Economic progress

Almost every adult living today is aware of the phenomenon of economic progress. Few, however, seem to know where it comes from or what causes it. Conventional explanations on this subject trace the origin of economic progress back to innovations in technology. Technological innovations can be traced back to new ideas in the minds of their inventors. However, the origin of economic progress is not well known.

History and Economic Progress
Geography and History of Economic Progress

An examination of history shows that economic progress has occurred in the West, in areas settled by European Civilization. However, it has not occurred in areas outside the West except through Western contact. Consider the case of China. In the early 20th century, before it had much contact with the West, the condition and living standards of most Chinese peasants was not much different as it was 3000 years before. If China never had contact with the West, there is little evidence to suppose that the condition of these peasants would be any better 3000 years from now.

An examination of history also shows that economic progress has not always occurred in the West. Consider Western history from the rise of the Minoan Empire around 1500 B.C. to the fall of the Western Roman Empire around 500 A.D. During this 2000 year period economic rises and declines seemed to have occurred with the rise and fall of empires, but overall there was little evidence of sustained economic progress. In fact, a case can be made for an overall economic decline because, for example, the plumbing technology of the Minoan Empire was in many ways superior to that of the Western Roman Empire and was not surpassed in the West until the 19th century.

Economic Progress Visible Since 500 A.D.

By contrast, consider the period of Western history from 500 A.D. to the present. During this shorter 1500-year period unprecedented economic advances occurred. “From the sixth century on, we can trace a slowly expanding technology. The water wheel comes in the sixth century, the stirrup in the eighth, the horse collar and rudder in the ninth, the windmill in the twelfth, and so on. For Europe, the invention of printing in the fifteenth century represents an irreversible take-off, because from this point on the dissemination of information increased with great rapidity. The seventeenth century saw the beginning of science, the eighteenth an acceleration of technological change so great that it has been called, perhaps rather misleadingly, the Industrial Revolution…”

History Before and After Economic Progress

From the preceding one can divide the Western history into two parts: an early history of events occurring before 500 A.D., a history that is not characterized by economic progress, and a later history of events occurring after 500 A.D., a history that seems driven by economic progress. In observing the distinction, one can focus on the cause of economic progress. Why was the West progressing after 500 A.D., but not before? Why was it that non-Western areas never progressed, except in modern times after they established contact with the West?

Christian Theory of Economic Progress

Christianity began spreading around 30 A.D, but it took centuries to become the predominant religion of Europe. For a time the government of the Roman Empire tried to suppress it. However, by 500 A.D., it had spread to most of Europe. It did not spread to Scandinavia until the years 800 to 1200 A.D.

Christianity shared some beliefs with its predecessor religion, Judaism. In that respect, it is similar to all other religions, in that one can consider it a set of beliefs. However, it also offered salvation to the individual. By accepting the gift of salvation from Jesus Christ, an individual can have eternal life. For an individual this eternal life means that he will go to heaven when he dies.

However, this eternal life also has a social impact in the here and now. The eternal life of an individual will lead the betterment of the society in which he lives. Such a betterment of society by one individual may be difficult to measure. However, when a society like Europe, has a large number of Christians who possess eternal life, the betterment becomes obvious. This betterment is manifested in economic progress. The eternal life of individuals leads to the eternal life of the economy, one that will progress forever and ever, assuming that there are individuals possessing eternal life that are present within it.

Nations at the Forefront of Economic Progress

In European history, one can detect differences in economic progress between nations. During the 1400s and early 1500s, Mediterranean nations were to be at the forefront of economic progress. Portugal began exploring the west coast of Africa. Gil Eannes rounded the previously impassable Cape Bojador in 1434. Bartholomew Diaz rounded the southern tip of Africa in 1488. Vasco da Gama reached India in 1497, initiating the first direct European trade with Asia.

Spain discovered the Americas in 1492 and the Spanish were soon inflating the European gold supply with numerous tons of gold that they found in the Aztec and Inca Empires. Ferdinand Magellan sailed around the southern tip of South America and across the Pacific Ocean to the East Indies in 1519-21. Magellan died, but his crew completed a circumnavigation of the world by sailing around Africa and back to Spain in 1522. In the late 1400s, the city-states of northern Italy began a high period of learning, culture, and art, known as the Renaissance.

However, by the late 1500s, the forefront of economic progress shifted northward to England and the northern German states. Such a shift appeared especially true after the English defeated an attacking Spanish Armada in 1588. These northern areas remained at the forefront during the Industrial Revolution that occurred during the 1700s and 1800s.

By 1900, economic progress was beginning to integrate the entire world economy, but economic power remained divided between two northern centers of progress, England and Germany. Both centers were so important, that the two wars between them in the 1900s pitted one half of the world economy with the other half. These wars involved so many economic allies on both sides that they were called World Wars. During the Second World War, England had some superior technologies like radar, while Germany held other superior technologies such as rockets and jet aircraft.

Following World War II, the centers of economic power or at least polarization shifted to the United States and the Soviet Union. The Soviet Union was not particularly advanced economically, but was the center of socialist ideology, and it did have the resources to invest in key military technologies. It was the first nation to launch satellites and men into outer space. The United States by contrast was the center of capitalist ideology and was a key contributor to economic progress. The polarization between the two nations and their allies was reflected in the Cold War. However, with the breakup of the Soviet Union in 1989, the Cold War ended, making the integration of the world economy essentially complete.

