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Econ 135: Fall 2024

'The Enlargement of the Human Empire, to the Effecting of All Things Possible': A History of Economic Growth

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Proposed Course Themes:

• How a bunch of jumped-up monkeys more-or-less accidentally became an anthology intelligence, and then hunted frantically for institutions to make that work…

• Along the way, we fell into a Malthusian Trap, in which we turned aside from societies-of-cooperation to societies-of-domination…

• Then we developed the institutions of Modern Economic Growth, which made us rich at a dizzying rate by doubling every generation our technological capabilities to manipulate nature and coöperatively organize ourselves…

• But what exactly those institutions of Modern Economic Growth truly are is a complex, cloudy, and disputable thing…

• As are the details as to how to rewrite the cultural-social-political-organizational software code of society to run on the underlying rapidly changing forces-of-production hardware…

• And, unfortunately, that Modern Economic Growth rate of technological progress and corresponding speed of structural economic transition were much too fast for any societa; process of gradient-descent institutional evolution to cope without repeated disastrous crashes…

• Now we face the truly big problem: that of building institutions for managing us, as an anthology intelligence and a society, that will actually enable us to live wisely and well…

Share Brad DeLong's Grasping Reality

Proposed Course Readings: Required:

• Crone, Patricia. 1989. Pre-Industrial Societies: Anatomy of the Pre-Modern World. Oxford: Basil Blackwell. <https://archive.org/details/isbn_2901851683115>.

• Wyman, Patrick. 2021. The Verge: Reformation, Renaissance, & Forty Years That Shook the World. New York: Twelve.  <https://www.twelvebooks.com/titles/patrick-wyman/the-verge/9781538701171/>.

• Koyama, Mark, & Jared Rubin. 2021. How the World Became Rich: The Historical Origins of Economic Growth. Cambridge: Polity Press. <https://www.howtheworldbecamerich.com/>.

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/globaleconomichi0000alle​>.

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books.  <https://www.hachettebookgroup.com/titles/j-bradford-delong/slouching-towards-utopia/9780465019595/?lens=basic-books>.

Proposed Course Readings: Very Optional:

• Henrich, Joseph. 2015. The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, & Making Us Smarter. Princeton: Princeton University Press. <https://archive.org/details/secretofoursucce0000henr>.

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>.

• Berry, Christopher. 2018. Adam Smith: A Very Short Introduction. Oxford: Oxford University Press. <https://www.google.com/books/edition/Adam_Smith/irRwDwAAQBAJ>.

Proposed Course Readings: So Optional It Shouldn’t Even Be on This Page:

• Gellner, Ernst. 1988. Plough, Sword, & Book: The Structure of Human History. Chicago: University of Chicago Press. <https://archive.org/details/ploughswordbooks0000gell>.

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PRELIMINARY: Course Schedule & Topics:

2024-08-28 We 10:00 PDT: Week 1: Introduction & Prehistory: “The Enlargement of the Human Empire, to the Effecting of All Things Possible” & Anthology Intelligence: Reciprocity, Redistribution, & Prestige…: -300,000 to -3000—how humans evolved and adapted to different environments, how they developed tools and technologies, how they organized themselves into bands and tribes, how they traded and exchanged; prestige, reciprocity, redistribution, dominance.

• Koyama, Mark, & Jared Rubin. 2022. How the World Became Rich: The Historical Origins of Economic Growth. Hoboken: Wiley. <https://ideas.repec.org/a/bla/ehsrev/v75y2022i4p1379-1380.html>. Read: 1. Why, When, & How? Save the rest of the book for later

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: Read: 1. Intro. Save the rest of the book for later.

• Henrich, Joseph. 2015. The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, & Making Us Smarter. Princeton: Princeton University Press. <https://archive.org/details/secretofoursucce0000henr>. Remember: this reading is “optional”: Skim entire, with more focus on the following eight chapters: 1. Puzzling Primate, 4. Cultural Species, 12. Collective Brains, 15. Rubicon, 16. Why Us?, & 17. New Kind of Animal.

2024-08-30 Fr 10:00 PDT: Exercises

I: Early Civilizations -3000 to +500—How humans created complex societies with states, laws, religions, writing, arts, and sciences, and how the two most important features of those civilizations were (a) their ensorcellment by the Devil of Malthus, & (b) the resulting diversion of society's energy from progress understanding nature to figuring out how to dominate and exploit humans

2024-09-04 We 10:00 PDT: Week 2: Agrarian-Age Malthusian Equilibrium Pre-1500

• Crone, Patricia. 1989. Pre-Industrial Societies: Anatomy of the Pre-Modern World. Oxford: Basil Blackwell. <https://archive.org/details/preindustrialsoc0000cron>. Read: Intro & chapters 1-7.

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>.  Remember: this reading is “optional”: Skim: 2. Malthusian Economy, 3. Living Standards, & 6. Technological Advance

2024-09-06 Fr 10:00 PDT: NO CLASS—visiting my 86 year old father on his birthday…

2024-09-09 Mo 10:00 PDT: NO CLASS—visiting my 86 year old father on his birthday…

2024-09-09 11 We 10:00 PDT: Week 3: Agrarian-Age Societies of Domination Pre-1500 & Slow Pace of Technological Progress Pre-1500

2024-09-13 Fr 10:00 PDT: Exercises

2024-09-16 Mo 10:00 PDT: Efflorescences & Dark Ages: Bronze, Iron, & “Classical”, & Advanced Modes of Human Interaction: Reciprocity, Redistribution, Hierarchy, Prestige, Honor, Bureaucracy, Propaganda, Market

• Crone, Patricia. 1989. Pre-Industrial Societies: Anatomy of the Pre-Modern World. Oxford: Basil Blackwell. <https://archive.org/details/preindustrialsoc0000cron>. Read: 8. The Oddity of Europe.

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Read: 5. Great Empires.

II: The Medieval Millennium & Its End +500 to +1600—the political and social fragmentation and economic near-stagnation of Eurasia in the Late-Antiquity Pause, followed by the Medieval recovery that restored civilizational complexity, but with denser populations and higher levels of technology (but not, yet, faster economic growth)

2024-09-18 We 10:00 PDT: Week 4: Gunpowder Empires & Colombian Exchange: ca. 1500: Inca, Mexica, Songhai, Osmanlis, Safavids, Gurkani, Brilliant-Dynasty Central Country—& the Dover Circle

• Wyman, Patrick. 2021. The Verge: Reformation, Renaissance, & Forty Years That Shook the World. New York: Twelve. <https://archive.org/details/the-verge-reformation-renaissance-forty-years-that-shook-the-world>. Read: 0. Intro, 1. Exploration, 2. State, 5. Printing, & 10. Conclusion. If you have time, skim: 3. Banking, 4. War,  6. Capitalism, 7. Church, 8. Ottoman, 9. Charles V

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Skim: 1. Divergence, 2. Rise of the West, 3. Industrial Revolution, 4. Ascent of the Rich

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: Read: 8. Institutions, 9. Modern Man, & 10. Wealth of Nations.

2024-09-20 Fr 10:00 PDT: Exercises

III: Imperial-Commercial Society +1600 to +1770—how humans transformed their world through globalization, colonization, empire-building, mercantilism, innovation, and capitalism, in a context in which for the first time technologies, ideas, and institutions such as printing, gunpowder, navigation, enlightenment, democracy, and others are developing fast enough to make a big difference over a single human lifetime.

2024-09-23 Mo 10:00 PDT: The Greatest Slave Trade—& the Racialization of Status—& The Dover Circle & the British Empire ca. 1770

• Koyama, Mark, & Jared Rubin. 2022. How the World Became Rich: The Historical Origins of Economic Growth. Hoboken: Wiley. <https://ideas.repec.org/a/bla/ehsrev/v75y2022i4p1379-1380.html>. Skim: 2. Geography, 3. Institutions, 4. Culture, 6. Exploitation, & 7. Northwestern Europe.

• Berry, Christopher. 2001. Adam Smith: A Very Short Introduction. Oxford: Oxford University Press. <https://www.amazon.com/Adam-Smith-Introduction-Introductions/dp/0198786098>. Remember: this reading is “optional”: Read: 8. Institutions, 9. Modern Man, & 10. Wealth of Nations. Skim: 1. Life, 2. Imagination, 3. Spectators, & 4. Virtuously. Focus on: 5. Working, 6. Trading, & 7. Legacy.

IV: Toward Steampower Society +1770 to +1880—how the engine of modern economic growth began to be built with the triple marriage of nascent empirical natural science, the market economy, and the commodities of coal, cotton and sugar. That marriage gave birth to the profession of engineering--and to fast enough techno-economic change to overthrow and destabilize all other features of society.

2024-09-25 We 10:00 PDT: The Last Efflorescence: The Dover Circle 1770-1870

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Read: 1. Divergence, 2. West, 3. Industrial Revolution, 4. Ascent of the West

• Crone, Patricia. 1989. Pre-Industrial Societies: Anatomy of the Pre-Modern World. Oxford: Basil Blackwell. <https://archive.org/details/preindustrialsoc0000cron>. Read: 9. Modernity.

• Koyama, Mark, & Jared Rubin. 2022. How the World Became Rich: The Historical Origins of Economic Growth. Hoboken: Wiley. <https://ideas.repec.org/a/bla/ehsrev/v75y2022i4p1379-1380.html>. Skim: 8. Britain’s Industrial Revolution

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: Read: 8. Institutions, 9. Modern Man, & 10. Wealth of Nations. Skim: 11. Industrial Revolution, 12. Industrial Revolution in England, 13. Why England? & 14. Social Consequences.

2024-09-27 Fr 10:00 PDT: Midterm I

2024-09-30 Mo 10:00 PDT: The Steampower Economy, the Pseudo-Classical Semi-Liberal Order, & the Gunpowder-Empire Steampunk Path

V: Applied-Science Society +1880 to +1920—how industrialization, urbanization, science, education, and democracy brought societal revolution after revolution, with growth development, inequality, poverty, warfare, fascism, communism, and nationalism all coming successively to the stage as Schumpeterian creative-destruction came not once a century but once a decade.

2024-10-02 We 10:00 PDT: Engineering, Research Labs, Corporations—& Globalization: The Applied-Science Economy

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>.Read: Intro, 1. Globalizing, 2. Revving, 4. Empires,

• Koyama, Mark & Jared Rubin. 2022. How the World Became Rich: The Historical Origins of Economic Growth. Hoboken: Wiley. <https://ideas.repec.org/a/bla/ehsrev/v75y2022i4p1379-1380.html>. Skim: 5. Babies, & 9 Modern Economy.

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: Skim: 4. Fertility, 5. Life Expectancy, 6. Malthus & Darwin, 15. Growth since 1800

2024-10-04 Fr 10:00 PDT: Exercises

2024-10-07 Mo 10:00 PDT: Economic El Dorado: Modern Economic Growth

2024-10-09 We 10:00 PDT: The Demographic Transition

2024-10-11 Fr 10:00 PDT: Exercises

2024-10-14 Mo 10:00 PDT: The Development of Underdevelopment

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Read: 3. Democratizing, 5. WWI, 8 Socialism, & 9. Fascism.

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Skim: 6. Americas, 7. Africa, & 8. Standard Model.

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: Skim: 16. Divergence, & 17. Why Isn’t the Whole World Developed?

2024-10-16 We 10:00 PDT: The Fight Over Orders: Imperial-Military Bureaucratic, Pseudo-Classical Semi-Liberal, Socialism, Fascism, Social Democratic, & the New Deal Order

VI: Mass-Production Society +1920 to +1980—how the development of mass production techniques, such as assembly lines, automation, and standardization, enabled the production of large quantities of standardized goods at lower costs and higher quality. How mass production transformed industries such as automobiles, consumer goods, and electronics, and created new markets and consumer cultures. How mass production also had social and environmental impacts, such as worker alienation, unionization, urbanization, suburbanization, pollution, and resource depletion.  

2024-10-18 Fr 10:00 PDT: Mass-Production Economy

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Read: 6. Twenties, 7. Depression, 10. WWII. 14. Glorious Years.

2024-10-21 Mo 10:00 PDT: Mixed Economy & the Thirty Glorious Years

2024-10-23 We 10:00 PDT: The Soviet Experience, & False (& True) Starts to Development

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Read: 11. Cold War & 12. Development.

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Read: 9. Big Push.

2024-10-25 Fr 10:00 PDT: Midterm II

VII: Global Value-Chain Society +1980 to +2020—how the fragmentation and dispersion of production across different countries and regions, facilitated by trade liberalization, lower transport costs, information and communication technologies, and innovations in logistics. How global value chains (GVCs) increased the efficiency, competitiveness, and diversity of products and services, but also created new challenges and risks, such as coordination, quality control, governance, distribution of value added, and vulnerability to shocks.

2024-10-28 Mo 10:00 PDT: The Productivity Slowdown & the Neoliberal Order

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Read: 15. Neoliberal.

2024-10-30 We Mo 10:00 PDT: East Asian Miracles & China Stands Up

2024-11-01 Fr 10:00 PST: Exercises

2024-11-04 Mo 10:00 PDT: Petro-States, & Russia Sits Down

2024-11-06 We 10:00 PST: The Global Value-Chain Economy & Hyperglobalization

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Read: 16. Hyperglobalization & 17. Recession.

2024-11-08 Fr 10:00 PST: Status Inclusion & within-Rich Nation Income Divergence

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Focus on: 13. Inclusion

• Koyama, Mark, & Jared Rubin. 2022. How the World Became Rich: The Historical Origins of Economic Growth. Hoboken: Wiley. <https://ideas.repec.org/a/bla/ehsrev/v75y2022i4p1379-1380.html>. Skim: 10. Industrialization & 11. The World

VIII: Attention-Info-Bio-Tech Society +2020 onward—how the convergence of information technology and biotechnology revolutionized science and humanity in the 21st century, creating new possibilities and risks for knowledge, discovery, creativity, and enhancement. How info-biotech enabled new forms of data generation, analysis, and manipulation, as well as new applications in health, agriculture, energy, environment, and security. How info-biotech also raised ethical and existential questions about the nature and future of life.

2024-11-11 Mo 10:00 PST: The Attention-Info-Bio-Tech Economy

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. <https://archive.org/details/slouching-towards-utopia-the-economic-history-of-the-20th-century>. Focus on: Conclusion

• Allen, Robert C. 2011. Global Economic History: A Very Short Introduction. Oxford: Oxford University Press. <https://archive.org/details/global-economic-history-a-very-short-introduction>. Focus on: Epilogue

• Clark, Greg. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://archive.org/details/farewelltoalmsbr00clar>. Remember: this reading is “optional”: 18. Conclusion.

2024-11-13 We 10:00 PST: Polycrisis

2024-11-15 Fr 10:00 PST: Exercises

2024-11-18 Mo 10:00 PST: The Renewed Fight Over Orders: Parasitic, New Deal, Neoliberal, Neofascist, State Surveillance Capitalist (with & without Egalitarian Aspirations

2024-11-20 We 10:00 PST: Global Warming

2024-11-22 Fr 10:00 PST: Exercises

2024-11-25 Mo 10:00 PST: Weak Reeds for Fixing Problems

2024-11-27 We 10:00 PST: NO CLASS

2024-12-02 Mo 10:00 PST: The Far Future: The Drake Equation & the Fermi Paradox

2024-12-04 We 10:00 PST: Living Wisely & Well?

2024-12-06 Fr 10:00 PST: REVIEW

RRR Week Project?

FINAL

• 2024-08-30 Fr 10:00 PDT: Exercises: The long-run shape of the human economy…

• 2024-09-13 Fr 10:00 PDT: Exercises: Societies of domination & the shape of human progress and human exploitation…

• 2024-09-20 Fr 10:00 PDT: Exercises: Efflorescences & Dark Ages…

• 2024-10-04 Fr 10:00 PDT: Exercises: Commercial, industrial, & steampunk economies…

• 2024-10-11 Fr 10:00 PDT: Exercises: Modern Economic Growth…

• 2024-11-01 Fr 10:00 PDT: Exercises: Demographic transitions & mass-production economies…

• 2024-11-15 Fr 10:00 PST: Exercises: East-Asian miracles & global divergence…

• 2024-11-22 Fr 10:00 PST: Exercises: The economics of an Attention economy…

TA: Daria Bakhareva dbakhareva@berkeley.edu

Sections:

• 102 VLSB2030 W1:00 PM

• 103 DWIN246 W4:00 PM

• 101 VLSB2030 M1:00 PM

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MEMO: Institutions:

• Communication: Language, Writing, Printing, Mass Media, Social Media, Algorithmic feeds…

• Motivation: Prestige, Reciprocal Gift-Exchange, Redistribution, Dominance, Propaganda, Charisma, Honor, Democracy, Clientel/Feudal, Market Economy (which is something much more than reciprocity), Bureaucracy (which is something much more than redistribution), Mass Politics (which is something much more than democracy), Algorithmic Classification…

• Of Production: Early Agrarian, Agrarian, Imperial-Commercial, Steampower, Applied-Science, Mass-Production, Global Value-Chain, Attention-Info-Bio-Tech…

• Societal Orders: Tribal, Feudal, Authoritarian, Military-Bureaucratic, Pseudo-Classical Semi-Liberal, Socialist, Fascist, Nationalist, New Deal/Social Democracy, Neoliberal, State Surveillance Capitalism…

Overview:

This File:

Humanity as an Anthology Intelligence:

The Agrarian Age:

Patriarchy:

https://braddelong.substack.com/p/a-woman-called-toad-mnesarete-of

“Dark Ages”, & Such:

“Efflorescences”, Roman & Otherwise:

Agrarian-Age Societies of Domination:

Climax-Stage Societies of Domination:

Theoretical Perspectives:

Modes of Production, & Modes of Other Things as Well:

Breaking the Stasis:

Commercial Society:

https://braddelong.substack.com/p/reading-friedrich-engels-speech-in

NOTES: On the Puzzling Classical Socialist Belief on Both the Necessity & the Ease of Building a Non-Market Economic System

What were the classical socialists thinking in their confidence that it would be very easy to replace the market economic system with some combination of workplace democracy and accounting bureaucracy? This is the feature of classical socialist thought that most puzzles and flummoxes me: I do not understand why the problem was thought of as so unproblematic. That the market system needed to be curbed and constrained seems to me to have been an obvious conclusion to reach. But abolished? Without even thinking that there were problems of information and incentivization that the market system solved?…

< https://braddelong.substack.com/p/notes-on-the-puzzling-classical-socialist > 

2024-05-19 Su

Steampower Society:

Modern Economic Growth:

The Launching of the Rocket:

The 20th Century:

Applied-Science Society:

READING: John Lukacs on Nationalism vs. Patriotism

From 1992. Courtesy of John Ganz <https://www.unpopularfront.news/p/reading-watching-050524>...

