My tweet storm for Slouching Towards Utopia:
What I call the “long twentieth century” started with the watershed-boundary crossing events of around 1870—the triple emergence of globalization, the industrial research lab, and the modern corporation—which ushered in changes that began to pull the world out of the dire poverty that had been humanity’s lot for the previous ten thousand years. What I call the “long twentieth century” ended in 2010, with the world’s leading economic edge, the countries of the North Atlantic, still reeling from the Great Recession that had begun in 2008, and thereafter unable to resume economic growth at anything near the average pace that had been the rule since 1870. The years following 2010 were to bring large system-destabilizing waves of political and cultural anger from masses of citizens, all upset in different ways and for different reasons at the failure of the system of the twentieth century to work for them as they thought that it should.
In between 1870 and 2010, things were marvelous and terrible, but by the standards of all of the rest of human history much more marvelous than terrible.
There we have my first claim about the history of the long 20th century: that, both compared to all past centuries and on an absolute scale, the history of the long 20th century was indeed, as Eric Hobsbawm says, the history of an Age of Extremes—but those extremes were much much much more marvelous than terrible. The arc of long 20th-century history was, by and large and broadly, with many hesitations, backward slippages, and complications, toward not justice but at least toward hope, hope for someday a truly human world.
The one-hundred and forty years 1870-2010 of the long twentieth century were, I strongly believe, the most consequential years of all humanity’s centuries.
Here is my second claim: that the long 20th century was the most consequential century in humanity’s history, ever. Why? Because back in 1870 humanity was still desperately poor. Now some of us are very rich—the upper-middle classes of the global north are rich beyond the most fabulous dreams of luxury dreamed by previous ages. And most of us are, by the standards of all previous centuries, very comfortable and long-lived indeed. And that all of us are not so is a great scandal.
And it was the first century in which the most important historical thread was what anyone would call the economic one, for it was the century that saw us end our near-universal dire material poverty.
Here is my third claim: That in the long 20th century, for the very first time in human history, the principal axis of history was economic—rather than cultural, ideological, religious, political, military-imperial, or what have you. Why was the long 20th century the first such century in which history was predominantly economic? Because before 1870 the economy was changing only slowly, too slowly for people's lives at the end of a century to be that materially different from how they had been at the beginning. So the economy was thus the painted-scene backdrop behind the stage, rather than the action on the stage. (Now do note that you can still say that the principal axis of any millennium's history is economic, for over millennia things do change.)
But back up: what I have said here simply establishes that the principal axis of the history of the long 20th century could have been economic—that the economy was changing and that enough economic damn things were happening one after the other to make it a player in history. But was it a lead actor? One of the major themes of my book is going to be: Yes, it was the lead actor.
My strong belief that history should focus on the long twentieth century stands in contrast to what others—most notably the Marxist British historian Eric Hobsbawm—have focused on and called the ‘short twentieth century’, which lasted from the start of World War I in 1914 to the fall of the Soviet Union in 1991.
This is a minor digression: My Grand Narrative of the 20th century is not the only Grand Narrative one could construct. We have to have some Grand Narrative, some single most-important plot thread—if we don't, we almost cannot think at all, for we really have almost no way to think other than in narrative. I think mine is the most important. But others disagree. And it is important never to forget that every Grand Narrative allows and enables you to see some things—hopefully the most important things to you—very clearly indeed, but blocks your vision of other things.
Such others tend to see the nineteenth century as the long rise of democracy and capitalism, from 1776 to 1914, and the short twentieth century as one in which really-existing socialism and fascism shake the world.
In fact, I believe that, in the western academy, the predominant major Grand Narrative, at least implicitly, of the 20th century is that it was really-existing socialism vs. fascism, and really-existing socialism knocking itself out in the process of winning its victory, leaving consumer capitalism—“that old bitch gone in the teeth”, as the other great post-WWII British Marxist historian E.P. Thompson calls it <https://marxists.org/archive/thompson-ep/1973/kolakowski.htm…>, as the unworthy victor in the struggle over systems of political-economic organization.
Needless to say, I do not take this view.
I see the three-part mid-century struggle between the systems as, not a sideshow, but as something taking place outside of the center ring.
Histories of centuries, long or short, are by definition grand narrative histories, built to tell the author’s desired story.
You cannot write a history of an entire century without committing yourself to some Grand Narrative—without a spearpoint you cannot conduct a successful hunt, and without a central thread for them to follow, humans, who think in narratives, cannot grasp and remember your story. Thus the necessity of the spearpoint. It will be imperfect and "false". But it is necessary and essential. You have to hold both the necessity and the imperfectness in your mind simultaneously, always, as you read and think. The map is not the territory. The map, however, is the map. Your history will then stand or fall based on how well you back that narrative.
Setting these years, 1914–1991, apart as a century makes it easy for Hobsbawm to tell the story he wants to tell.
Hobsbawm’s choice of period was calculated to provide heavy weight for the spearshaft behind the spearpoint of the particular Grand Narrative he wished to tell. Indeed, if you start and end on Hobsbawm’s dates—1917 and 1990—it is very hard not to wind up telling some version of his story. It may well not have the valence he gives it: of World Communism as the tragic and doomed hero of the century, defeating fascism but being so poisoned by the circumstances of its development and struggle that it then expires after a long decline, leaving its unworthy rival consumer capitalism in control, and thus closing off humanity's road to utopia. The 1917-1990 short 20th century can be told with Frank Fukuyama's "end of history" valence instead. But, as I said, while that is certainly a story, I do not think it is THE story that people 500 or 1000 years from now will .think is important and tell when they tell the story of the years on both sides of 1950.
But it does so at the price of missing much of what I strongly believe is the bigger, more important story.
I really don’t think either really-existing socialism or fascism is, in the long run of human destiny, worthy of being a protagonist (or an antagonist) in big-think broad-sweep history. I mean: really-existing socialism was a dead end, a false path, a horrible warning in terms of political-economic systems. And as for fascism... well... .if it turns out that future historians want to tell political history not as a whig progressive but rather as an Aristotelian alternation-and-decay-and-replacement-of-régimes story, then fascism will have its place as a form of tyranny in the age of mass and social media, much as Thoukidides discusses the role of Peisistratos and his supposed championing of the cause of the hyperakrioi—with the exception that Peisistratos did actually have policies to boost the prosperity of the hyperakrioi, and did make Athens great again. But if we do better than Aristotelian alternation in political régimes in the long run, fascism and its cousins will also be seen as dead ends, horrible warnings, stories that we tell to remind us how horrible people can be to one another, rather than the protagonist of some Grand Narrative principal thread of human history.
The bigger, more important story is the one that runs from about 1870 to 2010, from humanity’s circa-1870 success in unlocking the gate that had kept it in dire poverty, up to its circa-2010 failure to maintain the pace of the rapid upward trajectory in human wealth that the earlier success had set in motion.
I think that is the worthy story of the history of the 20th century has as its protagonist neither really-existing socialism, nor really the “free world” that triumphed over the totalitarianisms. I think that the worthy story is, rather, humanity’s escape from Malthusian poverty—and from societies in which the class of people with leisure to think deeply and nutrition to think about something other .than how hungry they are is small, and is composed of those who have figured out how to unproductively take an outsized share by force and fraud. This escape from the realm of material necessity into the realm of freedom, choice, and options is, I think, the proper story—and the big story. And its proper protagonist is humanity.
What follows is my grand narrative, my version of what is the most important story to tell of the history of the twentieth century. It is a primarily economic story.
Now I start to say exactly what my Grand Narrative thread that I will use to organize the history of 1870-2010 is.
It naturally starts in 1870.
A short reminder to readers of the start date.
I believe it naturally stops in 2010.
A short sentence to remind readers of the end date.
As the genius Dr. Jekyll-like Austro-English-Chicagoan moral philosopher Friedrich August von Hayek observed, the market economy crowdsources—incentivizes and coordinates at thegrassroots—solutions to the problems it sets…
Introducing two supporting characters: the market economy with its extraordinary power to grassroots-crowdsource powerful solutions to the problems it is set, and its principal 20th century theoretician, the good Dr. Jekyll-side of Prof. Dr. Friedrich August von Hayek.
Back before 1870 humanity, given its population, did not have the technologies or the organizations to allow a marketeconomy to pose the problem of how to make humanity rich.
However, back before 1870 humanity did not have the technologies—either the technologies of manipulating nature or the technologies of organizing humans—in either the level amount or the rate of growth for the market economy to be set the problem of moving humanity out of the realm of necessity in which it was trapped, the realm of dire Malthusian poverty.
So even though humanity had had market economies, or at least market sectors within its economies, for thousands of years before 1870, all that markets could do was to find customers for producers of luxuries and conveniences, and make the lives of the rich luxurious and of the middle class convenient and comfortable.
Hence before 1870 market sectors, and market economies, had merely turned their crowd-sourcing energies to making luxurious for the rich and conveniences to make the (small) middle-class comfortable. (Remember! The “middle class” is not the median 50th percentile! The “middle class” are, in previous centuries, those who are not rich but who do not fear starvation should the Wheel of Fortune take even a minor adverse turn!)
Things changed starting around 1870.
Another short sentence for the sake of rhetoric, attempting to hammer into readers the idea that 1870 and its triple—the coming of globalization, of the industrial research lab, and the modern corporation—in a strong and powerful sense marked the end of all previous human history.
Then [in 1870] we got the institutions for organization and research and the technologies—we got full globalization, the industrial research laboratory, and the modern corporation.
The coming of all three of these more or less at once was a truly mighty change. It rationalized and routinized the discovery and development and the development and deployment and not just the local but the global deployment of technological advances. The coming of all these three more than quadrupled the pace at which humanity’s technological empire was increasing. And that step-up in the growth rate lasted from 1870 to 2010.
Were those three changes baked in the cake by what had come before? Are they best thought of as slow, evolutionary advances that one would naturally have expected to follow from the course of the Industrial Revolution up to 1870? Alfred D. Chandler says: probably not. His "Scale and Scope" makes powerful arguments that the creativity that produced the modern corporation, and the industrial research labs that served it, were results of the particular historical situation and of accidents that happened in the U.S. after the Civil War, After all, no similar developments took place in France or Britain.
I tend to see industry-oriented universal banks as a key intermediary: those emerged in the U.S. and in Germany, so it was not a unique event. But they did not emerge elsewhere. So it was a rare event. This, however, carries me far away from my main thread.
These were the keys.
Again: a very short sentence to rhetorically hammer home the point that this 1870 triple of the industrial research lab, the modern corporation, and full (not just fledgling) globalization was really really important.
These unlocked the gate that had previously kept humanity in dire poverty.
Another short sentence, driving home the point. Without this triple of industrial research lab, modern corporation, and full globalization, we might well have been doomed. We might well have been doomed by slow productivity growth, by our fecundity, and by the patriarchy that made becoming the mother of at least one son who survived to adulthood nearly the.only source of significant social power for female members of homo sapiens sapiens—to Malthusian or near-Malthusian poverty.
(Parenthetically, many would dismiss my focus on 1870 and the industrial research lab, modern corporation, full globalization triple. They would say that the emergence of something like our modern world was close to baked in the cake once we had steampower and textile machinery. But is that really true? The First Industrial Revolution depends on really really cheap coal, and by 1870 the really, really cheap coal was near its end. Worldwide, the pace of global technological progress deployed was only some 0.45%/year on average from 1770-1870, less than 1/4 of what it was going to be from 1870-2010. If that pace had slowed to 0.3%/year (or even stayed ..at 0.45%/year), population growth of 0.6%/year (or 0.9%/year) would have induced sufficient resource scarcity to counterbalance technology's boost to living standards, and leave the bulk of humanity still under near-Malthusian conditions. Without the triple, I think, we might well today have a world in which the rough technology level would be roughly that of 1895 with 5 billion people on the globe: a steampunk world indeed.)
These unlocked the gate that had previously kept humanity in dire poverty…
Without this triple, we had been doomed—by slow productivity growth, by our fecundity, and by the patriarchy that made becoming the mother of at least one son who survived to adulthood nearly the only source of significant social power for female members of homo sapiens sapiens—to Malthusian or near-Malthusian poverty. With this triple, and with the more-than-quadrupling of the pace of proportional growth of humanity's deployed technological prowess that it drove, we had the possibility of escape, into a realm where we could for the first time build a truly human world.
The problem of making humanity rich could now be posed to the market economy, because it now had a solution.
The extraordinary more-than-quadrupling of the pace of human .technological progress deployed into the world economy allowed the market to turn its energies to doing more than making the lives of the rich luxurious and providing conveniences for the middle class.
On the other side of the gate, the trail to utopia came into view.
It was Malthusian poverty that had kept humanity from building its utopia or utopias before 1870. But with the coming of the rapid 2% per year technological progress of modern economic growth, that blockage to sprinting or running or marching humanity to utopia was removed. With the deployed technological prowess in manipulating nature and organizing humans doubling every 35 years starting in 1870, humanity's problem was merely to decide, deliberately, consensually, and thoughtfully, which utopia or utopias we should build for our descendants, right? right?
And everything else good should have followed from that.
Over the long 20th century humanity really should have used our collective technological prowess to build a Utopia or Utopias–have created, as my friend Max Singer used to say, a truly human world. Spoiler: it did not do so. But why not? And is there anything we can do to do better in the 21st century? And, if so, what?
Much good did follow from that.
Another short sentence to drive home the idea that while the long 20th century was both marvelous and terrible, it was more marvelous than terrible. Indeed, it was the fact that so much of it was so marvelous that makes it so disappointing that we have not progressed further on the road to utopia, to a truly human world.
My estimate—or perhaps my very crude personal guess—of the average worldwide pace of what is at the core of humanity’s economic growth, the proportional rate of growth of my index of the value of the stock of useful ideas about manipulating nature and organizing humans that were discovered, developed, and deployed into the world economy, shot up from about 0.45 percent per year before 1870 to 2.1 percent per year afterward, truly a watershed-boundary crossing difference.
If there is one single nugget of insight that I want readers of my book to permanently engrave on their brains, this is it: around 1870 the rate of technological progress and thus of potential wealth creation went into much higher gear. After 1870, humanity's deployed technological capabilities and thus potential prosperity doubled every thirty-five years—and with it came economic creative destruction that reduced old economic structures to rubble and built new ones, and .did it again, and again, and again, every single generation. Before 1870? From 1770-1870 humanity's globally-deployed technological prowess had a doubling time of about 150 years—not 35. From 1500-1770 it had a doubling time of 500 years. And before 1500, we are looking at a doubling time of 2000 years. The difference between our world, in which technological progress creatively destroys and revolutionizes the economy every 35 years, and the world of Agrarian-Age antiquity in which the same proportional changes in technology and economy, and thus in polity and society, take not 35 but 2000 years is, I think, a master force shaping human history.
A 2.1 percent average growth for the 140 years from 1870 to 2010 is a multiplication by a factor of 21.5.
