“The suddenness of the Great Enrichment is nuts,” writes Will Wilkinson at the Niskanen Center. “Graphs like this one actually conceal how nuts it is. Imagine a linear horizontal axis that is nothing but a flat line hovering above zero for, like, a mile. And then, about a second ago in geological time, wham! And here you are, probably wearing pants, reading about it on a glowing screen. Nuts is what it is.”
What caused it?
Joel Mokyr says it was the development of science and technology. Douglass North and his followers, such as Daron Acemoglu and James Robinson, say it was a matter of stumbling into the right political and economic “institutions”—of getting the “rules of the game” right. Acemoglu and Robinson say institutions need to be “inclusive” rather than “extractive.” They become more inclusive when ruling elites take a little pressure off the boot they’ve got on people’s backs (which they do mainly when cornered by effective collective action from below) and allow economic and political rights to expand. Deirdre McCloskey says the Great Enrichment came about from a shift in beliefs and moral norms that finally lent dignity and esteem to the commercial classes, their “bourgeois” virtues, and the tasks of trade and betterment. This revaluation of values was the advent of what has come to be known as “liberalism.”
Each of these views is part of the truth. The debate is mainly a matter of how beliefs and norms, institutions and incentives, scientific knowledge and technical innovation all fit together. Which are the causes and which are the effects? There’s no way to adequately summarize the involuted nuance of the debate. But it’s not wrong to sum it up bluntly like this: humans rather suddenly got immensely better at cooperating and now a lot of us are really rich.
But you know what’s also nutty?
What’s nuts is that nobody kicks off a discussion of justice, distributive or social, with the fact of the Great Enrichment. Because the upshot of our best accounts of the most important thing that has ever happened to the human race seems to be that equalizing the distribution of rights and liberties, powers and prerogatives, respect and esteem led to an increase in the scope and productivity of cooperation, generating hugely enriching surpluses.
And these gains spurred further demands for and advances in inclusion and dignity—that is to say advances in giving people what they’re morally due, in virtue of being people—which led in turn to broader, more intensive, more creative cooperation, producing yet more enrichment, and so on. There appears to be a very happy relationship of mutual reinforcement between what is very naturally called “social justice” and the sort of enrichment that is known to produce longer, healthier, happier, human lives.
How come? Why doesn’t this mass improvement in the lives of millions get mentioned much?
The 20th century socialist-leaning left misdiagnosed the sources of the economic growth. The Great Enrichment was rooted in the exploitation of labor and the depredations of colonialism, while ongoing post-capitalist production was largely a matter of technology and rational state management. Poverty is toxic and the effects of widespread wealth are beneficial. But wealth in excess of potential-realizing sufficiency isn’t improving. Stable equality is improving, and brings out the best in us. Continuously rising market-led prosperity, on the other hand, encourages uncivic avidity and generates inequalities that undermine the amiable stability of egalitarian social justice.
The left-leaning 20th century literature on the distributive aspects of social justice as often as not treated wealth like manna from heaven. It’s as if the astonishing bounty of the Great Enrichment was something we’d just stumbled upon, like a cave full of naturally-occurring, neatly-stacked gold ingots in a newly-discovered cave beneath the village square. How do we divide up the gold among the villagers? Equal shares seems fair!
Or else wealth was something workers produced automatically by working only to have it stolen by the idle rich, who control the state’s goons. Or wealth was something that mechanical and social engineers could get together to produce with the right combination of workers and machines. Since it was no problem whatsoever producing more than enough for everybody (our best men are on top of it!), there was no good reason for anybody to have more than everybody else.
Wilkinson takes a swipe at both Rawlsian leftists and Hayekian libertarians, but especially the latter for their rejection of the concept of social justice. He concludes,
[M]any advocates of economic liberty…reflexively badmouth the welfare state with little regard for the possibility that the welfare state is an efficiency-enhancing institution that helps maintain popular support for relatively free markets by ensuring they more or less benefit everyone. Meanwhile, people who like social insurance, and worry about bad luck and the human costs of capitalist creative destruction—that is to say, mostpeople—turn away in contempt or bemusement from what’s advertised to them as the politics of freedom.
More importantly, and more disastrously, rejecting the very idea of social justice, letting it harden into principle, hobbled classical liberalism’s ability to make the argument it has always been making, in less attractive terms, all along: that social justice is, first and foremost, a supply-side concept; that social justice is about the moral equality, respect, and rights that call forth cooperation and foster the creativity and cultivation of potential that generates ever larger surpluses, which, once they’ve been created, we can worry about divvying up; that social justice is a cause and effect of the Great Enrichment; that increasing social justice will make us greater and more greatly enriched.
It’s a potent and beguiling argument. It is an important argument. I’m convinced that it is, in broad strokes, a sound argument. The failure of our forebears to make it shouldn’t stop us from making it now.
I think he’s on to something.