For most of human history, we were caught in a stagnation trap. Improvements in technology and productivity led to population increases, and all those new people gobbled up the surplus, so that overall living standards always reverted to the historical average, barely above subsistence. Thomas Malthus, the unfairly maligned English clergyman, assumed this would always be the case. And yet, at least in the fortunate global north, things have been very different for the last century or so. How come?
This is the question the economist Oded Galor devised his rather grandiosely named “Unified Growth Theory” to address. (He uses lots of metaphors from physics, including “phase transition”, “economic black hole”, “gravitational forces”, and the like.) His answer, briefly, is that we sprang free of the Malthusian trap because of the effect the Industrial Revolution had on fertility rates. Rapid technological change placed a higher value on education, and families invested more in children’s schooling, which meant they could not afford to have so many children as before. So productivity gains were not swallowed up by burgeoning population. This virtuous cycle has persisted until the present, and might even, Galor suggests with unfashionable optimism, help us combine continued growth in living standards with reductions in carbon emissions.
The outline of this theory in the first half of the book is enjoyable and intriguing, if somewhat schematic in its picture of quasi-physical “fundamental forces” or “great cogs” operating over millennia of human history. The second half tackles what economists call the great divergence: why, given the above story, do we see such extreme global inequalities now? Here we enjoy a brief interlude in which the author gives some causal weight to ideas. Different legal systems and political institutions meant that some countries were in a position to profit more than others – for example, England’s 1689 bill of rights, its financial system, and the relative weakness of its artisan guilds (so that they could not block threatening inventions), are all argued to have given it a head start. Galor also follows Weber in suggesting that Protestantism was crucial to the development of modern capitalism, and that the most important invention of the Enlightenment was the idea of progress itself.
So far, so plausible. But, like a deep-time materialist, Galor is always looking to reduce the superstructure of ideas to something more tangible. Climate and geography, then, caused underlying differences in political systems: in places where native crops were suited to “large plantations”, such as Central America and the Caribbean, people were incentivised, so he argues, to adopt “centralised land ownership, which led to unequal wealth distribution, coerced labour and even slavery”. We may be thankful, then, for drizzly Europe.
It is tempting for a “unified theory” of the “journey of humanity” to try to provide the key to all mythologies, and the book becomes more speculative and dubious, suggesting that the economic performance of entire modern societies can be explained by a kind of cultural memory of their ancestors’ interactions with one kind of crop or animal versus another. Galor also proposes that languages with politeness distinctions (tu and vous in French or du and Sie in German) have thereby enshrined more rigid hierarchies, and so harmed individual business enterprise. This reminded me pleasantly of the remark attributed to George W Bush: “The problem with the French is that they have no word for entrepreneur.” The book’s desire to uncover the “great cogs” of history devolves into a kind of impersonal conspiracy thinking.
The penultimate chapter, more dangerously, claims to explain the differences in economic development in the modern world through “population diversity”, including genetic and cultural diversity. Galor argues that ethnic diversity has had conflicting effects: on the one hand it “has diminished interpersonal trust, eroded social cohesion, increased the incidence of civil conflicts, and introduced inefficiencies in the provision of public goods”. On the other hand it has “fostered economic development by widening the spectrum of individual traits, such as skills and approaches to problem-solving”. If this is so, then perhaps, a bean counter might dream, there is an amount of diversity that is just right. Galor finds that there is just such a “sweet spot”, and it can be found in a Goldilocks zone – neither too near nor too far, in terms of migratory distance, from our ancestors’ first journey out of Africa – where the “diversity” of the population is allegedly ideal for creating an economy such as the Netherlands’ or Malaysia’s rather than Ethiopia’s or Bolivia’s.
Here we encounter the limitations inherent in the publishing genre of “successful thinker lays out his pet theory as if it were the uncontroversial truth”. The original version of this argument appeared in a 2013 paper co-written with Quamrul Ashraf (“The ‘Out of Africa’ Hypothesis, Human Genetic Diversity, and Comparative Economic Development”), and attracted a highly critical public response from a number of biologists and anthropologists. “The argument is fundamentally flawed by assuming that there is a causal relationship between genetic diversity and complex behaviors such as innovation and distrust,” they observed; indeed, such “haphazard methods and erroneous assumptions of statistical independence could equally find a genetic cause for the use of chopsticks”. They warned, too: “The suggestion that an ideal level of genetic variation could foster economic growth and could even be engineered has the potential to be misused with frightening consequences to justify indefensible practices such as ethnic cleansing or genocide.” Galor responded at the time: “The entire criticism is based on a gross misinterpretation of our work and, in some respects, a superficial understanding of the empirical techniques employed.”
He ends his recapitulation of the same argument here by asserting that “geographical characteristics and population diversity” are “predominantly the deepest factors behind global inequalities”, which sounds rather like we can’t do anything about them. Happily, at least, he does suggest that a country such as Ethiopia, which in his view is too diverse, might be helped by “policies that enabled diverse societies to achieve greater social cohesion”. Meanwhile, Bolivia, which is allegedly too homogeneous, could achieve better economic growth by being more diverse and so benefiting from more “intellectual cross-pollination”. And so, though it has often seemed as if we can do little about his hidden “great cogs” and “fundamental triggers”, it appears cheeringly in the end that politics and ideas might at least sometimes trump their effects on the story of how we got here and where we might go next.
• The Journey of Humanity: The Origins of Wealth and Inequality is published by Bodley Head (£20). To support the Guardian and Observer, order your copy at guardianbookshop.com. Delivery charges may apply.
