For Project Syndicate...
We sit here in the midst of 10% unemployment in the USA, of fiscal policy that is crippled in some countries by (legitimate) fears that more deficit spending will trigger government debt crises and crippled in others by confusion between short-term cyclical and long term structural deficits, of banking policy crippled by the public populist reaction against more bailouts for the bankers, and of monetary policy crippled by a strange and sinister mindset among central bankers that fears inflation even as rates of wage increase continue to drop—people who are, as R.G. Hawtrey said of their predecessors in the Great Depression, “crying ‘Fire! Fire!’ in Noah’s flood.”
So it is time to calm myself down. And the best way to calm myself down is by taking the long view.
If all goes well in China and India in the next generation—and if nothing goes catastrophically wrong in the rich post-industrial North Atlantic core of the global economy—then the next generation will see a real milestone. For the first time ever more than half of the world will have enough food not to be hungry and worry about famine, enough shelter not to be wet and worried about trenchfoot, enough clothing not to be cold and worried about hypothermia, and enough medical care not to be worried that they and the majority of their children will die of microparisites well short of their biblical three-score-and-ten years. The big problems of the bulk of humanity will then be those of finding enough conceptual puzzles and diversions in their work and play lives so as not to be bored, enough relative status not to be green with envy of their fellows—and, of course, avoiding and quickly disposing of the thugs who used to have spears and will have cruise missiles and H-bombs who have functioned as macroparasites infecting humanity ever since the first farmers realized that now that they had crops running away into the forest was no longer an option.
How did this miracle come about?
Some say it was the disenchantment of the world: the shift from a world view that relied on prayer and the propitiation of spirits to one that believed in rational manipulation and management of nature and of society. But the Classical Greeks had natural philosophy. And the Classical Romans believed in figuring out what worked and applying it—but all they produced were some splendid works of architecture and infrastructure and a system of military training that conquered and spread their society beyond the Mediterranean.
Some say it was an agricultural revolution that allowed transfer of a large chunk of the labor force into making things. But eleventh-century China had had a bigger and earlier agricultural revolution than eighteenth-century Britain had.
Some say it was the European conquest of the Americas. But what was shipped back from America across the Atlantic to Europe and what was paid for in imports from Asia with American products was never real wealth but was instead sterile gold, sterile silver, some empty calories (in the form of sugar), and some psychoactive chemicals—coffee, tea, chocolate, and nicotine.
Some say it was the commercial revolution and the rise of the middle class. But in 1776 Adam Smith and a little later David Ricardo were looking forward to a future for Britain in which it became a lot more like China—a full country with high agricultural productivity per acre and a well-developed division of labor but a very poor and low-wage peasantry and working class ruled by very rich landlords.
Some say that it was the industrial revolution of the eighteenth century in Britain: the steam engine, the forge, the cotton mill. But as late as 1871 John Stuart Mill was writing that it was doubtful whether as yet all the inventions of the industrial revolution had lightened the day’s toil of a single worker.
It is hard looking back to avoid the conclusion that it was at the end of the nineteenth century that something really special happened—and that really special thing had three parts:
First, the coming of global communications so that ideas invented or found or applied in one part of the world could be quickly made known to and adapted to other parts rather than waiting decades or centuries to percolate across the oceans.
Second, the coming of global transportation so that any good economic idea could be turned to produce enormous profits as it was leveraged across the entire globe.
Third—and in large part a consequence of the other two—the coming of the professional inventor and the industrial research laboratory: people whose business wasn’t to make and apply a single invention, but instead to invent the process of continuous and constant invention and innovation itself.
And when all three of these happened together, we had our critical mass and our chain reaction that has brought us here.
Let’s hope we can keep it moving, and don’t spoil it.