TWELVE SLIDES: The History of Economic Growth :: (Roughly) Seven Summary Bullet Points per Lecture
Econ 135 :: Fall 2024 :: What I think I tried to teach people this semester now concluding—a summary slide deck…
Econ 135 :: Fall 2024 :: What I think I tried to teach people this semester now concluding—a summary slide deck…
From 75,000 years ago to the Drake Equation & the Fermi Paradox…
1. Introduction
1.1. What Economic Growth Is
Sustained increase in living standards and productivity levels…
Francis Bacon ca. 1610: “To the enlargement of the human empire, & the effecting of all things possible…”
Before 1870 we have biological growth in human numbers, but not really what we call “economic growth”…
Before 1870, economic growth confined to an élite running a society-of-domination…
After 1870, economic growth at 2%/year or more…
Solving the problem of baking an economic pie sufficiently large for everyone to have enough…
Problems of slicing & tasting the pie—of equitably distributing it, & of properly utilizing it so we can feel safe & secure & be healthy and happy—somehow continue to elude us…
1.2. Eagle-Eye Numeric Guesstimates of Economic Growth
Informed guesses at human numbers start at ca. 10 thousand in year -70000 up to maybe 240 million in 800…
Weak knowledge about human numbers from roughly 500 million in 1500 up to 8.2 billion today…
Guesses about standards of living at $1600/year per capita average before the year -8000 discovery of agriculture…
Informed guesses about standards of living at $1200/year per capita average in the long Agrarian Age from year -8000 discovery of agriculture…
Knowledge about standards of living at $17,000/year per capita average today…
Knowledge that standards of living today are extraordinarily unequally distributed: $68,000/year per capita in the Dover-Circle-Plus…
Knowledge that, for living standards and productivity levels, 1870 truly was the hinge of history…
The Singularity in our past: the $17,000 today vis-à-vis $1200 in the Agrarian Age comparison a very shaky one indeed…
2. Agrarian-Age Malthusian Economies
2.1. Agrarian-Age Societies of Poverty & Domination
Calculate H equal to the level of productivity times the square-root of population; calculate h as its annual proportional growth rate…
Identify H as the level of human technological nature-manipulation & coöperative-organization competence; h as the annual average rate of progress…
From year -10000 to 1500, h averages 0.038%/year
Normalize H=1 in the year 1870; then: in year -10000, H=0.059; in year 1500, h=0.504…
Immense technological progress in the Agrarian Age, but at a glacial pace…
Malthusian forces then made for true mass dire poverty…
In the long Agrarian Age, about the only way to get enough for yourself & your family was to JOIN THE GANG—the thugs-with-spears, their bosses, & their tame accountants, bureaucrats, & propagandists élite that ran a force-&-fraud domination & exploitation game on the rest of humanity…
2.2. Efflorescences & Dark Ages
There was partial escape from this Malthusian mass poverty: not just élite classes & status groups, but exceptional regions & eras…
An “efflorescence” a time when typical living standards are (relatively) high & population densities (relatively) great…
But these do not lead to any kind of “breakthrough” out of Malthusian poverty until the run-up to 1870…
Efflorescences driven by: law-&-order & pax imperia that allows for high savings & investment; a culture with a strong taste for “luxuries” that bring human happiness but not biological fitness; living in cities perhaps the most important of these; patterns of behavior (late marriage; female infanticide) that ease Malthusian pressures…
Extractive land-borne vs. commercial seaborne efflorescences?
