“The world’s unprecedented wealth is absurdly, appallingly, criminally maldistributed”
By J. Bradford DeLong, a former Deputy Assistant US Treasury Secretary, currently Professor of Economics at the University of California, Berkeley and research associate at the National Bureau of Economic Research.
Berkeley – Humanity as a whole is wealthier today than at any time in its history. And yet, from the short-term challenge of the pandemic to the existential threat of global warming, there is a widespread sense that things are going badly wrong. The start of a new year is an occasion for hope, but is pessimism the more appropriate default?
To answer that question, we should consider our current situation in a broader context. For the first ten thousand years after the invention of agriculture, humanity had no chance of achieving any approximation of “utopia,” regardless of how one defined that term. Then, within our parents’ and grandparents’ lifetimes, something approaching that ideal came into view. Yet we have repeatedly failed to grasp it. As my friend the late Max Singer used to say, a truly “human world” will remain out of reach until we have figured out the politics of wealth distribution.
Until just a few generations ago, humanity marched to a Malthusian drum. With technological progress ploddingly slow and mortality extremely high, population size was everything. In a world where almost one-third of elderly women had no surviving sons or grandsons, and hence no social power, there was immense pressure to have more children in one’s childbearing years. The resulting population growth (without commensurate growth in the size of farms) offset any gains in productivity and incomes from better technology and kept typical living standards low and stagnant.
The Malthusian society’s best shot at relative happiness was to foster a custom of delaying marriage, thereby pushing down the birth rate. Faced with the problem of unsustainable population growth, this practice represented a social rather than a biological solution (which took the form of malnutrition). At the same time, the elite’s best shot at happiness was to establish a smooth process of extracting wealth from the farmers and craftsmen.
It is now the third decade of the twenty-first century, and humanity is almost through what social scientists call the demographic transition: a shift from high to low birth and death rates, owing to economic development and technological advances. Malthusian population pressure no longer keeps us poor. Our productivity vastly exceeds that of all previous generations, and it continues to grow. In the next two generations, we will achieve as much proportional growth in our technological powers as our forebears in 1870 had since the great migration out of Africa 50,000 years earlier.
In many parts of the world, there already is enough wealth to ensure that nobody is hungry, unsheltered, or vulnerable to many of the health threats that used to shorten most lives. There is enough information and entertainment that nobody need be bored. There are enough resources to allow everyone to create or pursue whatever his or her calling may be. True, there will never be enough prestige to satisfy everyone; but if we are willing to settle for universal basic dignity, there is no longer any material reason why we should have a society where people feel disrespected.
Why, then, do things seem to be going badly wrong? First, the world has failed to build governance institutions that can manage global problems like climate change. That challenge could have been handled at very low cost a generation ago. Now, averting a disaster and adapting to the change that is already here will entail much, much larger upfront costs. And to what end? Merely to preserve for a few years longer the wealth of fossil-fuel robber barons?
Second, the world’s unprecedented wealth is absurdly, appallingly, criminally maldistributed. The bottom billion people may have smartphones and some access to health care, but in many ways, they are not much better off than our pre-industrial Malthusian ancestors. It has been 75 years since US President Harry Truman wisely added global economic development to the Global North’s agenda. Though he would be happy to see that the Global South is much, much richer now than it was in 1945, he would be tremendously disappointed to find that the proportional gap between rich and developing countries is as large as ever.
Even developed countries like the United States are apparently incapable of properly distributing the enormous wealth that has been created by modern post-industrial economies. The past four decades have given the lie to the neoliberal claim that a more unequal society would release immense entrepreneurial energies, lifting all boats. Yet policies to accord well-being, utility, and dignity to all people have consistently been blocked.
One major hurdle is the idea that some of society’s non-rich deserve not more but even less. This view has long been applied to Hispanics and African-Americans in the US, Muslims in India, Turks in Britain, and all those who have ever run afoul of blood-and-soil nationalism. Many now seem to believe that the Enlightenment vision of human equality was wrong and should be replaced with the Aristotelian principle that it is unjust to treat non-equals equally.
Another hurdle is economic. It was long assumed that technology, capital, and labour would always ultimately function as complements, because every machine and information-processing task would still need to be supervised by a human. But our information-processing technologies have been outpacing our educational system, and the hope for harmonious complementarity has become a pipe dream.
Climate change, nationalism, and the challenges associated with new technologies are just a few of the big problems humanity will be facing in the post-pandemic decades. In his first inaugural address, Franklin D. Roosevelt referenced Proverbs 29:18: “Where there is no vision, the people perish…” Unless and until such a vision for our own time emerges, the people will see only gloom ahead.
Copyright: Project Syndicate, 2022