Book review of The Journey of Humanity: The Origins of Wealth and Inequality by Oded Galor
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Homo sapiens have big brains. We use those brains to develop new technologies, which enable us to produce more stuff and support larger populations on the same amount of land. Higher population density makes possible greater specialization and increases demand for innovation. As a result, cultural attributes that favor education and innovation become more valuable, so families with those attributes are more likely to reproduce, resulting in a population that is more favorable for further technological development.
These “wheels of change” have been the key drivers of technological progress since the beginning of time, economist Oded Galor argues in his new book, “The Journey of Humanity: The Origins of Wealth and Inequality.” Throughout most of our history, however, our species was caught in a poverty trap. Technological innovation caused increases in food production, which caused higher population growth — until the additional mouths to feed canceled out the productivity gains, bringing living standards back to subsistence levels. In the 19th century, however, the inexorable march of technology reached a tipping point. With the Industrial Revolution, according to Galor, the value of human capital reached the point that parents chose to have fewer children and invest more in their upbringing. Longer life spans made human capital even more important. As women’s wages began to approach those earned by men, it became more costly for them to leave the workforce to have children, further reducing birthrates. This demographic transition allowed technological progress to vastly outstrip population growth, producing our present world of material plenty.
Unparalleled in its scope and ambition, “The Journey of Humanity” explains the whole of human history as an inevitable progression from the first primitive tools to supercomputers in every pocket. At the same time, the book explains why that progression has made some parts of the world so much richer than others.
All human beings are descended from people who migrated out of East Africa in successive waves beginning more than 60,000 years ago. At each point in the migratory chain, only a subset of the population chose to move on. Because a subset of a group is likely to be less diverse than the whole group, populations became more homogeneous the farther they traveled: Before recent centuries, the highest levels of diversity were found in East Africa and the lowest levels in South America (because people arrived in South America only after migrating through all of Asia and North America). According to Galor, diversity can inhibit economic growth by decreasing social cohesion, but it can also increase growth by promoting specialization and innovation; therefore, regions with an intermediate level of diversity had the highest levels of economic development.
Geography was also an important factor behind economic development. The Fertile Crescent, from northern Egypt to the Persian Gulf, had the most easily domesticated grains and animals, and the absence of barriers to east-west travel in Eurasia facilitated the spread of agricultural techniques. Populations that domesticated animals early developed more resistance to infectious diseases. Diversity and geography were the key drivers of regional economic differences; culture and politics played smaller roles.
According to Galor, economic development is driven by the interplay between technological innovation and the evolution of societies in ways that favor innovation. Global inequality is a product of five factors (in decreasing importance): migration distance, geography, disease, culture and political institutions. The author covers all of that in an admirably concise 240 pages of text. All readers will learn something, and many will find the book fascinating.
For Galor, this ultra-long-term perspective is the only way to separate out the motive forces of history from thousands of individually fascinating episodes. “It is easy to become adrift in this ocean of detail, buffeted by the waves and unaware of the mighty currents underneath,” he writes. But without a proper grasp of the undercurrents, “it is virtually impossible to understand the history of humankind.”
It’s hard to argue with the claim that today’s prosperity results from accumulated technological progress and that investment in human capital promotes technological development. But that still leaves the crucial question of why things happened when and where they did. Take the age-old question of why Europe became the richest part of the world. In Galor’s account, Europe escaped the poverty trap in the 19th century because of increased investment in education and the decline of the gender wage gap. But according to statistics compiled by prominent economic historian Angus Maddison, per capita gross domestic product in Western Europe more than doubled from 1000 to 1600. Something was going on well before the invention of the steam engine.
The commercial revolution in Italian cities — the first link in the chain of economic, political and social transformations that created the modern world — began in the 11th century. In 1000, however, Europe’s population was essentially the same as it had been a millennium before and only a fraction of the population of what is now India or China. Europe was also poorer and less technologically advanced than China and especially the Islamic states of Egypt and the Middle East. If the virtuous cycle of technological development and population density is the underlying cause of economic growth, Europe should have remained a backwater.
Galor cites a number of reasons that economic takeoff occurred first in Europe and not in Asia: England’s Glorious Revolution guaranteed property rights and the political power of the mercantile class; the Reformation led to higher levels of literacy and entrepreneurialism in Protestant areas of the continent; the Enlightenment encouraged an empirical mind-set that was favorable to scientific and technological progress. But these institutional and cultural factors were products of the 16th and 17th centuries. Galor also argues that Europe’s lower agricultural productivity — compared with other parts of Eurasia that had converted to agriculture earlier — became an advantage around 1500 as cities became the center of economic activity. But this only raises the question of why Europe developed autonomous city-states with thriving mercantile sectors in the previous half-millennium.
None of this contradicts Galor’s invisible wheels of history, inexorably pushing humanity forward from behind the scenes, all the kings and queens merely players with their exits and entrances. But even if an Industrial Revolution was foreordained by our large brains, it could have happened a thousand years ago, or it could still be a thousand years in the future. To understand why it happened in the 18th century in a chilly, damp corner of Europe, we have to figure out which factors are influential in particular times and places and why. In this case, we have to understand why, beginning in the 11th century, a handful of Italian towns became thriving commercial hubs of Mediterranean trade, laying the foundations for the advances of later centuries that would eventually give birth to capitalism and the Industrial Revolution.
But the payoff, for Galor, is not just interpreting the past. The hidden motors of human history, he argues, show us how to confront the challenges we face now — climate change first among them. The solution is to bet on the forces that brought us to where we are today: Falling birthrates will reduce the environmental impact of our species, buying time for technological innovation to engineer a shift away from fossil fuels. Together, these factors “should permit the timely advancement of the revolutionary technologies that will be needed, turning this climate crisis into a fading memory in the centuries to come.”
Well … yes, it’s likely that at least some people will survive climate change, and that 1,000 years from now their gadgets will make ours seem primitive. Galor may be right that the long-term story of humanity is and will continue to be an uninterrupted march of technological progress. But there are details that are hard to see from the 300,000-year perspective of all of human history. Sometimes those details matter a lot.
James Kwak is a research fellow at the University of Connecticut School of Law, where until earlier this year he was the Jesse Root professor of law.
The Journey of Humanity
The Origins of Wealth and Inequality
By Oded Galor
Dutton. 287 pp. $28
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