What reasons do we have to look forward to the future?

In his book, Progress: ten reasons to look forward to the future, Johan Norberg spends a lot of time looking back on progress that has been made. 

In brief, his ten reasons for optimism are:

1. The incidence of famine has declined. Only a few hundred years ago famine was a fairly regular phenomenon, occurring more than twice a century even in countries like France. In recent years the death toll from famine has been only about 2% what it was a century ago, even though the world population has increased fourfold.
2. Sanitation improvements since the “Great Stink” in London in 1858 have helped improve longevity and reduce infant mortality over much of the world. About two-thirds of the world’s population now has access to proper sanitation facilities.
3. Average life expectancy in the world is now 71 years, having risen from 31 years in 1900.
4. Poverty has declined because of economic growth. In the early part of the 19^th century the standard of living of the average world citizen was equivalent to that of the average citizen in the poorest countries today (e.g. Haiti, Liberia and Zimbabwe).
5. Violence has declined. For example, the annual European homicide rate declined from 30 to 40 per 100,000 people in the 14^th century to around 1 per 100,000 in recent years.
6. Although environmental damage tends to increase initially with economic growth it subsequently tends to decrease as people become wealthier. Technological advances seem likely to enable future generations to reduce climate change risks and still enjoy higher living standards.
7. Literacy levels have risen with economic development. The global literacy rate rose from around 21% in 1900 to 86% in 2015.
8. Freedom has increased. Slavery is now banned just about everywhere. Democracy now limits the abuse of government power in many parts of the world. Economic freedom has risen: the global average rose from 5.3 to 6.9 on the Fraser Institute’s ten-point scale between 1980 and 2013.
9. There has been growing recognition of equality of rights, irrespective of ethnicity, gender and sexual orientation.
10. Children are now seen as worthy of being given the best conditions for a long and happy life, rather than as resources for the household economy to exploit.

Many readers of this blog will probably be thinking at this point that they already knew most of that. However, readers of this blog tend to be exceptionally well informed. In the epilogue of his book Johan Norberg provides evidence that in the broader population most people consistently underestimate the progress that has been made. For example, in the U.S. apparently 66% of the population think that world poverty has almost doubled in the last 20 years, and only about 5% are aware that it has almost halved over that period.

This book provides a vast amount of useful ammunition for those of us trying to get the message across that “the good old days” were not so great.

However, I doubt whether the ten reasons provided will actually encourage many pessimists to look forward to the future. It is too easy to acknowledge the progress that has been made and yet to hold to pessimistic views of the future. The author acknowledges that being worried about the future may be in our genes:

“The hunters and gatherers who survived sudden storms and predators were the ones who had a tendency to scan the horizon for new threats rather than those who were relaxed and satisfied”.

The author also acknowledges threats to progress such as large scale war, more extensive terrorism with advanced technology, climate change and more large scale financial crises. He is most concerned that “people led by fear might curtail the freedom and the openness that progress depends upon”.

On a more optimistic note, he observes that in our era of globalization many countries now have access to the sum of humanity’s knowledge and are open to the best innovations from other places. “In such a world, progress no longer depends on the whim of one emperor”.

Johan Norberg’s message is not one of complacency. He claims that the book was written as a warning not to take progress for granted and that is the message of his final sentence:

“If progress is to continue, you and I will have to carry the torch”.

That means, in my view, that we will need to encourage people to contemplate optimistic visions of how the future might evolve.

Is the cycle of political complacency beginning to turn in the United States?

The villain in Tyler Cowen’s latest book, The Complacent Class: The self-defeating quest for the American Dream, is “us”. Tyler is writing about America, but much of what he has written is relevant to other high-income countries. The problem, as Tyler sees it, “is that peace and high incomes tend to drain the restlessness out of people”. Many people have become complacent – “satisfied with the status quo”. Most people don’t like change much and “they now have the resources and the technology to manage their lives on this basis more and more, to the country’s long run collective detriment”.

Tyler has not persuaded me that complacency is a problem of itself. It would be nice to be able to feel more complacent. (According to Tyler’s questionnaire - international version here - I am a striver: “You embrace newness, but you need to strive harder to break the mold”.) As I see it, complacency only becomes a problem when people are complacent about things that they have good reason to be alarmed about.

Tyler provides a fair amount of evidence that Americans have become more complacent. For example:

• ·         People now switch jobs less frequently.
• ·         Geographical mobility has declined.
• ·         There has been a decline in start-ups relative to total business activity.
• ·         There are fewer unicorns (miracle growth firms).
• ·         Market concentration has risen.
• ·         There is more pairing of like with like e.g. people are choosing marriage partners with similar education levels, and housing is more segregated by income and race.
• ·         Upward mobility in income and education has stopped rising.
• ·         People are now more inclined to stay at home and use delivery services.

