Reviews

Created 2/21/1997
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Review of Richard Easterlin's Growth Triumphant: The Twenty-First Century in Historical Perspective (Ann Arbor: University of Michigan, 1997).

J. Bradford DeLong Professor of Economics U.C. Berkeley


The title is a counterpoint to the title of Eric Jones's book, Growth Recurring, that argued that economic growth was the natural state of human societies. Richard Easterlin by contrast thinks--correctly--that modern economic growth is a truly astonishing accomplishment: back before the industrial revolution it would take millennia for living standards to double, yet today we have grown used to our material prosperity doubling every thirty years.

The subtitle is largely bait-and-switch. The book is not about the twenty-first century in historical perspective. Some 40% of it is about technology, 40% about fertility and mortality, and 10% about the connection between economic prosperity and human happiness. This leaves only 10% of the book for a projection forward of the trends of the twentieth century into an optimistic reading of the future: stable populations, rising living standards, international convergence, and continued invention and innovation.

Nevertheless the book is well worth getting and reading. Richard Easterlin is smart. More important, he is thoughtful. He tackles the big questions, and comes up with answers that are in most parts convincing, and even where unconvincing his answers are well and aggressively argued.

Easterlin's book makes three main points. The first is that modern economic growth--what has been happening to productivity levels and living standards for the past two centuries--is miraculous, unique, unprecedented. In the millennia between the invention of agriculture and herding and the industrial revolution, growth in average living standards over long periods was measured in hundredths of a percent per year. Were you better off being a slave in the household of Marcus Tullius Cicero in 62 B.C. or of Thomas Jefferson in 1801? Were you better off as a (free) yeoman farmer in the Campania region of southern Italy in the first century B.C. or in the eighteenth century? In each case the answer is probably the second, but the answer is not completely clear. Population densities were much higher in 1800, and increasing population density had eaten up the bulk--perhaps the overwhelming bulk, and perhaps all --of improvements in total factor productivity.

By contrast, we call measured productivity growth of 1.0 percent per year--plus somewhere between 0.5 percent per year and 1.5 percent per year of improvmeents in livings standards that are not captured in our NIPA tables--"slow growth". At 1.5 percent per year of growth, living standards double every fifty years. At 2.5 percent per year, they double every twenty five. Improvements in standards of living and material productivity that used to take millennia to accomplish now pass us by between youth and middle age. The past six generations of modern economic growth mark the greatest break in human technological capabilities and material living standards since the evolution of language or the discovery of fire. David Landes was not indulging in hyperbole when he titled his study of technological change in the industrial revolution The Unbound Prometheus.

The second major point is that the population explosion is almost over. As Easterlin sees it, the population explosion was first of all the consequence of a public-health revolution largely independent of but parallel to the industrial revolution. The industrial revolution greatly amplified productivity in manufacturing, resource extraction, and agriculture. The public-health revolution greatly increased human life expectancy by giving governments and doctors easy-to-use tools to conquer many of the major causes of death. Both had their origins in modern science. But they proceeded by and large independently.

The mortality decline of the public-health revolution set off the population explosion: fertility was still high and birth control scarce, hence populations grew rapidly. However, Easterlin believes that the population explosion is nearly over: Birth control is now cheap. The education requirements of modern economies have turned children from capital goods--assets to a household's production and insurance for the parents' old age--into consumption goods: sources of joy and of expense. The net result is a fall in the birth rate to match the fall in the death rate, and a worldwide human population that will approach stability over the next century.

So Easterlin sees an optimistic future: science and technology raise living standards, birth control lowers population growth, a century from now people in developing countries live better than people in developed countries today, and people in developed countries live better than kings live today. I think this is a bit toooptimistic: It is not inevitable that population balance worldwide will be attained through low fertility rather than high mortality. I see fewer signs of the successful spread of modern economic growth over the entire world than Easterlin does: I see as many signs of divergence as of convergence. And I fear that fertility will not decline completely in developing countries until well after modern economic growth has taken hold. Moreover, I suspect that the complex set of institutions that make for liberty, innovation, and growing prosperity is more fragile than Easterlin does. Even so, I see a good chance that he is right: his future is certainly a possible one, perhaps the most likely one, even if a relatively optimistic one.

This brings me to Easterlin's third point: The future he sees, of steadily rising material prosperity and economic progress, is a "hollow victory". Economic growth is indeed triumphant, but to no point. For material prosperity does not make humans happier: the "triumph of economic growth is not a triumph of humanity over material wants; rather, it is the triumph of material wants over humanity".

Easterlin believes that people are no happier today in their relative material abundance than they were three centuries ago in their relative material poverty. Indeed, Easterlin believes that people are not happier today in the U.S. than in India. Happiness is attained when you achieve your dreams and solve your problems. Material abundance helps you do so, but it also teaches you to dream bigger dreams and pose yourself more complicated problems.

People used to think that material progress would lead to material satiation. Lenin looked forward to a time when commodities were distributed in the way that sugar is distributed in hotel restaurants: it's on the table, you take what you need, and you leave the rest. Keynes looked forward to:

the day...not far off when the Economic Problem will take the back seat where it belongs, and that the arena of the heart and head will be occupied... by our real problems---the problems of life and of human relations, of creation and behavior and religion.

And on that day:

We shall...rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years.... We shall...assess...the love of money as a possession--as distinguished from the love of money as a means to the enjoyments and realities of life--for what it is... one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

Easterlin believes--and two hundred years of history tell us plainly--that Keynes and Lenin were wrong: that material desires are never sated, and never lose importance in the relative scale of human concerns. And so he calls our victory over material poverty a hollow one, because it has not been accompanied by any dimunition of the psychological pressures for further victories.

Last weekend my four year old daughter and I went out behind the house to pick blackberries. An hour later I returned with three pints of blackberries, a daughter with a very sticky face, and six scratches and punctures, two of which were quite painful. These blackberries--acquired at an opportunity cost of about $15 per pint (plus injuries) on a weekend when Safeway was selling blackberries for $0.99 a pint--were sweet, and watching my children eat them was sweeter. Richard Easterlin is probably right that if I had been living around San Francisco Bay four hundred years ago, watching my children eat the (few) blackberries the band managed to pick would bring me to the summit of human felicity.

Does this mean that our technological progress that has brought the price of blackberries down to $0.99 a pint from $15 a pint has been worthless-- a hollow victory--because each reduction in cost has been accompanied by an equal reduction in the utility value of a blackberry? Easterlin seems to think so. I look at my daughter eating blackberries, and I feel certain that he is wrong. I would be greatly saddened to learn that my descendants two thousand years hence will have lost their technology, and reverted to hunting and gathering--even if I were also assured that sociologists using questionaires to measure their subjective "happiness" would conclude that they were as happy as we.



Reviews

Created 2/21/1997
Go to
Brad DeLong's Home Page


Associate Professor of Economics Brad DeLong, 601 Evans
University of California at Berkeley; Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/