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All stories, all Grand Narratives, begin in some medias res.

I choose to begin my story, my Grand Narrative, in the year -3000.

70,000 years earlier we had been a not-terribly-successful Great Ape subspecies. We homines sapientes sapientes, we East African Plains Apes, were then, in the year -73000, perhaps:

• between 100 and 1000 groups, averaging 100 each, wandering around East Africa.

• cf. a perhaps equal number of phenotypically indistinguishable Southern African Plains Apes whose powerful genetic imprint we see in today’s Khoesan;

• equal numbers of each of the other homo sapiens subspecies that were our very close cousins:

  • the Central Asia and farther west homines sapientes neandertalenses,

  • the Central Asia and farther east homines sapientes denisovenses,

  • “ghost homo sapiens” lineages seen only in the imprint left in markers in our genes today;

• plus back then the much larger populations of the other hominids—perhaps 2 million:

  • chimpanzees,

  • bonobos,

  • gorillas,

  • orangutans,

  • outnumbering all the then-numbers of all the world’s homo sapiens subspecies together by maybe five to one.

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But by the year -3000 much had changed. By then there were nearly 50 million of us. For we had been fruitful, and multiplied, and subdued the earth. And so by the year -3000 we were exercising dominion as apex predators over every living thing that moveth, and taking every herb-bearing seed and also fruit-yielding tree as also our meat.

The year -3000 was well after the invention of agriculture and the domestication of animals. The year -3000 was the moment of the coming of bronze tools and weapons, of the calculating and writing of records, and of complex societies with deep and sophisticated divisions of labor. Those were therafter powered by four factors:

• Gossip

• Prestige

• Domination

• Gift-exchange

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By this point in time, humans had been a cultural species for so long that it had substantially affected our genetic endowment, albeit in ways we do not terribly well understand. By this point in time, we had long been an anthology-intelligence—what our extraordinarily abilities to communicate complexity and to gossip had given us was that what one East African Plains Ape in the band learned, all would soon know; and with many eyes looking at problems, not all but a very substantial proportion of bugs and difficulties proved shallow.

After this point in time, moreover, we were no longer merely a cultural anthology-intelligence species. After this point in time, we were an ASI—a time-binding and space-binding ASI—an Anthology Super-Intelligence with a scope covering the entire globe and all time since, wreaking mighty works indeed of nature-manipulation and social-organization via our fine and deep cognitive and productive divisions of labor.

That is the medias res at which I began. What followed that was what I have tried to teach.

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All stories, all Grand Narratives, cut themselves short by chopping things off at some arbitrary end—if not before now, at the current now after which we do not know what will happen next.

I cut my story short at the year 1875.

That 1875 was the moment of what Simon Kuznets identified and labeled as the coming of Modern Economic Growth. In our era of Modern Economic Growth we see the capabilities of the human ASI to manipulate nature and coöperatively organize ourselves grow by at least 2% per year. Cf. a value-of-the-human-ideas-stock growth rate only 1/100 as much from the start of the Bronze Age in the year -3000 to the end of the Late-Antiquity Pause in the year 800. We see in one year since 1875 the same amount of proportional “technological” change—on a much higher base!—that we saw in a century back in Agrarian-Age Malthusian civilization.

Since then we have speed-run through Applied-Science Belle-Époque, Mass-Production Social-Democratic, Globalized Value-Chain Neoliberal, and now are passing through the gate to Attention Info-Bio Tech Civilization. There is a strong sense in which there has been more economic history since 1875 than in all the eras and æons before.

But I pass the baton off to Chenzi Xu. She gets to cover: post-1875 market integration, capital markets , international money and finance, the Great Depression, financial crises, industrial policy, and economic development.

Not, mind you, that there was little economic history from the year -3000 to the year 1875. At that moment of 1875 Steampower Civilization had become well-established. At that moment our numbers had grown from the 50 million of the year -3000 to 1.4 billion—nearly thirty-fold. At that moment my crude guesstimate of the value of the stock of human ideas for manipulating nature and coöperatively organize ourselves had grown to a value I set at 1.00 from a value of 0.09 in the year -3000—eleven-fold. Civilizational accomplishments over -3000 to 1875 in culture and technology had been mighty indeed. The kinds and counts of luxuries that the rich and famous could utilize was at least one singularity-transformation’s worth above those found in the year -3000, when the luxuries available to King Gilgamesh were limited to perfume, cedar, wool, and beer. And yet the average material standard of living of humanity, as far as necessities and conveniences were concerned, was perhaps only twice what it had been in the near-subsistence Malthusian Agrarian Age—and was by 1875 astonishingly unequally distributed not just within individul societies but across the globe.

Between -3000 and 1875, a ten-fold increase in human technological capability. A thirty-fold increase in human numbers. Yet only a two-fold increase in human prosperity. And yet the stage then set for the post-1875 Modern Economic Growth explosion.

Just how did all that happen? And what were all of its ramifications?

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1. Putting “Supply & Demand” in Context:

History as Our “Treasure for All Time”

• Solow, Robert M. 1985. “Economic History and Economics.” American Economic Review 75 (May): 328-331. <https://www-jstor-org.libproxy.berkeley.edu/stable/pdf/1805620.pdf>.

2. The Long Malthusian Agrarian Age:

Long-Term Metals-Writing Agrarian-Age “Stagnation”, from -3000 to Post-1500

• Steckel, Richard. 2008. “Biological Measures of the Standard of Living” Journal of Economic Perspectives 22 (Winter): 129-152. <http://www.aeaweb.org/articles.php?doi=10.1257/jep.22.1.129>.

• Clark, Gregory. 2005. “The Condition of the Working Class in England, 1209–2004.” Journal of Political Economy 112 (December): 1307-1340. <https://www-jstor-org.libproxy.berkeley.edu/stable/10.1086/498123>.

Characterizing Agrarian-Age Societies

• Diamond, Jared. 1999. “The Worst Mistake in the History of the Human Race.” Discover Magazine (May). <http://discovermagazine.com/1987/may/02-the-worst-mistake-in-the-history-of-the-human-race>.

Multiple Dimensions of Social & Economic Development

• Morris, Ian. 2010. Social Development. Palo Alto: Stanford. Pp. 39-74, 83-106, 109-28, 148-55, 164-71. Skim. <https://pzacad.pitzer.edu/~lyamane/ianmorris.pdf>

3. Sources of Economic Growth & Prosperity:

Deeper Reasons for Agrarian-Age “Stagnation”

• Finley, Moses. 1965. “Technical Innovation & Economic Progress in the Ancient World.” Economic History Review: 29-45. <https://www-jstor-org.libproxy.berkeley.edu/stable/2591872>.

• Temin, Peter. 2001. “A Market Economy in the Early Roman Empire.” Journal of Roman Studies. 91: 169–181. <https://www.jstor.org/stable/3184775>.

How Much Growth-Acceleration Is Just “Two Heads Are Better than One”?

• Kremer, Michael. 1993. “Population Growth & Technological Change: One Million B.C. to 1990.” Quarterly Journal of Economics <http://www.jstor.org/stable/2118405>.

Ideas vs. Resources vs. Division of Labor in History

• Henderson, J. Vernon, Adam Storeygard, & David N. Weil. 2018. “The Global Distribution of Economic Activity: Nature, History, & the Role of Trade”. Quarterly Journal of Economics 133,1 (February): 357-406. https://www-jstor-org.libproxy.berkeley.edu/stable/26495164>.

4. Societies of Domination:

“Market Freedom” as a Mask for Unfreedom & Inequality

• Marx, Karl, & Friedrich Engels. 1848. Manifesto of the Communist Party <http://www.marxists.org/archive/marx/works/1848/communist-manifesto/>.

Guesses at Societal Inequality since Bronze & Writing

• Milanovic, Branko, Peter H. Lindert, & Jeffrey G. Williamson. 2011. “Pre-Industrial Inequality.” Economic Journal 121 (March): 255-272. <https://www-jstor-org.libproxy.berkeley.edu/stable/41057775>.

Societal Mistrust, Slavery, & the Shadow of the Past

• Nunn, Nathan. 2008. “The Long-Term Effects of Africa’s Slave Trades.” Quarterly Journal of Economics 123 (May): 139-176. <https://www-jstor-org.libproxy.berkeley.edu/stable/25098896

Patriarchal Domination

• Alesina, Alberto, Paola Giuliano, & Nathan Nunn. 2013. “On the Origins of Gender Roles: Women & the Plough.” Quarterly Journal of Economics 128 (May): 469–530. <https://www-jstor-org.libproxy.berkeley.edu/stable/26372505>.

5. Toward the Breakthrough:

The Final “Efflorescences”

• De Vries, Jan. 1994. “The Industrial Revolution & the Industrious Revolution.” The Journal of Economic History 54 (2): 249-270. <https://www.cambridge.org/core/journals/journal-of-economic-history/article/abs/industrial-revolution-and-the-industrious-revolution/CF3AE82F17442FEE4C3045507A5FF606>.

• Clark, Gregory. 2001. “The Secret History of the Industrial Revolution.” Unpublished manuscript. <http://faculty.econ.ucdavis.edu/faculty/gclark/papers/secret2001.pdf>.

The Early-Industrial Economy Still Malthusian

• Nicholas, Stephen, & Richard H. Steckel. 1991. “Heights and Living Standards of English Workers during the Early Years of Industrialization, 1770–1815.” Journal of Economic History 51 (December): 937–957. <http://www.jstor.org/stable/pdfplus/2123399.pdf>.

Empire, Commerce, Coal, & Science: One Chance Only to Thread the Eye of the Needle?

• Allen, Robert C. 2011. “Why the Industrial Revolution Was British: Commerce, Induced Invention & the Scientific Revolution.” Economic History Review 64 (May): 357-384. <https://www-jstor-org.libproxy.berkeley.edu/stable/41262428>

6. Modern Economic Growth:

Modern Economic Growth

• Kuznets, Simon. 1971. “Modern Economic Growth: Findings and Reflections.” Nobel Prize Lecture. <https://www.nobelprize.org/prizes/economic-sciences/1971/kuznets/lecture/>.

• Further Reading:

  • Keynes, John Maynard. 1919. The Economic Consequences of the Peace. London: MacMillan. <https://www.gutenberg.org/files/15776/15776-h/15776-h.htm>. Ch. 2.

7. Reflecting: “Enlarging the Bounds of Human Empire…”:

“The end of our foundation is the knowledge of causes, and secret motions of things; and the enlarging of the bounds of human empire, to the effecting of all things possible…”

• Bacon, Francis. 1627. The New Atlantis. n.p. <https://www.gutenberg.org/files/2434/2434-h/2434-h.htm>.

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READINGS: Mandatory:

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< https://bcourses.berkeley.edu/courses/1551896 >
< https://braddelong.substack.com/t/quantitative-long-run-global-economic >
< https://braddelong.substack.com/p/quantitative-long-run-global-economic >
< https://substack.com/home/post/p-184363836 >

J. Bradford DeLong

delong@econ.berkeley.edu brad.delong@gmail.com delong@hey.com +1-925-708-0467

Tu 1-3 Evans 560 :: Th 1-3 Zoom :: additional mandatory office hours to be arranged

Course Welcome Email:

< https://bcourses.berkeley.edu/courses/1551896/discussion_topics/7205916?is_announcement=true > (repeats this weblog post)

The idea is to put all of the course materials below the paywall fold so that those who want to follow along and virtually participate—and ask questions and get answers!—can do so.

Pre-Class Assignment:

< https://bcourses.berkeley.edu/courses/1551896/assignments/9022294 >.

READING: Mandatory:

• < https://braddelong.substack.com/p/draft-a-small-intensive-data-sciencey >,

• < https://braddelong.substack.com/p/am-i-biting-off-more-than-i-can-chew >,

• < https://braddelong.substack.com/p/all-that-is-solid-melts-into-air >,

• < https://forklightning.substack.com/p/using-generative-ai-to-learn-is-like >

READING: Strongly Recommended: < https://bcourses.berkeley.edu/courses/1551896/files?preview=93579591 >.

AND THEN ANSWER THE FIVE QUESTIONS: < https://bcourses.berkeley.edu/courses/1551896/assignments/9022294 >.

1. Consider the three short DeLong readings. What, in your view, is the single most important thing for success that I have overlooked in deciding to try to stand-up this new course this semester?

2. Consider the Deming reading: How have you used GPT MAML LLM MAMLMs—General-Purpose Transformer Modern Advanced Machine-Learning Large-Language Models—in your university experience so far? To what extent do Deming’s concerns resonate with you? To what extent do you think they are largely off-base?

3. How far did you get in the long DeLong Slouching Towards Utopia: The Economic History of the Twentieth Century reading? And what is the single thing in it you read that resonates in the front of your mind?

4. What is the story of “Ulysses & the Sirens”, where does it come from, and do you find it important for you?

5. What level of experience with the Berkeley standard data-science stack—Python Jupyter Notebooks, and so forth—have you had?

One paragraph answers for each. I need to have the answers to these by when I wake up Monday AM so that I can use them to plan the shape of Tuesday’s class. Hence no credit will be given for late answers.

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COURSE DESCRIPTION: What, quantitatively, do we actually know about the long-run shape of global economic history? And what can we say about how reasonable counterfactual simulations of alternatives can add to our knowledge?

In our modern information-technology age, we can do many more kinds of analysis much more quickly and deeply and broadly than we ever could before. We ought to be able to use these tools beyond simple counting—the tools of sampling, estimation, forecasting, simulation, classification, and so on that make up what is now “data science” as the coming-together and then expansion of statistics with operations research and economics—to know more and to know in new ways.

This course will cover the standard long-run picture, as set out by Melissa Dell in her “History of Economic Growth” Harvard Econ 1342 and Robert Allen in his “Global Economic, Political & Social Development” NYU-Abu Dhabi SOCSC-UH 1011. It will try to cover much of:

• Our ancestors’ separation from chimpanzee ancestors six-million years ago,

• the evolution of behavioral modern humans (perhaps) a hundred-thousand years ago,

• the coming of agriculture ten-thousand years ago,

• the agrarian age and its societies of domination up to 1500,

• the first globalization and the societies of the imperial-commercial age up to 1770,

• then the coming of industrialization and full globalization in the following century;

• followed by, successively, the economies of the:

  • steampower,

  • applied-science,

  • mass-production,

  • globalized value-chain,

  • and now attention info-bio tech modes of human economic life.

