History and imagination

The last of my holiday reads, albeit finished this week, was [amazon_link id=”0099590085″ target=”_blank” ]Sapiens: A Brief History of Humankind[/amazon_link] by Yuval Noah Harari. I was a bit disappointed, as it had absolutely glowing reviews. After reading Ian Morris’s [amazon_link id=”1846682088″ target=”_blank” ]Why The West Rules For Now[/amazon_link] and his more recent [amazon_link id=”0691160392″ target=”_blank” ]Farmers, Foragers and Fossil Fuels[/amazon_link], and Jared Diamond’s [amazon_link id=”0099302780″ target=”_blank” ]Guns, Germs and Steel[/amazon_link], and his later [amazon_link id=”0241958687″ target=”_blank” ]Collapse[/amazon_link], not to mention [amazon_link id=”052138673X” target=”_blank” ]Joseph Tainter[/amazon_link] and [amazon_link id=”1843547252″ target=”_blank” ]Walter Russell Mead[/amazon_link], I suppose it’s hard to describe anything completely new looking through the long lens on the history of civilisation. It’s quite a crowded terrain.

[amazon_image id=”0099590085″ link=”true” target=”_blank” size=”medium” ]Sapiens: A Brief History of Humankind[/amazon_image]

That isn’t to say I didn’t enjoy reading Sapiens. It’s eloquently written. I liked the emphasis on human social agency, and absence of technological or ecological determinism: “The ability to create an imagined reality out of words enabled large numbers of strangers to co-operate effectively.”

He writes of ‘imagined order’ (echose of [amazon_link id=”1844670864″ target=”_blank” ]Benedict Anderson[/amazon_link]): “We believe in a particular order not because it is objectively true but because believing in it enables us to coperate effectively and forge a better society.” He has a nice example using Peugeot, the car company. It doesn’t consist in the cars it makes, or its assets, or the people working for it – it has an existence beyind any of them, and a longevity too, kept in existence by the imagined order of the French legal system, the French state, the idea of nation states, and so on. The ‘rules of the game’ as an institutional economist might put it, are a set of Russian dolls.

It drove home for me the point that for individuals the agricultural revolution was an adverse development, although it was great for spreading Homo Sapiens genes. I liked the discussion of natural and unnatural – a distinction that pre-supposes the existence of a higher purpose, and since evolution has no purpose it is a distinction that comes from religion.

I very much enjoyed the contrasting portraits of Louis XIV of France and Barack Obama: “Dominant men have never looked so dreary as they do today. What happened to the wig, stockings, high heels?”

The book tails off a bit towards the end – the economics chapters seemed weak to me, although perhaps they wouldn’t to a non-economist. They cram the whole history of world economics with an emphasis on credit ([amazon_link id=”1612194192″ target=”_blank” ]Graeber[/amazon_link]-style) into three chapters.

Anyway, that’s it for summer paperbacks. Back to the serious reading now. Next up is John Kay’s [amazon_link id=”B00UJD8AS2″ target=”_blank” ]Other People’s Money.[/amazon_link] Four pages in, and I think it’s fabulous.

[amazon_image id=”B00UJD8AS2″ link=”true” target=”_blank” size=”medium” ]Other People’s Money: Masters of the Universe or Servants of the People?[/amazon_image]

Europe’s former glories

[amazon_link id=”0691139709″ target=”_blank” ]Why Did Europe Conquer the World?[/amazon_link] That’s the title of a new book by Philip Hoffman of CalTech. His answer is a very neat development of part of Jared Diamond’s famous [amazon_link id=”0099302780″ target=”_blank” ]Guns, Germs and Steel[/amazon_link] and Paul Kennedy’s equally famous [amazon_link id=”0006860524″ target=”_blank” ]The Rise and Fall of the Great Powers[/amazon_link].

[amazon_image id=”0691139709″ link=”true” target=”_blank” size=”medium” ]Why Did Europe Conquer the World? (The Princeton Economic History of the Western World)[/amazon_image]

[amazon_image id=”0099302780″ link=”true” target=”_blank” size=”medium” ]Guns, Germs and Steel: A short history of everybody for the last 13,000 years[/amazon_image]  [amazon_image id=”0006860524″ link=”true” target=”_blank” size=”medium” ]The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500-2000[/amazon_image]

Hoffman is not impressed by the germs part of the story, but does believe a combination of technological advances in weaponry, the ability to turn resources into tax revenues to fight wars, and competition between European states constitute a good explanation for the literal and cultural conquest of so much of the world by Europeans.

