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Brad DeLong knows the economic miracle is over

Brad DeLong knows the economic miracle is over

Brad DeLong was convinced the story began in 1870.

The polymath economist was writing a book about economic modernity – about how humans have moved from an existence on our small planet to building some kind of utopia – and he saw an inflection point of centuries after the rise of capitalism and decades after the advent of large-scale manufacturing. “The industrial revolution is good. The Industrial Revolution is huge,” he explained to me recently, sitting on the back porch of his wood-clad Colonial Revival in Berkeley, California. But “from 1870 things didn’t really change much for most people.” Soon after, however – after the development of the vertically integrated society, the industrial research laboratory, modern communication devices and modular navigation technologies – “everything changes in one generation, then changes again, and again, and again , and again.” World growth is multiplied by four. The world is emerging from almost universal agrarian poverty. Modernity is taking hold.

DeLong had begun work on this story in 1994. He had produced hundreds of thousands of words, then hundreds of thousands more, updating the text as academic economics and the world itself even changed. He kept writing, for years, for decades, for so long that he ended up writing for about 5% of the time capitalism itself existed. The problem was not how the story began. The problem was knowing when it ended.

In time, he decided that the era that began in 1870 ended in 2010, shortly after productivity growth and GDP growth collapsed as inequality strangled economic dynamism in the world and that revengeful political populism was on the rise. With a little more writing he’s done Advance towards utopia, one of this year’s most anticipated economics books, due out on Tuesday. His lengthy examination of what he calls the “long 20th century” is vast and detailed, scholarly and accessible, familiar and strange – a definitive look at how we came to such material splendor and how it never happened. failed to deliver everything it seemed to promise. His decision to end the story in 2010, and therefore to finish his book, carries a message for all of us: despite its problems and its inequities, the economic era that Americans have just gone through was miraculous. And now it’s over.

As for the story of DeLong himself: He’s an economic historian and macroeconomist at UC Berkeley, a devotee of liberal politics, and one of the earliest economics bloggers, still posting his thoughts almost daily, as he been doing it since before the word Blog was invented in 1999. His story, I guess, really begins in Washington, DC, where he grew up the son of a lawyer and a clinical psychologist, obsessed with science fiction and a math whiz. (His mother still sees patients.) He went to Harvard for an undergraduate degree, then a doctorate. in economics, writing articles and forming close friendships with a teenage Soviet refugee named Andre Shleifer (now the second most cited economist on Earth) and Larry Summers (the former Treasury secretary and president of Harvard). “Brad is the person you want to write to if you want a collaborator to do something bold, potentially important, possibly wrong, and unlikely to satisfy pedantic academic referees,” Summers told me. “I’m a big, big fan of the guy.”

Along with his academic work, DeLong served in the Clinton administration. He married jurist Ann Marie Marciarille, an expert in health care regulation; they had two children, now adults. And he started blogging – the thing he is perhaps best known for. Since 1999, he has been writing in his “semi-daily diary”, which is funny, erudite and bizarre. (Over the years, he’s blazed no less than 11 people as the “dumbest man alive,” including former World Bank President Bob Zoellick.)

DeLong’s book project predated the blog. In 1994, he read the work of socialist historian Eric Hobsbawm The age of extremes, on the “short 20th century” between the assassination of François-Ferdinand, in 1914, and the collapse of the Soviet Union, in 1991. “It makes a great narrative arc, with communism as the tragic hero of the 20th century, hopelessly messed up the circumstances of his birth,” DeLong told me. He loved it and decided to launch his own long arc, with capitalism as the tragic hero.

The heroic part is heroic: for the first time in history, DeLong notes, the world has managed to create sufficient after 1870. Enough to end subsistence farming in much of the world. Enough to reduce the global infant mortality rate from almost 50% to less than 5%. Enough that many of the poorest people on the planet have access to cell phones and electricity today. But the tragic part is tragic: this modern age has also brought with it machine guns and atomic bombs and the atrocities of the Holocaust, among other genocides. And while so many economies have succeeded, so many governments have failed – to end racial injustice, to protect the most vulnerable, to ensure that everyone shares in global prosperity, to preserve our common environment.

In his basement, attic, and office, DeLong continued to put his book together. He used free-trader Friedrich Hayek and social-protectionist Karl Polanyi as central figures, then weaved in detail a wide range of characters: Marx; Henry Ford; Keynes; Hitler; Gandhi; his own great-great-uncle, an economic historian named Abbott Payson Usher.

His editors kept checking. His friends inquired about the drafts they had read years before. The project swelled in its complexity. “I’ve had editors say [they were] gonna let me down if I couldn’t whittle it down to 150,000 words,” DeLong told me. (The book ended up at 180,000, plus online notes and appendices.) But he kept learning new things. “I can start reading a book, and then from it I can spin a sub-Turing instantiation of the author’s mind in my brain, which I then run on my wetware,” I said. he said. “I can ask him questions, and he answers.” Describing his own thought process, he added, “’A rich inner life’ is a way of saying it. Or maybe a slight lack of grip on what is the real world and what isn’t.

In 1999, he thought the book might end by discussing what Francis Fukuyama called “the end of history” – the idea, popularized in a book of the same name, that the fall of communism heralded the eventual triumph of democracy and neoliberal liberalism. economy. “There were these huge ideological struggles, but now we kind of have got itsaid DeLong, describing his mindset at the turn of the millennium. “There is going to be a future alternation between right-wing neoliberalism, left-wing neoliberalism and social democracy.” But then came 9/11 and the global war on terror. “People looked like they were about to start killing each other in droves over religion,” DeLong said. Moreover, he added, “most of what we Clintonians had managed to do in terms of economic policy in what we considered a good state was to allow another round of cuts taxes for the rich and another round of plutocracy”. And then came President Barack Obama and “the huge failure to implement what I thought was the standard playbook we learned during the Great Depression,” DeLong said.

Over time, DeLong concluded that neoliberalism and social democracy would not take turns gently. In political terms, the future would rather be about the “return of something that Madeleine Albright called fascism, and who am I to tell him not to,” he said. And in economic terms, it would be high inequality, low productivity and slow growth. “We may have solved the production problem,” DeLong told me. “We certainly haven’t solved the problem of distribution, or of using our extraordinary and immense wealth to make us happy and good people.”

The story the book tells is compelling, though at times overwhelming in its detail and telescoped in its argument. The Global South – where the majority of humanity lives – receives superficial treatment. DeLong argues that incorporating much of his economic history into his book would have been too complicated. And while showing evidence that colonial empires took prosperity from conquered lands, he argues that the North “causally led” the “advances” of the South. Yet the book is fair and tender too. “There is someone in Bangladesh who would almost surely be a better economics teacher than me who is now behind a water buffalo,” he told me. “The market economy gives me and my preferences 200 times the voice and weight of its people. If that’s not the greatest market failure of them all, I don’t know what your definition of market failure might be. »

Despite all its problems, the long 20th century granted enormous prosperity to billions of people: cell phones, white-collar jobs, birth control pills, penicillin, space exploration, household appliances, power grids, the Internet. If, as DeLong claims, a remarkable period of prosperity has come to an end, then governments face the enormous task of strengthening representative democracy, reallocating the world’s vast resources more equitably, and reviving productivity growth. As for DeLong, he has a more immediate challenge: figuring out what to do with the hundreds of thousands of words he deleted. Advance towards utopia. He thinks he could write a history of economics, period. This story could begin in 6000 BC.

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