Shawshots/Alamy Stock Photo

Slouching Towards Utopia


If you are not an economist, the most likely place you’ve run across J. Bradford DeLong is his always-smart blog, Grasping Reality. Within the profession, though, Brad is known as an economist’s economist, whose specialty is, well, non-specialty. He was deputy assistant secretary for economic affairs in the Clinton administration, which translated to alter ego for another polymath, Treasury Secretary Larry Summers. And since returning to academia (University of California, Berkeley), he’s been delivering wisdom on topics ranging from China to the political economy of democracy.

Slouching Towards Utopia: An Economic History of the Twentieth Century* is the essence of Brad, a far-reaching examination of economic growth since 1870 with numerous digressions along the way. Annie Lowrey of The Atlantic called it “sweeping and detailed, learned and accessible, familiar and strange — a definitive look at how we arrived at such material splendor and how it failed to deliver all that it seemed to promise.” Couldn’t have put it better myself. Here, we offer a look at the introductory chapter.

Peter Passell

Published April 21, 2023


* Copyright J. Bradford DeLong. Basic Books (2022). All rights reserved.

What I call the “long 20th century” started with the watershed-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 10,000 years since the discovery of agriculture. And what I all the “long 20th 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 20th century to work for them as they thought it should.

In between, things were marvelous and terrible, but by the standards of all of the rest of human history, much more marvelous than terrible. The 140 years from 1870 to 2010 of the long 20th century were, I strongly be-lieve, the most consequential years of all humanity’s centuries. 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.

My certainty that history should focus on the long 20th century stands in contrast to what others — most notably the Marxist Brit-ish historian Eric Hobsbawm — have focused on and called the “short 20th century,” which lasted from the start of World War I in 1914 to the fall of the Soviet Union in 1991. Such others tend to see the 19th century as the long rise of democracy and capitalism from 1776 to 1914, and the short 20th century as one in which socialism and fascism shook the world.

Histories of centuries, long or short, are by definition grand narrative histories, built to tell the author’s desired story. Setting the years 1914-1991 apart as a century makes it easy for Hobsbawm to tell the story he wants to tell. But it does so at the price of missing much of what I strongly believe is the bigger, more important story. It is the one that runs from about 1870 to 2010, from humanity’s success in unlocking the gate that had kept it in dire poverty up to its failure to maintain the pace of the rapid upward trajectory in human wealth that the earlier success had set in motion.

What follows is my grand narrative, my version of what is the most important story to tell of the history of the 20th century. It is a primarily economic story. It naturally starts in 1870. I believe it naturally stops in 2010.

Jekyll and Hyde

As the genius, Dr. Jekyll-like, Austro-English- Chicagoan moral philosopher Friedrich August von Hayek observed, the market economy “crowdsources” — incentivizes and coordinates at the grassroots — solutions to the problems it sets. Back before 1870, humanity did not have the technologies or the organizations to allow a market economy to pose the problem of how to make the economy rich. 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.

Things changed starting around 1870. Then we got the institutions for organization and research and the technologies — we got full globalization, the industrial research laboratory and the modern corporation. These were the keys, unlocking the gate that had previously kept humanity in dreadful poverty. The problem of making humanity rich could now be posed to the market economy, because it now had a solution. On the other side of the gate, the trail to utopia came into view, and everything else good should have followed from that. Much good, indeed, did follow.

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. A 2.1 percent average growth for the 140 years from 1870 to 2010 is a multiplication by a factor of 21.5. That was very good: the growing power to create wealth and earn an income allowed humans to have more of the good things, the necessities, conveniences and luxuries of life. 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 laborproductivity levels.

As a rough guess, average world income per capita in 2010 was 8.8 times what it was in 1870, meaning an average income per capita in 2010 of perhaps $11,000 per year. 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.

A 2.1 percent per year growth rate is a doubling every 33 years. That meant the technological and economic underpinnings of human society in 1903 were profoundly different from those of 1870 — underpinnings of industry and globalization as opposed to agrarian and landlord-dominated. The massproduction underpinnings of 1936, at least in the industrial core of the global north, were profoundly different also. But the change to the mass consumption and 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 in 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 provide for its people in the storms.

