Once, economists would have been counted among the pessimists. The moniker “the dismal science” surely stuck for such a long time because so many economists followed the lead of Thomas Malthus, who predicted that population growth in the face of resource constraints would inevitably squelch hopes for a broad-based rise in standards of living. Today, however, there are strong indications that the fog of gloom among economists has evaporated. The evidence of more than two centuries of burgeoning economic growth worldwide is hard to refute, and economists have revised their expectations and models in this light. Economic histories now bear titles like Growth Triumphant; a history of twentieth-century global investment is titled Triumph of the Optimists; and introductory textbooks work through the New Growth Theory, forecasting unchecked economic growth and likening the economy to a perpetual motion machine.
Further evidence that it’s time to rename economics the “cheerful science” comes from a recent survey I conducted of professional economists. I found that by wide margin economists are exceptionally optimistic about the future of the American economy: most predict that the robust economic growth of our recent history will continue into the foreseeable future. My respondents’ median prediction is that per capita income in the United States will grow at a rate slightly less than the 2 percent inflation-adjusted growth rate of the past sixty years. Almost half forecast a growth rate equal to or greater than 2 percent. Only one economist in my poll predicts economic decline for our grandchildren.
If my respondents are correct and economic growth continues at this pace, incomes will rise more than three-fold in the next sixty years—average incomes would equal approximately $147,000 in today’s dollars. If the growth rate does dip slightly, say to 1.8 percent per annum, incomes would almost triple, rising to only $131,000. These predictions are eye-popping.
In addition, economists believe that the U.S. will continue to be one of the world’s richest countries sixty years from now. Twenty-eight percent predict that the U.S. will have the highest per capita income in the world six decades from now. The largest group, 71 percent, expects the U.S. to be “not the highest, but in the top tier.” Again, only a single pessimist predicts that the U.S. will fall from the top tier.
Finally, economists expect that within the next couple of generations many (perhaps most) countries and regions that are currently poor and economically underdeveloped will…