< https://braddelong.substack.com/p/reading-john-lukacs-on-nationalism > 

2024-05-06 Mo

“Modern” Political Economy:

Mass-Production Society:

Fascism & Other Anti-Liberalisms:

Outside the Dover Circle:

Global Value-Chain Society:

Algorithmic Society & Its Discontents:

Global Warming, & Other Elements of the Polycrisis:

The Future:

Daily Class Organization:

• 10:10

• 10:55: James M. Lang: Small Teaching: 'Close class by asking students to write down the most important concept from that day and one question or confusion that still remains in their minds ( i.e., the minute paper)...

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I don’t want to send in the plan for my next book—even though it is 70% written, what with things borrowed from elsewhere and things picked up off the cutting-room floor of Slouching Towards Utopia—until I have a strong sense of where I am going. So here is my attempt at a first draft of the first part of the concluding chapter of What Rough Beast?: The 21st-Century World in Political-Economy Polycrisis:

Accelerating technological change has had a profound impact on societies, and how they can and ought to be governed. Especially in the post-1870 2% annual technological growth rate Schumpeterian creative-destruction era, the focus of good governance must be on attempting to strengthen and nudge the processes that produce the new ways of thinking about and organizing societies necessary to cope with the unprecedented pace of development. Feudal society to gunpowder imperialism, commercial to steampower and applied-science, and mass-production to global value-chain and now attention-info-biotech societies—each transition to the next has required. Good governance will focus on: maintaining peace, advancing technology, recognizing and managing the destructive aspects of creative destruction, ensuring equitable distribution of the growth dividend, preventing obstruction by powerful societal groups, and supporting the continuous rewriting of societal frameworks. The ride has not been easy: the wheels have come off many times since 1750. But the ride is only getting rougher: The cost of global warming will rob us of a large share of our technological growth dividend over the next two generations, leaving us with less room to redistribute, and adjust, and compensate, and buy off coalitions of the societally powerful who seek to block the forces that would increase human wealth. And that is not all that shadows us.

Technological Acceleration: Recall that Societies of Domination pretty much spanned the globe from the beginnings of our written records in the year -3000 up to a time not in living memory, but in a time in the living memory of those whom our oldest today met when they were young children. In those, human technological progress was slow. So human societies changed little over a lifespan: perhaps 5% growth in technology over a century. Consciousness that societies were different over time was partial, and vague. Consider, for example, Jacques de Longuyon’s 1312 poem “The Vows of the Peacock”, in which he writes:

The book now tells of the Nine Worthies,
Who were of ancient times the great lords,
The noble knights, valiant and wise,
Known for their prowess with the sword.
Three pagans, three Jews, three Christians strong,
Each famed for deeds of righting wrong…

The nine are, in historical (or semi-historical) order: Yehoshua of Israël, Hektor of Troy, King David of Judah-Israël, Alexander the Great, Yehudah HaMakabi, Gaius Julius Cæsar, King Arthur of Britain, Charlemagne, and Godefroy de Bouillon (first ruler 1099-1100 of the Latin Kingdom of Jerusalem). Very different people, ruling in very different ways over very different societies. Yet in Jacques’s eyes, they are all on the same single level: all mediæval “knights, valiant and wise… prowess with the sword… famed for deeds of righting wrong”.

But, as I have stressed, after 1500 things change.

The pace of technological change accelerated, reaching 2% per year or more after 1870.

We have, since then, seen more technological change in 2.5 years than Societies of Domination saw in a century, and more technological advance in a generation than they saw in a millennium. The first inklings of this were seen around 1600. It was in 1602 Tomasso Campanella wrote his City of the Sun, in which he said: “If you knew what our astrologers say of the coming age, and of our age, that has in it more history within 100 years than all the world had in 4,000 years before! of the wonderful inventions of printing and guns, and the use of the magnet…” Technological change of this magnitude was going to have powerful impacts. It was going to require new ways of thinking about human life and purpose and new ways of organizing the human race. When human technological competence to command nature and coöperatively organize ourselves was much greater and growing much faster than before 1500, society had to be very different, and could not be governed in the same old ways.

A Rough Periodization: Karl Marx and Friedrich Engels, writing their Communist Manifesto in 1848, saw what humanity was then already starting to have to deal with. It was the

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The Place of the “Poor Stockinger”: You think it weird to start the narrative of a history of the world's 21st-century political-economy polycrisis back in 1750, with the prosperous stockingers of the English Midlands.

But please bear with me.

Though this be madness, yet there is method in’t.

Radical English historian E.P. Thompson declared that he had written his The Making of the English Working Class in order to "rescue the poor stockinger... from the enormous condescension of history". There were a lot of stockingers back in 1750: perhaps 40,000 out of the one million-strong adult male workforce of then-England. The stockinger’s work was intricate. It required substantial practice, a high level of manual dexterity, attention to detail, and an understanding of complex patterns and techniques. And back in 1750 the stockingers were not poor.

Not that they were among England's rich, mind you. But back then the stockinger earned twice what a typical agricultural worker or an unskilled craft apprentice or journeyman earned. And In 1750 the English working class was by a substantial margin the most prosperous in the entire Old World. Figure stockinger typical earnings at 14 shillings per week. Back then, Robert Allen's family respectability-consumption basket cost 12 shillings a week—meaning that a stockinger man plus some earnings from a spinster wife had a substantial financial cushion above what was needed for them to be respectable.

Note that as of 1750 the stockinger's profession was new—only 150 years, six generations, old. William Lee in 1589 had invented the frame for the knitting of stockings: a series of needles fixed and arranged in the frame so that foot pedals and hand levers to control the movement of the needles and thread. The needles were fine, and required constant adjustment and maintenance to ensure smooth operation. The needles wove the stockings from yarn fed from bobbins. The stockinger needed to manage the tension and feed of the yarn to achieve consistency in the knit. Preparing the bobbins required skill and care. Setting up the stocking frame was a meticulous task. And, during the weaving, mistakes had to be corrected immediately to avoid defects.

Skilled work. Deserving of high wages, and of respect as people doing a skilled and valuable job well. The stockingers guarded their profession by asserting that women, children, and apprentices lacked the dexterity and experience to use the stocking-frame to do high-quality work. The stockingers were proud of the quality of their work.

The Stockinger’s Turn in the Barrel:: Technological innovation had been working for the stockinger from 1550 to 1750. It had created their profession, and had made the skills they acquired from working the machine valuable on the market. And skilled work that the market values and rewards brings respect and status: the sense that you are the kind of person who deserves to be prosperous.

The technological-organization competence of humanity as a whole grew by more than half from 1770 to 1870. And within the hot spot of human prosperity, the charmed circle of 300 or so miles around the port of Dover at the southeastern corner of the island of Great Britain (plus in its North American settler colonies and ex-colonies), technological-organizational competence had grown by a third every generation—a cumulative slightly more-than-doubling across the pre-1870 century.

But after 1750 technological innovation did not work for but against the stockinger. He was the first to take his turn in the barrel.

Market economies in eras of technological change are, as Joseph Schumpeter saw processes of creative-destruction. Hose--plain and fancy--was expensive and in high demand. Perhaps there was a better technology to make it more efficiently than with a machine that by 1789 was two-centuries old? There was. Jedediah Strutt developed the wide frame around 1776. It was much easier to use. It made more and wider fabrics.

Stockings had a different market configuration than was typical of cloth. Demand for cloth in general was highly elastic: drop the price by 50% via better technology, and the amount demanded more than doubles, so more demand money flows into the industry (even if not often to the same people). Demand for hosiery was not so elastic. More work per worker meant, necessarily and unambiguously, less money coming in, and thus fewer stockingers and downward pressure on the wages of those who remained. Plus it meant the cutting-of-corners: if you could get less for a stocking, perhaps you could lessen the pressure on your income by selling a cheaper and an inferior product.

General Ludd’s Army: The “poor stockinger” interpreted this process as, in E.P. Thompson’s words: “framework-knitting… being debased into a ‘dishonourable’ trade”. They saw themselves as being threatened by:

the least scrupulous hosiers… seeking to economise labour and cheapen production… [being] underpaid, as for work of coarser quality… [with] masters refus[ing] to… measure… the [thread] count…. [Plus] unscrupulous middlemen… “baghosiers"… persuading stockingers who were underemployed… to do work below the accepted rates…

But the:

most serious of all were the grievances as to "cut-ups" and "colting"….

Cut-up stockings… woven on a wide loom… then cut up into the required shape… [and] sewn at the seam… cheap… [but] they could be mass-produced….. The men, and many of the masters also, argued that the product was much inferior…. To the inexpert eye they resembled the real article, and therefore could undercut hose made "in a tradesmanlike manner"…. The poor quality of the "cut-ups" offended the craftsman's pride in his work, and led to the products of the trade generally falling into disrepute….

“Colting", or the employment of unskilled labour or of too many apprentices[, for] cheap techniques of production encouraged the influx of cheap and unskilled labour…

Plus “squaring”: using a machine that even an apprentice a woman, or an Irishman could use to align the fabric, rather than it being done by the hand and the eye of a proper and skilled craftsman.

Some of the great and good did think they ought to win their cases. Thompson quotes the middle-class radical Nottingham Review:

The machines, or frames... are not broken for being… new [inventions]... but in consequence of goods being wrought upon them which are of little worth, are deceptive to the eye, are disreputable to the trade, and therefore pregnant with the seeds of its destruction...

But the main judgment of the English power-brokers was that they were simply being uppity because of their former prosperity, luxury, and profusion. They were universally depraved to a degree “scarcely to be credited”. They needed to cease their licentious behavior, and work harder:

Among the men the discussion of politics, the destruction of game, or the dissipation of the ale houses was substituted for the duties of their occupation during the former part of the week, and in the remaining three or four days a sufficiency was earned for defraying the current expenses…

The market giveth; the market taketh away: blessed be the name of the market. The stockingers had been able to earn enough to allow their families to live more than respectably on four (or even three!) days’ worth of work a week, and they had accepted that blessing. Now the wheel had turned, and they needed to buckle down.

The stockingers did not think that they should take this deterioration lying down.

E.P. Thompson says they had “a long history of both constitutional and violent defence of their conditions”. As the Framework-Knitters’ Company, the stockingers had gained a Charter from King Charles II Stuart in the third quarter of the 1600s. It gave them the power to, in Thompson’s words: “appoint deputies to examine goods, and to cut to pieces those badly or deceitfully manufactured”. They sought to assert these royally-granted powers to “break and destroy all manner of frames whatsoever that make the following spurious articles and all frames whatsoever that do not pay the regular price heretofore agreed to by the Masters and Workmen…” They sued for damages against the “colters” employing too many apprentices and unskilled. The jury ruled that they had a case, but the damages it allowed were only a slap on the employer’s wrist. They tried to use the anti-union Combination Acts to sue the employing hosiers for conspiring in restraint of trade to reduce wages, but the magistrates refused to hear them.

As Thompson sums up their situation: “the framework-knitters felt that every statute which might have afforded them protection was abrogated or ignored, while every attempt to enforce their ‘rights’ by trade union action was illegal.

And so the Luddites were born. Here is their song: “General Ludd’s Triumph”:

The guilty may fear but no vengeance he aims    
At the honest man's life or Estate,    
His wrath is entirely confined to wide frames    
And to those that old prices abate.     
These Engines of mischief were sentenced to die    
By unanimous vote of the Trade     
And Ludd who can all opposition defy    
Was the Grand executioner made....

He may censure great Ludd's disrespect for the Laws    
Who ne'er for a moment reflects     
That foul Imposition alone was the cause     
Which produced these unhappy effects. 
Let the haughty no longer the humble oppress    
Then shall Ludd sheath his conquering sword,    
His grievances instantly meet with redress     
Then peace will be quickly restored. 

Let the wise and the great lend their aid and advice    
Nor e'er their assistance withdraw     
Till full-fashioned work at the old fashioned price     
Is established by Custom and Law. 

Then the Trade when this arduous contest is o'er    
Shall raise in full splendour its head,     
And colting and cutting and squaring no more    
Shall deprive honest workmen of bread. 

Rights, Powers, & Deservings: The poor stockinger believed—the Luddites believed—that they had rights. They thought that they had rights to life and liberty, to speech and conscience, and to property and the pursuit of happiness. And they thought they had rights to honest judges who would vindicate those rights.

But they believed that they had more rights than that. The way Karl Polanyi put it was that they had rights that the land, their labor, and the flow of finance that produced economic stability not be treated as commodities—things to rise and fall in price and value and to be pushed hither and thither by the profit-maximizing logic of the market. They deserved a society that understood that the market that was made for man, not man for the market. Secondary to the Luddites, but important in general: the natural and built environment was not a source of profit, but was rather where they lived. More important to the Luddites, society owed them employment: the flow of finance that kept demand for stockings high and the stocking value-chain working should not be vulnerable to the decisions of rootless cosmopolite financiers hundreds or thousands of miles away that their occupation did not pass some market profit-maximization test. And most important: society owed them an economy in which their earnings were commensurate with their status as honest, respectable, skilled, and honorable craftsmen.

The stockingers had these rights. And they also had the right to enforce them: by petition, by protest, by political action; and, if those did not suffice, by riot and—the power-brokers of England feared—revolution: to secure these rights governments are instituted among men, deriving their just powers from the consent of the governed. And the Luddites did not consent to an England in which their property in their occupation was to be devalued and dishonored by colting, cutting, and squaring.

The power-brokers did fear revolution—a Luddite Jacquerie. They did deploy 12,000 soldiers to the Midlands against the Luddites in 1811-1813. This was a serious effort, deployment, and exercise of governmental power. But Frank Darvell, Eric Hobsbawm, and E.P. Thompson greatly overstate their case when they claim that this deployment “greatly exceeded in size the army which Wellington took into the [Iberian] Peninsula in 1808” to fight Napoleon. First, of all, in 1808 Arthur Wellesley was still plain Mr. Arthur Wellesley. (He would not be ennobled as Viscount Wellington of Talavera and of Wellington, and Baron Douro of Wellesley, until August 26, 1809). Second, Arthur Wellesley was then the junior one of five generals sent to Portugal and Spain. He was indeed sent in in command of the vanguard of 9,000 troops. But 6,000 more rapidly followed. And then 13,000 more. And, finally, the overall commander John Moore with an additional 15,000. The total was 43,000 committed in the year 1808—plus more later.

No, the British government did not commit more soldiers to suppress the Luddites than to fight Napoleon. Darvell, Hobsbawm, and Thompson want to suggest that the Luddites were at least the spectre of a Bolshevik coup. They want to suggest that the Regency government of the British Empire had the class war of the Luddites at least as much on its mind as the geopolitical war against Napoleon. That was simply not the case.

And note that that General Ludd’s army did not see itself as waging a class war against the rich. They call on the wise and the great for aid. They say that the honest rich have nothing to fear. It is the guilty, those who install the wide frames, the haughty—plus women, Irishmen, unskilled workers who dare to make stockings, and apprentices thinking to rise above their station. General Ludd’s army wanted to be treated as they deserved, not treated equally with those who ought to stay beneath them in the hierarchy of the great chain of being

Ever Since, History Rhymes: Why spend this time on the stockinger experience? Because it set the frame. It was the first time some group of people see their comfortable and stable place in the commercial market economy evaporate as technology rushes forward. They were the first group of people who found general technology-driven advancing prosperity turning on them, and experiencing the loss of position, place, income, and wealth as it was their turn on the barrel. Over and over again, the stockinger experience has rhymed down through history for three-hundred years now. For the Schumpeterian creative-destruction process is ongoing: a permanent feature since well before 1870 of Modern Economic Growth.

What Rough Beast?: The World's 21st-Century Political-Economy Polycrisis

2. General Ludd & His Adversaries

2.1. The Poor Stockinger

2.2. Commercial Society

2.3. All Established Powers & Orders Are Steamed Away

2.4. Steampower Society

2.5. Industrial Research Laboratories & Modern Corporations

2.6. The 20th-Century Ride

2.7. The Fragility of Income, Wealth, & Status

2.8. American Exceptionalism

2.9. We Arrive at 1976

References:

• Anonymous. 1812. "General Ludd's Triumph." <https://archive.org/details/RTFM-Ludd>.

