First Friday Book Synopsis

Utopias are, by definition, the be-all and end-all.  

The history of the long twentieth century cannot be told as a triumphal gallop, or a march, or even a walk of progress along the road that brings us closer to utopia. It is, rather, a slouch. At best. …Slouching, however, is better than standing still, let alone going backward.

In 1870 a major shift took place for humanity. With the coming of the industrial research lab, the modern corporation, and truly cheap ocean and land transport and communication, we went from a world in which economic patterns formed a semistable backdrop of grinding mass poverty to one where the economy was constantly revolutionizing itself, entering into states of increasing prosperity via the discovery, development, and deployment of new technologies.  

Thus I see the history of the long twentieth century as 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 solved political-economic problems.  

The laboratory, the corporation, global transportation, global communications, and falling barriers—together, these factors were more than enough to trigger the decisive watershed and carry humanity out of Malthusian poverty.

And yet, after World War II, the world, or at least the global north, picked up its mat and walked—nay, ran—forward toward true utopia. 

Economic improvement, attained by slouch or gallop, matters. The attainment of more than enough—more than enough calories, shelter, clothing, material goods—matters.

In some sense, I am more optimistic.

J. Bradford DeLong, Slouching Towards Utopia: An Economic History of November Twentieth Century 

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I feel inadequate to this task; writing my blog post on this important book.

For 24+ years, I have presented synopses every month of business books at the First Friday Book Synopsis in Dallas.  In November, I presented my synopsis of Slouching Towards Utopia: An Economic History of November Twentieth Century by J. Bradford DeLong.  J. Bradford DeLong, an economic historian, is a professor of economics at the University of California, Berkeley. He was a deputy assistant secretary of the U.S. Treasury during the Clinton administration. He writes a widely read economics blog, now at braddelong.substack.com. He lives in Berkeley, California.

This book is a big book.  It is a big, big picture book.  It covers plenty of ground that was new to me.  And, to be honest, I felt a little overwhelmed by its scope and breadth.  In other words, I felt inadequate to the task of presenting a synopsis of this important book.

And, it is indeed important!  I think we need to understand the big picture of our economic history over the last few decades.  I am glad I read this book.  I encourage you to add it to your reading stack, and read it slowly.  (It is not a book to skim or speed read!)

As always, in my synopses, I ask “What is the point? of the book.  Here is what I said is the point of this book: We made great progress for many (most) people on planet earth during the long century from 1870-2010.  Will we continue to?  Are we still slouching toward utopia?

And I ask Why is this book worth our time?  Here are my three reasons for this book:

#1 – This is a comprehensive economic history of the last 150 years.

#2 – This book is filled with insight about how we were able to make great progress.

#3 – This book is a warning of current and coming dangers, while also pointing to possible ways to move forward towards utopia, in the coming years. 

I always include a few pages of quotes and Excerpts from the book—the “best of” Randy’s highlighted Passages.  Here are quite a few of the best of the best I included for this book: 

(Growth) shot up from about 0.45 percent per year before 1870 to 2.1 percent per year afterward, truly a watershed boundary-crossing difference. A 2.1 percent average growth for the 140 years from 1870 to 2010 is a multiplication by a factor of 21.5.

There were six times as many people in 2010 as there were in 1870.

As a rough guess, average world income per capita in 2010 would be 8.8 times what it was in 1870, meaning an average income per capita in 2010 of perhaps $ 11,000 per year. (To get the figure of 8.8, you divide 21.5 by the square root of 6.) Hold these figures in your head as a very rough guide to the amount by which humanity was richer in 2010 than it was in 1870—and never forget that the riches were vastly more unequally distributed around the globe in 2010 than they were in 1870.   

 A revolutionized economy every generation cannot but revolutionize society and politics, and a government trying to cope with such repeated revolutions cannot help but be greatly stressed in its attempts to manage and provide for its people in the storms. 

People can and do use technologies—both the harder ones, for manipulating nature, and the softer ones, for organizing humans—to exploit, to dominate, and to tyrannize.   

RETURN TO MY CLAIM above that the long twentieth century was the first century in which the most important historical thread was the economic one. That is a claim worth pausing over.   

John Stuart Mill claimed, with some justification, that “it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.” You have to go forward a generation after 1870 before general material progress becomes unquestionable.   

To listen to music on demand in around 1900 you had to have—in your house or nearby—an instrument, and someone trained to play it. 

Economics during the twentieth century has worked just shy of miracles.  … Today, less than 9 percent of humanity lives at or below the roughly $ 2-a-day living standard we think of as “extreme poverty,” down from approximately 70 percent in 1870.

Today, the typical citizens of these economies can wield powers—of mobility, of communication, of creation, and of destruction—that approach those attributed to sorcerers and gods in ages past.   

Call the century after 1770 the coming of the age of the “Industrial Revolution.” By 1870 the index of the value of knowledge stood at 1, more than twice as large as in 1500. It had taken 9,500 years to get the tenfold jump from 0.04 to 0.43—an average time-to-double of some 2,800 years—and then the next doubling took less than 370 years.   

The numbers are important: indeed, they are key. …the secret weapon of the economist is the ability to count.  …individual stories are only important if they concern individuals at a crossroads whose actions end up shaping humanity’s path, or if they concern individuals who are especially representative of the great swath of humanity. It is only by counting that we can tell which stories are at all representative and which decisions truly matter.  

With even moderately well-fed people, human sexuality can and does do much more: British settler populations in North America in the yellow-fever-free zone north of the Mason-Dixon Line quadrupled by natural increase along every one hundred years, without any of the advantages of modern public health.   

They produced new and better ways of doing old things: of making thread, of weaving cloth, of carrying goods about, of making iron, of raising coal, and of growing wheat and rice and corn. Having pioneered these improvements, their inventors then set about finding ways to exploit them. It was a process that required inventors to be not just researchers but development engineers, maintenance technicians, human resource managers, bosses, cheerleaders, marketers, impresarios, and financiers as well.   

Consider the invention of the steam engine in the eighteenth century. It needed a cheap source of fuel, it needed something important and profitable to do, and it needed societal competence at the metalworking technological frontier.  

What changed after 1870 was that the most advanced North Atlantic economies had invented invention. They had invented not just textile machinery and railroads, but also the industrial research lab and the forms of bureaucracy that gave rise to the large corporation. Thereafter, what was invented in the industrial research labs could be deployed at national or continental scale. Perhaps most importantly, these economies discovered that there was a great deal of money to be made and satisfaction to be earned by not just inventing better ways of making old things, but inventing brand-new things. Not just inventions, but the systematic invention of how to invent. Not just individual large-scale organizations, but organizing how to organize.  

The economist Robert Gordon wrote of “one big wave” consisting of everything from flush toilets to microwave ovens, after which the low-and even the moderate-hanging fruit of organic chemicals, internal combustion engines, and electric power had been picked and technology was bound to slow. 

Worldwide steel production would rise from trivial amounts—enough for swords, some cutlery, and a few tools that needed the sharpest attainable edge—to some 70 million tons a year by 1914. By 1950 this would grow to 170 million tons, and as of 2020 it is 1.5 billion tons a year.

…But it was not just steel. Robert Gordon was 100 percent right when he wrote that the year 1870 was the dawn of something new in the world, for over the next several decades, “every aspect of life experienced a revolution. By 1929, urban America [had] electricity, natural gas, the telephone, and clean running water,… the horse had almost vanished from urban streets,… and the household… enjoyed entertainments… beyond the 1870 imagination.”

…From the railroad and the steel mill as the high-tech edge of the economy in 1870, to the dynamo and the motor car as the high-tech edge in 1903, to the assembly line and the aircraft of 1936, to the television set and rocket (both moon and military) of 1969, to the microprocessor and World Wide Web of 2002—technological revolution, with its economic and then its sociological and political consequences, problems, and adjustments, came faster and more furiously than in any previous age.

In 1914 perhaps two-thirds of nearly all humans still tilled the earth to grow the bulk of the food their families ate. Most humans could not read; nor had they seen a steam engine up close, traveled on a railway train, spoken on a telephone, or lived in a city. Life expectancy was still little higher than it had been in the Agrarian Age.   

But by the time Adolf Hitler’s Nazi Germany went to war in 1939, four-fifths of the wheeled and tracked vehicles in his army were still powered by horses and mules. 

As Eisenhower put it, “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history.”  Voters, in other words, distrusted politicians who sought to cut these programs back, and tended to find taxes earmarked to support social insurance programs less distasteful than other taxes. Outside of the United States, right-of-center parties have seldom made any serious attempt to take a stand against social democracy.   

By 1946 Walter Reuther was head of the UAW, following a strategy of using the union’s power not just to win higher wages and better working conditions for its members, but to “fight for the welfare of the public at large… as an instrument of social change. 

The United States’ social insurance state turned out to be significantly less generous than the typical European iteration.  …Even the conservative Margaret Thatcher in Britain found the absence of state-sponsored medical care in the United States appalling, and even barbarous. 

Four forces in particular led to things playing out the way they did. The first was post–World War II reglobalization: the reversal of the step backward away from the 1870–1914 globalization that had taken place over the period 1914–1950. The second was a big shift in technology: starting in the mid-1950s, the steel-box shipping container conquered the world. The third was another big shift in technology: the nearly ethereal zeros and ones of information technology conquered the world. The fourth consisted of the neoliberal policies themselves and how they interacted with the other three. Together these four forces turned reglobalization into hyperglobalization. 

And then, in my synopses, I include some key points from the book.  Here are a number from Slouching Towards Utopia:

• The Long Twentieth Century –
• The 140 years from 1870 to 2010 of the long twentieth century were, I strongly believe, the most consequential years of all humanity’s centuries. And it was the first century in which the most important historical thread was what anyone would call the economic one, for it was the century that saw us end our near-universal dire material poverty. 

• The three great forces/sources, around 1870 — the triple emergence, which ushered in changes that began to pull the world out of the dire poverty that had been humanity’s lot for the previous ten thousand years, since the discovery of agriculture.
• globalization
• the industrial research lab
• But the creation of the industrial research lab was not the action of one, or of even only a few, humans. It took many working together, often at cross-purposes, over a course of years. Inevitable? No, but many people working together over time does make a particular outcome increasingly likely.
• the modern corporation
• Things changed starting around 1870. Then we got the institutions for organization and research and the technologies—we got full globalization, the industrial research laboratory, and the modern corporation. These were the keys. These unlocked the gate that had previously kept humanity in dire poverty.
• The research laboratory, the corporation, and globalization powered the wave of discovery, invention, innovation, deployment, and global economic integration that have so boosted our global useful-economic-knowledge index.

• What we now have…
• Everything… electricity…indoor plumbing, heat and cold, food (FOOD!), music on demand, all entertainment on demand…
• “If we [in the 1800s] could have devised an arrangement for providing everybody with music in their homes, perfect in quality, unlimited in quantity, suited to every mood, and beginning and ceasing at will, we should have considered the limit of human felicity already attained.” Think of that: the limit of human felicity.
• There are more than enough calories produced in the world, so it is not necessary for anybody to be hungry. There is more than enough shelter on the globe, so it is not necessary for anybody to be wet. There is more than enough clothing in our warehouses, so it is not necessary for anybody to be cold. And there is more than enough stuff lying around and being produced daily, so nobody need feel the lack of something necessary. In short, we are no longer in anything that we could call “the realm of necessity.” 

• Yet…maybe not so fast…
• any triumphalist narrative would collapse in the face of the conspicuous failures over the previous decade by the stewards of the global economy.

• Plenty – yet so uneven…
• Yes, during the years between 1870 and 2010, technology and organization repeatedly lapped fecundity. But material prosperity is unevenly distributed around the globe to a gross, even criminal, extent.

• What happened during this long century?
• 1870–2010 was the century when the United States became a superpower. Second, it was during this period that the world came to be composed primarily of nations rather than empires. Third, the economy’s center of gravity came to consist of large oligopolistic firms ringmastering value chains. Finally, it made a world in which political orders would be primarily legitimated, at least notionally, by elections with universal suffrage—rather than the claims of plutocracy, tradition, “fitness,” leadership charisma, or knowledge of a secret key to historical destiny. 

• Important Processes: From this explosion flowed five important processes and sets of forces that constitute the major themes of this book:
• History became economic: Because of the explosion of wealth, the long twentieth century was the first century ever in which history was predominantly a matter of economics: the economy was the dominant arena of events and change, and economic changes were the driving force behind other changes, in a way never seen before.
• The world globalized: As had never been the case before, things happening on other continents became not just minor fringe factors but among the central determinants of what happened in every single place human beings lived.
• The technological cornucopia was the driver: Enabling the enormous increase in material wealth—its essential prerequisite, in fact—was the explosion in human technological knowledge. This required not just a culture and educational system that created large numbers of scientists and engineers, and means of communication and memory, so that they could build on previous discoveries, but also a market economy structured in such a way that it was worth people’s while to funnel resources to scientists and engineers so that they could do their jobs.
• Governments mismanaged, creating insecurity and dissatisfaction: The governments of the long twentieth century had little clue as to how to regulate the un-self-regulating market to maintain prosperity, to ensure opportunity, or to produce substantial equality.
• Tyrannies intensified: The long twentieth century’s tyrannies were more brutal and more barbaric than those of any previous century—and were, in strange, complicated, and confused ways, closely related to the forces that made the explosion of wealth so great. 

• Some numbers, and key milestones:
• In 1870, 5 ounces of copper were mined per person worldwide; by 2016, we mined 5 pounds per person. In 1870, 1 pound of steel was produced per person worldwide; by 2016, we produced 350 pounds per person.
• What did happen was post-1870 innovation growth acceleration: a third watershed boundary crossing. Around 1870 the proportional rate of growth of humanity’s technological and organizational capabilities took a further fourfold upward leap to our current 2.1 percent per year or so. Thereafter, technology far outran population growth. And thereafter, population growth in the richest economies began to decline: humans became rich enough and long-lived enough that limiting fertility became a desirable option.
• Britain burned 194 million tons of coal in 1914. The total coal-equivalent energy consumption of Britain today is only 2.5 times that.
• US railroads carried passengers some 350 miles per citizen, on average, in 1914. Today US airlines carry passengers 3,000 miles per citizen.
• Compared to the past, it was almost utopia. Globally, the real wages of unskilled workers in 1914 were half again above their levels of 1870. Such a standard of living hadn’t been attained since before we’d moved to the farm.
• Four percent of Americans had flush toilets at home in 1870; 20 percent had them in 1920, 71 percent in 1950, and 96 percent in 1970. No American had a landline telephone in 1880; 28 percent had one in 1914, 62 percent in 1950, and 87 percent in 1970. Eighteen percent of Americans had electric power in 1913; 94 percent had it by 1950.

• Migration really mattered!
• Yet another aspect of globalization was a lack of barriers. Of the consequences arising from open borders, the most influential was migration—with the very important caveat that the poorest migrants, those from China, India, and so on, were not allowed into the temperate settlements. Those were reserved for Europeans (and sometimes Middle Easterners). Caveat aside, a vast population of people moved: between 1870 and 1914, one in fourteen humans—one hundred million people—changed their continent of residence.

• Joseph Schumpeter
• “Capitalism,” economist Joseph Schumpeter wrote in 1942, “never can be stationary.… The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.… Industrial mutation… incessantly revolutionizes the economic structure from within, incessantly destroying the old one.… This process of creative destruction is the essential fact about capitalism.”  — Great wealth is created by the creation. Poverty is imposed by the destruction. And uncertainty and anxiety are created by the threat. 

• The failure/challenges.. (from the official book description):
• Our ancestors would have presumed we would have used such powers to build utopia. But it was not so. When 1870–2010 ended, the world instead saw global warming; economic depression, uncertainty, and inequality; and broad rejection of the status quo. 
  

And I end with my own Lessons and Takeaways.  Here are my 5 lessons and takeaways for this book:

#1 – The big steps forward really mattered; technological progress; organizational progress; these mattered!

#2 – Things can get worse…pretty quickly.  Therefore, we have to care about big picture issues, and be vigilant.

#3 – I think maybe we should be very concerned about the collapse of globalization. – It really is better for countries to work together.

#4 – Inequality is very real – and genuinely harmful.  We need to pay plenty of attention to this challenge.

#5 – Uncertainty makes us…uncertain.  The loss of stability and certainty is a loss to be especially mindful of.

I believe that we read books for different reasons.  But reading to learn is always at the top of my list for choosing a book to read.  I read Slouching Towards Utopia, and learned much.  I encourage you to do the same.

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