The Grim Old Days

On wealth creation and the pre-industrial past

1. Wealth Creation

This semester, I am teaching a course called The Ethics and Economics of Wealth Creation. The phrasing, “wealth creation,” is intentional. The course was approved before my time, but the reason for that emphasis is something like the following.

When most political philosophers or other academics approach the issue of wealth, the focus, first and foremost, is wealth distribution. This is evident, in part, even from the terminology people use in addressing wealth. For instance, ‘distributive justice’ is the name commonly used for the area of political philosophy dealing with the normative study of wealth. As the linked Stanford Encyclopedia of Philosophy entry on the topic brings out, there are several views on the table here, though many of them lean heavily towards some egalitarian goal. According to strict egalitarianism, resources should be distributed equally. John Rawls’s Difference Principle allows for departures from strict equality so long as they benefit the least well off. G. A. Cohen’s luck egalitarianism seeks to mitigate the effects of all sorts of luck—from one’s social position to differences in natural talents arising from the “genetic lottery,” so to speak. Other authors like Elizabeth Anderson emphasize the idea of equal status and standing, for which material redistribution may be an important policy tool.

There is of course the ideal of utilitarianism, which seeks to maximize aggregate welfare over the long run. Now, utilitarianism is such a general theory that all the action is in the emphasis and the relevant empirical assumptions. One way to think about utilitarianism and wealth distribution is to look at the marginal benefits of wealth across people. A natural thought here is that $10k, for example, can benefit someone at the lower end of the income distribution much more, in terms of welfare, than someone like Bill Gates, for whom that amount is a rounding error. At first glance, then, utilitarianism too will prescribe heavily progressive taxation with the aim of achieving more equal income and wealth distributions.

Lost in all this discussion is the issue of how wealth is created in the first place. From the perspective of human welfare and flourishing, however, this is the paramount question. The rest is (or ought to be) a series of footnotes.

2. The Wealth of Nations

(The most important chart of all time. Source: Luke Muehlhauser)

To escape the parochiality of the present, we begin the course with the first four chapters of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Smith is writing this in 1776, just when all the lines in the chart above start trending up. This happens at the beginning of the Industrial Revolution, which gets its start in what is now the modern-day U.K. and the Netherlands, and eventually spreads across the world.

Smith is writing about wealth, and when we think about wealth we think of money. Or when we think about the wealthy, we think of people who own yachts, live in the Hamptons, and fly first class.

Wealth is not, in the first instance, about money, though. At least it’s not for Smith. Money may well be an indicator of relative wealth. But money is not wealth. I illustrate this to the class with a simple thought experiment: suppose all our bank accounts get multiplied by 10. Would we thereby become more wealthy? No. Things would just begin to cost more.

Wealth, for Smith, is primarily about standards of living. For most of recorded human history, the average person lived in conditions of dire poverty. Most were on the brink of starvation. Life expectancy hovered at around 20. Plagues and famines were the norm. The Black Death in medieval Europe killed off around half of the population.

Then, in the mid-18th century, something began to change. The Industrial Revolution brought with it the assembly line. This facilitated the division of labor, which, on Smith’s analysis, is what enabled prosperity. As workers specialized in one part of the process of making some product (Smith here uses his famous example of the pin factory), they produced much more. Even though they individually did not make an entire product (even, say, a pin), together, the workers began to produce a lot more.

As there are more goods and services to go around, the average standard of living rises. High standards of living presuppose an abundance of basic goods to begin with.

Another simple example I use in class is that in a typical middle-class American suburb, the median family usually has at least two cars. Imagine, though, that there were only 100 cars in the country. Given the population, it would be mathematically impossible for the median suburbanite to have two cars. Having such a standard of living, then, presupposes the existence of lots of cars, which in turn presupposes an efficient production process. What goes for cars goes for whatever other product we think lifts standards of living—vaccines, roads and sidewalks, medicines, trains, pots and pans, food, water, etc.