Just a very short sentence to hammer home the obvious to those who don't have exponential growth magnitudes in their immediate intellectual panoply: a more than tenfold amplification of human technological prowess in 140 years is a REALLY BIG F---ING DEAL. To get an equivalent proportional jump in the other direction, you have to go back from 1870 to the Bronze Age— to the year -2000 or so. We are, proportionately, as separate in technology from the railroad's Golden Spike and the first transoceanic cables as those were from the earliest chariots and the sculptor of the dancing girl of Mohenjo-Daro:
That [the 21.5-fold multiplication of human deployed technological prowess over 1870 to 2010] was very good: the growing power to produce and create wealth and earn an income allowed humans to have more of the good things, the necessities, conveniences, and luxuries of life, and to better provide for themselves and their families.
Briefly and very very roughly, what twenty workers were needed to do in 1870 with their eyes, fingers, thighs, brains, mouths, and ears, 1 worker was able to do in 2010. (And what one worker could do in 1870 required 20 in -6000; but the overwhelming bulk of the of the potential benefits for humansfrom that twentyfold -6000 to 1870 upward creep of technological knowledge had been eaten up by growing resource scarcity: the land and other natural resources available to support 1 person in -6000 had to support 200 by 1870.) But the twentyfold post-1870 technological-progress wave had to deal not with a 200- but only a 6-fold multiplication of human numbers, leaving lots to be devoted to bringing about much higher average productivity.
This does not mean that humanity in 2010 was 21.5 times as rich in material-welfare terms as it had been in 1870: there were six times as many people in 2010 as there were in 1870, and the resulting increase in resource scarcity would take away from human living standards and labor-productivity levels.
The unprecedented multiplication of human technological prowess and thus potential productivity over 1870-2010 was accompanied by unprecedented growth in population as well: the population explosion, now near its end with the near-completion of the demographic transition. Some of the 21-fold amplification of technology had to go to compensate for the six-fold multiplication of human population, from 1.3 to 7.6 billion, over 1870-2010. With much less land available to grow food for your typical person and other forms of resource scarcity, average growth in productivity and living standards could not keep pace with technology. But technology did definitively win the race with population: the Malthusian Devil that had kept humanity poor for millennia was trapped inside the confining pentagram.
As a rough guess, average world income per capita in 2010 would be 8.8 times what it was in 1870, meaning an average income per capita in 2010 of perhaps $11,000 per year (to get the figure of 8.8, you divide 21.5 by the square-root of 6; or, rather, we multiplied 8.8 by the square-root of 6).
Let me hasten to remind you that these are extremely rough guesses that only a foolhardy idiot would commit himself to. Only a foolhardy idiot would dare assert that productivity in living standards in the world of 2010 were 8.8 times what they had been in 1870. Such a number requires adding and then dividing things that really cannot properly be added and divided in any sense. The guess that world population in 20210 was six-fold higher than it had been in 1870 is at least a guess that we can more-or-less justify. But the further steps—that there is a one-dimensional thing we can call "technology discovered, invented, developed, deployed, and diffused" and that if we normalize it to our income measure the right way to compensate for population growth and according resource scarcity is to take a square-root? Ha ha hah ha ha ha ha ha ha ha!
Keynes warned: "The fact that two incommensurable collections of miscellaneous objects cannot in themselves provide the material for a quantitative analysis need not, of course, prevent us from making approximate statistical comparisons, depending on some broad element of judgment rather than of strict calculation, which may possess significance and validity within certain limits. But the proper place for such things as net real output and the general level of prices lies within the field of historical and statistical description, and their purpose should be to satisfy historical or social curiosity, a purpose for which perfect precision—such as our causal analysis requires, whether or not our knowledge of the actual values of the relevant quantities is complete or exact—is neither usual nor necessary. To say that net output to-day is greater, but the price-level lower, than ten years ago or one year ago, is a proposition of a similar character to the statement that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth—a proposition not without meaning and not without interest, but unsuitable as material for the differential calculus. Our precision will be a mock precision if we try to use such partly vague and non-quantitative concepts as the basis of a quantitative analysis..."
Keynes was right. I know he was right. I do it anyway.
Hold these figures in your head as a very rough guide to the amount by which humanity was richer in 2010 than it was in 1870—and never forget that the riches were vastly more unequally distributed around the globe in 2010 than they were in 1870.
That last is a puzzle: communications and transportation around the entire globe was SO much easier in 2010 than it has been in 1870. So why then was the world a more unequal place, looking across countries, in 2010 than it had been in 1870? Nay, not just a more unequal place, but a grossly and extraordinarily more unequal place.
A 2.1 percent per year growth rate is a doubling every 33 years.
Trying to remind the non-quantitative just what consistent 2.1%/year growth is: doubling in 33 years, multiplying eight-fold in a century, multiplying 64-fold in two centuries. That is the pace of underlying technology growth the world experienced over 1870-2010.
That [the 2.1 percent per year average annual technology growth rate starting in 1870] meant that the technological and productivity economic underpinnings of human society in 1903 were profoundly different from those of 1870—underpinnings of industry and globalization as opposed to ones that were still agrarian and landlord-dominated. The mass-production underpinnings of 1936, at least in the industrial core of the global north, were profoundly different also. But the change to the mass consumption-suburbanization underpinnings of 1969 was as profound, and that was followed by the shift to the information-age microelectronic-based underpinnings of 2002. A revolutionized economy every generation cannot but revolutionize society and politics, and a government trying to cope with such repeated revolutions cannot help but be greatly stressed in its attempts to manage and provide for its people in the storms.
Let me stress this: humanity had never before seen anything like this pace of economic transformation. Not just production, but newly-transformed production and the further transformation of production became the principal work-life business of humanity. As much economic change and creative destruction as had taken place over 1720-1870 took place every 33 years after 1870. And the pace of change over 1720-1870 had already been more than fast enough to shake societies and polities to pieces. "All that is solid melts into air", Marx and Engels had written in 1848: all established hierarchies and orders are steamed away. And they had no real idea what was coming: the pace of worldwide change of their day was less than 1/4 of what it would become after 1870.
Much good, but much ill also flowed [from the creative-destruction well-nigh complete revolutionizing of the economy every generation post-1870]: people can and do use technologies—both the harder ones, for manipulating nature, and the softer ones, for organizing humans—to exploit, to dominate, and to tyrannize. And the long twentieth century saw the worst and most bloodthirsty tyrannies that we know of.
More of a proportional increase in humanity's deployed technological prowess every 23 years after 1870 than was seen in the entire 1770-1870 Industrial Revolution century. (And more than in the entire 1500-1770 Imperial-Commercial Revolution Age. And more than over all of 800-1500.) These repeated generation-after-generation technological shifts upended and revolutionized economies. The associated repeated creative destruction upended societies as well. This posed two problems for governments: How were they to deal with the "destructive" part of creative destruction as it upended the lives of their people? And how were they to deal with neighboring governments that decided to use enhanced technological powers for evil for destruction and oppression? At the sharp end, a government gone horribly wrong was a genocide-scale problem for the people under its boot, and for the people who were that government's neighbors. The 20th century saw the worst tyrannies ever.
All that was solid melted into air—or rather, all established orders and patterns were steamed away. Only a small proportion of economic life could be carried out, and was carried out, in 2010 the same way it had been in 1870. And even the portion that was the same was different; even if you were doing the same tasks that your predecessors had done back in 1870, and doing them in the same places, others would pay much less of the worth of their labor-time for what you did or made. As nearly everything economic was transformed and transformed again—as the economy was revolutionized in every generation, at least in those places on the earth that were lucky enough to be the growth poles—those changes shaped and transformed nearly everything sociological, political, and cultural.
The wave of technological progress at an unprecedented pace—one that puts even the 1770-1870 Industrial Revolution Century to shame, and that packs as much into one year as we saw in 50 pre-1500 years—and the associated creative-destruction wealth-generating process of repeated revolutionizing and transformation of the economy is THE central underlying process of 20th-century history.
All else has to adapt, or fail to adapt, to that. And all else did—or failed to do so. That is why the history of the 20th century took the form that it did.
Suppose we could go back in time to 1870, and tell people then how rich, relative to them, humanity would become by 2010. How would they have reacted?
Remember: as much proportional increase in technological prowess over 1870 to 2010 as was seen over -4000 to 1870. And essentially all the potential benefits over the earlier period were eaten up by population growth and the relative resource scarcity that it generated. Nearly 6000 years of historical progress crammed into a century. What would our predecessors back in 1870 have rationally thought would be the result?
They would almost surely have thought thatthe world of today would be a paradise, a utopia. People would have 8.8 times the wealth? Surely that would mean enough power to manipulate nature and organize humans that all but the most trivial of problems and obstacles hobbling humanity could be resolved.
People in 1870, after all, thought that humanity had outgrown fighting over God. They fought—in one way or another and for one reason or another—over resources. They would have thought that in the world of 2010, with 20x the technological resources of 1870, jostling and fighting to get even more resources would have a much lower priority relative to turning your skill and energy to doing what you ultimately wanted to do with those resources. Consider Lenin's "State and Revolution": In a capitalist.future society of material abundance, scarcity must be artificially and brutally created:
The state in the proper sense of the word, that is, a special machine for the suppression of one class by another, and, what is more, of the majority by the minority. Naturally, to be successful, such an undertaking as the systematic suppression of the exploited majority by the exploiting minority calls for the utmost ferocity and savagery in the matter of suppressing, it calls for seas of blood, through which mankind is actually wading its way in slavery, serfdom and wage labor....
During the transition from capitalism to communism suppression is still necessary, but it is now the suppression of the exploiting minority by the exploited majority.... It is no longer a state in the proper sense of the word; for the suppression of the minority of exploiters by the majority of the wage slaves of yesterday is comparatively so easy, simple and natural a task that it will entail far less bloodshed than the suppression of the risings of slaves, serfs or wage-laborers....
And it is compatible with the extension of democracy to such an overwhelming majority of the population that the need for a special machine of suppression will begin to disappear.... The exploiters are unable to suppress the people without a highly complex machine... but the people can suppress the exploiters even with a very simple “machine”....
Communism makes the state absolutely unnecessary, for there is nobody to be suppressed—“nobody” in the sense of a class.... We are not utopians, and do not in the least deny the possibility and inevitability of excesses on the part of individual persons, or the need to stop such excesses.... [But] this will be done... as simply and as readily as any crowd of civilized people... interferes to put a stop to a scuffle or to prevent a woman from being assaulted.... We know that the fundamental social cause of excesses... [of] violation[s] of the rules of social intercourse, is the exploitation of the people, their want and their poverty. With the removal of this chief cause, excesses will inevitably begin to "wither away". We do not know how quickly and in what succession, but we do know they will wither away. With their withering away the state will also wither away.
Compare to Robert A. Heinlein's libertarian utopia of "The Moon Is a Harsh Mistress", in which the ungoverned convicts" of the Lunar ice-mining settlement deal with crimes by grabbing somebody to serve as a judge, having him hear the case, and then putting the guilty party out of the airlock into the vacuum.
The answer to the questions: Where moon? Where Lambo? Where Utopia? was:
Not here. By 2010 it had been 150 years [of doubling technological prowess every generation]. We did not run to the trail’s end and reach utopia. We are [at best] still on the trail—maybe, for we can no longer see clearly to the end of the trail, or even the direction the trail we are on is leading us in.
Let me ask you to note how remarkable this disappointment is. All previous this-world utopias—starting from Thomasso Campanella's 1602 La città del Sole <https://archive.org/details/thecityofthesun02816gut…> or Francis Bacon's New Atlantis <https://archive.org/details/fnewatlantis00baco…> on up through Lenin's State and Revolution >https://marxists.org/ebooks/lenin/state-and-revolution.pdf…> had managed to construct, in their imagination, more-than-satisfactory utopias with only a small amount of the technological power to manipulate nature and to organize humans in our highly, highly-productive 8 billion-strong division of labor that we have today. Considered as an anthology intelligence, humanity is inept, and not sane.
This is, perhaps, the place to tell the story Plutarch tells, of King Pyrrhus and his advisor Cineas: Plutarch:
[Cineas:] 'When all [kingdoms] are in our power what shall we do then?' Said Pyrrhus, smiling, 'We will live at our ease, my dear friend, and drink all day, and divert ourselves with pleasant conversation.' When Cineas had led Pyrrhus with his argument to this point: 'And what hinders us now, sir, if we have a mind to be merry, and entertain one another, since we have at hand without trouble all those necessary things, to which through much blood and great labour, and infinite hazards and mischief done to ourselves and to others, we design at last to arrive?' Such reasonings rather troubled Pyrrhus with the thought of the happiness he was quitting, than any way altered his purpose, being unable to abandon the hopes of what he so much desired.
For an entire anthology-intelligence species to properly set and balance ends and means in order to successfully accomplish what its best self truly desires is, of course, much harder considered as a coordination problem than for an individual brain controlling a single animal organism to do so. Nevertheless, the second key to the history of the 20th century, just behind the key that is the understanding of the enormous unprecedented leap forward in our technological prowess, is the recognition of how unintelligently humanity has chosen and is choosing the goals it is devoting its anthology-intelligence focus to pursuing.
What went wrong? Well, Hayek may have been a genius, but only the Dr. Jekyll-side of him was a genius. He [Hayek] and his followers were extraordinary idiots as well.
Truth be told, I actually think Hayek was about 1/4 genius and 3/4 idiot. Is macroeconomics was completely stupid, and enormously at variance with his microeconomic insights as well. That the extremely clever market economy could not find a way to respond to a monetary injection (whether coming from a gold discovery or a central bank expansion) other than by grossly over-investing in excessively roundabout and long-term unsustainable production processes? That having so over-invested, it had no way to unwedge itself than to shift huge numbers of workers from now low-productivity investment-goods production to zero-productivity unemployment? Come on! Be serious! His respect for the time-honored wisdom of the of the ages in human social organization combined with his contempt for such and for all countervailing-power institutions in the economy? Ludicrous. ‘And then there is the dodging-and-weaving Hayek: complaining to Paul Samuelson about the "malicious distortion" Samuelson committed by summarizing Hayek's position as "government modification of market laissez-faire must lead inevitably to political serfdom", yet in his 1956 forward to The Road to Serfdom we find:
Six years of [Labour Party] government in England have not produced anything resembling a totalitarian state. But those who argue that this has disproved the thesis of The Road to Serfdom have really missed... that the most important change which extensive government control produces is a psychological change... over... generations.... The change undergone by the character of the British people... can hardly be mistaken... The British experience convinces me... is that the unforeseen but inevitable consequences of socialist planning create a state of affairs in which... totalitarian forces will get the upper hand.
