WTS - Wealth Part 1 - Emergence of Economic Growth
When wealth started to increase
In the introduction I proposed the idea that Increasing Wealth is good for human happiness. Wealth is the resources that we use to do everything we want in life. To make things better, to make our lives what we want, all takes wealth.
But it’s a relatively new phenomenon that we can even create wealth. It’s so recent that it would make sense that most of our traditional systems of morality didn’t account for the possibility of deliberately increasing wealth.
I think first we should look at a quick history of why wealth has been historically regarded as either bad or morally questionable. This has a fair bit to do with economics.
Before Wealth
For this discussion the main dividing line is before 1820 and after 1820. Let’s start with before.
Pre 1820 is almost all of human history, a long time! Before 1820 the world was marked by widespread poverty. Even the wealthy of those times weren’t able to afford a fraction of the lives of a modern middle class American.
This poverty was due to the really low levels of economic growth. Pre-1820 average economic growth for the whole world was below 1% and often around .1%. To even get that level of economic growth took and incredible amount of labor.
It used to be that for most people it’d take a full day’s work to earn enough food, whether directly working on gathering that food or earning enough to purchase food. The margins on most folks lives were very slim. And the work was often so tiring that should someone end up making a little extra compared to what they needed, they’d opt to take time away from working instead of just building more wealth.
There was very little way for the average person to accumulate wealth, and those who had wealth had very few ways to create more. They may have had money to make investments, but there was nothing to be invested in that’d make any real returns.
So year after year lives of most people stayed mostly the same. The world you lived in was roughly the same as your great grandparents. Everyone lived a life of subsistence with almost no prospect of things truly getting better.
Post-1820
Something changed in 1820, starting in England. Real sustained economic growth started to occur.
Due to the perfect storm of like 8-10 societal variables the birth of modern economic growth occurred. It started slow by modern standard at about 1% per year, and then later in the century grew even faster. Some of these factors are simple like the climate and the ready availability of coal. Others are more complicated like the prevalence of the Calvinist philosophies and the relative strength (or weakness) of the Monarchy.
Some societies in the past had seen high economic growth, but it almost always spurted out quickly. In other times of high economic growth the monarchy would assert that all the created wealth was theirs. What happened in England was notable because it just kept going and the monarchy was too weak to claim all the created wealth. It took one country having the correct set of circumstances to start economic growth.
It was not inevitable that economic growth emerged. In the context of all of human history it is still a relatively new phenomenon. We are a species built for a world that only changed at the pace of centuries, yet we live in a world that changes at the pace of months.
It is possible that the conditions for economic growth could end. I don’t have a good mechanism for how that’d happen. But in the same way it took a list of 8-10 variables for economic growth to emerge, some set of multiple variables may put a stop to it.
Regardless of the future of economic growth, we know that it is possible to increase wealth. This increased wealth allows for us to do more in this world, which I think is good.
Next time I intend to do a brief history of the morality of wealth. A phenomenon as recent as 1820 doesn’t seem to be fully incorporated in most of our systems of morality, but I think it is very important!