Thursday, December 1 2022

In 1900, the world population was 1.65 billion. A century later, that figure had quadrupled to more than 6 billion. At the same time, despite this unprecedented overcrowding of humanity, gross domestic product per capita has more than quadrupled in real terms. This enormous increase in productive potential has redefined the lives of billions of people. It has also enabled more destructive wars than ever before and, beyond wars, something even more terrifying: the real possibility of the total annihilation of human life on the planet. This duality of production and destruction gives the 20th century the claim of being the most radical in the history of our species.

With Advance towards utopia, J Bradford DeLong, a Berkeley economics professor, former Clinton-era Treasury official, and pioneering economics blogger, tries his hand at a grand narrative of the last century. With disarming frankness, he starts from the fundamental question of such an enterprise: which model, which narrative frame to choose?

In The The age of extremes, Eric Hobsbawm, the great Marxist historian, organized his account of the “short” 20th century around the rise and fall of the Soviet project – 1917-1991. Economist Branko Milanovic, in his pioneering work on global inequality, sketched out a narrative dominated by globalization, de-globalization and re-globalization from the 1970s.

DeLong’s version of the 20th century is more parochial than either. It centers on the political battles that raged around the growth regime of modern American capitalism and continue to shape political debate in governments and central banks today. It is, one might say, the post-Clintonian internal history of the 20th century.

The story opens dramatically at the end of the 19th century, when the Second Industrial Revolution kicked global growth into a new gear. By then, the first British-centric industrial revolution was a century old. It had changed the face of a small part of northern Europe, but by modern standards it was moving at a snail’s pace. The phase of American-led growth that began towards the end of the 19th century was different. For the first time, a significant fraction of humanity experienced truly rapid economic growth, and this growth was sustained and accelerated well into the 20th century.

The drivers of this development, according to DeLong, were three forces: the laboratory, the enterprise and globalization. Migration has enabled tens of millions of people to raise their standard of living. Global investing put them to work. From the laboratory sprang the magic of modern technology. Surprisingly, DeLong makes no mention of the immense mobilization of raw materials that all this has enabled. As the economies of Europe and Japan developed their own growth patterns, as they collectively linked large parts of the rest of the world through trade, migration and capital flows, the whole gained such momentum that he promised to give history a deterministic logic dominated by economic growth.

At the beginning of the 20th century, it seemed that economic development would achieve utopia in the sense of freedom from want. But, as DeLong acknowledges, the engine of liberal development was fragile. Indeed, it was shattered by the cataclysm of the First World War.

On the question of whether this war was itself the result of combined and unequal economic development, or of nationalistic passion and chance, DeLong dithers. In any case, the war ended the first wave of globalization, not only by slowing growth but by opening the door to contingency and politics. Rather than walking the high road to material abundance, humanity has sunk into utopia.

According to DeLong, Friedrich von Hayek and his followers were right when they preached that the market would bring dynamism and innovation, but they ignored the issues of inequality and capitalist instability. As the economist Karl Polanyi has diagnosed, increasingly emancipated populations were not passive victims of history. They pushed back against market forces, demanding protectionism and social protection.

The result was a dysfunctional confusion, which John Maynard Keynes attempted to resolve. Around the triptych of Hayek, Polanyi and Keynes, DeLong travels through the familiar stations of North Atlantic political economy from 1914 until the 2010s.

It is a surprisingly political economic story. Of course, policy makers, ideologies and institutions matter. But in the process of narrating the twists and turns of economic policy, the companies and research labs that DeLong celebrated in the early chapters almost entirely fade from view, until they abruptly return in his triumphant account of the microelectronics.

The author loves European history and writes knowingly about WWII, but the United States is clearly the center of his world. The Great Depression, post-war social democracy, the race question, the history of technology, are all approached from an American point of view.

A global history centered on America has an obvious beginning – the years following the American Civil War. The trickiest question is how such a story should end. For DeLong, the long period of American dominance concluded in the decade after 2008, a period characterized by secular stagnation and the rise of Donald Trump.

One can see why this combination was traumatic for veterans of the Clinton administration of the 1990s. But, as a global historical caesura, it is something of an anticlimax. Does the shock of Hillary Clinton’s defeat in 2016 really sit alongside the fall of the Soviet Union or the rise of China? Or is the relative banality of this moment confirmation of the more important point, which is that for all its monumental self-obsession, the American narrative is losing its ability to organize our understanding of the world?

Moreover, are we convinced that this is how the American century ends – with a whimper, not a bang? The last few years do not suggest as much. For better or for worse, the US Federal Reserve remains the hub of the global financial system. US military power and technology covers the world and prepares for a clash with China. The United States is a major energy producer and the supplier of last resort for liquefied natural gas. Which brings us to what is surely the most confusing aspect of DeLong’s book: its failure to address the vast mobilization of nonrenewable resources that, from its inception, has defined and fueled the American-led growth model.

If the escape from Malthusian constraint defined what was radical in the 20th century, this century also brought us, from the 1970s, the dawning certainty that environmental limits will indeed constrain our future. It is no coincidence that modern environmentalism was born in the 1960s and 1970s, especially in the United States. In the 1990s, under Clinton and his Vice President Al Gore, the United States was the linchpin of global climate policy. But the American political class abandoned this leadership role and the climate problem has since become the clearest indicator to measure the end of the era of American economic preponderance.

In the early 2000s, in the wake of massive industrialization and urbanization, China overtook the United States as the largest emitter of greenhouse gases. Today, China emits more CO₂ than the entire OECD club of rich nations put together. In environmental terms, the American-led West no longer controls its own destiny.

Of any of this there is no mention in DeLong’s story. The title itself is revealing. Advanced towards utopia? If utopia were there, would sagging really be our problem? The big concern right now is the fear that the 20th century will precipitate us into collective disaster. Proponents of the technology insist that such pessimism is overdone. But these days they at least feel the need to make the case, to demonstrate that to avert disaster, DeLong’s 20th-century formula — labs, corporations, markets, and wise government — will suffice. Quietly indifferent to such concerns, Advance towards utopia reads less like a story than a lavishly decked out time capsule, a nostalgic return to the 20th century as imagined before the great angst began.

Advance towards utopia: An Economic History of the Twentieth Century by J. Bradford DeLong, Basic books £30/$35, 624 pages

Adam Tooze teaches history at Columbia University. He is the author of ‘Shutdown: How Covid Shook the World’s Economy’ (2021)

Join our online book group on Facebook at FT Books Coffee


How Live Shopping Platforms Are Shaping the Future of E-Commerce


Titles from the university library: 27.09.2022

Check Also