My book on the economic history of the twentieth century, published last fall, did not include a chapter on the question of the future or “what we should do next,” because my frequent co-author, Stephen S. Cohen, convinced me that whatever I wrote would come to look outdated and silly within six months. He was right: such arguments are better left to commentaries like this one. So, if I had written a final chapter looking to the future, what should I have said?
Prior to the phantom text, I argue that for most of history, humanity was too poor for political governance to be anything but elites ruling through force and fraud to amass wealth and resources for themselves. But in 1870, the rocket of modern economic growth blasted off, doubling humanity’s technological competence every generation thereafter. Suddenly, we seemed to have acquired the means to bake an economic pie large enough for everyone to have enough. If we could solve the second-order problems of how to distribute and consume the pie so that everyone felt safe, healthy, and happy, a kind of utopia would be within reach.
Yet something went wrong. Between 1870 and 2010, humanity did not gallop, run, canter, trot, or even walk toward utopia. At best, we slouched – and not even always in the right direction. By the first decade of this century, the engine of economic growth had clearly begun to misfire. Not only could we no longer count on rapid growth, but we also had to account for new civilisation-shaking threats like climate change.
The grand narrative of 1870-2010 was about technological triumph, coupled with social-organisational failure. The post-2010 grand narrative has yet to be written, mainly because humanity has been taking hesitant steps in at least four directions.
Some have looked back to the post-World War II social-democratic “New Deal Order,” which was born of a shotgun marriage between Friedrich von Hayek, with his exultant confidence in the power of the market to create prosperity, and Karl Polanyi, who stressed the importance of human dignity and rights other than those pertaining strictly to property. The shotgun was held by John Maynard Keynes, who believed in the power of technocratic economic management to maintain full employment, empower workers by making their time more valuable, and euthanise the rentiers through low interest rates.
But that system proved unsustainable in the late 1970s. It could no longer command the support of durable majorities in the world’s democracies, and its foundation of Fordist mass production had begun to fracture. The world economy was moving instead to global value chains and, eventually, to the current information-driven mode of production. To speak of reviving the New Deal today would be like someone in 1690 calling for a return to the eleventh-century feudal order that prevailed under William the Conqueror.
Others, meanwhile, have looked in the direction of doubling down on the neoliberal order that succeeded social democracy. For example, the United Kingdom did this starting in the late 2000s, when Nick Clegg, the leader of the Liberal Democrats, decided that his party’s purpose was to persuade voters who didn’t like Tories to support Tory rule. The reinvigorated neoliberalism that followed under Prime Minister David Cameron and Chancellor of the Exchequer George Osborne – not to mention the farcical experiment that Liz Truss and Kwasi Kwarteng recently pursued – delivered little in the way of absolute economic growth and offered a strong warning against moving in this direction.
A third option has been to conjure the spirit of ethnonationalism. Advocates of this direction believe that modern society’s principal flaws have less to do with material deprivation than with moral decay owing to the influence of outsiders and those who lack sufficiently deep roots in the blood and soil of the nation: immigrants, moochers, slackers, deviants, rootless cosmopolitans, and other sinister forces. Needless to say, this approach has very little to recommend it, both morally and as a matter of economic policy.
The fourth option addresses something that has been absent, or at least waning, ever since 1870. One could abandon the goal of utopia and return to orienting society around an elite – be it kleptocrats, plutocrats, party bosses, or some combination of these – that is focused on feathering its own nest through force and fraud. The strong would do what they wish, and the weak would suffer what they must. Going down this road, the closest one could get to a “good society” would be to use the new tools of the information age to enact a winner-takes-all hierarchy gently, rather than with the same brutality as in the past.
None of these options is likely to bring improvement, and some aren’t even feasible. Neoliberalism’s big problem was that it starved society of long-term investment, both in productivity-enhancing technology and in the vast majority of people. Social democracy’s problem was that most people did not want to be passive recipients of government benefits; rather, they wanted the social power to earn (and hence to deserve) their slice of the growing pie.
Is it fantastical to think that a productive and effective synthesis of these is still possible? Or is it just that I am an old ox who has been seeking such a synthesis for his entire career? Given the alternatives, I see no other choice than to keep pushing the same burden around the same circle. Like Martin Luther, I cannot do otherwise.
J. Bradford DeLong, a former deputy assistant US Treasury secretary, is Professor of Economics at the University of California, Berkeley, a research associate at the National Bureau of Economic Research, and the author of Slouching Towards Utopia: An Economic History of the Twentieth Century (Basic Books, 2022). Copyright: Project Syndicate, 2023, and published here with permission.
31 Comments
At a fundamental level what we're doing is flawed, because the assumption is ever increasing materialism is the pathway to human enrichment.
That creates a desire that'll never be satiated, and is at odds with the core human requirement to have meaningful connections with one another.
We do continue to make "progress", but it depends how its measured.
The biggest problems are:
a) political corruption - especially in the US where politicians are beholden to company donations
b) a) leads to excess corporate profits (shareholder benefits) and low taxation of the rich, poor laws (including taxation) and poor regulations and reduced public good.
c) a) & b) excess corporate profits and excess wealth accumulation by the rich leads to higher govt debt.
d) our continuing dependence on GDP as the key measure rather than measuring wellbeing per capita (net economic, environmental & social benefits)
Too much emphasis is placed on government debt with little understanding of what it is and why we have it. It is mostly used as a means to lower our expectations of the governments ability to do anything meaningful for us and to prevent it from competing with the banks and the private sector.
