Chapter 15: Lessons for Tomorrow

When Growth Stalls, Extremism Appeals

The unemployment lines of Detroit in 2009 stretched for blocks. Michigan's unemployment rate hit 14.6% that June, the highest since 1983. In manufacturing-dependent cities, the rate exceeded 20%. The psychological impact mirrored what German workers experienced in 1932: skilled workers discovering their expertise was suddenly worthless.

The pattern is historically consistent. Economic desperation precedes political extremism. When the Weimar Republic's unemployment reached 30% in 1932, support for extremist parties soared. When America's manufacturing heartland collapsed in 2008-2009, political movements promising simple solutions to complex problems gained traction.

The contemporary challenge differs from historical crises in crucial ways. American institutions have survived previous disruptions. The question becomes whether political movements channel anxiety toward constructive purposes or destructive ones, whether they pursue policies that enable growth or promise prosperity through exclusion.

The key insight from both historical periods remains clear. Economic desperation requires prosperity as its solution. Redistribution alone cannot address the psychological and material needs that drive political extremism. Both German recovery and American mobilization demonstrated that rapid growth is achievable when societies organize for productive achievement. The challenge is achieving similar rates through policies that enable market mechanisms and innovation.

The Power of Shared Purpose

President Kennedy's lunar landing announcement in May 1961 created national mission that mobilized American capacity beyond peacetime competition. "We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard," Kennedy declared at Rice University in 1962.

The Apollo program proved that democratic societies could accomplish rapid transformation when collective purpose aligned individual effort with inspiring objectives. The voluntary nature of democratic mobilization proved more effective than authoritarian compulsion in practical terms. Workers chose participation, bringing creativity and commitment that compliance alone couldn't generate.

Contemporary challenges require similar mobilization through democratic methods. Climate change, technological disruption, and competition demand coordinated responses. Yet we must preserve the freedom that makes markets efficient.

Consider nuclear energy. According to the U.S. Energy Information Administration, construction costs for nuclear plants increased from $1,000 per kilowatt in the 1970s to over $6,000 per kilowatt by 2020. The primary driver was regulatory changes rather than technological challenges. France streamlined regulations while maintaining safety and now generates 70% of its electricity from nuclear at costs 50% lower than U.S. electricity prices.

The Shippingport Atomic Power Station, America's first commercial nuclear plant, was built in four years (1954-1958). The Vogtle plants in Georgia, started in 2009, wasn't fully operational until 2024. Fifteen years for essentially the same technology.

The Two Paths to Prosperity: Democracy vs. Authoritarianism

The central lesson of this book is that the method of achieving growth matters as much as the growth itself. Nazi Germany and wartime America both achieved approximately 7-8% annual GDP growth. But one path led to catastrophe, the other to lasting prosperity.

The German miracle was built on theft. Jewish property confiscation provided 1 billion Reichsmarks after Kristallnacht alone. Forced labor—from political prisoners building autobahns to concentration camp inmates manufacturing weapons—reduced labor costs to zero. The Volkswagen savings program collected 280 million Reichsmarks from German workers for cars that were never delivered, functioning as a massive forced loan to fund rearmament.

Germany's growth required continuous expansion. When domestic theft was exhausted, the regime needed Austrian gold, Czech factories, Polish resources. Each conquest provided temporary growth, but sustainability required ever-more conquest. The system collapsed when expansion ended.

America's growth was different. Yes, it was driven by war demand, but the prosperity was built on voluntary participation, genuine wages, and productive capacity that served peacetime needs after 1945. The Liberty ships built at Kaiser Richmond sailed for decades in commercial service. The B-24 production capacity at Willow Run converted to automobile manufacturing. The women trained in electrical systems became engineers, supervisors, businesswomen.

Most critically: American democracy mobilized faster than German authoritarianism. In 1943, the U.S. produced 85,000 aircraft to Germany's 25,000, despite Germany's four-year head start. Democratic innovation—suggestion boxes, worker input, competitive private contractors—outperformed centralized control.

The authoritarian advantage is an illusion. Short-term efficiency gains from compulsion are offset by long-term innovation losses from suppressing initiative. Democratic messy debate produces better solutions than authoritarian clarity because reality is complex and centralized decision-making cannot process all relevant information.

Breaking Zero-Sum Thinking

World Bank data reveals unprecedented progress. Extreme poverty (living on less than $2.15 per day) declined from 38% of global population in 1990 to 8.4% in 2019. Two billion people escaped poverty in three decades through growth rather than redistribution.

China's transformation exemplifies both the power and limits of authoritarian growth models. Per capita income rose from $195 in 1980 to $12,556 in 2021 according to World Bank data. Meanwhile, global GDP grew from $11 trillion to $96 trillion in the same period. China's growth didn't impoverish other nations—this was wealth creation, not wealth transfer.

