Friday, February 24, 2023

Slouching Towards Utopia

 J. Bradford DeLong is a economics historian trying to explain how society got to its present stage.  After looking at events and statistics he concluded that our real wealth growth revolves around 1870 to 2010.  He makes a strong case.  There was lots happening before 1870.  We went from hunter gatherers, to manufacturers, developed a variety of complex cultures.  As a civilization we did make progress, but the author points the average person in terms of wealth, income, nutrition, longevity made only marginal progress.  However by 1870 many events have piled on top of one another and the average person does gain a share in an increase of global wealth.  Technology developed in fits and starts, but the population grew faster than wealth until 1870.

Slouching refers to the fact that much progress is diverted away from the idea of utopia.  Global wealth grows, but is not fairly distributed.

 Robert Malthus espoused the theory that mankind would breed so fast that we would annihilate ourselves with overpopulation.  In practicatl terms he noted that although mankind discovered or developed things that made human lives better our uncontrolled desires assured that there would be a diminishing amount of resources to sustain us.  Up until about 1870 that was true.  The Industrial Revolution started in England about 1770 and did boost the living standards of the rich and was part of the leadup to the greatest global economic growth period labeled the longest century.

A number of factors combined to lift more of mankind above sustenance.  Innovations in many fields were not only reinforcing one another, but research laboratories were assuring more innovations.  The  world was globalizing on many fronts including trans Atlantic transportation and underwater cable connections  Immigration and trade increased dramatically.   

Education was recognized at least in America and the British Empire as critical and suffrage gradually occurred around the world.  There was resistance, partly fueled by a misused Darwinian concept of "survival of the fittest" that seemed to justify increasing inequality.  Slavery had been reduced in Britain and America, but acceptance had a long way to go.  

Several European powers colonized huge parts of the world, Africa, Asia, Central and South America.  One country that escaped colonial efforts was Japan because they were able to initially resist contact with the outside world, but developed literacy and urbanization by adopting many westernizing methods.   They were able to send selected citizens to study in Europe or America.

An example of nationalization was the Boer War.  South Africa had a huge settlement of Dutch people.  They ran up against British ambitions and a war resulted in 1899.  Britain sent 250,000 military people and had so many prisoners they set up what came to be known as "concentration camps."  With a lot of brutal tactics the Brits won with the strong support of the British voters.  As a young boy I came across a book in our family home lauding the British effort in the Boer War.

Nationalism was on the rise.  When the heir to the Austrian Hapsburg throne was assassinated it was an effort to remove Serbia and Croatia from the grasp of the Austrian Hapsburg Empire.  It untangled alliances involving England, France, Russia, Romania and Germany resulting in World War I.  Otto von Bismarck was quoted "It is not by speeches and debates that the great issues of the day will be decided, but by blood and iron."

Despite  Woodrow Wilson proposing the League of Nations, the American reaction to the war was isolationism.  The Republicans forced the U.S. to withdraw from the League of Nations.  Heavy restrictions were imposed for immigration.  

John Maynard Keynes felt it was a big mistake to make Germany suffer which in turn was a grievance latched onto by Adolf Hitler.  

The Roaring Twenties ended with the start of one of the most serious global Depression.  Lots of action laying with the gold standard and interest rates.  Ironically Adolf Hitler understood better than Americans the importance of full employment and they came out of the troubled times better.  

Japan had become an industrial power, but were dependent on oil.  America blocked them from getting oil and the resentment led to Pearl Harbor.  After the brutality of WWII, the U.S. took on the role of a hegemon for the rest of the world.   Hegemon refers to a leadership role due to dominance.

United States, to placate returning military offered a GI bill that amongst others things encouraged  them to seek further education which not only raised standards, but gave the labor market time to sort itself out.  The Marshall plan helped to restore Europe to previous status.  President Eisenhower pushed for a greatly expanded highway system.

As racial minorities and females rose in stature there was resentment.  In 1964 the Civil Rights Act solidified rights.  Quoting the author, "Productivity depends on the division of labor...if you invite more people into your tent, your division can be finer and more productive".  Admittedly not everyone saw it that way.

From the 1990"s the Global South increased their real income faster than the Global North.  Information technology spurted ahead starting from the 1980's.  Another  factor was containerization meaning goods could be transported for lower income areas to areas of high consumption. 

In 2008 the world suffered a significant recession.  The author admitted he was wrong in his prescription (he actually started this book just before this new crisis and changed his outlook), but added most of the world did not handle it properly.  One exception was the Chinese who adopted the principle that the priority (remember Hitler) was to have full employment.  

Now we come to 2010, the author's designated end of the long century.  The world is going in different directions.  One alarming trend is the relative ignoring of climate change which will have life changing global impact.  Donald Trump was an indicator of a new economy.  He took advantage of people's natural desire to blame someone for their personal dissatisfaction.  His main policies were tax cuts and deregulation to support the already very rich.  The author thought that cruelty was also part of his legacy.  And he bungled the Covid crisis that negatively affected billions of us.  Not to mention stirring up a number of divisions of Americans.

One of those memorable passages for me was when the author paraphrased Abraham Lincoln.  "You only had the right to eat what you had earned by the work of your hands.  That was part of your rights to life, liberty and the pursuit of happiness.  To keep others from taking the bread that you had earned was the point of government.  Moreover, any such government was legitimate only through your consent." 

The author seems to be an admirer of John Maynard Keynes, suggesting his wisdom should have and still should be paid attention to.

There is much to ponder in this heavy book well worth reading to better understand how the world got this way.  We are still only "slouching towards utopia".  The average global inhabitant is much better off than they were in 1870, but there is still serious inequality.  Some have more freedom, but there are still a lot of restrictions limiting the enjoyment of most of the world.  I would like to close with a quote from John Maynard Keynes who felt the most permanent problem is "how to live wisely and agreeably and well."

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