2.3. Rome
An efflorescence case study I know something about: “Classical” late-Republican & Imperial Rome…
Starting in the year -340, the Roman Republic becomes uniquely (a) nasty, (b) well-organized, (c) assimilative…
Successive rings of conquest then join the imperial gang as the conquest frontier spreads outward…
Extraördinary accomplishments not in technology (outside technologies of domination) but in organization and the extent of the societal division of labor…
Decline-&-fall begins with the Antonine Plague (smallpox?) from 165-180 & a breaking of the élite’s willingness to share the wealth…
Decline-&-fall takes centuries, but driven by the fact that after the Antonine Dynasty’s end in year 192 competent & upwardly mobile non-honestiores had a very hard time joining the Roman élite but an easy time joining the barbarian—say, the Gothic—élite…
The last person to call himself by the title of a Roman Emperor—a Cæsar or an Imperator—was the grandfather George VI Windsor of King Charles of Great Britain (& Northern Ireland); George resigned his title as Kaiser-i-Hind on August 15, 1947…
2.4. Femur Length in the Mediterranean & Beyond: Quantifying Efflorescence
With the coming of “Classical” civilization to the Mediterranean Basin & beyond, a great boost in the production & distribution of not just true luxuries but of middle-class conveniences as well…
But people grow noticeäbly shorter: a richer middle (& upper-working?) class, but a less biomedically fit one…
Prosperity close to the Mediterranean proceeds the actual coming of Roman “governance”—a seaborne trade network managed by a few powers that suppress large-scale piracy does almost as well as a formal pax imperia, at least when you are within shouting distance of the coast…
Decline-&-fall in the centuries after the year 400 very apparent in the Roman Northwest European provinces—people (those who survive, at least) grow significantly taller…
The Roman Eastern Mediterranean does not decline in that timespan…
2.5. Slow Technological Progress in Agrarian-Age Antiquity
Since 1870 we have average h=2.2%/year; in 1870 H=1; today H=27…
Technological progress appallingly slow back in the long Agrarian Age—indeed, at all times before 1870…
Focusing on technological advance in a sociëty of domination makes you a very soft target for thugs-with-spears…
The élite has to justify why they deserve the good things—and so many of them…
Hence the psycho-social mechanism that produces the systematic degradation of people too interested in working with their hands: Aristotle of Stagira on how too great a knowledge of technology and markets is “crude”, and how the most important branch of economics is how to boss your slaves; Nero’s tutor L. Annius Seneca’s dismissal of the pro-technology arguments of Posidonios of Rhodos…
No apparent way out of the Malthusian Trap: poverty → fertility → resource scarcity → necessity of joining a gang → focus on technologies of domination → status-degradation of the productive → poverty…
3. Breaking Through
3.1. The Oddity of the Dover Circle
Patricia Crone’s point: as of 1500 all of High Civilizations of Eurasia at least were becoming more perfected versions of their society-of-domination selves…
Yes, technological progress was creeping slowly, glacially, forward; yes, numbers and civilizational complexity were growing; but no signs of any breakthrough out of the Malthusian Trap…
Except in the very odd place that was a circle of 400 mile-radius around the port of Dover at the southeast corner of the island of Great Britain…
After the decline & fall of the Roman Empire in the West, unsuccessful empires: rather, a snakepit of hostile yet somehow durable proto-nation-states coälescing around language communities…
Also: unsuccessful societies-of-domination: ancient, Germanic, feudal, theocratic, armed merchant empire claims to the right to rulership interacting with the coming of gunpowder-empire technology…
Produced a societal formation of unique flexibility & experimentation with different institutions & types of institutions…
Produced a drive to push forward not just technologies of domination but also technologies of productivity to create a larger resource base for warlords…
3.2. Imperial-Commercial Society
Commercial societies: as a shift to a “commercial” rather than a traditional-agrarian focus of the societal division of labor: property, contract, & rights—including the right to make the social contract—as the logical way for society to work…
Gunpowder empires as ruling bureaucracies with mercenary armies…
Productivity growth increases: a flexible & “tinkering” society with printing & a diminished focus on extraction vis-à-vis productivity; the Columbian Exchange; the benefits from long-distance transoceanic trade…
“Benefits”: extractive seaborne Europe-centered empires…
Britain as an island, the British fiscal-military state, & the concentration of the profits of global empire…
The coming of a pro-development pro-industrialization élite: “developmental” & “representative” institutions…
h=0.15%/year from 1500 to 1770…
3.3. The Industrial Revolution
Worldwide: h=0.33%/year; ⅓ from growing experimental-technological “nullius in verbo”—accept nothing at anybody’s word—⅓ from ingathering of global manufacturing into industrial regions; ⅓ from glaciers as coal-mining bulldozers…
Inside Dover Circle: h=0.9%/year; plus continued resource aggrandizement…
Only in Britain were real wages uniquely high; only in Britain were energy prices uniquely low—and coal uniquely available—& Britain was one of the few places that had an experimental pro-technology culture…
The first generations of steam engines useful only for pumping water out of near-surface coal mines…
The first generations of textile machinery useful only for spinning uniquely durable & radically cheap because slave-grown cotton…
Without those, would we have made the breakthrough out of the Malthusian Trap?
