Where Did the Future Go?

Summary

Torenberg examines the Great Stagnation -- the slowdown in Total Factor Productivity (TFP) over recent decades -- and argues we've been culturally brainwashed to believe growth and innovation are bad. The innovation deficit has concrete consequences: millions more people in poverty. Core mental models:

1. The Great Stagnation. Someone born in 1900 living to the 1970s experienced radical transformation: antibiotics, airplanes, atomic bombs, cars, telephones. Someone born in 1970 got internet, mobile phones, and social media -- real but less transformative. TFP has slowed, and the effects are real: we'd be 40% richer if growth rates held.

2. Innovation Precedes Application. Google Maps is foundational but doesn't appear in TFP figures. Technologies must be applied before they show up in productivity stats. Electricity didn't register in stats initially -- putting electricity in factories did. Computing's productivity revolution may still be ahead.

3. Output = Capital + Labor + TFP. TFP is "everything else" -- usually technology or institutional quality. Same labor and capital produce different outputs in the US vs. Venezuela. Institutional decay is harder to see than technological progress but equally important.

4. The Regulation Ratchet. Could America rebuild the interstate highway system today? Renew the energy grid? Launch a new Manhattan Project? Not with current regulation. We've shifted from "explore then regulate" to precautionary paralysis.

5. The "Developed" Mindset Trap. We renamed "first world" to "developed" -- implying there's no more growth to go. We've internalized the idea that growth and innovation are suspect. This cultural shift is both cause and consequence of stagnation.

Relevance

• [[06-reference/2026-04-03-existential-optimism]] -- Torenberg's argument is a call for exactly this: believing in the possibility of a much better future and working to build it despite institutional headwinds.
• [[06-reference/2026-04-03-ladders-of-wealth-creation]] -- The Great Stagnation makes climbing the wealth ladder harder for everyone. Innovation creates new rungs; stagnation removes them.
• [[06-reference/2026-04-03-the-global-chessboard]] -- The geopolitical dimension: nations that solve the stagnation problem first gain enormous strategic advantage.

Open Questions

• If computing's productivity revolution is still ahead, what triggers the phase transition from foundational technology to applied transformation?
• Is the regulation ratchet reversible, or do democracies inevitably accumulate procedural friction until crisis forces a reset?