J. Bradford DeLong - Slouching Towards Utopia: An Economic History of the Twentieth Century

W hat I call the long twentieth century started with the watershed-crossing events of around 1870the triple emergence of globalization, the industrial research lab, and the modern corporationwhich ushered in changes that began to pull the world out of the dire poverty that had been humanitys lot for the previous ten thousand years, since the discovery of agriculture. And what I call the long twentieth century ended in 2010, with the worlds 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, 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 twentieth century were, I strongly believe, the most consequential years of all humanitys 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 strong belief that history should focus on the long twentieth century stands in contrast to what othersmost notably the Marxist British historian Eric Hobsbawmhave 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. 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 shook the world.

Histories of centuries, long or short, are by definition grand narrative histories, built to tell the authors desired story. Setting these years, 19141991, 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 humanitys 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 twentieth century. It is a primarily economic story. It naturally starts in 1870. I believe it naturally stops in 2010.

As the genius, Dr. Jekylllike, Austro-English-Chicagoan moral philosopher Friedrich August von Hayek observed, the market economy crowdsourcesincentivizes and coordinates at the grassrootssolutions to the problems it sets.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 technologieswe got full globalization, the industrial research laboratory, and the modern corporation. These were the keys. These unlocked the gate that had previously kept humanity in dire 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 did follow from that.

My estimateor perhaps my very crude personal guessof the average worldwide pace of what is at the core of humanitys 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, and to better provide for themselves and their families. 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. 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

A 2.1 percent per year growth rate is a doubling every thirty-three years. That meant that the technological and productivity economic underpinnings of human society in 1903 were profoundly different from those of 1870underpinnings of industry and globalization as opposed to 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 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 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.

Much good, but also much ill, flowed: people can and do use technologiesboth the harder ones, for manipulating nature, and the softer ones, for organizing humansto exploit, to dominate, and to tyrannize. And the long twentieth century saw the worst and most bloodthirsty tyrannies that we know of.