• DeLong, J. Bradford. 2024. “Naughty, Naughty, Eric Hobsbawm”. Grasping Reality Notes. June 26. <https://substack.com/@delongonsubstack/note/c-60157293>.

• DeLong, J. Bradford. 2024. “How the Early 1990s Shaped Modern American Neofascism”. Grasping Reality. June 27. <https://braddelong.substack.com/p/how-the-early-1990s-shaped-modern>.

• DeLong, J. Bradford. 2023. “Teaching Note: EP Thompson & The Making of the English Working Class”. Grasping Reality. December 11. <https://web.archive.org/web/20230717123456/https://braddelong.substack.com/p/teaching-note-ep-thompson-and-the>.

• Ganz, John. 2024. When the Clock Broke: Con Men, Conspiracists, & How America Cracked Up in the Early 1990s. New York: Farrar, Straus and Giroux. <https://us.macmillan.com/books/9780374605445/whentheclockbroke>.

• Ganz, John. 2024. "What My Book Is About." Unpopular Front. June 26. <https://www.unpopularfront.news/p/what-my-book-is-about>.

• Hall, Stuart. 1983. "For a Marxism Without Guarantees." Australian Left Review. 84 (Winter). pp 38-43. <https://salvage.zone/for-a-marxism-without-guarantees/>.

• Heine, Heinrich. 1844. Germany. A Winter's Tale & New Poems. Hamburg: Hoffmann und Campe. <https://archive.org/details/newpoems00heinrich>.

• Hobsbawm, Eric. 1952. “The Machine Breakers”. Past & Present 1 (1): pp. 57-70.<https://academic.oup.com/past/article-abstract/1/1/57/1508444>.

• Marx, Karl, & Friedrich Engels. 1848 [1850]. Manifesto of the Communist Party. London: Communist League. Trans. Helen Macfarlane in The Red Republican. <https://archive.org/details/CommunistManifesto2>.

• Schumpeter, Joseph A. 1942. Capitalism, Socialism, and Democracy. New York: Harper & Brothers Publishers. <https://archive.org/details/j.-schumpeter-capitalism-socialism-and-democracy>.

• Polanyi, Karl. 1944. The Great Transformation: The Political and Economic Origins of Our Time. New York: Farrar & Rinehart. <https://archive.org/details/greattransformation00pola>.

• Thompson, E.P. 1963. The Making of the English Working Class. New York: Pantheon Books. <https://archive.org/details/makingofenglishw0000thom_p8d1>.

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Glossing the Communist Manifesto’s “Die moderne Staatsgewalt ist nur ein Ausschuß, der die gemeinschaftlichen Geschäfte der ganzen Bourgeoisklasse verwaltet”—“the power of the modern state is nothing but the associated management of the affairs of the business class”1. In 1884 Friedrich Engels expanded upon what he then thought he and Marx had meant back in 1848:

Friedrich Engels (1884): The Origin of the Family, Private Property & the State: ‘The state... is normally the state of the… economically ruling class, which… becomes also the politically ruling class… [with] new means of holding down and exploiting the oppressed.... The ancient state… of the slave-owners for holding down the slaves… the feudal state… of the nobility for holding down… peasant serfs and bondsmen, and the modern representative state… for exploiting wage-labor by capital… <https://archive.org/details/originoffamilypr1972enge>

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But Engels in 1884 expanded on it only to then reveal that he found the Communist Manifesto’s 1848 express line inadequate for any productive discussion of what was, to him, the modern politics and political strategy of the Steampower Age.

And so in 1884 Engels issued very important qualifications. But what is left after the qualifications? Damned little.

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An interesting exchange between Ilari Mäkelä and Daron Acemoglu over on Ilari’s “On Humans” podcast:

Ilari Mäkelä: [DeLong and Galor] would say is that in a patriarchal society before birth control… extra technology… can improve your living conditions for a while, but with the pressure to create male offspring… you’re… going to start having population increase, and… you might get GDP growth, but you don’t get GDP per capita growth….

Daron Acemoglu: If you look at taking a really macro perspective… working people’s income… might look flat. But if you look at specific episodes, especially institutionally diverse environments, you will see very different changes…. Take ancient Greece. There was a period of about 200 years in which real incomes grew, and there is no sign of Malthusian dynamics reversing that. If it was reversed, it was reversed thanks to Alexander the Great… <https://on-humans.podcastpage.io/episode/the-birth-of-modern-prosperity-part-3-power-to-the-people-with-daron-acemoglu>

This is, to my mind, a substantial misreading of the Hellenic efflorescence:

• The Hellenic Efflorescence was not -500 to -300: it was -1000 to 200.

• The Devil of Malthus was always active: from -1000 to 200 the number of people calling themselves “Hellenes” and living off the Hellenic resource base grew from 300 thousand to 15 million or so; but for half a millennium the growth of the resource base and of the intensity with which it was used outran

• Living standards did not, primarily, rise from -1000 to -300 because of an increase in the social power of hoi polloi—of “the many”; rather, they increased because investment, resources controlled by the Hellenes, and technologies of manipulating nature and coöperatively organizing humans outran Malthusian forces.

• Living standards of Hellenic hoi polloi did not fall after -300 because the rise of Alexander the Great and his successor kings diminished the social power of hoi polloi; rather, living standards fell because the Malthusian long run arrived.

• Did the Gini coefficient move? Was the inequality-measuring Gini coefficient in the “democratic” Athenian formal and informal empire in -435 noticeably less than in the “oligarchic” Spartan formal and informal empire in -435? I suspect not, or not by much.

In short, everything is much more complicated. Before the post-1870 modern economic growth escape from the Malthusian trap, you cannot map any concept of the social power of hoi polloi onto hoi polloi typical living standards in any clean and coherent way. (And, I would argue, after the post-1870 modern economic growth escape from the Malthusian trap, you cannot map any concept of the social power of hoi polloi onto hoi polloi typical living standards without holding a huge number of things ceteris paribus—unless you want to take the society’s Gini coefficient as a measure of hoi polloi social power. But that is for another time than this.)

Now, of course also:

• There are very interesting things going on the Archaic Hellenic, Classical Hellenic, Hellenistic, and Roman periods with respect to

  • how vicious the élite of the few—hoi oligoi—were to each other,

  • and to hoi polloi on whom they ran their domination-and-exploitation scheme,

  • the size and societal position of the “middle classes”,

  • the degree to which the ruling régime was “developmental” or “extractive”,

• The ideas that underpinned Athenian democracy in particular and polis democracy in general are of enormous value to us.

Let me expand:

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Podcast: <https://overcast.fm/+bbwlDPlr8>

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Sean Kenny: ‘In this episode, we meet Prof. Bradford DeLong to discuss his recent book Slouching Towards Utopia: An Economic History of the Twentieth Century. We cover the rate of technological change prior to the industrial revolution. Before 1500, "the amount of technological change they got in a century, we get in two and a half years"!  We also look at some prerequisites for industrialisation and discuss how the second industrial revolution was the game-changer in terms of long run living standards. After discussing the European turnaround after the Marshall Plan, we finish in the post-war era by looking at "Pacific Rim" development and how it differed from previous modern economic growth episodes… <https://overcast.fm/+bbwlDPlr8>

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Since 1870 technological progress has doubled human wealth every generation, promising unparalleled prosperity and yet failing to deliver. From the Luddite protests of the stockingers of the English Midlands in 1812 to today’s neofascist movement, the reaction to this broken promise of general prosperity has been a constant of modenr political life. Now comes John Ganz with his new book, When the Clock Broke, on how the latest version of this story took its sinister shape in the early 1990s. From David Duke's alarming gubernatorial run to Pat Buchanan's inflammatory presidential campaign, accompanied the hierarchical ravings of Samuel Francis and Joseph Sobran,

Ganz traces the rise of a new conservative ideology that rejected racial equality, equality of opportunity, and, indeed, the entire American dream. Ganz offers a crucial lens for understanding how we got here—and where we need to fear we might be headed.

How did we get from Reagan’s “Morning in America” conservativism to the conservatism of the Mob and the Race, anyway?

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By reviving the ideas of cybernetics pioneer Stafford Beer, Davies suggests we can build organizations that are not just efficient, but truly accountable. In an age of AI anxiety and institutional mistrust, The Unaccountability Machine offers a timely reminder: the machines we fear most are the ones we've already built.

We have built a world of vast, interlocking systems that no one can fully understands. From corporate behemoths to government bureaucracies, these leviathan-like societal machines with human beings as their parts make decisions that shape our lives—often with disastrous consequences. Can there be a way to tame these monsters of our own creation, to give them human faces? Dan Davies thinks the forgotten discipline of “management cybernetics” might provide a way. That is the crux of his brand-new The Unaccountability Machine. Our societal woes stem not from individual failings, but from the opaque workings of large-scale decision-making structures—hence the need for better system design, better feedback loops, and more and better chosen variety of information, state, and action in these machines’ control mechanisms. Cybernetics was the discipline to help us understand communication and control in complex systems. The steersmen all ran aground, But we can try again.

Understanding how to make our systems more accountable and more human may not be the key to our survival, but it is certainly the key to our happiness and prosperity.

Dan Davies’s The Unaccountability Machine: Why Big Systems Make Terrible Decisions & How the World Lost Its Mind is a little book, and is a great book.

How is it a little book? Damned if I know. Had I set out to write anything like book, I could not have done so in less than four times the length.

Why is it a great book?

It is a great book because it sheds light on one of the most pressing issues of our time: why big systems make terrible decisions. Through a blend of historical analysis, theoretical insight, and contemporary case studies, Davies provides an essential read for those looking to understand the complexities of modern decision-making, and the pervasive issue of unaccountability and dysfunction in large human organizational systems.

It is a great book because it is a book that takes a lot of very important and fuzzy ideas about how a world of more than 8 billion people tightly linked together by economic commodity exchange, lightspeed voice, and political control can somehow organize itself to be productive, peaceful, and free when there is no way anything in our evolutionary past could possibly have predisposed us to pull and think together at such a scale. The result is inherent complexities and lack of transparency that lead to catastrophic decision-making. Davies makes this case through intricately woven combinations of historical analysis, theoretical frameworks, and contemporary examples that he uses to critique the phenomenon of 'unaccountability' that plagues modern society, from corporate behemoths to governmental institutions.

So what do we do? Davies says the first step is for him to write his book, attempting to revive what was once an important intellectual movement of the post-World War II world, cybernetics—Norbert Weiner’s idea that there should be principles that we can discover about how to make our increasingly large and complex systems of human organization comprehensible, and manageable by human beings. The root is the Greek kybernētikos, meaning “good at steering a boat”. Cybernetics would have been a discipline, metaphorically, about how to steer a boat, or perhaps about how to build a boat that can be steered.

For at the heart of Davies’s argument is the concept that historical events and societal shifts are better understood through the prism of decisions rather than the events themselves. He posits that many of these decisions emanate not from the will of individuals but from the impersonal, often opaque workings of large systems. This perspective challenges traditional notions of accountability and decision-making, suggesting a world increasingly governed by what Davies terms 'accountability sinks'—structures within organizations that deflect responsibility, thereby diluting individual accountability. Thus not events, but rather cybernetic information-flow structures, are at the center of at least modern history.

Davies’s argument is thus an optimistic one—that we can understand what appear to be the opaque workings of large systems because if there is not yet we can build a functioning intellectual discipline to help us manage them. Davies writes as if this conundrum we face is a product of the post-WWII history of the so-called “managerial revolution”.

But Henry Farrell argues that it is in fact much older than that. And I agree with him. Davies has chosen what Farrell calls the “Vico” as opposed to “Kafka” prong of the fork:

Vico-via-Crowley and Kafka-via-Jarrell present the two prongs of a vaster dilemma. Over the last few centuries, human beings have created a complex world of vast interlocking social and technological mechanisms. Can they grasp the totality of what they have created? Or alternatively, are they fated to subsist in the toils of great machineries that they have collectively created but that they cannot understand?… Understood in this light, current debates about the Singularity are so many footnotes to the enormous volumes of perplexity generated by the Industrial Revolution: the new powers that this centuries-long transformation has given rise to, and the seething convolutions that those powers generate in their wake…

What is this rope he tries to revive? I see five pieces spun together:

(1) revive the influence and reputation of counterculture-era management cyberneticist Stafford Beer. In his view, the principal governmental problem in managing corporate bureaucracies’ problems is a matter not for economists who focus on eliminating market failures, but of rather supervising them in a way that ensures that the internal flow of information between deciders and decided-upon is kept in balance so that they become and remain viable systems that are useful to humanity.

(2) Our current world is beset by accountability sinks—places where things are clearly going wrong, but it is nobody’s fault. As Felix Martin puts it:

frustrated customers endlessly on hold to ‘computer says no’ service departments… banking crises regularly recur—yet few individual bankers are found at fault… politicians’ promises flop[ping and] they complain they have no power; the Deep State is somehow to blame…

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(3) Every organization needs to do five things: operations, regulation, integration, intelligence and philosophy. Operations is doing the work; regulation is making sure the people doing the work have what they need when they need it; integration is making sure people are pulling in the right direction; intelligence is planning so when things happen you can modify operations, regulation, and integration; philosophy is what you are doing all of this for. Davies writes:

Think of soldiers, quartermasters, battlefield commander, reconnaissance and field marshal, or… musicians, conductor, tour manager, artistic director and Elton John…

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(4) Sometimes you need to get all the things done by simplifying-and-optimizing: delegate some of the work to a suborganization that will report its metrics, and as long as it meets its metrics don’t worry about it—but when it fails to meet its metrics, take a careful look inside at what is going on. This is attenuation: somehow reduce the complexities the organization has to keep trying to deal with so that there is less to do. (But do this badly and you are just pretending things are less complicated than they are.)

Davies’s example is how you would regulate the temperature of a squirrel’s cage. Rather than record its temperature at every minute, and then think about what would be the best thing to do, simply install an automatic thermostat and set the target temperature:

Variety engineering for beginners: The ambient temperature of our squirrel cage could take practically any value (within a realistic range). If we make a decision to reduce our information set to 'too hot' and 'too cold', we can match it to a regulator with states of 'heater on' and 'heater off'; we've built a thermostat. Doing this isn't difficult—we just decide to throw away some of the information, on the assumption that it's not relevant. That might end up being a bad decision, of course (if the ambient temperature rises above 100 degrees, for example, perhaps because the lab is on fire), but there is a huge saving in the amount of variety and information that we need in the regulator. This sort of decision is fundamental to the cybernetic analysis of systems; you are always attenuating variety in some way or other, unless you are describing a system that consists of everything in the universe…

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(5) Most of the time what you really need to get all the things done is to build better feedback loops, which requires amplification so that the control mechanism can see what is really there outside. The organization needs to better match in its internal structures the complexity of the environment it is dealing with, so that it sees what it needs to see in time for something to be done about it before it is too late.

We have not learned these management-cybernetic lessons, we do not think of our systems in this way. And so lots of things have gone and do go and will continue to go wrong. Davies’s tracing of the cybernetic flaws in the implementation of the 'managerial revolution' provides a historical foundation for understanding the current state of unaccountability. Critical decisions increasingly made by systems and processes rather than by individuals with a stake. This shift, Davies argues, has not only made it difficult to pinpoint responsibility for poor decisions but has also alienated individuals from the very systems that govern their lives. A significant strength of the book lies in its ability to connect these abstract concepts to tangible, real-world consequences. Davies leverages a range of examples, from the tragicomic episode of squirrels at Schiphol Airport to the profound societal impacts of the 2008 financial crisis. These illustrations serve not only to elucidate his points but also to demonstrate the far-reaching implications of systemic unaccountability on both a micro and macro scale.

Note that nowhere in this management cybernetics is a primary task one of making sure that people have the right incentives to act on the information they have (that elimination of “market failures” is the focus of economics. It is, rather, making sure that the flow of information is not neurotic—neither too little for those who must decide to grasp the situation, too much so that those who must inside drown, or too irrelevant. I wish I could say: “It’s a kind of psychoanalysis for non-human intelligences, with [counterculture-era management cyberneticist] Stafford Beer as Sigmund Freud”. But I cannot. Felix Martin wrote that in his Financial Times review of The Unaccountability Machine. And since I cannot do better, I unabashedly steal it.

I need to stress here that economists’ advice and counsel is, in Davies’s view, worse than useless in solving these problems. Even on their home stomping grounds—in this case, on the functioning of international capital markets—economists’ insistence that market prices and profit-seeking economic agents guided by them goes abysmally wrong. In the 1980s British Chancellor of the Exchequer Nigel Lawson argued that since Britain’s foreign-exchange current-account deficit was generated by a free market, it must be good. But it was not good at all, Davies argued on his weblog. And it was not good at all for essentially cybernetic reasons that standard economics could not see:

Where did it all go wrong? Lots of places, of course, in different ways and at different times.  But the British economy… from about 1986 to 1992…. Among a certain kind of economist of a certain age… Nigel Lawson is famous for is the “Lawson Doctrine”…. Current account deficits… [that] have arisen as a result of private sector firms’ and households’ investment and spending decisions… are… “benign and self-correcting”…. A potted summary of the end of the Lawson Boom (and of Conservative Party economic credibility for two decades after the Black Wednesday currency crisis) would be “it wasn’t”….

