Enlightenment Now: The Case for Reason, Science, Humanism, and Progress

This doesn’t mean that comparisons of wealth across times and places in currency adjusted for inflation and purchasing power are meaningless—they are better than ignorance, or guesstimates—but it does mean that they shortchange our accounting of progress. A person whose wallet contains the cash equivalent of a hundred 2011 international dollars today is fantastically richer than her ancestor with the equivalent wallet’s worth two hundred years ago. As we’ll see, this also affects our assessment of prosperity in the developing world (this chapter), of income inequality in the developed world (next chapter), and of the future of economic growth (chapter 20).

What launched the Great Escape? The most obvious cause was the application of science to the improvement of material life, leading to what the economic historian Joel Mokyr calls “the enlightened economy.”⁸ The machines and factories of the Industrial Revolution, the productive farms of the Agricultural Revolution, and the water pipes of the Public Health Revolution could deliver more clothes, tools, vehicles, books, furniture, calories, clean water, and other things that people want than the craftsmen and farmers of a century before. Many early innovations, such as in steam engines, looms, spinning frames, foundries, and mills, came out of the workshops and backyards of atheoretical tinkerers.⁹ But trial and error is a profusely branching tree of possibilities, most of which lead nowhere, and the tree can be pruned by the application of science, accelerating the rate of discovery. As Mokyr notes, “After 1750 the epistemic base of technology slowly began to expand. Not only did new products and techniques emerge; it became better understood why and how the old ones worked, and thus they could be refined, debugged, improved, combined with others in novel ways and adapted to new uses.”¹⁰ The invention of the barometer in 1643, which proved the existence of atmospheric pressure, eventually led to the invention of steam engines, known at the time as “atmospheric engines.” Other two-way streets between science and technology included the application of chemistry, facilitated by the invention of the battery, to synthesize fertilizer, and the application of the germ theory of disease, made possible by the microscope, to keep pathogens out of drinking water and off doctors’ hands and instruments.

The applied scientists would not have been motivated to apply their ingenuity to ease the pains of everyday life, and their gadgets would have remained in their labs and garages, were it not for two other innovations.

One was the development of institutions that lubricated the exchange of goods, services, and ideas—the dynamic singled out by Adam Smith as the generator of wealth. The economists Douglass North, John Wallis, and Barry Weingast argue that the most natural way for states to function, both in history and in many parts of the world today, is for elites to agree not to plunder and kill each other, in exchange for which they are awarded a fief, franchise, charter, monopoly, turf, or patronage network that allows them to control some sector of the economy and live off the rents (in the economist’s sense of income extracted from exclusive access to a resource).¹¹ In 18th-century England this cronyism gave way to open economies in which anyone could sell anything to anyone, and their transactions were protected by the rule of law, property rights, enforceable contracts, and institutions like banks, corporations, and government agencies that run by fiduciary duties rather than personal connections. Now an enterprising person could introduce a new kind of product to the market, or undersell other merchants if he could provide a product at lower cost, or accept money now for something he would not deliver until later, or invest in equipment or land that might not return a profit for years. Today I take it for granted that if I want some milk, I can walk into a convenience store and a quart will be on the shelves, the milk won’t be diluted or tainted, it will be for sale at a price I can afford, and the owner will let me walk out with it after a swipe of a card, even though we have never met, may never see each other again, and have no friends in common who can testify to our bona fides. A few doors down and I could do the same with a pair of jeans, a power drill, a computer, or a car. A lot of institutions have to be in place for these and the millions of other anonymous transactions that make up a modern economy to be consummated so easily.