Like The Hub?
Join our community.
Join

Patrick Luciani: Is the age of prosperity over?

Commentary

Review of Slouching Towards Utopia: An Economic History of the Twentieth Century
Author: J. Bradford DeLong
Publisher: Basic Books, 2022

J. Bradford DeLong’s long-awaited book Slouching Towards Utopia is finally here, but despite its door-stopping size of 180,000 words, it’s surprisingly easy and breezy to read. Delong’s politics are unabashedly left-wing, having served in the Clinton administration, and has taught economics at the University of California at Berkeley since 1993. Professor DeLong is a polymath who knows much about economics, history, and philosophy, and here his talents are on full display. But talent often comes with a healthy ego. He “flambeed no fewer than 11 people as the stupidest man alive,” as one reviewer described. This includes his famous feud with the great economic historian Niall Ferguson. DeLong gained a loyal following from his endless blogging. That may explain why it took almost 30 years to finish his opus magnum

But finish it, he did, and it’s a fantastic read, if not a bit weird in places with an unapologetic leftist bias. (No surprise here, given that DeLong was inspired by socialist historian Eric Hobsbawm’s classic book on the twentieth century entitled The Age of Extreme, which goes from 1914 to the fall of the Soviet Union in 1991.) In no other book on economic history would you find the poetry of Rudyard Kipling or the colourful career of Herbert Hoover, a description of the neurosis of Nikola Tesla or witty allusions to Greek mythology. And here’s the best part: you don’t have to be an economist or historian to enjoy this book or reach for the smelling salts to revive you from boredom. 

His “grand narrative” is that the long 20th century started in 1870 and lasted until 2010. The year 1870 stands out as the moment in time when production and productivity were high enough to begin raising living standards. Until then, Thomas Malthus’s “devil” was at work where population growth subsumed any improvement in technology growth. 

It took almost 100 years from the start of the Industrial Revolution to see the benefits of an economic miracle that finally got off the ground, dragging part of the world into the modern age. It was a slight shift at first, but the momentum of technological change gradually transformed life on earth freeing humanity from hand-to-mouth misery. Before 1870, 70 percent of humanity lived on a standard of living of $3 a day, a level of income that hadn’t changed for thousands of years, to a daily average of $15 in poorer countries and $130 in richer ones. These numbers don’t consider the vast improvement in the quality of goods to the point that even the poor have access to cell phones and health care. Nobel economist Angus Deaton said, “children in sub-Saharan Africa are more likely to survive to age five than English children born in 1918.” The poor may not always be with us. 

DeLong argues that the miracle behind economic growth was the happy coincidence of three factors: globalization, the invention of the large modern corporation, and the industrial laboratory. He admits these weren’t the only factors, but he identifies them as the most important in pushing us toward utopia. It’s a puzzle why he left out property rights or the quality of public institutions and, perhaps most important, the rise of liberalism. 

According to economic historian Deirdre McCloskey, the gift of equality under British law, where everyone had the opportunity (and right) to “have a go”, improved the machinery of production and led to a better life. Free markets don’t guarantee success, but they allow anyone to get into the game for ill or good. With that freedom, we find that talent isn’t restricted to any class, gender, or race. 

Throughout the book there are surprises—both good and bad. Despite DeLong’s respect for leftist politics and evident admiration for Karl Marx, he admits Marx was wrong on bourgeois capitalism. “It is simply not the case that market economies produce ever-rising inequality and ever-increasing immiseration.” (As an aside, DeLong hardly uses the word “capitalism” and prefers the term “market economy”, which is a plus in his favour.) On the negative side, DeLong was wrong in his spurious attack on the political scientist Charles Murry’s 1984 ground-breaking book Losing Ground. DeLong blames racism for the plight of the black American family. At the same time, Murray, along with Senator Daniel Patrick Moynihan, showed that the cause of poor black performance was disastrous public policy. 

So why are we now slouching to utopia? His answer is a world dominated by too much market economy or what he calls the “Mammon of Unrighteousness.” Here DeLong splits the world into the pro-free market philosophy of economist and Nobel Prize winner Friedrich von Hayek and the Hungarian-Canadian critic of laissez-faire capitalism Karl Polanyi. Slouching Towards Utopia highlights the push and pull of ideas of both thinkers, coming down on the side of Polanyi’s view of the world, while Hayek is exposed to DeLong’s rough treatment. 

Skipping over 140 years, we come to 2010 and the decline of prosperity’s arc. Why 2010? The author has no specific answer or dramatic event that brought the miracle of growth to an end. But he does make some guesses, such as the loss of America’s hegemony and exceptionalism, the misadventures of endless wars in the Middle East after 9/11, and the financial meltdown of 2008. The economic pie was getting smaller as the productivity engine sputtered to a crawl. We now have a smaller economic pie—divided to benefit the plutocrats—thus bringing “the long twentieth century’s story to a close.”

One could have ended the history of the twentieth century with the same grim news in the late 70s with stagflation and high levels of unemployment. Or the 80s with interest rates over 20 percent while the economy was ravaged by high inflation and the stock market crash of 1987. How about the collapse of the dot coms in the late 90s? 

Did DeLong jump the gun on the end of growth? After two full years of economic shutdown from COVID, Western technology, in record time, came up with an effective vaccine while AI and biomedical engineering are just getting started with promises of extraordinary breakthroughs. DeLong probably would agree that the endpoint was arbitrary and that economists make lousy prognosticators, especially about the future. 

Leaving aside Professor DeLong’s sympathy for more government, it would be a shame to miss out on a great read just because of one’s political differences. 