Macro, society-economy, rhetorical honesty—against those three faces of the Bad Hayek we have the Good information-theoretic Hayek, who is very good indeed: https://delong.typepad.com/sdj/2014/08/over-at-equitable-growth-yet-another-note-on-mont-pelerin-thinking-some-more-about-bob-solows-view.html… You can quibble that Michael Polanyi saw further and deeper, and that Polanyi's distinction between "mercenary" and "fiduciary" modes of human activity is of decisive importance for understanding the proper place of the market in society, and you would be right. But Hayek got to the mountaintop to see what was on the other side first. <https://delong.typepad.com/sdj/2014/08/over-at-equitable-growth-yet-another-note-on-mont-pelerin-thinking-some-more-about-bob-solows-view.html>
They [Mr. Hyde-Hayek and his idiot followers] also thought the market alone could do the job—or at least all the job that could be done—and commanded humanity to believe in the workings of a system with a logic of its own that mere humans could never fully understand: “The market giveth, the market taketh away; blessed be the name of the market.” They thought that what salvation was possible for humanity would come not through St. Paul of Tarsus’s solo fide but through Hayek’s solo mercato. But humanity objected.
Karl Polanyi wrote that the Hayekian project, in which humanity is made rich as a byproduct of profit-motivated economic agents responding to the price signals sent by the rich was a:
stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it
Think of it: Your community and its associated land-use and sociability patterns ("land"), your occupations and its remuneration on a scale appropriate to your status and to your desert resulting from your applying yourself ("labor"), and the very stability of and your ability to be paid for performing your job at all (“finance”)—all of these melt into air if they do not satisfy some maximum-profitability-use-of-resources test (“fictitious commodities”) imposed by some rootless cosmopolite thousands of miles away. Furthermore, it is a maximum-profitability test that is applied, not a societal-wellbeing test The (competitive, externality-free, in-equilbrium) market system definitely and certainly maximizes something. But what it maximizes is not any idea of the well-being of society, but rather the wealth-weighted satisfaction of the rich.
So society responded: people believe that they have other rights rather than property rights (which are valuable only if your particular piece of property is useful for producing things for which the rich have a serious jones). And so they strove to organize society to vindicate those other Polanyian rights. And so society did so by attacking the market, and by attacking all of those it saw as its internal and external enemies that the global market system was empowering to oppress them.
Polanyi, writing in 1943 and thereabouts as Rotmistrov threw his 5th Guards Tank Army T-34s into the abattoir at Prokhorovka in an insanely one-sided loss ratio to keep the Nazi SS tank divisions "Adolf Hitler's Bodyguards", "The Empire", and "Death's Head" from breaking through in the one operation that might have won the Battle of Kursk for the Nazis, the most striking thing about this double movement—the market attempts to destroy society in the interest of creative-destruction and satisfying the desires of the rich, society strikes back—was the extraordinary size and violence of the cataclysm that, from 1914 to 1945, destroyed human progress that had, during the 1870 to 1914 Belle Époque, seemed a marvelous and unmerited miraculous and stable gift to humanity. "Economic El Dorado", in Keynes's words in 1919. Polanyi:
No explanation can satisfy which does not account for the suddenness of the cataclysm. As if the forces of change had been pent up for a century, a torrent of events is pouring down on mankind. A social transformation of planetary range is being topped by wars of an unprecedented type in which a score of states crashed, and the contours of new empires are emerging out of a sea of blood. But this fact of demoniac violence is merely superimposed on a swift, silent current of change which swallows up the past often without so much as a ripple on the surface! A reasoned analysis of the catastrophe must account both for the tempestuous action and the quiet dissolution.
Polanyi wrote at the midpoint of the 1870-2010 Long 20th Century. After 1945 things were put back together, and there was another age, a Super-Belle Époch, the Thirty Glorious Years of social democracy, during which the great and good of humanity, at least in the North Atlantic plus Japan, could think that they had finally gotten it right. It was attained not by returning to a more purified and ruthless version of the pseudo-classical semi-liberal Hayekian system, not by building the New Man in the New Order of market-free Socialism, and not by recognizing that good societies are unified communities for which their charismatic leaders serve as the thongs that bind the bundle of sticks together, and so make the Fascist people strong.
It was attained, rather, by compromises cobbled-together. John Maynard Keynes with a shotgun blessing the hasty wedding-under-duress of Friedrich A. von Hayek and Karl Polanyi. But that social-democratic order did not pass its own sustainability test, and gave way to neoliberalism, which repeatedly failed to deliver the goods, and now here we are.
The market economy solved the problems that it set itself [of making humanity rich as a byproduct of fulfilling the desires of those with valuable property rights—getting the rich their luxuries and the middle-class their conveniences]—but then society did not want those solutions. It wanted solutions to other problems, problems that the market economy did not set itself, and for which the crowdsourced solutions it offered were inadequate. It was, perhaps, Hungarian-Jewish-Torontonian moral philosopher Karl Polanyi who best described the issue. The market economy recognizes property rights. It sets itself the problem of giving those who own property—or, rather, the pieces of property that it decides are valuable—what they think they want. If you have no property, you have no rights. And if the property you have isnot valuable, the rights you have are very thin indeed.
As I wrote back then: I remember back in the… spring of 1981, I think it was. I asked my professor, William Thomson, visiting from Rochester, roughly this: "The utilitarian social welfare function is Ωu = U(1) + U(2) + U(3)… The competitive market economy maximizes a market social welfare function Ωm = ω(1)U(1) + ω(2)U(2) + ω(3)U(3)…, where the ω(i)s are Negishi weights that are increasing functions of your lifetime wealth W(i)—indeed, if lifetime utility is log wealth, then ω(i)=W(i). Market failures drive wedges between what the economy achieves and what it could achieve. There are massive, massive differences between the Ωu that is the true social welfare function and the function Ωm that the well-working market maximizes. Why isn’t the unequal distribution of ex ante expected lifetime income—inequality of opportunity—conceptualized by US economists as the greatest of all market failures?" Thomson did not have a good answer.
My other teacher Joe Kalt, however did—an answer that old Freddie from Barmen and Charlie from Trier would have endorsed. People who talk about the Pareto-optimality of the market rather than about the divergence between the market's and the real Societal-Wellbeing Function are in the business of justifying that wealth—however acquired—should be the source of social power, and they are not in the business of working for the public interest. Most are in this business because it is relatively lucrative.
Others have a somewhat deeper rationale. Friedrich von Hayek, for example, was convinced to his dying day and beyond that no better political-economic system than the market and private property could be devised, and that attempts to do so inevitably put us on the road to, well, serfdom. Thus justifications of the "optimality" of the market perform the same function in Hayek's Republic as the claim that those chosen to be guardians have souls of gold perform's in Plato's. But Plato never claims that the purveyors of the noble lie that beguiles the citizens of his Republic were philosophers.
But people think they have other rights [than property rights, which are themselves only worth anything only if their property is valuable]—they think that those who do not own valuable property should have the social power to be listened to, and that societies should take their needs and desires into account. Now the market economy might i n fact satisfy their [the non-rich's] needs and desires. But if it did so, it did so only by accident: only if satisfying them happens to conform to a maximum-profitability test performed by a market economy that is solving the problem of getting the owners of valuable pieces of property as much of what the rich want as possible.
The idea that the market economy is a societal machine for satisfying the desires not of the people, but rather of the people with disposable income—that is an old one, dating back to the mid-1700s and to Richard Cantillon's "Essay on the General Nature of Commerce". But it is not one that is highlighted in most economics courses—that the market listens to you more-or-less in proportion to your disposable wealth. That is instead hidden beneath the statement that the market considers your wishes according to your willingness-to-pay—as if it were purely a matter of individual will, rather than at least as much a matter of the social power your wealth assigns to you.
When I teach Econ 1, I replace "willingness to pay" with "intensity of desire times wealth." In general, in a market economy, if you have property or skills both useful for producing things for which the rich have a serious Jones and scarce, he will do OK. Otherwise not so much. Moreover, even if you are doing okay now, the creative destruction of the market system, especially in the long 20th century in which human technological capabilities are doubling and thus the economy is being revolutionized every generation creates great instability: if the particular value chain in which you are enmeshed shifts, or if your particular bargaining power within it changes up, whatever economic position and social power you have may will vanish overnight as the fabric of your life fails to pass some maximum-profitability test inflicted by some rootless cosmopolite financier thousands of miles away.
THIS IS NOT HOW PEOPLE THINK THEIR SOCIETY SHOULD WORK!!
As Karl Polanyi put it, the market system attempts to create a "stark utopia" by destroying all sources of social power and all societal bonds except those mediated by wealth. And society—which has very different ideas about who should have social power and who should be listened to—reacts, by trying to damage the market system and damage those whom it decides are the rootless cosmopolites and their allies who are misusing it to the detriment of the people, the real, essential, worthy people. This has a long history. When Karl Marx began writing, the word he used for the concept he later labelled "bourgeois" was "Jewishness".
So throughout the long twentieth century, communities and people looked at what the market economy was delivering to them and said: 'Did we order that?'”.
That last reference is to Nobel Prize-winning physicist I.I. Rabi's quip in response to the identification of the muon—an elementary particle that seemed then to be nothing other than a much heavier version of the electron. The point is that the industrializing market economy in the context of much more rapid technological progress fueled by the phase-shift from the coming of full globalization, the industrial research lab, and the modern was certainly producing something. But it was not producing what humanity had ordered for the era of progress that visionaries had hoped would be launched by the Belle Époque that began in 1870. It was not producing anything that could be called a real utopia, substantially because the market economy was solving the problem of getting those who owned valuable property the luxuries they thought they wished, rather than solving the problem of making a truly human world for us all.
And society demanded something else, The idiot Mr. Hyde-side of Friedrich von Hayek called it [what society demanded in addition to the vindication of property rights] 'social justice', and decreed that people should fuggedaboudit: the market economy could never deliver social justice, and to try to rejigger society so that social justice could be delivered would destroy the market economy’s ability to deliver what it could deliver—increasing wealth, distributed to those who owned valuable property rights.
In a way, von Hayek's point-of-view was as mystical as Marx, Lenin, and Trotsky's. Edmund S. Wilson noted, in his "To the Finland Station", that what Trotsky at least wrote made absolutely no sense unless you replaced "history" and "dialectic of history" with "Providence" and "God". Hayek has a very similar attitude toward the catallaxy. It was not designed by humanity. It cannot be improved by humans. For humans to even question it is impious, a violation of taboo, and brings down awful retribution and judgment.
Much wiser than von Hayek, I think, was Michael Polanyi, for whom both fiduciary and mercenary institutions have their proper place, and they can be (partially) designed, improved, and kept within their proper bounds by humans acting consciously and collectively.
Do note that in this context [the] 'social justice' [thata society demanded] was always only 'justice' relative to what particular [powerful] groups desired: not anything justified by any consensus transcendental principles. Do note that it was rarely egalitarian: it is unjust if those unequal to you are treated equally. But the only conception of 'justice' that the market economy could deliver was what the rich might think was just, for the property owners were the only people it cared for."
If we were to give Friedrich von Hayek the mic, he would say that the attempts by holders of other forms of social power to upend the workings of the market had to be destructive in terms of their effect on wealth-creation, and were at best neutral in terms of their effects on wealth-distribution. They brought more chaos and uncertainty to an already chaotic world, and so risk aversion made them a bad idea even if their revolutions could be quick and relatively painless. The social fabric of the Habsburg Empire was nothing to be proud of, but there was no gain in expected value by replacing it with one imposed by storm troopers, whether Steel Helmets or Red Guards or the ethno-nationalism of some particular relatively small grouping of valleys. The moral arc of the universe, von Hayek would have said, does not bend toward justice. Only a fool thinks it does. So all we can do is to try to calm everybody down, keep the (social) peace, and let obedience to market forces deliver what they can deliver—and they can deliver marvelous things. From the standpoint of the 20th-century history of Vienna, Budapest, Prague, Zagreb, Belgrad, or Cracow, Hayek's argument looks rather strong. It looks less strong from the standpoint of London, Paris, New York, or Los Angeles.
Plus, the market economy is powerful but very very imperfect even on its own terms of reference. It cannot by itself deliver enough research and development, for example, or environmental quality, or, indeed, full and stable employment.
The problems of "externalities "and "market power ": anytime there is somebody who is not a participant in a bargain who is materially affected by its terms and conditions, the argument that a bargain is win-win with no downside fails. And anytime there is not somebody just down the street able to offer an alternative bargain just as good, holdup problems will ensure that the market leaves substantial wealth on the table. A well-functioning market economy needs very aggressive antitrust and price-posting to support it. A well-functioning market economy needs an enormous structure of Pigovian taxes and subsidies to point it in the right direction.
There is, in Chicago-School folklore, a very strange belief that Ronald Coase with his "The Problem of Social Cost", disproved Pigou: that there are no externalities, there are only transaction costs resulting mostly from the failure to properly set up initial property rights by appropriately carving up the beast "at the joints" so that the relevant parties could make the needed externality-incorporating arrangements. There are references to a 1959 dinner at the house of Aaron Director,.where Coase convinced 20 initially very skeptical economists, including Friedman and Stigler, that Pigou was simply "wrong".
What was supposed to be Coase's argument-clinching point—that if the farmer has the right to keep sparks from the locomotive from.lighting his crops on fire, the railroad gets to decide whether to buy out that right or not; while if the railroad has the right to emit sparks, the farmer gets to decide whether to buy out that right or not, and so there is not an "externality" but merely a "transaction cost" (i.e., in this case a "holdup") problem. Thus it does not matter who holds the property right as long as somebody holds it. Now that argument is simply wrong. If the railroad has the property right, it installs a flamethrower on top of.the locomotive before the bargaining begins. It doesn't do that if the farmer has the property right.
Moreov3r, a world in which there are no significant transaction costs... that is not a market economy, that is a free society of associated producers—a verydifferent thing indeed. The claims that "the market will take care of it", and that government failure is always and everywhere a bigger danger than market failure rest on the claim that market failures are typically small. Yet that claim is ideological in the extreme, not empirical at all.
No:’ ‘The market giveth, the market taketh away; blessed be the name of the market' was not a stable principle around which to organize society and political economy. The only stable principle had to be some version of 'The market was made for man, not man for the market'.
The references, of course, are to Job 1:21: "And [he] said 'Naked came I out of my mother's womb, and naked shall I return thither: the Lord gave, and the Lord hath taken away; blessed be the name of the Lord.'" And Mark 227: "And he said unto them, 'The sabbath was made for man, and not man for the sabbath'. The.point is that human societies will not long stand for the inversion of values associated with the apotheosis of the Mammon of Unrighteousness. Society must work or must at least be perceived to work on a human scale. Now there is an argument that simply letting the market rip and hoping for the best is the best attainable option. But that can be sustained only when the "creation" part of Schumpeter's creative destruction is very large, and the "destruction" part unusually small. How to accomplish that is to borrow a phrase my teacher Charlie Kindleberger used in a different context, "a neat trick... sleight of hand, some trick with mirrors". The problem is that those who worship the Mammon of Unrighteousness that is the market cannot understand that hard and clever work is required to make that happen. They do not understand that in order to make that happen you actually need mechanics so that the two boats can sail, and the one helicopter can fly, in the terms of the old joke.
But who were the men who counted, for whom the market should be made? And what version would be the best making? And how to resolve the inevitable squabbles over the answers to those questions?
