Everything Is Just Dandy!

The Long 20th Century Comes to a Shuddering End

FP Foreign Policy
Brad DeLong
2022-10-02
https://foreignpolicy.com/2022/10/02/history-utopia-economics-climate/

The Long 20th Century Comes to a Shuddering End

An era of once-undreamt-of progress is over—and you won’t like what comes next.

By , a professor of economics at the University of California, Berkeley.


Traders work during the opening bell at the New York Stock Exchange (NYSE) on February 28, 2020 at Wall Street in New York City.
Traders work during the opening bell at the New York Stock Exchange (NYSE) on February 28, 2020 at Wall Street in New York City.

Traders work during the opening bell at the New York Stock Exchange (NYSE) on February 28, 2020 at Wall Street in New York City. Johannes Eisele/AFP via Getty Images

The history of the long 20th century, stretching from 1870 to 2010, is primarily the history of four things—technology-fueled growth, globalization, an exceptional America, and confidence that humanity could at least slouch toward utopia as governments could solve political-economic problems. And even that slouch was going to be done at uneven, unequal, and unfair rates, depending on skin tone and gender. Still, twice in that long century, 1870-1914 and 1945-75, something every preceding generation would have called near-utopia came nearer, rapidly. But these generation-long episodes of economic El Dorados were not sustained. Individuals, ideas, and opportunities help explain why.

Before 1870, only wild optimists had any confidence that humanity might have a path to utopia—and even for them, the path was a rugged road requiring massive transformations of human society and psychology.

One such utopian was Karl Marx. He and his close associate Friedrich Engels, writing in 1848, theorized that they were in the midst of what they called the “epoch of the bourgeoisie”—a time when private property and market exchange served as fundamental organizing principles in human society, creating powerful incentives for scientific research and engineering development, and spurring business investment to deploy marvels of technology to amplify human productivity beyond previous imaginings.

The history of the long 20th century, stretching from 1870 to 2010, is primarily the history of four things—technology-fueled growth, globalization, an exceptional America, and confidence that humanity could at least slouch toward utopia as governments could solve political-economic problems. And even that slouch was going to be done at uneven, unequal, and unfair rates, depending on skin tone and gender. Still, twice in that long century, 1870-1914 and 1945-75, something every preceding generation would have called near-utopia came nearer, rapidly. But these generation-long episodes of economic El Dorados were not sustained. Individuals, ideas, and opportunities help explain why.

Before 1870, only wild optimists had any confidence that humanity might have a path to utopia—and even for them, the path was a rugged road requiring massive transformations of human society and psychology.

One such utopian was Karl Marx. He and his close associate Friedrich Engels, writing in 1848, theorized that they were in the midst of what they called the “epoch of the bourgeoisie”—a time when private property and market exchange served as fundamental organizing principles in human society, creating powerful incentives for scientific research and engineering development, and spurring business investment to deploy marvels of technology to amplify human productivity beyond previous imaginings.

Marx and Engels saw the interrelated phenomena that defined this epoch as both Redeemer and Satan. They were Redeemer insofar as they created the possibility of a wealthy society in which people could, cooperatively, do what they wanted to live full lives. But at the same time, their satanic workings kept impoverished and even further impoverished the overwhelming majority of humanity and would in the end force them into a more bitter state of slavery than before.

For Marx, the path to utopia required the descent of humanity into an industrial inferno, for only that could trigger it to call forth the descent from heaven of a New Jerusalem, in the form of a communist revolution and the total overthrow of the existing order of society. But to believe that that path was there, and that humanity was certain to walk it, required great confidence that things hoped for had solid substance and that things not seen were truly in evidence.

Another relative optimist, John Stuart Mill, anticipated a lesser utopia that would require less of an overthrow. Mill was an ardent believer in freedom, individual initiative, science, and technology—but he was also deeply fearful of the Malthusian dilemma. The inventions of science and the deployment of technology would create fortunes for the rich and expand the numbers of comforts of the middle class, but the great majority of humanity would remain working class and continue to live lives of drudgery and imprisonment. Mill saw only one out: Government would have to control human fertility via mandatory birth control. Then all could be well.

But Marx’s and Mill’s rather odd optimisms made them somewhat outliers in their day, not in that their optimisms were odd but that they were optimistic at all. Back in 1870, there was great reason to doubt that social equality, individual liberty, political democracy, and general let alone abundant wealthy prosperity were in the future. The United States had just narrowly survived a bloody civil war that had killed 750,000 men, roughly one-twelfth of its adult white and one-thirtieth of its adult Black male population. Typical standards of living were still gravely impoverished. Most people were stunted, by our standards, and often hungry and illiterate.