Richard Shimooka: The neglect of Canada’s armed forces is leaving us all defenceless

Commentary

On Thursday, the Chief of the Defence Staff (CDS), General Wayne Eyre, made a tacit acknowledgment of what most people in the Canadian Armed Forces (CAF) have long known—the military is in serious trouble and unable to sustain its current commitments in the present state. While it is easy enough to point at the depleted state of its core capabilities like aircraft and ships, the evidence of the crisis is evident everywhere. Just last week it was revealed that 4500 members and their families are on a waitlist for base housing, a basic necessity for many personnel’s lives. 

In most other countries, this would have been a major scandal with political leaders resigning. Yet it barely made a ripple in the press. While CDS Eyre has outlined a plan to fix the situation, there are serious doubts that he will be able to achieve this outcome, partly because the problem is so severe, and partly because he does not have the necessary tools to do so.

Many factors are behind how the CAF reached this inflection point. While COVID has been a major issue for retention, many of these trends far predate the pandemic. A key component is related to funding. Simply too little money has been spent on the department since the end of the Cold War, and it has now caught up to the military.

Recruitment is one such area and a major source of the personnel problems the military currently faces. Moreover, the department’s procedures and functions have become particularly problematic and had a detrimental impact on the lives of its soldiers. This is not a new challenge, as finding the balance to sustain the CAF during peacetime and war has been fought since the 1950s. 

However, many soldiers feel that their administration has become turgid and unresponsive to their needs—getting basic paperwork through can be difficult at times, housing is nearly impossible to obtain, and the cost of relocation, an unfortunate reality for many members, is far too high. Furthermore many aspects of cultural reform have been poorly implemented, despite the critical nature of this effort considering the systemic issues surrounding sexual harassment. But it has alienated members and risks further damaging already sagging morale. Large segments of the personnel are disenchanted and have become unwilling to continue in their roles. They simply cannot continue to sacrifice their own well-being or that of their families and have instead “voted with their feet” and left the forces.  

Particularly problematic is the capital base of the armed forces, from physical facilities to the actual planes, ships, vehicles, and the like. Everywhere one looks, the CAF is crumbling due to significant underinvestment. Moreover, the basic tools that soldiers need to conduct their mission are simply falling apart. 

For example, the Royal Canadian Navy’s frigates—12 vessels that constitute the vast majority of the navy’s ability to protect the country—are in a dilapidated state. The fleet is now roughly over twenty-five years old and starting to show its age after years of hard deployments worldwide. Seven of the ships are currently in yards undergoing refits or repairs, with two on, which means fewer deployments available for crews. Unable to serve on their assigned systems for too long, many sailors become disillusioned and leave the service. It’s a problem experienced by many within the CAF and not just limited to the Navy. 

While some individuals see too few deployments, others are often over-committed. Due to undermanning, a small number of key specialists are utilized unsustainably. Some individuals spend six or more months away from home, only to be sent away for another deployment six months later. In some of these roles, like aircraft maintainers or sensor technicians, undermanning has reached 50 percent of the authorized strength. These specialists burn out and leave the service, leaving fewer individuals to shoulder the burden and exacerbating the “death spiral.” Eventually, there will be nobody available to man these critical positions.  

Political representatives continually claim how they support the forces and point to policies and programs that purport to show just that. But this cannot disguise the plain reality that faces CAF members every day. The 2017 white paper Strong, Secure and Engaged was supposed to remedy these issues—yet the situation is fundamentally worse now than before. Money has not materialized, and even the recent announcement of a $5 billion infusion over the next six years only represents a two percent increase in the force’s budget a year. None of it is earmarked for areas that will improve serving members’ situations. Personnel are simply disenchanted by the whole situation, feeling that the government does not truly care about their institution. 

This is not the first instance of a similar crisis in living memory, however. In the mid-1990s, the CAF faced similar organizational pressures, albeit for different reasons. It was undergoing a drawdown from the end of the Cold War, even as it was undertaking unsustainable missions simultaneously in places like the former Yugoslavia, Rwanda, and Haiti. The National Defence leadership attempted to implement an operational pause in 1996. Despite their best efforts, the military was still sent out on additional missions, such as Canada’s support of the Stabilization Force in Bosnia and Herzegovina. It was only in the 2000s that the situation was temporarily stabilized, thanks to a major infusion of funding and support midway through the decade. 

A similar situation may negate General Eyre’s plans. Given the ongoing war in Ukraine and growing tensions in the Western Pacific around Taiwan, it’s easy to see a situation where the CAF may be called upon to send more troops into the world. This week it announced the deployment of 40 combat engineers to Poland in order to train Ukrainian soldiers, and it is easy to envision more soldiers being deployed in the future.

Simply put, there are no easy answers to this problem. What is needed, however, is for the government to provide strong leadership in order to fix this situation. Unfortunately, given this government’s seven-year track record on the defence file, this seems unlikely to happen. Actually reconstituting the military will be a costly enterprise, given the perilous state of the CAF. Moreover, rather than proscribing solutions that are completely out of step with the military culture, any reforms must focus on service-members needs to deal with them effectively. Pouring cash into this existing system will be highly inefficient and may even be counterproductive in the end. 

This all suggests that the CAF, and the government writ large, may require a more fundamental change to how foreign policy is guided, administered, and funded. The orthodoxy of today is clearly not working, and unless Canada makes a major change, the current situation will only worsen—to the point where we may become truly defenceless. And that is not in anyone’s interest.