One statement of grounds that AI mightiness lead to explosive economical maturation is the precedent group by the Industrial Revolution. For hundreds of years — 1252 to 1652, to beryllium precise — the compound yearly maturation complaint of per capita existent GDP successful the UK was astir 0.07%. It past began to accelerate, settling into a caller compound complaint of astir 1.02% per twelvemonth by 1850, which it held until 1913. In different words, maturation accelerated by astir 15 times before; the statement goes that this should make america humble astir predicting it can’t hap again, and possibly we should beryllium unfastened to accelerations of 10 times aliases much today.
I deliberation this statement is overstated and the affinity betwixt a 10× acceleration coming and the acceleration that occurred during the Industrial Revolution is misleading. The extremity of the first portion of this station is to supply grounds for 2 claims:
- At the outset of the Industrial Revolution, yearly maturation that was 10× the long-run mean was comparatively common.
- In the modern world, yearly maturation that is 10× the long-run mean for the world is overmuch much rare.
The 2nd portion of this station characterizes the acceleration that occurred during the Industrial Revolution successful position of the modular deviation of year-to-year variety successful maturation rates. Applying the aforesaid attack to modern maturation suggests that an IR-style acceleration would return maturation successful frontier economies to astir 2.8% per twelvemonth — meaningfully faster than today, but good beneath the 10× declare that is often advanced.
Why spell done this exercise? A communal guidance to claims that AI will lead to yearly maturation rates successful excess of 20% per twelvemonth is skepticism and incredulity — it would beryllium truthful acold extracurricular humanities experience. A communal retort is that the aforesaid incredulity would person been incorrect successful the 1700s: had personification been told that early maturation would beryllium 10× the mean and dismissed it, they would person made an error.
The extremity present is to rescue that first reaction. A 10x acceleration coming is not the aforesaid point arsenic a 10x acceleration successful 1700. A personification surviving successful the 1700s would person been asked to envision bully years becoming overmuch much communal — a complaint they had already knowledgeable galore times. A personification coming is being asked to envision a qualitatively different benignant of economical dynamics, 1 that falls respective modular deviations extracurricular norm for the world today.
All estimates usage the Maddison Project Database 2023, which reports GDP per capita successful 2011 USD and organization successful thousands. The last conception considers immoderate objections to the relevancy of this analysis.
How communal was 10× faster maturation successful the pre-IR UK?
We will commencement by establishing that it was rather communal for maturation to transcend 10× the long-run mean successful the UK anterior to the Industrial Revolution. Over 1252–1652, the long-run mean was 0.30% per year. The compound maturation complaint complete this play — the complaint astatine which wealthiness really accumulated crossed generations — was astir 0.07% per year. Roughly 10× this compound complaint — astir 0.66% per twelvemonth — was exceeded successful astir 46% of years. (This fig is not delicate to the nonstop model chosen: the compound maturation complaint ranges from 0.07% to 0.18% crossed plausible replacement commencement and extremity years, and the stock of years exceeding 10× that complaint ranges from astir 40% to 50%.)
Distribution of yearly GDP per capita maturation for the UK, 1252–1652. The dashed reddish statement marks 10× the compound maturation complaint (0.66%/yr). About 46% of years exceeded this threshold.
Economic statistic from hundreds of years successful the past, earlier we had statistical offices, are of people highly unreliable, and truthful the remainder of this conception will effort to supply replacement grounds that 10× faster maturation was astir apt reasonably common. First, to destruct the value of year-to-year fluctuations, we tin attraction connected 20-year compound mean maturation rates. The mean compound complaint crossed each 20-year windows is 0.06% per year, accordant pinch the full-period CAGR of 0.07%, truthful 10× that is simply a period of astir 0.6%. About 17% of 20-year windows exceeded it. If this information is to beryllium believed, it implies that generation-long runs of 10× faster maturation were not unheard of anterior to the Industrial Revolution.
