FFor most of human history, we have been caught in a stagnation trap. Improvements in technology and productivity led to an increase in population, and all these new people gobbled up the surplus, so that the overall standard of living still returned to the historical average, barely above the level of subsistence. Thomas Malthus, the unjustly maligned English clergyman, assumed that would always be the case. And yet, at least in the fortunate global north, things have been very different over the past century or so. How come?
This is the question to which the economist Oded Galor devised his rather grandiosely named “unified growth theory”. (He uses many metaphors from physics, including “phase transition”, “economic black hole”, “gravitational forces”, etc.) His answer, briefly, is that we have freed ourselves from the Malthusian trap because of the Effect The Industrial Revolution Has Had on Fertility Rates. Rapid technological change placed a higher value on education and families invested more in the education of children, which meant that they could no longer afford to have as many children as before. Thus, productivity gains have not been swallowed up by population growth. This virtuous circle has persisted until now, and might even, Galor suggests with old-fashioned optimism, help us combine continued growth in living standards with lower carbon emissions.
The outlines of this theory in the first half of the book are pleasant and intriguing, though somewhat schematic in their image of quasi-physical “fundamental forces” or “great cogs” operating over millennia of human history. The second half tackles what economists call the Great Divergence: Why, given the story above, do we see such extreme global inequality today? Here we enjoy a brief interlude in which the author gives some causal weight to the ideas. Different legal systems and political institutions meant that some countries were able to profit more than others – for example, England’s 1689 bill of rights, its financial system, and the relative weakness of its craftsmen’s guilds (of so they couldn’t block threatening inventions). ), are all alleged that they gave him a head start. Galor also follows Weber in suggesting that Protestantism was crucial to the development of modern capitalism and that the most important invention of the Enlightenment was the idea of progress itself.
So far, if plausible. But, like a lifelong materialist, Galor always seeks to reduce the superstructure of ideas to something more tangible. Climate and geography then caused underlying differences in political systems: in places where indigenous cultures were suited to “big plantations”, such as Central America and the Caribbean, people were enticed, he says , to adopt “centralized land ownership, which leads to an unequal distribution of wealth, forced labor and even slavery”. So we can be thankful for drizzly Europe.
It is tempting for a “unified theory” of the “journey of mankind” to try to provide the key to all mythologies, and the book becomes more speculative and dubious, suggesting that the economic performance of entire modern societies can be explain by some sort of cultural memory their ancestors’ interactions with one type of culture or animal versus another. Galor also proposes that languages with polite distinctions (you and you in French or of and Sie in German) thus enshrined more rigid hierarchies and thus harmed individual enterprise. It pleasantly reminded me of the remark attributed to George W Bush: “The problem with the French is that they have no word for entrepreneur.” The book’s desire to uncover the “big workings” of history turns into a sort of impersonal conspiratorial thinking.
The penultimate chapter, more dangerously, purports to explain differences in economic development in the modern world by the “diversity of populations,” including genetic and cultural diversity. Galor argues that ethnic diversity has had contradictory effects: on the one hand, it “diminished interpersonal trust, eroded social cohesion, increased the incidence of civil conflict, and introduced inefficiencies in the provision of public goods”. On the other hand, it “promoted economic development by broadening the spectrum of individual traits, such as skills and problem-solving approaches”. If so, then perhaps, a bean counter might dream, there’s an amount of diversity that’s just right. Galor finds that there is such a “sweet spot”, and it can be found in a Goldilocks area – neither too close nor too far, in terms of migratory distance, from our ancestors’ first voyage out of Africa – where the ” diversity” of population is supposedly ideal for creating an economy like that of the Netherlands or Malaysia rather than that of Ethiopia or Bolivia.
Here we encounter the limitations inherent in the editorial genre of the “successful thinker lays out his favorite theory as if it were the indisputable truth”. The original version of this argument appeared in a 2013 article co-authored with Quamrul Ashraf (“The ‘Out of Africa’ Hypothesis, Human Genetic Diversity, and Comparative Economic Development”), and elicited a very critical public response from the from a number of biologists. and anthropologists. “The argument is fundamentally flawed in assuming that there is a causal relationship between genetic diversity and complex behaviors such as innovation and mistrust,” they observed; indeed, such “random methods and faulty assumptions of statistical independence could also find a genetic cause for the use of chopsticks”. They also cautioned: “The suggestion that an ideal level of genetic variation could promote economic growth and could even be engineered has the potential to be misused with chilling consequences to justify indefensible practices such as ethnic cleansing or genocide. Galor responded at the time, “All criticism is based on a gross misinterpretation of our work and, in some respects, a superficial understanding of the empirical techniques employed.”
He ends his recap of the same argument here by saying that “geography and population diversity” are “primarily the deepest factors behind global inequality,” which rather gives the impression that there is nothing we can do about it. . Fortunately, at least, he suggests that a country like Ethiopia, which he says is too diverse, could be helped by “policies that allow diverse societies to achieve greater social cohesion.” Meanwhile, Bolivia, allegedly too homogeneous, could achieve better economic growth by being more diversified and thus benefiting from greater “intellectual mixing”. And so, although it often seemed like there was not much we could do about its hidden ‘great cogs’ and ‘fundamental triggers’, it finally appears happily that politics and ideas could at least sometimes outweigh their effects on the story of how we got here and where we might go next.