Did Marx and Mill see the trends of their day more clearly than others? Or were they simply lucky in seeing something of the magnitude of forthcoming material wealth and the possibilities that material wealth might deliver for humanity? Humanity had been shaking the portcullis before 1870. And in 1870 a few major changes broke the lock. The coming of the industrial research lab, of the modern corporation, and of globalization opened up, for the first time in human history, the opportunity to solve our problems of material want.

Moreover, at that moment, humanity was lucky enough to have an about-to-be-global market economy. As Friedrich August von Hayek keenly observed, the market economy crowdsources—incentivizes and coordinates—solutions to the problems that it sets itself. After 1870, it could solve the problem of providing those with control over valuable property resources with an abundance of the necessities, conveniences, and luxuries they wanted and believed they needed.

Thus, the trail to human material abundance, and to utopia, became visible and walkable—or runnable. And everything else should have followed from that. Much has. By 1914, the prevailing pessimism of 1870 appeared old-fashioned, if not completely wrong. The intervening years had truly been, for the world, an extraordinary episode in the economic progress of humanity. And there was every reason to think it would continue: It seemed as if we could look forward to a genuine utopia of abundance, a future in which further scientific discoveries would be developed in the world’s industrial research laboratories and then spread worldwide into the globalized economy by modern corporations.

But then World War I came. And afterward it was clear that what the optimistic had regarded as aberrant and scandalous was the rule and that deep trouble could not be avoided. People were not satisfied with what the market economy offered them. Governments proved incapable of managing economies to preserve stability and guarantee year-to-year growth. Sometimes populations with democracy threw it away to authoritarian demagogues. Other times, the rich and the top military professionals of the world decided that domination was in fact worth trying. Technology and organization enabled tyrannies of unprecedented magnitude, and economic disparities—both between and within countries—grew and grew. The demographic transition to low fertility and low population growth was rapid but not rapid enough to prevent the 20th-century population explosion, with its additional stresses on and transformations of societal order.

Throughout this process, the global south was falling further and further behind—growing, on average, but not catching up, as decade upon decade saw those countries with less manufacturing and thus less in relative terms of an engineering and science community on which to build up their economies’ productive-knowledge stock. Outside of two charmed circles—the group of Marshall Plan aid recipients and those clinging to the Pacific Rim of Asia—the global south did not even begin to right itself (in the sense of starting to grow faster than the global north), and so even taking the first step toward catching up, rather than falling further behind, until more than a decade after the 1979 neoliberal turn. Those countries that did worst were those unlucky enough to be ensorcelled by the spell of Vladimir Lenin and thus took the actually existing socialist road from 1917 to 1990.

The global north was lucky enough to rediscover after World War II what it thought was the path to utopia. The pace of economic growth during the Thirty Glorious Years that followed made, by its end in the 1970s, people dizzy with success: expecting more and tremendously upset at what seem in retrospect to be relatively minor speed bumps and roadblocks. But mere rapid growth did not satisfy those of a right-wing temperament, who felt that a prosperity that was shared too equally was unfair and degrading. And mere rapid growth did not satisfy those of a left-wing temperament, either, for they felt that the problems that the market, even tweaked and managed by social democrats, solved did not produce even a partial version of the utopia they sought. And so the world took its neoliberal turn. But the neoliberal policy prescriptions did not produce a slouching toward utopia that was more rapid in any sense.

From 1870 to 2010 was 140 years. Who back in 1870, poor as humanity was then, would have thought that by 2010 humanity would have the ability to provide each person with more material resources than could have been imagined in 1870? And who would have thought that with those resources humanity would be unable to use them to build a close approximation to a true utopia?

Back at the beginning of the long 20th century, novelist Edward Bellamy had thought that the power to dial up any one of four live orchestras and put it on the speakerphone would carry us to “the limit of human felicity.” There was only one person in Britain in the early 1600s who could watch a theatrical entertainment about witches in his home: King James I—and that was only if Shakespeare and company currently had Macbeth in repertory. There was one thing that Nathan Mayer Rothschild, the richest man in the first half of the 1800s, wanted in 1836: a dose of antibiotics, so that he would not die in his 50s of an infected abscess. Today, we not only can produce the sorts of things that were produced in 1870 with remarkably less human effort but can easily produce conveniences (that we now regard as necessities), former luxuries (that we now regard as conveniences), and things that previously could not have been produced at any price. Does saying that we are more than 10 times richer than our 1870 predecessors really capture that sea change in a satisfactory way?

