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The Great Stagnation and the space program

Summary:
When I was young, the 1960s seemed like the “space age”—very high tech.  Now that period looks rather primitive in Hollywood films.  Tyler Cowen has a post reviewing the film First Man, and then discusses how it relates to the “Great Stagnation”.  I can’t recommend the film, which is a biopic about Neil Armstrong, but it does have a few points of interest. Here I’d like to focus on something else, the surprising slowdown in the pace at which these sorts of big projects get done.  We developed three major programs (Mercury, Gemini and Saturn) during the 1960s.  Today, this sort of undertaking would take much longer.  And it’s not just space. Tyler also has a recent post with a graph showing the speed of skyscraper construction over time.  Some commenters view the graph as

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When I was young, the 1960s seemed like the “space age”—very high tech.  Now that period looks rather primitive in Hollywood films.  Tyler Cowen has a post reviewing the film First Man, and then discusses how it relates to the “Great Stagnation”.  I can’t recommend the film, which is a biopic about Neil Armstrong, but it does have a few points of interest.

Here I’d like to focus on something else, the surprising slowdown in the pace at which these sorts of big projects get done.  We developed three major programs (Mercury, Gemini and Saturn) during the 1960s.  Today, this sort of undertaking would take much longer.  And it’s not just space.

Tyler also has a recent post with a graph showing the speed of skyscraper construction over time.  Some commenters view the graph as indicating a gradual slowdown in the pace at which skyscrapers get built.  To my eye, the graph looks relatively level (it’s pretty noisy, year to year.)  On the other hand, almost everywhere else you look things are far worse.  The speed at which we build other major projects such as subways, airport terminals, expressways, and railroads seems to have slowed dramatically over time.  In that sense, the skyscraper construction industry looks pretty good by comparison.

That might partly reflect the inefficiency of the public sector, but you also see a slowdown in private sector projects such as the newest passenger jets by Boeing and Airbus, which ran far behind schedule.

No single theory seems adequate:

1. Modern projects might be more complex, but wouldn’t that be equally true of skyscrapers?  And are modern subways actually all that much more complex than before?  Maybe they have better electronic switching equipment, but surely that’s not what explains the delay.

2.  Perhaps we go slower for safety reasons.  But even the post-1960s space program had a rather poor safety record.  And aren’t skyscrapers just as dangerous to build as subways, airport terminals, expressways, and high speed rail?

3.  More environmental controls?  Maybe, but that should be less of a problem for subways than for skyscrapers.

4.  A more litigious society?  This sort of relates to safety and the environment.  It’s probably one factor.

5.  Public spending diverted from investment to transfer programs?  This might lead cash-strapped governments to “stretch out” infrastructure projects.

It will be interesting to see if Elon Musk’s “Boring Company” can do an end run around all of these problems.  The early indications are not promising.

My hunch is that there is a complex mix of problems.  One is the growing complacency of a society that is increasingly averse to disruptive change, risk and environmental damage.  Another is an increasingly inefficient public sector, which devotes too many resources to public sector wages, health care and transfer payments, and not enough to infrastructure.

PS.  When I look out my window, I can see a new home being built and several more being remodeled.  All are far behind schedule.  The $3 million home is only half built, and nothing’s been done for 6 months.  The two remodeling projects have each been going on for more than a year (two years in one case).  One was slowed down by government regulations, the other by labor shortages.  And don’t even ask about the time involved in adding a lane to the 405 highway in Orange County.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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