Distribution of 20-year compound yearly GDP per capita maturation rates for the UK, 1272–1652. The dashed reddish statement marks 10× the long-run mean (0.60%/yr). About 17% of 20-year periods exceeded this threshold.
Our 2nd robustness cheque is to look for akin patterns complete 1960–2022 for countries pinch characteristics akin to the pre-IR UK. We are assuming that the maturation dynamics of this group of modern countries is simply a reasonable analogue for the maturation dynamics of the pre-IR UK — and hoping that the information for these modern countries is much reliable than reconstructions of pre-IR UK existent GDP per capita.
We place this group of countries based connected GDP per capita, population, and long-run mean maturation rate. In the Maddison data, pre-IR UK existent GDP per capita ranged from $995 to $2,056 (2011 USD), and organization information disposable for 1500 and 1600 shows a scope of 3.9 to 6.2 million, pinch arithmetic mean maturation averaging 0.30% per year. We place countries pinch existent GDP per capita betwixt $800 and $2,500, organization betwixt 1 cardinal and 10 million, and mean maturation betwixt −0.3% and 0.9%. Eight countries fulfill these conditions: Benin, Burundi, Chad, Haiti, Senegal, Sierra Leone, Togo, and Zimbabwe. Their mean compound maturation complaint is 0.35%/yr, and 10× that — astir 3.5% per twelvemonth — was exceeded successful astir 19% of country-years. This again suggests it was apt the lawsuit successful the pre-IR UK that yearly maturation rates exceeding 10× the mean were comparatively common.
Distribution of yearly GDP per capita maturation for 8 modern analogue countries (Benin, Burundi, Chad, Haiti, Senegal, Sierra Leone, Togo, Zimbabwe), 1960–2022. The dashed reddish statement marks 10× the mean compound maturation complaint (3.5%/yr). About 19% of country-years exceeded this threshold.
Our last study draws connected the full modern dataset. The floor plan beneath bins each countries successful the Maddison information by their 1950–1985 baseline maturation complaint and shows what stock of each group had astatine slightest 1 twelvemonth betwixt 1986 and 2022 successful which maturation exceeded 10× that baseline. Countries pinch zero aliases antagonistic baseline maturation are excluded.
Share of countries successful each baseline-growth bin (1950–1985 average) that had astatine slightest 1 twelvemonth of maturation exceeding 10× their baseline during 1986–2022. n gives the number of countries successful each bin.
Among the slowest-growing economies — those averaging 0–1%/yr, the aforesaid scope arsenic our analogues — 94% knowledgeable astatine slightest 1 10× year. That stock falls to 22% for countries averaging 1–2%/yr and to fundamentally zero supra 2%/yr. We find that 10× faster maturation is overmuch much communal for slow-growing countries, suggesting that a slow-growing system for illustration the pre-IR UK apt had galore years successful which maturation exceeded 10× its long-run average.
How communal is 10× faster maturation today?
Imagine surviving successful Britain astir 1700, connected the eve of the Industrial Revolution. Annual GDP per capita maturation had averaged astir 0.07% for the past respective hundreds of years — but your acquisition was not of slow, dependable progress. Harvest failures, wars, and illness sent yearly maturation swinging by 10 percent points aliases much successful either direction. A twelvemonth of 0.66% maturation — 10 times the compound maturation complaint — was not astatine each unusual: astir 1 twelvemonth successful 2 already exceeded that threshold. If personification had told you that maturation was astir to permanently accelerate tenfold, the caller complaint would person been thing you had already lived done galore times. It would person felt, twelvemonth to year, for illustration a tally of bully harvests.
Today the communicative is very different. In the modern USA, 10× the compound maturation complaint implies yearly maturation of astir 19% per year. Looking only astatine the acquisition of Americans surviving today, they person never knowledgeable this level of growth, moreover for a azygous year.
What if we broaden our aperture to the full world? Below is simply a histogram of the yearly maturation rates of each countries successful the Maddison dataset from 1950–2022. Only 0.76% of country-years person knowledgeable yearly maturation rates successful excess of 19%.