It will try to cover much of:

• the sources of and blockages to industrialization and economic growth across time and space,

• the origins and maintenance of large-scale inequality within and across societies,

• the social and political impacts of economic growth,

• the role of economic incentives and political institutions in underpinning and retarding economic progress,

• and other similar questions.

But it will cover it from a pedagogical-experimental angle that attempts to use “Data Science” estimation and counterfactual simulation tools to the max, to the extent that that can be done with a student body that has had little or no exposure to those tools beforehand.

And the hope is that in the process the course will generate teaching materials that will allow the course’s subsequent scaling-up to 150 people, or more—with enough of a Royal Road that students coming from the humanities-literary side of C.P. Snow’s “Two Cultures” will find it friendly and approachable and learn stuff, and enough analytical and intellectual depth that students coming from the STEM-numeroliteracy side of C.P. Snow’s “Two Cultures” will not find it trivial, and not be bored.

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##enlarging-the-scope-of-human-empire
##quantitative-long-run-global-economic-history
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READINGS: Mandatory:

• DeLong J. Bradford. 2023. “Viewing Sparta, & Ancient Society More Generally”. DeLong’s Grasping Reality. August 10. <https://braddelong.substack.com/p/viewing-sparta-and-ancient-societyLinks to an external site.>.

• DeLong J. Bradford. 2023. “Grokking the History of Antiquity: Ancient Stories of Élites Already More than Half-Transformed into Myth”. DeLong’s Grasping Reality. July 26. <https://braddelong.substack.com/p/should-we-read-steven-pressfieldsLinks to an external site.>.

• Jongman, Willem. “Gibbon Was Right: The Decline & Fall of the Roman Economy”. In Crise et transformation des sociétés archaïques de l’Italie antique au Ve siècle av. J.-C.: Actes de la table ronde en l’honneur de Raymond Bloch, edited by John H. D’Arms and E. Christian Kopff, 183–199. Rome: École Française de Rome <https://bcourses.berkeley.edu/files/93874526/download?download_frd=1> <https://brill.com/display/book/edcoll/9789047420903/Bej.9789004160507.i-448_015.xml>.

• Temin, Peter. 2013. “Economic Growth in a Malthusian Empire”.
  Chapter 10 in Peter Temin, The Roman Market Economy. Princeton, NJ: Princeton University Press. <https://bcourses.berkeley.edu/files/93874581/download?download_frd=1>.

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The pairing of these four readings is designed to force students to hold two seemingly contradictory ideas in their heads at once: that the long agrarian age was structurally a set of societies of domination in which a small and largely predatory élite took one-third or so of the crops and the crafts by force and fraud, and that within that structure there were real, if temporary, efflorescences in which material life genuinely improved for many people we would call “middle class”, and not just for the largely predatory élite.

The two DeLong weblog posts are doing conceptual and moral groundwork:

“Viewing Sparta, & Ancient Society More Generally” tries to strip away the heroic glaze from classical antiquity.

Elites are recast as gangs of “thugs with spears” and their retinues, extracting as much as they can from peasants and craftsmen subject to a Malthusian resource constraint. The point is not just to debunk Sparta, but to reframe almost all pre‑industrial élites—Greek, Persian, Davidic, Roman—as variants on the same extraction game, constrained only by the need not to kill the host society on which they depend.

“Grokking the History of Antiquity” then turns to how those same elites narrate themselves.

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2026 02 11 Econ 210a Slow Agrarian Age Growth

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Today is week 3 of my tranche of the “Introduction to Economic History” for first-year economics graduate students, the course this week I am sharing with Chenzi Xu.

I am keying off of my guesses as to how to try to quantify the longest-run shape of human economic history—population, productivity levels/living standards, their rates of growth, and then the rate of growth and the level of an index of “technology”—the human capability to manipulate nature and coöperatively organize ourselves that we have discovered, developed, deployed and diffused across the world for the benefit(?) of humanity considered as an anthology super-intelligence with now an extraordinarily fine physical and cognitive division of labor:

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These are, as I said, guesses. They are not just empirically but conceptually shaky. How would one measure the value of “technology”, understood as the value of the stock of ideas that are now humanity’s collective property and that turn out to be useful in our physical division of labor?

I guess that the rate of growth of the value of this ideas stock is equal to the rate of growth of measured output-per-capita plus half the growth rate of population: that ideas are twice as salient as resource scarcity in enabling productivity.

But if you have a better guess, I would be very happy to adopt it.

There are also deep conceptual problems in the real output-per-capita guesstimate. It is, roughly, our collective power to produce necessities and simple conveniences—what we need in order to survive, reproduce, and not end each day exhausted and in substantial pain from RSI and other injuries. But it does not take proper account of the extraordinary range of what every previous generation would call extravagant luxuries. And variety matters. There is an argument that if one tries to build a sensible model of the value of variety and of experience, one winds up with something like real output-per-capita times the variety of commodities you consume times lifespan. If that is our rough measure, than we today are not 16 but rather 16 x 10 x 4 = 640 times as “rich” as our preindustrial ancestors—and those of us among the richest tenth of the world today are 3200 times as “rich”.

But what could such an excessive quantification actually mean? Other than “it is a real big difference, so big that there is no doubt that quantity has turned into an unbridgeable qualitative gulf here”.

That is the background: an expansion of humanity from 10,000 people (sort-of) 75000 years ago to 5 million 10000 years ago on the cusp of the invention of agriculture; demographic expansion from 5 million 10000 years ago to 500 million 400 years ago with a loss of income per capita for the non élite hewers of wood and drawers of water; technological progress very slow—less than 3% per century up until 800, and even that was not guaranteed as 200 to 800 shows us, and then 8% per century in the Mediaval 800-1600 era; followed by progress at a rate of 20% per century over the Commercial-Imperial 1600-1775 age, 80% per century over the Industrial Revolution 1775-1875 age, and at 2% per year—a 7.4-fold amplification over a century—in the Modern Economic Growth era since, not taking full account of the amplification of the variety of luxuries and the increase in lifespan.

In this context the big questions for class today are:

• Why was techno-economic progress so slow back in the -3000 to 1600 agrarian age compared to its pace today?

• why did essentially all of the ten-fold improvement in technology between -8000 and 1600 go into multiplying human numbers a hundred-fold, and essentially none of it go into improving non-élite standards of living?

Today, bearing on this, I am hoping to cover six readings (including one left over from last time: Morris) that cover four different topics:

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• Morris, Ian. 2010. Social Development. Palo Alto: Stanford. Pp. 39-74, 83-106, 109-28, 148-55, 164-71. Skim. <https://pzacad.pitzer.edu/~lyamane/ianmorris.pdf>

Ian Morris is the most explicit about the ambition. In his “social development” work he wants to take 15,000 years of human history and turn it into a single time‑series for “the West” and a single time‑series for “the East,” built up from four ingredients: energy capture per capita, scale of organization (proxied by city size), war‑making capacity, and information technology. That is, he wants a scalar index of “how good a job a society is doing at mastering its physical and intellectual environment to get things done.”

There is much admirable here: instead of waving his hands about “civilization” or “modernity,” he actually tries to count stuff. We should all be in favor of actually counting stuff. But it’s also deeply annoying. First, the East/West dichotomy is a Procrustean bed imposed on a much messier Eurasian landmass with lots of cross‑cutting variation. (I prefer what I’ve elsewhere called the “Dover Circle”: think of the North Atlantic basin plus its appendages, rather than a monolithic “West”; while ancient Chang’an has definite continuities with Xian today, tracing things year-by-year, what has Los Angeles today to do with Ur of the Chaldees?) Second, the choice of traits bakes in a particular view of what matters—war‑making, say—without much room for alternative conceptions of “development”.

So Morris is useful for us less because his numbers are the last word than because he forces us to ask: what, exactly, are we trying to summarize when we talk about long‑run “development”? Which dimensions go into the summary statistic, and which get left on the cutting‑room floor?

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• Kremer, Michael. 1993. “Population Growth & Technological Change: One Million B.C. to 1990.” Quarterly Journal of Economics <http://www.jstor.org/stable/2118405>.

Michael Kremer’s 1993 paper is a very different style of big picture. He takes the simplest possible endogenous growth framework—ideas are nonrival; the more people there are thinking, the more ideas you get—and welds it onto a Malthusian world in which technology pins down carrying capacity. Put those two together and you get a stark prediction: over most of human history the growth rate of population should be roughly proportional to the level of population. More people → more ideas → more productive technology → higher carrying capacity → more people, and so on.

Kremer goes to the data and, remarkably, population growth over one million B.C. to 1990 lines up pretty well with this “two heads are better than one” logic, at least until the demographic transition. The point here is not that Kremer’s model is the whole story—obviously institutions, culture, and politics matter—but that you can get a surprising amount of structure out of just the nonrivalry of ideas plus Malthus. That’s a powerful baseline: if your story about long‑run growth fights these two forces, you’d better have a very good reason.

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• Finley, Moses. 1965. “Technical Innovation & Economic Progress in the Ancient World.” Economic History Review: 29-45. <https://www-jstor-org.libproxy.berkeley.edu/stable/2591872>.

• Temin, Peter. 2001. “A Market Economy of the Early Roman Empire.” Journal of Roman Studies. 91: 169–181. <https://www.jstor.org/stable/3184775>.

• Temin, Peter. 2006. “The Economy of the Early Roman Empire.” Journal of Economic Perspectives 20 (1, Winter): 133–151. <https://www.aeaweb.org/articles?id=10.1257/089533006776526148>.

The Finley–Temin debate over the Roman economy is in one sense much narrower—were the early Roman Empire and its Mediterranean periphery really a “market economy”?—but it is also about how we should model the deep past.

Finley, in The Ancient Economy, famously said “no”: ancient society did not have an “enormous conglomeration of interdependent markets.” Exchange was embedded in status, custom, and politics; prices and profit maximization were marginal. Temin replies—first in the JRS article, then in his JEP piece—that this picture badly underweights the evidence: coins circulating as a medium of exchange; prices that move in ways that look like supply and demand; interest rates that look like a capital market; merchants using contracts, tenders, and risk‑sharing devices; grain and oil and textiles moving over long distances.

Temin is not saying Rome had Walrasian GE with Arrow‑Debreu securities; he is saying that if you tried to describe 18th‑century Holland with Finley’s vocabulary you would recognize that something had gone badly wrong.

For our purposes, the value is that it forces us to ask: when in the past is it appropriate to use the machinery of market economics? When do we treat agents as responding to prices and arbitrage conditions, and when do we think other logics dominate? That choice matters for how we read everything from wage data to shipwreck counts.

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• Henderson, J. Vernon, Adam Storeygard, & David N. Weil. 2018. “The Global Distribution of Economic Activity: Nature, History, & the Role of Trade”. Quarterly Journal of Economics 133,1 (February): 357-406. https://www-jstor-org.libproxy.berkeley.edu/stable/26495164>.

Fourth and last, Henderson, Squires, Storeygard, and Weil give us a beautifully concrete, spatial version of long‑run development and path dependence. Take a satellite map of the world at night—where the lights are—and run a horse‑race: how much of that variation can be explained by geography? They find that a small set of purely physical variables—soil quality, growing days, ruggedness, temperature, proximity to coasts, rivers, harbors, big lakes—explains about half the cross‑section in light density, and about a third even within countries.

Then they do something very clever: split the geography into “agricultural” advantages and “trade” advantages, and split countries into those that structurally transformed early versus late. In early developers, agricultural variables do most of the explanatory work; in late developers, the trade variables matter relatively more—even though those late developers are more agricultural today. They explain this with a simple dynamic story plus agglomeration: where you were when you started to urbanize, given transport costs, leaves a deep imprint. If you got dense when transport was expensive, your cities sit on good land; if you got dense when transport was already cheap, your cities sit on coasts and trade nodes.

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Put all of this together, and you can see the arc of what we’re trying to do in Econ 210a. Morris pushes us to quantify “development” as a multi‑dimensional index and to think hard about what dimensions we care about. Kremer gives us a clean baseline in which ideas and population co‑evolve in a Malthusian world. Finley versus Temin forces us to interrogate when and how we can legitimately deploy market models back into antiquity. Henderson & al. then show, with modern data and a lot of econometrics, how geography plus timing plus path dependence can lock in patterns of economic activity that our simple models would otherwise miss.

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One way to think about what we are doing in this course is that we are trying to build a usable “big picture” of how human societies have changed over the very long run that is (a) empirically defensible and (b) analytically helpful, without (c) becoming so over‑schematic that it dissolves into ideology. Today’s four sets of readings are all attempts—very different attempts—to do small pieces of just that. Today’s job is not to take any of these as gospel, but to mine them for tools: what do we want to keep in our own modeling of very long‑run economic history, what do we want to modify, and what do we want to throw overboard?

That, at least, is the plan.

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Main DeLong segment course page: <https://braddelong.substack.com/p/graduate-economic-history-spring>:

The Practice & Scope of Economic History (January 28)

• Solow, Robert M. 1985. “Economic History & Economics.” American Economic Review 75 (May): 328-331. <https://www-jstor-org.libproxy.berkeley.edu/stable/pdf/1805620.pdf>.

The Longest-Run Take at Human History

Start with some extremely rough numbers, guesstimates, and guesses:

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I continue to grope my way forward with my experimental “Econ 196” attempt to take a much more data‑sciency approach to economic history than is usual in the field. The aim is to use the modern “data science” toolkit—sampling, estimation, simulation, and counterfactual modeling, mostly via Python and Jupyter—not as an add‑on but as a central way of thinking through the long‑run trajectory of the world economy, from agrarian Malthusian regimes to industrial and post‑industrial growth. My hope is that this will give both humanists and quants a shared Royal Road into global economic history: accessible enough for students who have never coded before, but with enough analytical bite that numerate students will not be bored.

Will it succeed? I do not know.

