Sketch of a Presentation for þe Book Launch Event
Sketch of a Presentation for þe Book Launch Event
Yes, “Slouching Towards Utopia” is unleashed upon the world. Its highest Amazon sales rank so far was (briefly) 125…
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FIRST: Sketch of a Presentation for the Book Launch Event
So, my actual post-book launch first presentation on Slouching Towards Utopia <bit.ly/3pP3Krk> is Wednesday morning in Washington DC: at the Peterson Institute for International Economics, in Dupont Circle. (I have given three pre-publication dry runs: for Chris Meissner's class at UC Davis, for the Esteves-Sussman international macro history virtual seminar, and for the Berkeley Network for a New Political Economy.)
So what should I say at the actual lunch?
I figure I have 15 minutes:
1870 Was the Hinge of History:
Before 1870, slow technological progress, the necessity under patriarchy of trying to have more sons in the hope that at least one would survive, and natural resource scarcity--those put mankind under the Malthusian harrow, in dire poverty. Most social energy back then was devoted to the elite's (a) running a force-and-fraud, exploitation-and-domination machine, (b) elbowing other potential elites out of the way, and then (c) utilizing their ill-gotten gains in building a high culture in which the non-elite were villains and churns.
After 1870, technological progress took off like a rocket. It rapidly became clear that there was a good chance that humanity would soon, in historical timescales, gain the technological powers to bake a sufficiently large economic pie that everybody could have enough.
Then, having baked a sufficiently large, Economic pie, all humanity would have to do is solve the second order problems of slicing the pie, and then tasting the pie – utilizing our soon-to-be-immense collective wealth to enable people to flourish, to live lives that were safe, secure, healthy, and happy.
Before 1870, the road to anything one might claim as even a semi-utopia was closed. After 1870, the road was open.
What is that? You say that 1712 and the invention of the steam engine, not 1870, is the hinge of history? Maybe you are right. But I think you're probably not. Globally, economic growth from 1770 to 1870, in the century of the steam engine, was insufficient for humanity to gain more than a few steps in the race between technological invention and Malthusian fertility. Over 1770 to 1860, only perhaps 1/3 of growth comes from technological progress proper. The second third comes from concentrating the industry of the world in the place where manufacturing production is most efficient. The last third comes from the natural resource bonanza of extremely cheap coal because the last glaciers scraped off all the rock that had covered it. But the extremely cheap cold was close to gone by 1870. And you can only globalize and gain the efficiency benefits from concentrating manufacturing once.
Absent the technological-acceleration sea-change in 1870, I claim that the most likely counterfactual would be for growth to slow after 1870 and humanity to remain under the Malthusian harrow in a a Steampunk World.
But, for the purpose of my book, this is a side issue. We can debate 1712 or 1870 until the cows come home. Indeed, economic historians will debate it as long as the human species lasts--and perhaps longer. My book wants to look forward from 1870, not backward at the earlier 1800s, the 1700s, and the times before.
NO, NO, NO! DON’T GET DISTRACTED AND TANGENTIAL!!
Trying again…
1870 Was the Hinge of History:
Before 1870, there was no possibility that the economic pie could be big enough. Slow technological progress, the necessity under patriarchy of trying to have more sons in the hope that at least one would survive, and natural resource scarcity—those put mankind under the Malthusian harrow, in dire poverty. Most social energy back then was devoted to the elite's (a) running a force-and-fraud, exploitation-and-domination machine, (b) elbowing other potential elites out of the way, and then (c) utilizing their ill-gotten gains in building a high culture in which the non-élite were villains and churns.
After 1870, technological progress took off like a rocket. It rapidly became clear that there was a good chance that humanity would soon, in historical timescales, gain the technological powers to bake a sufficiently large economic pie that everybody could have enough.
Then, having baked a sufficiently large economic pie, all humanity would have to do is solve the second order problems of slicing the pie, and then tasting the pie – utilizing our soon-to-be-immense collective wealth to enable people to flourish, to live lives that were safe, secure, healthy, and happy.
Before 1870, the road to anything one might claim as even a semi-utopia was closed. After 1870, the road was open.
We can see this if we make the heroic leaps of (a) trusting our estimates of human productivity levels and living standards in the past, and (b) identifying the level of technology—the value of the stock of useful ideas about manipulating nature and organizing humans deployed in and diffused throughout the world economy—as proportional to average real income times the square root of population.
Then we see that back before 1500 it was a very good century in which technology improved by more than 5% in a century—and, no, the march upward was not as an increasing pace. Over the 1500-1770 Imperial-Commercial era the rate of technology growth jumped up to 15%/century: the Columbian Exchange, the rest of full globalization, and a historically unique tinkering-inventing culture at the western edge of Eurasia playing about equal roles in the acceleration. Over the 1770-1870 Industrial-Revolution century deployed-and-diffused technology grew by 55%, with the benefits of concentrating the entire manufacturing of the globe in the region most productive, a unique engineering-inventing culture in the 300-mile radius circle around Dover, England, and the very lucky fact that the last glaciers had given us access to mines better than gold mines: mines of unbelievably cheap and accessible coal.
