Wednesday 24 October 2012

The Industrial Revolution and long-term economic growth was due to Creative Destruction, and not much else...


My opinion is hardening that it is the mechanism of Creative Destruction, and not much else, which underlies the long terms economic growth of the past couple of hundred years (until the past couple of decades).

And that Creative Destruction almost always depends upon specific human geniuses making qualitative breakthroughs.

(The breakthroughs ("creative") wipe-out the previous system ("destruction") - and that is how productivity increases.) 

And that, therefore, when there are not enough human geniuses working in the necessary areas, then economic growth stops and reverses (due to the intrinsic tendency for parasitic economic activity).


For a few hundred years until the mid-twentieth century, there was an unprecedented concentration of geniuses in Europe and Britain (and their diaspora), generating an unprecedented frequency of breakthroughs in domains relevant to economic activity (production, trade and distribution of goods) - so that for a while economic growth outran the rapid and increasingly-rapid growth of parasitic activity (mostly in the form of bureaucracy) and standard of living per capita went up and up.

But that now the number of relevant geniuses has dwindled, the frequency of relevant breakthroughs has slowed to almost nothing; but the growth in economically parasitic activity has continued unabated indeed ideologically encouraged; thus there will be a crash, a collapse, a massive readjustment; and a return to (necessarily smaller scale, more-autonomous, less-developed, less-populous) zero growth agrarian societies.


I don't think anything can be done to stop this happening - although it could be delayed rather than (as at present) accelerated.

Much could be done to help - mostly of a negative kind. For example ceasing actively to subvert and destroy the family and civil society (all institutional arrangements between the family and the state).

But the main decision to be made is to decide what kind of zero growth agrarian society we hope will emerge from collapse.


The post-collapse society will be religious, because all such societies are religious, and there are two contenders able and willing to do the job.

That is a stark and simple choice, a forced-choice+; and it will be made by each individual - willy nilly, like it or not, no opt-outs.

(Forget that weird and unnatural historical mutant atheism; forget other religions; forget new religions: two contenders only. The relevance of the other options will be in choosing alliances; that is, which of the two main contenders they support.)

Then come the implications of that choice.


+ The forced choice, if there is indeed any choice, is not about belief and certainly not about devout belief; but about which type of religious rulership to strive for, to live-in. 



AlexT said...

Time to buy some farmland! Do you think that the collapse will result in technology free subsistence agriculture, or will some technologies survive, and if so which ones?

Bruce Charlton said...

@AT - The crucial thing is that new breakthroughs technologies are not invented quickly enough to outrun population growth - it does not mean that there will not be the occasional economic breakthrough. But these would merely lead to increased population density and a lower standard of living in the long run (see A Farewell to Alms by Gregory Clark).

Andrew said...

It is interesting to witness the general consensus surrounding this topic from many highly intelligent people. This sentiment existed before 2008, but I think the economic emergencies accelerated both the corruption and general interest in discovering the nature of the beast.

Droughts and food riots are already leading to regime changes. We don't even have the necessary technology to maintain the existing population. It is worrying to consider the intense tragedy that could occur as soon as 2046 with a projected 9 billion.

While I also hope for a slow decline, we seem to be accelerating our pace towards a cliff. All calls for moderation are ignored or only paid lip service.