3.4. Steampower Society
Sufficient wealth generates reduced infant & child mortality: population explosion & the beginning of the demographic transition…
Rights of Man vis-à-vis humanity as an anthology intelligence in which value springs from human coöperation & organization in which nobody is special, hence a good society would be one of radical equality…
& expectations of radical abundance—an economy more than sufficiently productive for everybody to have much more than enough, by every previous generation’s definition of enough…
Underlying techno-econo-organizational changes that used to take 700 years are packed into 50…
Can the society-of-domination élite evolve its patterns of rule fast enough to keep its footing? No…
“All that is solid melts into air”; “Every established institution and hierarchy is steamed away”; “if everything is to stay the same, everything must change”…
But even so, would these have been enough to allow us to escape, or would we have gotten stuck in a SteamPunk Society, one still ruled by resource scarcity, and headed back into the Malthusian Trap?
4. Modern Economic Growth Post-1870
4.1. The Coming of Modern Economic Growth
Post-1870 industrial research labs, modern corporations, & full globalization—& so the big jump to h>2%/year…
Were these three capstone institutions inevitable once you had steampower, textile machinery, an engineering profession, & a nascent machine-tool industry? Or might we have missed developing them?…
Dover-Circle-Plus & worldwide h jump from 0.9 & 0.33%/year before 1870 to 2.5 & 2.0%/year afterwards…
Technological advance broadly shared across the world—but the Great Global Divergence continues…
4.2. From Steampower to Applied Science Society
New GPTs (General Purpose Technologies) every decade or so: the Second Industrial Revolution of materials, electricity, internal-combustion, organic chemistry, information technology, & MOAR…
The steamroller of Schumpeterian creative-destruction rolling forward at speed—and, every generation, large social groups are in its destructive-aspect path…
The coming of nationalism—& of other very different forms of political-economic contestation than bourgeois vs. aristocracy vs. royals & bureaucracy vs. theocracy of 1500-1770 & of the bourgeois vs. proletarians that Marx & Engels had forecast…
von Hayek vs. Polanyi—“the market giveth, the market taketh away: blessed be the name of the market” vs. “the market was made for man, not man for the market” as structuring the attempt to rewrite on the fly society’s econo-politico-socio-cultural organizational software so that it can run on top of the continuously revolutionized techno-economic hardware without crashing…
Social Darwinism as a new ideological justification for market-driven wealth inequality—& its spillover into national Darwinism as World War I approaches…
The development of underdevelopment, as world trade & migration patterns concentrate engineers in the rich countries…
Bob Allen’s standard package—banks, schools, infrastructure, & appropriate infant-industry tariffs—as the road to successful economic development…
The standard package impossible under the dominion of colonial masters…
4.3. The Fight Over Systems of Governance & Organization
Reaction…
Authoritarian national-Darwinism…
Pseudo-classical semi-liberalism—laissez-faire, but with property concentrated into a combination of an old landed-bureaucratic aristocracy annealed to a new industrial plutocracy…
Egalitarian & leading-party socialism…
Fascism…
Cosmopolitan liberalism…
Populism & progressivism…
4.4. From Applied-Science to Mass-Production Society
The Soviet really-existing socialist detour…
The United States as the furnace where the future is being forged…
Henry Ford & the T-Model as the assembly line becomes a key element of the mode of production…
World War I, the Great Depression, & WWII…
Nobody likes the pseudo-classical semi-liberal order—hence space for renovation…
Franklin Delano Roosevelt: taking over in the Great Depression, trying everything, and reinforcing success…
& post-WWII Cold-War Era U.S. dominance spreads the social-democratic New Deal Order patterns throughout the Dover-Circle-Plus
4.5. Mass-Production, Social-Democratic, “New Deal Order” Society