Now, the primary indicator we have of wealth in this sense is the Gross Domestic Product—the total final value of goods and services produced in some area. Many people (across the political spectrum) are skeptical of the probative value of GDP. But notice in the chart above that all the other welfare indicators (including life expectancy) begin to kick up just as GDP per capita kicks up.

Suppose, instead of GDP, you care about the Human Development Index—a measure, among other things, of education and health outcomes such as life expectancy. It correlates very strongly with GDP per capita, as shown above. Even life satisfaction travels with GDP.

3. The Grim Old Days

To really escape the parochiality of the present, we need to read Chelsea Follett’s forthcoming book, The Grim Old Days. We romanticize the past, yearning for the good old days, but in many ways, life before industrialization was nasty, brutish, and short. “If you could visit the preindustrial past,” she writes, “you would give the experience a zero-star rating.”

The book begins by noting that

History is often told as the story of kings, generals, epic power struggles, and sweeping tales of glory. Seldom told are the stories of peasants, housewives, shopkeepers, or farmworkers, let alone the countless children who lost their lives before adulthood… Despite vast cultural differences, people across the globe once eked out existences that were remarkably alike.

Of course, many advances took place over time from 1000 B.C. to the Industrial Revolution—but as the chart above illustrates, nothing really budged for the average person over that time. Follett writes:

[S]ome progress certainly occurred, but a rural peasant in the early days of the Roman Empire and a rural peasant circa 1700, separated by centuries, would find each other’s world surprisingly familiar.

4. The Details

Follett divides the book into short, easily readable, and highly engaging chapters, each exploring a particular aspect of life in the preindustrial past. Some titles include Birth, Infancy, Childhood, Marriage, Water, Hygiene, Violence, Dentistry, and Aging. A few details:

1. Women, for the most part, moved from one pregnancy to the next, beginning in their teens. Most of their children would not survive past a very young age. Women dying in childbirth was routine. In Europe, they were encouraged to drink alcohol, which would have led to rampant fetal alcohol syndrome. “Picture the situation,” Follett says, “a midwife with no formal training and perhaps little experience, bringing a bowl of alcoholic gruel to a pregnant woman’s lips as the latter labored with no option of anesthesia, surrounded by superstitious charms as her only protection against the perils of birth.” A grim picture indeed.

2. Many (most) infants would not make it into adulthood. For one, they were given alcohol, which was believed to promote their health. Furthermore, in a situation with no vaccines and only rudimentary medical care, many succumbed to diseases very early on. “Although losing a child to death in infancy was a common, indeed near-universal experience among parents,” Follett explains, “the loss was no less painful for all its ordinariness.” What’s more, across the world, infanticide was exceedingly common, for a variety of reasons. “Several Mesoamerican civilizations,” for example, “constructed elaborate skull racks or tzompantli to proudly display the results of their extensive human sacrifices, which included child victims. Some Mayan tribes observed a festival specifically for the sacrifice of infants.” In some cases, infanticide occurred because having children out of wedlock was illegal. Consequently, “the bodies of dead infants were found hidden in a variety of locations, particularly toilets.”

3. The vast majority of people lived in extremely cramped and shabby housing. In rural 17th-century France, for example, most people lived in a situation where two or three families shared an area of around 180 square feet. “In other words,” Follett writes, “multiple families often once survived in a space smaller than the average size of a single primary bedroom today in the United States.” Follett also quotes a description of housing in India from 1639. The homes “are all made of straw, and very small, having no opening except a low and narrow doorway. The furniture consists of a few rush mats, on which people lie down to sleep or take their meals… They coat their houses with cattle-dung, because they think it keeps the fleas away.”

4. Before modern sanitation, hygiene was terrible, to say the least. Follett writes: “Consider the incident in the year 1184 that came to be known as the Erfurt latrine disaster. An assembly of noblemen from across the Holy Roman Empire engaged in political negotiations fell through the floorboards of a building into the latrine cesspit underneath, resulting in the deaths of approximately 60 nobles who drowned in a sea of excreta and suffocated in the repulsive fumes rising from the decaying human waste.” Even the Palace of Versailles had a grotesque smell as human waste piled up in its hallways and courtyards.

