Sapiens and Homo Deus: The E-Book Collection
The Miracle Pie
Evolutionary pressures have accustomed humans to see the world as a static pie. If somebody gets a larger slice of the pie, somebody else inevitably gets a smaller slice. A particular family or city may prosper, but humankind as a whole is not going to produce more than it produces today. Accordingly, traditional religions such as Christianity and Islam sought ways to solve humanity’s problems with the help of current resources, either by redistributing the existing pie, or by promising a pie in the sky.
Modernity, in contrast, is based on the firm belief that economic growth is not only possible, but absolutely essential. Prayers, good deeds and meditation might be comforting and inspiring, but problems such as famine, plague and war can only be solved through growth. This fundamental dogma can be summarised in one simple idea: ‘If you have a problem, you probably need more stuff, and in order to have more stuff, you must produce more of it.’
Modern politicians and economists insist that growth is vital for three principal reasons. Firstly, when we produce more, we can consume more, raise our standard of living and allegedly enjoy a happier life. Secondly, as long as humankind multiplies, economic growth is needed merely to stay where we are. For example, in India the annual population growth rate is 1.2 per cent. That means that unless the Indian economy expands each year by at least 1.2 per cent, unemployment will rise, salaries will fall and the average standard of living will decline. Thirdly, even if Indians stop multiplying, and even if the Indian middle class can be satisfied with its current standard of living, what should India do about its hundreds of millions of poverty-stricken citizens? If the economy doesn’t grow, and the pie therefore remains the same size, you can give more to the poor only by taking something from the rich. That will force you to make some very hard choices, and will probably cause a lot of resentment and even violence. If you wish to avoid hard choices, resentment and violence, you need a bigger pie.
Modernity has turned ‘more stuff’ into a panacea applicable to almost all public and private problems, from religious fundamentalism through Third World authoritarianism down to a failed marriage. If only countries such as Pakistan and Egypt could maintain a healthy growth rate, their citizens would come to enjoy the benefits of private cars and bulging refrigerators, and would take the path of earthly prosperity instead of following the fundamentalist pied piper. Similarly, economic growth in countries such as Congo and Myanmar would produce a prosperous middle class which is the bedrock of liberal democracy. And in the case of the disgruntled couple, their marriage would allegedly be saved if only they would buy a bigger house (so they don’t have to share a cramped office), purchase a dishwasher (so they stop arguing whose turn it is to do the dishes) and attend expensive therapy sessions twice a week.
Economic growth has thus become the crucial juncture where almost all modern religions, ideologies and movements meet. The Soviet Union, with its megalomaniacal Five Year Plans, was as obsessed with growth as the most cut-throat American robber baron. Just as Christians and Muslims all believe in heaven, and disagree only about how to get there, so during the Cold War both capitalists and communists believed in creating heaven on earth through economic growth, and wrangled only about the exact method.
Today Hindu revivalists, pious Muslims, Japanese nationalists and Chinese communists may declare their adherence to very different values and goals, but they have all come to believe that economic growth is the key to realising their disparate goals. Thus in 2014 the devout Hindu Narendra Modi was elected prime minister of India thanks largely to his success in boosting economic growth in his home state of Gujarat, and to the widely held view that only he could reinvigorate the sluggish national economy. Analogous views have kept the Islamist Recep Tayyip Erdoğan in power in Turkey since 2003. The name of his party – the Justice and Development Party – highlights its commitment to economic development, and the Erdoğan government has indeed managed to maintain impressive growth rates for more than a decade.
Japan’s prime minister, the nationalist Shinzō Abe, came to office in 2012 pledging to jolt the Japanese economy out of two decades of stagnation. His aggressive and somewhat unusual measures to achieve this have been nicknamed Abenomics. Meanwhile in neighbouring China the Communist Party still pays lip service to traditional Marxist–Leninist ideals, but in practice is guided by Deng Xiaoping’s famous maxims that ‘development is the only hard truth’ and that ‘it doesn’t matter if a cat is black or white, so long as it catches mice’. Which means, in plain language: do whatever it takes to promote economic growth, even if Marx and Lenin wouldn’t have been happy with it.