The point of the Hayekian economy as information processor is that whenever a private sector transaction happens, information is transmitted through the supply and demand mechanism, and then incorporated into the price mechanism.  If you presume rational expectations, then this mechanism ought to be self-regulating; the price ought to adjust to bring the transactions into equilibrium, so that it shouldn’t be possible to build up deficits which have really bad consequences…. [Yet] the thing that happened is… the good kind of deficit… that should self-correct, didn’t. How come?…

Tak[e] seriously the Hayekian model of the market economy as an information processor.  If you do that, the answer is pretty trivial—the self-regulatory mechanism didn’t have enough information processing capability to regulate this problem quickly enough…. It didn’t have enough bandwidth…

If von Hayek’s arguments that the market-economy price mechanism can and does have enough information-transmission bandwidth were correct, Black Wednesday would not have happened, because the Lawson Doctrine would have been sound. It wasn’t sound. It did happen. It is not correct.

Davies goes on:

Economists don’t… think this way… because the economic debate about information and calculation was won in the 1920s with the “socialist calculation problem”, while the modern theory of information wasn’t invented until Shannon and Wiener… in the 1940s.  “Long and variable lags” could and should have been translated into much more rigorous terms, decades ago.  But we had other things on our minds…

This worse-than-uselessness is especially baneful, Davies thinks, as far as the large-corporation sector of the economy is concerned. Davies appears especially angry at what he sees as the intellectual wasteland and on-the-ground rubble left by Milton Friedman, and his shareholder value-maximization doctrine. It took a post-WWII oligopolistic-company system that was in rough, effective, and useful cybernetic balance—what John Kenneth Galbraith called the “technostructure”—and destabilized it by turning its components into harmful paperclip short-term profit maximizers.

He eloquently warns of us economists’ potentially baneful influence:

As long as the ideology of economics maintains its dominant position, there is always a considerable danger of the Friedman doctrine rising back up from the dead. If the highest-level decision-making mechanisms of the world are to be viable systems, they need a philosophy which can balance present against future and create self-identity…. This philosophy cannot look much like mainstream economics…. Any system which is set up to maximise a single objective has the potential to go bonkers…. You can’t have the economists in charge, not in the way they currently are…. The top level of any decision-making system that’s meant to operate autonomously can’t be a maximiser. And so, the governing philosophy of the overall economic system can’t be based on the constrained optimisation methodology that’s currently dominant in the subject of economics…

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And he has much else to say.

Still, is this more than mere handwaving? I think not quite, but almost: I hope this book will spur the thinking that we actually need to do, for we badly need a revival of the intellectual thread of cybernetics.

Why do we badly need it? Let me back up, and approach that question the long way around:

We East African Plains Apes are neither wise, nor smart. We are lucky if we can remember where we left our keys last night.

And yet, working together, we have conquered and dominate the world. are an awe-inspiring concept-thinking and nature-manipulating anthology intelligence, whose spatial reach embraces the globe, whose numerical reach now covers more then 8 billion of us, and whose temporal reach—because of writing—now extends back 5000 years. Even as long ago as 150,000 years ago, weak of tooth and absence of claw as we are, and when our ability to coöperate to work and think together was limited to a band of perhaps 100 with a memory that extended back only 60 years or so, we were not just being eaten by but we (or, rather, our very close Neandertal cousins) were also eating the hyenas.

But how can we work and think together at 8 billion-plus scale? We no longer just have our families, our neighbors, and our coworkers with whom we interact via networks of affection, dislike, communication, barter, exchange, small-scale plan, and arm-twisting.

Instead, or rather in addition, more and more of what we do is driven by an extremely complex assembly of vast interlocking social and technological mechanisms that we have made but that we do not understand. Dan Davies hopes to set forth an intellectual schema to help us understand them: that is the goal of management cybernetics.

The publisher’s website for the book says says:

Profile Books: The Unaccountability Machine (Hardback): ‘Part-biography, part-political thriller, The Unaccountability Machine is a rousing exposé of how management failures lead organisations to make catastrophic errors. “Entertaining, insightful ... compelling” Financial Times…. Dan Davies examines why markets, institutions and even governments systematically generate outcomes that everyone involved claims not to want…. Stafford Beer… argued in the 1950s that we should regard organisations as artificial intelligences, capable of taking decisions that are distinct from the intentions of their members. Management cybernetics… was largely ignored…. With his signature blend of cynicism and journalistic rigour, Davies looks at what's gone wrong, and what might have been, had the world listened to Stafford Beer when it had the chance… <https://profilebooks.com/work/the-unaccountability-machine/>

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Groups of humans that achieve outcomes or “decisions that are distinct from the intentions of their members…”—now that leads me to reach for Adam Smith and his Wealth of Nations, in which the combination of profit and security motives on the part of merchants leads them to take actions that add up to making society as rich as possible by:

render[ing] the annual revenue of the society as great as he can…. [although] he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it…

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For Adam Smith, the fact that the market economy considered as a slow-AI has a mind of its own is not a bug but a feature. Indeed, the fact that the market economy as slow-AI has this mind of its own allows Adam Smith to dynamite the entire “Political Œconomy” literature of how to make England great that The Wealth of Nations intervenes in.

Smith thus created the intellectual discipline of economics by building a toolkit for thinking about the global-scale societal human thinking- and doing-mechanism that is the coördinated market economy.

But the market economy was not alone as a human-made but inhuman-scale and incomprehensible societal mechanism. We have others. And all of our global-scale societal mechanisms are Janus-faced.

They are extraordinarily, massively, mind-bogglingly productive. How much richer am I than my Ohlone predecessors who were the only people then living on the shore of San Francisco Bay four hundred years ago? A hundredfold richer? More? And what do I do to gain these riches? I know things and tell people stories about the human economy of the past. That is what I do.

But these mechanisms are also horrifyingly alien, inhumanly cruel, and bizarrely incomprehensible. Franz Kafka saw this. As Randall Jarrell wrote: “Kafka says… the system of your damnation… your society and your universe, is simply beyond your understanding…” Purdue Pharmaceuticals “decides” that a good way to make money for its shareholders is to addict Americans to opiates, and the individual humans who are its components fall into line—and afterwards all protest that that was not what they meant to do. But they did it. Global warming means that Berkeley right now has the climate that Santa Barbara 300 miles south had in my youth. Who decided to do this?

And I have not gotten to the fact that this is the timeline with the killer robots and the automated distributed propaganda machines that would make O’Brien of 1984 or Gletkin of Darkness at Noon laugh with joy.

New York Times columnist Ezra Klein says that in trying to understand the latest wave of cultural technologies that are the tech sectors MAMLMs—Modern Advanced Machine-Learning Models—he is driven to:

metaphors… [from] fantasy novels and occult texts… act[s] of summoning… strings of letters and numbers… uttered or executed… create some kind of entity… [to] stumble through the portal…. Their call… might summon demons and they're calling anyway…

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But what Ezra does not appear to recognize is that his metaphors of finding ourselves in a room with possibly malevolent THINGS that have escaped confining pentacles applies not just to programs running on NVIDIA-designed GPUs. Mary Shelley saw that it applied to science, Marx to the market economy, Kafka to bureaucracy. Adorno to the creation and transmission of culture, Marcuse to modern democracy, and so on. Can we understand and manage these inhuman massive-scale systems that are in the last analysis made up of people doing things for reasons? Can we control or constrain them to give them humanlike souls, or a human face?

So far the answer has been, largely, no. Consider what Gabriel Garcia-Marquez thought of was extremely high and definitely worshipful praise of Cuba’s Maximum Leader Fidel Castro:

He has breakfast with… two hundred pages of news…. No one can explain how he has the time or what method he employs to read so much and so fast…. A vast bureaucratic incompetence affecting almost every realm of daily life, especially domestic happiness, which has forced Fidel Castro himself, almost thirty years after victory, to involve himself personally in such extraordinary matters as how bread is made and the distribution of beer...

To which Jacobo Timerman snarked:

Castro… has a secret method… for reading quickly…. Yet, thirty years after the revolution, he hasn't managed to organize a system for baking bread and distributing beer…

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From a cybernetic perspective, most of our economic world today suffers from the inverse of the flaws of Fidel Castro’s system. We are under the dominion of sophisters, calculators, and most of all economists. So we have systems that are highly efficient at managing the wrong things in the wrong way. They are maximizers, where the goal is to make as much money as possible. As Davies writes:

A maximising system… defin[es] an objective function, and throw[s] away all the other information…. [But] the environment is going to change, and something which isn’t in the information set any more is going to lead… [to] destruction…. Every decision-making system set up as a maximiser needs to have a higher-level system watching over it. There needs to be a red handle to pull, a way for the decided-upon to indicate intolerability

But all is not lost, at least not with respect to the major shoggoths of our economy. This is what I see as Davies’s major action-item conclusion:

[In] the decision-making system of a modern corporation… one of its signals has been so amplified that it drowns out the others. The ‘profit motive’ isn’t…. Corporations… don’t have motives. What they have is an imbalance…. They aren’t capable of responding to signals from the long-term planning and intelligence function, because the short-term planning function has to operate under the constraints of the financial market disciplinary system…. Take away that pressure [and] it’s quite likely…corporate decision-making systems will be less hostile…. Viable systems fundamentally seek stability, not maximisation…. On any given day, managers spend a lot more time talking to their customers and employees than they do to investors; if they were able to pay attention to what they heard, that would be much healthier...

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The von Hayekian strand of economics—which is still the dominant strand—assumed that the tasks of managing society were primarily that of moving decision-making to where the information already was—that was the function of private property—that of signaling where addition resources were needed—that was contract—and that of incentivizing those with the resources, authority, and information to do their job—and that was the profit motive. Actual information flows of any more bandwidth than “this is the price” were seen as unnecessary.

But that has to be wrong. Management cybernetics offers a possible way to think about what would be right.

But economics is not the only intellectual discipline and the economy not the only global-scale societal-organizational mechanism that could not become more accurate and relevant with a dose of management cybernetics. Consider the issue of choosing “targets”, and then rewarding people for meeting them:

Targets… ought to target the thing that you care about, not something which you believe to be related to it, no matter how much easier that intermediate thing is to measure. That doesn’t guarantee success; the phenomenon of “gaming the system” or the tendency of control systems to be undermined by adversarial activity is much more general and complicated than this single problem. Targets are… an information reducing filter on the system…. Attenuating information to, literally. “make it manageable” is the whole [point]… That’s the fundamental reason why they sometimes go wrong…. As far as I can see, “teaching to the test” is a one hundred and eighty degrees inverted description of a phenomenon that ought to be called “not testing for the outcomes you want”…

And the tasks of management cybernetics will never end:

Complexity is constantly increasing…. Reorganisation is the way in which environmental variety is brought back into balance with the capacity to manage it…. The highest function of the Viable System Model is that of balancing the need to change with the capacity to change.  It’s necessary to respect the problem, make a realistic assessment of what capacity exists or can be gathered, then think in terms of priorities and trade-offs to meet the most vital and immediate changes that need to be made. Systems have to be designed and redesigned, so that they obey the basic principles of “variety engineering” (the management science of ensuring that information arrives in the right place, in time and in a form in which it can be the basis of decision making)…

Thus the book is one of great, if Sisyphean, hope. We can fix our excessive dependence on unaccountable inhuman-scale systems. It is a problem of information flow: greater transparency, human oversight, and reintroducing personal responsibility. But this requires conscious efforts to combat and fix the tendency towards unaccountability and system opacity and misoptimization.

The Unaccountability Machine is, I think, a much better road towards understanding our current societal-organizational environment than others currently being put forward. I found Henry Farrell’s remarks on two of these useful. Remember Henry Farrell’s setting the stage as he sees it:

Human[s]… have created a complex world of vast interlocking social and technological mechanisms…. Humans have created a world… impervious to… understanding…. Our first instinct is to populate this incomprehensible new world with gods and demons…

And then, Henry says, technoutopianbros or technodystopianbros divide. The utopians are the:

AI rationalists… [who suppose] the purportedly superhuman entities they wish to understand and manipulate are intelligent, reasoning beings… [that] reason their way towards comprehensible goals. This might… allow you to trammel these entities, through the subtle grammaries of game theory and Bayesian reasoning. Not only may you call spirits from the vasty deep, but you may entrap them in equilibria where they must do what you demand they do…

This belief that the tools of the economist can successful bespell our societal-scale mechanisms is, Donald Davies would say, naïve and wrong. I think he is right.

Then there are the dystopians, who believe that we should abdicate all choice and direction and simply welcome our AI-overlords:

We are confronted by a world of rapid change that will not only defy our efforts to understand it: it will utterly shatter them. And we might as well embrace this, since it is coming, whether we want it to or not. At long last, the stars are right, and dark gods are walking backwards from the forthcoming Singularity to remake the past in their image. In one of Land’s best known and weirdest quotes:

“Machinic desire… rips up political cultures, deletes traditions, dissolves subjectivities, and hacks through security apparatuses, tracking a soulless tropism to zero control. This is because what appears to humanity as the history of capitalism is an invasion from the future by an artificial intelligent space that must assemble itself…. Digitocommodification is the index of a cyberpositively escalating technovirus, of the planetary technocapital singularity: a self-organizing insidious traumatism, virtually guiding the entire biological desiring-complex towards post-carbon replicator usurpation…”

And this “technocapital singularity” is to be celebrated! William Gibson describes a future “like a deranged experiment in social Darwinism, designed by a bored researcher who kept one thumb permanently on the fast-forward button”…

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And this is simply crazy. For one thing, none of these processes have human intentionality. We are primed to attribute human intentionality to them for lots of reasons. But actually believing that they do have it will lead us far astray.

if these are our other potential guides, Dan Davies is vastly to be preferred.

In the final analysis, therefore, The Unaccountability Machine is a guide to action—or at least to thought to how to take action. It is a great book: a crucial addition to the discourse on governance, ethics, and the role of social-organizational as well as nature-manipulation technologies in society. It should be read by anyone concerned with the direction in which our world is headed, offering both a stark warning and a glimmer of hope for a more accountable future.

Moreover, once we economists recognize our subordinate role, there may still be a place for us not that far from the hearth:

It’s not as if the toolkit of optimisation needs to be thrown away completely. As we said before, if you have some inputs and you want some outputs, then you want to get the most outputs for your inputs, and that’s what economics is all about. Providing a governing ideology and philosophy isn’t the only thing that makes a science worth doing—John Maynard Keynes once said that economists could consider their discipline a success when they were regarded as useful and competent technicians, like dentists.

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References:

• Adorno, Theodore, & Max Horkheimer. 1947. Dialectic of Enlightenment. Amsterdam: Querido. <https://archive.org/details/dialecticofenlig0000hork>.

• Beer, Stafford. 1972. The Brain of the Firm. London: Allen Lane. <https://archive.org/details/brain-of-the-firm-reclaimed-v-1>.

• Crowley, John. 1987. Ægypt. New York: Bantam Books. <https://archive.org/details/isbn_9780553051940>.

• Davies, Dan. 2024. The Unaccountability Machine: Why Big Systems Make Terrible Decisions and How the World Lost Its Mind. London: Profile Books. <https://www.blackwells.co.uk/bookshop/product/The-Unaccountability-Machine-by-Dan-Davies/9781788169547>.

• Davies, Dan. 2024. “Sympathy for the Folk Devil”. Back of Mind. January 17. <https://backofmind.substack.com/p/sympathy-for-the-folk-devil>.

• Davies, Dan. 2024. “Laws of Managerial Motion”. Back of Mind. November 22. <https://backofmind.substack.com/p/the-laws-of-managerial-motion>.

• Davies, Dan. 2023. “Goodhart as Epistemologist”. Back of Mind. July 21. <https://backofmind.substack.com/p/goodhart-as-epistemologist>.

• Davies, Dan. 2023. “The Lawson Doctrine”. Back of Mind. April 21. <https://backofmind.substack.com/p/the-lawson-doctrine>.

• DeLong, J. Bradford. 2024. “Large-Scale Transcontinental Coöperation in the Classical-Age East-African Plains Ape”. Grasping Reality. April 8. <https://braddelong.substack.com/p/large-scale-transcontinental-societal>.

• DeLong, J. Bradford. 2024. “Really-Existing Socialism”. Grasping Reality. April 8. <https://substack.com/@delongonsubstack/note/c-53454807>.

• Farrell, Henry. 2024. “Vico’s Singularity”. Programmable Mutter. May 1. <https://www.programmablemutter.com/p/vicos-singularity>.

• Farrell, Henry. 2024. “Cybernetics Is the Science of the Polycrisis”. Programmable Mutter. April 17. <https://www.programmablemutter.com/p/cybernetics-is-the-science-of-the>.

• Farrell, Henry. 2010. “The Goggles Do Nothing”. Crooked Timber. December 8, 2010. <https://crookedtimber.org/2010/12/08/the-goggles-do-nothing/>.

• Jarrell, Randall. 1941. “Review: Kafka's Tragi-Comedy”. Kenyon Review. 3:1 (Winter), pp. 116-119. <https://www.jstor.org/stable/4332231>. Cited in: Farrell, Henry. 2024. “Vico’s Singularity”. Programmable Mutter. May 1.

• Herodotos of Hallicarnassos. [-425] 1904. Histories. Trans. Henry Cary. New York: D. Appleton and Co. <https://archive.org/details/historiesofherod00her>.