Now I have reached the “Long Agrarian Age Malthusian Stagnation” section of the course, and so I am musing—much to myself—as to what I should do with it:

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Pre-Industrial Economic Growth

At one level, the history of pre-industrial economic growth is relatively easy to summarize: Up until at least 1500, there was essentially none—if “economic growth” is taken to be a significant sustained improvement in the material living standards of a typical human.

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“WAIT!!!! WHAT?!?!” Explaining What I Mean by This

Before 1500, there was technological growth. There was artistic growth. There was intellectual and conceptual growth. There was imperial growth. There was organizational growth. There was political growth—although that was not necessarily a good thing, if you understand “politics” to be mostly a matter of domination and redistribution.

But there was not, or at least there was very little, economic growth as we would term it. A typical human in 1500—hell, 1875—had a material standard of living not that much different from that of the typical human back in –3000. As far as necessities and simple conveniences are concerned, typical peasant and craftsman living standards in the age of Gilgamesh of Uruk in Mesopotamia and Narmer of Inebu‑hedj (the city that was later to be called Men-Nefer, which the Hellenes heard as “Memphis”), the probable first king of Kemet (which the Hellenes, for no comprehensible reason, called “Aígyptos”).

(For the élite, by contrast, the life-styles of the rich and famous did get and kept getting much more convenient and luxurious. over time)

What kept there from being “economic growth” before 1500?

My tentative answer is that, back before 1500, the world economy was under Malthusian pressure that kept humanity desperately poor. Agrarian-Age technological progress was slow: on the order of 5% per century before 1500. That meant, before 1500, that a 10% percent per century rate of growth in the human population would reinforce resource scarcity enough to offset the benefits that better technology would otherwise have yielded in higher material living standards.

Such 10% per century increases in human population were almost inescapable.

Why was sufficient population growth to offset the slow progress of technology, in terms of its effect on typical living standards, near-inevitable back then?

That was itself an indirect consequence of the slowness pre–1500 of technological advance.

People really like to make love. People really, really like to make love. Patriarchy prioritizes surviving sons. In the dire poverty of pre-modern patriarchal societies, it is nearly social death for women—and, substantially, for men—to reach late middle-age with no surviving sons. Reflect that under conditions of slow technological development, and thus slow population growth, one-third of humans will wind up without surviving sons.

Hence, whenever there were extra resources to support raising more children, people were under enormous pressure to use them to do so. This was Thomas Robert Malthus’s key insight: population expands until it reaches the limits of subsistence. Slow technological progress means that that “until” arrives in, at most, a few generations.

The only potentially bright spot in the picture is that “subsistence” is as much a sociological as a biomedical and nutritional concept. Malthus strongly believed that the right sociological institutions were patriarchy, monarchy, and orthodoxy. Patriarchy was to delay, the age of female marriage, and so reduce female, fertility without requiring women to be so skinny that ovulation was hit or miss. Monarchy was to reinforce patriarchy, as the king as father of the country figured the father as king of the household. Orthodoxy to threaten women who engaged in premarital sex with hell.

This dire poverty meant that pre-modern politics and governance were a poisonous weed. In a world in which there cannot be enough for all, at the foundation politics and governance can be little more than an élite elbowing competitors out of the way, and running a force-and-fraud exploitation game on the rest of humanity.

This élite of thugs-with-spears (and later thugs-with-gunpowder-weapons), along with their tame accountants, bureaucrats, and propagandists—they could have enough. And with their enough they could build and enjoy their high culture. But those who controlled the commons, and had enough so that they could have the leisure to write the literatures that have come down to us—those were hard men, who reaped where they did not sow, and gathered where they did not scatter. They made typical human life fairly dystopian back in the long Agrarian age, even after taking account of the general poverty.

But why was technological progress slow back then?

A good deal of the answer is that they simply were not enough people and not enough sufficiently educated people to have the energy and time to think about solving the problems of advancing technology. Two heads are not twice as good as one, quite. But two heads are considerably better than one. And heads that are not exhausted by the combination of hard work and a scant diet have more energy to think, plan, experiment, and evaluate.

Plus we humans are much smarter when we think together. Thinking together requires that we be able to communicate not just within our own little band or village, but communicate across space and across time. To the extent that humanity is more numerous, richer, better educated, and better able to communicate across space and time, we can become a truly remarkably intelligent anthology intelligence.

In the years since 1875, that ability to transform ourselves into such an anthology intelligence has allowed us to power technological progress forward at 2% per year on average, even though the low-hanging technological fruit has long been harvested, and even though a great deal of the technological fruit we are now harvesting is a very, very high indeed.

But there is more than a lack of numbers, lack of education, lack of energy and leisure, and lack of the means of communication and memory behind the slow rate of technological progress back before modern economic growth. In a society where the typical activity of those who deploy resources is to use them to grab enough for themselves from everybody else, the ideas that will be promoted will not be ideas that are true, but rather ideas that are useful for that grabbing process. The consequences of general poverty for inequality, and the consequences of inequality for ideas and for the direction of societal effort are major drags on even the possibility of technological development.

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Now What to Give Students to Read?

But what should I give modern students to read that they will read to drive these points home?

And by now I find I have made a great many—too many—attempts at laying all of this out. Plus there are the other takes at it that I regard as standard workhorses. Everything I think is good. Everything I think is valuable. But the overlap is much too large. And students’ attention-spans are not what I would wish.

Here is my current list, ranked by my guesses of a combination of approachability by students and usefulness to them.

Start with a relatively “humanistic” summary:

1. DeLong J. Bradford. 2024. “The Great Agrarian-Age Vine-&-Fig Tree Shortage”. June 18. <https://braddelong.substack.com/p/hoisted-from-the-archives-ensorcelled.>

Then go into the numbers and the models:

1. Clark, Gregory. 2007. “Living Standards”. Chapter 3 in: Clark, Gregory. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. ​⁠<https://bcourses.berkeley.edu/files/93800462/>

2. DeLong J. Bradford. 2023. “Ensorcelled by the Devil of Malthus”. DeLong’s Grasping Reality. July 2. <https://braddelong.substack.com/p/ensorcelled-by-e-devil-of-malthus.>

3. DeLong, J. Bradford. 2023. “DAY 3: LECTURE NOTES: 2. Ensorcelled by þe Devil of Malthus: 2.1. The Logic of the Malthusian Economy.” DeLong’s Grasping Reality. January. <https://braddelong.substack.com/p/day-3-lecture-notes-the-logic-of>.

4. DeLong, J. Bradford. 2023. “LECTURE NOTES: Lessons from Simulating a Malthusian Economy.” DeLong’s Grasping Reality. <https://braddelong.substack.com/p/lecture-notes-lessons-from-simulating>.

5. DeLong J. Bradford. 2023. “1. Guesstimating Typical Living Standards in the Agrarian Age”. DeLong’s Grasping Reality. September 28. <https://braddelong.substack.com/p/1-guesstimating-typical-living-standards>.

Plus I want to note that there is a debate—one that I (naturally) think I won:

• Guthmann, Rafael R. 2023. “The Great Waves in Economic History.” Rafael’s Commentary. February 20. <https://rafaelrguthmann.substack.com/p/the-great-waves-in-economic-history>

• DeLong, J. Bradford. 2025. “Yes: Pre‑Modern Economies Were Meaningfully ‘Malthusian’ (Which Does Not Mean Incomes Were Stable).” DeLong’s Grasping Reality. February 4. <https://braddelong.substack.com/p/hoisted-from-the-archives-yes-pre>.

And add a relatively recent update on whether or not there is still anyplace in the world where the Malthusian model is now relevant:

• Chatterjee, Shoumitro & Tom Vogl. 2018. “Escaping Malthus: Economic Growth and Fertility Change in the Developing World”. American Economic Review. 108:6 (June), pp. 1440–67. <https://www.aeaweb.org/articles?id=10.1257/aer.20170748>.

Then reserve other workhorse works for background, and for going deeper:

1. Clark, Gregory. 2007. “The Logic of the Malthusian Economy”. Chapter 2 in: Clark, Gregory. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://bcourses.berkeley.edu/files/93800463/>.​

2. Clark, Gregory. 2007. “Fertility”. Chapter 4 in: Clark, Gregory. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://bcourses.berkeley.edu/files/93800461/>.

3. Clark, Gregory. 2007. “Life Expectancy”. Chapter 5 in: Clark, Gregory. 2007. A Farewell to Alms: A Brief Economic History of the World. Princeton: Princeton University Press. <https://bcourses.berkeley.edu/files/93800460/>.​⁠

4. Max Roser. 2020. “Breaking out of the Malthusian trap: How pandemics allow us to understand why our ancestors were stuck in poverty”, Our World in Data. <​⁠https://ourworldindata.org/breaking-the-malthusian-trap>.

5. Wikipedia. 2025. “Malthusianism”. <https://en.wikipedia.org/wiki/Malthusianism>

6. CORE. 2018. “Econ Handout: The Economics of the Malthusian Trap”. <⁠https://www.core-econ.org/wp-content/uploads/asgarosforum/27/MALTHUS-Reading.pdf>.

Is this the right order to rank these? And how many of them can I assign? I mean, I am now up to nine required pieces, even though all except the Clark chapter are very short.

And then there are the questions to ask them to think about before class:

1. Land and diminishing returns: Why is a fixed factor like land central to Malthusian dynamics, and how does that assumption generate the wage‑population feedback highlighted in the readings?

2. Demographic response: Describe the mechanisms by which fertility and mortality respond to changes in real income in the pre‑modern settings discussed. Which margin (fertility vs mortality) seems more important in the examples you read?

3. Luxuries and norms: How can rising demand for “luxuries” or shifts in social norms (e.g., later age at marriage) raise average living standards in a Malthusian world without implying an escape from the Malthusian regime?

4. Inequality within Malthusian systems: How do the readings suggest elite living standards and mass living standards can move differently under Malthusian constraints, and what implications does that have for interpreting archaeological or literary evidence?

5. Consider Guthmann and DeLong. In what senses do you think DeLong is too full of himself, and needs to rethink his position and move closer to Guthmann’s non-Malthusian take on global economic history in the long -3000 to 1500 agrarian age?

6. Consider Chatterjee and Vogl: what do you think could go wrong with how the world works over the next twenty-five years that could restore the relevance of Malthusian models and thinking to understanding significant parts of our world?

Are these the right questions to ask them to think about before next Tuesday’s class?

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Rafael Guthman Says on the Internet That I Am Wrong!

This is, of course, wonderful: a smart and thoughtful person disagreeing with me on the internet. He is, of course, wrong. But now I get to revisit my trains of thought, and explain why he is, in his turn wrong.

Rafael’s Commentary

The Great Waves in Economic History

Introduction Economists often state that economic growth simply did not exist before recent times. The orthodox view that I was taught as an undergrad is that sustained economic growth began in the late 18th century. This view is articulated by economic historians like Clarke (2007). DeLong (2022) goes even further. He claims that modern economic growth …

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3 years ago · 6 likes · 1 comment · Rafael R. Guthmann

Rafael R. Guthmann: The Great Waves in Economic History: Malthusians are wrong: far from being stagnant, in western history, living standards had three “supercycles” of rise and fall of economic activity over the past 4,000 years…. DeLong (2022) [Slouching Towards Utopia]… claims that modern economic growth only began in earnest in 1870, with the growth from 1770 to 1870 being very small in comparison, and that there was absolutely no growth in real incomes for ordinary people before 1770 (but he admits that living standards could have varied over pre-modern history for a tiny elite)…. This model of economic history is plain wrong…. Three major very-long-run economic cycles in the Western world that featured increasing incomes and then very long periods of decreasing incomes. These cycles of expansion and contraction lasted for several centuries…

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The three cycles are (1) the Bronze Age Near East starting in -3000, followed by the late -1000s civilizational collapse; (2) the Classical and Hellenistic Greece plus Roman efflorescence from -700 to 150, followed by what I politely call the “Late-Antiquity Pause” from 150 to 700; and (3) the long mediæval and early modern ascent, followed by the industrial revolution and modern economic growth breakthrough.

The support is (1) the assertion that urbanization—even in cities as small as 5000—is closely correlated sith living standards an productivity levels, and (2) our guesses about the share of Europeans living in cities of 5000 or more:

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Rafael says:

There is no evidence of any tendency for the rate of urbanization to stabilize around a level consistent with the Malthusian model’s “subsistence level.” Instead, the urbanization rate suggests that over the last three millennia of the history of Europe, there were long and sustained periods of economic progress and regression and that modern economic growth has been a dramatic acceleration compared to the pre-modern trend, instead of a complete break from it...

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But what would we expect to see if we were, in fact, observing a Malthusian economy?

What is a Malthusian economy anyway?

I write it down in four equations:

The first and second equations are simply definitions: The first says that we are going to give proportional growth rate of living standards and productivity levels—the proportional growth rate of the output per worker y variable on the left-hand side—a label, and that label will be g, g for growth. The second says that we are going to give the proportional growth rate of population and the labor force L, L for labor, a label, and that label is on the right-hand side and is n, n for numbers.

The third and fourth equations are behavioral relationships:

The third says that g—the proportional growth rate of living standards and productivity levels—on the left-hand side is equal to the proportional rate of growth h of human ideas about technology, minus the proportional rate of growth of population and the labor force n, with that latter divided by a parameter ɣ—a parameter that tells us how salient ideas about technology are in generating productivity vis-à-vis resource scarcity, plus a random shock term.

It is human ingenuity versus resource scarcity. And resource scarcity is made more dire by population increases.

The fourth says that the population growth rate variable n on the left-hand side will be such that population will grow if living standards y are above, and shrink if living standards are below, some “subsistence” level y^{sub}. It says that how much population will do so depends on a parameter β—a parameter that tells us how responsive fertility and mortality are to want and deprivation, plus another random shock term.

Twice as big a gap between living standards and subsistence will produce twice as fast a population response, with the value of the β parameter calibrating how much.

As people get poorer, fertility drops: women become sufficiently skinny that ovulation becomes hit-or-miss. And as people get poorer, mortality rises: it is not just that some people starve to death, it is that the malnourished have compromised immune systems, and malnourished children, especially, are easily carried off by the common cold.

This model captures three features of a pre-modern Malthusian economy:

• There is (slow) progress in technology

• A more prosperous society has higher population growth

• Resource scarcity matters

What consequences do those features have?

