In business today, much is being made about new companies using new technologies to “disrupt” old business lines that may not have adapted to new technological methods. Communications, banking and transportation are all being challenged in this way. In his new New York Times best seller “The Rise and Fall of American Growth,” Robert Gordon takes us back to old business “disrupters” such as telephones, newspapers and automobiles, all of which come on the scene in the early part of what he calls the “special” century between 1870-1970.
The book is essentially economic history of the U.S. during this period. The book’s starting point is the year 1870, which he paints a stark portrait of post war living standards and their “unremitting daily grind of painful manual labor, household drudgery, darkness, isolation and early death.” Mr. Gordon points to a series of “great inventions” that changed daily life dramatically for the better, and to the people of that age created as much wonder and disruption than rivals what we are seeing in today’s technological advances. Electricity brought light from a flick of a switch instead of the strike of a match. The automobile ended the preeminence of the horse and carriage. The phone and printing presses reduced isolationism and created an opportunity for recreation where little to none existed before.
As Mr. Gordon states, “a nation bereft of information in 1870 soon benefitted from growth in newspapers as technology powered the price of paper and printing almost as dramatically as the internet reduced costs in the 1990’s.” The telephone came about later with greater disruptive influence on old ways of communicating.
Perhaps his favorite “disruptive” invention was the automobile. Mr. Gordon goes to great lengths to discuss its life changing attributes on society, in terms of time, quality of life and even health. The book is replete with stories that testify to the importance of the automobile in American life. My favorite was the Indiana house wife who, when asked what was more important, the car or indoor plumbing, replied “you can’t go to town in a bathtub. “ Another house wife, equally enthralled, was quoted that “we would rather go without clothes than to give up the car.”
The book continues with numerous stories of progress in each of these inventions, noting the disruptive influences of each. The automobile puts pressure on the corner store and local banks, now able to be bypassed for larger stores and different banks in larger towns. Likewise street vendors, carriages, the telegraph and numerous other products of the day were impacted by the popularity of the new inventions.
A critical point to all of this is a reminder that our past can serve as a reference point to the tech future we face today. The changes discussed in Mr. Gordon’s book are arguably just as influential as those we are seeing now. In fact in one of his later points, that we don’t have space to discuss today, is that today’s technological advances don’t have the same impact on G.D.P. that we saw between 1870 and 1970. Hence the title of the book, but we will have to save that for the second installment.