Simply concluding that the creative-destruction of the technological progress-fueled market had to be somehow leashed got humanity to precisely nowheresville. Humanity needed a plan. And it needed to be a good plan. Much of the failure of humanity to use its technological powers during the Long 20th Century 1870-2010 to approach utopia had to do with the absence of a good plan, or indeed of any .coherent plan at all, or even of a mechanism to filter possible plans to reach near-consensus on one probably-good one that then could be turned into running code.
John Maynard Keynes saw this lack in the early 1920s, and expressed it well in a review he wrote of the work of Leon Trotsky <https://marxists.org/history/etol/document/comments/keynes01.htm…>: Keynes:
Granted his assumptions, much of Trotsky’s argument is... unanswerable.... But what are his assumptions? He assumes that the moral and intellectual problems of the transformation of Society have been already solved—that a plan exists.... He is so much occupied with means that he forgets to tell us what it is all for. If we pressed him, I suppose he would mention Marx. And there we will leave him with an echo of his own words—'together with theological literature, perhaps the most useless, and in any case the most boring form of verbal creation.' Trotsky’s book must confirm us in our conviction of the uselessness, the empty-headedness of Force at.the present stage of human affairs.... 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 – and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait.
In the Thirty Glorious Years after World War II, it seemed as though mixed-economy social-democracy was the plan, but that failed its political sustainability test in the 1970s. At the end of the 1990s many (including me) claimed that "soft" left-neoliberalism was the plan, but its failure to surpass the bar has been far more glaring than social democracy's failures in its day. And "hard" right-neoliberalism has delivered on none of its promises save to create and entrench a corrupt plutocracy.
So we are still waiting.
As Max Weber <https://soc.upenn.edu/sites/default/files/Weber-Science-as-a-Vocation.pdf> once wrote:
For the many who tarry today for new prophets... the situation is the same as... the... song of... exile...
Watchman, how much longer will this dark night last?' 'The morning will come, but then the night will return. Ask when you want to. And return to ask again.
From this we want to draw the lesson that nothing is gained by yearning and tarrying by themselves, and we shall act differently. We shall set to work and meet 'the demands of the day' in human relations as well as in our vocations...
But in spite of what Weber tries to claim at the end of "Wissenschaft als Beruf", meeting 'the demands of the day' without a prophet with a good plan is not easy. Not easy for each of us. Not easy for all of us.
Throughout the long twentieth century, many others—Karl Polanyi, John Maynard Keynes, Benito Mussolini, and Vladimir Lenin serve as good markers for many of the currents of thought, activism, and action—tried to think up solutions.
How do you keep—or perhaps improve upon—the incentives for efficient production, rapid creative destruction, and technological advance that the private-property market economy provides, without also buying into its proviso that only property conveys rights that allow one to count in the eyes of society's decision-making processes? Keynes thought the problem could be.finessed with an extremely light-handed amount of central planning: full-employment policy, and the euthanization of the rentier class by the low interest rates need to implement full-employment policy, would do enough of the job to make the economic problem cease being a bigger deal than the problem of the continued survival of Disco.
Karl Polanyi thought that human recognition of society's demands for more rights than property rights would be the key:
Acceptance of the reality of society gives man indomitable courage and strength.... As long as he is true to the task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality.
That peroration may have satisfied Polanyi, but I have no idea what it means.
Mussolini took the strength of ethno-nationalism to teach the lesson, as Polanyi says, that humans must "resign [themselves] to relinquishing freedom and glorif[y the] power which is the reality of society", just as a single stick that claims to be free is soon broken, while if it loses its freedom in a stick-bundle tied with leather thongs it becomes a mighty force in the hand of its wielder.
Lenin suffered from the infantile mental disorder of believing that upon the removal of the market the oppressive state would also wither away, and all would be very simple and easy, for:
Accounting and control necessary... have been simplified by capitalists to the utmost and reduced to the extraordinarily simple operations—which any literate person can perform—of supervising and recording, knowledge of the four rules of arithmetic, and issuing appropriate receipts.
They [Polanyi, Keynes, Mussolini, Lenin, and uncountably many others] dissented from the pseudo-classical (for the order of society, economy, and polity as it stood in the years after 1870 was in fact quite new), semi-liberal (for it rested upon ascribed and inherited authority as much as on freedom) order that Hayek and his ilk advocated and worked to create and maintain. They did so constructively and destructively, demanding that the market do less, or do something different, and that other institutions do more.
As I said above, recognition that people reject the idea that social power .should be distributed according to wealth (whether earned, windfall, or inherited) and mediated purely through the cash nexus is not an answer to the problem of managing creative destruction, but merely a recognition that there is a question. The answer remains opaque and obscure. Finding an answer became an extremely pressing need after 1870, as technological progress doubled humanity's collective powers to manipulate nature and organize themselves not every 1450 years (as in the pre-1500 Agrarian Age), not every 500 years (as in the 1500-1770 Imperial-Commercial Age), not every 160) years (as in the 1770-1870 Industrial Revolution Age, but every 35 years in the post-1870 Modern Economic Growth Age. Without an answer, and a good answer, to how to manage such a pace of creative destruction, society would react against the logic the market was imposing on it, and in the process smash things to bits.
Perhaps the closest humanity got [to the road to a real utopia, to a truly human world] was the shotgun marriage of Hayek and Polanyi, blessed by Keynes, that took form in post-World War II North Atlantic developmental-state social democracy. But that institutional setup failed its own sustainability test. And so we are still on the path, not at the end, and unsure whether the path leads anywhere.
And so we are still, at best, slouching toward utopia.
That the pseudo-classical semi-liberal order of the 1870-1914 Belle Époque fell apart into so many different catastrophes after 1914 is readily comprehensible. Governments and élites failed to manage economic creative-destruction at the fever-heat pace at which it lurched forward after 1870, as full globalization, the industrial research lab, and the modern corporation all came on stream. The failure-to-manage led to many, many societal reactions against the ongoing rush of claims that all was OK—that "the market giveth, the market taketh away: blessed be the name of the market". The demands and then the attempts to build a better New Order—or rather, multiple attempts to do so—turned at least Europe into a hellhole and an abattoir until 1945.
And then things were somehow righted. And history began to rhyme, as the pattern of an upward lurch to unprecedented economic growth and technological change after 1870 that created the Belle Époque was followed by another upward lurch to super-unprecedented economic growth after 1945 that created the Thirty Glorious Years of social democracy: the most golden of Golden Ages, as far as visible progress toward a true utopia, a truly human world, was concerned.
Yet it did not last: by the late 1970s social democracy failed its political-economy sustainability test, in a way somewhat reminiscent of post-1914 loss of confidence in pseudo-classical semi-liberalism. Yet why the judgment of the Great and Good—and of the voters at the polls—that what was needed was A Neoliberal Turn remains obscure to me, even though I lived through it.
With sentence 86, my "Slouching" reaches the first of its pauses. By this point I have run through my Grand Narrative, which I chose not because it was true but because it was the least false one I could think of, and I badly needed a Grand Narrative on which to hang the structure of the book.
The one I chose is, broadly, a Polanyian one. And I freely avow myself a pupil of that mighty thinker. But instead of turning him on his head, I have merely mixed him with flavors of Keynes and von Hayek. (Alas! I have not managed to also mix in the flavors of Schumpeter, Popper, Drucker, and Karl Polanyi's younger brother Michael. That would have required a book with pages numbering in the four digits, which Basic would have been very unlikely to publish. But I dearly feel the absence.)
Now, in the next passage in my manuscript, I turn to defending and explaining why I feel I have to have a Grand Narrative at all, and why the one I have chosen has the virtue of being least-false:
Return to my claim above that the long twentieth century was the first century in which the most important historical thread was the economic one. That is a claim worth pausing over.
The [long 20th] century saw, among much else, two world wars, the Holocaust, the rise and fall of the Soviet Union, the zenith of American influence, and the rise of communist China. How dare I say that these are all aspects of one primarily economic story? Indeed, how dare I say that there is one single most consequential thread?"
Let alone boldly and baldly assert that that single most consequential thread was the economic one?
Technological advance in the context of a globalized market economy as the coming of modern science assisted by the industrial research lab and the modern corporation discovered, developed, deployed, and then diffused enough new technologies—enough new and better ideas about how to manipulate nature and organize humans—to double humanity's collective technological prowess every generation, and thus to revolutionize and re-revolutionize the economy every single generation from 1870 to 2010. How dare I assert that, you ask?
I dare assert it because it is true.
And you cannot understand even a smidgeon of history over 1870 to 2010 without starting from d deep grasp of that economic process and its impact on everything else.
I dare [assert my Grand Narrative that the economic thread is by far the most important thread of the history of the long 20th century] because we have to tell grand narratives if we are to think at all. Grand narratives are, in the words of that bellwether twentieth-century philosopher Ludwig Wittgenstein, 'nonsense.' But, in a sense, all human .thought is nonsense: fuzzy, prone to confusions, and capable of leading us astray. And our fuzzy thoughts are the only ways we can think—the only ways we have to progress. If we are lucky, Wittgenstein said, we can 'recognize…. them as nonsensical', and use them as steps 'to climb beyond them . . . [and then] throw away the ladder'—for, perhaps, we will have learned to transcend 'these propositions' and gained the ability to 'see the world aright'.
This is a personal milestone: I have never had occasion to quote Ludwig Wittgenstein before.
I am trying at this point in the manuscript to pull off a double movement: First, to assert the "truth" of my Grand Narrative—for it is true, or rather if you do not presume that it is true you cannot think about the history of the long 20th century at all. Second, that the Grand Narrative is false—a crutch that we need because our East African Plains Ape monkey-brains can only think in narratives. Thus it is a crutch that is essential to us. But it is a crutch that breaks when .we lean on it.
I really do not know how to think about this: Paradox of knowledge? Paradox of ignorance? The ultimate "motte & bailey" intellectual move?
It is in hopes of transcending the nonsense to glimpse the world aright that I’ve written this grand narrative. It is in that spirit that I declare unhesitatingly that the most consequent thread through all this history was economic.
In short, if you are to understand anything at all about the history of the long 20th century—if your thoughts are to be even somewhat coherent, and somewhere in the neighborhood of what a much vaster scrutinizing intelligence might call "the truth", you have to start from the premise that the axis around which history revolved from 1870-2010 was that of the economic trends, events, patterns, and transformations that rocked the world, not once, but every single generation again and again and again.
Moreover, you have to hold tight to the true knowledge that the long 20th century was the first century in which this was true. In all previous centuries—with the partial exception of 1770-1870—the economic side was the painted backdrop in front of which the play proceeded, with the economy becoming a protagonist in history only when we stepped back from any single-century perspective and took the millennial perspective of the longue durée.
The British Industrial Revolution century was a partial—a very partial—exception to this. In the radius-300 miles "Dover Circle" and its offshoot economies, by 1870 humanity's discovered, developed, deployed, and diffused technological prowess stood at 2.5x its level of 1770.
By 1870, in the "Dover Circle" plus offshoots, roughly and approximately, on average what it had taken 250 workers to do in 1770 it took only 100 workers to do in 1870. That economic change had upended society, culture, and politics within the "Dover Circle" (plus offshoots). But it had only done so once. And it had taken 100 years. '
After 1870, that much economic creative-destruction upending everything else would take place every generation.
And if we step outside the 300-mile radius Dover Circle, and look at the world as a whole? For the world as a whole humanity's deployed technological prowess was only some 3/5 higher than it had been in 1770.
That was certainly enough to shake thrones and altars and shift patterns of authority, hierarchy, coordination, and gift- and market-exchange. But outside the Dover Circle, the meat and fish of history over 1770-1870 remained the dance of culture, society, war, conquest, and politics, with the economic being the scene backdrop and arranging the furniture on stage before and as the actors entered and the play of history began.
Before 1870, over and over again, technology lost its race with human fecundity, with the speed at which we reproduce.
Simply reminding readers that humanity was ensorcelled by the Devil of Malthus before the start of the Long 20th Century: improvements in technology flow overwhelmingly to increasing human numbers, very secondarily to the material benefit of the rich, (and tertiarily to sharpening the incentives of the powerful to dominate and their capabilities to do so,) and otherwise leave humanity stuck in poverty without positive liberty, living "the same life of degradation and imprisonment" in the words of John Stuart Mill.
Greater numbers, coupled with resource scarcity and a slow pace of technological innovation, produced a situation in which most people, most of the time, could not be confident that in a year they and their family members would have enough to eat and a roof over their heads.
Figure, very very roughly, $2.50 per day as the living standard for a not-atypical human back before 1500, or, indeed 1870. Things were different for upper and middle classes, and for favored members, at least, of working classes during "efflorescences". But most humans during the long Agrarian Age lived in what the World Bank today would classify as on the edge of extreme poverty. And they did not have access to the village smartphone, or to the public health that gives our people living on $2.50/day a life expectancy at birth of 60 instead of 30.
Why were they so poor? Well, consider: in an Agrarian Age society, durable social power for women (and for men too) rests on being the mother (father) of surviving sons, themselves reproducing. But in a world of slow population growth, 1/3 of couples wind up having zero. That means that, at the margin, given that you face that 1/3 risk of ending up sonless, what do you do with extra resources? Yup. Try to have another boy. And if the average couple has 2.01 children themselves surviving to reproduce, smaller farm sizes and the greater resource scarcity that creates will eat up all of the potential higher-standard-of-living benefits from the glacially-slow Agrarian-Age growth of human technological prowess.
Before 1870, those able to attain such comforts had to do so by taking from others, rather than by finding ways to make more for everyone (especially because those specializing in producing, rather than taking, thereby become very soft and attractive targets to the specializers in taking).
This is, I think, one key difference between the old days and now. We see shadows of what we have become in the "efflorescences" of past eras, when Imperial Peace actually allowed commerce to flourish. And those times were, indeed great times for those days. But the prospects for us are so much greater.
The ice was breaking before 1870. Between 1770and 1870 technology and organization gained a step or two on fecundity. But only a step or two.
Worldwide, between 1770 and 1870, population grew by 0.55%/year and my estimate of average real income per capita grew at 0.17%/year. Using my rule-of-thumb that the value of the human deployed-ideas stock in the world economy is average income per capita times the square-root of population, that gives us a rate of growth of technological prowess of 0.44% per year over that British Industrial Revolution century
Such a rate-of-increase of the deployed-ideas stock could be neutralized, as far as its effect on average human standards of living is concerned, by population growth at 0.88% per year. What we actually got, worldwide, since 1870 has been population growth at 1.18%/year. If we had not had a further upward leap in the pace of growth of our technological prowess after 1870, odds are that increasing human average material prosperity would have come to a stop around 1900, with average incomes around $4.25/day. Since then, if our global technology had continued to advance at the pace of the British Industrial Revolution century, our world population would have grown from 1.5 billion to 4 billion, with average living standards worldwide like those of Eritrea or Mozambique actually saw in 1905 or so—the year that Henry Ford announced that he could build the Model T (it then took three years to get that 20-hp vehicle rolling off the assembly line); and that Leonardo Torres y Quevedo and A. Kindelán built the dirigible "España". Our counterfactual steampunk world today with such technology would have been a lot poorer than the world actually was back in 1905: 0utside China and India average income per capita in 1905 was something like $8/day; including China and India the world average in 1905 was something like $6/day. Why the greater poverty? Supporting 4 billion rather than 1.5 billion people on circa-1905 agricultural technology would have been very hard.