Well, let us set up a toy economy—a simulation—with these features, and only these features, and see how history evolves. Let us set h = 0.0005—5% growth in technology over a century. Let us set β= 0.25—if real living standards are 40% over “subsistence”, population grows at 1% per year, or doubles in three generations. And let us set ɣ = 2—ideas about technology are twice as salient as resources in generating productivity. And we also need to add a random term, an ε term, for plagues, bountiful harvests, mild winters in which babies do not die of pneumonia, and all the other non-systematic accidents that affect the growth of population. We do this in Python. Here is our first simulation run: the level of income per capita:

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We see, in this simulation, a 500-year advance in civilization as measured by living standards, and then a sudden following crash into a dark age. There is then a 400-year period during which little appears to happen.

Would Rafael Guthman say of this that there “no evidence of any tendency… to stabilize around a level consistent with the Malthusian model’s ‘subsistence level’”? Would he point to it as strong evidence against the Malthusian economy hypothesis? Quite possibly. I would even say: probably. And yet there it is. There is nothing non-Malthusian going on here. There are no patterns. There are only chance shocks here.

We find patterns even where there are no patterns—where there is only the random buffeting of the society by plague and good harvest, with each year’s shocks being independent and unconnected with what was going on before or after in the sense of shocks to the system.

Now, actually, I think there is much more going on with the Classical and Hellenistic Greek efflorescences, and with the Roman efflorescence, than just the random chances of plagues and good harvests.

But that more is happening than can be captured in my very simple model is not, I think, dispositive. A society can see considerable advances in average living standards and considerable increases in population without thereby ceasing to be Malthusian.

A society that acquires a substantial taste for luxuries—for expenditures on things that do not directly contribute to making women more fertile and children more likely to survive—will raise the average standard of living even in a Malthusian economy. So will customs, like late female first marriage or female infanticide, that will have the effect of diminishing reproduction. And the coming of a large commercial trade zone or an imperial peace—something that greatly increases the rewards of investing in tools and infrastructure and other forms of social, public, and private capital—will raise the average standard of living in the short run, and raise population in the long run, but note that it can take up to half a millennium for the long run to arrive.

So I regard Rafael’s figure as a striking illustration of how a Malthusian economy does not have to be completely stagnant. We start with four boring equations. We add year by year (and, in more sophisticated models, multi-year) shocks—plagues, good harvests, the coming of an imperial peace. We iterate in Python. We do not get a flat line. We get exactly what Rafael’s eye is drawn to in the data: centuries‑long upswings in income and population, followed by collapses and plateaus in which nothing much seems to happen for a very long time.

In such a world, you can and do have:

• Large, sustained rises in average living standards.

• Big expansions in urbanization and specialization.

• Cultural “miracles” like Classical Greece that ride on top of a real economic wave.

And yet the basic logic is still Malthusian: the system never breaks free of the feedback by which higher incomes eventually call forth more people and more resource stress.

Tastes for luxuries that don’t raise fertility, customs like late marriage or female infanticide, or a large trade zone and imperial peace that make capital investment more rewarding—all of these can raise average incomes substantially inside a Malthusian regime. They can produce exactly the sort of “supercycles” Rafael documents. They do not, by themselves, produce a world in which sustained, compounding gains in living standards for the broad population become the normal condition rather than an episodic exception.

Thus Rafael’s figure does not shake my confidence in the proposition that before 1870 the world economy was Malthusian.

It does not shake my confidence in that at all.

Refer a friend

• Guthmann, Rafael R. 2023. “The Great Waves in Economic History.” Rafael’s Commentary. February 20. <https://rafaelrguthmann.substack.com/p/the-great-waves-in-economic-history>.

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• 2022-01-17 Tu: Day 1: 1. Introduction: Economic Growth in Historical Perspective: 1.1. Five Questions; course capture video: <https://bcourses.berkeley.edu/courses/1522040/external_tools/78987>

• 2022-01-19 Th: Numerical Guesses at þe Quantitative Picture of Long-Run Economic Growth; course capture video: <https://bcourses.berkeley.edu/courses/1522040/external_tools/78985>

Required Readings:

• Clark: A Farewell to Alms ch. 1

• Allen: Global Economic History ch. 1

• DeLong: Slouching Towards Utopia Intro.

• Greg Clark (2005): The Condition of the Working Class in England, 1209-2004…

Optional Readings:

• Doug Jones (2022): Toba, or the Sperm Whale Effect?…

• Monika Karmin & al. (2015): A Recent Bottleneck of Y-Chromosome Diversity Coincides with a Global Change in Culture…

• Jared Diamond (1987): The Worst Mistake in the History of the Human Race…

• Doug Jones (2022): The Patriarchal Age…

• Andy Matuschak (2022): Why Books Don't Work...
  

• Syllabus: <https://bcourses.berkeley.edu/courses/1522040/files?preview=85130561>

• Course Logistics Discussion:<https://bcourses.berkeley.edu/courses/1522040/discussion_topics/6496784>

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Main DeLong segment course page: <https://braddelong.substack.com/p/graduate-economic-history-spring>:

MALTHUSIAN ECONOMICS (January 28)

• Steckel, Richard. 2008. “Biological Measures of the Standard of Living” Journal of Economic Perspectives 22 (Winter): 129-152. <http://www.aeaweb.org/articles.php?doi=10.1257/jep.22.1.129>.

• Clark, Gregory. 2005. “The Condition of the Working Class in England, 1209–2004.” Journal of Political Economy 112 (December): 1307-1340. <https://www-jstor-org.libproxy.berkeley.edu/stable/10.1086/498123>.

• Diamond, Jared. 1999. “The Worst Mistake in the History of the Human Race.” Discover Magazine (May). <https://web.cs.ucdavis.edu/~rogaway/classes/188/materials/Diamond-TheWorstMistakeInTheHistoryOfTheHumanRace.pdf>.

• Morris, Ian. 2010. Social Development. Palo Alto: Stanford. Pp. 39-74, 83-106, 109-28, 148-55, 164-71. Skim. <https://pzacad.pitzer.edu/~lyamane/ianmorris.pdf>

The Longest-Run Take at Human History

Start with some extremely rough numbers, guesstimates, and guesses:

Notes:

• The 10,000 people 75000 years ago: the gene people say that the overwhelming bulk of the genetic ancestry of the overwhelming bulk of people alive today comes from 100 bands of about 100 East African Plains Apes wandering around the Horn of Africa 75,000 years ago.

  • Subnote: Perhaps 500,000 people back then have or had cousins who have living descendants today—South African Plains Apes (some 5,000,000 or so of today’s Khoesan and allied Griqua and others carry very substantial ancestry from them), European Neandertals, Asian Denisovans, and other “ghost populations” for which we have no identified exemplars. But the contribution share of the other 490,000 to the genes carried by nearly all of us are small.

• By 50,000 years ago this “we” had spread out over most of Africa.

• By 10000 years ago “we” had spread out over the entire world, nearly.

  • Subnote: the “0” for the population growth rate from -48000 to -8000 is actually 0.004%/year.

• Then comes the transition to agriculture—a sharp (for the time, in perspective) rise in population, and a sharp fall in at least the biomedical fitness-relevant standard of living.

  • Subnote: Population growth ten times as fast in the 3000 years after -8000 as in the 40,000 years before

• There follows the long agrarian age, up to 1500 or so, during which technological progress remains very low by our standards, and what technological progress there was shows up in larger populations rather than higher living standards.

  • Subnote: Technological progress during the long agrarian age is not guaranteed. It looks as though there was actual technological regression in terms of the loss of some theoretical knowledge and the loss of a lot of substantial practical expertise between the year 200 and 800.

• The commercial-imperial age kicks off in 1600 or so, with more rapid—though not very rapid: 25%/century or so—technological progress largely via the Columbian Exchange of biotechnology resources and expanded market-enabled divisions of labor, and with population falling a little bit behind in its race with technology.

• And then starting in 1775 or so comes the coal-steam-iron-machinery-textiles complex: rates of technology growth of 0.5%/year or so, double the 0.25% of the commercial-imperial age, six times the 0.08% of the late agrarian age, and twenty times the 0.025% of the long slog from the invention of bronze and writing up to the fall of the Roman and Han empires.

• But it is in 1875 that we see the true watershed boundary crossed: thereafter productivity and technology growth has averaged nearly 2% per year: a doubling time, at least for the measured guesstimates we present, of only a little more than a generation. And each doubling of human technological capacity brings with it a qualitatively new economic structure, a different “mode of production”, as somebodies or other once said.

  • The somebodies—Charlie from Trier and Freddy from Barmen, Karl Marx and Friedrich Engels—talked of ancient (year ca. -600, technology index T=0.16), mediæval (ca. 1300, T=0.30, modern bourgeois (1800, T=0.6), and socialist (which they expected by 1900 or so) modes of production, with each quantitative doubling of human technological capability giving us a qualitatively different economy, a different “mode of production”.

  • Well, we did not get an automated luxury full communist economy: we got, perhaps, with four doublings after steampower: applied-science, mass-production, globalized value-chain, and now attention info-bio tech economies.

But today we go back before 1500…

Reading About the Agrarian-Age Malthusian World, -3000 to 1500 (& Later)

From that starting point we descend into the very long stagnation of the agrarian age:

• Steckel’s biological measures and Clark’s centuries-long series on English living standards show us a world in which, for millennia, technological advances and productivity gains mostly bought more people, not better lives.

• Diamond’s deliberately provocative “Worst Mistake in the History of the Human Race” pushes us to ask whether the shift to agriculture and settled states was, from the standpoint of human flourishing, an unambiguous step forward at all. It unsettles any easy Whig story in which history is a simple march toward betterment.

• And Morris tries to put some quantitative guesstimates on the forward march of “technology” during the long Malthusian agrarian-age.

Here are questions to think about as you read:

1. When Solow insists that “economic theory learns nothing from economic history” in current practice, do Clark, Steckel, or Diamond provide things that can be taken as specific examples that either confirm or refute his claim?

2. In the periods Clark labels as “Malthusian stagnation,” do Steckel’s biological indicators support or undermine the idea of trendless living standards before 1800?

3. Diamond calls agriculture “the worst mistake in the history of the human race.” Using Steckel’s long‑run health evidence and Clark’s wage series, how far can that claim be sustained for: (a) early farmers vs hunter‑gatherers, and (b) post‑1500 agrarian/early industrial societies?

4. Clark’s wage and skill‑premium series suggest that the break from Malthusian stagnation begins ca. 1640, well before the classic Industrial Revolution. How does that timing interact with Diamond’s narrative of a late, fossil‑fuel‑driven discontinuity and with Morris’s much longer social‑development curve?

5. Solow wants “a collection of models contingent on society’s circumstances” rather than one monolithic model. If you had to match one simple model to each of Diamond, Steckel, Clark, and Morris, what would those models look like, and where would each obviously fail?

6. Morris operationalizes “social development” via four traits (energy capture, organization/city size, war‑making capacity, information technology). In what concrete ways do his index values for 500 BCE, 1000 CE, and 1800 CE line up—or not—with Clark’s wages and Steckel’s biological measures?

7. All of these authors implicitly or explicitly confront the Malthusian mechanism. Where do you see genuine empirical tests of the Malthusian model in this reading set, and where is “Malthusian” functioning more as a rhetorical label than as a falsifiable hypothesis?

8. Th Dickson Mounds example shows worsening health with the shift to maize farming. How can we reconcile that micro‑regional deterioration with Morris’s claim that energy capture and social development were rising over the same broad timeframe?

9. Clark and Morris both make heavy use of long‑run quantitative series with substantial imputation and interpolation. Where, in each, do you think the big inferential leaps are, and what’s at stake—substantively—if those particular leaps are wrong by, say, 20–30 percent?

10. How should we interpret episodes where measures diverge—for example, rising GDP and falling life expectancy in Russia, or rising per capita energy capture with stagnant heights in 18th‑century Europe? Which indicator, if any, do you treat as the “tie‑breaker” for welfare, and why?

11. Steckel’s work on slaves and Plains Indians highlights extreme biological inequality within societies that may have fairly high average development. How does that complicate Morris’s use of a single regional social‑development score, and what would a distribution‑sensitive version of his index look like?

12. Clark reads his wage and skill‑premium series as challenging “human‑capital” stories of the Industrial Revolution. Using Solow’s methodological criteria, what kind of historical evidence would you need to decide between Clark’s interpretation and a human‑capital‑driven account?

13. Across these texts, whose implicit political economy of growth do you find most persuasive—Diamond’s ecological and demographic constraints, Clark’s cultural and institutional deep determinants, Morris’s quasi‑inevitable energy‑technology trajectory, or Solow’s modest model‑building pragmatism—and why?

14. Finally, if you had to explain to a non‑economist why “Is the rise of agriculture and modern growth a good thing?” is a nontrivial question, which specific pieces of evidence from these readings would you deploy, and how would you weigh them against each other?

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I am teaching half of UC Berkeley Econ 210a this semester. I find that there are 20 topics I really, really want to cover within the potential subject areas of the course that have been marked out for me. I have seven two-hour classes. So I can do it if I manage to do three topics per class. The question is: should I try to do all 20, or should I slim down the list of topics?

My portion of the course is a demand that students take the long view of the economy: not the next quarter’s GDP release, not even the next election cycle, but more than five-thousand years of humans trying—often fumbling—to wrest a tolerable life from nature, technology, and each other. The readings are not a canon, but a curated set of arguments and measurements that let us ask, with some seriousness: why did the world stay so poor for so long, why did that change, and why has that change been so uneven and so fraught?

Here’s how I might introduce my set of readings and topics, if I decide I should do it in a lump:

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We begin by putting the economist’s favorite toy—supply and demand—into its proper historical box. Solow’s short, sharp essay on “Economic History & Economics” reminds us that our models are, at best, compressed stories about worlds that once existed and may never exist again.

Thus economic history is not a branch of applied theory; it is instead our “treasure for all time”, κτῆμα ἐς ἀεί.

