In Fully Grown, Vollrath really takes you step by step through what was lowering the rate of GDP growth in the last couple of decades. For me, what really makes intuitive sense is the move from a more goods-producing, industrial economy to a more service-oriented economy. A service-oriented economy by nature has less opportunity to scale and thus is held back from growth. The classic example of Baumol’s cost disease here is a good illustration – 100 years ago you needed 4 musicians to play an hour of a quartet by Mozart, and even now you still need those same 4 musicians (OK, maybe not the same ones but four members of the set “musicians”) to play that quartet. In the same time our factory output has soared while seeing fewer workers.
Of course, this book, like any other economic books released before about 3/17/2020 is from the before-times but I feel that the general trend will hold as our new normal gets as close as possible back to the old normal. One final note – this book is systematic. While reading I noted to myself that it was very well organized. That’s not something that normally pops in my head while reading, so I must give the author and his editors kudos on that one.