All this counterfactual Steampunk World today assumes that the world would have kept up the 1770-1870 pace of advance of deployed technology. But that depended on really cheap coal. And, as W. Stanley Jevons had pointed out, the really cheap coal was being rapidly exhausted. A slowdown in the pace of worldwide deployed and diffused technology after 1870 to the 0.15%/year pace of the Imperial-Commercial Revolution 1500-1770 age would give us today ca.-1885 technology and a world of 2 billion people, at an average income of maybe $3.25/day—what Croatia or Peru had in 1800.
That, of course, is not the world we got. Around 1870 the rate of growth of human technological prowess, powers to manipulate nature and organize humans, discovered, developed, deployed, and diffused around the world, jumped up from 0.44%/year to 2.1%/year. And that has made all the difference between the counterfactual Steampunk Worlds today of 1885-level technology and 2 billion people, or 1905-level technology and 4 billion people, and us.
In the early 1870s that British establishment-whig economist, moral philosopher, and bureaucrat John Stuart Mill claimed, with some justification, that “it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.” You have to go forward a generation after 1870 before general and broadly distributed material progress becomes unquestionable.
Mill did say that, as of 1870, mechanical inventions had enabled a much larger comfortable middle class, and had fabulously enriched plutocrats. But his normal Benthamite utilitarianism gave him a near-Rawlsian take on the value of different societies—that the marginal utility of wealth declines steeply enough that any sensible social welfare function is very close to simply being the standard-of-living of the working class. That take on the SWF has to, I think, be the take of any moderately competent economist. And it is always a marvel to me that such a small proportion of economists seem moderately competent in this way.
Mill's declaration was thus (a) a claim that hitherto mechanical inventions had not been such hot stuff, plus (b) a claim that humanity was using those inventions badly from the standpoint of accomplishing human flourishing—not even slouching towards utopia.
I think that combination of claims about the 1770-1870 world is broadly right. But that rightness should not lead you to forget that the ice had broken up over 1770-1870—a proportional rate of growth h of the value H of the human deployed-and-diffused stock of technology of some 0.44%/year worldwide, and of some 0.91%/year in the 300-mile-radius circle around the southeast England port of Dover, plus its offshoots and successful emulators elsewhere.
The world on average was still ensorcelled by the Devil of Malthus in 1870. But that was no longer true for the Dover-Circle-Plus. It, over 1770-1870, saw rough average annual rates of growth of 0.85%/year in population (via natural increase, immigration, and emulation), and an absolutely-stunning-in-the-perspective-of-all-past-history 0.69%/year in living standards and productivity levels.
My guess was that that extraordinary century 1770-1870 in the Dover-Circle-Plus was driven 5/6 by technological advancement (and supporting physical and human capital investment) and 1/6 by resource engrossment via conquest, settlement, theft, and purchase. But I could be wrong. And that is something to think hard about.
And the ice could then have resolidified—the nineteenth-century technologies of steam, iron, rails, and textiles were approaching their culmination point; moreover, they all depended on hypercheap coal, and the hypercheap coal was being exhausted.
Could humanity have missed the on-ramp to modern economic growth? Could humanity's pace of technology growth have fallen back below its 0.44%/year 1770-1870 pace, or stayed at that pace, but failed to make it through to the demographic transition, and so had a near-static average real income level to our day? Or were full globalization to make it profitable to diffuse technology, industrial research labs to rationalize and routinize the discovery and development of technology, and modern corporations to rationalize and routinize the development and deployment of technology—were these all close-to-inevitable once humanity had taken the fork in the historical road that led to steampower and textile machinery?
My hunch is that without a good and strong theory about why things that look like sharp phase-transitions are inevitable, odds are that they are a matter of chance and contingency. But I do not know how I would even start going about testing that hunch.
But tell anyone from before the long twentieth century about the wealth, productivity, technology, and sophisticated productive organizations of the world today, and their likely response, as noted above, would be that with such enormous power and wealth in our collective hands we must have built a utopia. That is in fact what they did tell us. Perhaps the third best-selling novel in the United States in the nineteenth century was Looking Backward, 2000–1887, by Edward Bellamy. Bellamy was a populist and—although he rejected the name—a socialist: he dreamed of a utopia created by government ownership of industry, the elimination of destructive competition, and the altruistic mobilization of human energies."
There would by 2000 be, Bellamy thought, more than enough for everyone to live comfortably. And with more than enough, everyone should relax beneath their own vine and fig tree, rather than struggle to deprive others of what was rightfully theirs. The only reason to struggle to deprive was if it was the way for you to get enough. That was Bellamy's underlying logic. What Bellamy did not see was that people would think that it was bad that the undeserving would get the enough that they did not deserve. And what people did not see was that the cost you paid for their being enough was that you found yourself enserfed to the logic of the marketplace—where you had no rights other than those given you by your property, and where your property rights were worthless unless they were helpful in producing things for which the rich had a serious jones.
Technological and organizational abundance, [Edward Bellamy] believed, would generate a society of abundance. His novel, therefore, was a “literary fantasy, a fairy tale of social felicity”, in which he imagined “hanging in mid-air, far out of reach of the sordid and material world of the present... [a] cloud-palace for an ideal humanity."
And Bellamy saw no reason why that palace for ideal humanity might not be attained before our day. The northern mobilization for the Civil War had, he thought, shown the enormous powers of humanity when mobilized for good and the enormous willingness of humanity to bend the moral arc of the universe towards justice. Add on the marvels of modern science and technology, and all the things that had blocked utopia—that had kept humanity fighting over mine and thine—would melt away. How could it not be the case that a humanity that could send 400,000 young men South to die to free 5,000,000 slaves could fail to use awesome technological powers to take us all up into the cloud-palaces of the utopian future?
[Edward Bellamy] throws his narrator-protagonist forward in time, from 1887 to 2000, to marvel at a rich, well-functioning society. At one point the narrator-protagonist is asked if he would like to hear some music. He expects his hostess to play the piano.
Bellamy's point is going to be that the technological marvels of the year-2000 allow for the incredible amplification of even the wonders of civilization—in this case, the wonder of civilization that is the incredible versatile piano. This alone would be testament to a vast leap forward. To listen to middle-class music on demand in around 1900 you had to have—in your house or nearby—an instrument, and someone trained to play it. It would have cost the average worker some 2,400 hours, roughly a year at a 50-hour workweek, to earn the money to buy a high-quality pianoforte. Then there would be the expense and the time committed to piano lessons." Listening to middle-class moderate-quality music in your house was a privilege reserved to the rich. It was something that Edward Bellamy dreamed would be democratized in the world of technological abundance and human solidarity that he dreamed that the year 2000 would see. Anyone could listen to music in their house! And not just the performance of one amateur performer! Professional music, orchestral music—and you would have a choice of one of four currently-playing orchestras that you could dial up on your speakerphone. That was what Edward Bellamy chose as his example of the wonders of human flourishing that technology and solidarity, the utopia that he thought was hidden in the womb of the then-present.
We have far exceeded his hopes of technology. We have fallen far short of what he thought would be the development of solidarity. And where moon? When Lambo? Where utopia?
But Bellamy’s narrator-protagonist is awed when .his hostess does not sit down at the pianoforte to amuse him. Instead, she “merely touched one or two screws,” and immediately the room was “filled with music; filled, not flooded, for, by some means, the volume of melody had been perfectly graduated to the size of the apartment. ‘Grand!’ I cried. ‘Bach must be at the keys of that organ; but where is the organ?’
Where indeed? In 1884 the Atlanta telephone exchange served over 300 customers—albeit at very low fidelity. (Also: "gramophone" was trademarked in 1887.) But Bellamy's is the first mention I know of as using the telephone network for broadcasting one-to-many provision of services to people not gathered in a concert hall.
[Edward Bellamy’s narrator-protagonist .in Looking Backward: 2000-1887] learns that his host has dialed up, on her telephone landline, a live orchestra, and she has put it on the speakerphone. In Bellamy’s utopia, you see, you can dial up a local orchestra and listen to it play live. But wait. It gets more impressive. He further learns he has a choice. His hostess could dial up one of four orchestras currently playing. The narrator’s reaction? “If we [in the 1800s] could have devised an arrangement for providing everybody with music in their homes perfect in quality, unlimited in quantity, suited to every mood, and beginning and ceasing at will, we should have considered the limit of human felicity already attained.”
Think of that: the limit of human felicity. That is the most that Bellamy thinks he can demand of technology in terms of promoting human flourishing and comfort: that you have a choice of which orchestra you can dial up on your speakerphone. That is the limit of his imagination. Oh. And his characters have Amazon Prime—but they have to go to showrooms rather than browse the internet. And they go out to eat rather than cooking at home. And nobody is overworked. And everyone is middle-class.
Thus the thing that strikes me most about Edward Bellamy's year-2000 utopia of common purpose and material abundance is both how less in the way of technological prowess it requires than we have today, and yet how far we still are from it psychologically. "The limit of human felicity". Think of that.
Utopias are, by definition, the end-all and.be-all. “An imagined place or state of things in which everyone is perfect”: so says Oxford Reference. Much of human history has been spent in disastrous flirtations with ideals of perfection of many varieties. Utopian imaginings during the long twentieth century were responsible for its most shocking grotesqueries. Citing a quotation from the eighteenth-century philosopher Immanuel Kant—“out of the crooked timber of humanity no straight thing was ever made”—the philosopher-historian Isaiah Berlin concluded “and for that reason no perfect solution is, not merely in practice, but in principle, possible in human affairs.” Berlin went on to write, “any determined attempt to produce it is likely to lead to suffering, disillusionment, and failure.” This observationalso points to why I see the long twentieth century as most fundamentally economic. For all its uneven benefits, for all its expanding human felicity without ever reaching its limit, for all its manifest imperfections, economics during the twentieth century has worked just shy of miracles.
Berlin's translation of Kant may not be completely honest—your mileage may vary. Kant's "Aus so krummem Holze, als woraus der Mensch gemacht ist, kann nichts ganz Gerades gezimmert werden" Kant has a sense of imperfection—the things that cannot be made are not "completely straight things": there must be compromises with the reality imposed by the material of which society is built up. Berlin, by contrast, has simply "straight things", and the sense is not of imperfection but of failure. Indeed, Berlin'sentire career can be seen as one long sustained argument that government in particular and human collective action in general should be confined to the very narrow sphere of simply trying to establish tolerance, so that each can sit under his vine and fig tree, and not be afraid.
Freedom from fear is, yes, very important, and an essential part of it is freedom of worship. Freedom of speech can also be seen as part of the vine-fig-peace trinity of bare stripped thin liberalism. But there is also, in FDR's.taxonomy, freedom from want. John Stuart Mill rejected the firm divide Isaiah Berlin wanted to draw between good "negative" and bad so-called "positive" liberty. Society needs to arrange things so that everyone in fact has their own vine and fig tree. Lacking those, people, no matter how much negative liberty they have, are condemned to "the same li[ves] of drudgery and imprisonment".
But let us accept Berlin's broadening from "completely straight" to simply "straight". There is an important and valid insight to be gained here: Edward Bellamy was all but sure that with the technological marvels he saw the 20th century as likely to bring and with the human solidarity that had led 400,000 young men to go South and die in the decisive push to free 5 million slaves, it should be simple and straightforward to build for humanity a real utopia by 2000. But: crooked timber. Technology enables people to make more and more sophisticated things. And one the things people are best at making is, in the words of the brilliant late novelist Iain M. Banks, is "their own unhappiness".
Utopian aspirations, many of them based on ideas of how to organize society's division of labor, have been the source of much misery in the 20th century when people attempt to put them into practice—to force people to become a straight thing. "We need to replace the anarchy of the market with a society that takes direction from a Leader" was one such, and the worst such when the Leader's directions were to exterminate Jews, kill Slavs and herd those whosurvived into concentration camps, all so that German farmers could be fruitful, multiplying, and flourishing on large farms with black earth. But only slightly behind was the idea that we need to replace the anarchy of the market with one particular leader's idea of how Imperial German had run its WWI-era war economy. Third—and not nearly as deadly as the first two—was the idea that the most we could ask for was the market's "stark utopia", in Karl Polanyi's words, and that societies needed "Lykourgan moments".after which all else—even (especially?) democracy—would be subordinate to the creed: "the market giveth, the market taketh away; blessed be the name of the market".
And, yet, the engine of technological advance has given humanity at least 21 times the technological power we had in 1870, and 300 times the prowess of the age of Gilgamesh, King of Uruk, two-thirds god and one-third man, who sought deathlessness and learned wisdom. For those of us lucky enough to take substantial advantage of that technological prowess—which is by now more than half of us—there are vines and fig trees galor! Taco trucks on every corner!
But also surveillance systems, and thermobaric and nuclear weapons.
The consequences of the long twentieth century have been enormous: Today, less than 9 percent of humanity lives at or below the roughly $2-a-day living standard we think of as “extreme poverty,” down from approximately 70 percent in 1870. And even among that 9 percent, many have access to public health and mobile phone communication technologies of vast worth and power.
This is one key consequences of the 2%/year global productivity growth we have seen since 1870, the doubling every generation of human deployed technological prowess, and the creative-destruction every generation revolutionizing and then re-revolutionizing of the economy: humanity is no longer desperately poor, as it was even in 1900. Yes, it is still the case that 10% of us are desperately poor, with material living standards day-to-day not that different from our typical Agrarian-Age ancestors. But even they have double and triple the life expectancy of the Agrarian Age. And they have access to our communications and information technologiesmat some level. And for the remaining 7.2 billion of us, we are all, by the standards of all previous civilizations, at least members of the comfortable middle class (called "middle class" not because they were near the median—they weren't: they were in the upper 15%—but because they stood between the rich and the poor, and their wealth was "middling").
That dire poverty is now a problem of a (substantial) number of very poor people in what are, by previous standards, middle-class countries, rather than that the overwhelming number of people in all countries are desperately poor—that is a tremendous human achievement.
Today, the luckier economies of the world have achieved levels of per capita prosperity at least twenty times those of 1870, and at least twenty-five times those of 1770—and there is every reason to believe prosperity will continue to grow at an exponential, if perhaps somewhat slower, rate in .the centuries to come. Today, the typical citizens of these economies can wield powers—of mobility, of communication, of creation, and of destruction—that approach those attributed to sorcerers and gods in ages past. Even the majority of those living in unlucky economies confront not the $2- to $3-a-day living standard of those economies in 1870 or before, but an average closer to $15 a day.
