Chapter 21 of The Bourgeois Revaluation:
It Led to a Hockey Stick of Growth

It had never happened before. In 1798 Robert Malthus (1766-1834), an Anglican clergyman irritated by the extravagant and anti-clerical claims of the French revolutionaries and their British friends that a new day had dawned, explained for the first time why the enrichment of the poor had not yet happened. He said in his great book An Essay on the Principle of Population that it was not a divine malevolence but human sin and economic scarcity after Eden that kept people poor. The pressures of population (assuming only modest technological improvement), Malthus argued, had kept our ancestors living on about a $3 a day (the figure is Angus Maddison’s estimate of world income before 1800 in 1990 prices, brought up to 2010). 453 If income got a little higher, as when potatoes were introduced from Peru into Europe and China, the people had more children, and anyway more of their children survived to adulthood. The supply of labor therefore grew, and in a generation or so the real wage went down again to subsistence. If it got lower than subsistence, then more children died, and in a while the real wage rolled back up to a dollar or two a day. The $3 was in engineering lingo a “homeostatic equilibrium,” and worked the way your thermostat does.

A sad business. But our cheerful little joke in economic history when we lecture to undergraduates is that the story of welfare among humans is a “hockey stick” (many economic historians are Canadians). That is, the amount of food and education and so forth per person ran along at subsistence on a straight handle with little change at $1 or $3 during the fifteen hundred or so centuries since Homo sapiens first walked in Africa. Or during the five-hundred centuries or so since the invention of language. Or during the hundred centuries since the invention of agriculture. Or during the ten centuries since commerce revived in the West. Pick whatever length of handle you want. Anyway, for a long, long time not much happened to the economic well-being of the average Jack or Jill. Think of that $3 a day, with ups and downs — all right, in the richest parts of China and Europe perhaps $2.00 a day. Well-being would go up for a while (people were not by any means always “starving,” as Goldstone points out). But after a while it would go down. 454

In other words, until a couple of centuries ago, the economic historians have recently discovered, Europe and Asia were about equally poor, pegged to $3 a day pretty much regardless of where they lived. 455 And so was everybody else in the world. The imperialist vision of China and India as always and anciently terribly overrun with paupers is a modern misunderstanding (with consequences in the eugenic excesses of the family-limitation movement after the 1950s). For most of history, that a place was densely populated was a sign it was doing reasonably well, though not all that well for Jack or Jill — the Ganges Plain, for example, or on a smaller scale the Low Countries in Europe. But no one stuck much above the rest of the poppies for very long. Marshall Sahlins and other anthropologists have observed that hunter gatherers often had an easier life, working fewer hours a week for their food, than people tied down to the abundance of agriculture — the abundance of which went, according to the inexorable Principle of Population, to priests and knights rather than to our ancestors the peasants. 456 Why for the long length of the hockey stick did ordinary people do no better? Because of the long-run homeostatic equilibrium.

Until 1750 or even 1850 Malthus looks right. Then history reached the business end of the hockey stick. Suddenly real income per person started growing at an astounding rate. The growth started slowly first in a few countries in northwestern Europe, during the eighteenth century. During the nineteenth other countries joined at a higher rate the blade part of the stick, and during the twentieth century many others worldwide at still higher rates of growth. In other words, modern economic growth emerged only in the last couple of centuries out of 1500 centuries, or out of 500, or 100, or 10. Humankind broke out of the homeostatic equilibrium. Ironically, the Malthusian constraint dissolved just about the time that Malthus so persuasively articulated it. (Environmentalist still take the Malthus of 1798 as their guide.)

In many countries income per person has risen by now to 20 times its former level. More. The English colonists in North America in 1700 managed on a mere $1.40 a day in 1990 prices. Visit the historical reconstruction of the Plimouth Plantation *** to get a sense of what such a figure means: drafty, unplastered house walls without glass windows, enclosing one room with a sleeping loft for six people (in northern Europe there were animals in the back for additional heat); one skirt for Sunday and one for the rest of the week; in America ample food, usually, though trusting to the harvest; smallpox and dysentery routine; life expectancy low. Yet by 1998 the average resident of the United States consumed $75 a day, that is, over fifty times more housing, food, education, furniture than in 1700. 457 Fifty times.

Nowhere in the world 1800 to the present did real income per head actually fall, except in places with the misfortune of tyrants on the model of Robert Mugabe in Zimbabwe, or entirely uncontrolled robbers or pirates as in Somalia. When as in Argentina during the 1930s [***check] or East Germany during the late 1940s or Venezuela during the 2000s a naïvely populist or socialist policy took hold, such as subsidies to inefficient industries or regulatory attacks on markets and property, income grew slower than it could have. But worldwide from 1800 to the present the material welfare of humanity per average human rose by a factor of about 9.

And it has accelerated, rising faster and faster and faster, albeit with a sickening slowdown during the anti-bourgeois disorders of Europe and its imitators, 1914-1950. 458 By contrast the years 1950-1972 after the disorders, writes Angus Maddison, “were a golden age of unparalleled prosperity.” 459 World domestic product per head rose at nearly 3 percent a year, implying a doubling of material welfare of ordinary people every 24 years — that is, in a single long generation. The later, less vigorous growth of 1973-1998, Maddison points out, was nonetheless higher than any earlier period except the postwar boom.

