Neoliberalism and Technological Slowdown

The possibility that the rate of technological change slowed after the mid-twentieth century has interested me for over a decade--as has the correlation of that slowdown with the neoliberal turn, about which I have had occasion to write much. Of course, the neoliberal decades have been decades of weak growth with what came before--perhaps even very weak growth.

Gerard Dumenil and Dominique Levy in Capital Resurgent contend that the technological slowdown led to slower productivity growth and slower growth generally, which helped prompt the neoliberal turn.1 Yet, one could argue that the relationship has been the other way around--that neoliberalism contributed to a technological slowdown. It is not at all difficult to think up reasons why this might be the case--the neoliberal preference for speculative over productive investment, a "short-termism" in management (fixated on quarterly balance sheets, the highest possible share prices and dividend payouts at a given moment, and the excuses they provide for preposterous executive compensation, and to hell with everything else) that wreaks havoc with genuinely productive work and especially R & D, an IP system run amok that has innovators getting in each others' way.1

There is, too, the disincentive of the ample, cheap labor supply opened up by convenient offshoring and the collapse of the Communist bloc for the development of labor-saving technologies, and the encouragement that the concentration of global sectors in a few, oligopolistic hands provides for sustaining rather than breakthrough technologies, and the opportunities corporate colossi have for defending themselves against disruption. (Consider how long and successfully Big Oil has warded off the challenge from renewable energy technologies.) And there is the austerity that has proceeded from all of it, leading to the trimming of research budgets (often, in unintelligent ways), while discouraging not just the speculation-mad but anyone from investing to the degree they otherwise might.

It seems to me that any serious discussion of the rate of progress, whether a case for its having slowed down, sped up or anything else, needs to take account of all that.

1. In Capital Resurgent the fuller reading of the history is that technological advance slowed in the '60s, encouraging finance's efforts to get the upper hand in economic life, the essence of the neoliberal turn; but that technological progress did resurge later in the century, despite which finance remained dominant, and neoliberalism endured. In fairness, the original edition of the book appeared about the turn of the twenty-first century (2000), when the argument for revived progress seemed more plausible. (To go by Robert Gordon's work, the 1996-2004 period did see strong advance, which petered out again.)