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Deep Economy: The Wealth of Communities and the Durable Futureby Bill McKibben
For almost all of human history, said the great economist John Maynard Keynes, from “say, two thousand years before Christ down to the beginning of the eighteenth century, there was really no great change in the standard of living of the average man in the civilized centers of the earth. Ups and downs, certainly visitations of plague, famine and war, golden intervals, but no progressive violent change.” At the utmost, Keynes calculated, the standard of living had increased 100 percent over those four thousand years. The reason was, basically, that we didnt learn how to do anything new. Before history began wed learned about fire, language, cattle, the wheel, the plow, the sail, the pot. We had banks and governments and mathematics and religion.1
And then, in 1712, something new finally happened. A British inventor named Thomas Newcomen developed the first practical steam engine. He burned coal, and used the steam pressure built up in his boiler to drive a pump that, in turn, drained water from coal mines, allowing them to operate far more cheaply and efficiently. How much more efficiently? His engine replaced a team of five hundred horses walking in a circle.2 And from therewell, things accelerated. In the words of the economist Jeffrey Sachs, “The steam engine marked the decisive turning point of human history.” Suddenly, instead of turning handles and cranks with their own muscles or with the muscles of their animals (which had in turn to be fed by grain that required hard labor in the fields), men and women could exploit the earths storehouse of fossilized energy to do the turning for them. First coal, then oil, then natural gas allowed for everything we consider normal and obvious about the modern world, from making fertilizer to making steel to making electricity. These in turn fed all the subsidiary revolutions in transportation and chemistry and communications, right down to the electron-based information age we now inhabit. Suddenly, one-hundred-percent growth in the standard of living could be accomplished in a few decades, not a few millennia.
In some ways, the invention of the idea of economic growth was almost as significant as the invention of fossil fuel power. It also took a little longer. Its true that by 1776 Adam Smith was noting in The Wealth of Nations that “it is not the actual greatness of national wealth, but its continued increase” which raises wages. But, as the economist Benjamin Friedman points out in The Moral Consequences of Economic Growth, his recent and compelling argument for economic expansion, its “unclear whether the thinkers of the mid-18th century even understood the concept of economic growth in the modern sense of sustained increase over time,” or whether they thought the transition to modern commerce was a onetime eventthat theyd soon hit a new plateau.3 The theorists didnt control affairs, though; and the dynamic entrepreneurial actors unleashed by the new economic revolution soon showed that businesses could keep improving their operations, apparently indefinitely. By the early twentieth century, increasing efficiency had become very nearly a religion, especially in the United States, where stopwatch-wielding experts like Frederick Taylor broke every task into its smallest parts, wiping out inefficiencies with all the zeal of a pastor hunting sins, and with far more success. (Indeed, as many historians have noted, religious belief and economic expansion were soon firmly intertwined: “economic effort, and the material progress that it brought, were central to the vision of moral progress,” notes Friedman.)4 Soon, as Jeremy Rifkin observes, the efficiency revolution encompassed everything, not just factory work but homemaking, schoolteaching, and all the other tasks of modern life: “efficiency became the ultimate tool for exploiting both the earths resources in order to advance material wealth and human progress.” As the nations school superintendents were warned at a meeting in 1912, “the call for efficiency is felt everywhere throughout the length and breadth of the land, and the demand is becoming more insistent every day.” As a result, “the schools as well as other business institutions, must submit to the test of efficiency.”5 It was a god from whom there was no appeal.
Even so, policy makers and economists didnt really become fixated on growing the total size of the economy until after World War II. An economic historian named Robert Collins recently described the rise of what he called “growthmanship” in the United States. During the Great Depression, he pointed out, mainstream economists thought the American economy was “mature.” In the words of President Franklin D. Roosevelt, “our industrial plant is built. . . . Our last frontier has long since been reached. . . . Our task now is not discovery or exploitation of natural resources, or necessarily producing more goods. It is the soberer, less dramatic business of administering resources and plants already in hand . . . of adapting economic organizations to the service of the people.” It was left to former president Herbert Hoover to protest that “we are yet but on the frontiers of development,” that there were “a thousand inventions in the lockers of science . . . which have not yet come to light.” And Hoover, of course, did not carry the day. Even a decade later, as the country began to emerge from hardship with the boom that followed Pearl Harbor, many businessmenthe steelmakers, the utility executives, the oilmenwere reluctant to build new plants, fearing that overproduction might bring on another depression.
But they were wrong. Mobilization for war proved just how fast the economy could grow; by 1943, even in the midst of battle, the National Resources Planning Board sent this report to Roosevelt: “Our expanding economy is likely to surpass the wildest estimates of a few years back and is capable of bringing to all of our people freedom, security and adventure in richer measure than ever before in history.” From that point on, growth became Americas mantra, and then the worlds. Hoover had been rightthere were all kinds of technological advances to come. Plastics. Cars that kept dropping in price. Television. Cheap air-conditioning that opened whole regions of the country to masses of people.
Per capita gross national product grew 24 percent between 1947 and 1960, and during that years presidential election John F. Kennedy insisted he could speed it up if the voters would only reject “those who have held back the growth of the U.S.” Indeed, he proved correct: between 1961 and 1965, GNP grew more than 5 percent a year while the percentage of Americans living in poverty dropped by nearly half. Economists scrambled to catch up, and in doing so they built the base for modern growth theory. The general mood was captured by Lyndon Johnson, who, not long after moving into the White House, told an aide: “Im sick of all the people who talk about the things we cant do. Hell, were the richest country in the world, the most powerful. We can do it all. . . . We can do it if we believe it.” And he wasnt the only one. From Moscow Nikita Khrushchev thundered, “Growth of industrial and agricultural production is the battering ram with which we shall smash the capitalist system.”
There were hiccups along the way, as Robert Collins points out in his account. LBJ&
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