• Klein, Ezra, & Erik Davis. 2023. "Ezra Klein Interviews Erik Davis." New York Times. May 2. <https://www.nytimes.com/2023/05/02/opinion/ezra-klein-podcast-erik-davis.html>.

• Koestler, Arthur. 1941. Darkness at Noon. New York: The Macmillan Company. <https://archive.org/details/darknessatnoon0000arth>.

• Marcuse, Herbert. 1964. One-Dimensional Man: Studies in the Ideology of Advanced Industrial Society. <https://archive.org/details/marcuse-herbert-one-dimensional-man-1964_202012>.

• Martin, Felix. 2024. “The Unaccountability Machine—why do big systems make bad decisions?" Financial Times, April 4. <https://www.ft.com/content/0bb1b48f-b85a-4596-a0da-ac819bc69647>.

• Marx, Karl. [1849] 1976. Wage Labor & Capital. New York : International Publishers, <https://archive.org/details/wagelabourcapit000marx>.

• O'Hanlon, Larry. 2010. "Ancient Humans May Have Dined on Hyenas." NBC News, June 9. <http://www.nbcnews.com/id/wbna37784102>.

• Orwell, George. 1949. Nineteen Eighty-Four. New York: Milestone Editions. <https://archive.org/details/nineteeneightyfo0000orwe_q5v1>.

• Profile Books. 2024. “The Unaccountability Machine”. <https://profilebooks.com/work/the-unaccountability-machine/>.

• Shelley, Mary Wollstonecraft. . Frankenstein, or The Modern Prometheus. London: Lackington, Hughes, Harding, Mavor & Jones. <https://archive.org/details/frankenstein1818_202012>.

• Smith, Adam. 1776. An Inquiry into the Nature & Causes of the Wealth of Nations. London: W. Strahan & T. Cadell. <https://archive.org/details/inquiryintonatur01smit_0>.

• Timerman, Jacobo. 1990. “Reflections: A Summer in the Revolution—1987”. New Yorker. 66:26 (August 13), p. 62 ff. <https://archives.newyorker.com/newyorker/1990-08-13/flipbook/062/>.

• Vico, Giambattista. 1744. The New Science. Trans. Thomas Goddard Bergin & Max Harold Fisch. Ithaca, N.Y.: Cornell University Press. https://archive.org/details/newscienceofgiam0000vico

• Wiener, Norbert. 1948. Cybernetics: Or Control and Communication in the Animal and the Machine. Cambridge, MA: MIT Press. Accessed June 3, 2024. <https://archive.org/details/cyberneticsorcon0000wien>.

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In essence, the overarching takeaway from Alan Blinder’s A Monetary and Fiscal History of the United States, 1961-2021 is that there is no single, definitive lesson to be learned. The narrative lacks a linear progression, and the post-WWII era does not present a clear trajectory of improved economic management for macroeconomic stability. Instead, Blinder portrays the history as

wheels within wheels, spinning endlessly in time and space… [with] certain themes… waxing and waning… monetary versus fiscal… the intellectual realm… the world of practical policy making… the repeated ascendance and descendance of Keynesianism…

Issues arise and are addressed—or not. But each solution or lack thereof sets the stage for new problems. These new challenges leave the economy more susceptible, due to the very actions taken previously. By the narrative’s conclusion, one perceives a cyclic recurrence of similar problems, resembling an eternal game of whack-a-mole. This perspective underscores the complex and often cyclical nature of economic policy challenges, emphasizing that history is more about recurring themes and less about a straightforward path of progress. And even when one does succeed in stabilizing the economy, it is because of guesses from a weak knowledge base: I remember Blinder telling me in the early 1990s that the structure of the macroeconomy changes so fast and business cycles come sufficiently rarely that forward-looking business-cycle analysis is always fundamentally based on a one data-point regression with the sample limited to the business cycle just past.

On the fiscal side, Alan Blinder’s book stands as a worthy successor to Herbert Stein’s 1969 classic The Fiscal Revolution in America: Policy in Pursuit of Reality. While Blinder’s work is broader in scope and more contemporary, it leans more heavily into political and intellectual narratives than Stein’s administrative and technocratically focused analysis. For anyone seeking to understand the historical trajectory of fiscal and monetary policy in the United States, both works are indispensable.

However, when it comes to monetary policy, I hesitate to call Blinder’s book a successor to Milton Friedman and Anna J. Schwartz’s 1963 A Monetary History of the United States, 1867-1960. The framework presented by Friedman and Schwartz, which views macroeconomic outcomes through a rigid framework of mechanical transmission from the M2 money stock to nominal spending, falls short. This perspective assumes independent determinations by central banks, banks, and households regarding high-powered money, the deposit-to-reserve ratio, and the deposit-to-currency ratio, respectively. Such an approach fails to capture the complex, interdependent nature of monetary economics. Consequently, despite the numerous accurate observations and insights in A Monetary History, they do not coalesce into a coherent framework. Blinder does a much better job of not letting a faulty analytical framework—and, over a span of sixty years, all simplistic macroeconomic-model frameworks will be faulty—get in the way of the book.

Blinder’s central thesis, if he has one, is that:

Fiscal policy decisions will continue to be made largely on political grounds while monetary policy decisions will continue to turn on technocratic, economic considerations. The twain will not soon meet…

This suggests that macroeconomic stabilization and growth policies will remain a complex mix, tackling current issues while inadvertently creating new problems for the future. This is exacerbated by the disjointed functioning of fiscal and monetary policies and the persistent reliance on outdated models by policymakers. These models often fail to address the current fiscal and monetary environment effectively, as they are rooted in the contexts of past generations rather than present realities. Thus, the policy landscape is destined to be one of ongoing adjustments and recurring challenges, much like a blancmange of evolving issues.

I highly, highly recommend this book.

I see, in addition to that semi-central thesis, three major leitmotifs in Blinder’s book:

(1) The Perils of Politicized Monetary Policy: Blinder illustrates how monetary policymakers can derail economies and permanently damage their reputations when they make decisions based on political considerations. The case of Arthur Burns, whose reputation was marred by his focus on Nixon’s re-election in 1972, serves as a stark example. Alan Greenspan’s legacy, too, is diminished by his apparent support for the Bush tax cuts during the 2001 congressional debate. Blinder notes:

During the congressional debate in 2001, Greenspan tarnished his gold-plated reputation by seeming to endorse the Bush tax cuts. His thinly disguised advocacy not only crossed the line between monetary and fiscal policy but also struck many people as way too political for the Federal Reserve. Democrats were naturally displeased. But Greenspan’s endorsement of the Bush tax cuts probably didn’t hurt his chances for reappointment by Bush in 2004…

(2) The Complexity of Fiscal Policy: Blinder emphasizes that effective demand-management and growth-oriented fiscal policy is extraordinarily intricate. The appropriate guidelines and best practices shift significantly from decade to decade, rendering them nearly incomprehensible to the political system in real-time. This evolving complexity poses a significant challenge.

(3) The Limited Utility of Macroeconomic Theories: Blinder critiques the practical effectiveness of macroeconomic theories, particularly those championed by the elite academic community.

Let me elaborate.

These theories often fail to provide actionable guidance. Policymakers who have relied on elite macroeconomic thought often find themselves out of sync with current economic realities. Instead of guiding policy towards future economic conditions, these theories are typically based on outdated historical analogies and ideological biases. Even at best, such theories are of little use in a dynamically changing economic landscape driven by technological advancements.

In the worst of times, those who attempted to rely on cutting-edge macroeconomic theory found that it told them to take off their skates and exit the rink entirely.

And even in the best of times, policymakers who adhered closely to academic elite macroeconomic theories found themselves reacting to past economic conditions rather than anticipating future developments. These cutting-edge theories were essentially historical analogies from previous generations, influenced by ideologies—ideologies that one would hope were benign like oregano, rather than distortive like peyote. These theories offered little utility in a rapidly changing macroeconomy. Policymakers who paid them much attention found themselves skating not to where the puck was going to be, not even to where the puck was, but to where the puck had been in the past.

I would especially note this:

By about 1972 the strong consensus among macroeconomists was that neither monetary nor conventional forms of fiscal policy had permanent effects on employment or output. There was a short-run… no long-run trade-off…. Expansionary monetary or fiscal policies could put the economy on a short-term “sugar high.” But the sugar would dissolve, leaving inflation somewhat higher in its wake. That quickly became the canonical view in [élite high-status] academia, and it still is…

This proved disastrous for Federal Reserve Chair Ben Bernanke’s and President Barack Obama’s stabilization policymaking in the aftermath of the 2007-2009 financial crisis and Great Recession. Their belief that further stimulative measures to rapidly restore full employment would merely put the economy on a short-term sugar high followed by the creation of a persistent inflation problem doomed the United States to a lost half-decade in the first half of the 2010s. When President Joe Biden and Fed Chair Jerome Powell decided to ignore that conventional wisdom after the Covid plague depression of 2020, their stimulative policies rapidly returned the economy to full employment, and did so without creating any persistent inflation problem requiring a substantial recession to solve.

And Blinder’s scars from the 1970s clearly—and, I think, justifiably, pain him.

Blinder judges that once-fashionable monetarism:

rose to prominence on a combination of some hotly disputed scholarly work, Milton Friedman’s singular brilliance and skill in debate, and perhaps most important the [supply-shock driven] rise of inflation… [in which] Keynesianism was unjustly tagged as inherently ‘inflationary’… registered substantial influence on policy formulation…

And its influence on policy was substantial and malign:

The policy debate was… about whether fiscal policy not accommodated by monetary policy mattered. As it turns out, it did…

But Blinder also pulls no punching in recognizing acts of successful monetary judgment and statesmanship, even by those who I believe waged subterranean bureaucratic war to make sure Blinder’s own career as a monetary policymaker reached a premature end:

Greenspan [in the mid-1990s] saw that inflation was not rising. Why not? He hypothesized that rapid productivity growth from New Economy innovations was pushing potential GDP up faster than people realized. It was a hunch at first, but the data subsequently vindicated his iconoclastic view. Due largely to this ‘great call,’ the Fed let the good times roll into the late 1990s…

In sum, Blinder’s book offers a compelling and insightful journey through the tumultuous landscape of U.S. macroeconomic policy after World War II. It allows readers to sit in the passenger seat as the U.S. government navigates the treacherous terrain of managing the macroeconomy, striving for price stability, full employment, financial robustness, and healthy investment. Each episode in this narrative is vividly and wittily recounted, and I believe Blinder’s portrayal is almost entirely accurate.

Engage with this work, and you will gain the knowledge and perspective necessary to present yourself as a sagacious and respected elder statesperson in the realm of macroeconomic policy. You will be equipped with valuable historical lessons that are essential for understanding and advising on the complexities of economic policy.

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References:

• Friedman, Milton, & Anna J. Schwartz. 1963. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press.

• Stein, Herbert. 1969. The Fiscal Revolution in America: Policy in Pursuit of Reality. Chicago: University of Chicago Press.

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Brad DeLong is Professor of Economics at the University of California. His recent works include Slouching Towards Utopia: An Economic History of the Twentieth Century (Basic Books, 2022). <http://bit.ly/3pP3Krk>.

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I have long thought that Marx's fixation on the labor theory of value made his technical economic analyses of little worth. Marx was dead certain for ontological reasons that exchange-value was created by human socially-necessary labor time and by that alone, and that after its creation exchange-value could be transferred and redistributed but never enlarged or diminished. Thus he vanished into the swamp, the dark waters closed over his head, and was never seen again.

And I have long thought that Marx's confusion about nominal and real magnitudes, about shares and absolutes, fueled his extraordinary misapprehension that he was watching not the birth-pangs but the death-throes of capitalism. Because of this confusion, Marx could not fully grok that rising real material living standards for the working class might well go along with a rising rate of exploitation and a smaller labor share. Thus he takes a demonstration that labor's share of income might fall and without noticing turns it into a claim that the working class will starve.

The greater division of labour enables one labourer to accomplish the work of five, 10, or 20. How could a mass of workers thrown out of one branch of industry by machinery find refuge in another branch, unless they were to be paid more poorly? Thus the forest of outstretched arms begging for work grows ever thicker, while the arms themselves grow ever thinner…

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Moreover as Suresh Naidu pointed to me, there is a third huge mistake for this time: Marx thought increased investment and capital accumulation diminished the value of labor to employers, and thus diminished the bargaining power of workers -- when actually it increased it.

But although this third belief was wrong for his day, is it wrong for ours and for our future? We (1) move things with large muscles; (2) manipulate things with small muscles; (3) use our hands, mouths, brains, eyes, and ears to make sure that ongoing processes and procedures stay on track; (4) via social reciprocity and negotiation try to keep us all pulling in the same direction; and (5) think up new things for us to do. The coming of the Industrial Revolution --the steam engine to power and the metalworking to build machinery -- greatly reduced the need for human muscles and fingers for (1) and (2). But it enormously increased (3), for all those machines needed to be minded and all of that paper needed to be shuffled. Each improvement in machines made each human cybernetic control element more valuable as well.

But there is no iron law requiring that technologies of power application and matter manipulation must always advance more rapidly than technologies of governance and control. What happens when our machines take over (3) and leave humans seeking employment with only (4) and (5)? How many and at what wage can we employ people in the social arts of personal services and as inventors and creators?

Karl Marx in his day could not believe the volume of production could possibly expand enough to re-employ those who lost their jobs as handloom weavers as well-paid machine-minders or carpet-sellers. He was wrong.

The optimistic view is that our collective ingenuity will create so many things for people to do that are so attractive to the rich that they will pay through the nose for them and so recreate a middle-class society.

The pessimistic view is that some pieces of (3) will be (a) mind-numbingly boring while (b) stubbornly impervious to artificial intelligence, while (4) will remain limited and for the most part poorly paid. In that case, our future is one of human beings chained to desks and screens acting as numbed-mind cogs for Amazon Mechanical Turk, forever.

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70,000 years ago, back in the Early Paleolithic Age, there were perhaps 100,000 of us—100,000 East African plains apes who looked like us, moved like us, acted like us, talked like us, and from whom the overwhelming proportion of all of our heredity is derived. Yes, we have small admixtures (5%?) from other groups and subspecies and maybe even species, but overwhelmingly we are those proto-hundred-thousand's children. Each of them who has living descendants today has a place—has an astronomical number of places—on each of our <http://ancestry.com> family trees. (No, I do not believe that the Khoisan are in any relevant sense “a separate creation”, diverging from those who became the rest of us 200,000 years ago—lots of back-and-forth gene flow over those 200,000 years.)

Back then we were culture-biology co-evolved herd animals. We gathered, we hunted (some), we protected ourselves, we made stone and wood tools, we understood our environment, we manipulated our environment, we communicated with each other, we cooperated and we fought, we talked, and we did the things that humans.

Flash-forward 20,000 years to 50,000 years ago, on the eve or possibly in the middle of our final radiation-migration out of the Horn of Africa and to the rest of Africa, and also across the Red Sea to the wider world. There were then, perhaps, one million of us. We had been very successful in amplifying our numbers, almost surely by crowding our near-cousins out of our common ecological niche in and around the Horn of Africa.

Our standard of living back then? If we had to slot it into emerging-markets standards of living in the world today, we might call it 3.50 dollars a day. Poverty, but not quite what the United Nations calls extreme poverty: natural resources were not scarce, our knowledge of our east African environment was profound, and we probably had to spend a little more than one-third of our waking hours collecting 2000 calories plus essential nutrients each day, plus enough shelter and fire and clothing that we were not unduly wet or cold. We were buff: life was strenuous. But we were short-lived: a life expectancy at birth of perhaps 25-30, for hauling around a family in our then-semi-nomadic lifestyle was dangerous: life was strenuous. And we were in rough ecological balance. The level of our technology? Normalized to our benchmark H(1870) = 1.0, that guessed standard of living and that guess at our then-numbers computes a level H(-48000) = 0.0256 back 50,000 years ago,

Flash-forward another 40,000 years, to 10,000 years ago, on the very eve of the invention/discovery of agriculture and of animal domestication. Things were much the same, save that there were then not one million of us in East Africa but rather perhaps two-and-a-half million of us, well, pretty much everywhere. Our living standards were much the same as they had been. We had better tools, but they were of stone and wood, plus fur and fiber, and not yet metal: it was still the Mesolithic Age. Our knowledge of our environment—or rather environments—was more profound, and so was our power to manipulate them. But in each environment we lived in we found ourselves in rough ecological balance. As of 8000 BC the index H of human technological capabilities stands at 𝐻(-8000) = 0.04.

Over the Paleolithic Era of stone and the Mesolithic Era of stone plus some pottery and textiles from 70 to 10 thousand years ago, the rate at which the stock of useful ideas about technology and organization was growing was 0.001% per year—and, with standards of living stagnant at an average of $3.5 dollars a day or so, the rate of growth of human populations was twice that: 0.002% per year, or 0.05% per generation: a typical generation would see, an average, 2000 people turn into 2001. What if growth over the generations had been much faster? Then, given the—very slow, 0.001% per year—rate of growth in useful ideas H, the population finds itself without sufficient resources to sustain itself and drops. What if growth over the generations had been much slower? The population would find itself better-nourished, with children's immune systems less compromised and women ovulating more regularly, and population growth would have accelerated. Malthusian equilibrium thus kept population growing along with useful ideas, and the rate of growth of useful ideas was very slow.