That is all very interesting. It changes my perceptions about America. I have to get used to the idea that Americans are no longer as mobile and innovative as they were a couple of decades ago. But that does not necessarily mean that complacency is a problem. If peace and high incomes have made Americans more complacent, isn’t that a good thing? There is not much point in striving for more of anything once you are satisfied with what you have already. How is complacency leading to bad outcomes?

When Tyler looks in detail at some of these changing characteristics, he points to the failure of political decision-making to cope with interest groups seeking to protect themselves from change. How does complacency come into that? The NIMBY advocates who are using their political muscle to protect their interests against higher density building can hardly be described as complacent. The people at Donald Trump’s rallies who are supporting his policies to protect jobs - by reducing immigration and constraining import competition - do not seem complacent. The complacency must lie with the general public, who are not yet sufficiently outraged by the stasists to cast their votes for candidates who will constrain their political influence.

Tyler’s discussion of declining geographical mobility provides a good example of political market failure. He points to research showing potential for a substantial increase in GDP if more people were to move from low-productivity cities to high-productivity cities. Regulatory constraints prevent this from happening:

“Residents in Manhattan, San Francisco, and many other high-productivity locales just don’t want all of those new people moving in, and so they have passed overly strict building and land use regulations or in some cases they have limited infrastructure so that adding more residents just isn’t practical. Without good bus or subway connections, for instance, a lot of neighbourhoods just don’t work for people with jobs downtown”.

Tyler uses the terms ‘stasis’ and ‘dynamism’ quite frequently in this book, but I couldn’t find any reference to Virginia Postrel’s pathbreaking book on this topic, The Future and Its Enemies, published 18 years ago (my discussion here). I would have been satisfied with a footnote to explain how Tyler’s views build on, or differ from Virginia’s views. Similarly, it would have been nice to see a footnote discussing the affinity between Tyler’s views and Mancur Olson’s argument that stable societies tend to accumulate distributional coalitions that slow down their capacity to adopt new technologies and reallocate resources. See: The Rise and Decline of Nations.

Early in the book Tyler suggests that “the growing success of the forces for stasis” are linked to complacency. That argument has most force it the final chapters of the book where he discusses politics.

Tyler makes the point that much of the U.S. federal government budget is locked in to spending programs that are politically untouchable. Political change occurs at the margin and is the result of complex battles among interest groups, political manoeuvring and use of public relations campaigns. The Trump administration is unlikely to change this situation much. The pre-allocation of tax revenues will ultimately become unsustainable:

“At some point this country will face an immediate crisis, and there won’t quite be the resources, or more fundamentally the flexibility to handle it”.

Tyler presents a view about the tendency of governments to take on more responsibilities than they can cope with effectively that is similar to the view I expressed in Chapter 8 of Free to Flourish. I argued that there is a growing gap between the expectations that many people have of what democratic governments can deliver and what they are capable of delivering.

However, Tyler seems to present a more optimistic view of the ability of western democracies to reform themselves rather than to collapse and to be replaced by authoritarian regimes. That is just my impression. I find it hard to point to particular passages that support that view. The scenario that Tyler presents of a possible future that would be more dynamic does not feature less dysfunctional government, although smaller government may be implied.

Although I'm not sure why, after reading the book I was left feeling hopeful that the cycle of political complacency has reached its peak and that, over the next few years, American politics might become less shrill and more focused on problem solving. Perhaps the actions of the Trump administration will further erode political complacency in ways that will lead to a public reaction favouring a more constrained role for government. So, democracy will probably survive in the U.S. I’m also reasonably confident that a fiscal crisis in Australia will eventually result in rule changes needed to make democracy sustainable in this country. I’m less complacent about the future of democracy in some of the countries of southern Europe. 

Postscript
Tyler Cowan has provided some grounds for optimism in a recent Cato article entitled "Between authoritarianism and human capital". An extract:

"So we’re going to see a kind of intellectual war, and possibly war in other, more violent forms too. That war, using that word in the broadest sense possible, will be between today’s amazing accumulated stock of human capital — and the emotional momentum behind authoritarianism, which is encouraged by the political fraying that stems from underlying fears of disruption.

Right now, I’d still put my money on the positive side of talent and human capital. But in recent times, I can’t say I’ve seen the odds moving in my favor."