The Great Stagnation and the space program

When I was young, the 1960s seemed like the “space age”—very high tech.  Now that period looks rather primitive in Hollywood films.  Tyler Cowen has a post reviewing the film First Man, and then discusses how it relates to the “Great Stagnation”.  I can’t recommend the film, which is a biopic about Neil Armstrong, but it does have a few points of interest.

Here I’d like to focus on something else, the surprising slowdown in the pace at which these sorts of big projects get done.  We developed three major programs (Mercury, Gemini and Saturn) during the 1960s.  Today, this sort of undertaking would take much longer.  And it’s not just space.

Tyler also has a recent post with a graph showing the speed of skyscraper construction over time.  Some commenters view the graph as indicating a gradual slowdown in the pace at which skyscrapers get built.  To my eye, the graph looks relatively level (it’s pretty noisy, year to year.)  On the other hand, almost everywhere else you look things are far worse.  The speed at which we build other major projects such as subways, airport terminals, expressways, and railroads seems to have slowed dramatically over time.  In that sense, the skyscraper construction industry looks pretty good by comparison.

That might partly reflect the inefficiency of the public sector, but you also see a slowdown in private sector projects such as the newest passenger jets by Boeing and Airbus, which ran far behind schedule.

No single theory seems adequate:

1. Modern projects might be more complex, but wouldn’t that be equally true of skyscrapers?  And are modern subways actually all that much more complex than before?  Maybe they have better electronic switching equipment, but surely that’s not what explains the delay.

2.  Perhaps we go slower for safety reasons.  But even the post-1960s space program had a rather poor safety record.  And aren’t skyscrapers just as dangerous to build as subways, airport terminals, expressways, and high speed rail?

3.  More environmental controls?  Maybe, but that should be less of a problem for subways than for skyscrapers.

4.  A more litigious society?  This sort of relates to safety and the environment.  It’s probably one factor.

5.  Public spending diverted from investment to transfer programs?  This might lead cash-strapped governments to “stretch out” infrastructure projects.

It will be interesting to see if Elon Musk’s “Boring Company” can do an end run around all of these problems.  The early indications are not promising.

My hunch is that there is a complex mix of problems.  One is the growing complacency of a society that is increasingly averse to disruptive change, risk and environmental damage.  Another is an increasingly inefficient public sector, which devotes too many resources to public sector wages, health care and transfer payments, and not enough to infrastructure.

PS.  When I look out my window, I can see a new home being built and several more being remodeled.  All are far behind schedule.  The $3 million home is only half built, and nothing’s been done for 6 months.  The two remodeling projects have each been going on for more than a year (two years in one case).  One was slowed down by government regulations, the other by labor shortages.  And don’t even ask about the time involved in adding a lane to the 405 highway in Orange County.



14 Responses to “The Great Stagnation and the space program”

  1. Gravatar of Benjamin Cole Benjamin Cole
    24. October 2018 at 16:37

    And new military weapons are on the boards and then in development over decades and decades.

    An amazing story is the de Havilland Mosquito bomber plane built in World War II by the Brits. Britain had steel shortages and labor shortages. The Mosquito began production in 1941 and entered service in November.

    Built out of wood, the bomber served brilliantly and was loved by its crews. In wartime conditions, 1,378 Mosquitoes were built.

    Development of the F 35 US fighter jet began in 1992 and the fleet is presently grounded.

    When you get complexity and public agencies put together….

  2. Gravatar of Luc Mennet Luc Mennet
    24. October 2018 at 17:59

    Something I would be interested in is comparing sectors where stagnation has occurred in America to other countries that are developing. It might become apparent that there’s some sort of natural soft ceiling that economies reach in certain sectors where after that point they stop expanding at the rate they were before. However, that doesn’t explain delays in projects so much as a decreased demand for new projects. Also, in Tyler’s First Man post he mentions how Cars Aren’t much better than they were in 1969, which by pretty much any metric is really not true, especially if you look at things like fuel economy. sure, they do the same function of moving people from place to another, but they do it way better, which I imagine is not something that you can say about, for example, the NYC Subway. Additionally, from my time spent in Japan they seem to spend a good amount of time and money constantly improving their rail systems in a way that I would expect mirrors American car improvements post-GM stagnation.

  3. Gravatar of Matthias Goergens Matthias Goergens
    24. October 2018 at 19:13

    From what I’ve heard, most of the surprises in construction come from below the ground. Skyscrapers have proportionally less of that than roads or subways.

    I wonder whether lower interest rates would explain a revealed preference for putting up with longer delays before taking radical action?

  4. Gravatar of Brett Brett
    24. October 2018 at 22:12

    Space was always hard – it’s just that there was more federal funding for it in the Space Race Era for certain reasons than there is now. There also hasn’t really been any big incentives to get costs down, because most of the customers for space launches in the US have been governmental without tight budgets. And without those cheaper flights, it’s hard to do much with people in space.

  5. Gravatar of ssumner ssumner
    25. October 2018 at 05:43

    Matthias, Note that one reason rates are so low is that we now are less interested in building infrastructure.

  6. Gravatar of Matthias Goergens Matthias Goergens
    25. October 2018 at 09:01

    Scott, yes, that makes sense.

    In an empiric sense, I’d still like to know whether one can measure the effects of real interest rates on how and how much projects to over schedule.