Rise of Mass Production: dominance of big corporations with strategies like planned obsolescence and product differentiation…
Shift to Consumer Goods: Emphasis on appliances, cars, and radios for middle-class households…
Labor and Employment: High employment levels driven by industrial production & New Deal policies aimed to stabilize and support mass production industries…
Safety Nets & Union Power: Strong labor unions negotiating better wages and working conditions…
Suburbanization: Growth of suburban living supported by mass car ownership…
Postwar Prosperity: A "Golden Age" of economic growth from the late 1940s to early 1970s…
At least one of Big Business, Big Labor, or Big Government have your back…
4.6. Global Value-Chain “Neoliberal” Society
Global Value Chains (GVCs): Shift to production networks that span multiple countries, optimizing efficiency, outsourcing production to lower-cost countries, reshaping global labor markets…
Deindustrialization: Decline of manufacturing jobs in developed nations, increasing service sector dominance.
Neoliberal Policies: Reduction of trade barriers, deregulation, and emphasis on market-based solutions; removal of constraints on businesses, particularly in finance, trade, and labor markets…
Income Inequality: Rising disparities as capital owners captured a larger share of economic gains.
4.7. Inclusion & Divergence.
Economic Inclusion: Efforts to extend prosperity to broader segments of society, especially marginalized groups…
Civil Rights Movements: Pushes for racial, gender, and economic equity, particularly in the Global North…
Education Access: Broader access to higher education, viewed as key to economic mobility…
Social Movements: Grassroots campaigns for economic, environmental, and social justice.
Global Development Initiatives: Efforts to promote development in the Global South through aid and investment…
5. After? the Neoliberal Order
5.1. Global Warming
Stored solar power energy from sunlight more than half a billion years ago in the form of coal, oil, and natural gas is a marvelous thing for human civilization…
But it warms up the planet: right now in the northern hemisphere the climate is marching northwards at an average of three miles a year because of human carbon energy, and we need to stop this…
Both because the three-miles-a-year is going to be very costly in and of itself, and because that is only the average—variability matters a lot, and tail-risk disruptions are really scary…
Stern Review of 2006: 1.5C warming is costing us 0.5% of global GDP; 3C costs us 2% of global GDP; 5C costs us 12% of global GDP; shlould stabilizing GHG CO2e concentrations at <550 ppm; limit global temperature rise <3C (5.4F); reach peak emissions… now; impose carbon tax of $40/ton ($0.50/gallon)…
Almost got there back in 1993 because of Al Gore; failed; have done little since…
What are the consequences for human society not just of global warming’s costs but also that dealing with it will eat up much of the next two generations’ technological-growth dividend—the dividend we would otherwise use to grease adjustment to ongoing Schumpeterian creative-destruction?…
5.2. Neoliberalism & After
The neoliberal era of an orthodoxy of free markets, globalization, and minimal state intervention, focused on enabling unrestricted market access; Milton and Rose Director Friedman’s vision of “capitalism and freedom”…
A pragmatic adaptation blending social-democratic goals with market tools betting on markets as more effective than bureaucracies for achieving equitable growth, while promoting better management due to lack of ideological rigidity…
Post-neoliberalism is likely to feature place-based policies, addressing community support over market efficiency; industrial policies, explicit rather than hidden, aiming at economic advantages; Strongman politics; and fear of the “woke”…
The New Deal Order relied on at least one of Big Labor, Big Government, and Big Business to have every individual’s back; eeoliberalism rejected these institutions as ossified and sclerotic, and instead promoted markets and individual freedom…
But neither Big Market Nor Big Do-Your-Own-Thing turned out to have your back, leaving individuals searching for new frameworks of support and justice in a fragmented global economy.