“Powers akin to sorcerers and gods", like flying down to LA for the day, and thinking little of it. Odin had two—only two—ravens to fly around the world, act as his eyes and ears, and report back to him. Zeus and Thor could throw thunderbolts. Demeter could make crops grow much more abundantly. We do that, and much more.
The many technological innovations of the past century have transformed experiences that were rare and valued luxuries—available only to a rich few at great expense—into features of modern life that we take so much for granted that they would not make the top twenty or even the top one hundred in an ordered list of what we think our wealth consists of. So many of us have grown so accustomed to our daily level of felicity that we utterly overlook something astounding. We today—even the richest of us—rarely see ourselves as so extraordinarily lucky and fortunate and happy, even though, for the first time in human history, there is more than **enough**."
People in past ages thought it was clear what would happen when there was **enough**—when, for the first time in human history, the struggle to gain **enough** for your self and your family was not overwhelmingly difficult and of overwhelming importance. As John Maynard Keynes put it, we shall then:
value means above ends and prefer the good to the useful.. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin...
But that turned out not to be the case. Instead, as RichardEasterlin puts it, the creation of potentially enough is: "a hollow victory.... The triumph of economic growth is not a triumph of humanity over material wants; rather, it is the triumph of material wants over humanity."
There are, now, more than enough calories produced in the world, so it is not necessary for anybody to be hungry. There is more than enough shelter on the globe, so it is not necessary for anybody to be wet. There is more than enough clothing in our warehouses, so it is not necessary for anybody to be cold. And there is more than enough stuff lying around and being produced daily, so nobody need feel the lack of something “necessary”.
In short, we are no longer in anything that we could call “the realm of necessity.” And, as G. W. F. Hegel said: "Seek food and clothing first, and then the Kingdom of God shall be added unto you.” So, one would think, we humans ought to be in something recognizably utopian. That we cannot accept this is another consequence of living our lives fully in the stream of economic history. While history fueled by utopian aspirations is an all-or-nothing proposition, economic history’s successes and failures are most often experienced in the margins. Which is partly why no full-throated triumphalism over the long twentieth century can survive even a brief look at the political economy of the 2010s: the stepping-back of the United States from its role of good-guy world leader and of Britain from its role as a key piece of Europe; and the rise in North America and Europe of political movements that reject democratic representative consensus politics—movements that former US secretary of state Madeleine Albright has called “fascist” (and who am I to tell her she is wrong?).
Indeed, any triumphalist narrative would collapse in the face of the conspicuousfailures over the previous decade by the stewards of the global economy.
And this is why the book's title starts: "Slouching...", with its echoes of the "rough beast" of Yeat's "The Second Coming", that poem must plundered of all in the twentieth century. With material abundance, good-willed people should have been able to build here on earth, if not the Kingdom of the Heavens, at least an Earthly Paradise—"paradise", is, after all, the Farsi word for a walled, irrigated garden. Fig trees and grape vines for everyone! Taco trucks on every corner! And none shall be afraid! Except... many of us are very afraid, of something and somethings. And that makes the rest of us, rationally, very afraid as well.
Yes, during the years between 1870 and 2010 technology and organization repeatedly lapped fecundity. Yes, a newly richer humanity resoundingly triumphed over tendencies for population to expand and so for greater resource scarcity to offset more knowledge and better technology. But material prosperity is unevenly distributed around the globe to a gross, even criminal, extent. And material wealth does not make people happy in a world where politicians and others prosper mightily from finding new ways to make and keep people unhappy. The historyof the long twentieth century cannot be told as a triumphal gallop, or a march, or even a walk of progress along the road that brings us closer to utopia. It is, rather, a slouch. At best.
The failure of the cornucopia of the long 20th century—four successive creatively-destructive revolutions of the economy, one happening every generation, each of which doubled humanity's deployed technological competence to manipulate nature and organize humans—to allow us to draw nearer to something we would recognize as a real utopia is at the crux of the history of the long 20th century. Maldistribution, and associated disrespect, vulnerability, and violations of perceived rights are at the heart of the problem. A cooperative free society of associated producers—that not we have.
One reason why human progress toward utopia has been but a slouch is that so much of it has been and still is mediated by the market economy: that Mammon of Unrighteousness. The market economy enables the astonishing coordination and cooperation of by now nearly eight billion humans in a highly productive societal division of labor. But the market economy also recognizes no rights of humans other than the rights that come with the property their governments declare they possess. And those property rights are worth something only if they help produce things that the rich want to buy. That cannot be 'justice' or 'fairness'".
The market rations good things, allocating them to those with the greatest willingness-to-pay. Willingness-to-pay is, roughly, desire (or need) times wealth:
Only if people’s wealth levels are in accord with society's ideas of relative merit and deservingness will people look at the market's allocation of good things and say "this is just" or "this is fair". That simply does not happen. And if you have gross maldistribution, you do not have utopia.
As I noted above, that genius-idiot Dr. Jekyll-Mr. Hyde figure of the 20th century Friedrich von Hayek always cautioned against listening to the siren song that we should seek justice, rather than mere productivity and abundance. We needed to bind ourselves to the mast. Interference in the market order, no matter how well-intentioned or technocratically-justified when it started, would send us into a downward spiral. It would put us on a road to, well, some industrial-age variant of serfdom.
Abundance, equitability, human flourishing. Hayek saw more clearly than anybody else how, in the context of modern science and technology, the market economy could bring forth abundance. He, however, say this as coming at the price of sacrificing all hopes of equitability. But he also claimed that paying any attention at all to equitability would inevitably destroy both abundance and any hope of human flourishing.
This was, as somebody-or-other once said, a Fatal Conceit.
It was, rather, the Stark Utopia of "the market giveth, the market taketh away: blessed be the name of the market" that would lead to reaction and catastrophe, not the cobbled-together compromises of incoherent social democracy.
Perhaps we can excuse Hayek: Somebody who lived his first 32 years in Red Vienna might well have seen market-driven prosperity as extremely fragile, and all those who wanted to soften its edges as useful idiots for the Bolsheviks. But after 1931 von Hayek lived for a very long time in Britain and in the United States, but was unable to learn—either about Anglo-Saxon political economy, or about how the business cycle really worked. And if you cannot learn, you lose your intelligence and your social utility quite quickly.
But Karl Polanyi responded that such an attitude was inhuman and impossible: People firmly believed, above all else, that they had other rights more important than and prior to the property rights that energized the market economy. They had rights to a community that gave them support, to an income that gave them the resources they deserved, to economic stability that gave them consistent work. And when the market economy tried to dissolve all rights other than property rights? Watch out!
This is, I think, the crux of the answer to my question of why the technological production cornucopia of the long 20th century has enabled us only to, at best, slouch towards utopia.
Utopia requires production of enough, but it also requires right distribution and right utilization of what is produced. The “right distribution” for any particular society will not be one that accords either with market property-owner or social-democratic egalitarian logic or with some linear combination of the two. Right distribution for a particular society will follow logics of security, stability, status, and deservingness. Perhaps a particular order will pass its sustainability test given how it is bound to inevitably fall short in those dimensions if it delivers enough economic growth—enough of “you never had it so good”. Perhaps not.
And right utilization of our wealth? Ha! We East African Plains Apes recently down from the trees with our jumped-up semi-intelligent monkey brains have a hard time even beginning to grasp what that might be. But when we don’t think we have gotten it, we are very resentful of the system that has failed to deliver.
Slouching, however, is better than standing still, let alone going backward. That is a truism no generation of humanity has ever disputed. Humans have always been inventive. Technological advance has rarely stopped. The windmills, dikes, fields, crops, and animals of Holland in 1700 made the economy of its countryside very different from the thinly farmed marshes of 700. The ships that docked at the Chinese port of Canton had much greater range and the commodities loaded on and off of them had much greater value in 1700 than in 800. And both commerce and agriculture in 800 were far more technologically advanced than they were in the first literate civilizations of -3000 or so.
Let me stress this for the moment: There is an immense gap, a more than twenty-fold gap, between the deployed technological prowess of the human race today and where we stood back in 1870. But there was an equally large proportional gap between where humanity stood, in terms of deployed and diffused technology—ways of manipulating nature and organizing people productively—in 1870 and where we had stood back in -6000, at the end of the first wave of the global diffusion of agriculture and herding.
Yes, technological progress was glacial in the Old Days, in the days of the long Agrarian Age. You could not tell that there was an upward drift to technology in general over the course of any single person's life.
But between -6000 and 1870 stood 160 consecutive lives. And that added—or, rather, exponentialed—up to something impressive in its own way. But nearly none of that twenty-fold amplification of human deployed and diffused technological prowess between -6000 and 1870 went to higher living standards for the typical human. Nearly all of it went to compensating for resource scarcity as 1870 saw not the 5 million human population of -6000 but rather 1.3 billion of us.
But before our age, back in the preindustrial Agrarian Age, technological progress led to little visible change over one or even several lifetimes, and little growth in typical living standards even over centuries or millennia.
Not just slow growth in living standards over a human lifetime, but effectively no growth in an average period in the material living standards of a typical human over a lifetime, or even a century. Now "average period" matters here; "typical human"—i.e., excluding the élite—matters here; and "material" matters here. Nevertheless, it is striking: how different was the life of a slave of Gilgamesh in the year -3000 to the life of a slave of Jefferson Davis or Stephen Douglas in 1850? Can anybody argue with a straight face that the differences were large?
Recall my very crude index that tracks the value of humanity’s useful ideas about manipulating nature and organizing collective efforts—an index of our “technology,” as economists call it. To calculate it, assume that each 1 percent increase in typical human standards of living worldwide tells us that the value of our useful ideas has risen by 1 percent. That is simply a normalization: I want the index to scale with real income, and not with something else, such as the square root of or the square of income. Also assume that each 1 percent increase in the human population at a constant typical living standard tells us that the value of useful ideas has risen by 0.5 percent—for such an increase is necessary to hold living standards constant in the face of resource scarcities that emerge from a higher population. This is a way of taking account of the fact that, since our natural resources are not unlimited, we depend on added human ingenuity to support a larger population at the same standard of living as we would depend on it to support the same population at a higher standard of living.
I find, or at least I think I find, such a rough and crude efforts at quantifying things that are not really quantifiable to be useful for my thought, or at least I think that they are in some way useful. We are wired to think that large differences are important differences, and that important differences are large differences. Thus this index is a (very crude) way of trying to get our handle on just how important differences that are large—even if highly dimensional and substantially qualitative—are, doing so by turning them into a (crude) quantitative difference.
Your mileage may well vary here.
Set this quantitative index of the global value of useful human knowledge equal to a value of 1 in 1870, at the start of the long twentieth century. Back in the year -8000, when we discovered agriculture and developed herding, the index stood at 0.04: roughly, and on average across the globe, with the same materials and on the same size farms, it would take twenty-five workers in -8000 to do what one worker could do in 1870. By the year 1, eight thousand years later, this index was 0.25: with the same resources, better “technologies” meant that the typical worker was now more than six times as productive as the typical worker had been back at the beginning of the Agrarian Age—but only one-quarter as productive as the typical worker of 1870. By the year 1500, the index stood at 0.43, more than 70 percent above the year 1 and a little less than half the value of the year 1870.
I know, I know.
Constructing an index number—a one-dimensional summary measure of an inherently multi-dimensional quantity, many aspects of which cannot be properly quantified at all is in the best of all possible worlds a fool's errand, almost surely a fount of misleading misinformation, and at its worst poisonously destructive of coherent thought. (Remind me to talk about Ian Morris sometime.) But I am trying to get you to grasp the importance of huge qualitative shifts, and I have decided that the best way to do this is via quantitative measures, for a large-enough quantity has, to our jumped-up monkeybrains, a quality of its own. To say that human "technology" was amplified fourfold from the year 1 to 1870, and six-fold from -8000 to 1, creates in your brains the impression I want it to. And it then sets the stage for the twenty-fold amplification in the value of the stock of useful ideas about manipulating nature and organizing humans that were discovered, developed, deployed, and then diffused throughout the human economy from 1870 to 2010.
These are impressive changes in the index numbe. They summarize and gesture at, from the standpoint of those who lived eight thousand years ago, truly miraculous and impressive enlargements of the human empire since. Technologies of the year 1500, the Ming pottery or the Portuguese caravel or the wet cultivation of rice seedlings, would have seemed almost unbelievably marvelous to those first discovering that spoiled barley porridge was actually fun to drink.
But this growth up to 1500, and the pace of invention necessary to drive it, took place over an enormous span of time: thus technology crawled ahead at a glacial pace, only 0.036 percent per year for the entire period between 1 and 1500—that is only 0.9 percent over an average twenty-five-year lifetime of that age.
The point is that technology and economy, at no time before the modern age, advanced far and fast enough over any single human lifespan to derange the pattern of society. "All that is solid melts into air" wrote Charlie from Trier and Freddie from Barmen back in 1848. But the pace of growth in humanity's deployed and diffused technological progress then was less than 1/4 of the pace we are used to, when measured worldwide, and only a bit more than 1/3 of the pace we are used to when you confine yourself to the lucky economies of the charmed Dover Circle (plus New England).
Charlie and Freddie saw the patterns of the capitalist economy driving the bourgeoisie—the business class—to push forward technology and investment at a previously unprecedented pace that would **steam away** all establishments and order. But since 1870 we have seen what they saw—but speeded up by a factor of four, making the stresses on (and opportunities for) human psychology, society, and polity an order of magnitude greater. And what they saw as a process likely to be completed in a generation or two—as they mistook the birth pangs of modern economic growth for the death throes of the capitalist order—we have seen hitting us hard for, by now, five consecutive generations.
And did greater knowledge about technology and human human organization cause the life in 1500 of a typical person to be much sweeter than it had been in -8000? It turns out not. The human population grew at an average rate of 0.07 percent per year from year 1 to 1500, and this 0.07 percent per year decrease in average farm size and other available natural resources per worker meant that more skillful work produced little, if any, additional net product on average. While the elite lived far better in 1500 than they had in -8000 or the year 1, ordinary people—peasants and craftsmen—lived little or no better than their predecessors.
This point leans very heavily on a very strong Malthusian interpretation of agrarian age economic history. And we do know that a nutritionally-unstressed pre-artificial birth control human civilization will tend to more than quadruple its numbers in a century. That agrarian-age populations typically grew by less than 10% tells us a lot about how hungry such populations were. And I bet that if they were rich enough so that the typical human could have consumed conveniences and luxuries on a large scale, they would not have—they would have shifted more production to necessities so as not to have been so hungry and malnourished. But that is a bet.
Agrarian Age humans were desperately poor: it was a subsistence-level society. On average, 2.03 children per mother survived to reproduce. A typical woman (who was not among the one in seven who died in childbirth, or the additional one in five who died before her children were grown, sometimes from the samecontagious diseases to which her children succumbed) would have spent perhaps twenty years eating for two: she would have had perhaps nine pregnancies, six live births, and three or four children surviving to age five; and the life expectancy of her children remained under, and perhaps well under, thirty.