But you can only concentrate global manufacturing once. And you can only mine the near-surface coal once.
And even at the boosted 1770-1870 pace, growth did not get humanity out from under the Malthusian harrow. It was in the 1870s that John Stuart Mill published the last edition of his _Principles of Political Economy_, and he was then still claiming:
Hitherto it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being. They have enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes…
After 1870, however, the economy went into gear: a 2.1%/year technology growth rate; a 33-year doubling time. Previously unimaginable economic growth revolutionized human life over and over, generation by generation, in not just one episode of Schumpeterian creative destruction but in repeated, never-ceasing episodes.
The problem of baking a sufficiently large economic pie so that everyone could, potentially, have _**enough**_ became visible. Accomplishing that seemed straightforward: let science rip to discovery, let engineering too rip to develop the fruits of science, and then let the market economy rip to deploy and diffuse the technologies of human benefit. And the market economy could do this, for if market prices are properly aligned are properly aligned with social values, the market economy is a magnificent crowdsourcing machine for humanity to use to solve the problems that it can be set. And the market can be set the problem of applying technology to produce wealth.
As of now, we have long since achieved what previous centuries would have seen as a solution to the problem of baking a sufficiently large economic pie to serve as the foundation for a proper utopia.
But somehow our utopia is not here.
After 1870 the problem of baking a big-enough pie was on track to being solved. And then? The problems of slicing and tasting the pie were seen by our predecessors as second-order problems, or barely problems at all. With potentially _**enough**_, there is no reason to maintain the force-and-fraud exploitation-and-domination machine that élites before 1870 had used to slice the pie to their benefit. And the problem of tasting—utilizing our technological powers to live life wisely and well, to empower human flourishing to produce safety, security, health, and happiness—should not be beyond the powers of a humanity that can invent AC power and the microprocessor, should it.
What went wrong? What happened.
This, I think, my book has nailed. Letting the market economy rip to solve the problem of making enough had consequences. The repeated, sequential, Schumpeterian creative-destruction economic revolutions meant that all was solid melted into air—all established patterns and orders were steamed away. Again and again. Men (and women) did have to try to build new institutions to manage the problems and opportunities of production, distribution, and utilization that the onrushing technological cornucopia brought.
But, as Friedrich Engels—this was Engels more than Marx—all of the rest of society must grow out of and be compatible with the technological base that is the shape of the forces of production. Revolutionizing technology every generation meant that the societal software running on the forces-of-production hardware needed to be rewritten on the fly as well. What had worked a generation ago, as for as socio-economo-political order was concerned, would not work now. What was cobbled together to fit the situation now would be buggy and crash in less than a generation. That was what post-1870 meant. And that was a new dynamic pattern for human history.
But there was more. The market economy had to be unleashed to apply technology to wealth creation. But the market economy produces wealth. It does not produce anything that society would regard as just.
Friedrich von Hayek—the genius who most clearly saw the value of the market economy for crowdsourcing—warned us not ask for social justice. Attempting to achieve it would undermine the market economy’s ability to do what it could do, and put us on, well, The Road to Serfdom. “The market giveth, the market taketh away: blessed be the name of the market” had to be our only gospel.
But, as the genius Karl Polanyi put it, people will not stand for being told "blessed be the name of the market" that there are no rights but property rights, and Friedrich von Hayek is their prophet. People instead insist that “the market was made for man, not man for the market”. People saw themselves as deserving communities, incomes, and stability. They needed their Polanyian rights—to economic security, to an income level proportional to what they deserved, that other people should have income levels proportional to what they deserved too, in a connected society that gave them respect and place—plus that you should have some power in society even if you had no wealth. Trying to bring about the stark utopia of market society would thus be overwhelmed by social-political movements seeking social justice—and society might think that what was just could turn disastrous: :Hitler got substantial buy-in to his version, involving the extermination Jews and the demographic replacement of the population of Eastern Europe by ethnic Germans.
And, off in the corner, we have John Maynard Keynes whimpering: if only governments allowed his technocratic students to conduct a sensible monetary policy, along with a "somewhat comprehensive" socialization of investment, everyone would have a job in a tight labor market that gave some social power to the working class, technology plus compound interest would wreak marvels, rock-bottom interest rates would "euthanize" rentiers—they could only exert social power only at the cost of spending down their capital—and so humanity would solve the problems of production and distribution, leaving humanity to grapple with its real problem: that of utilization of our wealth to create a truly human world.
If we had time, we could go through the generations, the modes-of-production, the political-economy orders. But let me just say that it was was within these parameters—von Hayekian, Polanyian, Keynesian—that people frantically tried to rewrite society's socio-economic running code on the fly to cope with the technological changes in the underlying forces-of-production hardware.
Perhaps humanity, did indeed come close to an institutional-societal setup to tackle the problems of slicing and tasting. Post-WWII "social democracy" in the rich countries was a good try. Keynesian focus on full employment (and low interest rates to make amortizing the WWII-era debt easy), Beveridgian equality-through-redistribution (and public provision), plus a little Pigovian externality-compensation produced the Thirty Glorious Years.