Then, at the end of the gatherer-hunter age, comes the upward leap (or was it an upward leap) of the neolithic—new stone—revolution. The proportional rate of growth of ideas jumped up, massively, eleven-fold to 0.011% per year, during the -8000 to -6000 Neolithic Revolution: herding and agriculture were really good ideas. 2000 years after -8000 we are (poor) agriculturalists and (unsophisticated) herders of barely domesticated animals, with a human population of perhaps 7 million, but a lower living standard of perhaps 2.50 dollars a day, with an index 𝐻(-6000) = 0.051.

Why a near-tripling of population in 2000 years or so? Because living was easier when you were sedentary or semi-sedentary: you no longer had to carry babies substantial distances, and you could accumulate more useful stuff than you could personally carry. Plus even early agriculture and herding were very productive relative to what had come before. Since life was easier, more babies survived to grow up and themselves reproduce.

Why a fall in the standard of living? Because population grew until humanity was once again in ecological balance, with population expanded to the environment's carrying capacity given technology and organization. But what keeps population from growing further? The fact that life has become harder again. But it became harder in a different way: agriculturalists are shorter—figure about three inches, 7.5 centimeters—malnourished, prone to endemic diseases, and vulnerable to plagues relative to gatherer-hunters. Biologically, it would seem much better to be a typical person in the gatherer-hunter than in the post-Neolithic Revolution agrarian age: your life expectancy is no less, your daily life presents you with more interesting and less boring cognitive problems, and you are much more buff and swole.

Jared Diamond believes—or at least provokes—that the invention of agriculture was, as the title says, a bad mistaker: humans would be better-off had we remained gatherer-hunters.

Technological progress—the discovery, invention, development, deployment, and diffusion of useful and valuable ideas about how to manipulate nature and organize humans—continued at 0.013% per year from -6000 to -3000, the end of the Stone and the start of the Literacy and Bronze Age.In the Bronze and then the Iron Age agriculture, craftwork, organization, literacy, and more advance civilization: from -3000 to -1000, and then from -1000 BC to the year 1, we see H rise at first 0.03% per year, and then 0.061% per year, with a year-1 human population of 170 million. St least half of that year-1 population was collected in three great empires—Roman, Parthian, and Han—enforcing imperial peace, and together spanning Eurasia from what is now Vladivostok to Cadiz and from Hainan to Scotland.

Then comes further development of agriculture, craftwork, organization, literacy, civilization: by year 1 the index 𝐻(1) = 0.25, but our standard of living was not significantly higher, for there were now 170 million of us on the globe.

This is still a Malthusian Equilibrium: vast improvements in technological and organizational capabilities, from 0.4 to 0.43; but all of that improvement going to support a 70-fold increase in human population; and with only 1/70 the potential natural resources at their disposal, the typical peasant or craftsman in 1500 was able to use that technology to eek out roughly the same standard of living as their predecessors 7.5 millennia before.

Now be careful: there is definitely a spurious precision here.

Even if we could gain universal assent as to technological capability in, say, ceramics and each of the other aspects of human productivity and creativity, squashing multi-dimensional objects down into a single one-dimensional index simply cannot be done. All we can say is that if there were an economy simple enough for such an index to be accurate, and if its levels of productivity corresponded to those we assign to the real history, then its index of human technological and organizational capabilities would be our H.

Nevertheless, I find such a framework very useful as a metaphor in organizing my thoughts. The numbers assigned to H do carry meaning. Look at pottery in -8000, in year 1, and in 1500:

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John Maynard Keynes, however, would reject that the difference can be measured as quantitative. He said that the idea of doing so is a mistake: that any such quantitative measurement:

is a proposition of a similar character to the statement that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth — a proposition not without meaning and not without interest, but unsuitable as material for the differential calculus. Our precision will be a mock precision if we try to use such partly vague and non-quantitative concepts as the basis of a quantitative analysis…

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Mock or not, I find such quantitative estimates useful for organizing my thinking. Queen Victoria does not appear to have been a much better queen than Queen Elizabeth. But, from all historical accounts, Gloriana appears to have been perhaps four times as happy a woman as the Widow of Windsor.

Then from 1—or, rather, from 165 or so—to 800 it looks like we get a definite downshift: the Late-Antiquity Pause. We do not get a further acceleration to more than 0.06%/year of technology growth. We get a fall to a rate of 0.2%/year, a slower rate of technology growth than humanity had seen since before the start of the Bronze Age. Something goes wrong. There is the crisis of the Antonine Dynasty in the Roman Empire at one end, the collapse of the Han Empire at the other end, shortly followed by the collapse of the Parthian Empire and the Indo-Greek kingdoms under pressure a Sassanians, Kushans, Hephthalites, and others.

Instead of the near-tripling from the year 1 to the year 800 in population that the Axial Age of -1000 to 1 would have led us to expect, human population in 800 is less than 40% above population in the year 1. Ideas growth—and population growth—slowed drastically. From 1 to 1500, each person on the globe contributed only 1/6 as much to ideas growth. And it was still the case that essentially all improvements in technology flowed through to increasing population, with essentially none flowing through to higher labor efficiency, productivity, and living standards for the typical human.

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The sources of the Late-Antiquity are a substantial mystery, surrounded by speculation, but with little in the way of solid knowledge.

But things then recover, somewhat: 800 to 1500 see technology growth recover to 0.05%/year. So progress in technological advance does, however, continue. By the year 1500 we have 𝐻(1500) = 0.43. But we also have 500 million humans, compared to the 170 million of year 1 or the 7 million of year -6000. Typical standards of living in 1500? They still seem much the same: still 2.5 dollars a day.

Thereafter come the really big changes. Thereafter comes the breakout:

• a growth rate of useful ideas of 0.15% per year during the 1500-1770 Imperial-Commercial Revolution Age.

• a growth rate of useful ideas of 0.44% per year during the 1770-1870 Industrial Revolution Age.

• a growth rate of useful ideas of 2.06% per year during the post-1870 Modern Economic Growth Era.

• a population explosion, and then a slowdown toward zero population growth as prosperity brings female education, female education brings greater female autonomy, and literate women with rights to own property find that there are other ways to gain and maintain social power than to try as hard as possible to become the mother of many sons and daughters.

In the speedup from 1500 to 1770 to 1870—over, first, the Imperial-Commercial Revolution and, second, the Industrial Revolution eras—our quantitative index H grows from 0.43 to 0.64 to 1.0. And this time there was some increase in typical standards of living: figure a world in 1870 with $3.50 a day per person, albeit much more unevenly distributed. But, still, the overwhelming bulk of improvements in human technology and organization went to supporting a larger population: the 500 million of 1500 had grown to 1.3 billion by 1870, as better living standards lowered death rates worldwide.

After 1870 came the explosion: from 1870 to 2010, in our era of Modern Economic Growth, our H has risen from 1.0 to 21.5. Our population has risen from 1.3 to 7.6 billion. And our resources from $3.5 to $32 a day: tenfold and more above what it was back in the Agrarian Age. If we have not—as we have not—used our remarkable technological power and wealth relative to all previous human societies to build a utopia, that is on us.

From this perspective, there are two big questions in post-Neolithic Revolution global economic history:

1. Why was there and what determined the pace of the triple accelerations in growth to 0.15% and then 0.44% and now 2.06% per year?

2. Why was there and what determined the—much, much, much slower—pace of growth of 0.03% per year (with a -1000 to 1 temporary and with a post-800 perhaps permanent jump up) from the -3000 invention of writing to 1500?

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References:

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: An Economic History of the Twentieth Century. New York: Basic Books. <http://bit.ly/3pP3Krk>.

• Keynes, John Maynard. 1936. The General Theory of Employment, Interest, and Money. London: Macmillan. <https://archive.org/details/generaltheoryofe00keyn>.

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Audio: <https://overcast.fm/+8kS9Nlf7M>

Webpage: <https://onhumans.substack.com/p/brad-delong-on-the-birth-of-modern>: Ilari:

What is the biggest story of the 20th Century? The battles of ideologies? The collapse of empires? The transformation of China? None of these, according to Brad DeLong. Rather, he told me: “The big story, starting around 1870, is ... how humanity for the first time has to deal with the idea that we are probably going to become rich as a species. That's the big picture. That's the big story. That's the story of the long 20th century.” I think DeLong is onto something. Future archaeologists might deduce the Iron Curtain by comparing Eastern housing units to Western suburbia. They might deduce British imperialism from Victorian buildings in Mumbai. But they could simply not miss that humans across the globe have grown older, taller, and wildly richer…. Indeed, whatever virtues we find in the lifestyles of our pre-modern ancestors, their lives were challenged by the risk of poverty. According to DeLong, this was a life: “… in which you between two and four inches shorter than we are because of calcium and other nutritional deficits. It’s a life in which … potentially one in seven women dies in childbirth. And all of that changes — or the potential for all of that — changes after 1870”…

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Ilari Mäkelä: A very brief note before we get started. If you want to read in addition to, or instead of listening, you can read episode breakdown of this and other episodes of the series of The Birth of Modern Prosperity at onhumans.substack.com. There’s also a link in the show notes.

I hope that you enjoy it.

This is the “On Humans” podcast with your host, Ilari Mäkelä. And the journey continues. The journey to understand the birth of modern prosperity.

So this is a four-part series, small feast of curated highlights from my conversations with some of the world’s leading economic historians. And don’t worry if you haven’t listened to part one, each of these episodes can stand on their own, but whether you have or have not listened to that, it might be useful to have a quick zooming out of where we are right now. So we all know that humans are richer today than ever before.

And some of us rejoice in this. Others worry about its impacts on climate, on Earth’s limits. I personally do both.

But this series is not really about celebrating or worrying. It’s about explaining how we got to be where we “are. So in part one, I had Oded Galor, author of Journey of Humanity on the show, who explained what he sees as the big arc of humanity’s economic history.

And the big arc, at least, since the dawn of agriculture is very simple. There are ups, there are downs. But until the 1800s, nothing really changes for the average person.

How could this be? You might ask us. Technologies sure did get better.

Well, Galor says that it happened because improvements in technology, agriculture, etc. led to more humans, not to more prosperous humans. Humans became better at getting grain from a single patch of land.

But so we had more and more humans living from that single patch of land. So this is the so-called Malthusian trap. Now, my guess in episode three, Daron Acemoglu will push back against this Malthusian thinking.

But my guess today, Brad DeLong broadly agrees. And indeed, he will give many, he will agree with many things that Galor says. And he’s a very good person in explaining how Malthusian trap interacts, for example, with patriarchy.

And so Galor and DeLong agree on a lot of timing, including the escape from the “escape from the trap 150 years ago, so in the 1870s. But they disagree on what changed. Galor focused on the role of education, especially family science, which then changes the economy.

DeLong flips things around. He focuses on the economy, on inventors, on corporations, globalization, which then changes education and family. And I will let him tell you why.

If you like DeLong so much, that you want to hear more of him, you can head to episode 18, which is the full episode. And if you like this material more generally, do subscribe to On Humans podcast and the On Humans newsletter. On Humans newsletter, you can find it on

Anyway, let’s get the show started.

So here is Brad DeLong on what he thinks is the biggest story of the long 20th century. And might be the biggest story in the history of our species.

Brad DeLong: Big story starting around 1870 is the end of the Malthusian era and how humanity now for the first time has to deal with the idea that we are probably going to become rich as a species. That’s the big picture. That’s the big story. That’s the story of the long“20th century. 

The elevator-pitch summary is: Yes, we learned how to bake a sufficiently large economic pie, something vastly in excess of what any previous century would thought could ever be needed. But the problems of slicing and tasting the pie, of equitably distributing it, and then using it wisely and well so that people feel safe and secure and are healthy and happy—those problems of slicing and tasting, of distribution and utilization continue to flummox us pretty much completely.

And hence we are not in utopia.

Our predecessors—this would have struck them as rather strange, because previous centuries would have seen baking the sufficiently large economic pie as the major problem.

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‘In 572, after the capitulation of Pavia… King Alboin was assassinated… by his wife Rosamund and her lover, the noble Helmichis…. They were forced to flee together to the Byzantine territory before getting married…. Later in 572, the thirty-five dukes assembled in Pavia to hail king Cleph…. He, too, fell victim to regicide in 574, slain by a man… who perhaps colluded with the Byzantines. Following Cleph’s assassination… for a decade dukes ruled as absolute monarchs in their duchies…. In 584 the dukes agreed to crown King Cleph’s son, Autari…. He assumed, like the Ostrogoth Kings, the title of Flavio, with which he intended to proclaim himself also protector of all Romans in Lombard territory….

Autari… marr[ied] a princess, Theodelinda, from the Lethings dynasty… a line of descent from Wacho, king of the Lombards between 510 and 540, a figure surrounded by an aura of legend…. Autari died in 590, probably due to poisoning…. The young widow Theodelinda… [then] chose the heir to the throne and her new husband: the Duke of Turin, Agilulf…. A rebellion among some dukes in 594 was preempted…. [A] new organisation of power, less linked to race and clan… more to land management…. The Lombard kingdom… gradually lost the character of a pure military occupation…. Agilulf made some symbolic choices aimed at… gaining credit with… Latin[s]…. The ceremony of ascension to the throne of his son Adaloald in 604, followed a Byzantine rite…. Gratia Dei rex totius Italiae, "By the grace of God king of all Italy", and not just Langobardorum rex, "King of the Lombards"…. Strong pressure, particularly from Theodelinda, to convert the Lombards….

After the death of Agilulf in 616, the throne passed to his son Adaloald, a minor. The regency (which continued even after the king passed into majority) was exercised by… Theodelinda, who gave command of the military to Duke Sundarit…. A civil war broke out in 624, led by Arioald, Duke of Turin and Adaloald’s brother-in-law (through his marriage to Adaloald’s sister Gundeperga). Adaloald was deposed in 625 and Arioald became king…. Rivalry between the Arian and Catholic factions…. The Arians also opposed peace with Byzantium and the Papacy and integration with the Romans… At [Arioald’s] death… Queen Gundeperga had the privilege to choose her new husband and king. The choice fell on Rothari, the duke of Brescia and an Arian…

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That is from Wikipedia: Kingdom of the Lombards <https://en.wikipedia.org/wiki/Kingdom_of_the_Lombards>.

A Bright Age, indeed, was Italy around 600 under the Lombards!

As you can see, Matthew Gabriele & David M. Perry (2021): The Bright Ages: A New History of Medieval Europe (New York: Harper) <https://www.google.com/books/edition/The_Bright_Ages/UgwiEAAAQBA> rubbed me rather the wrong way with its rather bizarre and tendentious claims that:

One premise: Rome did not fall. Things continue and things change…. Cities never vanish but they do shrink, both in population and in importance, as people find new ways to organize political, economic, and cultural life in seeking stability. That stability comes with innovative ways of thinking about God… sparking a fire that will nourish a blossoming of intellectual and literary life…. But then circles turn again…. Connections between regions that were never severed did stretch and attenuate… creating the conditions for a medieval Italian poet to follow in the footsteps of a late Roman empress. Welcome to The Bright Ages…

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And yet, in ex-Roman Italy, we have: a pure military occupation for the first two generations, “strong pressure” to convert people to Christianity (and we know how that goes), kings trying to convince a subject population that they are more than barbarian bully boys by claiming that they are of Rome’s Flavian clan—that is, kin in some sense to the late-00s Roman Empire Titus Flavius Vespasianius (as claiming status as kin to a Roman princeps et imperator of the past was a thing to conjure with)—the near-collapse of urban life, a substantial reduction in the ability of the rural population to purchase cheap mass-produced conveniences that make life comfortable from urban workshops, possibly a reduction in exploitation to feed an upper class, certainly a loss-of-status as small independent farmers who can no longer trust in the pax Romana. What was the alternative, then? To go to the local bullyboy, and put yourself in bondage as a colonus or a villain:

By the Lord before whom this sanctuary is holy, I will to [NAME] be true and faithful, and love all which he loves and shun all which he shuns, according to the laws of God and the order of the world. Nor will I ever with will or action, through word or deed, do anything which is unpleasing to him, on condition that he will hold to me as I shall deserve it, and that he will perform everything as it was in our agreement when I submitted myself to him and chose his will…

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(Parenthetically, the last person to conjure with names, attempting to gain authority by claiming kinship with a Roman princeps et imperator from before the Dark Ages was Albert Frederick Arthur George Windsor, George VI, who called himself “Caesar of India” up until 1947.)

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Starting 50,000 years ago, we have our guesses—my guesses—of the level of average annual real income per capita y, measured in today’s dollars, and of the human population P. Define the level of human technological prowess H as equal to y times the square-root of P. Why is H proportional to y? That is just a definition, a normalization: technology enables and enhances a finer and more productive human division of labor, and so it makes sense to define H so that a counterfactual globe with the same population and resources but twice as high a living standard y would require twice as great a level of technology H to support that higher living standard. Why the square-root of P? Well, if we defined H = yP, we would be implicitly saying that individual human hands, eyes, brains, and mouths were of no account: that to support twice the population at the same living standard would require twice the technology. That makes no sense. If we defined H = y we would implicitly be saying, to the contrary, that national resources were unnecessary and unproductive. That also makes no sense. The square-root seems a reasonable compromise.

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Thus from our guesses as to average real income y and global population P, we can construct guesses as to H: the value of the stock of useful and productive technological ideas about the manipulation of nature and the organization of humans known by the time-binding anthology intelligence that is the human race. And we can construct guesses as to h, the proportional growth rate of the value of that as stock.