But China's model differs fundamentally from 1930s Germany. Deng Xiaoping's reforms freed markets and enabled private enterprise, even within an authoritarian political framework. "It doesn't matter if a cat is black or white, so long as it catches mice," Deng declared. This pragmatism created genuine productive capacity, not just theft-funded expansion.

Yet China's growth is slowing as it exhausts the catch-up phase. GDP growth fell from 10% annually (2000-2011) to 6% (2012-2019) to 3-4% today. The authoritarian model works for copying and scaling existing technology. It struggles with frontier innovation that requires free inquiry, dissent, and the creative destruction that threatens political control.

The key question isn't whether authoritarian states can achieve growth—they can, at certain stages. The question is whether such growth is sustainable without evolving toward greater freedom, and whether democracies can match authoritarian urgency when necessary without sacrificing the liberty that makes them worth defending.

Paul Romer, in his work on endogenous growth theory that earned him the 2019 Nobel Prize, emphasized that ideas and knowledge don't follow the logic of scarcity. Unlike physical resources, ideas can be shared infinitely without depletion. Economic growth comes from better recipes, not just more cooking.

The semiconductor industry demonstrates abundance creation. The cost per transistor fell from $10 in 1965 to $0.000000001 in 2020. This billion-fold improvement created entirely new industries rather than redistributing existing wealth.

Warning Signs: When History Rhymes

The pattern is unmistakable to anyone who has studied the 1930s:

Then: Unemployment reaches 30% in Germany (1932). Politicians promise simple solutions to complex problems. "Arbeit und Brot"—Work and Bread—becomes the slogan that drowns out democratic debate.

Now: Manufacturing employment in the U.S. falls from 19.5 million (1979) to 12.8 million (2010). Entire regions collapse. Politicians promise to "Make America Great Again" or redistribute wealth through massive government programs, offering certainty in place of nuance.

Then: Skilled workers find their expertise worthless overnight. Ernst Müller, a trained metalworker, spends 1,127 days unemployed. The psychological devastation of idleness exceeds the material hardship.

Now: When Detroit's auto plants close, engineers with 20 years of experience stock shelves at Walmart. When coal mines shut in West Virginia, miners in their 40s are told to "learn to code," as if decades of expertise can be erased and replaced in six months.

Then: Democracy seems slow, incompetent, unable to deliver results. The Weimar Republic collapses under the weight of its own process. People crave decisiveness, even authoritarian decisiveness.

Now: American approval of Congress falls below 20% for years. Gridlock becomes the norm. People admire "strong leaders" who "get things done" without worrying about checks and balances.

Then: Scapegoating replaces solutions. Germans blame Jews, Communists, international bankers—anyone but the actual structural problems of currency instability and trade collapse.

Now: Americans blame immigrants, China, coastal elites, or billionaires—anyone but the actual structural problems of regulatory sclerosis and innovation barriers.

The warning signs are not guarantees. America in 2025 is not Weimar Germany in 1932. American institutions are stronger, civil society is deeper, and democratic norms are more resilient. But the pattern is concerning.

Economic anxiety + political dysfunction + scapegoating + promises of simple solutions = democratic vulnerability.

The antidote is not more redistribution or more restrictions. The antidote is growth—actual, measurable, broadly distributed prosperity that gives people reason to believe the system works.

Reasons for Hope

Yet contemporary conditions also contain unprecedented opportunities. The technology sector created 5.9 million jobs between 2010-2020 according to CompTIA data, exceeding manufacturing losses. Austin, Texas transformed from government town to tech hub, with median household income rising from $42,689 in 2000 to $75,413 in 2020.

When Youngstown's steel mills closed, the city's population fell from 170,000 in 1930 to 65,000 in 2020. Median household income dropped to $28,822, half the national average. Regional collapse creates conditions that historically made extremist politics appealing.

But Youngstown's fate was not inevitable—it was a choice. Pittsburgh, facing similar steel industry collapse, reinvested in universities, technology, and healthcare. Today Pittsburgh thrives, with median household income of $52,876 and population stabilized. The difference was not resources or geography. The difference was policy choices that enabled new industries rather than protecting dying ones.

Europe's postwar recovery proved that societies could rebuild through policies expanding opportunity and strengthening market institutions. German GDP grew close to 8% annually from 1948-1960 after currency reform and market liberalization. The Marshall Plan succeeded by restoring market mechanisms rather than creating dependency.

The lesson: Growth is possible, even after catastrophe, when societies choose policies that enable rather than constrain.

The Semiconductor Lesson

Gordon Moore's 1965 observation became prophecy: transistor density would double approximately every two years while costs halved. This was a market prediction, not a government mandate, yet it held for five decades.

Intel, Texas Instruments, and competitors raced to fulfill Moore's prediction through fierce competition rather than central planning. Andy Grove titled his memoir "Only the Paranoid Survive," capturing the relentless pressure that drove innovation faster than any government program achieved. Companies fighting for their right to exist can be huge drivers of prosperity for the consumer.