It has now been 150 years. We did not run to the trail’s end and reach utopia. We are still on the trail — maybe, for we can no longer see clearly to the end of the trail or even to where the trail is going to lead.

Much good, but also much ill, flowed: 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 20th century saw the worst and most bloodthirsty tyrannies that we know of.

Moreover, much that was mixed, both for good and for ill, also flowed. 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.

Suppose we could go back in time to 1870 and tell people how rich humanity would become by 2010 relative to them. How would they react? They would almost surely think that the world of 2010 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 obstacles hobbling humanity could be resolved.

But not so. It has now been 150 years. We did not run to the trail’s end and reach utopia. We are still on the trail — maybe, for we can no longer see clearly to the end of the trail or even to where the trail is going to lead. What went wrong?

Well, Hayek may have been a genius, but only the Dr. Jekyll side of him was a genius. He and his followers were extraordinary idiots as well. They also thought the market alone could do the whole 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 by faith alone, but through Hayek’s by the market alone.

However, humanity objected. The market economy solved the problems that it set for itself. But then society did not want those solutions — it wanted solutions to other problems for which the crowdsourced solutions the market offered were inadequate.

The only stable principle had to be some version of “The market was made for man, not man for the market.” But who were the men who counted, for whom the market should be made? And what version would be the best making?

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 is not valuable, the rights you have are very thin.

But people think they have other rights. 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, in fact, satisfy their needs and desires. But if it does, it does 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 property as much of what the rich want as possible.

So throughout the long 20th century, communities and people looked at what the market economy was delivering and said: “Did we order that?” And society demanded something else. The idiot Mr. Hyde side of Friedrich von Hayek called it “social justice,” and decreed that people should forget about it: 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.

Do note that in this context “social justice” was always only “justice” relative to what particular 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. Plus, the market economy, while powerful, is not perfect. It cannot by itself deliver enough research and development, for example, or environmental quality, or, indeed, full and stable employment. “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.” 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 squabbles over the answers to those questions?

Throughout the long 20th century, many others — Karl Polanyi, Theodore Roosevelt, John Maynard Keynes, Benito Mussolini, Franklin Delano Roosevelt, Vladimir Lenin and Margaret Thatcher serve as good markers for many of the currents of thought, activism and action — tried to think up solutions. They 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 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. Perhaps the closest humanity got was the shotgun marriage of Hayek and Polanyi blessed by Keynes in the form of post–World War II North Atlantic developmental social democracy. But that institutional setup failed its own sustainability test. And so we are still on the path, not at its end. And we are still, at best, slouching toward utopia.

Heritage Space/Heritage Images via Getty Images
It’s the Economy, Stupid

Return to my claim above that the long 20th century was the first century in which the most important historical thread was the economic one. That is a claim worth pausing over. The 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 modernized 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?

I do so because we have to tell grand narratives if we are to think at all. Grand narratives are, in the words of that bellwether 20th-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.”

It is in hopes of transcending the nonsense to glimpse the world aright that I’ve written this grand narrative. It in that spirit that I declare unhesitatingly that the most consequent thread through all this history was economic.

Before 1870, technology lost its race with the speed at which we reproduce over and over again. 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 would have enough to eat and a roof over their heads. 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).

The ice was breaking before 1870. Between 1770 and 1870 technology and organization gained a step or two on human fecundity. But only a step or two. In the early 1870s the British establishment 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 material progress becomes unquestionable. The ice could then have resolidified — the 19th-century technologies of steam, iron, rails and textiles were approaching their culmination point. Moreover, they all depended on hyper-cheap coal, and the hyper-cheap coal was being exhausted.

But tell anyone from before the long 20th 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 19th 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 owner-ship of industry, the elimination of destructive competition and the altruistic mobilization of human energies. Technological and organizational abundance, he 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.”

To listen to music on demand in 1900 you had to have an instrument nearby and someone trained to play it. It would have cost the average worker some 2,400 hours, roughly a year at a 50-hour work-week, to earn the money to buy a high-quality piano.

He 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 — this alone would be testament to a vast leap forward. To listen to music on demand in 1900 you had to have an instrument nearby 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 piano. Then there would be the expense and the time committed to piano lessons.

But Bellamy’s narrator-protagonist is awed when his hostess does not sit down at the piano 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?’”