From there we descend into the very long stagnation of the agrarian age:

Steckel’s biological measures and Clark’s centuries-long series on English living standards show us a world in which, for millennia, technological advances and productivity gains mostly bought more people, not better lives. Diamond’s deliberately provocative “Worst Mistake in the History of the Human Race” and Morris’s social development indices push us to ask whether the shift to agriculture and settled states was, from the standpoint of human flourishing, an unambiguous step forward at all. Together, these pieces are meant to unsettle any easy Whig story in which history is a simple march toward betterment.

We then take up the question of why this Malthusian trap held so long—and why it eventually loosened:

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“West” or “Dover Circle”? A student asked me why, in my lectures earlier this week, I kept on referring to the “North Atlantic” rather than the “Western” economies. Why did I use the first to refer to those that have become vastly richer than the world average over the past 200 years? Even as of the early 1800s, “North Atlantic” made more sense than did “West”. By 1960, “North Atlantic” itself became less apposite. Would “Global North” be a good replacement? And in the 2000s things have changed still further: I have swung around to think that a more useful and informative label would be “Dover Circle-Plus”: those economies and societies that are, that have received very large settler inflows from, or that have strained every nerve to emulate the particular economic structures and patterns and practices that developed in the years after 1500 in a 300-mile radius circle centered on the port of Dover at the southeast corner of England…

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When asked why I kept on referring to the “North Atlantic” rather than the “Western” economies, I responded: I was not aware that I had settled on “North Atlantic”— I had thought that I found myself bouncing around when I am not focusing on what descriptor to use.

I do, however, try to avoid “West”. Part it is that “West” is out-of-date. “West” comes from a time and a place now long ago: a time and a place when it was assumed that pretty much everything of interest was in Eurasia, and that the most important thing was the contrast between the western edge of Eurasia and everything else that was east—that was the “Orient”, from the Latin word for the direction from which the sun rose.

But even then, “West” as in “Western edge of Eurasia” did not really cut it.

The phrase does not even begin to take off until after 1840 or so. And by then, there was no sense in which Portugal, Spain, Italy, and southern France were no longer securely among the relatively rich. The United States, and Canada too, were very rich indeed, and the United States’s population was growing rapidly. Even as of the early 1800s, “North Atlantic” made more sense than did “West”.

And today? “Global North”? “Global North” is not quite right either: New Zealand, Australia, Singapore, Hong Kong, and soon—we hope—Chile?

Here is a hill to defend: A more useful and informative label would be “Dover Circle-Plus”: those economies and societies that are, that have received very large settler inflows from, or that have strained every nerve to emulate the particular economic structures and patterns and practices that developed in the years after 1500 in a 300-mile or so radius circle centered on the port of Dover at the southeast corner of England.

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But there is another reason to avoid much talk of the “West” and the “East”.

Above is a map showing what Stanford’s Ian Morris <https://archive.org/details/whywestrulesforn00morr_1/mode/1up> thinks are the economic and civilizational "core areas" of “Western” and “Eastern” civilization since the year -9600.

For nearly all the time since the invention of agriculture, the Eastern core is the Yellow River and Yangtze Valleys, according to Morris. He sees it as, by 1900, moving a little further east: gaining Manchuria and Japan, while losing Sichuan and the upper Yellow River Valley. By 2000 the core has further gained Taiwan island and the Pearl River Delta, but lost has non-coastal China (including Manchuria).

There is continuity here: political continuity, cultural continuity, unbroken chains of influence, even substantial continuity of genetic descent.

This is in great contrast to the “Western core”. Morris claims that from -9600 to 1400 it extended from Basra on the Persian Gulf to Tbilisi in the Caucasus to Ithaka off the northwest corner of Greece to Thebes in Egypt. Then, from -250 to 250 it…moved? …had added on? … comprised Italy, Sicily, and Sardinia. Yet after 250 it reverted back to the original Basra-Tbilisi-Ithaka-Thebes quadrangle.

In 1400, however, that then pops like a bubble. For the period 1400 to 1800, according to Morris, the “Western core” picked up stakes and moved to Western Europe. And by 1900 the Western “core area” has extended a pseudopod across the Atlantic to the American northeast and contracted in Eurasia, where it is: Ireland and Britain, the Low Countries, northern and western France, and northwest Germany.

Come 2000, Morris’s “Western core” is the continental United States plus the more-settled parts of Canada.

Truly a moveable feast.

I feel a great lack of continuity here. What has the civilization of Uruk in -3000 have to do with the civilization of Silicon Valley today? In what sense are they both “the West”, save that there are some people at Stanford who read The Story of the Man Who Saw the Deep, the Epic of Gilgamesh <https://archive.org/details/gilgameshnewrend00ferr>?

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Certainly there was a time in the 1800s when people wanted to tell the Story of Civilization as something like an Olympic-torch relay race:

• The flint is struck and the torch lit in the Uruk of Gilgamesh and in Ur of the Chaldees.

• It is then passed down to the Pharaohs of Egypt and to the Babylon of Hammurabi.

• It winds up in Jerusalem, in the hands of Kings Dovid Melech Yisrawel and his son Salomo.

• The torch is then passed—perhaps through Kurush and the other Loyal-Spirit Great Kings of the Persian Empire—to Athens!

• And then on to Rome!

• And conquering Rome is then conquered by Jerusalem and Galilee, as the torch is carried forward!

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And so on. In the aftermath of the fall of Rome, barbarian invasions and western Christendom then meld themselves into European feudal civilization, which picks up the torch. The torch is handed off to the Renaissance. The Reformation, The Enlightenment rise of representative government and common-law systems: governments that exist to secure people’s natural rights and that derive their just powers from the consent of the governed. Then the British Industrial Revolution. And on to modern democratic capitalism, or capitalist democracy.

But this is like picking out pictures of things you like in a photograph and claiming that they are “yours”.

Moreover, the phrase rocketed up in prominence just in those early-1900s years in which anything that might be called “civilization” in Europe was catastrophically falling apart. Europe in those years was indeed becoming, as Mark Mazower calls it, the “Dark Continent”. And at its apogee at the start of the 1950s—I think that my long-ago teacher the brilliant Judith Shklar put it very well in her assessment of why it was that in the post-WWII United States, “Western Civilization” had a moment:

Judith Shklar: A Life of Learning <https://www3.nd.edu/~pweithma/Shklar/Haskins%20Lecture.pdf>: The real ideal of many teachers at Harvard in the 1950s was the gentleman C-er. He would, we were told, govern us and feed us, and we ought to cherish him, rather than the studious youth who would never amount to anything socially significant. There was, of course, a great deal of self-hatred in all this…. Harvard in the 1950s was full of people who were ashamed of their parents’ social standing, as well as of their own condition… closet Jews and closet gays and provincials… obsessed with their inferiority… [to] some mythical Harvard aristocracy….

[There] was also a bizarre refusal to think through the real meaning of the Second World War…. I found Harvard conversations unreal. I knew what had happened in Europe between 1940 and 1945, and I assumed that most people at Harvard also were aware of the physical, political, and moral calamity that had occurred, but it was never to be discussed…. If these matters came up in class, it was only as part of the study of totalitarianism, and then it was pretty sanitized and integrated into the Cold War context….

A look at the famous “Redbook,” which was the plan for the general education program at Harvard, is very revealing:

• Its authors were determined to immunize the young against fascism and its temptations so that “it” would never happen again.

• There was to be a reinforcement of The Western Tradition, and it was to be presented in such a way as to show up fascism as an aberration, never to be repeated.

• I would guess that in the pre-war Depression years some of the young men who devised this pedagogic ideology may have been tempted by attitudes that eventually coalesced into fascism, and now recoiled at what they knew it had wrought. They wanted a different past, a “good” West, a “real” West, not the actual one that had marched into the First World War and onward. They wanted a past fit for a better denouement.

• I found most of this unconvincing…

“Western Civilization”, the Harvard Redbook, Humanities 1 and Social Sciences 2, the through-line of cultural, political, historical, and logical development from Gilgamesh to FDR—an ideological project principally aimed, whether consciously or unconsciously, at constructing a fake but usable past for a post-World War II New Deal Order of social democracy in a free, capitalist, and above all anti-Leninist anti-Stalinist anti-Hitlerian society.

In fact, there was no single torch. There were no hand-offs. And if there had been a single torch, it would come with all kinds of things that we do not like at all.

However, do not get me wrong: There is a great deal of value in teaching:

Matthew Yglesias: Thankful mailbag <https://www.slowboring.com/p/thankful-mailbag>: ‘There’s just a big divergence between what most people see as potentially valuable in the liberal arts and what most humanities faculty think is valuable and important…. Educated professionals… it’s good for them to be inculcated with… values… the history of proto-constitutionalism in England and the classical republics… religious freedom… [which] develop[ed] out of the specific circumstances of the Protestant Reformation….

Historical events… Greece to Rome to “the Dark Ages” and the Renaissance and Reformation and the founding of America… philosophical lineage from Plato and Aristotle to Hobbes and Locke and Mill and Rawls… literary and artistic cultures… informed by these… and that also informed them…. That kind of traditional broad liberal education would of course involve some exposure to radical critics of Anglo-American liberal capitalism….

[But] current trends on campus are toward an atmosphere where the radical criticism predominates…. The critical theories themselves would tell you, there’s no way Anglo-American liberal capitalist society is going to sustain generous financial support for institutions whose self-ascribed mission is to undermine faith in the main underpinnings of society…

But I do substantially disagree with Matt here. For one thing, I do not think Matthew has Ground Truth as to what is going on in American universities. I have said this before, and I do believe I have receipts:

Thus it does annoy me when people speak of cultural-civilizational patterns rooted in the early-modern imperial-commercial age Dover Circle and then the Dover-Circle-Plus as “the West” and talk of and unreflective believe in some “it” that is “Western Civilization”, which the people living in the Thames Valley of the island of Great Britain in the 1800s possessed as rightful heirs.

Earlier peoples ascribed the rôles of torch-bearers in this relay would have been very surprised to learn that the inhabitants of the Thames Valley were in any way them or their heirs. In the -50s, Roman Senator and Proconsul Marcus Tullius Cicero snidely snarked argued that the Britons had no silver and were too stupid and uneducated to make good slaves—hence they were not worth imperializing. Athens had very little tolerance for Jerusalem. And Jerusalem had even less tolerance for Athens.

If you want continuity starting at the Western edge of Eurasia of the same kind as you see in the “Eastern Core”—political, cultural, linked chains of influence, some continuity of genetic descent—you certainly cannot start before 800, and almost surely not before 1500. And you have to start in the Dover Circle.

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But do not carry this tradition-demolition project too far.

In 800 the Dover Circle a backwater, technologically behind—and hundreds of years technologically behind, much of the time—the world average. But around the year 800, in the Dover Circle, a local barbarian, a Frankish king, Charles, son of the usurper Pippin the Short, extended his military reach from his sometime capital city of Aachen or Aix-la-Chapelle in the Dover Circle to the Elbe River in Germany, the Tiber in Italy, the Ebro in Spain, and to the borders of Hungary.  Pope Leo II then crowned “Charlemagne” Emperor, the first emperor dwelling west of Constantinople for three and a quarter centuries. And after that interesting things did begin to happen between Stockholm and Sevilla, ultimately concentrating in the Dover Circle.

But they did not happen rapidly. Even as of 1500 the Dover Circle held no place special in world civilization. Yes, the Dover Circle by 1500 was no longer a backwater. Yes, it ad from 800 to 1500 had a rapid creative run of growth and technological advance for a pre-Imperial-Commercial civilization in the Middle Ages. But much of that was simply a Viking-raided backwater’s catching up to world civilization. In 1500 it certainly had no “edge” in governance or culture, and in technology whatever edge it had was narrow—ships and gunpowder and cannon, and perhaps precision machinery like, clocks.

Maybe it has a small technological edge on average in 1500. Perhaps 1.1 over the other high civilizations of Eurasia? It did forge ahead after 1500 in technology faster than the world average, but not that much faster.

It certainly developed a politically and militarily important technological edge in ocean navigation and gunpowder weaponry. Caravels begin to dominate the world’s oceans from 1500 on—although the first great exploratory-imperialist wave comes from Portugal and Greater Castile. But do not overstate that edge. The Ottoman Empire was still besieging Vienna in 1688. It was only in ships that it dominated up until 1800. And its ships did not dominate always: the Omani from Muscat threw the Portuguese out of East Africa, and then ruled the coasts of the Indian Ocean from Zanzibar.

As of 1500 the Dover Circle had potential. And I see that potential as consisting of five important elements:

1. The Joseph Henrich point: the Mediaæval church’s war on cousin marriage and on relationship affinities—an attempt to make Jesus, and the Church, the place you went to for help—had created a diffuse sociability in which you could, within reason, trust almost everyone in society who you dealt with, rather than just your close kin. Diffuse sociability rather than clan-based was to be very important after 1500.

2. Harold J. Berman’s point, in his 1983 Law and Revolution: The Formation of the Western Legal Tradition, that the struggle over whether emperors bossed popes or popes bossed emperors had created for the first time ever Dover Circle civilizations were places in which the default assumption was that the law was not a mere tool of the most powerful, but that even the most powerful were bound by the law.

3. Durable proto-nation states rather than more or less evanescent continent-spanning empires amped up the pressures of military competition for governmental effectiveness.

4. The primarily rural-military basis of the Dover Circle aristocracies, which meant that cities were an anomaly in the major military-political power network, and so became self-governing, making merchants not the clear subordinates but the near-equals of warriors and bureaucrats among the society-of-domination élites.

5. The Patricia Crone point that Dover Circle societies were imperfect and rather unsuccessful society of domination. In the other high civilizations of Eurasia-Africa (and MesoAmerica), it was very clear how the society-of-domination élite ran its force-and-fraud game, it was very clear that it was a sweet deal, and it was very clear to all that big changes would turn many big power brokers into big losers; in the Dover Circle, by contrast, kings, aristocrats, merchants, priests, and more all had claims to various levers of society of domination power.

6. All these created a remarkable plasticity in social organization—a situation in which many things could be tried, some of which would turn out to be productive and effective. Society was not bound by kinship, not under the thumb of a ruler unbound by procedure and law, subject to fierce incentives to improve productivity and efficiency to mobilize for war, creating a place in which at least some societal power could be exercised by those—merchants—more interested in efficiency in productivity than in exploitation, and in which the possibility of change and revolution in favor of some élite faction was regarded by large segments of the élite with something other than horror and dismay.

