Brad DeLong’s History of Economic Growth Catechism, Part I

I have not put enough work into this to call it a dialogue...

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Brad DeLong’s History of Economic Growth Catechism, Part I

Where do you start?

I start with a very crude global index of the value of the stock of human technology—useful ideas about manipulating nature and productively organizing humans—that have been discovered, developed, and then deployed-and-diffused throughout the world economy.

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How do you construct this index?

I calculate it as the average worldwide level of income per capita, times the square root of population.

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Why “square root”?

The square-root recognizes that there is resource scarcity—hence generating income for more people is burdensome, and so the technology level is not simply average output per capita—but also that each mouth comes with two eyes, two arms, and a brain, so that labor is productive—hence total world product is not the technology level either. “Square-root” is a balance.

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Would you die on the hill that it is square-root, rather than some other power between 0 (which gives average income per capita) or 1 (which gives total world product) multiplying population?

No.

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What do your guesses—I won’t call them numbers—then show, in terms of the annual average proportional growth rates of technology deployed-and-diffused, worldwide?

Roughly:

• 2.1%/yr., at least, after 1870; the Modern Economic Growth era

• 0.45%/yr. 1770 to 1870; the Industrial Revolution era

• 0.15%/yr. 1500 to 1770; the Imperial-Commercial era

• 0.05%/yr. 800 to 1500; the High Mediæval era

• 0.015%/yr. 150 to 800; the Late-Antiquity Pause era

• 0.06%/yr. -1000 to 150; the Axial-Iron age

• 0.03%/yr. -3000 to -1000; the Literacy-Bronze age

• 0.018%/yr. -6000 to -3000; the Early Agrarian era

• 0.009%/yr. -8000 to -6000; the Early Neolithic era

• 0.003%/yr -48,00 to -8000; the Out of Africa-Upper Paleolithic and Mesolithic eras

Basically, growth very slow for millennia—visible only in la longue durée—then growth visible over a human lifetime, barely, after 1500; growth substantial over a human lifetime after 1770; and then growth so that humanity’s technological prowess doubles every generation after 1870.

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What do your guesses show, in terms of the levels of technology deployed-and-diffused, worldwide?

Roughly:

• 2020: 25.4, Today

• 2010: 20.6, End of the Neoliberal era

• 1870: 1.0, Shift to the Modern Economic Growth age

• 1770: 0.64, Industrial Revolution age

• 1500: 0.43, Imperial-Commercial age

•   800: 0.30, Mediæval age

•   150: 0.27, Classical Antiquity

• -1000: 0.136, Early Iron age

• -3000: 0.074, Early Literacy-Bronze age

• -6000: 0.043, Neolithic era

• -8000: 0.036, Late Mesolithic era

• -48000: 0.011, Out-of-Africa-Paleolithic era

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The proportional jump from 1870 to 2020 is larger than the proportional jump from -6000 to 1870. Surely the jump from 1 to more than 20 deserves some intermediate steps?

I am playing with:

• 2035: High Information Age

• 2002: Global Manufacturing Age

• 1969: Mass Consumption Age

• 1936: Mass Production Age

• 1903: Industrial Age

• 1870: Steampower Age

• 1605: Imperial-Commercial Age

• 135: High Classical Antiquity (ancient, asiatic, feudal)

• -1300: Late Bronze-Literacy Age

• -4000: Early Agrarian Age

• -15000: Mesolithic Era

with each “mode of production” marking a rough doubling of the technology level. If you believe that “the hand-mill gives you society with the feudal lord; the steam-mill, society with the industrial capitalist”, then the list above are what you would like to mark and reference: not any of this “asian-ancient-feudal-capitalist-socialist” stuff.

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Do you really think that the technological-underpinning base and the corresponding superstructures of human society really stayed the same in any meaningful sense from 200 to 1500?

No. I take the point that back in the Before Times smaller quantitative changes in the level of productivity had larger qualitative effects on how societies were run—that smaller changes in the forces- and relations-of-production carried with them bigger effects on the superstructure, at least in the long run

If, before 1500 we move to dividing history up into “modes of production” by marking an age difference as a roughly √2-ing in our valuation of the stock of deployed-and-diffused “technology”:

• 1125: High Mediæval Age (feudal, asiatic)

• 135: High Classical Antiquity (ancient, asiatic)

• -450: Early Classical Antiquity (bronze, axial)

• -1300: Late Bronze-Literacy Age

• -2400: Early Bronze-Literacy Age

• -4000: Early Agrarian Age

• -6000: Early Neolithic Age

• -15000: Mesolithic Era

• -30000: Upper Paleolithic Era

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Okay. Anything more to say about periodization?

Not right now, no.

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Then let us move on: Why do you set the technology level proportional to the level of average output per capita?

That is just a normalization: it makes it easy to interpret—double the technology level, and you double the average income per capita level the world’s resources can support at a fixed population.

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What does this measure tell us about when the big, important quantitative change in the course of human economic growth came?

