August 27, JDN 2457993
The Great Depression was, without doubt, the worst macroeconomic event of the last 200 years. Over 30 million people became unemployed. Unemployment exceeded 20%. Standard of living fell by as much as a third in the United States. Political unrest spread across the world, and the collapsing government of Germany ultimately became the Third Reich and triggered the Second World War If we ignore the world war, however, the effect on mortality rates was surprisingly small. (“Other than that, Mrs. Lincoln, how was the play?”)
And yet, how long do you suppose it took for economic growth to repair the damage? 80 years? 50 years? 30 years? 20 years? Try ten to fifteen. By 1940, the US, US, Germany, and Japan all had a per-capita GDP at least as high as in 1930. By 1945, every country in Europe had a per-capita GDP at least as high as they did before the Great Depression.
The moral of this story is this: Recessions are bad, and can have far-reaching consequences; but ultimately what really matters in the long run is growth.
Assuming the same growth otherwise, a country that had a recession as large as the Great Depression would be about 70% as rich as one that didn’t.
But over 100 years, a country that experienced 3% growth instead of 2% growth would be over two and a half times richer.
Therefore, in terms of standard of living only, if you were given the choice between having a Great Depression but otherwise growing at 3%, and having no recessions but growing at 2%, your grandchildren will be better off if you chose the former. (Of course, given the possibility of political unrest or even war, the depression could very well end up worse.)
With that in mind, I want you to think of the last few years—and especially the last few months—as a moral recession. Donald Trump being President of the United States is clearly a step backward for human civilization, and it seems to have breathed new life into some of the worst ideologies our society has ever harbored, from extreme misogyny, homophobia, right-wing nationalism, and White supremacism to outright Neo-Nazism. When one of the central debates in our public discourse is what level of violence is justifiable against Nazis under what circumstances, something has gone terribly, terribly wrong.
But much as recessions are overwhelmed in the long run by economic growth, there is reason to be confident that this moral backslide is temporary and will be similarly overwhelmed by humanity’s long-run moral progress.
What moral progress, you ask? Let’s remind ourselves.
Just 100 years ago, women could not vote in the United States.
160 years ago, slavery was legal in 15 US states.
Just 3 years ago, same-sex marriage was illegal in 14 US states. Yes, you read that number correctly. I said three. There are gay couples graduating high school and getting married now who as freshmen didn’t think they would be allowed to get married.
That’s just the United States. What about the rest of the world?
100 years ago, almost all of the world’s countries were dictatorships. Today, half of the world’s countries are democracies. Indeed, thanks to India, the majority of the world’s population now lives under democracy.
35 years ago, the Soviet Union still ruled most of Eastern Europe and Northern Asia with an iron fist (or should I say “curtain”?).
30 years ago, the number of human beings in extreme poverty—note I said number, not just rate; the world population was two-thirds what it is today—was twice as large as it is today.
Over the last 65 years, the global death rate due to war has fallen from 250 per million to just 10 per million.
The global literacy rate has risen from 40% to 80% in just 50 years.
World life expectancy has increased by 6 years in just the last 20 years.
We are living in a golden age. Do not forget that.
Indeed, if there is anything that could destroy all these astonishing achievements, I think it would be our failure to appreciate them.
If you listen to what these Neo-Nazi White supremacists say about their grievances, they sound like the spoiled children of millionaires (I mean, they elected one President, after all). They are outraged because they only get 90% of what they want instead of 100%—or even outraged not because they didn’t get what they wanted but because someone else they don’t know also did.
If you listen to the far left, their complaints don’t make much more sense. If you didn’t actually know any statistics, you’d think that life is just as bad for Black people in America today as it was under Jim Crow or even slavery. Well, it’s not even close. I’m not saying racism is gone; it’s definitely still here. But the civil rights movement has made absolutely enormous strides, from banning school segregation and housing redlining to reforming prison sentences and instituting affirmative action programs. Simply the fact that “racist” is now widely considered a terrible thing to be is a major accomplishment in itself. A typical Black person today, despite having only about 60% of the income of a typical White person, is still richer than a typical White person was just 50 years ago. While the 71% high school completion rate Black people currently have may not sound great, it’s much higher than the 50% rate that the whole US population had as recently as 1950.
Yes, there are some things that aren’t going very well right now. The two that I think are most important are climate change and income inequality. As both the global mean temperature anomaly and the world top 1% income share continue to rise, millions of people will suffer and die needlessly from diseases of poverty and natural disasters.
And of course if Neo-Nazis manage to take hold of the US government and try to repeat the Third Reich, that could be literally the worst thing that ever happened. If it triggered a nuclear war, it unquestionably would be literally the worst thing that ever happened. Both these events are unlikely—but not nearly as unlikely as they should be. (Five Thirty Eight interviewed several nuclear experts who estimated a probability of imminent nuclear war at a horrifying five percent.) So I certainly don’t want to make anyone complacent about these very grave problems.
But I worry also that we go too far the other direction, and fail to celebrate the truly amazing progress humanity has made thus far. We hear so often that we are treading water, getting nowhere, or even falling backward, that we begin to feel as though the fight for moral progress is utterly hopeless. If all these centuries of fighting for justice really had gotten us nowhere, the only sensible thing to do at this point would be to give up. But on the contrary, we have made enormous progress in an incredibly short period of time. We are on the verge of finally winning this fight. The last thing we want to do now is give up.
Human Economics 