Only place, and only time, all of these came together was in the post-1500 Dover Circle.

Even in the late 1700s it was touch-and-go. The British started to conquer India, but they could not maintain their hold on North America. What had been a perhaps 1.1-1 edge in technological prowess in 1500 was only perhaps 1.4-1 in 1770.

Even in the 1800s the French failed in their conquest of Mexico and had a devil of a time conquering and colonizing Algeria.

Not until 1880 and the machine gun did it become the case that Dover Circle-Plus armies could march anywhere and conquer anything (save, for the Italians, Ethiopia; and save, for the British and the Russians, Afghanistan). And in the end the durable expansion of the Dovber Circle to the Dover Circle-Plus of today was as much a soft- as a hard-power process.

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References:

• Shklar, Judith Nysse. 1989. “A Life of Learning.” Charles Homer Haskins Lecture, ACLS Occasional Paper No. 9. Washington, DC: American Council of Learned Societies. <https://www3.nd.edu/~kellogg/_files/pdf/old-documents/ACLS_Judith_Shklar_A_Life_of_Learning_1989.pdf>

• Yglesias, Matthew. 2023. “Thankful Mailbag”. Slow Boring. November 24. <https://www.slowboring.com/p/thankful-mailbag>.

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Slides:

2026 01 20 Econ 196

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READINGS: Required:

• <https://braddelong.substack.com/p/draft-a-small-intensive-data-sciencey> DeLong: “A Small, Intensive, Data-Sciencey Seminar”

• <https://braddelong.substack.com/p/am-i-biting-off-more-than-i-can-chew> DeLong: “Am I Biting Off More than I Can Chew Here?”

• <https://braddelong.substack.com/p/all-that-is-solid-melts-into-air> DeLong: “’All That Is Solid Melts into Air’: Since 1870, Roughly One-Fifth of the Economy Is Transformed Every Thirty Years”

• <https://forklightning.substack.com/p/using-generative-ai-to-learn-is-like> Deming: “Using generative AI to learn is like Odysseus untying himself from the mast”

READING: strongly recommended:

• <https://bcourses.berkeley.edu/courses/1551896/files?preview=93579591> DeLong: Slouching Towards Utopia: The Economic History of the Twentieth Century

And POST-CLASS READING:

• Lee, Ronald. 2003. “The Demographic Transition: Three Centuries of Fundamental Change”. Journal of Economic Perspectives. 17:4 (Fall), pp. 167-90. <https://pubs.aeaweb.org/doi/pdfplus/10.1257/089533003772034943>.

Course Introduction and Structure

• Econ 196: Quantitative Long Run Global Economic History

• Schedule: Tuesdays 1-3pm Evans 560 (attendance required), Thursdays 1-3pm optional Zoom sessions, save for

  • your turn in the hot seat: 20-minute one-on-one meetings with professor via Zoom

  • 5-6 meetings per Thursday, rotating through class every 5 weeks

Instructor Background

• Brad Delong, 32 years at Berkeley

• Left U.S. Treasury Department in 1995 (worked under Bob Rubin)

  • Couldn’t handle Goldman Sachs-style always-on-call culture for 1/10 Goldman Sachs pay

  • Chose to remain married by leaving the Treasury (That’s a joke. Mostly.)

• Recruited by Barry Eichengreen and Christina Romer and company to jump to Berkeley.

Grading Philosophy

• Grade inflation context: Princeton avg GPA 3.8, Harvard 3.83

• Decision: Everyone gets A unless they don’t show up or completely zone out

• Rationale: Unfair to penalize students given peer institution standards

• Requirements: Show up Tuesdays, do pre-class assignments (code correctness not required), engage in Zooms, do readings, participate meaningfully

Assignments Structure

• Short weekly writing assignments due Sundays

• Background readings for following week (to be determined based on class progress)

• Possible data science components with small datasets

• Final paper decision depends on first month engagement level

Liberal Arts Philosophy

• Etymology: “artes liberales” = skills for free persons

• Medieval curriculum: Logic, grammar, rhetoric, arithmetic, geometry, harmony, astronomy/astrology

• Modern equivalent: Data science literacy as “fine chancery hand” of our era

• Goal: Train students as front-end interfaces to humanity’s collective knowledge

Technology and Learning Framework

• Python programming introduction

  • Population data structure creation

  • Emphasis on compressed, arcane syntax origins (Turing, WWII constraints)

  • Tolkien/Lord of Rings influence on “magical” programming culture

• Human population data visualization

  • 8.25 billion current population

  • Exponential growth from 10,000 (75,000 years ago) to present

  • Key inflection points: agriculture (-8000), civilization growth, modern explosion

Class Logistics

• bCourses site for all materials and communications

• Read course welcome emails carefully

• Attendance policy: Maximum 1-2 absences for serious reasons only

• Thursday Zoom format: Previous week’s discussion + instructor reality check

• Random selection for Thursday hot seat participation.

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2026 01 20 Econ 196 Week 1 Pop Income Final

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Meeting Title: Econ 196, Class 1
Date: January 20, 2026
Location: Evans 560, UC Berkeley

Professor J. Bradford DeLong: Welcome. We begin as we hope to go on.

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At the moment, I am up to sixteen who must be covered if you have a sense of where markets work and where they do not. Start with Adam Smith on market coördination, and go on from there

The notional course the book might be for (which I very much doubt I will ever teach) would be two quarters course. The first tranche would cover market success and then, running through thinkers chronologically, market failures of maldistribution, unemployment, innovation, externalities, and domination. The second tranche would cover more subtle market failures.

Here is a taste—the current version of the week 2 lecture notes, on Adam Smith.

What do people think? Would getting out the whip and the chair and

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J. Bradford DeLong: Lecture Notes: Economic Thought:

1. Introduction: Large-Scale Production Coördination, Distribution, & Utilization in the East-African Plains Ape via the Societal Instrumentality of Markets

2. Adam Smith & the Miracle of the Market: Powering the Productive Division of Labor

3. Karl Marx & the Rise of the Techno-Bourgeoisie: The Market’s Golden Rule Is “He Who Has the Gold Makes the Rules”

4. John Maynard Keynes & Aggregate Demand: Light-Handed Central Planning Needed to Power the Market Miracle

5. Joseph Schumpeter & Creative Destruction: Not Finding Equilibrium But Creating Disequilibrium

6. Karl Polanyi & Non-Property Rights: The Market Was Made For Man, Not Man for the Market

7. A.C. Pigou & Economic Spillovers: Externalities Rule Everything Around Me

8. William Beveridge & Social Insurance: One Neat Trick to Resolve Inequality

9. Eric Williams & Domination Societies: Using Resources to Purchase vs. Using Resources to Control

10. Intermission: The State of Economics as of World War II

11. Resumption: More Subtle “Market Failures”

12. Douglass North & Institutions for Prosperity: Making Property & Contract Rights Real

13. W. Arthur Lewis & How Underdevelopment Developed: The Global Market & Migration Bars

14. Paul Samuelson & Public Goods: Non-Rivalry to the Max

15. George Akerlof & Adverse Selection: Information About the Commodity as the Key

16. Charles Kindleberger & the Lender of Last Resort: How to Make Sure That the Liquid Trust That Is Money Remains Liquid & Trusted

17. Robert Shiller & Behavioral Finance: It Being Hard to Make Easy Money Does Not Mean Financial Prices Are Right

18. David Card & Employer Monopsony: Market Power Almost Everywhere You Look

19. Claudia Goldin & Feminist Economics: Holding Up More than Half the Sky

20. Herbert Simon & Cybernetic Systems: Price Alone Is Rarely a Large Enough Information Channel

21. Mancur Olson & Calculating Political Consent: Political-Institutional Foundations of Win-Win Prosperity

22. Danny Kahneman & Slow-Enough Thinking: We Need Help Choosing Our Utility Functions

23. Nicholas Stern & Global Warming: Bringing Ecology Back in in a Big Way

24. Paul Romer & Rivalry & Excludability: Toward the Attention Info-Bio Tech Economy

25. Conclusion: Between Market Economics & Management Cybernetics: Managing the Societal Division of Labor at Scale

J. Bradford DeLong: Lecture Notes: Adam Smith:

1. Smith’s Human Nature

Adam Smith starts with the observation that humans are largely but not exclusively self-interested creatures: we are, largely but not exclusively greedy. Yet we have a complex and sophisticated societal division of labor. And that division of labor is essential to our prosperity. Indeed, it is essential to our survival: drop one of us into the Sierra Nevada, even in summer—or even in our environment of evolutionary adaptation in the Horn of Africa—and we will quite likely die. Drop 100 of us, and we will quite likely survive, and even flourish.

How can animals that are by nature greedy nevertheless cooperate on a large scale? That is the deep moral-philosophical question that we can see both of Smith’s big books—his Theory of the Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations—as aimed at. As Robert Heilbroner puts it in his The Worldly Philosophers, Smith:

is interested in laying bare the mechanism by which society hangs together. How is it possible for a community in which everyone is busily following his self-interest not to fly apart from sheer centrifugal force? What is it which guides each individual’s private business so that it conforms to the needs of the group? With no central planning authority and no steadying influence of age old tradition, how does society manage to get those tasks done which are necessary for survival?...

Adam Smith says that our ability to create and maintain a complicated societal division of labor that is so productive rests on four facets of human nature:

1. language: in that we are an anthology intelligence—what one of us knows or learns, pretty quickly all of us within and many of us without earshot will quickly learn;

2. hierarchy: in that we tend to form and respect dominance hierarchies in which we can command and obey;

3. gift exchange: in that we bind ourselves together by forming gift-exchange relationships—what Adam Smith called our “natural propensity to truck and barter”: we firmly expect to be and are very happy when we trade favors with each other, and we are uneasy when we feel as though we are always giving or always receiving, for we want the exchange of gifts and favors to be reciprocal, and roughly balanced.

4. benevolence: in that our weak sense of fellow-feeling and empathy can be trained up to be quite strong and govern our decisions in gives us a powerful bias toward choosing win-win arrangements.

The Wealth of Nations, of course, is about (3). But that does not mean that (1), (2), and (4) are secondary in the mind of Adam Smith the moral philosopher. (1), (2), and (4) become secondary only when we read Adam Smith as he would not have and his peers would not have. (1), (2), and (4) become secondary only when we read Adam Smith as an economist.

But the Wealth of Nations is about (3). And there is enough in (3) to fill a huge book.

Back in our environment of evolutionary adaptation, we could form gift-exchange relationships only with a few: our close neighbors, our good friends, and our near kin. Trust, you see, is necessary for a long-term gift-exchange relationship, and short-term such relationships are rare because each has to have and be willing to give up something the other wants or needs right now. And since we are largely self-interested, trust is hard to generate and maintain without other binding social ties.

2. From Human Nature to Human Society

Hence the key importance of the human cultural invention of money in forming our large-scale human society: money means that any one of us can make a short-term one-shot exchange relationship with any other one of us, someone who we may well never see again. Money, you see, is manufactured trust, and it allows us to extend our societal division of labor to encompass, indirectly, nearly everybody else in the world.

For example, consider the 30-foot bronze statue of Athene Promakhos— Athena Fighting-in-Front—that the council and people of Athens had cast and installed on the Acropolis around -450. The Greek geographer Pausanias wrote that anyone approaching Athens by sea by day could see her gleaming helmet and the tip of her spear as soon as they had rounded Sounion Head at the southern tip of Attika.

70 tons of bronze supposedly went into the statue, which survived until 1204—63 tons of copper, 7 tons of tin. Copper was abundant.

But where in the -400s were the artisans of Athens to find 7 tons of tin?

The historian Herodotos states that he could find nobody in Athens who knew where the tin was coming from: all anyone could say was that the ships had picked up the tin, already mined, in Sicily, and that they thought it came from “tin islands” in the ocean on the other side of Europe. But he could find nobody who would claim to have actually seen these tin islands, or this ocean on the other side of Europe. So he doubted the stories.

The answer, of course, was that the tin was in Cornwall, at the southwestern tip of the island of Britain.

The societal division of labor, as governed by the market, was a mechanism that “knew” that 7 tons of tin needed to be mined in Cornwall and then shipped, probably via the English Channel-Seine-portage-Rhone-Mediterranean route, to Athens via Sicily. And so it happened. But, apparently, nobody anywhere in the value chain knew its entire extent. The market knew things that no human individual knew. And this was almost 2.5 millennia ago: the market knows much, much, much more now.

Language, weak dominance, gift exchange, and money have enabled us to progress from perhaps 10,000 of us 70,000 years ago living at a global average living standard of perhaps three 3.5 dollars a day to today’s worldgirdling societal division of labor now 7.5 billion strong, with a global average standard of living no about $35 a day. We are now, collectively, on average, at least 10 times as well-off and 750,000 times as numerous as we were 70,000 years ago back in the environment of evolutionary adaptation when we last passed through a Darwinian bottleneck.

3. The “System of Natural Liberty”

Adam Smith was a genius because he had a truly game-changing insight into how our societal division of labor should be organized.

As far as the production and distribution of our collective material wealth is concerned, you see, most of what we need and want is both excludible and rival. If something is “excludible”, that means we can assign it an owner—some one of us can be designated to control it, and to decide on its use, or decide to transfer “ownership” of it to something else. If something is excludible, we can push the decisions about how it is to be used out to the periphery of society, to the people on the ground who know what is going on, rather than have the decision made by some centralized bureaucracy clueless because of its inability to reliably judge information conveyed to it at third- or fourth-hand.

Having “ownership” thus makes sense, if information about what is going on is dispersed and hard to assemble: giving control to people on the spot is then a very good idea. If something is “rival”, that means that one person's use of it forecloses the opportunities of others: if I am using this iPhone, you cannot be using the same iPhone. If a good is rival, that one of us is using it diminishes the opportunities and possibilities available to others. That makes them poorer. Thus it makes sense to charge a price for somebody using a rival commodity. That makes them feel in their gut the effects of their decisions on the opportunities open to others. Charging prices is a way to align individuals’ incentives about whether it is worth it for them to make use of a commodity with the effects of their decision on the overall well-being of the society.