Compare semiconductors to nuclear energy. The same America that went from concept to atomic bomb in three years (1942-1945) now takes fifteen years to build a nuclear plant using 1960s technology. The constraint is not technological complexity. Advanced semiconductors (the same ones we use for our AI - literally taking sand and making it think) are some of the most complex things human beings have ever manufactured. Computers are affordable and ubiquitous.

Housing demonstrates the same pattern. Tokyo maintains stable housing costs despite population growth through minimal zoning restrictions. San Francisco saw median home prices rise from $600,000 in 2012 to $1.4 million in 2022 due to extensive restrictions. The constraint involves permission, not land or materials.

The biotech revolution shows both progress and unrealized potential. The Human Genome Project cost $2.7 billion to sequence the first genome in 2003. Today, a full genome sequence costs under $600 and takes 24 hours. The technology improved 10,000-fold while regulations barely budged.

CAR-T cancer therapy took five years for FDA approval, celebrated as "accelerated." But patients with terminal cancer don't have five years. The actual cell modification takes days, safety testing weeks. The remaining years consist of bureaucracy: forms, meetings, committees reviewing committees.

What We Could Build Tomorrow

The tools exist. The knowledge exists. The capital exists. What's missing is permission and will.

Energy: Small modular reactors could provide carbon-free baseload power at scale. NuScale Power's design produces 77 megawatts in a factory-built unit smaller than a shipping container. Cost per kilowatt should be 40% lower than traditional nuclear. The technology is proven. The regulatory approval process takes 10+ years.

Meanwhile, France built 56 nuclear reactors in 15 years (1977-1992) while maintaining safety records superior to most other energy sources. They achieved this not through authoritarian decree, but through standardized designs and streamlined regulations that maintained rigorous safety standards without requiring each plant to reinvent the wheel.

Housing: Tokyo built 142,000 housing units in 2022 while maintaining stable prices despite population growth. How? Minimal zoning restrictions, by-right development, and recognition that housing is essential infrastructure. San Francisco built 5,000 units the same year while prices soared to $1.4 million median.

The constraint is not land—San Francisco has plenty of underutilized space. The constraint is not construction capacity—American builders are among the world's best. The constraint is permission. Each San Francisco development requires years of hearings, environmental reviews, and neighborhood approvals that function as vetoes.

Medicine: CRISPR gene therapy could cure sickle cell disease, which affects 100,000 Americans and causes immense suffering. The actual gene editing takes hours. Safety verification takes weeks. FDA approval takes 5+ years and costs hundreds of millions.

Compare this to Right to Try laws, which allow terminally ill patients to access experimental treatments. These patients have nothing to lose—they're dying anyway. Yet they must wait for bureaucratic processes designed for healthy populations being offered elective treatments.

Transportation: The first 300 miles of high-speed rail in California was supposed to cost $33 billion and open in 2020. By 2024, costs exceeded $100 billion with no operating segments. Japan built their entire Shinkansen network—1,400 miles—for $90 billion in 2024 dollars. The difference isn't engineering—it's process.

Each of these examples shares a pattern: The technology works. The economics work. The barrier is regulatory and political structures that prioritize process over outcomes, that value theoretical risk avoidance over actual human suffering, that protect incumbent interests over new possibilities.

The Choice Ahead

Peter Thiel captured the contemporary challenge in "Zero to One" (2014): "We wanted flying cars, instead we got 140 characters." The technological capacity exists. Policy choices block implementation.

Patrick Collison and Tyler Cowen argued in The Atlantic (2019) for a new field of "Progress Studies," noting: "Progress itself is understudied. By 'progress,' we mean the combination of economic, technological, scientific, cultural, and organizational advancement that has transformed our lives and raised standards of living over the past couple of centuries."

The comparison between 1930s Germany and 1940s America remains instructive. Germany achieved 7% annual growth through systematic exclusion, requiring continuous expansion of theft and aggression. America achieved similar growth through inclusion, building productive capacity that served peacetime prosperity.

Contemporary societies possess greater technological capacity, institutional knowledge, and human resources than any previous generation. Small modular nuclear reactors (or why not BIG modular nuclear reactors as well!) could provide carbon-free electricity at scale. SpaceX reduced launch costs from $54,500 per kilogram (Space Shuttle) to $2,720 per kilogram (Falcon 9, costs are still falling as I'm writing this) through iterative development. CRISPR could cure genetic diseases. The tools exist. We must decide whether to use them.

Robert Lucas Jr. observed in 1988: "Once one starts to think about growth, it is hard to think about anything else."

He was right. The choice is straightforward: enable growth or manage decline. Create abundance or distribute scarcity.

We know what happens when societies choose wrong. The 1930s proved that. We know what's possible when they choose right. The semiconductor revolution proved that.

Time to choose.