It is horrifying that the tenfold upward leap in human technology from -6000 to 1500 brought essentially no (and the 25-fold upward leap from -6000 to 1870 brought little) improvement in the material circumstances of a typical human. But it is not terribly mysterious.
With glacially-slow technology improvement, we have glacially-slow population growth. That means 1/3 of women have no surviving sons. And so at the margin it is overwhelmingly worthwhile to pour all your resources you can scrounge into trying to up the chances of having a surviving son, for in an agrarian-age subsistence-level society that is pretty much the only source of durable social power for a female. Thus Malthus rules—until life expectancy rises and infant mortality falls. But how are they to fall when technological progress is glacial?
Keeping your children from dying is the first and highest goal of every parent. Humanity in the Agrarian Age could not do so at all reliably. That is an index of how much pressure from material want humanity found itself under."
The curse of Malthus was indeed fearsome. And so there is some reason to view Malthus's intellectual position with less unsympathy than one otherwise might. Malthus's position was that the foes of familial patriarchy, political monarchy, and religious orthodoxy were short-sighted enemies of societal well-being. Why? Because the shorter the length of the typical woman's sexual activity, the higher was the setpoint human standard of living in Malthusian equilibrium. Hence anything—anything—that controlled, constrained, and delayed female sexuality was worth doing. And in Malthus's world that was religious orthodoxy that constrained unsanctioned female sexual activity out of fear of damnation, and familial patriarchy that delayed female sexual activity by denying agency to daughters? And monarchy? It was a slippery slope argument: that "rights of man" would slide into "rights of woman", and then Katie bar the door.
Malthus, however, wrote very near the end of the Malthusian Age—although people like John Maynard Keynes feared its reappearance after World War I; and the Ehrlichs' 1968 The Population Bomb's very first words were:
The battle to feed all of humanity is over. In the 1970's the world will undergo famines—hundreds of millions of people are going to starve to death... [as] nothing can prevent a substantial increase in the world death rate...
However, over the millennia, 1.5 percent average population growth per generation added up, however. In 1500 there were about three times as many people as there had been in year 1—500 million rather than 170 million. But additional humans did not translate to more individual material want. As of 1500, advances in technological and organizational knowledge went to compensate for fewer natural resources per capita. Thus economic history remained a slowly changing background in front of which cultural, political, and social history took place.
This is onekey to the riddle of history. Before 1870—even over 1500-1770, and even over 1770-1870—economic change was not fast enough to overthrow societies in a single generation. Alles Ständische und Stehende verdampft—NICHT! All establishments and orders were steamed away-NOT! The establishments and orders by and large stood, and history was people maneuvering within and around them as they guided the resource flows and directed the power arrangements of society. Yes—there was change, but truly system-shattering economic changes took first millennia, and then centuries.
But post-1870 was to be very different indeed.
The ice started to groan and shift after 1500. Or perhaps a better metaphor is crossing a divide and entering a new watershed—you are now going downhill, and things are flowing in a new direction. Call this shift the coming of the age of the “Imperial-Commercial Revolution.” The pace of inventions and innovation sped up. And then, in around 1770, the ice was cracking as we crossed into yet a different watershed, as far as the level of worldwide prosperity and the pace of global economic growth was concerned: call the century after 1770 the coming of the age of the “Industrial Revolution.” By 1870 the index of the value of knowledge stood at 1, more than twice as large as in 1500. It had taken 9,500 years to get the tenfold jump from 0.04 to 0.43—an average time-to-double of some 2,800 years—and then the next doubling took less than 370 years.
Pause and reflect on that: Up until 1500, it took more than 2500 years for humanity’s technological progress in manipulating nature and organizing humans for productive purposes to double. But then from 1500 to 1870 we get another more than doubling. That is an amazing accomplishment: an amazing shift of humanity’s efforts away from an élite desperation to get enough for itself by robbing others and then dominating them so they could not respond; to spending much more of society’s effort on what Francis Bacon around 1600 called “the enlargement of the human empire, to the effecting of all things possible.”
Note, however, that doubling humanity’s technological competence in 300 years is not, by itself, enough to escape the harrowing of Malthus. We know that a poor nutritionally-unstressed human population without artificial means of birth control triples every 100 years. Human populations over 1500 to 1870 were not unstressed nutritionally, but they were less stressed than they had been before 1500. As technological competence grew by a factor of 2.3, population grew by a factor of 2.6. The $900/year typical income world of 1500 did not produce the $1800/year typical income world of 1870 that a stable population would have given, but a world of only $1300. And as of 1870 world population was growing at 0.8%/year—enough to neutralize the effects of better technology at the pre-1870 pace of technological development.
But, worldwide, technology took another upward leap around 1870: from 0.05%/year over 800 to 1500 to 0.15%/year over 1500-1770 to 0.45%/year over 1770-1870 to 2.1%/year after 1870.
But did this mean a richer, more comfortable humanity in 1870? Not very much. There were then in 1870 1.3 billion people alive, 2.6 times as many as there had been in 1500. Farm sizes were only two-fifths as large, on average, as they had been in 1500, canceling out the overwhelming bulk of technological improvement, as far as typical human living standards were concerned.
As of 1870, however, the final, decisive, technological-growth acceleration that mattered was still in the future. In the previous century not all but the bulk of the expansion of human possibilities for flourishing made possible by technology had been eaten up by population growth, and the resource scarcity population growth generated.
Around 1870 we crossed over another divide into yet another new watershed: the age Simon Kuznets called an era of “modern economic growth.” During the period that would follow, the long twentieth century, there came an explosion.
After 1870, technological progress was so fast that population growth could not keep up: humanity became richer. And then we became rich—and women became socially powerful enough—that we began to limit our fertility, undergo the demographic transition, and so population abandoned its attempt to grow to neutralize technological progress. Humanity thus became, by the standards of all previous ages and eons, fabulously rich.
The approximately 7 billion people in 2010 had a global value of knowledge index of 21.
Pause to marvel.
The value of knowledge about technology and organization had grown at an average rate of 2.1 percent per year. Since 1870, the technological capability and material wealth of humankind had exploded beyond previous imagining. By 2010, the typical human family no longer faced as its most urgent and important problem the task of acquiring enough food, shelter, and clothing for the next year—or the next week.
(a) Enough food that you are not thinking most of the time about how hungry you are; (b) enough clothing that you are not thinking most of the time about how cold you are; (c) enough shelter that you are not thinking much of the time about how wet parenthesis or sunburned) you are—those are the most basic human needs. Running very close to those is (d) watching your children grow up, survive, and launch themselves on lives of their own.
Then there is (e) enough technological power to manipulate nature and social power to organize humans to support making your contribution to standing on your own two legs (for all of us can only make a contribution: none of us can stand without major help from others). Accomplishing your other purposes, including (f) satisfying your curiosity and (g) avoiding excessive boredom.
Typical humans in 1870 and before could not satisfy those needs because, given the balance of resources and technology to population, humanity could not make enough. Indeed, the only way for even some to have enough was for them to focus their energy and social power not on “enlarging the human empire for the effecting of all things possible” but on dominating and oppressing others, and taking others’ stuff for themselves.
But by 2010 humanity was surely productive enough so that from the perspective of all societies as of 1870 and before, there was no problem in producing enough so that nearly everyone could use their share of resources to satisfy (a)-(g). As of 2010 the problem was, rather, as John Maynard Keynes had written back in 1930, for humans individually and collectively, “to use freedom from pressing economic cares… occupy the leisure which science and compound interest will have won… to live wisely and agreeably and well”, for, as Keynes saw in 1930, in the Long 20th Century “mankind is solving its economic problem” of limited resources and pressing needs and uses.
From the techno-economic point of view, 1870–2010 was the age of the industrial research lab and the bureaucratic corporation. One gathered communities of engineering practice to supercharge economic growth, the other organized communities of competence to deploy the fruits of invention. It was only slightly less the age of globalization: cheap ocean and rail transport that destroyed distance as a cost factor and allowed humans in enormous numbers to seek better lives, along with communications links that allowed us to talk across the world in real time.
To put it another way, the industrial research lab fused science to technological innovation and technology to enterprise: a scientist could science, an inventor could invent, and a technologist could technologize without one person having to be all three—plus financier, manager, chief pitchman, human resource department, and so forth. Division of labor. And the bureaucratic corporation allowed the visible hand of management to scale a successful workshop and store nationwide, or worldwide. And then there was diffusion: what one bureaucratic corporation could do, another could duplicate. And duplicate worldwide, with globalization. Discovery, development, deployment, and diffusion—the rationalization and routinization of those are what more than quadrupled the proportional rate of technological progress in the years around 1870.
235-242: The research laboratory, the corporation, and globalization powered the wave of discovery, invention, innovation, deployment, and global economic integration that have so boosted our global useful-economic-knowledge index. Marvel still. In 1870 the daily wages of an unskilled male worker in London, the city then at the forefront of world economic growth and development, would buy him and his family about 5,000 calories worth of bread. That was progress: in 1800, his daily wages would have bought him and his family perhaps 4,000 coarser-bread calories, and in 1600, some 3,000 calories, coarser still. (But isn’t coarser, more fiber-heavy bread better for you? For us, yes—but only for those of us who are getting enough calories, and so have enough calories to give us the energy to do our daily work and then worry about things like fiber intake. In the old days, you were desperate to absorb as many calories as possible, and for that, whiter and finer bread was better.) Today, the daily wages of an unskilled male worker in London would buy him 2.4 million wheat calories: nearly five hundred times as much as in 1870.
Few people know or consider the extent to which, back even in 1870, for the working classes of even the richest countries in the world, sheer calories were a considerable constraint on your daily activities. You could work and do stuff until you had drained your energy budget and so were tired. Then you more or less had to stop. That the work or other stuff you could do was tightly constrained because you simply could not afford the calories that you needed to do it—that is not a thing in the global north today. Yet that was an important part of the experience of humanity back before 1870.
From the bio-sociological point of view, this material progress meant that the typical woman no longer needed to spend twenty years eating for two—pregnant or breastfeeding. By 2010, it was more like four years. And it was also during this century that we became able, for the first time, to prevent more than half our babies from dying in miscarriages, stillbirths, and in infancy—and to prevent more than a tenth of mothers from dying in childbirth.
Consider a typical human agrarian-age civilization, with technological progress advancing at 5% per century, fast enough to support a 10% per century rate of population growth. We know that a pre-industrial no-artificial-birth-control nutritionally-unstressed human population will quadruple in a century. So what has to be going on in the typical agrarian age human civilization to keep average population growth in a century down to 10%? Three things: (a) social institutions to keep women (but not men!) chaste for a substantial period of time between monarch and menopause, (b) women so skinny that ovulation is hit-or-miss, and (c) children so malnourished that their immune systems are substantially compromised.
Is it possible that conscious family planning could take up some of the slack? Yes—in France around 1800, but I am aware of no substantial historical evidence of that happening in other places at other times. How about large-scale female infanticide? Yes—in classical Greece and in a number of other times and places, but that requires not just extreme patriarchy but also substantial within-males inequality as well: it is much easier for a patriarch to decide to kill some other man’s daughter than his own.
Consider that in a society in which the only way for a woman to acquire durable social power is to be the mother of surviving sons. Consider that in a slowly growing population, the Poisson distribution tells us that about 1/3 of women will not manage to accomplish this. Consider that all women will fear that they will wind up one of those 1/3. Thus for a very large share of women, from the moment your father says he is old and established enough to have bright prospects or your fiancé says your father has provided a large enough dowry or your fiancé’s older brother says that there are now enough resources for him to bring a bride into the clan house, fertility is a principal task.
Consider that we can do the math: 2 children surviving to reproduce means 3 reaching adulthood, 4 reaching age 5, 6 or 7 live births, perhaps 9 pregnancies (considering that you are under stubstantial nutritional stress and pregnant: “have a baby, lose a tooth”). 9 months per pregnancy, perhaps three years nursing—you are eating for two for twenty years.
And that is if you survive childbed. I don’t think we know how ferocious childbed mortality was. But we do know that the queens of England were the most cosseted women on the island. And if we look from the ascension of the Lancastrian dynasty to the Industrial Revolution, we find 32 queens of whom five—Catherine Parr, Jane Seymour, Elizabeth of York, Mary de Bohun, and throw in Victoria’s cousin, the more senior in the succession Crown Princess and Heir Apparent Charlotte—died in childbed. That is a 16% childbed mortality rate. What was it like for women not so well-situated with respect to nutrition and comfort?
From the nation-and-political point of view, the wealth creation and distribution drove four things, of which the first was by far the most important: 1870–2010 was the century when the United States became a superpower. Second, it was during this period that the world came to be composed primarily of nations rather than empires. Third, the economy’s center of gravity came to consist of large oligopolistic firms ringmastering value chains. Finally, it made a world in which political orders would be primarily legitimated, at least notionally, by elections with universal suffrage—rather than the claims of plutocracy, tradition, “fitness,” leadership charisma, or knowledge of a secret key to historical destiny.
Here I may have overstepped: These four were all profoundly influenced by the technology-driven explosion of wealth and associated economic repeated creative-destruction revolutions of 1870-2010. But were they caused by them? Wouldn’t some version have happened without the economic-technology revolutions? Wouldn’t a persistent steampunk world have seen analogous processes?
But I don’t think I have overstepped. No Second Industrial Revolution and no full globalization means much less global migration to America, much much less of an American midwestern industrial powerhouse. I think that means no American exceptionalism. It also means no dominance of the economy by oligopolistic global or even national value chains. Full nationalism requires near-universal literacy, I think, which comes only in a world no longer under the harrow of Malthus. Ditto for democracy as the only source of legitimate authority.
Much that our predecessors would have called “utopian” has been attained step by step, via economic improvements year by year, each of which is marginal, but which compound. Yet, as of 1870, such an explosion was not foreseen, or not foreseen by many. Yes, 1770–1870 did see, for the first time, productive capability begin to outrun population growth and natural resource scarcity. By the last quarter of the nineteenth century, the average inhabitant of a leading economy—a Briton, a Belgian, a Dutchman, an American, a Canadian, or an Australian—had perhaps twice the material wealth and standard of living of the typical inhabitant of a preindustrial economy.
This passage is part of my argument that the 1770-1870 Industrial Revolution might well have been—i.e., there is a reasonable counterfactual in which it would have turned out it had been—merely another albeit very large “efflorescence” of a Malthusian economic order. I argue that the true breaking of the Malthusian pattern comes only after 1870, with what Robert Gordon calls the “one big wave” of the Second Industrial Revolution. This is, to say the least, a very contestable argument. And I am eager to learn more by watching people contest it, as they react to my book.
Was that enough to be a true watershed?
"That", here, is attainment in 1870 in the richest countries of living standards and productivity levels twice those of Agrarian-Age civilizations. We could have a huge debate on this. Suffice it to say here that my view is that that was not enough: that the true watershed was the removal of the ensorcelment of the Devil of Malthus; and that that had not been accomplished by 1870 and was not clearly in train.