Hence, Adam Smith argued in his Inquiry into the Nature and Causes of the Wealth of Nations, the wealth of nations is most greatly enhanced by following the dictates of what he named the System of Natural Liberty —“liberty” because it leaves people free to do what they wanted with their labor and their possessions, “natural” because it conforms with human nature, "system" because it can be and is extended to the status of a general principle.

Let people decide what they want to do with their things and their labor, and they arrange themselves in a large highly-productive societal division of labor. Self-interest focuses people on creating value. Competition curbs any distracting focus of self-interest on accomplishing exploitation.

This “System of Natural Liberty” is, Smith argues, very good.

As Heilbroner summarizes:

Self-interest… drives men to action…. [But] a community activated only by self-interest would be a community of ruthless profiteers. This regulator is competition, the socially beneficial consequence of the conflicting selfinterests of all the members of society. For each man, out to do his best for himself with no thought of social cost, is faced with a flock of similarly motivated individuals who are in exactly the same boat…. A man who permits his self-interest to run away with him will find that competitors have slipped in… will find himself without buyers in the one case and without employees in the other. Thus very much as in the Theory of Moral Sentiments, the selfish motives of men are transmuted by interaction to yield the most unexpected of results: social harmony…. The… market is that it is its own guardian. If output or prices or certain kinds of remuneration stray away from their socially ordained levels, forces are set into motion to bring them back to the fold. It is a curious paradox which thus ensues: the market, which is the acme of individual economic freedom, is the strictest task master of all…

This leads to a fraught question: Is this a theological point?

Is the fact that acting “naturally” in the sense of giving market exchange free rein produces good results evidence that there is a benevolent Providence out there?

Is this a teleological point? Are, in some sense, money and giftexchange aimed at creating prosperity? How is it that processes that are not human—that lead to consequences not desired directly by any human —have a mind of their own, and lead to good ends?

It is indeed a marvel that, as Smith puts it, in his theory at least:

[While] every individual… endeavours… to direct that industry that its produce may be of the greatest value… labours to render the annual revenue of the society as great as he can…. He… neither intends to promote the public interest, nor knows how much he is promoting it…. He intends only his own security…. He intends only his own gain…. In this, as in many other cases, [he is] led by an invisible hand to promote an end which was no part of his intention…

It is a marvel. But what kind of a marvel is it?

Note that it is not that Smith is opposed to government. Government is necessary to protect property, and to enforce contracts: people—most people—will respect others’ property and keep their own contracts, most of the time. But for the non-most people and at the non-most times we need the police, hence we need government. We need public works. We need public 6 2019-11-21 4339 words education. We need national defense. Adam Smith is very clear on all of these. In fact, Book V of the Wealth of Nations on what the government should do and how it should do it is the largest of the five parts of the book.

But, Smith is certain, attempts of some centralized bureaucrat to undermine the System of Natural Liberty in its proper sphere—to direct who should do what when and where—were likely to produce not wealth and prosperity but poverty and misery.

4. Adam Smith & Poverty

Adam Smith loathes poverty.

Adam Smith is eager to create a society in which there is no poverty. Adam Smith spends a substantial amount of time investigating the course of poverty over time. For example, he takes time and care to write:

During the course of the last century, taking one year with another, grain was dearer in both parts of the united kingdom than during that of the present…. It is equally certain that labour was much cheaper. If the labouring poor, therefore, could bring up their families then, they must be much more at their ease now.

In the last century, the most usual day-wages of common labour through the greater part of Scotland were sixpence in summer, and fivepence in winter.… Through the greater part of the Low country, the most usual wages of common labour are now eight pence aday; tenpence, sometimes a shilling, about Edinburgh….

In England, the improvements of agriculture, manufactures, and commerce, began much earlier than in Scotland. The demand for labour, and consequently its price, must necessarily have increased with those improvements. In the last century, accordingly, as well as in the present, the wages of labour were higher in England than in Scotland. They have risen, too, considerably since that time, though, on account of the greater variety of wages paid there in different places, it is more difficult to ascertain how much…. Not only grain has become somewhat cheaper, but many other things from which the industrious poor derive an agreeable and wholesome variety of food have become a great deal cheaper.

Potatoes… cost half the price which they used to do thirty or forty years ago. The same thing may be said of turnips, carrots, cabbages; things which were formerly never raised but by the spade, but which are now commonly raised by the plough. All sort of garden stuff, too, has become cheaper….

The great improvements in the coarser manufactories of both linen and woollen cloth furnish the labourers with cheaper and better clothing; and those in the manufactories of the coarser metals, with cheaper and better instruments of trade, as well as with many agreeable and convenient pieces of household furniture…

Which he then cross-checks with elite gossip:

The common complaint that luxury extends itself even to the lowest ranks of the people, and that the labouring poor will not now be contented with the same food, clothing, and lodging which satisfied them in former times, may convince us that it is not the money price of labour only, but its real recompense, which has augmented…

Having established that poverty has diminished, he next launches a fullbore attack on all those who claim this is a bad thing:

Is this… to be regarded as an advantage or as an inconveniency?… Servants, labourers, and workmen… make up the far greater part…. What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable…

And then he makes a strong appeal to human solidarity, and to the reciprocal obligations humans undertake by entering into the gift-exchange relationships that knit society together:

It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged…

It is but equity, besides…” This is a very strong appeal to human solidarity. It is coming from someone often seen as and sometimes dismissed as an apostle of human self-interest.

5. Adam Smith & Inequality

5.1. Inequality Generated Outside the Market: Smith’s first way of minimizing the importance of inequality—or at least minimizing the responsibility of the market and of the economy for fighting inequality—is to argue that inequality springs from politics and sociology rather than from market economics. Inequality arises from the role that hierarchy and command-and-control play in the mixed-up processes that are human society. The society of England becomes more unequal because William the Bastard from Normandy and his thugs with spears—300 families, plus their retainers—kill King Harold Godwinson, and declare that everyone in England owes him and his retainers 1/3 of their crop. The society of England becomes more unequal because Queen Elizabeth I Tudor grants a monopoly over trade with America to Sir Walter Raleigh. Why? Because he had successfully flirted with her. These are not economic processes. These are not closely connected with the “system of natural liberty” that is the market economy.

Indeed, the system of natural liberty is only one way you can organize society. Societies can be organized as ones of feudal lords and peasants, as priests and worshippers, robbers bands and their victims. But these ways of organizing society are impoverishing and, Smith claims in his very naming of his system the “System of Natural Liberty”—unnatural. Dugald Stewart quotes from one of Smith’s lectures that, at least in the lecture hall at Glasgow in 1749, Smith was blunt:

Little else is required to carry a state to the highest degree of affluence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things…

I believe that the later Adam Smith would note that “tolerable administration of justice” covers a lot of ground: the later books of An Inquiry into the Nature and Causes of the Wealth of Nations are very long indeed: Book III on how the historical development of Europe has let it to deviate from the System of Natural Liberty is 43 pages, Book IV on errors being made in 1776 by the governments of Europe is 273 pages, and Book V on what governments should and should not do is 276 pages—a total of 592 pages on what governments should, should not, and have unfortunately done, with only a total of 346 pages laying out Smith’s analytical system and its conclusions, among them that:

All governments which thwart this natural course, which force things into another channel, or which endeavor to arrest the progress of society at a particular point, are unnatural, and, to support themselves, are obliged to be oppressive and tyrannical…

As Heilbroner puts it:

The great enemy to Adam Smith's system is not so much government per se as monopoly—in any form. “People… meet[ing] together… [and] the conversation ends in… some diversion to raise prices.”… If the working of the market is trusted… anything that interferes… lowers social welfare. If, as in Smith’s time, no master hatter anywhere in England could employ more than two apprentices or no master cutler in Sheffield more than one, the market system cannot possibly yield its full benefits…. If, as in Smith's time, great companies are given monopolies of foreign trade, the public cannot realize the full benefits of cheaper foreign produce. Hence, says Smith, all these impediments must go…

5.2. Wealth Inequality Prevents Worse Damage: Adam Smith’s second way of minimizing the importance of economic inequality is to claim that it is a relatively gentle alternative to other forms of inequality that will emerge if economic inequality is reduced. Smith argues in Book III of the Wealth of Nations that the rise in inequality in market income and consumption went along with reduced inequality in social status and hierarchy—and in reduced societal violence as well. Great landlords who cannot earn and spend their wealth in the city will focus on arming and maintaining retainers, and the result will be that they will “make war according to their own discretion, almost continually upon one another, and very frequently upon the king; and the open country still continued to be a scene of violence, rapine, and disorder”. But once there are luxuries to be purchased by wealth earned by selling produce to the growing cities, “it was impossible that the number of their retainers should not as gradually diminish, till they were at last dismissed altogether”, and so peace came to the countryside.

As John Maynard Keynes was to write a century and a half later: “It is far better for a man to tyrannize over his bank balance than over his fellow citizens…”

5.3. Smith Gets Snarky, Stoic, and Cynical: 5.3.1. Snarkism: Adam Smith’s next way of minimizing the importance of economic inequality is to snark. The aim of wealth is to make you happy. Smith thinks that what wealthy women wish they could buy is beauty, and what wealthy men wish they could buy is strength. But who are the beautiful and strong in England? Adam Smith tells us in an aside on nutrition on the good qualities of the potato:

The chairmen, porters, and coal-heavers in London, and those unfortunate women who live by prostitution, the strongest men and the most beautiful 11 2019-11-21 4339 words women perhaps in the British dominions, are said to be, the greater part of them, from the lowest rank of people in Ireland, who are generally fed with this root [the potato]…

The rich aren’t doing a terribly good job of using their wealth to promote human flourishing, are they? And there is the implication that the rich are none too happy.

We see Smith, and what he is doing here, I think.

5.3.2. Stoicism: But Adam Smith’s main way of minimizing the importance of economic inequality is to assume the philosophical pose of the stoic. You work hard. You sacrifice your peace and leisure in order to get rich. And what does that get you as you age? Adam Smith writes that to the aging, looking back at a life in which they have sacrificed their ease and their happiness in order to gain wealth:

Power and riches appear then to be, what they are, enormous and operose machines contrived to produce a few trifling conveniencies to the body, consisting of springs the most nice and delicate, which must be kept in order with the most anxious attention, and which in spite of all our care are ready every moment to burst into pieces, and to crush in their ruins their unfortunate possessor. They are immense fabrics, which it requires the labour of a life to raise, which threaten every moment to overwhelm the person that dwells in them, and which while they stand, though they may save him from some smaller inconveniencies, can protect him from none of the severer inclemencies of the season. They keep off the summer shower, not the winter storm, but leave him always as much, and sometimes more, exposed than before, to anxiety, to fear, and to sorrow; to diseases, to danger, and to death…

Who then benefits from all the industry and toil of the upwardly-mobile? Adam Smith argues that it was, somewhat paradoxically, the poor. The rich sacrifice their true happiness to set in motion enterprises. And the commodities produced by those enterprises are principally consumed by the poor:

The earth by these labours of mankind has been obliged to redouble her natural fertility, and to maintain a greater multitude of inhabitants…. The proud and unfeeling landlord…. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of… all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice…

5.3.3. Cynicism: Last, Adam Smith minimizes the importance of economic inequality by claiming that there is little or nothing to be done about it. Human nature is such that people will seek to create, and then to obey, those whom they will call their superiors. It is the view expressed by Calvera in the movie The Magnificent Seven. Chico asks Calvera:

And the people of the village? What about them?

Calvera responds:

I leave that to you. Can men of our profession worry about that? If God did not want them to be sheared, he would not have made them sheep!

As Adam Smith puts it in his Theory of Moral Sentiments:

A stranger to human nature, who saw the indifference of men about the misery of their inferiors, and the regret and indignation which they feel for the misfortunes and sufferings of those above them, would be apt to imagine, that pain must be more agonizing, and the convulsions of death 13 2019-11-21 4339 words more terrible to persons of higher rank, than they are to those of meaner stations. '

Upon this disposition… is founded the distinction of ranks, and the order of society. Our obsequiousness to our superiors more frequently arises from our admiration for the advantages of their situation, than from any private expectations of benefit from their goodwill…. We desire to serve them for their own sake, without any recompense but the vanity or the honour of obliging them…

To attempt to eliminate inequality is, for Smith in his cynical mode, like trying to bail out the sea: make society equal, and people will find somebody to look up to, and then figure out a way to give their money away to the rich.

So that is Adam Smith: worry about prosperity and wealth, yes; trust the (properly managed) “system of natural liberty”, yes; worry about poverty and want, yes; worry about inequality, not so much.

References:

• Akerlof, George A. 1970. “The Market for ‘Lemons’: Quality Uncertainty & the Market Mechanism.” Quarterly Journal of Economics 84 (3): 488–500. <https://archive.org/details/akerlof-1970-lemon>.

• Beveridge, William. 1942. Social Insurance & Allied Services (The Beveridge Report). London: His Majesty’s Stationery Office. <https://archive.org/details/beveridge_report>.

• Card, David, and Alan B. Krueger. 1995. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, NJ: Princeton University Press. <https://archive.org/details/mythmeasurementn0000card>.

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

• Goldin, Claudia. 1990. Understanding the Gender Gap: An Economic History of American Women. New York: Oxford University Press. <https://archive.org/details/understandinggen0000gold>.

• Heilbroner, Robert. 1999. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. 7th rev. ed. New York: Touchstone. <https://www.google.com/

  books/edition/The_Worldly_Philosophers/vIxtW9cw-DQC>

• Kahneman, Daniel. 2011. Thinking, Fast & Slow. New York: Farrar, Straus and Giroux. <https://archive.org/details/thinkingfastslow0000kahn>.

• Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. London: Macmillan. <https://archive.org/details/generaltheoryofe030620mbp>.

• Marx, Karl. 1867. Capital: A Critique of Political Economy, Vol. 1. Hamburg: Otto Meissner. <https://archive.org/details/capitalcritiqueo01marx>.

• Pigou, Arthur C. 1920. The Economics of Welfare. London: Macmillan. <https://archive.org/details/economicsofwelfa0000pigo>.