When we do this, we see that h has been 2.2%/year for a century and a half in our age of Modern Economic Growth; that it was less than a quarter as much—0.45%/year—for the Industrial Revolution Age century before that; that it was a third of that—0.15%/year—for the Imperial-Commercial Age from 1500-1770; that it was 2/5 of that—0.6%/year—for the High Mediæval Age from 800-1500; and that it was a quarter of that—0.015%/year—from the year 1 to the year 800. We see for the past 2000 years an upward march of the level of technology H—although for the first 1500 years this upward march is diverted to compensate for increasing resource scarcity as greater human numbers mean smaller farm and grazing-land sizes per person—at an increasing pace.

But then, as we look back from the year 1 to the year -1000, we see something odd. Human population increased by only 30% from 1 to 800. (That is what drives our h of 0.015%/year.) But in the 1000 years before the year 1 human population more than tripled. (That gives us a Classical Antiquity Age h of 0.6%/year, equal to what we saw from 800 to 1500.)

So what happened in the years up to 800? It was not technological regress (though there was some: loss of the ability to make cement, for example). The world population was 30% larger and thus people were managing on 30% smaller farm sizes than they had back in the year 1 But the pace of innovation appears to have fallen to 1/4 of what it had been in the pre-1 years of Classical Antiquity. And there was a definite loss at the eastern and western provinces of Eurasia of the ability to invest in building and maintaining physical capital. It was most pronounced by far at the western edge of Eurasia, in the Roman Empire, and especially the western Roman Empire.

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But you can, if you squint, see a fall in the indexes we have of long-distance trade and durable construction across the supercontinent.

The rest of the pattern of human history would have suggested an increasing h from 1-800—perhaps to 0.1%/year or so—and a world population of 375 million or so. Such human numbers not reached in our history until the eve of the 1346-8 Black Death.

It seems to me to try to write human history without taking note of this… let’s politely call it “the Late-Antiquity Pause”—that is not just to present Hamlet without the prince, but without the king, queen, advisor, lover, and best friend as well…

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I wrote: “America's exceptional wealth relative to other North Atlantic economies is, to a remarkable degree, Alexander Hamilton's creation. And so is America's remarkable tolerance for high inequality. William Hogeland is the best guide I have found to understanding how we today are, for good and evil, children of Alexander.”

That is 100% true.

So now I have one ask to make of you: Go and read The Hamilton Scheme: An Epic Tale of Money & Power in the American Founding <https://www.amazon.com/dp/0374167834>.

Then come back.

I will wait.

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At the end of Part IV of his The Hamilton Scheme, Hogeland writes that Alexander Hamilton’s actions as Washington’s Treasury Secretary had made sure:

the Democracy… had been truly demolished at last…

What is this “The Democracy”?

Start with with the Great Peasants’ Revolt of 1381 during the reign of King Richard II Plantagenet . John Ball had been imprisoned for ‘heresy” in Maidstone, Kent. The Peasants’ Revolt washed over and released him. He then preached an open-air sermon at Blackheath:

When Adam delved and Eve span, who was then the gentleman? From the beginning all men by nature were created alike, and our bondage or servitude came in by the unjust oppression of naughty men. For if God would have had any bondmen from the beginning, He would have appointed who should be bond, and who free. And therefore I exhort you to consider that now the time is come, appointed to us by God, in which ye may (if ye will) cast off the yoke of bondage, and recover liberty…

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Where Ball says “delved” we would say “dug,” the past of dig. Where Ball says “span” we would say “spun”, the past of spin. For “of naughty men” we would say “by evil and empty men”. But the message is clear: all—not just men: Eve is in there too—were created equal and should be equal, and are not equal only because of injustice perpetrated by the evil and worthless.

John Ball—Froissart’s “Mad Priest of Kent”—was not popular among the élite of 1300s England. He was put on trial, where by virtue of his status as a priest he was actually permitted to speak in his own defense. King Richard II Plantagenet himself presided over his execution on July 15, 1381 at St. Albans. He was hanged, drawn and quartered. His head was stuck on a pike on London Bridge. The four quarters of his body were displayed at the four corners of the 200- by 150-mile diamond of Coventry, St. Albans, Norwich, and York. Sources do not tell me which quarter was sent where.

John Ball, Wat Tyler, and the other leaders of the 1381 Great Peasants’ Revolt were to a large degree a new thing, at least in English history. The idea that the realm was divided between those who prayed, those who worked, and those who fought and governed—and that movement from one category to another was next to impossible—was by 1381 well past its sell-by date. You were not, overwhelmingly, born to be what your father or mother had been: slave, serf, churl, franklin, merchant, cleric, knight, lord, or king. You were, instead, a man like other men, finding your place in the societal division of labor by using your resources to make yourself useful to counterparties and making bargains and contracts that could be revised when needful.

And one of those bargains that could be revised when needful was the social contract.

The barons had, after all, bargained with the king at Runnymede in 1215 and won Magna Carta. If the Mediæval Catalan oath to their count had never been “We, who are worth as much as you, take you as our king, provided that you preserve our laws and liberties, and if not, not”, people in the Renaissance firmly believed it had. The peasants of 1381 thought that they could do the same. For God was on their side. After all, when Adam delved and Eve span, who was then the Gentleman?

They could not do the same.

But their ideas grew.

And eventually these truths were held to be self-evident:

• that all men were created equal.

• endowed with inalienable rights.

• among which were life, liberty, and the pursuit of happiness.

• with government instituted to secure these rights.

• with government deriving its just powers from the consent of the governed.

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In The Hamilton Scheme, “The Democracy” was a radical populist movement that takes these seriously, at least for white settler guys. It held the flowery words at the start of the Declaration of Independence thought it thought it could cash. And so The Democracy sought to achieve greater political and economic equality for the American white, male and settler—not Black, female, or Amerindian—working class: against élite control, and for more inclusive and equitable governance, for white settler guys.

In The Hamilton Scheme, “The Democracy” hates taxes, hates banks that want money paid back at high interest rates, hates the fact that the Revolutionary-War state bonds that they had sold to bond dealers for a song are going to be honored by Alexander Hamilton’s Treasury Department at full real value, hates the failure of a federal government and a Pennsylvania state government that takes their taxes and does not do enough either to protect their existing farms from Amerindian raids or to push out the Amerindians so they can establish more farms. The Democracy does not consent, and thinks that their lack of consent means something—no matter what machinations in earlier years and back east had produced referendums with majorities for a constitution under which Hamilton is Treasury Secretary, and in which those in Philadelphia in New York who are supposed to represent them wind up instead listening to and representing the interest of eastern urban bankers, want-to-be monopolist merchants, and insider traders.

The Democracy saw itself as empowered to protest, and maybe to hint at doing more if their protests did not persuade the government to change course—to threaten to “appeal to heaven” as Supreme Court Justice Alioto might say, if the Congress insisted that Joe Biden had won the 2020 election just because he had a majority of the valid electoral votes submitted under the procedures set out in the laws of the fifty states. Organize a local militia for self-defense, but leave it a little vague as to against who. Remembering the “Committee of Privates” that had overthrown the government of Pennsylvania Colony in 1776.

Washington and Hamilton hated The Democracy.

Madison, casting a very wary eye on events in France after 1789, hated it as well.

Jefferson… Jefferson combined private disapproval of the federal government’s military suppression of the so-called Whiskey Rebellion, philosophical endorsement of occasional rebellion as a check against governmental overreach, substantial public silence, and a great fear that he might have a difficult time ascending the political ladder if his ability to form coalitions was damaged by too close an association with the Committee of Public Safety vendors of the guillotine and their corrupt Directory successors in France.

Gallatin—Gallatin came very close to denying the existence of anything within light-years of what the Whisky Rebellion was made out to have been, and tied himself to the mast that nobody serious in America would have such a contempt for private property as to adopt the platform of Solon, Cleisthenes, and the Gracchi of seisachtheia: “abolish the debts and redistribute the land”.

The Hamilton Scheme adds The Democracy to the political players of America in the 1790s, as—no surprise—the schemes of Alexander Hamilton are getting underway. Hogeland notes that:

General readers of U.S. history have gotten used to defining the essential American conflict in terms of… Hamilton and Jefferson…

Indeed it does. And it is not wrong to do so. E.H. Halliday:

Before they had finished their service as cabinet officers, Jefferson was calling Hamilton (in a letter to Washington) “a man whose history... is a tissue of machinations against the liberty of the country”; and Hamilton was calling Jefferson (in a newspaper piece) “the promoter of national disunion, national insignificance, public disorder and discredit”…

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But Hogeland wants to focus elsewhere than exclusively on the Hamilton-Jefferson war:

Stressing… “the Democracy”… raises questions about that binary’s long-standing primacy in common understandings of U.S. founding politics…. Hamilton and Jefferson did… have divergent ideas of… American prosperity…. Hamilton’s purpose was to consolidate public and private high finance, via a powerful administrative state, to promote national industrialization and make both manufactured and agricultural goods domestically, at a big scale…. Jefferson did prefer a less centralized and—at least at first, and philosophically, anyway—a more agrarian society… link[ed]… philosophically with a smallholding yeomanry…. Within the governing class of the founding generation, the differences became existential, zero sum. Hamilton and… Madison, especially, went through a painful breakup…. But take for a moment the point of view of the free-laboring many and the Hamilton and Jefferson groups, so deafening in mutual vituperation, collapse into a small hegemony forever bickering over how best to exploit the free majority, as well as the enslaved, and control and distribute the fruits of labor…

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That is where Hogeland starts from: The premise is that both Hamilton and Jefferson are, in reality, old-school society-of-domination élitist wolves wearing modern democratic sheep’s clothing. Their principal goal is the old goal of those who find themselves at the top of a society of domination: to get enough for themselves and their families by taking advantage of the fact that grain is easily, stolen, that farmers and their families cannot easily run away from their plots, and that twenty guys not protein-deprived in utero and childhood with enough wealth to buy and enough leisure to train with a full panoply can make a very good living indeed by controlling a thousand peasants.

In Hogeland’s view, Hamilton wants to sit on top of a market-capitalist commerce, banking, and manufacturing domination-and-exploitation scheme working primarily by fraud and secondarily by force.

In Hogeland’s view, Jefferson wants—at least initially—to sit on top of an agrarian slave, hiring, and landlord domination-and-exploitation scheme working secondarily by fraud (an identity of interest of some sort between small landowners who are virtuous because they work the land with their hands and large landowners) and primarily by force. (We can meditate on the idea, running from Cato the Elder down through Jefferson and beyond, that the large landowners, those who master those who work the land with their hands, drive them with the whip, take their stuff, somehow also share in the actual farmers’ virtue.)

But, in Hogeland’s view, recognizing as he does that The Democracy of the 1790s was, as we say today, “deeply problematic”:

The white working class… white… men… seeks political and economic equality for white men…. Attitudes toward enslaved black people… the Shawnee, Delaware, and other woodland nations, white people across all social classes are most often flat-out bloodthirsty, at best brutally patronizing…

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But there still was a sense in which Jefferson could have allied with The Democracy and made a better world. But the REVOLUTION WAS BETRAYED!:

[Because of] Madison and especially to Gallatin, relations between the Jeffersonians and the white working class grow fraught, in ways that have baffled our history and civics down through the centuries…. This book’s reviving… the Morris-Hamilton-Gallatin arc… the all-important impact of the Democracy… a narrative realism not often found…. Characters rarely seen in the Hamilton context. Thomas Paine… James Cannon… William Findley…. Hamilton will try to get both Findley… and Gallatin… arrested and hanged on trumped-up charges…. He’ll fail with both. Findley, born an outsider, lives to become the longest-serving member of the House and will die at home at the age of eighty…

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In a way, Hogeland is an anti-federalist. He thinks a less Hamiltonian America with more powerful and more autonomous individual states would have been more susceptible to popular pressures and democratic movements. “Populist” pressures, yes. Bot “popular and democratic” in the sense of majority rule, equal suffrage, and democratic rights? I know of no African-American except (possibly) Clarence Thomas who would agree. Hogeland sees an America in which more autonomous state governments respond to ordinary citizens pushing for the issuance of paper money, debtor relief, and a general tilting of policies toward, if not abolish the debts and redistribute the land, inflate away the debts and sell-off land in small parcels as cheap homesteads. And that definitely was not the America that Hamilton wanted to see.

Hamilton truly did envision the United States transforming from an agrarian economy, heavily reliant on exporting raw materials and importing finished goods, into a robust manufacturing powerhouse capable of rivaling Britain. This transformation was to be driven by rapid industrialization, characterized by large-scale manufacturing, mechanization, and the establishment of a manufacturing economy throughout the country. The Bank of the United States, the assuption of state debts, funding via excise, government-chartered factories, support via tariffs, subsidies and infrastructure for domestic manufacturing, plus industrial espionage against Britain were all parts of the Hamilton Scheme.

And then Hamilton fell out with Adams. And then the 3/5 clause votes of Jefferson’s slaves gave the southern states a predominance of electoral votes: 1800 was the first election in which the electoral-vote winner had lost (or, rather, would have lost) the popular vote of a one man-one vote white citizen electorate.

But Jefferson in power clung much more closely to Gallatin and Hamilton than he did to his own much-honored-in-the-breach egalitarian and democratic commitment. Madison feared Jacobin-like mob rule. Gallatin saw the American farmer as too virtuous to even think of wanting the government’s thumb put on the scale against private property, however concentrated. The independent, pioneering smallholder who, provocation, would remain humane and reasonable, possessing an exceptional character that distinguished him from members of a European mob. Gallatin and Madison thus sidelined the more radical democratic impulses that had been present in the early republic more effectively than Madison had.

And, in power, the former Jeffersonians saw how very useful Hamilton’s instrumentalities could be.

In power, Gallatin realized that Hamilton's financial system was intricately designed and highly functional. Operational stability was his watchword. A full-fledged Jeffersonian government would have been unable to resist the encroachments of the British Empire. And so, especially after the ex-Jeffersonians decided to wage the War of 1812, they needed the bank, the debt, customs if not excise, and to wring dry the source of revenue that was land sales.

By 1811 it was clear to Gallatin that he needed the Bank of the United States. He failed in recharter in 1811. He succeeded in 1816.

Not just “The Democracy” but Jeffersonian Agrarianism was dead. It had become Neo-Hamiltonian Industrialism

Now Hogeland is not wrong in his portrayal of who Hamilton was. Again, E.H. Halliday:

Hamilton’s dream focused primarily on economic development… manufacturing… merchandising… commercial enterprise aided by a strong central government and appropriate legislation… run by a powerful elite consisting of the wealthy, well-educated, and privileged…. A constitutional monarchy would have been preferable to a democratic republic…. The ability of common people to make the right choices on matters of national policy was feeble…. Shortly before his death in 1804 he wrote to a friend that what really ailed America was “the poison” of democracy…

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But Hamilton was more than a crypto-monarchist society-of-domination wolf in revolution-and-constitution “national greatness” democratic sheep’s clothing. For one thing, America was not a society-of-domination caught in a Malthusian trap. It was, from its founding, something else. In an economy both commercial and Malthusian, protecting property at the point of a spear really is just a more clever and more efficient way of running a society-of-domination for the benefit of the propertied élite than is extracting the harvest at the point of a spear for the benefit of the military-bureaucratic élite. But since the American economy was never Malthusian, “national greatness” was not just part of the fraud part of the force-and-fraud exploitation-and-domination machine, Hamiltonian “national greatness” created a great nation. I said and I meant both parts of: “we today are, for good and evil, children of Alexander.”

I confess I find it much harder to find something good to say about Jefferson, that slavemaster wolf in democratic “rights of man” sheep’s clothing. The fact that he halfway and his successors Gallatin and Madison adopted Hamilton’s scheme in the end says what needs to be said about the Hamilton-Jefferson struggle.

Could Jefferson have done more to empower true democracy?

The odd thing is that, viewed in the long-run, Jefferson did do the most important and powerful of the things he could have done to empower true democracy.

I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man…

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, among these are life, liberty, and the pursuit of happiness, that to secure these rights governments are instituted among men. We... solemnly publish and declare, that these colonies are and of a right ought to be free and independent states... and for the support of this declaration, with a firm reliance on the protection of divine providence, we mutually pledge our lives, our fortunes, and our sacred honour…

Almighty God hath created the mind free. All attempts to influence it by temporal punishments or burthens... are a departure from the plan of the holy Author of our religion.… No man shall be compelled to frequent or support religious worship or ministry or shall otherwise suffer on account of his religious opinions or belief, but all men shall be free to profess and by argument to maintain, their opinions in matters of religion. I know but one code of morality for men whether acting singly or collectively…

God who gave us life gave us liberty. Can the liberties of a nation be secure when we have removed a conviction that these liberties are the gift of God? Indeed I tremble for my country when I reflect that God is just, that His justice cannot sleep forever. Commerce between master and slave is despotism. Nothing is more certainly written in the book of fate than that these people are to be free. Establish the law for educating the common people. This it is the business of the state to effect and on a general plan…

I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as a civilized society to remain ever under the regimen of their barbarous ancestors…

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So go buy and read Hogeland’s The Hamilton Scheme! It is truly great! Characters as lifelike and as interesting as in Lin-Manuel Miranda’s Hamilton! But the stories are all true! (Albeit shaded differently and somewhat darker in the end than I would.)

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References:

• de Ste. Croix, G. E. M. 1981. The Class Struggle in the Ancient Greek World: From the Archaic Age to the Arab Conquests. Ithaca, NY: Cornell University Press. <https://archive.org/details/g.-e.-m.-de-ste.-croix-geoffrey-ernest-maurice-de-ste.-croix-the-class-struggle→.

