Gloomy Economic Stats Don’t Tell the Full Story
GDP statistics overlook improvements brought by science and technology
EVANSTON, Ill. --- Despite the nation’s current slow economic growth, science and technology continue to improve our quality of life, argues Northwestern University economics professor Joel Mokyr in an opinion piece in the Aug. 8 edition of The Wall Street Journal.
Traditional economic growth measurements such as gross domestic product (GDP) don’t take science and technology into consideration and will become increasingly misleading as innovation accelerates, says Mokyr in “What Today’s Economic Gloomsayers Are Missing.”
“These measures were designed for a steel-and-wheat economy, not one in which information and data are the most dynamic sectors,” writes Mokyr, an expert in economic history and the economics of technological change. “They mismeasure the contributions of innovation to the economy…Technology is not our enemy. It is our best hope.”
Mokyr is the Robert H. Strotz Professor of Arts and Sciences and professor of economics and history in the Weinberg College of Arts and Sciences.
“As science moves into new areas and solves problems that were not even imagined, inventors, engineers and entrepreneurs are waiting in the wings to design new gizmos and processes based on the new discoveries that will continue to improve our lives,” Mokyr writes.
He highlights just a few areas, fueled in part by the “digital codification of information,” that are expanding frontiers and providing society with new tools for progress: materials science, genetic modification and nanotechnology.
“The breakthroughs are not ‘on the horizon,’” Mokyr says. “They are here. The economy may be facing some headwinds, but the technological tailwind is more like a tornado. Fasten your seat belts.”
Mokyr is the author of the book “The Lever of Riches: Technological Creativity and Economic Progress,” an economic history of technological progress (Oxford University Press, 1990). His most recent book is “The Enlightened Economy: An Economic History of Britain 1700-1850” (Yale, 2009).
Read the full Wall Street Journal opinion piece online (subscription required).