16 August 2022
Ziņas un Viedokļi
Why History Never Ends

Avoiding Dangerous Illusions on the Way to a Sustainable Future

Back in 1843 Henry Ellsworth, the Commissioner of the US Patent and Trademark Office, wrote in his annual report to Congress that “the advancement of the arts, from year to year, taxes our credulity, and seems to presage the arrival of that period when human improvement must end”.

I would agree that human improvement, development and technological progress do not follow a simple, linear trend. However, it never “ends” from a historical perspective.

In 1992 Francis Fukuyama, a US political scientist, published his famous book “The End of History and the Last Man” in which he argued that humanity had reached the ultimate point of its evolution following the end of the Cold War.

This statement looks so ridiculous now when we are witnessing the world’s largest systemic crisis in 30 years. There is a pretty good chance that it may put an end to the process of globalization as we know it. Instead, we may end up living in a world of “global clusterization” where larger and smaller “clusters” of countries will try to reduce their dependence on each other. This may imply separate socio-economic frameworks, separate financial and payment systems, separate trade relationships and supply chains, separate technical standards, etc. This will certainly mean lower economic growth and higher inflation. And there will be more military spending.

Why is this happening? To understand that just have a look at these classical textbook definitions. First, this is happening because any economic system’s major task is to allocate limited resources to meet our unlimited wants. Second, this is happening because politics is the most concentrated expression of economics. Third, this is happening because war is nothing but the continuation of policy with other means.

As long as we do not have access to unlimited resources or as long as we do not control our unlimited wants, there will be history. And this is exactly what we are witnessing today: history in the making.

Simple logic says that there are only three ways to maintain the sustainable use of limited resources.

First, you make a technological breakthrough in order to reduce the use of resources. It sounds great. However, you cannot guarantee the on-demand delivery of new technologies in accordance with any specific schedule. The rates of technological progress and labor productivity growth have been declining for 50 years now. And it cannot be assured that they will pick up the pace in the next 50 years (see Picture 1 below).

Second, you reduce individual or per capita consumption. Since the rates of technological progress, labor productivity and real wages have been slowing down (see Picture 2 below), then you have to curb the growth rate of consumption. It sounds unappetizing. However, it can be achieved given there are changes in economic, financial and social policy aimed at curtailing our consumer society.

In fact, real per capita consumption is already being reduced right now thanks to shortages and inflation. I doubt, though, that you can politically achieve a sustainable lower level of consumption without tackling wealth and income inequality. Calling on the less prosperous sections of society and nations to curb their consumption while maintaining your own level of consumption is the most direct way of sparking a conflict.

Third, you reduce the number of … consumers. This can be done through military conflicts, pandemics or birth control policies. It sounds horrible. However, mankind was regularly reverting back to these “population-control measures” in times of political, economic and social stress.

The reality on the ground tells us that our current level of consumption exceeds our current level of technological advancement. It also tells us that focusing solely on green technologies may not be enough. Thus, there should be fallback plans to achieve the sustainable use of resources. Reducing consumption is one of them. Buying less staff. Traveling less. Making a sensible housing choice. Focusing on the things that really matter: health, education, skills, job experience, social connections and networking.

Following this path you will have a decent chance to increase your labor productivity. Rising labor productivity means rising wages and consumption. There is no way around this microeconomic textbook definition. Certainly, a fairer economic system would also be helpful.

Humans, as a biological species, need material motivation, while simultaneously striving for social justice. Thus, both our economy and our politics are just the battlegrounds for our technologies and our biology. On the way to a sustainable future we should invest in our technologies. Equally, however, we should learn to control our biology. The rest is history.