Maybe it's too much to ask that voters, politicians and
I've noticed quite a lot of interest among the pointy-headed intellectual set lately in the broad sweep of economic history. The latest nugget is from Brad DeLong, who on the occasion of the death of historian Eric Hobsbawm has reprinted this review from 1995 of the lapsed Communist historian's Age of Extremes. I'm not particularly interested in Hobsbawm's ideologically induced brain damage as I am in the history DeLong reviews. I've come across several other essays on the general subject of what exactly it was that happened from the late 19th through late 20th Century that made our world.
And what a world it is. As DeLong says, it is not clear that people in say, 18th Century France or Virginia were materially any better off than Athenians. But today, Americans are arguably 20 times wealthier than they were in 1900. You can't really quantify it because a whole lot of our stuff didn't even exist then. Take it back to 1850 and you can't even make sense of the question. People spent a good many hours every day hauling water and firewood into the house and hauling out excrement. Bedrooms were unheated. There was no refrigeration, or even canning. You had to either eat produce within a couple of days or somehow preserve it by drying or pickling. If you wanted to communicate with someone in your own town, you had to physically go to their house and, if they weren't home, leave a message. Agricultural techniques hadn't changed substantially since Roman times. If you wanted to hear music, you needed a village band or to wait for a traveling performer to come through town. Chances are you had never been more than a few miles from the place you were born. If you did move -- say from the east coast to the frontier -- it was a once in a lifetime journey filled with great peril. Now people of modest means fly back and forth from the west to east coast in a few hours, for the sake of a brief vacation or a one-day business meeting.
The political developments of the 19th and particularly the 20th Centuries were possible only in the context of this astonishing material transformation; and they were necessary in order to sustain it. But now many intersecting crises threaten the good life people have come to take for granted and assume must last forever. To take just a few of the most important, we have to begin with the fundamental dependence of the transformation on fossil fuel energy, which is not sustainable. Many other essential resources are being depleted, from water to soil to phosphorus.
That aside, industrial capitalism must grow or contract -- it cannot stand still. One could quite credibly argue that we have enough already, we just need to distribute it properly and turn our energies from creating more and more stuff to contemplating art and cultivating the virtues. But we have no mechanism of organizing society so as to make that happen. But fueling continued growth requires continuing technological innovation. You probably have central heating and indoor plumbing and major appliances and an automobile. The next generation of smartphone isn't gong to get you to spend more than a fraction of what you spent on that stuff. The Chinese and Indians have managed to find a way to grow and more of their people will be able to buy those things, or at least so it seems. But it's not clear they will be made in the U.S.A., and anyway that will top out in due course.
We haven't figured out how to allocate investment without creating both repeated financial crises and gross inequality. The prospect of the whole house of cards collapsing is quite real, though not for the reasons Ron Paul thinks. The threat is not the national debt, but the claim on non-existent assets represented by the immense accumulation of monetary wealth. That's what's driving Europe into depression -- the creditors demand to be paid money lent on bogus collateral, and the ordinary people, who had nothing to do with the whole scam, are being made to pay. This promises a downward spiral of misery with no clear end in sight.
We aren't having any sort of a discussion about the problems we actually face. The marginal tax rate on the wealthy does matter, but even that discussion is happening on nonsensical terms. It's time we all got real, folks.