to fossil fuels for the economic miracle of the past two centuries. Or indicate their importance for future economic and technological progress.

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