The grand narrative
Introduction
Although I am not a trained historian it has become clear to me that my understanding of important economic events are shaped by an implicit historic narrative. This article is my attempt to articulate what I consider to be the broad contours of modern history , which serve as the foundations for my analysis.
Consider Ursula Kuczynski, pictured below, and subject of Ben MacIntyre’s entralling 2020 biography, ‘Agent Sonya’.
She has claim to warrant our attention for what she did, but I also note MacIntyre’s observation about what she experienced:
“she was ten years old when the Bolshevik Revolution took place, and eighty-two when the Berlin Wall came down. Her life spanned the whole of communism, from its tumultuous beginnings to its cataclysmic downfall” Macintyre, 2020, p.327
The critical events of the twentieth century were, of course, the First and Second World Wars. But if you take one step back to consider the ideological quakes and geopolitical trends that generate the conditions that incubate conflict, I think it is fair to say that the communist experiment book ends an important period of modern history. This justifies the post-communist transition as being an important focus for historic research, as well as a critical period to learn about comparative economic systems.
To take a further step back, however, brings into question the fermentation of Marxism-Leninism and the origins of the “neoliberal” revolution that came to such prominence in the collapse of the USSR. A historian would emphasise the underlying structural and socio-economic context and I think it is therefore fair, and clear, to identify three distinct eras. When I read Brad DeLong’s 2022 book, “Slouching towards Utopia”, I noticed a concerted effort to link together events into a grand narrative. Here, I try to do something similar.
Era 1: 1870–1973
As a consequence of the Industrial Revolution income per person increased dramatically in recent human history, and lift off became most visible circa 1870.
This period is what DeLong refers to as the “long twentieth century”:
“The “long twentieth century” started with the watershed-crossing events of around 1870… which ushered in changes that began to pull the world out of dire poverty that had been humanity’s lot for the previous ten thousand years” DeLong, 2022, p.1
In his analysis, this era is characterised by three things:
- The modern corporation
- The industrial research lab
- Globalization
These broadly capitalist and generally inclusive forces unleashed incredible economic growth, and although it often gets ignored or downplayed it stands as one of the greatest accomplishments in human history. Billions were lifted out of poverty and noticeably higher living standards, from one generation to the next, became an expectation.
Era 2: 1973–2016
Unprecedented economic growth came at a price, and we can consider inequality and environmental degradation to be the two main offshoots of this time of prosperity. But if it is common today to question whether we should shift our priorities to dealing with the downsides of growth, note that this was the choice that was taken in the 1970s.
“After 1973, in Europe and in the United States and in Japan, there was a very sharp slowdown in the rate of productivity and real income growth. Some of it was a consequence of the decision to shift from an economy that polluted more to an economy that attempted to begin the process of environmental cleanup.” DeLong, 2022, p. 431
We handed over the keys to progress to social democrats and they chose to prioritise inclusion and the environment at the expense of greater material progress. Where technologies existed that would give us the best of everything (e.g. nuclear power that is clean and growth enhancing) it was shunned.
The global economy stagnated.
I think it is a mistake to try to identify a single event in 1973 that explains why there was such a dramatic tailing off of economic growth, but the presentation below gathers many. Interestingly, 1974 saw the “Carnation Revolution” which was the precursor to the wave of peacefully democratic uprisings across Central and Eastern Europe.
I am not claiming that life became bad in this period. On the contrary, this is the tailend of the Industrial Revolution and the post Second World War generation enjoyed the benefits of peace and prosperity. Certainly by the time that the Vietnam War ended in 1975 conflicts eased and only the lingering shadow of the Cold War threatened US interests. This was a period where the innovation and exceptionalism that had been unleashed by a febrile combination of high military investment and entrepreneurial capitalism became increasingly manifested in mass consumer goods and greater leisure time.
The period between the collapse of the Soviet Union and 9–11 represented a remarkable decade of stability. Indeed, if we were to pinpoint the peak of human civilization it might possibly be 1996–1998. Certainly, for a teenage European these were times where life seemed very good and was getting better. I remember England hosting the European Championships in 1996 (and the St George’s cross being liberated from the far right to become a symbol of national pride) and Oasis at the height of their fame delivering their defining gig at Knebworth (I was at Wembley for the opening game, but missed out on tickets to Oasis.)
A successful England football team, the global prominence of BritPop and New Labour’s victory in 1997 all represented a period of hope and optimism. France winning the World Cup as host nation in 1998 marked this as being a wider phenomenon.
If one searches for contradictions (and when confronted with bold claims one probably should) there is an important counterexample: the former Yugoslavia. Indeed my narrative identifies Kosovo for being particularly important to understand. For now, however, we should acknowledge that Croatia gained independence in 1995 and reached the quarter finals of Euro ’96 as well as the semi final of France ’98. So if Balkan turmoil is the main argument against my thesis, Croatian glory works in favour.
Era 3: 2016-present
The global financial crisis is typically considered to be a seismic shock, and the point at which the great stagnation turned into something else. I am increasingly of the view that 2007 is not as pivotal as we thought at the time — low economic growth continued; central banks modified but did not fundamentally alter their operations; and politics didn’t change a great deal. One can point to important changes in social media algorithms, circa 2012, that weaponised attention and contributed to political polarisation. But if one is looking for a clear dividing point, it seems 2016 is an appropriate time in recent history: the Brexit referendum and the election of Donald Trump.
This constituted a “post truth” world that carted off technocrats and experts and is characterised by identity politics and tribalism. Amplified by the covid pandemic I would argue that we live in a “realigned” and post-ideological world. Traditional arguments between alternative economic systems seem less relevant now, but I am not sure of this is the case. I suspect that fundamental issues relating to political economy (which to me rests on a core normative attachment either to collectivism or individualism) continue. But it is hard to historicise the present, and although 2016 appears to be a better cut off to define an era than 2007, that remains to be seen. More time needs to pass.
When I look to the future, however, I think we need to distinguish between the forces of economic growth that we have previously experienced. Like DeLong I believe that the (largely British) Industrial Revolution of Era 1 and the (mostly) American exceptionalism of Era 2 are related. Their common theme is the “invention of innovation” and this rests on important institutional prerequisites, a conducive policy environment, and optimistic cultural attitudes. Efforts to create another industrial revolution are futile without having another culture of exceptionalism to drive that technological progress. Hence to obtain growth we need to think about progress.
Conclusion
I know that all aging men think that the best period of history just so happened to be when they were a teenager. It is easy to conflate the world around us with how we felt at the time. Indeed, that is why I have written this article — to confront my bias for interpreting world events through my own experience, and to acknowledge that just because Everton winning the FA Cup while I was on a school exchange to France made me very happy, it was not necessarily a reflection of wider global harmony.
But then again, maybe I was just very lucky to come of age when the world seemed a lot richer and safer than it does today. Maybe my generation exists in part because of those wider conditions. I am a consequence of well educated and globally mobile parents whose opportunities were a reflection of their times. So perhaps it is not narcissism so much as self-awareness to recognise the parallels between history and biography.
References
See DeLong, J.B., 2022, Slouching towards Utopia, Basic Books