Back in the early 1870s, John Stuart Mill put the finishing touches on the final edition of the book that people seeking to understand economics then looked to: Principles of Political Economy, with Some of Their Applications to Social Philosophy. His book gave due attention and place to the 1730–1870 era of the British Industrial Revolution. But he looked out on what he saw around him, and saw the world still poor and miserable. Far from lightening humanity’s daily toil, the era’s technology merely “enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes.”
I should point out that John Stuart Mill was wrong. It was not just the case that there were more rich and richer superrich, and that there was a larger middle class with comforts of various kinds. The working classes of… call it the Dover Circle, by which I mean people who lived within 300 miles of the English port of Dover at the southeast corner of England, plus places that they and their descendants settled in large numbers, plus those who strove all their nerves and muscles to emulate them and did so successfully, had since 1500 grown as rich as the middling classes elsewhere. But he was not very wrong: between 1770 and 1870, worldwide, roughly 5/8 of the increase in humanity’s deployed and diffused technological prowess had gone to compensating for increased resource scarcity as the human population explosion began, while 3/8 had gone to raise average living standards—and those, overwhelmingly, had been concentrated inside the Dover Circle (plus offshoots) and there alone.
One word of Mill’s stands out to me: “imprisonment.”
John Stuart Mill says that as long as the bulk of humanity, the working classes, are under the harrow of Malthus—as long as they are so poorly nourished as to be 3” shorter than their upper-class siblings, so poorly nourished that even though their women strive with all nerves and muscles to raise surviving sons population growth is only a crawl—they live a life of “drudgery” and “imprisonment”.
Ever since Isaiah Berlin sharpened Benjamin Constant’s distinction between the “liberty of the ancients”—a liberty of solidarity and agency and purpose, of “Make Rome Great for the First Time”—and the “liberty of the moderns”—the liberty to march to the beat of a different drummer—there have been many, usually among the rich and comfortable, who exalt what Isaiah Berlin called the negative liberty of being unconstrained and decry the positive liberty of accomplishing purposes. Here, however, we see John Stuart Mill—usually claimed as the patron saint of negative liberty—eliding this distinction. For Mill, if you are locked in a cage, it does not matter whether you stay locked in because there is no key or because you cannot afford to buy the key. True liberty, for Mill, has to include agency, and thus the social power to command the attention of others so that they assist you in accomplishing your purposes, for none of us can do anything on our own. The only liberty worth the name, for Mill, is a liberty that includes not just individuals’ freedom from constraint, but the wealth of a rich society, and equitably distributed wealth at that.
Yes, Mill saw a world in 1871 with more and richer plutocrats and a larger middle class. But that, for him, was not the main event. He also saw the world of 1871 as not just a world of drudgery—a world in which humans had to work long and tiring hours. He also saw it not just as a world in which most people were close to the edge of being desperately hungry, not just a world of low literacy—where most could only access the collective human store of knowledge, ideas, and entertainments partially and slowly.
The world Mill saw was a world in which humanity was imprisoned: in a dungeon, chained and fettered.
And Mill saw only one way out: if the government were to take control of human fecundity and require child licenses, prohibiting those who could not properly support and educate their children from reproducing, only then—or was he thinking “if”?—would mechanical inventions wreak the “great changes in human destiny, which it is in their nature and in their futurity to accomplish.”
Mill did not believe that technological progress by itself could ever be fast enough to allow humanity to escape from its place beneath the harrow of Malthus. Mill did not believe that human couples could ever be far-sighted, collectively rational, and public-spirited enough to limit fertility enough to allow escape from the harrow of Malthus. Mill believed that only the state’s prohibiting the poorer of the working classes from having children could allow for the building of a truly human world.
That Mill believed this is an index of how poor humanity’s long-run prospects appeared to be back in 1870—how incompatible general prosperity was and always would be with important dimensions of personal liberty.
And there were others who were much more pessimistic than even Mill. In 1865, then thirty-year-old British economist William Stanley Jevons made his reputation by prophesying doom for the British economy: it needed to immediately cut back on industrial production in order to economize on scarce and increasingly valuable coal.
After the invention of the steam engine, Britain’s coal supply had been elastic up through the mid-1800s. The coal was there on the surface, for God’s sake—glaciers having scraped all the rock it had been buried under away—and water for transport to float the coal wherever you wished was abundant. In fact, water was too abundant—that is why you needed the steam engines to pump the water out of the mines. Britain had cumulatively mined 80 million tons of coal as of 1700 when the London price was 30 shillings a ton. Britain had mined 1.1 billion tons of coal by 1870, and the London price was then 20 shillings a ton.
But, Jevons argued <https://archive.org/details/in.ernet.dli.2015.224624/page/n1/mode/1up?view=theater>, “the duration of our present cheap supplies of coal cannot help but excite deep interest and anxiety…” Jevons claimed that at a depth of 50 feet the temperature of the rock being mined was 50F. At 2000 feet it would be 80F. And at 4000 feet it would be 106F. Jevons asserted that “if coal were [to be] brought from an average depth of 2000 feet, our manufactures would have to contend with a doubled price…. [At] 4000 feet, a further great but unknown rise in the cost…. [Thus] the cost of fuel must rise, perhaps within a lifetime, to a rate threatening our commercial and manufacturing supremacy… our present happy progressive condition is a thing of limited duration…”
Jevons was, of course, wrong. The Second Industrial Revolution gave us oil as an alternative power source, globalization to economically transport coal from first Wyoming and then other places anywhere in the globe, electricity to flexibly apply power where it was useful, and mining technologies to overcome all the problems of extraction that Jevons had seen as blockages. But simple straight-line extrapolation of trends up to 1865 was what Jevons had done, and on the assumption that things related to the rate of technological progress were not going to change, his extrapolations were not unreasonable.
But, in 1870, things were about to change.
267-270: Karl Marx and Friedrich Engels had in 1848 already seen science and technology as Promethean forces that would allow humanity to overthrow its (mythical) old gods and give humanity itself the power of a god. Science, technology, and the profit-seeking entrepreneurial business class that deployed it had, they said, “during its rule of scarce one hundred years, . . . created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground—what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?”
Freddie from Barmen and Charlie from Trier mistook the birth pangs of modern capitalism for its death throes; they mistook dawn for high noon. Yes, the business class—the French term bourgeoisie was the word they ultimately settled on—they had, earlier, followed Heinrich Heine is using the unfortunate terms “the Jews and the Jew-like”—had done revolutionary things in the century before 1848. Yes, my index of global deployed-and-diffused technology had grown from 0.62 to 0.91 over 1748-1848; the last previous jump of such proportional magnitude had taken from 1500-1748, and the next-to-last from 800 to 1500. Yes, the index of deployed-and-diffused technologies in the charmed Dover Circle economies had jumped from 0.78 to 1.65 over 1748-1848, with the last previous such proportional jump requiring 1150-1748. Yes, 1770-1848 had seen the globe advance at a rate three times what it had during the 1500-1770 Imperial-Commercial Age and nine times what it had during the 800-1500 Mediæval Late Agrarian Age.
But after 1870 technological progress was going to get into serious gear, and amplify itself up by another factor of 4.5. Progress that had taken 50 years over 1770-1848 would, afterwards, take 11.
Engels snarked that in overlooking the power of science, technology, and engineering, mere economists (such as Mill) had demonstrated that they were little more than the paid hacks of the rich.
This is a one-sentence digression—I probably should have cut it from the main text, and put it in a footnote. Engels’s snarking comes in a piece he wrote in 1843 and “published”, if that is the word, in the Deutsch-Französische Jahrbücher, a one-issue publication edited by Arnold Ruge and Karl Marx. Frederick Engels (1843): Outlines of a Critique of Political Economy <https://www.marxists.org/archive/marx/works/1844/df-jahrbucher/outlines.htm>:
According to the economists, the production costs of a commodity consist of three elements: the rent for the piece of land required to produce the raw material; the capital with its profit, and the wages for the labour required for production and manufacture. But it becomes immediately evident that capital and labour are identical, since the economists themselves confess that capital is “stored-up labour.” We are therefore left with only two sides – the natural, objective side, land; and the human, subjective side, labour, which includes capital and, besides capital, a third factor which the economist does not think about – I mean the mental element of invention, of thought, alongside the physical element of sheer labour. What has the economist to do with inventiveness? Have not all inventions fallen into his lap without any effort on his part? Has one of them cost him anything? Why then should he bother about them in the calculation of production costs? Land, capital and labour are for him the conditions of wealth, and he requires nothing else. Science is no concern of his.
What does it matter to him that he has received its gifts through Berthollet, Davy, Liebig, Watt, Cartwright, etc. – gifts which have benefited him and his production immeasurably? He does not know how to calculate such things; the advances of science go beyond his figures. But in a rational order which has gone beyond the division of interests as it is found with the economist, the mental element certainly belongs among the elements of production and will find its place, too, in economics among the costs of production. And here it is certainly gratifying to know that the promotion of science also brings its material reward; to know that a single achievement of science like James Watt’s steam-engine has brought in more for the world in the first fifty years of its existence than the world has spent on the promotion of science since the beginning of time.
Engels’s critique of the discipline of economics here is, I think, dead-on. It anticipates that of Paul Romer more than 130 years later. The economists, Engels argues, ought to be scientists aimed at understanding increasing prosperity—the wealth of nations, as somebody-or-other once said. And the key to that is advances in technology: how we expand human control of nature and ability to organize ourselves through discovery, development, deployment, and diffusion of technology. But in Engels’s day—and largely in ours—that is not the subject of economics. It ignored science and technology. It focused on a government that established law-and-order and protected property, and on the extended division of labor mediated through trade and the increased stock of productive capital mediated through the thrift and “abstinence” of the rich as the sources of prosperity. And this makes, Engels argues, economics as it was practiced in his day (and often in ours) a fake science, of use to the rich and the propertied but not to humanity.
I often wonder what works Freddie from Barmen might have produced, had he not fallen under the spell of Marx, and decided to devote his life to supporting and then explaining the ideas of his genius-friend.
But Marx and Engels’s promise was not just that there would someday be enough to eat, or enough shelter, or enough clothing for the masses, let alone an exponential increase in the value of global knowledge, or even a nearly unlimited choice of music to listen to, video to watch, and games to play at whim. Slouching, galloping economic growth was but a necessary paroxysm on the way to utopia. Their promise was utopia. In Marx’s few and thin descriptions of life after the socialist revolution, in works such as his “Critique of the Gotha Program”, the utopian life he foresaw echoed—deliberately, but with what authorial intent?—the descriptions in the Acts of the Apostles of how people who had attained the Kingdom of Heaven behaved: each contributed “according to their ability” (Acts 11:29), and each drew on the common, abundant store “according to their needs” (4:35). Perhaps he kept these descriptions rare and without detail because, concretely, they differed so little from what Mill envisioned: an end to the imprisonment and drudgery of poverty, a society in which all people could be truly free because all could have enough.
The “Critique of the Gotha Programme” is a very frustrating and allusive text—or so I find it—because Marx is being quite slippery. He is quite clear that the “higher phase” of communist society is not for today, or for tomorrow, or for us to set out, but rather something that will be constructed by the people living in the post-revolutionary world after all echoes of the old class society have died away. And he very clearly, via his conscious allusions to Acts of the Apostles 4:35 and 11:29, identifies the “higher phase” with the Millennium, with the coming of the New Jerusalem down to earth, and so sets out Marxism as a Christian heresy—the Kingdom of the Heavens to be made present here not by the will of God in the future or the preachings of prophets who change people’s minds today, but rather by the common revolutionary wark of humanity.
The problem is that Marx’s thought eludes us when we try to draw conclusions from his explicit use of religion’s imagery for what will be inscribed on humanity’s banners in the “higher phase” of communist society. For Marx, as we all know, did not like religion as a social practice: it was something that distracted humans from working to obtain their real happiness by promising them the illusory ghost of happiness—it was “the opium of the people”.
So is Marx here saying that hopes for a “higher phase” of communist society are, inasmuch as they veer into religion, also “the opiate of the people”? That socialists should stick to their knitting—revolution, confiscation of the means of production, and thereafter (moderate) equalization of the distribution of income to give everybody enough to the extent the productivity of society and incentive-compatibility allows? Or is Marx saying that what religion falsely promises we socialists will deliver—but just not now, and not in the years immediately after the revolution, no more than the bourgeoisie could deliver an industrial revolution in the decade after the 1649 execution of King Charles I Stuart?
I can see it going either way. I can see it going a third way too: Marx, old and cranky, painfully afflicted with massive infected boils, angry and petulant at what he thought of as his wing of the German socialist movement outgrowing his tutelage and making its own decisions about alliances and messages.
The text may simply be a temper tantrum, and not something that bears too much weight of interpretation.
Economic improvement, attained by slouch or gallop, matters.
While there will be no New Jerusalem descending from the Heavens, and while we will not obtain brand-new Resurrection Bodies, at least not in this age of the world, the movement toward something we think of as “utopia” matters—even if we have no clue how to actually reach it, or what it might be. In the meanwhile, in this age, more wealth is a good thing, for more wealth is power, both power to manipulate nature so that we can better accomplish our purposes, and also power to command the attention of others, so that we can organize them to aid us, and they can command our attention to aid them. Economic improvement allows us to bake a bigger economic pie, one that comes closer to being big enough. True, there then remain the big problems of slicing the pie equitably so that everyone has enough, and then tasting—enjoying—the pie to make ourselves healthy, safe, secure, and happy. But without economic improvement, we cannot even talk about solving the problems of slicing and tasting. Without economic improvement, the only way for some of us to have enough is if they figure out a way to, by force or fraud or both, appropriate large chunks of the work of others. And building such an appropriation process carries us far away from the shores of utopia.
How many of us today could usefully find our way around a kitchen of a century ago? Before the coming of the electric current and the automatic washing machine, doing the laundry was not an annoying, minor chore but instead a major part of the household’s—or rather the household’s women’s—week. Today few among us are gatherers, or hunters, or farmers. Hunting, gathering, farming, along with herding, spinning and weaving, cleaning, digging, smelting metal, and shaping wood—indeed, assembling structures by hand—have become the occupations of a small and dwindling proportion of humans. And where we do have farmers, herdsmen, manufacturing workers, construction workers, and miners, they are overwhelmingly controllers of machines and increasingly programmers of robots. They are no longer people who manufacture, who make or shape things with their hands.
As Oded Galor puts it, if you took someone from Jerusalem in the year -800 or 50 or 1500 or 1800, and then dropped them in Jerusalem in any one of the other three years, most of what was going on would be comprehensible. Take someone from any of those years—even 1800—and drop them in Jerusalem today, and most of what was going on would be very strange indeed. In terms of my technology index, that is the difference between the 0.16 of the year -800 or the 0.24 of the year 1 or the 0.43 of 1500 or the 0.7 of 1800 on the one hand, and the index value of 25 today. And that shift is not just that we do what we did more efficiently and productively by orders of magnitude, but that we do new and very different things than we did.
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