Antonio Gramsci’s Warning: The transition from neoliberalism is fraught with instability: “The Old Order is dying; the New Order appears perhaps stillborn: now is a time of monsters…”
5.3. “Polycrisis”—The Economy
The interconnection of multiple crises—environmental, economic, cultural, political, trade-related, and military—that collectively strain the system beyond its capacity to resolve any single issue effectively…
Economic dimensions include financialization, hyperglobalization, digitization, and “technofeudalism,” each amplifying inequalities, vulnerabilities, and systemic fragility…
Financialization: amplifying inequality and instability by disrupting old cybernetic economic systems-control mechanisms at local, national, and global levels, exacerbating the destructive effects of Schumpeterian creative-destruction…
Hyperglobalization creating significant fragility, prone to collapse under shocks such as pandemics or through the deliberate weaponization of interdependence (e.g., the oil crises starting in the 1970s)…
Digitization has eliminated opportunities for moderate-status but high-paid “unskilled” jobs, which previously offered a bridge to middle-class prosperity through farming, craftwork, or unionized assembly-line positions…
The absence of stable, well-paying jobs for those without advanced education has severed pathways to socioeconomic advancement…
“Technofeudalism”: Plutocrats & near plutocrats in today’s Silicon Valley vs. the broad middle-class prosperity seen in previous industrial cycles like those of Kodak in Rochester, NY…
5.4. “Polycrisis”—Other: Culture, Communication, Domestic Politics, & War
Cultural shifts like the renegotiation of gender relations and a reduction in traditional privileges (racial, ethnic, male, and local-origin) exacerbate "economic anxiety" and "cultural panic," especially amid slowed productivity growth…
The rise of digital media has enabled rapid dissemination of misinformation, incentivizing sensationalism and fear-mongering to capture attention. This moment parallels earlier communication upheavals like the Gutenberg printing press and the rise of mass media...
Responses to fear often oscillate between liberalism, seeking to curb violence and domination, and tyranny, leveraging populism or authoritarianism to promise protection or address grievances…
Populism or Fascism: Populists lift the burdens off of the backs of the people; fascists and neofascists prioritize their personal glory over solutions that create prosperity, often targeting "fake enemies," fostering divisions while consolidating power…
After decades of relative major-power peace post-WWII, major-power war has reemerged as a significant concern…
Adam Tooze invokes John Maynard Keynes as a model for addressing polycrisis by isolating solvable problems (e.g., unemployment, high interest rates) with technical fixes, freeing political capacity to tackle more complex and contentious issues…
5.5. The New Fight Over Systems & Orders
Orders consist of dominant ideas, principles, and institutions that exert hegemony by compelling even dissenters to engage with and adapt to them…
The remnants of the Neoliberal Order now exercise a zombie hegemony—it is dead, disliked by everyone, but the alternatives appear even less appetizing:
A return to the New Deal Order is implausible as the economy transitioned from mass-production globalized value-chain and is moving on to attention info-bio tech…
Historical populism sought to cancel debts, redistribute land, and curb oligarchic power by mobilizing the people as a counterweight to oligarchic wealth and clan-head patron-client networks…
Pragmatic pseudo-populism, by contrast, talked a good game but did little more—and always risked, as Plato said, transforming themselves from men into wolves…
Neofascists prioritize convincing people that they are collectively empowerment via following the leader’s "glorious purpose”—often defined by targeting weak or fabricated enemies, with in-group mobilization through ethnic or cultural exclusivity and spectacle…
Renewed Societies of Domination: Modern technology and key resource-control bottlenecks challenges the argument that exploitation is inefficient…
Surveillance State Capitalism: China exemplifies a hybrid model of socialism with authoritarian oversight, where the Leninist state balances egalitarian ideals with intensive investment in infrastructure, technology, and ideological control mechanisms…
Future directions hinge on the role of transformative GPTs (General-Purpose Technologies) in reshaping institutions, communication, and societal norms…