But somehow social democracy failed its sustainability test, and was replaced by neoliberalism, which stubbornly persists in spite of its failure to fulfill any of its promises except that it would make the rich much richer with much more social power. Society may not know what "social justice" is, but it knows that it manifestly does not consist of giving benefits to and making life easy for those it assesses as "undeserving".
And so the wheel turned. Here we are. Why are not the good people of the global north happier and more satisfied with the techno-utopian marvels that have been delivered to them? Why has great wealth in historical perspective produced not reduced but increased economic anxiety? And how does that economic anxiety get transformed into ethno-nationalist fear and rage?
How is it that the neoliberal ordering of society still survives? In the global north, at least, it has not fulfilled its promise of restoring golden-age growth rates, or dismantling rent-seeking interests, or restoring society's moral center, or achieving a pro-producer form of social justice. In fact, it accomplished exactly none of the promises made by its original salesmen, save for making the rich richer and society more economically unequal. And yet it hung on.
Our current situation: in the rich countries there is enough by any reasonable standard, and yet we are all unhappy, all earnestly seeking to discover who the enemies are who have somehow stolen our rich birthright and fed us unappetizing lentil stew instead.
What do we do next? The answer to this question my book simply punts. That is for a younger generation than my failed one to decide. Global warming. Ethno-national terrorism on all scales from the individual AR-15 to the Combined Arms Army. Nuclear proliferation. Revived fascism. Technokleptocracy. I do quail.
As John Maynard Keynes wrote back in 1924, any call to follow a particular plan of action:
assumes... a plan exists.... [But] we lack more than usual a coherent scheme of progress, a tangible ideal. All the political parties alike have their origins in past ideas and not in new ideas.... No one has a gospel. The next move is with the head...
1935 words..
Slouching: Responding to Critics II:
The substantive critics of the book are beginning to show up. Critical comment B:
I think… the market (if we can even think of it as one concrete thing) is not really the core driver of our successes and failures. I think it is rather our capacity to cooperate with each other, or not, which you capture in multiple places by the issue of trust. We cannot transact in any market (virtuous or otherwise) if we don’t trust each other, or have sufficient rules and enforcement of them to mimic trust where none existed organically…. [Thus] I find statements such as this one on development in the global south to be really misleading: the reason that the global south did not catch up or even keep pace (p. 341) as: “The pre-World War II colonial masters did next to nothing to prepare the colonized nations of Asia and Africa for independent prosperity.”
The lack of effort on the part of former colonizers may well be true (although material and advice aid to the global south has been a very big industry for a long time—simultaneously accused of being patronizing and not enough). But that is only one hypothesis among many possible. And it overlooks the role of trust-supporting-exchange entirely. I think it is possible to ‘teach’ people not to trust, but much more difficult to teach them to trust. So, it is not unreasonable to go next to the African slave trades of 1600-1900 period as a teacher of not-trust. This too is a testable hypothesis, but I suspect many of the standard tests are post-hoc…
I think I was unclear here, to compressed, and this is a fault in my writing. I was thinking along the lines of:
Imperialists show up and dismantle existing networks of commodity and favor exchange—the forms of interaction that both build and result from social trust.
Imperialists assimilate the colonies into their own trust-and-exchange networks.
Imperialists are uninterested in building the physical and educational and network infrastructure of a "Hamiltonian" industrial policy to give their colonies a fast track to something like Japan-style industrialization and modernization.
Imperialists withdraw (or, in the case of Latin America, which I see as largely "colonized” internally by its own notionally Castilian-descended élites, fight tooth and nail to stop the course of history), and as they withdraw take their trust networks with them, leaving rubble.
Over and above this, sub-Saharan Africa bears a special trust-destruction burden as part of the legacy of Atlantic (and other) slave trades. Cue Shaihu Umar and the sad story of the first Prime Minister of Nigeria, Abubakar Tafawa Balewa, ending in his murder. That is my guess of the source of much of 1950-2000 exceptional sub-Sarahan African growth retardation.
I also guess I am an optimist, and a true believer in the doux commerce thesis: give yourself a generation of people exchanging commodities for good money, and you start viewing everyone as a trustable and likable potential partner in win-win market exchange. Potential win-win Virtua circles abound. They do, however, interfere with the favor-based redistributive logic of state-building. And so where the withdrawing imperial powers did not leave much of an intact functioning state but only a ritualistic one…
Is the diagnosis of the demise of Social Democracy that a) for reasons unknow (!) growth slowed down after 19xx. b) This was misdiagnosed as too much (rather than the wrong kind of) state interference with the market, including tax and redistribution to the unworthy.* c) This led after 1980(?) to the wrong kind (rather than less) interference with the market, specifically lower tax collections from high income earners and higher structural deficits. d) Ongoing changes in transportation and communication technologies plus economic reforms in some developing countries, especially China, (and a smidgen of reduction in trade restrictions), led to a Stolper-Samuelson decline in the relative incomes of lower skilled manufacturing labor which had previously been the main political support of Social Democracy**?
*Hayek gleefully rubs hands together saying “I told you so.”
** Polanyi mournfully wrings hands saying “I told you so.”