5. Persistent toothaches were common, which led to the profession of the tooth puller. Methods of tooth pulling included “grinding newts or lizards into a powder and applying the concoction to the rotten tooth frequently, purportedly to cause the tooth to fall out painlessly.”

Obviously, the nobles and aristocrats had a higher standard of living compared to peasants or shepherds. But even their lot would make any moderner wince. Follett describes the fate of royal women in Austria when it came to childbirth. For example:

Queen of Spain Margaret of Austria (1584–1611) died at age 26 giving birth to her eighth child, a son who lived a year… Holy Roman Empress Maria Leopoldine of Austria (1632–1649) met her end at age 17, giving birth to her only child, a son who only lived to age 14.

And on and on it goes. Despite deaths from childbirth, though, noblewomen still outnumbered noblemen, especially in their later years, because the latter died at even higher rates in war and other forms of violence. Even the poorest people in the poorest countries today enjoy much higher life expectancies than the nobles of the preindustrial past in the richest areas of the time.

5. Time Privilege

The discourse of ‘privilege’ has gained much currency in recent times. But the greatest privilege of all is time privilege—of being born today, as opposed to in our preindustrial past. Even over the past two centuries, progress has been remarkable.

And what’s more, we didn’t do anything to earn being born now, as opposed to, say, 1000 years ago. This ought to fill us with an enormous sense of gratitude—not only to fate, but also to those countless human beings who labored and innovated in the past to make our current lives possible.

Here’s a thought experiment. Would you rather be the median middle-class American now or a billionaire in 1916, say, John D. Rockefeller? Speaking for myself, the answer is easy. But if it isn’t for you, dear reader, consider this description by George Will from The Washington Post:

If in 1916 you suffered from depression, bipolar disorder, a sexually transmitted disease or innumerable other ailments treatable in 2017, you also would not know that you were missing antibiotics and the rest of modern pharmacology. And don’t even think about getting a 1916 toothache. You can afford state-of-the-art 1916 dentures — and probably will need them. Your arthritic hips and knees? Hobble along until you cannot hobble any more, then buy a wheelchair. Birth control in 1916 will be primitive, unreliable and not conducive to pleasure.

Got a bacterial infection? Sayonara! Cancer? Forget about it. There was no polio vaccine either.

The median North American today is far richer than John D. Rockefeller was in 1916.

6. Preserve the Institutions!

The Industrial Revolution has had its detractors, from Karl Marx and his followers to Ted Kaczynski, the Unabomber. The latter wrote in his manifesto that “The Industrial Revolution and its consequences have been a disaster for the human race.”

What such perspectives miss are the brutal, painful, and short lives of most of our ancestors. Follett’s book is a welcome reminder of this reality. It is a thoroughly researched and accessible entrée into what the past was really like.

The tragedy here is that factories and assembly lines and GDP statistics leave our human hearts cold. We are inclined to easily forget what they enable us to do. But as the Industrial Revolution got going, Follett writes,

Death gave way to dancing.

No longer did people merely survive; they gained agency and sought to build lives and relationships that they found meaningful and joyful. A world of choices opened up to each individual, and the pursuit of happiness and fulfillment became possible.

For the first time in history, pursuing dreams came within reach of the average person.

Now, the world is far from perfect, of course. But if the institutions that enable prosperity are fragile, we ignore them at our peril. The collectivist experiments of the 20th century are a stark reminder of the fragility of our abundance. The default setting for humanity has been extreme poverty, and everything that comes along with it. Our modern abundance—with our antibiotics and well-stocked grocery stores and cars and ACs—is not something we should take for granted. Focusing our attention merely on redistribution is myopic; what should occupy the biggest space on our radar are the preconditions of prosperity in the first place.

First and foremost, do not kill the goose that lays the golden eggs.