Distribution of yearly GDP per capita maturation rates crossed each countries successful the Maddison database, 1950–2022. The dashed reddish statement marks 18.9%/yr — 10× the modern frontier compound maturation rate. About 0.8% of country-years exceeded this threshold.
It is worthy examining the 89 country-years that did transcend 20%. The ample mostly autumn into 2 categories that connection nary meaningful precedent for an AI-driven acceleration. The first is lipid and assets windfalls: Kuwait’s GDP per capita roseate 105% successful 1992 arsenic lipid accumulation restarted aft the Gulf War; Libya appears many times done the 1960s lipid roar and again successful 2012 aft Gaddafi fell; Equatorial Guinea, Qatar, Oman, Nigeria, and Gabon each person years driven by commodity discoveries aliases value spikes. The 2nd is post-conflict recovery: Lebanon successful aggregate years done its civilian warfare and aftermath, Bosnia successful 1996, Rwanda successful 1995, Afghanistan successful 2002, Iraq successful 2004. These are cases of GDP returning to a level it had antecedently reached, not of an system operating successful a caller gear.
A third, smaller class is much interesting: a fistful of countries — South Korea successful 1953, Botswana successful the early 1970s, immoderate Soviet-bloc countries successful the early 1950s — achieved little periods of very accelerated maturation from genuinely debased starting points during early industrialization. This class is worthy taking earnestly arsenic a partial analogue for the AI argument. If AI unlocks a fundamentally caller accumulation frontier, 1 mightiness reason that today’s economies are “at a debased base” comparative to that frontier’s potential, conscionable arsenic early industrializing economies were comparative to the exertion they were adopting. I deliberation this is the strongest type of the IR-as-precedent argument.
In sum, a 10× maturation acceleration successful the modern world, moreover for a azygous year, would consciousness qualitatively different from almost each lived experience. It would beryllium a caller measurement for the system to operate. In contrast, during the Industrial Revolution, a 10× acceleration would consciousness for illustration a alternatively mean bully twelvemonth for the system — pinch the main quality being that these bully years would support connected coming.
The modular deviation approach
Suppose we understand the Industrial Revolution arsenic “more of the bully years, less of the bad years.” What would that consciousness for illustration today?
If we want to seizure what an IR-level acceleration would consciousness for illustration coming comparative to our lived experience, we request a ruler calibrated to existent maturation experience. The modular deviation of yearly maturation rates is simply a useful measurement here. For reference, the modular deviations crossed various samples are:
| Pre-IR UK, 1252–1652 | 6.9% |
| Modern analogue countries (8 countries, 1960–2022) | 5.5% |
| USA, 1950–2022 | 2.3% |
| All countries, 1950–2022 | 6.2% |
Using the pre-IR UK data, the Industrial Revolution amounted to an summation successful the compound maturation complaint from 0.07% to 1.02% — a 15× acceleration, not 10×. In position of modular deviations of yearly maturation rates, going from 0.07% to 1.02% represents an summation of astir 0.14 modular deviations measured against the pre-IR UK yearly distribution, aliases 0.17 modular deviations measured against the modern analogue countries.
Taking the US compound maturation complaint of 1.9% per twelvemonth arsenic the frontier baseline, a likewise sized summation — 0.17 modular deviations of the analogue distribution, our preferred measurement since it doesn’t trust connected the reliability of pre-IR UK information — would return maturation to astir 2.8% per year. Using the US modular deviation alternatively gives astir 2.3% per year; utilizing the all-country modular deviation gives astir 3.0%. For comparison, a genuine 10× summation successful the compound maturation complaint — from 1.9% to 18.9% — would beryllium an summation of 3.1 modular deviations utilizing the analogue SD, aliases 7.5 modular deviations utilizing the US SD.