• Froissart, Jean. 1400 [1899]. The Chronicles of Froissart. Trans. John Bourchier, Lord Berners; ed. G. C. Macaulay. London: Macmillan and Co. <https://archive.org/details/chroniclesoffroi00froiuoft>.

• Halliday, E.H. 1978. Understanding Thomas Jefferson. New York: Harper & Row. <https://archive.org/details/understandingtho00hall/>.

• Hogeland, William. 2024. The Hamilton Scheme: An Epic Tale of Money & Power in the American Founding. New York: Farrar, Straus and Giroux. <https://us.macmillan.com/books/9780374167837/thehamiltonscheme>.

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Moreover, the bulk of our predecessors thought that the second problem biggest problem humanity faced—the other cause of most of what had gone wrong with human society—was a feature overlaid on top of the basic societal mode of production that could only prooduce a Malthusian society characterized by population pressure to guarantee scarcity and poverty. It was that if you are in a world of scarcity and poverty, then there are enormous pressures to join a gang: to turn governance and politics into a system of domination by force and fraud, so that you at least can get enough for yourself.

The pressures for that force-and-fraud gang domination-and-exploitation machine should have died away with the coming of a world sufficiently prosperous for everyone to potentially have enough. Force-and-fraud, domination-and-exploitation—those are rather difficult and dangerous things to undertake. Why undertake them if there is no great need, if there is enough? Why not, if everyone has their own vine and fig tree, simply take your ease beneath them, and lead a good life?

And yet, needless to say, that is not the world we have. Right now:

• We have armed killer robots stalking the skies above Ukraine and the Middle East.

• We have extraordinary, extraordinarily unequal income distribution around the world.

• We have a great many countries and a great many people who are not taking anything like full advantage of our magnificent productive technologies.

• And we have lots of people very angry because they see others getting more than is "fair".Moreover, we are failing to face worldwide challenges, of which global warming will be perhaps foremost for the next fifty years. The monsoon was three hundred miles off of where it was supposed to be two years ago. Why? Because of global warming. Pakistan, as a result, has $60 billion dollars of flood damage. Who is going to pay that bill, and the other bills that come due? The costs of global warming are falling on poor countries. The rich countries that could pay and that caused the problem are not ponying up.

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Since Dylan John Riley has said that my Slouching Towards Utopia book <bit.ly/3pP3Krk> is the .last work of orthodox Second International Marxism, let me lean into that conceit very heavily:

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Where Moon? Where Utopia? Where Lambo?:

We have finished our survey of economic growth. We have covered the process of increasing production per head and per worker proceeded from the invention of agriculture up to the present.

We thus move on to the natural next question: Why, with our enormous productive capabilities have we failed to make a more utopian world? The bulk of our predecessors thought that the big problem was that humanity could not bake a sufficiently large economic pie for everyone to potentially have _enough_. They thought that was the really hard problem. We have solved it—or, rather, we have partially solved it, and can see our way clear to completely solving it.

Moreover, they thought that a second problem, another cause of much of what went wrong with human society, was overlain on top of that scarcity and poverty and would vanish if scarcity and poverty were to vanish. That second problem was that you if you had any social power at all, in a world of scarcity and poverty would join a gang. You would be under enormous pressures to do so: to turn governance and politics into a system of domination by force and fraud, so that you at least could get enough for yourself.

The pressures for that force-and-fraud gang domination-and-exploitation machine should have died away with the coming of a world sufficiently prosperous for everyone to potentially have _enough_. Force-and-fraud, domination-and-exploitation—those are rather difficult and dangerous things to undertake. Why undertake them if there is no great need, if there is enough? Why not, if everyone has their own vine and fig tree, simply take your ease beneath them, and lead a good life?

And yet, needless to say, that is not the world we have. Right now we have killer robots stalking the skies above Syria and Ukraine. We have extraordinary, extraordinarily unequal income distribution around the world. We have a great many countries and a great many people who are not taking anything like full advantage of our magnificent productive technologies. And we have lots of people very angry because they see others getting more than is "fair".

Moreover, we are failing to face worldwide challenges, of which global warming is perhaps foremost for the next fifty years. The monsoon was three hundred miles off of where it was supposed to be last year because of global warming. Pakistan has $40 billion dollars of flood damage. Who is going to pay that bill, and the other bills that come due?

The purpose of this political economy unit is to figure out why it is that, in spite of our extraordinary success in developing modern science and applying it via technology to production to bake a sufficiently large economic pie, we have failed to properly slice and taste the pie. Why is so much of the world still so poor? Why have we done such a lousy job at utilizing our wealth wisely and well. Why is a civilization as wealthy as ours one in which people do not feel safe and secure, and are not healthy and happy?

The Primacy of the Economic:

One good way to think about our political economy problems: The world has been on a wild ride tsince 1870 as the bulk of history at even a generational scale becomes economic. In all previous ages history at the generational or even the century scale was not economic, for not much changed in the economy over such a time period. Yes, history had an economic background behind it. But history was of changing culture, religion, architecture, polities, and dynasties. Only if you stepped back and took a millennial perspective could economic change and its downstream ramifications make a claim to be the most important part of history.

Yet when studying history after 1870 at even a generational scale, economic changes and their implications are crucial, are everywhere. And it is not just local economic changes—globalization means that you cannot write the history of one region without considering how economic changes on other continents created and closed off opportunities and possibilities. And you cannot write any history without looking upstream at changing technology: the impact of science, engineering, industrial research labs, and the build-out of technologies undertaken by large corporations and then diffused elsewhere in the economy.

It is not the case that all of post-1870 history is bright. Governments often mismanaged what ought, in some sense, to be a progressive and prosperous social system. Tyrannies intensified. Technology, after all, could be used for evil rather than good, for control and domination rather than production and cooperation, and it was so used.

So how are we to understand our radical disjunction between our success at baking a sufficiently large economic pie and our inability to properly slice and taste said pie? How is it that the problems of equitable distribution and wise and well utilization continue to flummox us?

Friedrich Engels as Our Guide:

Let me start by appealing not to Karl Marx but his partner Friedrich Engels. Karl Marx thought that he had to be a British classical economist, and so he focused on trying to build analytical models of the market economy, private property, investment, and productivity—and, I think, went down many rabbit holes, and did not come back up. Engels, by contrast, focused on changing _technology_—and its influence on modes of production, distribution, consumption, communication, and domination.

Consider the late Agrarian Age—Western Europe's Feudal Society around the year 1000, for example. How people lived and worked taught everyone that society was relatively static, hierarchical, and characterized by exploitation and domination. Technological progress was slow. People's roles in society were largely determined by where in the society they were slotted by their birth.

However, technology moved on. Feudal society was not the end of history.

By 1650 or so we were in the Imperial-Commercial Age. Advancements in printing, transportation, gunpowder, and other technologies, plus biotechnology from the Americas had had powerful implications. For one thing, technological progress was no longer glacial. People had a sense that history was moving forward. People no longer saw themselves as limited to the roles of their ancestors. Society was becoming mobile and contractual.

People were increasingly finding—or, rather, making—their own place within a web of market and contractual relationships. A king-controlled legal system provided structure and protection for individuals. The king's judges were more or less honest, or at least bribeable according to established principles. That offered a much better framework than the feudal one in which the local landlord was the local warrior was the local policeman was the local judge, and the distant king could not have done anything about that even had he wanted to.

In 1650, as in year 1000, there probably still was a Lord of Dean. But he was not the landowner-policeman-judge, and could not defy the king because the king had trained mercenaries with gunpowder weapons The ca-1000 Lord of Dean a knight on horseback with a long lance takes five years. However, it only takes three months to teach someone to be proficient with a musket or a pike. The ability to assemble warriors, provide them with weapons, produce gunpowder , and feed them as they march across the country is crucial to military power. This is in contrast to the skills of a Sir Lancelot, who has essentially been a well-trainedprofessional athlete, only instead of knowing how to throw and catch a football he knows how to kill people with a spear.

This shift in the mode of domination makes the world less reliant on violence and protection and more reliant on the law. Society begins to be viewed as a series of contracts, with the social contract being the greatest of them all. This political system is based on the idea that everyone should voluntarily agree to it and benefit from it, as opposed to being assigned a specific role in society because God decided it should be that way from the beginning.

The feudal survivals were seen as obstacles to prosperity. The Lord does not protect; he simply collects money. The monopolist does not produce, he simply gave money to the king when he needed it for war, and in return got the exclusive right to sell salt in the province. These undeserved methods of obtaining wealth are unproductive. Note the striking contrast to the feudal system back in earlier days, back when free peasants would willingly become serfs to knights who would protect them from bandits and barbarians, and willingly pay tithes in order to get spiritual guidance from those who knew the prayers.

Thus, Friedrich Engels argued, the transition from agrarian feudal society to imperial commercial society fundamentally changed how people viewed social organization. Kings and aristocracies that claimed to protect people from invaders like Vikings had no purpose when no marauding Vikings had been seen in 500 years. And so figures like Thomas Jefferson argued that people have inherent rights and should decide the course of their own lives. The purpose of society, Jefferson said, is to protect these rights to life, liberty, and either property or the pursuit of happiness, depending on the level of abstraction. It was not a smooth transition from feudal to imperial-commercial society: recall the Dutch, British, American, and French revolutions. None of them was a walk in the park. And one of the consequences of the invention of printing in Western Europe was almost two centuries of near-genocidal religious war, after all. But it happened: a different mode of production at the base required a different kind of society built on top of it, the “last instance” came. Society adjusted to technology. And things seemed to fit. The social theorists of commercial-imperial society—the Adam Smiths, John Lockes, and Barons de la Brède et de Montesquieu were a pretty optimistic bunch.

Successive Later Modes of Production:

Imperial-commercial society, however, was not the end of history. Technology moved on. The next stop was the society of steampower and machinery.

Engels saw—or thought he saw—that this new era would teach yet different lessons about social organization. Steam-powered factories required people to work together in large groups, highlighting the collective nature of productivity. In this context, individuals could not be seen as especially productive or particularly important adandn thus deserving of a larger share of the wealth produced. It was the human organization that mattered collectively, not any one person’s contribution that mattered individually. Hence, Engels thought, steampower and machinery society would teach people the desirability of, and bring about, egalitarian socialism. As of Engels’s day, there had not been nearly enough time for the "last instance" in which society adjusts fully to technology to appear: it had been 600 years from late-agrarian to imperial-commercial society, but as of 1870 only 200 years from imperial-commercial to steampower-and-machinery society.

But steampower and machinery society were not the end of history either.

Technological progress continued, with society transitioning, successively, into the applied-science age, the mass-production age, the global value-chain age, and now into the info biotech age. Each of these eras taught different lessons about social organization.

In the applied-science age, people were definitely not interchangeable: the technical and practical knowledge needed to do a job well was often painfully acquired. Moreover, politics determined which economic sectors grew and prospered—it was not labor vs. capital, but import-competing vs. other industries as a key political fault line. Mass production taught that high wages for blue-collar workers required unions as well as industrial expansion to realize large economies of scale. An so on. The simple egalitarian lessons that Engels had thought would be taught everyone obviously by the way they worked dropped away. New and more complicated lessons were taught.

And after 1870 there was the pace of change: not 650 or even 250 years before one mode-of-produciton is replaced by another, but only 40 years. Let us adopt a metaphor: You need to rewrite the software code of society to run on new technological hardware. You need to cobble together something that will be running code so that society does not crash. You have to do it in 40 years. And before you have finished, the mode-of-production is changing and shifting underneath your feet once again.

Thus we have our big post-1870 political economy questions…

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ONE IMAGE: Muskland Is a Dumpster Fire!

Elon Musk remains all-in on crypto grifting:

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Very Briefly Noted:

• BLS: Employment Situation Summary: ‘Total nonfarm payroll employment rose by 236,000 in March, and the unemployment rate changed little at 3.5 percent…. Employment continued to trend up in leisure and hospitality, government, professional and business services, and health care…

• Adam Ozimek: ‘It’s easy to get confused, but at this point here is what we want: good news is strong jobs growth, weak wage growth. Yes we want strong real wage growth once inflation comes down. We want sustainable, strong real wage growth for the long-run!…

• Jason Kottke: How to Counter the Gish Gallop: ‘I was keen to read that the debating method practiced by Trump, Putin, anti-vaxxers, and climate deniers of flooding the zone with a firehose of incorrect information has a name: the Gish Gallop…

• Sarah Quincy and Chenzi Xu: Branch Banking and Capital Misallocation: ‘A new database of bank and branch level balance sheets to contrast how branch networks and unit banks participate in capital markets from a period of substantial branch expansion, the 1930s…

• Dan Davies: Taleb as Miseducator: ‘There’s something psychologically intolerable about Taleb’s work to a lot of people, which is why so many of them want to simultaneously say it’s banal and exaggerated, that he’s way out of the mainstream but only saying things that everyone knows. (He also attracts a lot of the kind of people who could have been present at the Creation and would have still said that light was nothing new)…

• Jason Zweig: The Seven Virtues of Great Investors: ‘The seven virtues of great investors are: Curiosity…. Skepticism…. Independence…. Humility. …. Discipline…. Patience…. Finally, courage…

• Samuel Hammond: The adverse selection of political "moderates": ‘On the lemons among our leadership…. A more credible signal of commitment is now sorely needed; something that separates the reformist wheat from the establishment chaff…

• Noah Andre Trudeau: Bloody Roads South: The Wilderness to Cold Harbor, May-June 1864…

• Bret C. Devereaux: Colleges Should Be More Than Just Vocational Schools…

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¶s:

Preston Mui: ‘Rumors of dead labor supply's death have been greatly exaggerated, as they say…. My replication of White House CEA's Core Non-Housing Services Wages -- bumpy way down but clearly slowing down, yoy in orange, 3m/3mma in blue…. 0.8% pp prime-age LFPR increase in 3 months is pretty great right? It's the fastest 3-month increase in almost 25 years. Here are our Shimer flows. Interestingly, the layoffs aren't showing up here as EU flows. Also, labor force entry is still coming from N->E rather than N->U. Problem for the Fed if it's staring too hard at the unemployment rate! Labor supply can show up as high employment…

Dan Wang: China’s Hidden Tech Revolution: ‘Along with its dominance of renewable power equipment, China is now at the forefront of emerging technologies such as artificial intelligence and quantum computing. These successes challenge the notion that scientific leadership inevitably translates into industrial leadership. Despite relatively modest contributions to pathbreaking research and scientific innovation, China has leveraged its process knowledge—the capacity to scale up whole new industries—to outcompete the United States in a widening array of strategic technologies…. China has grounded its technology sector not in glamorous research and advanced science but in the less flashy task of improving manufacturing capabilities. If Washington is serious about competing with Beijing on technology, it will need to focus on far more than trailblazing science. It must also learn to harness its workforce the way China has, in order to bring innovations to scale and build products better and more efficiently. For the United States to regain its lead in emerging technologies, it will have to treat manufacturing as an integral part of technological advancement, not a mere sideshow to the more thrilling acts of invention and R & D…

Benjamin Graham: The Active Management Delusion: Respect the Wisdom of the Crowd: ‘My basic point here is that neither the Financial Analysts as a whole nor the investment funds as a whole can expect to ‘beat the market,’ because in a significant sense they (or you) are the marke…. The greater the overall influence of Financial Analysts on investment and speculative decisions the less becomes the mathematical possibility of the overall results being better than the market’s”…

Jorge G. Castañeda: Reversing Latin America’s Democratic Decay: ‘Major segments of the region’s population – not least the middle class – are fed up with successive governments’ failure to tackle social and economic problems, including high crime rates, soaring inflation, low salaries, inadequate education and health services, scant pensions, and precarious and overcrowded transportation. Authoritarian populists thrive in such a context, as they promote simple solutions that are often popular in the short term…. We at Alternativa Latinoamericana… are convinced that Latin America must… build… strong welfare states. But this is a medium- to long-term project…. It is also imperative to devise “fast democratic deliverables”…. Bolsa Família… Luiz Inácio Lula da Silva’s previous term in office… benefits to households in exchange for actions supporting their ability to escape poverty…. But it is in the realm of security and law enforcement that progress is most urgently needed. In countries across Central and South America, the middle classes and leading economic sectors are clamoring for a reduction in violent crime and delinquency. Devising short-term solutions that uphold human and constitutional rights will be no easy feat. But without progress on this front, threats to the region’s democracies will continue to grow…

Gilian Tett: Why moderate Republicans still won’t confront the Trump bandwagon: ‘For Trump, agreeing with the lie that the 2020 election was “stolen” has become a litmus test for entry into his political tribe…. The McCormick episode shows the problems that centrist conservatives face when confronted with the Trump bandwagon. On paper, McCormick has the credentials for a Senate run: he trained at an elite military academy, served in Iraq, worked in the Treasury department under Hank Paulson during the 2008 financial crisis and spent 13 years at Bridgewater. So he has experience of how to run things and staying calm under stress. But this pedigree does not count with Trump…. Trump sees loyalty in black-and-white terms; and, with the judicial stakes rising, increasingly so…. “It’s shocking,” observes Frank Luntz, the Republican pollster. “In private they tell me they can’t wait for him to go, but in public they say nothing—they know he will crush them.”… In the meantime, moderate Republicans are watching — and waiting…

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