This excerpt is from DeLong’s interview on Conversations with Tyler. It’s a great discussion – highly recommended.
COWEN: If we’re trying to think about the period, say, 1870 through to the 1920s, when you have some kind of modern consumer society, what’s the best number for reflecting how big that change was?
DELONG: I would say that you’ve got to look worldwide, and that if you look worldwide, and if you take account of the fact that world population growth has now hit more than 1 percent per year after 1870, then you had something like 1.3 percent per year for average world real income growth from 1870 on up to the eve of World War I, worldwide.
And you do what I do, which is say, “Let’s take real income growth and add half of population growth and call that technology growth.” Do that and you get something like 1.7 percent per year for the global rate of increase of “technology” from 1870 to 1913, which is four times what the worldwide average was back in the century before 1870. It’s a huge shift, and it’s one of the things that makes the modern world, as we know, even vaguely possible to imagine.
COWEN: If I’m trying to understand economic statistics, and if I believe the 50 years starting in 1870 changed everything, but if I also believe the last 50 years in the West did not change everything — it gave us computers and internet, but it’s had growth rates that are probably not too far from the earlier rates — what accounts for that difference? Should we then say —
DELONG: Well, I think it did change everything. It didn’t change everything, but it changed a lot of things. There is a difference between the growth rate of wealth and what that growth rate of wealth means. You only go from having no indoor plumbing and no public health — and so having half your babies die before the age of five — to one in which infant mortality is extremely low and a genuine astonishing tragedy once.
You only go from spending two hours a day, at least, thinking about how hungry you are and how it really would be nice to have more calories right now to not having to think about that once. You only go from having your children so malnourished that the adult heights of the boys are 5 foot 3, to adult heights of 5 foot 9 or so, on average — you only do that once. We did that, and we did that mostly in the 50 years after 1870, at least for the global north.
We’re doing equal things in terms of how much we’re making since, but with possible exceptions after 2006 slowdown. But in some sense, it means a great deal less because it doesn’t impact our thinking and our family tragedies and our children so malnourished that they’re badly stunted in such an obvious and visceral way, but there have been big changes.
You want to talk about modes of production. You want to be an orthodox Marxist in following, not so much Marx, but Friedrich Engels, and you say there’s a huge jump between feudal society and the commercial societies of the gunpowder empires, between 1000 and 1650 or so.
Then there’s another equal jump between the gunpowder empire commercial societies and the steam-power societies of 1870, but the Second Industrial Revolution beasts of 1910 or so are a different animal, too, as are the mass-production societies of 1960, as was the global value chain society of 2000. Right now, we’re well onto an info-biotech economic revolution.
Now, the underlying technology-driven forces of production are continuing to change, and are continuing to change a lot, but in some sense, we think it means less simply because our needs are biologically much less urgent.Brad DeLong and Tyler Cowen – Conversations with Tyler Ep. 172: Brad DeLong on Intellectual and Technical Progress
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Economic Growth, poverty and inequality