He learns that his host has dialed up a live orchestra on her telephone landline, 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.

Utopias are, by definition, the be-all and end-all. “An imagined place or state of things in which everyone is perfect,” 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 20th century were responsible for its most shocking grotesqueries.

Citing a quotation from the 18th-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.”

So many of us have grown so accustomed to our daily level of felicity that we utterly overlook something astounding. Today, even the richest of us rarely see our-selves as so extraordinarily lucky and fortunate and happy, even though for the first time in human history there is more than enough — more than enough calories, more than enough shelter, more than enough clothing.

This observation also points to why I see the long 20th 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 20th century has worked just shy of miracles.

The Future Was Here and It Was Unevenly Distributed

The consequences of the long 20th 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.

Today, the luckier economies of the world have achieved levels of per capita prosperity at least 20 times those of 1870 and at least 25 times those of 1770, and there is every reason to believe prosperity will continue to grow at an exponential rate in the centuries to come. Today, the typical citizens of these economies can wield powers of mobility, communication, creation and destruction that approach those attributed to sorcerers and gods in ages past. Even the majority of those living in unlucky economies and in the “global south” confront not the $2- to $3-a-day living standard of those economies in 1800 or 1870, but an average closer to $15 a day.

Many technological inventions of the past century have transformed experiences that were rare and valued luxuries available only to a rich few into features of modern life that we take so much for granted that they would not make the top 20 or even the top 100 in a 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.

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 — more than enough calories, more than enough shelter, more than enough clothing. And there is more than enough stuff lying around and being produced daily, so nobody need feel the lack of something necessary.

One reason 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.

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 20th 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; the rise of political movements in North America and Europe that reject democratic representative consensus politics — movements that former U.S. Secretary of State Madeleine Albright called “fascist” (and who am I to tell her she is wrong?). Indeed, any triumphalist narrative would collapse in the face of the conspicuous failures over the previous decade by the stewards of the global economy.

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 history of the long 20th 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.

One reason 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 nearly eight billion humans in a highly productive division of labor. The market economy also recognizes no rights of humans other than the rights that come with the property their governments say they possess. And those property rights are worth something only if they help produce things that the rich want to buy. That cannot be just.

As I noted above, 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, no matter how well-intentioned 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. 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 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!

Harold M. Lambert/Getty Images
Technology Through the Ages

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 BCE or so. 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.

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. 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 larger population. This is a way of taking account of the fact that, since our natural resources are not unlimited, we depend as much 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.

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 20th century. Back in the year 8,000 BCE, when we discovered agriculture and developed herding, the index stood at 0.04. That is, on average across the globe, it would take 25 workers in 8000 BCE to do what one worker could do in 1870 with the same materials and on the same-size farms. By the year one, 8,000 years later, this index was 0.25: 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 would be in 1870. By the year 1500, the index stood at 0.43, more than 70 percent above the year one and a little less than half the value of the year 1870.

These are impressive changes. They summarize, from the standpoint of those who lived 8,000 years ago, truly miraculous and impressive enlargements of the human empire. Technologies of the year 1500, the Ming pottery or the Portuguese caravel or the wet cultivation of rice seedlings, would have seemed miraculous. But this growth, and the pace of invention, took place over an enormous span of time, crawling ahead at only 0.036 percent per year for the entire period between one and 1500. That is only 0.9 percent over the average 25-year lifetime of that age.

Keeping your children from dying is the 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.

And did greater knowledge about technology and human organization cause the life of a typical person in 1500 to be much sweeter than it had been in 8000 BCE? It turns out not. The human population grew at an average rate of 0.07 percent per year from year one 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 additional net product. While the elite lived far better in 1500 than they had in 8000 BCE or the year one, ordinary people lived little or no better than their predecessors.

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 same contagious diseases to which her children succumbed) would have spent perhaps 20 years eating for two. She would have had perhaps nine pregnancies, six live births, and three or four children surviving to age 5, and the life expectancy of her children remained under, perhaps well under, 30.

Keeping your children from dying is the 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.

However, 1.5 percent average population growth per generation added up. In 1500 there were about three times as many people as there had been in year one — about 500 million rather than 170 million. Additional humans did not translate to less 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.

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, around 1770, the ice was cracking as we crossed into yet a different watershed as far as 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.