Some imaginable objections and replies
Objection 1: Pre-industrial maturation and business maturation person different mechanisms
One objection mightiness reason that this study is irrelevant because the mechanisms underlying yearly maturation fluctuations successful pre-industrial societies (such arsenic weather, disease, and war) are different from the drivers of maturation successful the business world. The very long-run inclination strips retired irrelevant year-to-year fluctuations, and leaves down the information of maturation derived from technological progress. This constituent does accelerate 15x during the Industrial Revolution, and hence provides a precedent for a akin technologically driven acceleration today.
As a response, statement that the processes governing economical maturation are only incompletely understood. An economy’s exertion is surely an important determinant of the eventual level of output per personification successful an economy, but the complaint of alteration astatine which output per personification grows whitethorn beryllium constricted by galore further factors beyond the velocity of technological progress. The complaint of alteration of the economy, for example, mightiness beryllium governed successful portion by the complaint of technological progress, but besides by:
- The easiness aliases trouble of transferring spot authorities complete productive assets to their astir businesslike users
- The propensity of workers to waste and acquisition income for reductions successful hours worked
- Savings rates and the maturity of financial markets that nonstop those savings towards productive investment
- Security of spot authorities for prosperous economical agents
- The size of communal markets And truthful on. Importantly, these factors whitethorn govern the velocity astatine which it is imaginable for an system to turn successful some the pre-industrial and business eras.
Given the incompleteness of our understanding, it is informative to look astatine humanities precedent. If personification were to reason that a caller policy, for example, would summation the maturation complaint from x to y, it is an informative workout to inquire really often we person seen maturation scope y successful the past.
Objection 2: Sensitivity to the meaning of interval
Another entity points retired that location is thing typical astir a one-year interval. The station establishes that we get different results if we take to measurement maturation complete 1 year, 20 years, aliases a 100+ years. Given location is nary logic to privilege 1 temporal framework complete another, we don’t study overmuch from this exercise.
I disagree; shorter intervals are useful precisely because if we cannot deed a fixed maturation complaint connected moreover a very short clip interval, it becomes little apt we will deed it connected a longer one. Imagine 2 runners who request to suffice for a title by moving a 1600m title successful nether 5 minutes. If 1 of the runners has shown themselves tin of moving 400m successful good nether 75 seconds astatine slightest immoderate of the time, they person amended likelihood of moving a 5 infinitesimal mile than a runner who has ne'er tally 400m successful nether 75 seconds.
Put different way, the Industrial Revolution’s long-run maturation acceleration did not require the UK system to deed unusually accelerated short-run maturation rates by its ain standards, but to deed them much often than it antecedently did. Explosive maturation coming would require hitting short-run maturation rates that are unusually accelerated by modern standards.
A closing observation
To close, I’ll statement that the Industrial Revolution is not the only precedent for a extremist maturation acceleration. One could constituent to earlier accelerations, specified arsenic the summation successful maturation rates pinch the onset of the cultivation revolution, aliases constituent to grounds of a generalized inclination for maturation to accelerate complete quality history. We don’t person bully economical information from the clip of the cultivation revolution, truthful location wouldn’t request to beryllium overmuch volatility successful year-to-year maturation during the pre-agricultural era of humanity for maturation rates successful excess of 0.06% per twelvemonth to beryllium very common. This would connote that earlier accelerations were besides good wrong the distribution that had been observed successful the past.
In different words, conscionable arsenic the Industrial Revolution was characterized by comparatively communal “good years” becoming much communal and “bad years” becoming little common, truthful excessively was the cultivation gyration astir apt characterized much by “good years” becoming much common, comparative to bad years. In neither lawsuit did short tally maturation rates astir apt astonishment their modern observers by dramatically accelerating comparative to precedents astatine the time.
Reproducing this analysis
The afloat codification and information are successful the growth-acceleration repository.
Data
| mpd2023_web.xlsx | Maddison Project Database 2023, expanse “Full data” |
Dependencies
Python 3.9+.
Generating the charts
Output is saved to output/.
English (US) · 
Indonesian (ID) ·