The above graph is an amusing example of futurologists falling in love with the idea of exponential growth. It was reprinted by historian Sean Manning in a long essay in the form of a blog post, on the difference between how historians and economists think about economic history.
You’ll have to read the whole thing–also it’s written as a review of a book, “Slouching Toward Utopia,” by economist Brad DeLong, that I haven’t read–but here’s Manning:
Slouching Towards Utopia is . . . a big ideas book, or as DeLong prefers to call it a grand narrative. . . . Almost any paragraph of this book poses two or three fun subjects for debate. But this week, I [Manning] will put most of them aside and show how this book tells one story while the author wants to tell a different one.
A Grand Narrative
Slouching speaks of things which were, and things which are, and things which will be. . . . DeLong is an economist, and economists love to model things as exponential growth. So DeLong makes up numbers for world population and GDP in 6000 BCE, 1000 BCE, 1 BCE, and 1500 CE . . .
Slouching ends in the recent past, but it is optimistic about the future. Incomes are no longer increasing as fast in the rich countries, but much of the world is still poor, and prosperity in the rich countries which grows at 0.5% a year instead of 2% a year is still growth. “There is every reason to believe prosperity will continue to grow at an exponential rate in the centuries to come” (p. 11)
This is a grand narrative about incomes and population and exponential growth, three of economists’ favourite things. It is a narrative where before 1870 population grows slowly and prosperity barely grows at all, then from 1870 to 2010 both grow rapidly, and after 2010 prosperity is likely to continue to grow while populations stabilize or shrink. Economists love to tell grand narratives about trends, even though they know why historians have trouble believing in them. I have not written a book with a grand narrative. But I can summon the old magic of Max Weber and use the facts in this book to tell a different story.
A Counter-Narrative of What Was
I [Manning] don’t see much value in estimating the population of the world in 6000 BCE when we can’t agree on the population of the Americas in 1492 within a factor of 5 [Manning’s original post said “a factor of 20” here, but after looking back at the literature he changed this to a factor of 5. — AG], and took decades to agree on the population of the Roman empire under Augustus within a factor of two. But we do have data on population and prices in specific places such as England since Domesday Book or Achaemenid Babylonia. These show cycles of rising and falling, with rising population tending to correspond to falling wages and vice versa. In the best times, an ordinary worker or peasant might consume twice as much as the worst times.
I think most people could agree that populations tended to slowly increase, particularly when new crops or methods of farming were introduced. . . . But its not clear that standards of living trended upwards. . . . data before the 19th century shows standards of living rising and falling in cycles, not stable with a gradual upwards trend. . . .
In past societies with great material wealth, such as the Roman empire, its not clear to me that the health benefits from tiled roofs or plastered aqueducts outpaced the health dangers of crowding people into cities and moving them back and forth. Height is a good proxy for health and nutrition, and height in Europe also goes up and down before the 20th century, rather than having a clear trend. Notably, it is higher in the material-poor early middle ages than the material-rich Roman empire or nineteenth century.
A Counter-Narrative of What is and What Will Be
Beginning in the 19th century, population and welfare begin to rise at the same time across much of the world. But countries which tried to imitate the richest countries often failed, and growth in any one country often stalled. . . . Economists can calculate, but physicists can too. Colleagues like University of California physics professor Tom Murphy have done the math . . . Economic growth that is decoupled from energy consumption won’t look much like GDP, and there are only so many hours in the day to enjoy our futuristic entertainment centers or teleport to our beach huts in Maui and stroll on the beach. Even if we avoid ecological catastrophe, a devastating plague, exhaustion of resources, and the replacement of humans-as-we-know them with something else, growth in prosperity is likely to end within the next century or two because of physical limits.
Manning concludes:
As a historian, I don’t think that exponential growth is the natural state of things. I think in terms of cycles and tradeoffs and phase changes. The simultaneous rise in health, wealth, and population in the long 20th century was a new thing in world history, and much of the world is transitioning into a new state. I think that looking at the past with a mind trained on the long 20th century is a mistake, and so is imagining the future that way. . . .
I think that [De Long’s] book would have been better if it presented exponential growth as typical of the long 20th century, not as the way economies usually behave.
Interesting. Slouching Toward Utopia also has a blurb from Paul Krugman, so maybe he and De Long can respond in comments.
The issue of exponential growth in the economy came up last year in our post, How to think about the claim by Justin Wolfers that “the income of the average American will double approximately every 39 years”?, where economist Wolfers shared this graph:
And here are some earlier posts regarding historians’ efforts to acknowledge historical uncertainty in social science and journalism:
History, historians, and causality
Uncertainties regarding historical facts
Decorative statistics and historical records
Uncertainties regarding historical facts
P.S. Manning’s counter-narratives can be given a “left” or “right” political spin. From the left, Manning’s arguments push against the right-leaning view that, whatever happens, the existing system of capitalism will bail us out: maybe a steady state of economic expansion will not be expected even in the absence of government interference. From the right, Manning’s arguments push against the left-leaning view in which gradually increasing prosperity is a given, and so our society can afford economic redistribution.
To put it another way, both the left and the right have contradictions in their views of the economy. Economic leftists oscillate between saying that the capitalist system is failing and needs to be replaced before we all choke on our own filth, and saying that, as the richest society in the world, we should be able to afford to massively reduce poverty and inequality. On the other side, economic rightists are torn between viewing capitalism as an unstoppable force (the resonant phrase is “there is no alternative”) and the idea that it is a fragile golden goose whose supply of eggs is endangered by any reforms.
In saying this, I’m not trying to “both-sides” the debate or imply that leftist and rightist views on economics are equally correct–it would be more accurate to say that I have various policy preferences on specific economic issues but I don’t have any coherent view of macroeconomics myself. As a political scientist, I’m interested in the arguments used by different sides in these debates, and I’m interested in how various ideas and talking points can implictly depend on the understanding of historical claims that themselves are in legitimate dispute.
P.P.S. More from Manning here, where he lists some factual errors or dubious claims in Slouching Towards Utopia, a book which Manning seems to like overall.