6. Conclusion
6.1. The Economic Growth History of the Future?
Modernity’s Acceleration: Since 1870, human technological capabilities have roughly doubled each generation. This rapid pace will likely continue—until it “logistics”…
In the near future, the shift to renewable energy and carbon-neutral economies will dominate, but time lags ind dealing with global warming threaten social stability…
A Post-Neoliberal Turn?: As neoliberalism falters under its inability to address crises like climate change or inequality, what new paradigm will rise? Will it be one of inclusion, sustainability, and equity, or further polarization?...
S-Curves: The Principal of Mediocrity says that we are in the middle of the S-Curve—that past inventions peeling-back energy and organization from combustion and carpentry to nuclear energy and quantum manipulation will be roughly matched by future innovations, perhaps in complex biological and information systems, before our technology and living standards approach some asymptote.,
“Algorithms” may be joining reciprocity, redistribution, markets, and bureaucracy as primary modes of organizing human activity…
Economic pressures and digital surveillance threaten democratic norms. As inequality grows, democracies may evolve or fragment into illiberal systems .
Demographic Cliff Edges: Aging populations in advanced economies and a peaking global population may radically alter how human societies work...
The Drake Equation & the Fermi Paradox: It is not surprising that there is a Great Filter—that in few if any places in our galaxy where chemicals became yeast which mutated, and mutated again, and again, and became grass and fish and walked on two legs like the Thrintun and built an enduring civilization visible from interstellar distances. But increasingly it looks as though the Great Filter is in our future, rather than our past, which is very disturbing…
6.2. Pulling It All Together: Conclusion
We are an immensely powerful and capable anthology intelligence with a profoundly disordered soul…
Up until 1870 all of our intelligence and ingenuity could not produce anything other than a desperately poor world ensorcelled by the Devil of Malthus…
The "rocket" of modern economic growth took off in 1870, doubling technological competence every generation, producing enough of a gain in prosperity to trigger the demographic transition, and thus making our unprecedented economic prosperity possible…
The Principle of Mediocrity suggests that we are halfway through the growth phase of the logistic…
Key economic institutions—markets, democracy, & bureaucracies; globalization, research labs, & corporations; writing, mathematics, & science—played central roles in organizing societies for productivity and innovation…
Slouching Towards Utopia: Despite technological advances, humanity has often failed to distribute wealth and power equitably, resulting in a slouch rather than a sprint toward economic and social utopia—we have solved the problem of baking a sufficiently large economic pie for everyone to have much more than enough by all previous generations’ definitions of enough; we continue to be flummoxed by the problems of slicing and tasting the economic pie, of distributing it semi-equitably and utilizing it so that we feel safe and secure and are healthy and happy…
False Starts in the Global South: Efforts to replicate the successes of the Global North have often faltered due to incomplete institutional development and disparities in global economic integration…
Social Democracy's "Golden Age": The 30 years post-World War II were the most successful economically and socially in the Global North, driven by the social-democratic New Deal Order and its policies of equitable growth..
The shift to the Neoliberal Order post-1970s delivered far fewer successes…
The story is likely to shift, primarily because of the drag on growth to be created by the costs of dealing with global warming…
The future is in your hands…
6.3. Pulling It All Together: Review
What are your questions?…
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