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The Salience Today of the Economic: Part II of My "The Economist as ?: The Public Square and Economists: Equitable Growth Note for October 10, 2013

Sit down some evening and watch the news on the TV, or scan the magazine covers in the supermarket, or simply immerse youself in modern America.

If you are like me, you will be struck by the extent to which our collective public conversation focuses on seven topic areas:

  1. The personal doings of the beautiful, the powerful, and the rich—and how to become more like them.
  2. The weather.
  3. Local threats and dangers, especially to children.
  4. Amusements—usually gossip about the past or about our imaginary friends, frenemies, etc. (it is amazing how many people I know who have strong opinions about Daenerys Stormborn of House Targaryen--many more than have any opinions at all about her creator George R.R. Martin).
  5. How to best procure necessities and conveniences.
  6. Large scale dangers (and, rarely, opportunities): plagues, wars, the fall and rise of dynasties. 7.“The economy”: unemployment, spending, inflation, construction, stock market values, and bond market interest rates.

Now out of these seven topic areas, the first six are found not just in our but in other societies as far back as we have records. They are common in human history as far back as we have been writing things down, or singing long story-songs to one another around the campfire.

What, after all, is the story of Akhilleus, Hektor, and Agamemnon in Homer’s Iliad but a combination of (1), (4), and (6)?

Last April, by a strange chance, the internet led me to a passage from the lost Biographies of third-century B.C.E. philosopher Hermippos of Smyrna. The passage was about a fourth-century B.C.E. Athenian, Phryne, who may or may not have been a model for the sculptor Praxiteles of Athens’s lost Aphrodite Knidia and the painter Apelles of Kos’s lost Aphrodite Anadyomene. Hermippos wrote of:

...the dazzling Phryne, who, according to Hermippus of Smyrna, was almost never seen naked. But "at the great festival of the Eleusina and that of the Posidonia in full sight of a crowd that had gathered from all over Greece, she removed her cloak and let loose her hair before stepping into the sea; and it was from her that Apelles painted his likeness of Aphrodite coming out of the sea."

That made me think: was the occupation “philosopher” in the third-century B.C.E. was some weird mixture of what we would call a “philosopher” and what we would call a “writer for People”? It appears so. Surely Hermippos of Smyrna’s agent would have welcomed a booking on “Oprah”.

Six of these seven topics of public-square conversation are recognizably common across societies and across history. But we have a seventh. It is Somewhat different. And it is what I want to focus on: that our collective public-sphere concern about the economy is unusual in historical perspective. Past society’s public squares have dealt with issues we would call economic: the local price of food is always of general interest as is the supply and demand of traded goods of interest to merchants. The wealth or lack thereof of individuals and cities of interest is always of interest to money-lenders.

But the economy?

There really wasn’t such a thing before 1700. We only begin to even see the word in the eighteenth century, as the phrase “home economics”—teaching how to cook, how to sew, how to clean, and how to budget—finds its first word replaced by “political”. Then “political economy” becomes a study of how the government managers should do for the state the things that a household manager does for a household. And then, in the nineteenth century, the “political” gets dropped. Why? As part of a movement to make the subject less, well, political—less partisan. It is a semi-deliberate move by those who were political economists and seek to become economists to claim a mantle for their discipline as more an objective branch of knowledge that can at least aspire to the prestige of a true natural science and the respect given to its advice possessed by a technocratic what-works discipline like engineering.

So why does “the economy” and its study—”economics”—become a concept that needs a label in the eighteenth century? Why do we today watch it on the TV and read about it in the newspaper instead of learning more normal things—like Phryne’s dress secrets, or Odysseus’s least-known battle strategems, or Akhilleus’s favorite recipes?

I believe that there is a simple answer. When we look into the deep past, the evidence—especially the skeletal evidence that finds adult humans around the year 1 little more than five feet tall—strongly suggests that, save for a small upper class, and save for lucky generations born into times of temporary land abundance (from technological changes like the invention of the wet-rice paddy or the horse collar, or from previous plague) the bulk of human populations saw very little economic change. Most people lived for the most part close to subsistence in the years between the invention of agriculture and 1500 or so. We can guess at what their material standard of living was like, and we can guess that their income level would strike us in today’s dollars as something less than $1000 per person per year. We do see substantial population growth: we guess that there were about 5 million humans in 8000 B.C.E., and 500 million in 1500, for we had lots better agricultural and herding “technology” in 1500 than we did in 8000 B.C.E. But all or nearly all of better technologies between 8000 B.C.E. and 1500 showed up in Malthusian fashion as increasing population rather than increasing living standards. Cunch these guesstimates, and find a worldwide economic growth rate of 0.05%/year. That is not five percent per year.

Thus what might have been called the economy was pretty much an unchanging backdrop back before 1500 from the standpoint of any individual year, or, indeed, from the standpoint of any individual’s lifetime—plagues, war and rumors of war, and their economic consequences aside. Substantial transformations of what might have been called the economic would have been visible only if one stepped back and looked across multiple centuries at what Fernand Braudel called the Longue Durée—the analytical perspective from which the long and gradual four-century long spread of the Merino-breed sheep across Mediterranean and then northwest Europe truly was a really big deal. Thus in any previous era the idea that one should pay attention to somebody called an economist—that there would even be a subject called economics that could be thought of as significant—would have been a strange one indeed.

Compare that to the years since 1900 in which worldwide average real GDP growth of 3.5% per year. Compare that to the years from 1990-2007: worldwide average real GDP growth of 4.5%/year. And compare that to what happened in 2008-9: an eight-percent fall in total economic production in the United States and a six percent fall in employment driven purely by the derangement of our economy, and not by any change in our knowledge or our technological capabilities or in the rest of the natural world.

The fact is that we today see roughly 100 times as much economic growth and change in any given period—for good and for ill—than our pre-1500 ancestors did. Today economic change is a very big deal that determines what kind of job you will have, and if you will have a job, and how you will live ten or twenty years from now--if not tomorrow. Is it any wonder, given this ramping up of the pace of change, that the economy is salient today? Ours is an era in which, in our consciousness, issues like the filioque clause and the vicissitudes of the Bush or Habsburg dynasties appear to us to be in relative terms less salient, and the economy much more so. In such an age it is natural that the public square has a desire to listen to economists—for they claim to have knowledge about what is an important, newsworthy, and changing aspect of our civilization. And it is natural that economists will seek to speak in the public square as public intellectuals.

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