However, historical contingency also played a huge part in his telling of the story, the contingency of the long Dark Ages that kept European states of a similar size to each other, without a single hegemon becoming much larger than its rivals. This turned the competition described by Kennedy into a tournament – and an appendix models this formally. Rulers were in a contest for a big enough prize – glory or land – and incentivised to use resources – revenues that they could raise at low political cost especially as financial innovations came along in the modern era – to pour into new military technologies based on gunpowder to get an edge over each other. War was frequent, and there were few obstacles to adopting the new technologies.

Having set out the model, the book shows quite persuasively why only the European states met these tournament conditions. For example, China was much larger than neighbouring states and used its resources on old technologies to fight the horsemen of the steppes. India had plenty of rivalrous states but was unable to raise revenues at a low enough political cost because the raising of tax revenues was decentralised to local rulers.

Hoffman’s argument makes sense to me, although I’m sure historians could find some of the generalisations too sweeping. This book is a very interesting addition to the flourishing history of the world genre, including Ian Morris’s enjoyable [amazon_link id=”1846681472″ target=”_blank” ]Why the West Rules for Now[/amazon_link] as well as Diamond and Kennedy. The tournament model is not a complete explanation. For instance, it does not fully explain things like the origins and role of financial innovations or scientific discovery. However, this is a terrific example of the insight you can get from a simple model.

[amazon_image id=”1846681472″ link=”true” target=”_blank” size=”medium” ]Why The West Rules – For Now: The Patterns of History and what they reveal about the Future[/amazon_image]

Enlightenment values

I’ve been slowly reading [amazon_link id=”0691150648″ target=”_blank” ]The Shape of the New: Four Big Ideas and How They Made the Modern World[/amazon_link] by Scott Montgomery and Daniel Chirot. Slowly because it’s too big to carry in my bag on the tube. It’s an intriguing history of the modern world as shaped by – yes – Big Ideas. The authors’ argument is that: “Ideas have been among the primary forces behind modern history during the past three centuries.”

[amazon_image id=”0691150648″ link=”true” target=”_blank” size=”medium” ]The Shape of the New: Four Big Ideas and How They Made the Modern World[/amazon_image]

This isn’t a new argument in itself. In the context of economic history, Joel Mokyr’s [amazon_link id=”0691120137″ target=”_blank” ]The Gifts of Athena[/amazon_link] and his [amazon_link id=”0140278176″ target=”_blank” ]The Enlightened Economy[/amazon_link] give pride of place to ideas, then embodied in innovations.

[amazon_image id=”0691120137″ link=”true” target=”_blank” size=”medium” ]The Gifts of Athena: Historical Origins of the Knowledge Economy[/amazon_image]  [amazon_image id=”0140278176″ link=”true” target=”_blank” size=”medium” ]The Enlightened Economy: Britain and the Industrial Revolution, 1700-1850[/amazon_image]

And as Keynes famously said at the close of [amazon_link id=”B00N47UOI4″ target=”_blank” ]The General Theory[/amazon_link]:

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.” (The quotation is usually shortened but it’s better in full.)

[amazon_image id=”B00N47UOI4″ link=”true” target=”_blank” size=”medium” ]The General Theory of Employment, Interest, and Money[/amazon_image]

The Shape of The New does though have a distinctive version of the ideas that created our world. The first four chapters cover Adam Smith (morality and self-interest in political economy), Karl Marx (the desire for revolutionary redemption), Charles Darwin (embedding humanity in nature, the scientific method turned on ourselves) and the Jefferson-Hamilton debates (the nature and meaning of democracy). I knew the least about the last of these, so found it particularly interesting. The second half turns to the backlashes: the counter-Enlightenment all the way through to Fascism; and Christian and Muslim counter-reactions to modernity.

As the book concludes, the debates are still live, although of course taking new forms constantly. Those of us who hold Enlightenment values dear have to fight for them.

However, it ends with a bit of a damp squib, the conclusion being that the humanities are essential in higher education, and one of the most important aspects of study should be the history of ideas. I do happen to agree (even in economics), but it’s a rather low key ending to an ambitious and interesting book.

 

Time for the next techno-enviro-social paradigm?

On this week’s flights I read [amazon_link id=”0691160392″ target=”_blank” ]Foragers, Farmers and Fossil Fuels: How Human Values Evolve[/amazon_link] by Ian Morris. I thoroughly enjoyed Morris’s big book, [amazon_link id=”1846682088″ target=”_blank” ]Why the West Rules (For Now)[/amazon_link], a grand sweep of economic and social history in the vein of ([amazon_link id=”0099302780″ target=”_blank” ]Guns Germs and Steel[/amazon_link], [amazon_link id=”0241958687″ target=”_blank” ]Collapse[/amazon_link]) Jared Diamond. This new book is a series of essays based on his 2012 Tanner Lectures at Princeton, with comments/criticisms and a response. So it’s much shorter and less detailed than the previous one, although a very good and enjoyable read nonetheless.