In Singapore, as befits that no-nonsense city-state, they pursue this line of thinking even further, and peg ministerial salaries to the national GDP. When the Singaporean economy grows, government ministers get a raise, as if that is what their jobs are all about.2
This obsession with growth might appear self-evident, but only because we live in the modern world. It wasn’t like this in the past. Indian maharajas, Ottoman sultans, Kamakura shoguns and Han emperors rarely staked their political fortunes on ensuring economic growth. That Modi, Erdoğan, Abe and Chinese president Xi Jinping all bet their careers on economic growth testifies to the almost religious status growth has managed to acquire throughout the world. Indeed, it may not be wrong to call the belief in economic growth a religion, because it now purports to solve many, if not most, of our ethical dilemmas. Since economic growth is allegedly the source of all good things, it encourages people to bury their ethical disagreements and adopt whichever course of action maximises long-term growth. Thus Modi’s India is home to thousands of sects, parties, movements and gurus, yet though their ultimate aims may differ, they all have to pass through the same bottleneck of economic growth, so why not pull together in the meantime?
The credo of ‘more stuff’ accordingly urges individuals, firms and governments to disregard anything that might hamper economic growth, such as preserving social equality, ensuring ecological harmony or honouring one’s parents. In the Soviet Union, the leadership thought that state-controlled communism was the fastest way to grow, hence anything that stood in the way of collectivisation was bulldozed, including millions of kulaks, the freedom of expression and the Aral Sea. Nowadays it is generally accepted that some version of free-market capitalism is a much more efficient way of ensuring long-term growth, hence greedy tycoons, rich farmers and freedom of expression are protected, but ecological habitats, social structures and traditional values that stand in the way of free-market capitalism are dismantled and destroyed.
Take, for example, a software engineer earning $100 per hour working for some hi-tech start-up. One day her elderly father has a stroke. He now needs help with shopping, cooking and even bathing. She could move her father to her own house, leave for work later in the morning, come back earlier in the evening and take care of her father personally. Both her income and the start-up’s productivity would suffer, but her father would enjoy the care of a respectful and loving daughter. Alternatively, the engineer could hire a Mexican carer who, for $12 per hour, would live with the father and provide for all his needs. That would mean business as usual for the engineer and her start-up, and even the carer and the Mexican economy would benefit. What should the engineer do?
Free-market capitalism has a firm answer. If economic growth demands that we loosen family bonds, encourage people to live away from their parents, and import carers from the other side of the world – so be it. This answer, however, involves an ethical judgement rather than a factual statement. When some people specialise in software engineering while others devote their time to care of the elderly, we can no doubt produce more software and give old people more professional care. Yet is economic growth more important than family bonds? By presuming to make such ethical judgements, free-market capitalism has crossed the border from the land of science into that of religion.
Most capitalists would probably dislike the label of religion, but as
religions go, capitalism can at least hold its head high. Unlike other religions that promise us pie in the sky, capitalism promises miracles here on earth – and sometimes even delivers. Much of the credit for overcoming famine and plague belongs to the ardent capitalist faith in growth. Capitalism even deserves some kudos for reducing human violence and increasing tolerance and cooperation. As the next chapter explains, there are additional factors at play here, but capitalism did make an important contribution to global harmony by encouraging people to stop viewing the economy as a zero-sum game, in which your profit is my loss, and instead see it as a win–win situation, in which your profit is also my profit. This mutual-benefit approach has probably helped global harmony far more than centuries of Christian preaching about loving your neighbour and turning the other cheek.
From its belief in the supreme value of growth, capitalism deduces its number one commandment: thou shalt invest thy profits in increasing growth. For most of history princes and priests wasted their profits on flamboyant carnivals, sumptuous palaces and unnecessary wars. Alternatively, they placed their gold coins in iron chests, sealed them and buried them in a dungeon. Today, devout capitalists use their profits to hire new employees, enlarge the factory or develop a new product.
If they don’t know how to do it themselves, they give their money to somebody who does, such as a banker or a venture capitalist. The latter lend the money to various entrepreneurs. Farmers take loans to plant new wheat fields, contractors build new houses, energy corporations explore new oil fields, and arms factories develop new weapons. The profits from all these activities enable the entrepreneurs to repay the loans with interest. We now have not only more wheat, houses, oil and weapons – but also more money, which the banks and funds can again lend. This wheel will never stop rotating, at least not according to capitalism. We will never reach a moment when capitalism says: ‘That’s it. Enough growth. We can now take it easy.’ If you want to know why the capitalist wheel is unlikely ever to stop, talk for an hour with a friend who has just accumulated $100,000 and is wondering what to do with it.
