Is the Industrial Revolution a good precedent for explosive growth today?
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One line of evidence that AI might lead to explosive economic growth is the precedent set by the Industrial Revolution. For hundreds of years — 1252 to 1652, to be precise — the compound annual growth rate of per capita real GDP in the UK was around 0.07%. It then began to accelerate, settling into a new compound rate of around 1.02% per year by 1850, which it held until 1913. In other words, growth accelerated by roughly 15 times before; the argument goes that this should make us humble about predicting it can’t happen again, and perhaps we should be open to accelerations of 10 times or more today.
I think this argument is overstated and the analogy between a 10× acceleration today and the acceleration that occurred during the Industrial Revolution is misleading. The goal of the first part of this post is to provide evidence for two claims:
The second part of this post characterizes the acceleration that occurred during the Industrial Revolution in terms of the standard deviation of year-to-year variation in growth rates. Applying the same approach to contemporary growth suggests that an IR-style acceleration would take growth in frontier economies to around 2.8% per year — meaningfully faster than today, but well below the 10× claim that is often advanced.
Why go through this exercise? A common reaction to claims that AI will lead to annual growth rates in excess of 20% per year is skepticism and incredulity — it would be so far outside historical experience. A common retort is that the same incredulity would have been wrong in the 1700s: had someone been told that future growth would be 10× the average and dismissed it, they would have made an error.
The goal here is to rescue that initial reaction. A 10x acceleration today is not the same thing as a 10x acceleration in 1700. A person living in the 1700s would have been asked to envision good years becoming much more common — a rate they had already experienced many times. A person today is being asked to envision a qualitatively different kind of economic dynamics, one that falls several standard deviations outside norm for the world today.
All estimates use the Maddison Project Database 2023 , which reports GDP per capita in 2011 USD and population in thousands. The final section considers some objections to the relevancy of this analysis.