Arnold Kling opens his Kurzweilomics piece — about the economic consequences of Kurzweil’s singularity — with an anecdote from Simon Kuznets, cited by Robert Fogel:
He used to give a one-year course in growth economics, both at Johns Hopkins and Harvard. One of the points he made was that if you wanted to find accurate forecasts of what happened in the past, don’t look at what the economists said. The economists in 1850 wrote that the progress of the last decade had been so great that it could not possibly continue. And economists at the end of the nineteenth century wrote that the progress of the last half century had been so great that it could not possibly continue during the twentieth century. Kuznets said you would come closest to an accurate forecast if you read the writers of science fiction. But even the writers of science fiction were too pessimistic.
If returns are in fact accelerating, many of our problems go away:
If output per person in 2025 is more than 5 times what it is today, then the economy will have won the race. That means that all of the concerns that economists raise about the middle of this century, such as the external debt of the U.S. economy (the cumulative trade deficit), the fiscal implications of Social Security and Medicare, or gloomy scenarios for global warming, will be trivialized by the sheer heights that economic wealth will have scaled by that time. If Kurzweil is correct, then the mountain of debt that we fear we are accumulating now will seem like a molehill by 2040. We will pay off this debt the way someone who wins a million-dollar lottery pays off a car loan.