We’re Aiming for Mach 10 Economic Growth

In the last two weeks, three very important things happened. 

Firstly, Boom Supersonic’s XB-1 aircraft successfully completed its first flight in Mojave. Secondly, the first human used a Neuralink brain implant to play chess by thinking. Thirdly, Nvidia announced the latest cutting edge chip, the Blackwell B200, which has 208 billion transistors.

When history is happening, rarely is it possible to appreciate its full significance at the time. And even when we can appreciate the significance, it’s usually when catastrophic events are happening, such as wars and terrorist attacks. The good breakthroughs often go unnoticed.

Business and the capitalist economy will do fine over time. But there are times when we’ll do more than fine, and we’ll look back and realise there we lived during a great leap forward. There are times when you can appreciate the significance of present events. This is one of those times. So, even if you are only slightly paying attention, you’ve probably noticed that we are on the cusp of a technology revolution that will reshape our world and change history. 

The industrial revolution was a game changer, shifting manufacturing from human labour to machinery, lifting thousands out of poverty and sparking a shift from agriculture to manufacturing. The Industrial Revolution introduced power looms, steam engines and the telegraph. Its impact was profound, with second and third order effects permeating the globe, such as the railways leading to the standardisation of time and the adoption of Greenwich Mean Time. The epicentre of the Industrial Revolution was Britain, but industrial machinery and the railway spread to Europe and North America and now cover every corner of the world.

The 1990s arrived, and with it came the Internet Revolution. Previously secure industries like publishing and retail were disrupted as low marginal cost internet companies provided convenient services for zero or very low cost. The world got smaller and more globalised than ever before whilst international supply chains changed permanently. The epicentre was in Silicon Valley and quickly spread around the world, with tech hubs popping up in Shenzhen, Hangzhou, Tallinn, London and Berlin.

These aren’t the only revolutions — we’ve had smaller ones, too: the space race, the 1986 Big Bang, the commercialisation and growth of aviation, a “PC in every home” during the 1980s and 90s, and the growth of cloud computing in the 2010s. But the Industrial Revolution and the Internet Revolution are the big two.

But now, imagine an even more transformative revolution, one driven by technology that moves quicker than anything we’ve seen before.

Artificial intelligence, nuclear fusion, the return of supersonic flight, human-machine symbiosis, satellite internet constellations, reusable rockets, autonomous consumer vehicles, and robotics (and add to that list technology that hasn’t even been invented yet) will combine in the coming years to deliver an even more transformative revolution, one driven by technology that moves quicker than anything we’ve seen before. This is the revolution we are about to witness.

Just as the Industrial Revolution had the infamous Luddites who actively opposed industrialisation and machinery, and the internet had its doubters, both in everyday life and amongst academics, the forthcoming revolution will have its doubters. 

But this time, the doubters are doomsday pessimists who think the world will end in about, ugh, tomorrow. That’s because there’s no punishment for pessimism, only optimism.

It’s why we need people like Marc Andreessen and his techno-optimism. It’s why we need people like Noah Smith who can describe the economic mechanisms to be optimistic about the future. Otherwise, the glorious future of increased economic growth and endless abundance will be dead on arrival. 

Through mass production, efficiency gains, railway and canal transport and logistics networks, the Industrial Revolution increased productivity, sustained economic growth, and lifted large swathes of the population out of poverty. Through increased free trade and the opening up of global markets, the Internet Revolution provided opportunities for entrepreneurs worldwide, increasing economic opportunity and improving well-being. These are the outcomes of techno-optimism.

Techno-optimism means that technological innovations drive progress and improvements in living standards and economic opportunities well beyond the epicentre. The economist William Nordhaus has shown that inventors of technology get about 2% of the economic value created by that technology. The remaining 98% of the value goes to society.

You can see this: it’s why most of the world has trains, and it’s why 66% of the world has access to the internet, and it’s why cutting-edge AI models like GPT4, Claude 3, Mistral, and LLaMA-2 will soon be in everyday use and replaced by better cutting-edge models. 

Techno-optimism means that economic opportunities, capitalist risk taking and global potential drastically increase. Techno-optimism means a world of exploration and adventure, of accomplishing things that used to be fiction. Techno-optimism means that we don’t just have one or two centres of global trade, we have a planet full of them. Techno-optimism means that we don’t only have a couple of locations producing cutting edge technology, we have one on every continent. Techno-optimism means that every child worldwide can become an engineer, a scientist, an economist or an entrepreneur. It means that if you have an idea, you can start a business and make it.

All you and everyone have to do is decide whether to join the fun. It’s easy to join, and you can even do so passively: thanks to the 1980s financial markets liberalisation, you can simply buy a low cost index fund. You can be part of the 98%.

Forget everything else. Every government policy should embrace the free market and create fiscal and monetary conditions conducive to increasing GDP per capita growth through technology innovation and productivity growth for the next decade. Economic growth is back. Like Pete "Maverick" Mitchell in Top Gun Maverick, we’re aiming for Mach 10 economic growth.