The Journey of Humanity - Chapter 3, The Storm Beneath The Surface PDF

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Document Details

ComplimentaryTurquoise6651

Uploaded by ComplimentaryTurquoise6651

Nova School of Business and Economics

Oded Galor

Tags

human history economic growth population dynamics unified growth theory

Summary

Oded Galor's work explores the phase transition experienced by humanity from a period of economic stagnation to sustained growth. The chapter analyzes how factors like population size, technological advancements, and population composition, have significantly influenced this transition. It also examines how this transition, fueled by the Industrial Revolution, has resulted in the levels of inequality we see today.

Full Transcript

# The Storm Beneath the Surface ## A Glass Kettle Analogy A glass kettle is placed on a hot stove. As the water heats, the molecules absorb heat energy, move more rapidly, and the intermolecular attractive forces diminish until, past a critical point, the water undergoes a phase transition from l...

# The Storm Beneath the Surface ## A Glass Kettle Analogy A glass kettle is placed on a hot stove. As the water heats, the molecules absorb heat energy, move more rapidly, and the intermolecular attractive forces diminish until, past a critical point, the water undergoes a phase transition from liquid to gas. This process eventually sweeps all water molecules away, and the properties and appearance are soon entirely transformed. ## A Similar Phase Transition in Humanity In the past two centuries, humankind experienced a similar phase transition where economic stagnation intensified invisibly throughout the surface. This transition appeared dramatic and sudden, but the fundamental triggers were operating from the human species' emergence, gaining momentum over the history of humankind. This phase transition occurred at different times across the globe, generating previously inconceivable levels of inequality between the countries that underwent the phase transition relatively early and those that remained trapped longer. ## Unified Growth Theory Unified growth theory captures the journey of humanity over the entire course of history, starting with Homo sapiens' emergence in Africa nearly 300,000 years ago. It identifies and traces the forces that governed the development process during the Malthusian epoch, triggering the phase transition in which the human species escaped from the poverty trap into an era of sustained economic growth.  ### Unified Growth Theory - Insights * The growth process in its entirety, the hurdles faced by poorer economies today in their transition from stagnation to growth, the origins of the great divergence in the wealth of nations in the past centuries, and the fingerprints of the ancient past in the fate of nations. * During the Malthusian epoch, innovations, conflicts, and institutional and epidemiological changes, generated powerful counter-reactions of the population, reverting per capita income to its long-run level.  * The Industrial Revolution is the force that gave the world an abrupt external shock that jolted it into the modern phase of growth. However, the transition occurred suggests that there was no 'jolt' at any point during this period.  ## Wheels of Change ### Population Size One of these wheels of change was population size. At the eve of the Neolithic Revolution (10,000 BCE), an estimated 2.4 million human beings roamed the Earth. By the year 1 CE, as the Roman Empire and the Mayan civilization approached their height, the world's population had multiplied seventy-eight-fold, and soared to 188 million. As noted above, larger populations were more likely to generate both a greater demand for new goods, tools and practices, as well as exceptional individuals capable of inventing them. ### Technological Advancements And Population Growth The relationship between population size and technological change is reciprocal: * Just as technological advancements during the Malthusian epoch enabled populations to densify and grow 400-fold within a 12,000-year period, so had the size of these human populations contributed to an acceleration in the pace of innovation. ### Population Composition Population size operated in tandem with another wheel of change - population composition. Like size, population composition was also a product of Malthusian forces. One of the first scholars to realize this was Charles Darwin, who recounted in his autobiography: _"In October 1838, that is, fifteen months after I had begun my systematic enquiry, I happened to read for amusement Malthus on Population, and being well prepared to appreciate the struggle for existence which everywhere goes on from long-continued observation of the habits of animals and plants, it at once struck me that under these circumstances favourable variations would tend to be preserved, and unfavourable ones to be destroyed."_ What did Darwin mean by 'favorable variations', and how would their preservation in a Malthusian environment affect the composition of a population? * Any intergenerationally transmitted trait which makes an organism better adapted to their environment, generating for them more resources thus affording them greater or more reliable nourishment and protection and thereby fostering for them a larger number of surviving offspring, can be considered 'favorable'. The prevalence of these 'favorable' characteristics in any population will increase over time. This is the essence of Darwin's natural selection. ### Rapid Adaptations In Human Population Human beings do not reproduce as rapidly as moths, but even so we have experienced rapid adaptations to diverse environments across the planet. This includes the acquisition of natural immunity to local diseases, regional food supply, and the ability to metabolise the regional food supply. This is also the core of the evolution of skin pigmentation. ### Cultural Adaptations Cultural adaptations can take hold in a population even more rapidly. These processes do not require the passing of genetic mutations from one generation to the next; the principles that lead to their greater prevalence over time are similar but they spread instead through the mechanisms of imitation, education or indoctrination, swiftly giving rise to new cultural traits. **This is how we have developed cultural traits that influence worker productivity, such as education, training and skill, along with health and longevity.** ## A Thought Experiment: The Quanty And Qualy Clans The cultural traits that were complementary to the technological environment would have generated higher income and thus a larger number of surviving offspring, leading therefore to a gradual increase in the prevalence of these traits in the population. These traits would have contributed to the pace of the development process from stagnation towards growth.  Imagine two large clans: 1. **The Quanty Clan:** adheres to the cultural norm, 'be fruitful and multiply' (Genesis 9:1), bringing as possible children into the world and investing their limited resources in raising them. 2. **The Qualy Clan:** chooses to have fewer children but invest a considerable part of their time and resources in factors that influence their children's productivity and earning capacity. **The Qualy clan will ultimately dominate the population in the long run because the increasing dominance of Qualy families will foster technological progress, and technological progress will increase the share of Qualy families in the population.** ## A Larger Number Of Offspring Vs. Parental Nurturing It is worth mentioning that this basic trade-off between a larger number of offspring or greater parental nurturing is common to all living organisms: bacteria, insects and small mammals, such as rodents, evolved to follow the 'quantity strategy' of reproduction, whereas larger mammals such as humans, elephants and whales, as well as parrots and eagles, evolved to follow the 'nurturing strategy'. ### The Quebec Study The extensive genealogical records of nearly half a million progeny of European settlers in Quebec between the sixteenth and eighteenth centuries provide a unique opportunity to test the validity of this theory. Tracing the number of offspring of the founder populations in Quebec over four generations, it is apparent that the largest dynasties originated with moderately fertile settlers who had only a moderate number of children (and invested proportionately more in their children's human capital), while the more fertile founders, who formed large families (and invested proportionately less in each of them), had fewer descendants over time. In other words, the evidence suggests that, perhaps paradoxically, a moderate rather than a large number of children per family was conducive to a larger number of descendants after several generations. This reflects the beneficial effects of a smaller number of children on each individual child's likelihood to survive, marry, acquire literacy and reproduce. ### The Industrial Revolution Larger and more adapted populations fostered the ability of humankind to design new technologies and gain increasing control of their environment. This ultimately led to a spectacular explosion of innovations on a scale never seen before in human history - the Industrial Revolution. 

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