Right now, with China and India taking up 37 percent of world population, and income per head in the two free-market and innovative places growing at 7 to 12 percent per head per year, the average income per head in the world (all the economists agree) is rising faster than ever before in history. 460 It seems likely to continue doing so — in their long socialist experiments during the 1950s and 1960s and 1970s China and India were so badly managed that there is a good deal of ground to make up. Certainly no genetics implies that Chinese or Indians should do worse than Europeans permanently. No limit is in sight. Rising income at such heady rates is understandably popular with ordinary Chinese and Indian people. As their incomes go up they, like the Westerners, will come to value the environment more. Oil is no long-term limit to growth, as the repeated failures of limits-to-growth predictions have shown. If we take 9 percent as the China-India annual per capita growth rate, the rest of the world could have literally zero growth per capita and still the world’s growth per year of real income per head would be (.37) x (9), or 3.3 percent per head per year, faster than the great postwar boom of 1950-1972. If the rest of the world were to grow instead merely at the subdued rates of 1973-2003 (namely, 1.56 percent per head per year), the resulting world figure, factoring in the Chinese and Indian miracles, would be (.37) (9.0) + (.63) (1.56), or 4.3 percent per year. 461 A sustained growth rate of 4.3 percent per year per capita results in a doubling of the welfare of the average person within a short generation of 17 years, or a quadrupling in about 34 years.

The resulting spiritual change has been just as impressive. Consider the move to democracy in Taiwan and South Korea, other places enriched by setting up free trade zones in which innovation was permitted and honored. Let us earnestly pray for China, which has done the same. Or consider the emergence in the West by 2000 of a Nature-worshipping environmentalism that would have been thought absurd in the straited times of 1700. It was made possible by enrichment. Rich places like Sweden, though contemptuous of such absurdities as the worship of the actual God, have found their transcendent in the worship of Nature, and spend their Sundays gathering mushrooms in Nature’s forest. Or consider the present flourishing of world music and world cuisine. And imagine the future explosion in world art and science when India and China become fully rich — not to speak of old Africa, whose genetic diversity promises when it too enters upon the hockey stick of growth a crop of geniuses unprecedented in world history. Today a Mozart in western China follows the plow; an Einstein in East Africa herds cattle. Some mute inglorious Milton here may rest. “Full many a gem of purest ray serene/ The dark unfathom’d caves of ocean bear:/ Full many a flower is born to blush unseen,/ And waste its sweetness on the desert air.” We await during the century to come a world spiritual change enabled by gigantically higher incomes. In fifty years at 4.3 percent per year (it will probably be higher, as more and more countries see the Chinese and Indian light, lit first in Holland and Britain) world income per head will rise by a factor of about eight and a half — 750 percent. That is about what it has risen in the past 200 years. In fifty years, in other words, if tyrants and robbers and populists and socialists do not win, the businesslike blade of the hockey stick will eliminate the worst of human ignorance and poverty, the malaria-crippled, soldier-raped, zero-schooling life of the poorest among us. By the middle of the twenty-first century it will result in a big bang of world culture, with Africa in the twenty-second century leading all.

A rhetorical and ethical change caused the up-curve of the hockey stick in the seventeenth century and will transform the world in the twenty-first century. Without the change and the resulting material improvement, the politics would not have changed. If ordinary people had not started after 1848 benefitting from industrialization the politics would have turned even nastier than it in fact did. The various novel darknesses since 1848, such as communism or fascism, racism and nationalism, theorized imperialism and theorized eugenics, would have stopped the gain. They almost did, especially from 1914 to 1950. The darknesses came out of nineteenth-century theorizing about nationalism and socialism and race, with a hangover in large parts of the world down to 1991. And likewise for that matter the gain from 1848 to the present could have been stopped by any of the old darknesses — of royal tyranny or aristocratic presumption or peasantly envy or religious intolerance, or simply the reign of robbers into whose clutches we could have fallen. It always had.

Ideas and rhetoric mattered here, too. The uniquely European ideas of individual liberty, generalized from earlier bourgeois liberties as it might have been in other parts of the world but was not, could protect the material progress. Admittedly the ideas were double-edged, encouraging progressive redistributions that killed innovation (think again of Argentina), yet keeping social democratic countries from the chaos of revolution, too (think Germany). 462 But in any event the ethical and rhetorical change that around 1700 began to break the ancient trammels on innovation was liberating and it was Enlightened and it was liberal and it was successful. As one of its enemies put it:

Locke sank into a swoon;

The Garden died;

God took the spinning-jenny

Out of his side. 463

Joel Mokyr has noted that Jews were not innovative in capitalism, especially in machines. They were he argues until their emancipation too devoted to honoring the past. “Inventions and scientific [and religious and political and marketing and literary and philosophical and sociological] breakthrough have a character of rebellion against cultural authority and the canon.” NNNN has made a similar point about the origins of the French Enlightenment in the debate between the ancients and the moderns. The cheekiness of imagining that one can indeed innovate is the connection between invention and (English) revolution, (Dutch) revolt, (German) reformation: it results in a revaluation of innovation, such as in the Age of Exploration or the Scientific Revolution or the Industrial Revolution. Similar backward-looking conservativism explains the other, non-Jewish cases of successful merchants and financiers who also did not innovate: the Old Believers in Russia were good at commerce but not especially good at the mechanical invention necessary for an industrial revolution. The “large amount of obedience and respect for tradition and the wisdom of the past generations” Mokyr observes in pre-haskala Judaism strikingly characterizes China in general, and would apply to overseas Chinese, too. “There are . . . prominent orthodox Jewish scientists, [but] their number has remained smaller than one would expect given the qualities of human capital involved in a Jewish orthodox education.” Against the capital-obsessed economists, education can be a conservative force. And as David Mitch has shown, early education for the masses was anyway not a big factor in productivity.

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It Led to a Hockey Stick of Growth

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