It tells us that the big leap upward in economic growth—the bit watershed boundary-crossing—comes in 1870, when the global rate of technological progress jumps up more or less discontinuously from an average proportional growth rate of 0.45% per year to a rate of at least 2.1% per year.

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Why the "at least"?

Because the standard statistical measures disturb me: they assign very little economic value to a huge range of activities, starting with the invention of radio, that absorb a huge proportion of our leisure time, our attention, and our concert. An economy that sees advertising supported information, entertainment, communication, and social network media—television and cable and all the rest—not as a generator of wealth but as an intermediate-good resource-consuming subtraction from wealth has something wrong with it. How wrong? I do not know. But that is why I say “at least”.

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What do you think about when the big, important qualitative change in the structures underlying human economic growth came?

There are various arguments, innumerable arguments made…

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Yes?

Some date the Big, Important Change sometime in the 800 to 1500 time frame, with the formation of "western culture". Others date it to the 1500 to 1750 time frame, either with the Imperial-Commercial Revolution or through the coming of limited government. Then there are those who place it in the 1750 to 1870 time frame, the age of the Democratic and Industrial Revolutions. We are not going to resolve this.

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So what do you think?

I have a very, very hard time dating the Big, Important Change that brings “modernity” to any moment before 1800.

First of all, whenever I look around the world after, say, the Middle Bronze Age—after -2000 or so—I see places around the world where the economies, societies, and polities of the urban hotspots of the civilization look pretty damned “modern” to me. I see urban, commercial, intellectual, and political slices of society that have elite politics characterized by various forms of checks and balances, bureaucratic military routinization, market economies, sophisticated divisions of labor, at least semi-rational inquiry into causes and effects, and the application of knowledge to problems of production. These modern sectors have a much lower information density and knowledge stock than did western Europe in the 1600s, and the upper class has a much lower scale of material power over nature, and they float on top of an enormous exploitation-and-extraction apparatus that holds the farmers and the craftsmen in an iron fist. But political institutions, cultural attitudes, market systems—they are there, they are just not dominant.

This means that when people look for a key watershed-boundary crossing, they have a hard time. They pick a moment, any particular moment—whether the first steam engine, or the Glorious Revolution of 1688, or Abelard’s publication of Sic et Non—and say “this switched us onto the track to modernity”, and it is easy for critics to respond by pointing out precursors all the way back to classical Athens, if not to the revolt after the death of Solomonof the North Kingdom of Israel against the House of David. So I placer the Big, Important Change very late—to when the entire package comes together, sometime after 1800.

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So when does the entire package come together?

Maybe it comes together after 1800, with the deployment of the steam engine and automatic textile machinery and the consequent development of an engineering profession and a machine tool industry, a thing that brings us first the railroad and then the Second Industrial Revolution and everything else. That is definitely one possibility. But it is not the one I am most attracted to right now.

So what view of when the entire package comes together are you most attracted to right now?

I am most attracted to: after 1870, with the speed-up of technological growth to an average pace of 2.1%/year, and the consequent creation of a world rich enough and feminist enough to undergo the demographic transition and release humanity from ensorcellment by the Devil of Malthus.

Take all the changes and processes that had been going on before 1870, have them continue, and you find that you do not have anything like our modern world today.

Have technical change worldwide continue at its 1770 to 1870 pace after 1870, and you maybe have a world that runs into substantial resource scarcity as the really easy coal is mined out quickly. And even if you do not, well, an 0.45%/year rate of growth of technology is offset by an 0.9%/year rate of growth of population, and you get that rate of growth of population at a typical living standard of less than $5/day. Without the 1870 speedup and the coming of Modern Economic Growth, odds are we would have a Malthusian steampunk world today, with little sign of enough curbing of patriarchy and infant mortality to induce the demographic transition. Women would still be focused on using marginal resources to boost fertility, for a 1%/year population growth rate means that their number of surviving sons will be roughly Poisson(1.3), which means that more than ¼ of women will experience the social degradation involved in having no surviving sons and hence very little social power. Such a world is still, for more than half the world’s population, an Agrarian Age world.

And if technical progress worldwide were to have continued at its 1500 to 1770 pace after 1770, or its 800 to 1500 pace after 1500, we would be even worse off.

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Do tell…?

We would, today, be in a gunpowder-empire world. Figure a world today with the technology level of 1850—but with a much higher population than in 1850, or a world today with the technology level of 1670—but with a higher population than in 1670. Such a world is not “modern”, but is still for the overwhelming bulk of people an Agrarian Age world.

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Brad DeLong’s History of Economic Growth Catechism, Part II

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I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that the great bulk of it goes out for free to what is now well over ten-thousand subscribers around the world. If you are enjoying the newsletter enough to wish to join the group receiving it regularly, please press the button below to sign up for a free subscription and get (the bulk of) it in your email inbox. And if you are enjoying the newsletter enough to wish to join the group of supporters, please press the button below and sign up for a paid subscription: