Listening to environmental activists today, you get the idea that we have only two options.
Is there a third option? Is there an option that leads to robust economic development, to human flourishing, and to a healthy environment? I believe there is.
Return with me to America in 1910. Imagine that we have foreknowledge that the population will increase more than threefold over the next century. The present cropland in use is 330 million acres. The amount of cropland in use, as a ratio of population, has not changed dramatically over recent years. How much additional cropland will we need to accommodate future population growth? Approximately 700 million acres will be needed, an area approximately the land area of the US east of the Mississippi River. What actually happened?
Through improvements in farming methods, irrigation, fertilizer, storage and transportation, seeds, and other variables, enough food was produced to not only accommodate the growing domestic population but to generate a surplus for distribution to other nations. Corn yields per acre increasing by 60% between 1977 and 2007, is just one example of these changes. In fact, government subsidies are paid to some farmers not to grow crops so prices can be kept at stable levels. But in addition to food production, this explosion in productivity has empowered tremendous overall economic growth. Note the impact on gross domestic product.
One of the single biggest threats to biodiversity is destruction of habitat. The World Conservation Union estimates that habitat loss, of which agriculture is the biggest contributor, affects 85-90% of bird, mammal, and amphibian species. (The Improving State of the World, 117-118) Think of the millions of acres of land alone that were conserved, not destroyed, because of economic growth. Up until 1960, the world was in a situation similar to that of the United States in 1910. However, due to infusions of technology and aid, conversion of land to cropland around the world has slowed drastically. Despite a 160% increase in population since 1960 the amount of cropland has expanded by 14%. And there still are vast regions of the planet where existing technologies have yet to be applied. As the world population is likely to grow again by half before leveling off (and possibly declining) in a few decades, agricultural technology will indirectly be protecting billions of acres of habitat around the world.
The economic growth generated by new technologies has not been without trouble. Factories and vehicles turned out a tremendous about of pollution in Europe and in the United States. As scientists began to assess the harm caused by pollution, and as people had ever higher incomes meeting their basic needs, demand began to grow for a cleaner environment. The 1960s became a major turning point for cleaning up pollution. The chart below from the EPA shows the levels of pollution for the six major air pollutants and how they have dropped by 54% since 1970; this while population grew by half and GDP tripled.
The American experience exemplifies what economist Indur Goklany describes in his Environmental Transition theory. The graph below illustrates what Goklany calls the Environmental Transition curve.
Those who are familiar with the Kuznets Curve will recognize the similarity, except here "Time" has replaced per capita income (or GDP) on the X-Axis. Goklany describes the Environmental Transition hypothesis this way.
"...society is on a continual quest to improve its quality of life, which is determined by numerous social, economic, and environmental factors. The weight given to each determinant is constantly changing with society's precise circumstances and perceptions. In the early stages of economic and technological development, which go hand-in-hand, society places a higher priority on increasing� affluence than other determinants, even if that means tolerating some environmental deterioration, because increasing wealth provides the means for obtaining basic needs and amenities (e.g., food, shelter, water, and electricity) and reducing the most significant risks to public health and safety (e.g. malnutrition, infectious and parasitic diseases, and child mortality). Also, in those early stages, society may, in fact, be unaware of the risk imposed by a deterioration in the specific environmental impact, measured by the particular indicator in question. However, as society becomes wealthier; tackles these problems; and, possibly, gains more knowledge about the social, health, and economic consequences of the environmental impact in question, reducing� the environmental impact due to the specific indicator automatically rises higher on its priority list (even if the impact does not worsen). But because the first increments of economic activity further increase environmental impact, it becomes an even more important determinant of the overall quality of life. Accordingly, lowering the specific impact becomes even more urgent. (The Improving State of the World, 106-107)
The Kuznets Curve uses only affluence on the X axis. Goklany points to the need for sufficient time for the technology generated by rising affluence to emerge and be deployed. Consequently, technological innovation may lag to varying degrees depending on the particular set of issues a nation confronts. Furthermore, critical to the performance of the Environmental Transition Curve are democracy, property rights, free press, and rule of law. Individuals must have just social institutions by which they can make their growing concerns felt.
Environmentalist Seymour Garte drives the importance of this home in Where We Stand: A Surprising Look at the Real State of our Planet. There is a tendency by some parties to resist moving toward less polluting technology even when it becomes apparent that failure to do so is harming others. Property rights are important because they give us a basis for challenging folks that harm our property and our persons through pollution. Political freedom and rule of law are important in providing just means for bringing polluters to accountability. Without this freedom, many of the improvements that have been made to the environment would not have been possible. I would also add that is by these same processes that alleged polluters can seek justice against overly aggressive environmentalists.
The process is often messy and rancorous. If we had perfect knowledge about all issues and impacts involved, we would no doubt discover that improper balances have been struck on any number of issues. But that is precisely the point. We don’t have perfect knowledge. That is why these less than perfect outcomes (by divine standards), sometimes achieved only through adversarial engagement, are probably the optimal we can hope for. It is hubris to believe that state run expertocracies or perfectly functioning markets can move us closer to divine wisdom. Russia and former Soviet Bloc nations had increasing per capita income but horrendous levels of pollution. Several Latin American countries have had rising per capita income but due to corruption and inadequate government, aid and trade has tended to impact only the top minority of society. There is little recourse to address abuses, including environmental issues. Political freedom, property rights, free press, and rule of law are the only soil from which sustainable cycles of prosperity can be generated.
Addressing environmental challenges can be costly. Businesses and industries may find it more costly to operate which means their goods will become more expensive to consumers. The more economically advanced a society is the less of a burden this is. Subsistence societies do not allow for human flourishing and they are not environmentally friendly. When people are trying to live day to day there is little concern about long-term environmental consequences. As economic growth takes root, environmental issues will still not be an immediate priority but as described in the Environmental Transition Curve people will increasingly have both the will and the resources to care for their environment.
Now any astute reader will note that have eschewed the issue of CO2 and global warming. What impact does the issue of global warming of emerging cycles of prosperity and how should we respond?
One of the biggest challenges in appreciating the word trends we've been examining in this series is what I call "parochialism of the present." This refers to the twofold trap we fall into if we do not make they effort to view our circumstances from beyond our own narrow sliver of time. One trap is that we ignore history and fail to appreciate the trajectory of change that is moving through our time. The other trap is to insufficiently appreciate rates of future innovation and erroneous project present circumstances into the future. A particular variety of this mindset, known as Malthusianism, extends back to the earliest days of the Industrial Revolution. (More recent versions are frequently called neo-Malthusian.)
Thomas Malthus was an early nineteenth century British minister who analyzed parish records spanning many years. He published his research in An Essay on the Principle of Population, in 1798. At the core of Malthus’ observations was the relationship between population and resources. He observed that while resources tend to grow arithmetically (i.e., 1, 2, 3, 4, 5…), population tends to grow geometrically (i.e., 1, 2, 4, 8, 16…). Population always outgrows the ability of resources to support the population.
Aside from the normal causes of death like accidents and old age, factors like war, pestilence, and famine also served as a check. These would reduce the population to manageable levels. Population would increase again and repeat the cycle all over again. Being opposed to contraception and abortion, the only solution Malthus saw was late marriage and abstinence. His outlook for humanity in the century ahead was one of catastrophic economic disaster. Malthusian thinking predominated in the early years of the nineteenth century.
In the latter part of the nineteenth century, other Malthusians appeared. William Stanley Jevons (1835-1882) wrote The Coal Problem in 1865. Concerning Jevons, Angus Maddison writes:
Jevons estimated that British coal output was 83.6 million tons in 1861, and projected a need for 2,607 million tons in 1961, if 'the present' annual growth of 3.5 per cent persisted (in fact production grew from 1820 to 1860 at about 3.8 per cent a year). Such growth 'would exhaust our mines to a depth of 4,000 feet or 1,500 feet deeper than our present deepest mines' (p. 274), and bring a prohibitive rise in prices. He rejected the feasibility of substitutes -- timber, wind, water, tidal energy, hydrogen, or petroleum. ... He also rejected the feasibility of large scale imports, because of heavy transport costs. ... He recommended 'wholesale emigration' to countries like Australia of the US which had much larger coal reserves. In fact British coal production peaked a 292 tons in 1913, fell to 118 million in 1973 and 26 million in 2003. In 2003, British energy consumption was equivalent to 370 million tons of coal, about a seventh of what he projected for 1861, and British coal provided only 7 per cent of it. Thus Jevons failed to see the possibilities for reducing energy intensity, was wrong about substitution possibilities and the pace of technological advance. He also demonstrated the fragility of centennial forecasts. (Contours of the World Economy, 1-2030, AD. 353)
Those old enough to remember the 1960s and 1970s will remember the last neo-Malthusian revival with people like Paul Ehrlich, the Club of Rome, and Jimmy Carter and his Global 2000 Report. These folks predicted exhaustion of most major commodities, increased number of famines, and unprecedented global unrest from shortages and economic collapse by 2000. In 1980, economist Julian Simon offered a $1,000 bet that commodities chosen by his opponent, at date in the future chosen by his opponent, would be cheaper than they were in 1980. Ehrlich took him up on the bet, choosing a handful of commodities to be valued after ten years. A decade later, Ehrlich paid up when every commodity had fallen from its 1980 price.
In the past decade or so we’ve seen another neo-Malthusian resurgence that is married to cataclysmic climate change scenarios (which we will visit soon), suspicion about economic growth, and an anti-technology predisposition. Much of what is called the “sustainable growth” movement is permeated with neo-Malthusian thinking. People who don't hold neo-Malthusian views are cast as sinister people who refuse to live within limits (meaning the overwhelming majority of economists.)
Like failed second coming forecasters, each new revival has reasons why this time it is going to come true. The problem with the Malthusian views is the failure to appreciate the dynamism involved in the market economies. If the supply of a commodity is becoming scarcer for the commodity, then the commodity’s price will climb. Commodity prices factor in anticipated growth in present and future demand, estimated quantities of natural resources, and the capacity to extract resources for productive use. What has happened to commodity prices over the years? A 2001 study looked at commodity prices over the previous 140 years and charted the following trend.
Paul Cashin and John McDermott conclude:
“…while there has been a downward trend in real commodity prices of 1.3 percent per year over the last 140 years, little support is found for a break in the long-run trend decline in commodity prices. …”
Keep in mind that over this 140 year period the earth's population grew by a factor of five and the per capita gross domestic product grew by a conservative factor of ten. Meanwhile, resources have become more abundant! How is this possible?
When a commodity becomes scarcer, several things happen. Suppliers are motivated to search harder for more of the commodity, to find ways to renew supplies of it (i.e. the lumber industry), and to embark on recovering less accessible deposits of the commodity. Entrepreneurs enter the markets. They begin offering substitute commodities, they recycle the existing commodity, and they begin to find ways to use the commodity more efficiently. In the Ehrlich vs. Simon bet, most of the commodity prices went down because of better extraction or processing techniques (ex. better smelting for tungsten) or substitute commodities came into the market (ex. aluminum began replacing tin for some uses and sand made into fiber optic cable began replacing cooper.) Users of the commodity will likely decrease usage as price increases and/or look for alternatives.
Donald Hay writes in his book, Economics Today: A Christian Critique:
Assuming that an exhaustible resource is going to be put to a good use, are we justified in depleting it and so depriving future generations? Our response is in the affirmative, but with a reservation. If a substitute does not exist, then it is presumptuous to believe that our needs are greater than those of a later generation. In practice, it is hard to find an example of a resource without a biologically renewable substitute. For example, the fossil fuels could, in principle, be replaced by wood or solar energy. Metals are more of a problem, but it is not impossible to conceive of a culture that uses no metal in its artefacts (and metals can be recycled their availability over time). (298)
Jared Diamond is a biologist and geographer who has contributed greatly to our understanding about past cultures but he too unfortunately lapses into a Malthusian mindset. If you look at most of his examples of resource exhaustion, two factors are at play. First, there was insufficient scientific and technological knowledge to allow innovation to develop. Second, assuming there was sufficient knowledge, there were insufficient feedback loops about supply and demand of waning resources. Market economies provide a dynamic feedback loop that prohibits an abrupt exhaustion of resources, even as they generate the human and financial capital to address new challenges. The market will inhibit the total depletion of resources because people will abandon the commodity when the price is too high, long before its exhaustion. Human and financial resources empower aggressive searches for new solutions.
The remarkable improvements in human life over the last couple of centuries do no warrant pessimism. It is not a suicide machine. I believe Indur Goklany gets it right when he writes:
...these overall improvements in human well-being contradict the view advanced by Jared Diamond, for example, that new technology creates more problems than it solves because it replaces old problems with new, more difficult problems. A more accurate characterization of new technology is that it generally replaces imperfect existing technologies with improved, but still-less-than-perfect technologies. (The Improving State of the World, 374)
Just as Malthus could not see the impact of the Industrial Revolution on resource availability, I think many neo-Malthusians are blind to the evolution of renewable, reusable, and synthetic fabrication (from renewable resources) that is taking place in our lifetimes. Had Malthus’ perspective won out in the early nineteenth century, it is hard to imagine the devastating impact it would had on generations down to this day. The same caution needs to be sounded about neo-Malthusians today.
In closing this post, I'm sure many are aware that there has been a recent spike in oil and commodity prices. None of this has an impact on the long-term trend of commodity prices. Artificial factors intervene from time to time to cause prices to spike or drop. For instance, OPEC may decide to restrict the rate at which they pump oil. (See here.) That doesn't change the actual quantity of oil available. Economic growth in emerging nations likely has some impact in the short term on commodity prices but it is worth noting that with both the US and emerging economies slowing, commodity prices have still gone higher. The recent rise in prices likely has much to do with the present unusual situation of negative real interest rates. (See this article by Harvard economist Jeffrey Frankel.)
The bottom line is that we are not running out of resources or depriving future generations of a better life. On the contrary, economic growth accomplished through developing cycles of prosperity (more about this phrase later) is an important gift we can give to our children and it is absolutely essential for lifting billions of others around the world into prosperous lives. Parochialism of the present must be resisted.
To understand the impact technophysio evolution has had on global population, we can look at what demographers call the Demographic Transition Model (DTM). The DTM is a model reflecting the experience of Western Europe, extrapolated to interpret anticipated global demographic trends. There are four phases to the DTM:
Stage 1: Death rates (deaths per 1,000 population) and birth rates (births per 1,000 population) vary but tend to balance each other out. Prior to the eighteenth century, this was the near universal story for humanity (although as we have seen, very slow steady growth had been the norm for many centuries before.)
Stage 2: Death rates begin to decline significantly. Birth rates stay constant for a while and then began to drop in a pattern similar to death rates. Though both are declining, the birth rate stays significantly above the death rate for decades (see the dashed line in the chart.) This leads to a significant increase in the population.
Stage 3: Death rate decline begins to slow and level out. Meanwhile fertility rates continue to decline leveling out at a later date. The population continues to experience growth but at an ever slowing rate.
Stage 4: Death rates and birth rates stabilize at or below replacement levels.
Wikipedia provides a chart for 250 years of Sweden’s history that illustrates this. Notice the parallel death and birth rates until the beginning of the 1800s. The stages are demarcated for you at the top of the chart.
Stage 2 emerged in Europe because of technophysio evolution. Increased agricultural productivity led to a surplus of food and an improved diet. Improved health and vigor meant more productive people. It reduced the death rate as people lived longer and people lived more productive lives. (Robert Fogel notes that, in England, agriculture improved the caloric intake but the rapid urbanization created health problems that tended to retard advances in life expectancy until the late nineteenth century.) With improved health, and enough resources to meet basic subsistence needs, people began to address environmental problems like waste elimination and personal hygiene. This lessened the amount of disease and allowed more people to live longer and more vigorous lives.
Stage 3 was a period when the infant morality rate (children dying before their first birthday) was noticeably lower. Whereas only four or five children out of eight might have lived to adulthood in the past, now seven or eight children might reach maturity. Fewer children were needed to perpetuate the family and birth rates declined. Increased industrialization also meant urbanization and a departure from traditional values about family size and the role of women. Women no longer gained as much status from family. They become more educated and literate, often entering the workforce. This led to greater affluence and greater sophistication in knowing how to create a better quality of life. People become evermore empowered and greater demands were made for environmental improvements, safety, and health care.
Stage 4 has seen a stabilization of death and birth rates. Concerns about quality of life issues including environment and health have risen in importance.
Some believe there may be a stage 5. At some point our ability to extend life expectancy will hit a wall and the death rate will rise a little before stabilizing. With affluence, death rates may begin to increase because of decreased physical activity and increasingly unhealthy lifestyles like overeating. How birth rates will respond isn’t known. Whether this is true and to what degree is a subject of debate.
Now we can extrapolate the DTM to represent global changes, with one significant change. The distinguishing feature of the global model is that instead of a relatively smooth transition into declining death rates over decades, death rates plummet in a short time period. Most developing nations have experienced their population explosions in the years after World War II when large amounts of aid, vaccines, and technological knowledge were made available. Traditions and customs about family size can’t adapt as quickly. Therefore, the gap between birth rates and death rates (see dashed line in graph below) is considerably larger than with the DTM for Western nations. This leads to very rapid population growth.
Here is chart showing global birth and death rate from the 1950 with projections until 2050:
Another distinguishing feature about the global DTM is the linkage between increases in per capita income and improvements in living conditions. In the Western DTM, growth in per capita income seemed to draw living conditions to higher levels. The global experience has been more a matter of improved living conditions and health drawing per capita income to higher levels. Aid and technology transfers from the West have essentially shortened the learning curve for other nations that are following the West through the demographic transition.
It is important to note that the DTM is not without controversy. Looking nation by nation there is considerable variation in how demographic transitions are taking place. Still, the DTM serves as a good standardized that helps us frame questions about specific nations and regions. It does seem to keep capture a sense of the overall global trend.
Next we will look at the economic growth machine that made possible the recent rapid growth in population while expanding prosperity.
(For a scholarly presentation of technophysiological evolution, see The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. Wikipedia has a pretty good article on the Demographic Transition Model.)
Two “L” shaped graphs highlight the extraordinary changes in human prosperity over the last twelve thousand years. After millennia of infant mortality rates of 200-300 per 1,000 and life expectancy at birth of 20-30 years, most people today are living in nations where infant mortality rates are dropping below 50, on their way to the single digit levels of the West. Global life expectancy is pushing 70 years. These “L” shaped developments contribute to the development of yet another “L” shaped curve. Look at this chart of world population:
We can get a better sense of population growth if we break the chart into two segments:
From 10,000 BCE to 5000 BCE, the global population increased from about 4 million to 5 million. Beginning in the fifth millennium, the plow was invented, irrigation began, and cities emerged. There was an up turn in population during the Greco-Roman era beginning in the middle of the first millennium BCE. Much slower growth followed in the third through eighth centuries CE. Population fluctuated until after the major European plague in the mid-1300s, after which population resumed an upward trajectory, particularly accelerating in the seventeenth century.
Many have attributed the population explosion of recent centuries to the Industrial Revolution but clearly its impetus predated the Industrial Revolution by one or two centuries. Economist Robert Fogel attributes this population growth to what he calls the Second Agricultural Revolution beginning in the seventeenth century (the First Agricultural Revolution beginning around 9000 BCE with the discovery of farming techniques.) The Second Agricultural Revolution, starting in Europe, involved a combination of improved crop rotation methods, better planting and cultivation techniques, new technology, and improved storage and distribution methods. Beginning in the early nineteenth century (c. 1820) the Industrial Revolution built upon the gains from agricultural advancements.
Robert Fogel calls the phenomenon we have experienced in recent centuries “technophysio evolution.” Technology improved agricultural to the point that vast numbers of people could eat beyond mere subsistence levels and live healthier and more productive lives. Better agriculture production also required fewer workers freeing up labor for other pursuits. These other pursuits included pursuit of new technologies that both bettered people’s lives and further improved agricultural production. Thus, a cycle of technophysio evolution was set in motion.
Next we look at what is known as the Demographic Transition Model
The relationship between longer lives, more income, and greater freedom, and other aspects of prosperity show up in other indicators as well. Here are just three:
Keep in mind that the population of the world has nearly doubled over the time elapsed in these graphs. Thus, if the percentages are increasing, the absolute numbers are growing rapidly. I could go on with more stats like the precipitous drop in conflicts around the world over the fifteen years (click here) but you get the picture. The world is becoming a more prosperous place for more and more people!
With that said, I want to be clear on a few issues. Nothing I’ve written in these last three posts in any way justifies colonialism or the horrific abuses that have occurred with oppression. Nor does it justify interventionist acts committed by the United States and other world powers in pursuit of their own interest. Nor does it suggest that there isn't abuse today or that every corner of the world is growing prosperity. But what it does suggest is that, in a stumbling bumbling manner, the world has been experiencing a widespread, and spreading, outbreak of prosperity that dwarfs anything humanity has encountered before.
In the next few posts I want look at what sparked the changes of the last three centuries.
(For further enlightenment, I'd also invite you to check out this entertaining and informative 20 minute presentation at the TED conferences by Hans Rosling about the improving state of the world.)
The previous four posts have illustrated the improvement in prosperity spreading across the globe as measured by long life and the soaring improvements in economic status. But there is at least one other measure of prosperity we need to visit. What about political freedom and civil liberties?
At the close of the eighteenth century, the number of democracies in the world could be counted on one hand and they represented only a tiny fraction of the world population. By the late nineteenth century, democracy was beginning to spread to more nations. Today, most nations feel obliged to characterize themselves as democracies, regardless of their actual circumstances.
For decades, an organization called Freedom House has been using a variety of criteria to evaluate nations on their political and civil rights. They rank nations into seven categories but more generally rank them as “free,” “partly free,” and “not free.” In the two tables below I have compared the state of freedom in the world between 1975 and 2005. The population of each nation at the time was assigned one of the three statuses. Each percentage below is the percentage of people of a designated region with a given status. Pay particular attention to the size of the green bars as they indicate the percentage of people living in “free” countries.
The percentage of the world population living in free countries has soared from 16% to 43% over the last thirty years. Only the Middle East and North Africa region has actually moved away from freedom. Significant improvements are seen in most other regions of the world.
Next we turn to a few other general indicators.
Economic historian Angus Maddison offers us some other powerful insights in to the recent global economic expansion by doing some regional analysis. The popular history of the world is that through colonization, the West European nations enriched themselves by robbing other regions of the world of their resources, thus driving them into destitution. Let’s take a look at the impact of colonization and the industrial revolution on those regions outside Western Europe, West European Offshoots (like USA, Canada, Australia, and New Zealand) and Japan:
Every region of the world has experienced magnitudes of growth since the beginning of the industrial revolution. We see this is particularly true after World War II. The former USSR data is a bit distorted on the graph because there was a significant drop in per capita income during the 1990s after the dissolution of the Soviet Union. However, growth has returned over the past decade. Russia’s per capita GDP has grown nearly 25% in the three years after 2003.
The truly bleak portion of the picture is Africa. Africa was actually ahead of Asia in growth throughout the twentieth century until the 1980s. Inability to establish sound governments and the AIDS epidemic have stagnated Africa’s growth and even reversed it in several sub-Saharan nations. Sub-Saharan Africa is one of the few stagnate or declining regions of the globe but this reversal did not begin until the 1980s.
The fact is that there has been a significant improvement in the absolute per capita income of nations outside the West. And not only are people not getting poorer outside the West, non-Western emerging economies have been growing at a faster rate than Western economies.
(Source: The Economist)
However, as this chart below shows there is a lot of catching up to do:
The realities of world economic growth are more complex than I can nuance in this short post. There are disparities when we disaggregate the data. Still, the percentage of people living on the equivalent of less than I$1 a day has shrunk from 39% in 1970 to less than 20% in 2000. The UN anticipates it will be less than 10% in 2015. All this during a period when the world population doubled!
Nearly half of humanity lives in forty nations that are experiencing 7% annual growth, a growth rate that will double the size of the economy every ten years. A recent article in the Economist reports:
...since the mid-1990s, the incomes of the poorest fifth have risen everywhere except, marginally, in Latin America, where they have been affected by after-shocks of debt crises. In Asia, the real incomes of the poorest fifth rose 4% a year; in Africa, by 2% a year, faster than the rise for other income groups.
A recent Reuters story indicates that while Brazil's overall annual economic growth for the first decade of the 21st Century has been at 5%, while the annual economic growth rate for Brazil's bottom 10% of the populaton has been 9%.
The overall picture is one of unprecedented improvement in the lives of billions of people around the world. Whatever we may think of the rate of change, the overall picture is not one of the poor getting poorer under the oppression of Western consumerism.
Finally, a closing note on the impact of colonialism. Economic historian Paul Bairoch highlights two powerful and pervasive myths about colonialism in his book Economics and World History: Myths and Paradoxes. One is held by the right and the other by the left. The one held by the right is that the nations of Western Europe achieved their growth through free trade. He shows convincingly that only after about 1960 did free trade begin to be practiced widely among nations. The other myth, more pertinent to our discussion, is that colonialism was the backbone of European economic growth. On the contrary, Bairoch shows that imports of raw materials into Western economies accounted for a small fraction of total raw materials and colonial markets for finished goods never amounted to but a few percentage points of the overall economy. In fact, colonial possessions, originally established when mercantilist thinking was in vogue, may actually have stunted the economic growth of colonial powers during the industrial revolution because of the high “carrying cost” of maintaining colonies.
The real damage done to colonies was less a matter of the resources extracted and far more about the suppression of industrial development within the colonies. The good news is you don’t need colonialism to develop a strong economy. The challenge is to nurture industry among the former colonial states and that is happening at various rates around the world right now.
So once again when we look at our present circumstances in the context of the flow of history we see an expansion of prosperity working its way throughout the world. But there are a few more indicators we should take note of as well.
We have seen how prosperity, measured in terms of long life, is spreading throughout most of the planet. Yet when most people of think of disparity between nations, they usually think in terms of levels of income. Income is correlated with other factors that empower us to not only survive but thrive.
The common refrain we hear today is “The rich are getting richer and the poor are getting poorer” and that perspective is present in Brian McLaren's Everything Must Change. N. T. Wright, a theologian whose work I’ve found very helpful, writes:
And now we have the new global evils: rampant, uncaring, and irresponsible materialism and capitalism on the one hand; raging unthinking religious fundamentalism on the other. As one famous book puts it, we have ‘Jihad versus McWorld.” (Whether there is such a thing as caring capitalism, or for that matter thoughtful fundamentalism, isn’t the point at the moment.) …. It doesn’t take a Ph.D in macroeconomics to know that if the rich are getting richer by the minute, and the poor poorer, there is something badly wrong. (Simply Christian, 8)
It also doesn’t take a Ph.D. in macroeconomics to verify such claims either. :) What can we say about per capita income on an historic basis?
Comparing income across eras is difficult. Inflation and other variables make direct comparison impossible. Furthermore, comparing contemporary currency based economies to barter economies will not work. To aid in this comparative analysis, economic historians have developed a concept called “purchasing power parity” (PPP). The value of a dollar at a fixed point in time is chosen and the value of income at all other points in time is pegged to the purchasing power of the fixed dollar. For our purposes, we will be using a PPP measure of “1990 International Dollars” (I$). Annual per capita Gross Domestic Product (the total market value of all final goods and services produced within a given country in a given period of time, usually a year) will be used as a proxy for income.
Not all economists agree on how to achieve parity between the present and more distant eras. Angus Maddison, one of the foremost authorities on this topic, suggests that I$400 per capita is a subsistence level of income and was typical of subsistence living prior to the industrial revolution. However, economist Brad Delong, who has done his own analysis, claims:
“A large proportion of our high standard of living today derives not just from our ability to more cheaply and productively manufacture the commodities of 1800, but from our ability to manufacture whole new types of commodities, some of which do a better job of meeting needs that we knew we had back in 1800, and some of which meet needs that were unimagined back in 1800.” (Brad DeLong)
Therefore, DeLong puts historic subsistence living at I$90, but both scholars end up with similar income estimates in recent eras.
Another difference is that while Maddison has tended to focus his analysis on the past two millennia, DeLong has analyzed more ancient eras. Either way, when you plot their data over the past few millennia on a chart, you get this:
DeLong reports that it took from 10,000 BCE until 1750 for per capita GDP to double from I$90 to I$178. (I$109 in year 1 CE.) Maddison reports a per capita GDP of I$467 in 1 CE and I$616 in 1700. The following chart shows their estimates between 1600 and 2003:
You can see that the growth accelerates beginning in the early nineteenth century. Many have suggested that the industrial revolution began not long after 1750 and it is true that many inventions came in to being not long after that time. However, there was a lag time of a few decades between the advent of various technologies and the placement of them in productive use. Maddison argues for a beginning point of 1820 (as do other economic historians.) Whichever the case, keep in mind that the world population grew more than sixfold from less than 1 billion to more than 6.6 billion from 1750 to 2000 during this explosion in per capita income.
So in the aggregate, we can see that growth in worldwide per capita income is astounding. But who broadly spread is the economic expansion?
A second measure of prosperity demographers frequently use is the infant mortality rate. The infant mortality rate is the number of children that die between birth and their first birthday, per 1,000 live births. Because the first year of life is when human beings are most vulnerable, their ability to survive the first year of life says a lot about the state of their society; thus the significance of the infant mortality rate.
So what can we say about this measure of prosperity throughout human history? Here are estimates typical of social scientists and economists who study these issues:
In the year 1000, the average infant could expect to live about 24 years. A third died in the first year of life. Hunger and epidemic disease ravaged the survivors. By 1820, life expectation had risen to 36 years in the west, with only marginal improvement elsewhere. (Angus Maddison, Contours of the World Economy, 1-2030 AD, 69)
Before industrialization, at least one out of every five children died before reaching his or her first birth day; that is infant mortality measured as the number of children dying before the age of one, typically exceeded 200 per 1,000 live births. … In the United States, as late as 1900, infant mortality was 160; …” (Indur Goklany, The Improving State of the World, 27)
Let's look at the change in the infant morality rate for the last fifty years:
Note that the average infant mortality rate for developing nations in 2003 is at the same level the rate was for the developed world fifty years ago. The trend continues downward. This is not to say that every nation, or every region within a nation, or every subgroup within in a nation, have prospered equally well. As with life expectancy, note the tragic impact of the AIDS epidemic and social has had on sub-Saharan Africa by looking at this of infant mortality from wikipedia:
During the 1990s there was a small increase in the rate for the former Soviet nations but that trend has turned positive again. There are disparities between Anglos and non-Anglos in the United States. Disparities exist, but only about a dozen (mostly small) African nations have infant mortality rates above 100. The great majority of the total world population lives in nations with far lower rates including India (34.6) and China (22.1).
Using infant mortality as measures of prosperity, the world is far more prosperous than it has ever been and the gap is narrowing between the top and bottom rungs of the global social ladder. Again, most of this change has occurred over a time when the total world population grew sixfold, from less than 1 billion in 1800 to about 6.6 billion today!
So as we look at the trajectory of change in the world we find unprecedented rises in prosperity. It is uneven growth but the every corner of the planet has improved and the gap between top and bottom nations is closing.
Next we we will look at economic issues.
Demographers commonly use life expectancy rates as a measure of societal well-being. The life expectancy rate is the number of years someone is expected to live at the time they are born based on actuarial science. Long life is a universal indicator of prosperity across cultures and time. It is an important measure to demographers because achieving it requires a complex mix of variables, like a sustained nutritious food supply, a sanitary and safe environment, relatively little disease, absence of war, and a stable society.
So what can we say about this measure of prosperity throughout human history? Here are estimates of two social scientists and economists typical of those who study these issues:
For most of its existence, Homo sapiens lived in far-flung hunter-and-gathering communities, each of which was quite small and barely able to reproduce itself. Life expectancy at birth was hardly twenty-five years on average, and those persons who survived childhood often died violently, in combat with other hunters, at relatively young ages. (Robert William Fogel, The Fourth Great Awakening and the Future of Egalitarianism, 48)
For much of human history, average life expectancy used to be 20-30 years. By 1900, it had climbed to about 31 years … By 2003 it was 66.8 years. (Indur Goklany, The Improving State of the World, 31)
To put the last statement by Goklany in perspective lets graph the estimated life expectancy on a chart:
If we show only the last two centuries we get a clearer picture of what has happened:
Using life expectancy as a measure of prosperity, the world is far more prosperous than it has ever been and the gap is narrowing between the top and bottom rungs of the global community. More amazing, most of this change occurred over a time when the total world population grew sixfold, from less than 1 billion in 1800 to about 6.6 billion today!
This is not to say that every nation, or every region within a nation, or every subgroup within in a nation, has prospered equally well. Note the tragic impact of the AIDS epidemic and social chaos has had on sub-Saharan Africa by looking at this map of life expectancy from wikipedia:
The trajectory of change is an unprecedented rise in prosperity. It is uneven growth but every corner of the planet has improved and the gap between top and bottom nations is closing.
Next we look at infant mortality rates.