Yet we found, as of 2010, that we had not run to the utopian trail’s end. Moreover, for us the end of the utopian trail was no longer visible, even if we had previously thought that it was.
Driving it all, always in the background and often in the foreground, were the industrial research labs discovering and developing things, the large corporations developing and deploying them, and the globalized market economy coordinating it all. But in some ways the market economy was more problem than solution.

It recognized only property rights, and people wanted Polanyian rights: rights to a community that gave them support, to an income that gave them the resources they deserved, and to economic stability that gave them consistent work. And for all the economic progress that was achieved during the long 20th century, its history teaches us that material wealth is of limited use in building utopia. It is an essential prerequisite but far from sufficient. And this is where economist John Maynard Keynes’s comment about the most permanent problem being how “to live wisely and agreeably and well” comes in once again. His speech was an important moment because he perfectly expressed what the essential difficulty has proved to be.

Of the four freedoms that U.S. President Franklin D. Roosevelt thought ought to be every person’s birthright—freedom of speech, freedom of worship, freedom from want, and freedom from fear—only freedom from want is secured by material wealth. The others remain to be secured by other means. What the market taketh and giveth can be, and often is, overshadowed by hopes and fears arising out of other wants and needs.

The shotgun marriage of Hayek and Karl Polanyi, blessed by Keynes, that helped raise the post-World War II North Atlantic developmental social democracy was as good as we have so far gotten. But it failed its own sustainability test, partly because a single generation of rapid growth raised the bar high and partly because Polanyian rights required stability, the treating of equals equally, and the treating of perceived unequals unequally in ways in which neither the Hayekian-Schumpeterian market economy of creative destruction nor the Polanyian social democratic society of universal egalitarian social insurance rights could ever deliver.

In the decades around 2000, four developments together brought to an end the timespan of the long 20th century—and together might mark the end of humanity’s time slouching toward utopia. The first came in 1990, when the highly innovative and productive industries of Germany and Japan successfully challenged the United States’ technological edge, undermining the underpinnings of American exceptionalism.

The second was 2001, when forms of fanatic religious violence that we all thought had been in retreat for centuries flamed up again, and pundits scratched their chins and opined about a “war of civilizations”—but there was no such thing. The third was the Great Recession, which began in 2008, when it became clear that we had forgotten the Keynesian lessons of the 1930s and lacked either the capacity or the will to do what was necessary. The fourth was the world’s failure during the period from roughly 1989 (when the science became clear) to the present to act decisively to combat global warming. History after the confluence of these events looks notably distinct from history before, as if it requires a new and different grand narrative to make sense of it.

That the long 20th century was over by 2010 and would not be revivified was confirmed by the rupture that came next, on Nov. 8, 2016, when Donald Trump won that year’s U.S. presidential election. In that moment, it became clear that each of the four defining developments of the long 20th century could not be restored. Economic growth in the North Atlantic had slipped substantially—if not all the way to the pre-1870 slower pace, then a substantial part of the way. Globalization was definitely in reverse: It had few public advocates and many enemies.

Plus, people elsewhere—rightly—no longer saw the United States as an exceptional country or the U.S. government as a trustworthy leader on the world stage. Those judgments were massively strengthened when 345,323 Americans (and likely more) died of COVID-19 in 2020 alone, as the only virus containment reaction the Trump administration could muster was to spin in circles and whisper sotto voce that the deaths weren’t their fault, for how could they have been expected to anticipate an unleashed Chinese bioweapon? Science and technology produced marvels in terms of the extremely rapid and successful development of powerful vaccines. U.S.-led global governance, however, proved inept in vaccinating the world before the virus spread widely and developed new variants.

In addition, confidence in the future was greatly attenuated, if not gone. The threat of global warming was the Malthusian devil taking, if not yet flesh, at least a form of shadow. The only place where confidence in the future was strong was among the cadres of the Chinese Communist Party, who saw themselves leading humanity forward holding high the banner of socialism with Chinese characteristics and guided by Mao Zedong-Deng Xiaoping-Xi Jinping Thought. But to all outside, that seemed more like corrupt, authoritarian state surveillance capitalism with Chinese characteristics (although paying lip service, and perhaps someday more, to egalitarian-utopian “common prosperity” aspirations).

So, China’s possible ascendance seemed to outsiders unlikely to promise forward steps on the path to utopia. Instead, it seemed to signal a return—albeit at a much higher level of general prosperity—to history’s Wheel of Fortune, to the cycle of rulers and ruled: the strong grabbing what they wished and the weak suffering what they must.

Brad DeLong is a professor of economics at the University of California, Berkeley.