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Sylvia Nasar’s ‘Grand Pursuit’BY: Tom Purdom 01.24.2012
Why are we so much better off materially than our ancestors? The author of A Beautiful Mind tells the story of the economists who wrestled with the process that liberated humankind from “the nightmare of the past.”
Grand Pursuit: The Story of Economic Genius. By Sylvia Nasar. Simon and Schuster, 2011. 576 pages; $35. www.amazon.com.
The liberation of the 90 per centTOM PURDOM
Isaac Asimov once heard someone say they wished they could have lived back in the wonderful days when servants cost only $15 a month.
“It would have been terrible,” Asimov replied. “We would have been the servants.”
It’s a truth that’s easy to forget when you watch Masterpiece Theater or read the contemporary fantasy novels set in pseudo-medieval never-never lands.
Compare the number of servants, peasants and laborers with the number of aristocrats who occupy the front of the stage. Do you really think, given those odds, that you would have been an embattled prince or princess destined to set the world aright with your magic sword?
Sylvia Nasar, the author of A Beautiful Mind, begins her highly readable foray into economic history with a portrait of the anonymous millions who supported the society depicted in Jane Austen’s novels. Austen and her family weren’t rich, Nasar notes, but they (and the characters in her books) belonged to the upper 5% of her time.
One room, no medical care
The typical Englishman, Sylvia Nasar writes, was a farm laborer who lived, with his family, in a cottage with one dark room heated by a single cooking fire. He owned one set of clothing, didn’t travel, received no medical care, lived almost exclusively on bread or mush made from wheat and barley, enjoyed no recreations beyond “sex and poaching,” and was probably illiterate.
He was poor— not because the rich exploited him, but because he lived in a poor society. If all of England’s wealth had been evenly distributed, everyone would still have been poor by our standards.
Nasar’s subject is the history of an idea— “the notion that the nine parts of mankind could free itself from its age-old fate.” The heart of that idea is the concept of economic growth: the steady rise in productivity per labor hour that has averaged one or two per cent per year since the late 18th Century.
At those rates, productivity doubles about once every 50 years. Every half-century, we produce twice as much per worker, creating economies that deliver the cornucopia of goods and services that most modern people take for granted.
Some of this increase in productivity can be credited to technology, but technological development is only one aspect of a larger process. As Nasar argues, other societies developed ideas that could have led to steam engines and electrical generators. The critical development was a system that encouraged people who turned ideas into practical applications.
This process has gone global in the last few decades. Countries like South Korea, Singapore and China have achieved growth rates that double their standard of living every ten years. They have exploited technologies that had already been developed in the West, but public policy has played a major role too: Their leaders have placed economic growth at the center of their national goals.
Marshall was an Oxford mathematician when he decided to devote his life to economics. But he had nothing in common with the economists who base their theories on complicated mathematical models without bothering to observe the actions of real people. In the last quarter of the 19th Century, Marshall visited hundreds of factories and talked to management and workers in a tenacious campaign to find out what was really going on.
He concluded that managers were constantly making improvements in efficiency, under the relentless pressure of competition, and that this steady increase in efficiency led to lower prices and higher wages for the workers. Marshall thought of himself as a socialist, but he placed the business firm at the center of the drive for better living conditions.
Nasar’s narrative includes portraits of personal matters, like Marshall’s relationship with his wife, and dramatic scenes like the moment in 1919 when the young John Maynard Keynes learned of the disaster of the Versailles Treaty. But the most moving aspect of Grand Pursuit is her steadfast conviction that economic growth has created a better world and will continue to do so if it goes on. In her final paragraphs, she refers to the world before 1800 as “the nightmare of the past.”
To be sure, the enterprise could end in disaster. We could blunder into a trap like global warming and obliterate our species. It’s my personal opinion that the adventure is worth the risk. The lives most of us lived before the Industrial Revolution were not worth living.♦
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