Robert Gordon, a curmudgeonly 73-year-old economist, believes our best days are over. After a century of life-changing innovations that spurred growth, he says, human progress is slowing to a crawl.
Joel Mokyr, a cheerful 67-year-old economist, imagines a coming age of new inventions, including gene therapies to prolong our life span and miracle seeds that can feed the world without fertilizers.
Both points of view are wrong. The section of the economy that has "spurred growth" over the past 30 years, the financial sector, has had nothing to do with "life-changing" innovations. The stock market is almost entirely disconnected with research and development in the productive sector, which for its own part, as the economist Mariana Mazzucato points out in The Entrepreneurial State, is greatly dependent on research funded by the government. And the reason we should not expect "new inventions" to save the world any time soon is because in our age of finance capitalism, governments have one priority: support the financial markets. Complying with this directive means keeping inflation low, protecting private assets with public money, and cutting government spending—infrastructure maintenance, social services, and, of course, funding for precisely the kind of scientific research that the productive sector depends on for new and innovative products like the iPhone.