Much that our predecessors called utopian has been attained via economic improvements year by year, each of which is marginal, but which compound. Yet, as of 1870, such an explosion was not foreseen by many.

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.

But did this mean a richer, more comfortable humanity in 1870? Not by very much. In 1870 there were 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 the living standard of the typical humans was concerned.

Around 1870 we crossed over another divide into yet another new watershed: the age the economist Simon Kuznets called an era of “modern economic growth.” During the period that would follow, the long 20th century, there came an explosion.

The approximately seven 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.

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. 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 about 5,000 calories worth of bread. That was progress: in 1800, his daily wages would have bought him 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 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 500 times as much as in 1870.

From the bio-sociological point of view, this material progress meant that the typical woman no longer needed to spend 20 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 infancy, and to prevent more than a tenth of mothers from dying in childbirth.

Yes, Mill saw a world with more and richer plutocrats and a larger middle-class. But he also saw the world of 1871 as a world in which humans had to work long and tiring hours. The world Mill saw was a world in which humanity was imprisoned in a dungeon, chained and fettered.
What Comes After Empire?

From the nation-and-polity 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 in which 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 ring-mastering 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.

Much that our predecessors would have called utopian has been attained via economic improvements year by year, each of which is marginal, but which compound. Yet, as of 1870, such an explosion was not foreseen by many. Yes, 1770-1870 did see productive capability begin to outrun population growth and natural resource scarcity for the first time. By the last quarter of the 19th 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.

Was that enough to be a true watershed? 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 1770-1870 era of the British Industrial Revolution. But he looked 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.”

One word of Mill’s stands out to me: imprisonment. Yes, Mill saw a world with more and richer plutocrats and a larger middleclass. But he also saw the world of 1871 as a world in which humans had to work long and tiring hours. 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.” And there were others who were much more pessimistic than even Mill. In 1865, 30-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.

With so much pessimism circulating, the coming explosion in economic growth was far from expected — but it would also be dangerously misconstrued by some. In 1848, Karl Marx and Friedrich Engels had 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 them 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, canalization 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 labor?

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. But Marx and Engels’ promise was not 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. 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 his ability” (Acts 11:29), and each drew on the common, abundant store “according to his needs” (4:35). Perhaps he kept these descriptions rare and without detail because 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.

Kypros/Getty Images

However, attained by slouch or gallop, economic improvement matters. How many of us today could usefully find our way around a kitchen of a century ago? Before the coming of electric current and the automatic washing machine, doing the laundry was not an annoying, minor chore but 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.

What do modern people do instead? Increasingly, we push forward the body of technological and scientific knowledge. We educate each other. We doctor and nurse each other. We care for our young and our old. We entertain each other. We provide other services for each other so that we can all take advantage of the benefits of specialization. And we engage in complicated symbolic interactions that have the emergent effect of distributing status and power and coordinating the division of labor of today’s economy, which encompassed seven billion people in 2010.

Over the course of the long century, we have crossed a great divide between what we used to do in all of previous human history and what we do now. Utopia, it is true, this is not. I imagine Bellamy would be at once impressed and disappointed.

The economic historian Richard Easterlin helps explain why. The history of the ends that humans pursue, he suggests, demonstrates we are ill-suited for utopia. With our increasing wealth, what used to be necessities become matters of little concern — perhaps even beyond our notice. But conveniences turn into necessities. Luxuries turn into conveniences. And we humans envision and then create new luxuries.

Easterlin puzzled over how “material concerns in the wealthiest nations today are as pressing as ever, and the pursuit of material needs as intense.” He saw humanity on a hedonic treadmill: “Generation after generation thinks it needs only another 10 or 20 percent more income to be perfectly happy. … In the end, the triumph of economic growth is not a triumph of humanity over material wants; rather, it is the triumph of material wants over humanity.” We do not use our wealth to overmaster our wants. Rather, our wants use our wealth to continue to overmaster us. And this hedonic treadmill is one powerful reason why, even when all went very well, we only slouched rather than galloped toward utopia.

Nevertheless, getting off the treadmill looks grim. Only a fool would wittingly or ignorantly slouch or gallop backward to nearuniversal dire global poverty.

main topic: Economics Profession
related topics: Books