The Retreat of Western Liberalism

by Edward Luce

Between 1870 and 1970 – the century of the West’s greatest productivity growth – incomes grew far faster than ever experienced. They also exceeded anything we in the West have seen since. With the exception of the 1990s, when the digital revolution hit our desktops, productivity growth has slowed sharply in the past half-century. In America it dropped from an average of 2.7 per cent a year in the 1950s and 1960s to below 1 per cent in the last decade. As a result, income growth has also slowed. The median US household income in 2014 was $50,600. If we had maintained pre-1970 productivity growth, it would have been $97,300.63 We are already well into a slowdown that, in Gordon’s view, is likely to slow further.