  7. Gravatar of Christian List Christian List
    25. October 2018 at 17:34

    I know that the Great Stagnation narrative is trendy but how can people even say this when the US is growing so fast? So it’s fake growth or what are you guys saying? I don’t really get the Great Stagnation narrative. So much growth and a “great stagnation” don’t seem to go well together. It’s either one or the other.

  8. Gravatar of Jon Jon
    25. October 2018 at 18:48

    I’ll bite. This problem is in many fields; let’s discuss one I know: software engineering. There is a limited fraction of the population suitable to be software engineers, but we are computerizing more and more devices. In your space age, we didn’t do this. Computerizing things is valuable; so we are proportionately increasing our computerization of life. To acess more software engineers as a proportion of the population, we build frameworks that allow increasingly less adept people to construct complex software systems but these mitigation’s are only partially successful. Person-hours per product is increasing faster than the frameworks make up for the decline in labor skill.

    Worse for the pace of complex projects, scale effects in software still allow software engineers to capture a very large revenue which interacts with the above to produce high salaries. Another field I know well — VLSI — is seeing significant labor shortages worldwide. The best students in school go into software engineering. Hardware components have become less numerous over time but the engineering skill is declining faster than methods are improving. Projects are taking longer.

    This factors into the dominance of the largest firms. They pay the best salaries because they have revenue scale against engineering input. So they have the best engineers. Those engineers can hold the old cadence. So if building a system some percent better each generation, the CAGR of these firms products is much higher.

    It’s all the same effect.

    So why does your bridge take longer to be built? Software.

  9. Gravatar of BC BC
    25. October 2018 at 22:18

    One example of rapid building might be the Seaport District in Boston. It’s amazing how quickly so many buildings are going up. The buildings aren’t really skyscrapers, more like 10-20 floors, but large enough to change the skyline. I usually visit the area about once every few months. Each time, I notice entirely new buildings, where I don’t even remember a construction site from the previous visit.

    I don’t know how long the planning and approval for these projects took, but the actual construction has been amazingly fast.

    26. October 2018 at 04:49

    One guy I wouldn’t bet against is Elon Musk. What he’s achieved at Tesla, even given the often unrealistic projected timeframes and unnecessary drama, is nothing short of spectacular. He has the most exciting car company since Ford began building the Model T. Even if the project in Chicago is late and over-budget, I won’t bet against it.

  11. Gravatar of ssumner ssumner
    26. October 2018 at 20:37

    Christian, Growth since 2007 has been slow. It remains to be seen whether the recent pick-up will persist.

    Michael, Yes, his car company is impressive.

  12. Gravatar of Michael Rulle Michael Rulle
    27. October 2018 at 04:00

    I have always wondered about this topic. The classic example of course is the Empire State Building, which took about 14 months to build. Another example is the Newport RI Vanderbilt Mansion, which took 2 years to build at a 2018 cost of 150mil (7mil in 1893-95). Then we have the opposite examples in recent times——the Boston Harbor tunnel, the California “bullet” train, the NYC 3rd Avenue subway. I have always assumed it is some combination of a more distributed labor force today(the number of workers are listed at 3400 for Empire State Building which seems like a huge number in one year) although one would think technology would counter act that; corruption; and regulation. Then again, I have never seen a true detailed study on the topic.

  13. Gravatar of Les Cargill Les Cargill
    27. October 2018 at 13:37

    There was among the Silent Generation, the Greatest Generation and the generation before that a sort of unqualified belief in technology. After all, between the three they’d seen us go from railroads and telegraphy to the moon.

    But then it stopped. It didn’t stop all at once, but the flywheel took say, three decades to wind down. Richard Nixon correctly surmised we wouldn’t miss it, and a million Nixons bloomed. The efect of hgrand scale New Deal projects had began to curdle – the Robert Moses exprressways, the Floyd Dominy water control systems, even the Interstate.

    Having a good, “moonshot” sized thing to unify people overcomes the central tendency towards narcissistic competition. Ital;lows aligning egos towards a single pole, as magnetic domains are aligned in a magnet.

    Since 2007, we’ve all gotten small pocket electronic narcissism amplifier appliances. So try to constrain people from using them and see what happens ( as is done in secure projects sites with proscriptions against small electronc transmitters ).

    If you do innovate in today’s climate, you need the status-bucks to support it or you’ll be shut down. This is for the same reason that a basket of crabs needs no lid. And then you’ll find, as Trump and Elon Musk have, that what you’re really doing is advanced branding and you don’t need to show results. There’s a sort of Says Law thing related to status….

    With Microsoft-era tech, tech was its own reason. Now they sell the story, not the product…

    Blaise Pascal identified the problem early on – all man’s problems stem from not being able to work quietly in a room by themselves.

  14. Gravatar of Bob Bob
    27. October 2018 at 14:40

    We cannot discount the fact that most of the west has a very different view of economic progress than it did even 30 years ago. Building more, bigger and better is just not something we really want, society wide. We have conservatives looking at the old days, but regarding jobs, not regarding the growth and dynamism. How much if red America wants more building? They want fewer people around them. The left does not aim at fixing climate problems through more technology and rebuilding a better, more efficient infrastructure: More focus on no, instead on new yes. Construction, like anything else, improves with practice, and the grand projects like that are all in software.

    While I find Randian writing, and Randian morality appalling, the idea of making industrialists and engineers have high status is a good one. The idea that the story of industry can be inspiring, and we should look for ways to put sustainable growth first is one that should be spread in our culture. Instead, our idea of a successful man is someone who inherits their money, cheats on their taxes, defrauds their investors and is as uninspiring as it gets. How can we go anywhere like this?

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