Clint Ballinger gives a good description here of the reasons for government debt and why we don't actually need it. https://clintballinger.com/2018/11/13/decouple-spending-from-bond-sales/
Economic growth from 1870-2010 was basically backed by ever cheaper energy. Coal to oil, and technological advancements making it cheaper to extract. However now energy is getting more expensive, we've used up much of the cheapest reserves, and due to climate change are deliberately making it more expensive.
There is promise in "clean" energy such as wind and solar as if you can keep them around and producing long enough the cost per joule generated is very low. But they don't solve all problems, in particular compact storage is still a real issue.
Vanadium redox flow batteries can provide cheap, large-scale grid energy storage. Here's how they work
https://www.abc.net.au/news/science/2023-02-02/vanadium-redox-flow-batt…
What is utopia ?
Overall liberal democracies have been hugely successful in creating dramatic improvements in the general standards of living in the last 120 or so years.
There is no perfect system or policies, everything is a compromise, the best policies provide for the greater good. Recent years have seen the abandonment or reversal of many sensible policies by leadership who ignore or think they know better than history.
100 % correct : " utopia " is a nebulous concept , and not at all relevant to living in the real world ...
... our standard of living , life expectancy , advances in equality for females , medical & scientific breakthroughs ... all are testament to the gigantic strides humanity has made ...
We need only continue along a similar path , but with increased awareness that we must keep the planet habitable for future generations ...
... they're comparing us to Asia ? ... it's a no-brainer , Asia every time ...
I'm in the Philippines ... the locals seem happy , mostly ... but they all dream of a life " in the West " ...
No one anywhere in the world dreams of a better life in Darfield ... which is sad ...
... it isn't that life is bad in Zealandia ... it's just that we're vastly underachieving our immense potential ....
Utopian dreams like a carbon free economy , road to zero , predator free NZ 2050 are downright stupid ... the bar is set impossibly high ... so , we give up before hardly starting ...
With our ideologically driven PM gone , our current political leaders can get back to the real world of fixing education , healthcare , & infrastructure
Considering that the world population trebled since WW2, increased average affluence is indeed an economic miracle, largely wrought out of an environmental economic common good.
Until population is an integral part of the conversation, along with the religious & cultural dysfunction that refuses to consider it, the burden will indeed continue to go around the same circle.
Fortunately for me this short article is brief and lacks any overly technical terms. Distilling past human actions and present experiences with future prediction is fraught., so I find Bradfords thoughts interesting and it's wonderful that he can think on this scale. I can't imagine that utopia is possible during my lifetime, more likely a rearguard action as global warming wrecks food production and habitability in an ever increasing portion of lived on landmasses, with wars and misery the most likely outcomes for most of humanity for decades. Hope is possible and the pathway forward is summarized by the writers key insights 'Neoliberalism’s big problem was that it starved society of long-term investment, both in productivity-enhancing technology and in the vast majority of people.'
To me this statement brings into sharp focus the lack of a publicly expressed future vision of NZ by politicians, especially in the NZ National Party, and the widespread denial and apathy of older New Zealanders concerning actions on global warming needed now and before 2030.
The spectres of the 20th century, the ideological battles for the hearts and the minds of the masses via economic delivery of results. These battles were over with the fall of the Berlin Wall and will not be back. Last century was the century of the masses, this century is something else.
Liberal Capitalism survived the ordeal by systematically adopting the managerial elite, implemented technocratic systems for improving the conditions of ordinary people. It managed to trick and murder Fascism, while exhausting Communism. The American Empire enjoyed its hegemony and is now deeply under threat from challenges posed by its competitors.
Look at how pathetically the Americans responded to the Chinese spy balloon. The chinese could just use spy satellites to get the same data, yet they messed with the Americans by sending a balloon drifting across the sky which the Americans didn't shoot down. The American Elite purposefully looted their own manufacturing base and purposefully decimated their own populations with these Zionist foreign wars, allowing hard drugs to destroy their people, deindustrializing their heartland etc. USA might as well stand for Usury, Sodomy and Abortion.
Yet the spectres of a pre-modern world haunt the world today. Economic growth that comes purely from debt bubbles and Usury, technological stagnation (outside of computers, what has advanced in the last 40-50 years?). Both our elites and the masses are decadent, degenerate and morally bankrupt. Look at the referendum during 2020, a vote on whether we wanted to legally commit suicide and on whether we should legalise a means to anaesthetize ourselves via drugs. Future peoples will judge this event as a mark of our nihilism and decadence.
Where once the radio and television projected a one way, culturally homogenous worldview onto the masses to mold their personalities and minds to, the internet has allowed the feedback of anyone and completely broken the illusion that the media monopolies once held over the minds of people. The return of tribalism and the ever growing awareness of the failure of the neoliberal model is spiralling political system out of control. The smooth controlled world of television set narratives simply isn't coming back, no matter how many fact checkers and scary documentaries the establishment media releases.
When does the immigration solve the labour shortage? When do the houses become affordable? When do the birth rates recover? When does the solution to the climate crisis emerge? When does the health system get better? Perpetual crises which are never solved and seem to never be 'solvable'.
These endless and perpetual crises are slowly moving us towards Caesarism, you can feel the rumblings of it with the authoritarianism of the Jacinda government and the cult of personality in the Key government.
It is becoming increasingly clear that democracy is absolutely failing to deliver, and increasingly clear that it was merely an illusion of choice where political power was elected by the media machines and their owners.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.