[amazon_image id=”0691160392″ link=”true” target=”_blank” size=”medium” ]Foragers, Farmers, and Fossil Fuels: How Human Values Evolve (The University Center for Human Values Series)[/amazon_image]

Morris comes across here as a sort of [amazon_link id=”1840226994″ target=”_blank” ]Karl Marx[/amazon_link] meets Jared Diamond. In a nutshell, his argument is that humanity has grown better at using the prevailing energy technology to acquire more kilocalories of energy for use, up to a ceiling. At that ceiling, a new energy basis for society evolves, importantly affecting population density and the size of human social groups, and replaces the previous social/technical paradigm. Domestication of grains and animals enabled farming to replace foraging. The extraction of fossil fuels and their harnessing as steam power led to industrial societies in place of agrarian ones.

Each of these three paradigms involves a different kind of social relations: egalitarian in foraging societies because co-operation is necessary for hunting and gathering, and nobody has a lot of property; hierarchical ones in agrarian societies because some people accumulate property to be defended, and a biological division of labour between the sexes emerges too; and industrial ones more egalitarian with respect to politics and gender but tolerant of wealth inequality. There has been little if any biological evolution among humans – and through the millennia the same basic characteristics (or even values) such as the capacity for love, a sense of fairness etc, exist – but there has been cultural evolution. Specifically, values evolve, being shaped by interaction with the physical, social and intellectual environment. Is it acceptable to treat women as chattels or to have slaves? Do animals have the right to humane treatment? Does marital fidelity matter? These kinds of values have changed significantly.

Although it seems highly plausible that the material and technical basis of a society plays an important part in shaping its higher level values, and that population density and the size of social groups will be important, there is something that feels a bit deterministic about Morris’s argument. It may be that at this short length the arguments become caricatures, with less scope for nuance, because the four critiques of the argument aren’t all that convincing either.

The book has lots of facts, always appealing to me. For instance, did you know the Royal Navy’s West Africa Squadron had intercepted and freed 150,000 Africans being shipped across the Atlantic to the US between banning slave trading in 1807 and the outbreak of the US Civil War in 1865?

It ends rather gloomily, pointing out that the big transitions he identfies – from foraging to farming to fossil fuels – occurred when successful societies hit the “hard ceiling of what was possible given their stage of energy capture and found themselves taking part in a natural experiment….. More often than not, people failed to revolutionize their energy capture and suffered Malthusian collapses.”

Perhaps, he muses with unseemly cheer, that’s about to happen to us unless we can solve the climate change issues. So that’s our choice: a catastrophic collapse of civilization, or a new techno-enviro-social paradigm.

A challenge to techno-euphoria

After plucking it off the shelf for yesterday’s post on the ebb and flow of economic power in the long sweep of history (or – what I did on my holidays), Angus Maddison’s [amazon_link id=”9264022619″ target=”_blank” ]The World Economy: A Millennial Perspective [/amazon_link] (read it online here) absorbed me. He identifies three forces driving long term growth: conquest and settlement; trade (specialisation and the division of labour); and technological innovation. On the last of these, he writes:

“It is clear that technological progress has slowed down. It was a good deal faster from 1913 to 1973 than it has been since. The slowdown in the last quarter century [ie. to 1999] is one of the reasons for the deceleration of world economic growth. ‘New economy’ pundits find the notion of decelerating technological progress unacceptable and cite anecdotal or microeconomic evidence to argue otherwise. However, the impact of their technological revolution has not been apparent in the macroeconomic statistics until very recently, and I do not share their euphoric expectations.”

I would really challenge the implication here that macroeconomic statistics are facts and microeconomic evidence just anecdote. SInce Maddison wrote this, we have had the early 2000s boom and then the financial crisis and its aftermath. It will be a while before the macro data can make sense of it all.

It’s quite clear though that there are some innovations that have not improved productivity or welfare – see Thomas Philippon’s marvellous paper Has the US Finance Industry Become Less Efficient? (Answ: Yes) The Maddison challenge is a good one to those of us who do think there is important technological innovation occurring – just as when Solow made his famous comment about computers, there is a question about why it doesn’t show in macro data. One answer might be that GDP data don’t capture the welfare gain due to new technologies (see my [amazon_link id=”B00M0H5PGU” target=”_blank” ]GDP[/amazon_link] for more). Another might be that the technologies are doing more for growth outside the OECD countries – think mobiles in Africa, South Asia or Latin America. But if Maddison is right, the interesting question then is why this wave of technology uniquely has not translated into faster growth and social welfare?