Opinions about Economic Progress
Empiricism

The empirical observation of economic progress in the modern West encourages many to apply the concept universally to all cultures, and to all times, and even to non-humans. Humans are alleged to have progressed in a straight line from cave men to modern man. The publication of Charles Darwin's, The Origin of Species, led to the belief of evolution. Evolution teaches that over time life forms inexorably progress by means of natural selection to more advanced life forms. Implicit in the concept of evolution is the idea of progress and the creation of wealth in the form of more advanced animal bodies.

Without empirical support, Evolution would not gain much social support. Nineteenth century Chinese peasants would regard the theory as delusional, as they would not grasp the concept of progress.

Rationalism

In contrast to the empiricist belief that economic progress occurs universally throughout history is the rationalist belief that doubts whether economic progress occurs or will occur in the future. A leading example of rationalist belief is the environmental movement.

Environmentalists believe that there exists physical limits to economic growth and that society should plan to live within these limits. They point out that reserves of physical resources like crude oil and various metals are limited and that society faces hard times when such resources run out. In addition, environmentalists argue the threat of global warming and believe that society should cut back its economic activity in order to avoid the consequences posed by this threat.

In indicating various limits to growth, environmentalists do not believe that innovations created by economic progress will overcome such limits. They see no cause for economic progress and that therefore believe economic progress cannot be occurring.

One American environmentalist, Jeremy Rifkin, argues this way and he points out in his book Entropy: A New World View the ancient peoples did not think at all in terms of economic progress, but felt that society had retrogressed from a golden age of the past.

Geographical Distribution of Opinion

In using environmentalism as an indicator of rationalism, one can observe that rationalism is more prevalent outside the United States as there is no popular support for environmental "Green Parties" in American politics. In regard to global warming, the United States and Australia are the major nations that has not signed the International Kyoto Accord on Global Warming. One would expect environmentalism and rationalism to be more prevalent in nations that experience little or no direct economic progress, and facts confirm that expectation.

Alternate Theories of Economic Progress
Max Weber's Protestant Work Ethic

As mentioned above, the writer Max Weber gives an alternate theory of economic progress. His theory is notable in that it focuses on a religious distinction between geographical areas where economic progress is evident versus areas where such progress is lacking. However, he attributes a work ethic as the cause of economic progress. A society that works 50 percent more will presumably have a 50 percent increase in living standards, although they will also have less free time to enjoy such standards. It is not clear how such a work ethic would cause continuous economic progress.

Ayn Rand's "Men of the Mind"

Philosopher Ayn Rand presents another theory of economic progress in her best-selling novel, Atlas Shrugged. The 1957 novel opens in a deteriorating America that shows signs of economic decline. Within this America are a few individuals of competence like railroad manager Dagny Taggart, and steel magnate Hank Reardon. Throughout the novel Taggart and Reardon attempt to expand their companies by doing business with other competent industrialists.

Usually Taggart and Reardon succeed for a short while, but then the competent industrialist with whom they do business mysteriously disappears. Eventually the two find out that another individual, John Galt, is organizing a strike and withdrawing all the competent people from the world. After some convincing, the two decide to join the strike, and retreat with Galt to a utopia of competent people that is hidden in a valley inside the Rocky Mountains. As the two are retreating, incompetence is running amuck and America is collapsing into a pre-industrial chaos.

Implicit in Atlas Shrugged is the theory that particularly competent individuals create economic progress. Rand calls these individuals, the "men of the mind." While Rand's theory makes superficial sense in that knowledge and competence invariably drive economic progress, she does not explain what causes competent people to arise.

Besides Atlas Shrugged, Rand has also written, Anthem, a short novel about a dystopia of the future in which society has economically regressed from the present day. Ms. Rand is unusual in that she cannot be characterized as an empiricist because she does not believe that economic progress is automatic and she is clearly not a rationalist as she has written The New Left: The Anti-Industrial Revolution, a book that is highly critical of the environmental movement. Rand happened to grow up in economically stagnant Russia before moving to the United States, so she knows that progress is not automatic. Despite being an atheist, she is appreciative of economic progress and few individuals glorify economic progress as much as she does.

Alleged Western Economic Progress in Pre-Christian Times

There was a significant economic progress in the Bronze Age, but between the 12th and 8th centuries BC there occurred significant decline. Maritime trade collapsed during this period and the average house size declined from 70 square meters in Minoan Greece to 55 square meters in eighth century Greece. But with the rise of Ancient Greece occurred an unprecedented economic progress, the average house size reached about 230 square meters by the fourth century BC and average lifetimes increased about 7 years, from 30 to 37 years . Economic progress continued in the next centuries and by the 1st century BC, the ancient Mediterranean world reached its economic peak. During this century 185 shipwrecks were found in the Mediterranean sea, compared to only 20 for the 6th century BC. However economic growth stopped during the Early Roman Empire, and by the late empire the standard of living had returned to early Iron Age standards.

Alleged Chinese Economic Progress and Population Growth

In the early 20th century China was able to support more than an order of magnitude higher population than 3000 years before, which became only possible due to an enormous number of important technological innovations introduced in this country during these years. Note also that, e.g., during the Sung period (especially in the 11th century) the twofold population increase took place against the background of the growing per capita production, which was achieved due to the so called "Sung Green Revolution"; hence, we are confronting here a clear-cut case of pre-Modern economic progress outside Europe (see, for example, Chapter 2 of the [http://urss.ru/cgi-bin/db.pl?cp&pageBook&id37484&langen&blangen&list14 Introduction to Social Macrodynamics]by Andrey Korotayev et al.]).

Kenneth Boulding, The Meaning of the 20th Century: The Great Transition. p. 6 (New York, Harper & Row, 1964.)

Max Weber, The Protestant Ethic and the Spirit of Capitalism. (New York, Scribner’s Press, 1958)

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