• Polanyi, Karl. 1944. The Great Transformation: The Political and Economic Origins of Our Time. New York: Farrar & Rinehart. <https://archive.org/details/greattransforma00pola>.

• Romer, Paul M. 1990. “Endogenous Technological Change.” Journal of Political Economy 98 (5, pt. 2): S71–S102. <https://archive.org/details/romer-1990>.

• Samuelson, Paul A. 1954. “The Pure Theory of Public Expenditure.” Review of Economics and Statistics 36 (4): 387–389. <https://archive.org/details/samuelson-1954>.

• Schumpeter, Joseph A. 1942. Capitalism, Socialism and Democracy. New York: Harper & Brothers. <https://archive.org/details/capitalismsocial0000schu>.

• Shiller, Robert J. 2000. Irrational Exuberance. Princeton, NJ: Princeton University Press. <https://archive.org/details/irrationalexuber0000shil>.

• Simon, Herbert A. 1947. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations. New York: Macmillan. <https://archive.org/details/administrativebe0064simo>.

• Smith, Adam. 1776. An Inquiry into the Nature & Causes of the Wealth of Nations. London: W. Strahan and T. Cadell. <https://delong.typepad.com/files/wealth-of-nations.pdf>

• Smith, Adam. 1759. The Theory of Moral Sentiments. London: A. Millar. <https://

  delong.typepad.com/files/moral.pdf>

• Stewart, Dugald. 1793. Account of the Life and Writings of Adam Smith LL.D. Edinburgh: William Creech.

  <https://delong.typepad.com/files/stewart.pdf>

• Williams, Eric. 1944. Capitalism & Slavery. Chapel Hill: University of North Carolina Press. <https://archive.org/details/capitalismslaver00will>.

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What if we see the idea of “owning” something is one of humanity’s strangest inventions? Before markets, before money, there was a peculiar leap: the belief that things could be “mine” even when I’m not looking. Explore how property and exchange, far from being “natural”, are peculiar to the East African Plains Ape, are societal-scale technologies that turned us into a market-making species, and how that leap—property and exchange—became the foundation of our economic world and of a great deal of our success as an action-taking anthology-intelligence.

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That we believe in property and exchange is absolutely key to the “market” institutional mode of organizing the practical-action coördination side of humanity as a successful anthology intelligence. And that is not all that property is key to, for spheres of ownership, action, and control that can be readjusted are very important parts of our conceptual map for a great deal of our additional collective modes and mechanisms of societal organization. And these ideas—not just “I will growl and bite you if you try to drag this zebra carcasse I am eating right now away from me”, but that this is mine and it stays mine even if I am not right here growling—is really weird.

Where and how does it originate?

And why did it make sense for the first of the homines erecti who added this to their shared conceptual maps?

Doug Jones puts forward a not-unreasonable guess:

Doug Jones: My Handaxe <https://logarithmichistory.wordpress.com/2021/06/19/my-handaxe-6/>: ‘1,043 – 986 thousand years ago….. Acheulean tools… in Africa, and… India too…. The Acheulean hand axe probably tell[s] us something not just about cognition… [and] tool making, but… social cognition. You wouldn’t make a hand axe, use it, and abandon it. Nor would you… if the biggest, baddest guy… was immediately going to grab it…. Probably some notion of artifacts-as-personal-possessions… a social relationship….

Linguists have noted something interesting about the language of possession…. Expressions… are often similar to expressions for… locations…. “The Crampden estate went to Reginald.”… [It] didn’t go anywhere in physical space, but it still traveled in the abstract social space of possession….

What may be going on here: people (and many other creatures) have some mental machinery for thinking about physical space. That machinery gets retooled/borrowed/exapted for thinking about more abstract relationships…. Barbara Tversky’s recent Mind in Motion: How Action Shapes Thought…. For a while most of the evidence of repurposing spatial cognition for more abstract relationships came from linguistics, but there’s now some corroboration from neurology…

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Adam Smith, in seeking to understand the foundations of economic life, looked for a principle that could serve as a secure starting point—something so basic and universal that the rest of his analysis could be constructed upon it.

He settled on what he called a “certain propensity in human nature,” namely, the propensity to “truck, barter, and exchange one thing for another.” This, for Smith, was not merely an incidental quirk of certain societies or a byproduct of particular historical circumstances, but a fundamental feature of the species. It is the drive to exchange, to seek out advantage through mutual agreement, that underpins the entire edifice of economic cooperation and, in his view, makes possible the complex web of specialization and interdependence that characterizes advanced civilization. Smith’s insight was to see that exchange is not simply a matter of swapping goods, but a social process that enables the division of labor and, through it, the astonishing productive powers of modern economies.

This “propensity to exchange,” Smith argued, is the root from which the division of labor grows. The division of labor—the process by which different people specialize in different tasks, each becoming more skilled and efficient at their chosen work—unleashes a cascade of benefits. It allows for the proliferation of skills, the invention of new tools and techniques, and the emergence of entire industries that would be unimaginable in a world where each person had to provide for all their own needs. But the division of labor does not arise in a vacuum; it is the necessary, though gradual, consequence of our willingness to engage in exchange. Only when people can reliably trade the fruits of their labor for the things they need from others does it make sense for anyone to specialize. Thus, the market, in Smith’s telling, is not an artificial construct imposed from above, but the organic outgrowth of a deep-seated human tendency.

What is especially striking in Smith’s account is his insistence that this propensity to exchange is rooted in human nature, and not found in the animal kingdom. Other animals may cooperate, they may even share resources within a group, but they do not—so far as we can tell—engage in the kind of deliberate, negotiated, reciprocal exchange that is the hallmark of human economic life:

Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal, by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that…

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The human capacity for exchange, for not just seeing the world in terms of “mine” and “yours” but for then negotiating the transfer of goods and services, is, for Smith, a defining characteristic of the species. It is this, above all, that distinguishes us from the rest of the animal world and makes possible the extraordinary complexity and wealth of human societies.

Yet, even as Smith’s formulation has become canonical, it is not entirely satisfying—at least not to us, looking back with the benefit of subsequent inquiry. To say that humans exchange because it is in their nature is to offer a description rather than an explanation; it risks devolving into a kind of evolutionary just-so story, as indeed all EvoPsycho stories are at best just one fine hair removed from.

Why did this propensity emerge? How did it become so central to our way of life? What cognitive, social, and historical developments made it possible for humans, and only humans, to build societies organized around property, exchange, and markets?

Smith’s insight remains profound, but it leaves open the deeper questions—questions that continue to animate research in anthropology, psychology, and the history of institutions. The challenge is to move beyond Smith’s starting point and to excavate the layers of contingency, invention, and adaptation that have shaped the idea of property and the practice of exchange into what they are today.

And even once one grants the propensity, there are still enormous leaps. Property is itself light-years away from the idea that, having acquired property, one might then give it away in some reciprocal gift-exchange mutual-obligation process to establish or reinforce societal bonds. Reciprocal gift-exchange is light-years away from one-shot arms-length exchange in some kind of market. And even exchange in a market at some kind of fixed fair “just price” is light-years away from a market economy, in which fluctuating prices are not regarded as prima facie evidences of evil exploitation but part of the luck of the game.

Plus all these leaps need to be backed-up, as they are not natural inevitabilities but contingent socially constructed arrangements, requiring constant upkeep by legal, political, and cultural institutions. Thirty years before Adam Smith wrote the Wealth of Nations and only one-hundred miles north of Adam Smith’s Kircaldy, after all, we have Diana Gabaldon’s Highlander, which is not a world of truck-and-barter in response to a natural propensity, but rather a world in which there are clan hierarchies to be respected, clan members and allies to be aided, clan enemies to be killed, and strangers to be robbed at pleasure.

However, once we have constructed this jenga tower on top of its foundations of reciprocity and ownership, one of very key pieces of humanity’s glory and power as an action-taking coördinated anthology-intelligence has fallen into place.

The true genius of the market system lies in its capacity to decentralize decision-making, to push choices and authority out to the periphery—out to the individuals and enterprises who are closest to the ground, who possess the granular, local knowledge that no distant central planner or bureaucratic committee could ever hope to match. In this way, the market harnesses and aggregates the dispersed intelligence of society, transforming millions of individual judgments, preferences, and bits of information into a coherent pattern of production and allocation.

The result is an astonishingly adaptive and responsive system, one that can, at its best, direct resources toward their most valued uses with a minimum of wasted effort. But, and this is crucial, this remarkable coördination is only truly effective for rival and excludible commodities—goods and services for which one person’s consumption precludes another’s, and for which access can be limited to those who pay. In these domains, the market’s invisible hand is real and powerful, allocating goods through the interplay of supply, demand, and price.

When markets are functioning well—when property rights are secure, when contracts are enforced, when information is sufficiently available—they become the central nervous system of a vast, intricate organism. They coordinate sprawling networks of production and exchange, linking together farmers, manufacturers, merchants, workers, and consumers in a web of mutual interdependence. It is the division of labor, enabled and deepened by the existence of wide and deep markets, that serves as the engine of productivity and prosperity. As Adam Smith observed, the specialization of tasks allows individuals to become more skilled and efficient, unleashing a flood of innovation and output that no autarkic household or command economy could hope to rival.

Yet—and this is a point too often ignored—the benefits of this productivity are not distributed evenly or automatically. Who gets what, and how much, is determined by the prevailing structure of bargaining power and the existing arrangements of property. The market does not guarantee justice, only efficiency; it delivers abundance, but it apportions that abundance according to the rules of the game, rules that are themselves the product of history, law, and politics. Thus, while the market is a marvel of coordination, it is never a substitute for vigilance about the distributional consequences it generates. into place.

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Of course, there are views of this held and debated by moral philosophers that are very different from the economist’s praise of the market economy as a societal-scale action-coördination mechanism that I have set out here.

The origins and meaning of property—why we think things can be “owned,” how property shapes society, and whether it is natural or constructed—have been central questions for moral philosophers for millennia.

Consider:

There is Aristoteles of Stagire: Property as natural and necessary, but ought to be used for the common good: Politics, Book II contains Aristoteles’s critique of Platon’s idea of total communal ownership, for:

• “Property ought to be common in a sense but private speaking absolutely. For the superintendence of properties being divided among the owners will not cause these mutual complaints, and will improve the more because each will apply himself to it as to private business of his own; while on the other hand virtue will be exercised to make ‘friends’ goods common goods,’ as the proverb goes, for the purpose of use…”

There is John Locke: Property as a fundamental natural right, rooted in labor and self-ownership: In the Second Treatise of Government: Locke argues that property arises from labor:

• “Though the earth, and all inferior creatures be common to all men, yet every man has a property in his own person…. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property…”

There is Jean-Jacques Rousseau: Property is a group societal hallucination, or perhaps invention, at the root of inequality and the functioning of human societies-of-domination: The Discourse on the Origin of Inequality:

• “The first man who, having enclosed a piece of ground, bethought himself of saying ‘This is mine,’ and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody…”

And there is Friedrich Engels: Property is a historical development, tied to class, patriarchy, and the state: a historical development tied to the rise of the unequal and oppressive class-based societies we know: The Origin of the Family, Private Property and the State:

• “The first division of labor is that between man and woman for child breeding. And today I might add: The position of the mother of the family under the original communistic household was, as we have seen, a very honorable one…. The overthrow of mother-right was the world-historic defeat of the female sex. The man took command in the home also; the woman was degraded and reduced to servitude; she became the slave of his lust and a mere instrument for the production of children. This degraded form of the family, which is based on the supremacy of the man, was linked with the enslavement of women and the emergence of private property...”

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References:

• Aristoteles of Stagire. 1998 [ca. -330]. Politics. Translated by C.D.C. Reeve. Indianapolis: Hackett Publishing Company. https://archive.org/details/aristotlepolitic00aris_0

• DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the Twentieth Century. New York: Basic Books. https://www.hachettebookgroup.com/titles/j-bradford-delong/slouching-towards-utopia/9780465019595/

• Engels, Friedrich. 1884. The Origin of the Family, Private Property and the State. Zurich: Hottingen. https://archive.org/details/originoffamilypr00enge

• Gabaldon, Diana. 1991. Outlander. New York: Delacorte Press. https://archive.org/details/outlander00gaba

• Henrich, Joseph. 2020. The WEIRDest People in the World: How the West Became Psychologically Peculiar & Particularly Prosperous. New York: Farrar, Straus and Giroux. https://us.macmillan.com/books/9780374173227/theweirdestpeopleintheworld

• Henrich, Joseph, Steven J. Heine, & Ara Norenzayan. 2010. “The Weirdest People in the World?” Behavioral and Brain Sciences 33(2-3): 61-83. https://henrich.fas.harvard.edu/publications/weirdest-people-world​

• Jones, Doug. 2021. “My Handaxe.” Logarithmic History (blog), June 19. https://logarithmichistory.wordpress.com/2021/06/19/my-handaxe-6/

• Locke, John. 1980 [1689]. Second Treatise of Government. Edited by C.B. Macpherson. Indianapolis: Hackett Publishing Company. https://archive.org/details/lockessecondtrea00lock

• North, Douglass C. 1990. Institutions, Institutional Change & Economic Performance. Cambridge: Cambridge University Press. https://archive.org/details/institutionsinst00nort

• Parkinson, Carolyn, & Thalia Wheatley. 2013. “Old Cortex, New Contexts: Re-purposing Spatial Perception for Social Cognition.” Frontiers in Human Neuroscience 7:645. https://www.frontiersin.org/articles/10.3389/fnhum.2013.00645/full

• Rousseau, Jean-Jacques. 1992 [1755]. Discourse on the Origin and Foundations of Inequality Among Men. Translated by Maurice Cranston. New York: Penguin Books. https://archive.org/details/discourseonorigi00rous

• Smith, Adam. 1976 [1776]. An Inquiry into the Nature and Causes of the Wealth of Nations. Chicago: University of Chicago Press. https://archive.org/details/wealthofnationsa00smituoft

• Tversky, Barbara. 2019. Mind in Motion: How Action Shapes Thought. New York: Basic Books. https://www.amazon.com/Mind-Motion-Action-Shapes-Thought/dp/046509306X/

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