Looking Back from 2075: The Case for Optimism

 

twenty20_cd8caa36-a91d-4125-b593-f84ced651faf_child_hope_future_optimism-e1472839152581Will people living a half century from now think the 21st century’s been a good one? Economist Brad DeLong explains his optimism:

The reason is simple: the large-scale trends that have fueled global growth since World War II have not stopped. More people are gaining access to new, productivity enhancing technologies, more people are engaging in mutually beneficial trade, and fewer people are being born, thus allaying any continued fears of a so-called population bomb. Moreover, innovation, especially in the global north, has not ceased, even if it has possibly slowed since the 1880s. And while war and terror continue to horrify us, we are not witnessing anything on the scale of the genocides that were a hallmark of the twentieth century.

Fortunately, these major trends are likely to continue, according to data from the Penn World Table research project, the best source for summary information on global economic growth. The PWT data on average real (inflation-adjusted) per capita GDP show that the world in 1980 was 80% better off than it was in 1950, and another 80% better off in 2010 than it was in 1980. In other words, our average material wellbeing is three times what it was in 1950.

Tripling global material wellbeing may sound like a lot, but if anything it’s a low estimate. The way we measure real GDP accounts for all the goods and services being produced, but it doesn’t properly account for value that exists but cannot be measured – such as the immense benefits that accrue to social-media users from services that cost them nothing. …

It may well be true that the engine of innovation itself will run more slowly. But it will still run, and people will still adopt new technologies, and the world economy will still grow. Short of a nightmare scenario like terror-driven nuclear war, you can expect my successors in 2075 to look back and relish that, once again, their world is three times better off than ours is today.

Beyond that, DeLong worries about the impact of climate change. Point taken. Also consider that this brief rejoinder to “the end of growth” type arguments probably assumes only reasonable public policy and no sudden leaps forward (nuclear fusion, artificial superintelligence). The former may be a stretch given recent events.

Still, better-than-expected public policy stretching over the decades might make DeLong’s optimism seem cautious in retrospect.

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  1. Israel P. Inactive
    Israel P.
    @IsraelP

    The world of Islam doesn’t do innovation. At least not the kind you are talking about.

    And that world, with its priorities, is growing.

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  2. Fake John/Jane Galt Coolidge
    Fake John/Jane Galt
    @FakeJohnJaneGalt

    I am sure those Americans working for the government and government related industries will be doing fine and drag the average up.  Of course, those Americans (and others living in the country) that live outside the DC bubble can continue their downward slide as the DC types continue to make fun of them.

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  3. I Walton Member
    I Walton
    @IWalton

    It ought to be so, but rent takers grow  relative to wealth creaters.  Civilizations die in spite of the processes that gave rise to them.  It does does not have to be so, but if not faught, peeled back, dismanteled the default is stagnation and death.  Perhaps someone knows of a civilization that has not followed this path.

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  4. Al Sparks Thatcher
    Al Sparks
    @AlSparks

    James Pethokoukis: [from Brad Delong] More people are gaining access to new, productivity enhancing technologies, more people are engaging in mutually beneficial trade, and fewer people are being born, thus allaying any continued fears of a so-called population bomb.

    The poorer nations in the South are reproducing, while in the North, yes, we are not.  That doesn’t bode well for our civilization.  The peoples of the southern hemisphere won’t all of a sudden adopt our culture, whether they stay in the Southern hemisphere (seems unlikely) or not.

    James Pethokoukis: Beyond that, DeLong worries about the impact of climate change. Point taken.

    Will it get warmer?  Cooler?  No one has been able to explain to me why our present climate (or the one 20 years ago?) is the optimal one.  If we don’t ruin the world economy “fighting” what we can’t change, we won’t be able to deal with whatever climate change we’ll have as well, though I expect I will have passed by then.

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  5. Douglas Inactive
    Douglas
    @Douglas

    “Brad DeLong” … what, Paul Krugman wasn’t available for a quote?

    And this assertion if his in particular sticks out:

    …and fewer people are being born, thus allaying any continued fears of a so-called population bomb.

    Except that the people that have stopped breeding are the people that make things… software, machines, food, research innovations and discoveries. The people that ARE breeding are doing none of these things, and see things like iPhones and computers as a means to an end, and an end that is destructive to the very process of inventing things like smart phones; spread jihad or game welfare and immigration systems to get an all-expense paid life in the home countries of people that still make things. And these people are breeding a lot. Any faith that after we die off, these people will start magically inventing things is just that… belief in magic. And before you say “but China!”, what does China make that’s original? Or India for that matter? These are cultures of copiers. They simply ape what the West is doing. China is infamous for simply making carbon copies of Western products (badly). If the West stops the innovations, the copying stops in China and India. These countries economies are dependent upon Western innovation. If there are no more Westerners, there’s no more Western innovation. Japan’s dying even faster.

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  6. Old Bathos Moderator
    Old Bathos
    @OldBathos

    The pace of the kinds of innovation that yields productivity growth appears to have stalled or maybe we have successfully implemented a regulatory/legal/political web sufficiently comprehensive to strangle it in the crib.  I also sometimes fear we may have exhausted the moral and ideological wellspring brilliantly explained in McLoskey’s Bourgeois Dignity: Why Economics Can’t Explain the Modern World.

    There is a large inchoate mass of people ranging from Bernie Sanders followers to jihadis who strongly fear and detest the rapid unfolding of economic, political and social change.  I am not always optimistic they can be stopped from crashing the whole modern human project.

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