‘The banks offer such low interest rates,’ he would complain. ‘I don’t want to put my money in a savings account that pays barely 0.5 per cent a year. Maybe I can make 2 per cent in government bonds. My cousin Richie bought a flat in Seattle last year and has already made 20 per cent on his investment! Maybe I should go into real estate too; but everybody is saying there’s a new real-estate bubble. So, what do you think about the stock exchange? A friend told me the best deal these days is to buy an ETF that follows emerging economies, like Brazil or China.’ As he pauses for a moment to breathe, you ask, ‘Well, why not just be satisfied with your $100,000?’ He will explain to you better than I can why capitalism will never stop.
This lesson is hammered home even to children and teenagers through ubiquitous capitalist games. Premodern games such as chess assumed a stagnant economy. You begin a game of chess with sixteen pieces, and you never finish a game with more. In rare cases a pawn may be transformed into a queen, but you cannot produce new pawns nor upgrade your knights into tanks. So chess players never have to think about investment. In contrast, many modern board games and computer games focus on investment and growth.
Particularly telling are civilisation-style strategy games, such as Minecraft, The Settlers of Catan or Sid Meier’s Civilization. The game may be set in the Middle Ages, the Stone Age or some imaginary fairy land, but the principles always remain the same – and are always capitalist. Your aim is to establish a city, a kingdom or maybe an entire civilisation. You begin from a very modest base, perhaps just a village and its nearby fields. Your assets provide you with an initial income of wheat, wood, iron or gold. You then have to invest this income wisely. You have to choose between unproductive but still necessary tools such as soldiers, and productive assets such as more villages, fields and mines. The winning strategy is usually to invest the barest minimum in non-productive essentials, while maximising your productive assets. Establishing additional villages means that next turn you will have a larger income that would enable you not only to buy more soldiers (if necessary), but simultaneously to increase your investment in production. Soon you could upgrade your villages to towns, build universities, harbours and factories, explore the seas and oceans, establish your civilisation and win the game.
The Ark Syndrome
Yet can the economy actually keep growing for ever? Won’t it eventually run out of resources – and grind to a halt? In order to ensure perpetual growth, we must somehow discover an inexhaustible store of resources.
One solution is to explore and conquer new lands. For centuries, the growth of the European economy and the expansion of the capitalist system indeed relied heavily on overseas imperial conquests. However, there are only so many islands and continents on earth. Some entrepreneurs do hope eventually to explore and conquer new planets and even galaxies, but in the meantime, the modern economy has had to find a better method of expanding.
It is science that has provided modernity with the solution. The fox economy cannot grow, because foxes don’t know how to produce more rabbits. The rabbit economy stagnates, because rabbits cannot make the grass grow faster. But the human economy can grow because humans can discover new materials and sources of energy.
The traditional view of the world as a pie of a fixed size presupposes that there are only two kinds of resources in the world: raw materials and energy. But in truth there are three kinds of resources: raw materials, energy and knowledge. Raw materials and energy are exhaustible – the more you use, the less you have. Knowledge, in contrast, is a growing resource – the more you use, the more you have. Indeed, when you increase your stock of knowledge, it can give you more raw materials and energy as well. If I invest $100 million searching for oil in Alaska and I find it, then I now have more oil, but my grandchildren will have less of it. In contrast, if I invest $100 million researching solar energy, and I find a new and more efficient way of harnessing it, then both I and my grandchildren will have more energy.
For thousands of years the scientific road to growth was blocked because people believed that holy scriptures and ancient traditions already contained all the important knowledge the world had to offer. A corporation that believed all the oil fields in the world had already been discovered would not waste time and money searching for oil. Similarly, a human culture that believed it already knew everything worth knowing would not bother searching for new knowledge. This was the position of most premodern human civilisations. However, the Scientific Revolution freed humankind from this naïve conviction. The greatest scientific discovery was the discovery of ignorance. Once humans realised how little they knew about the world, they suddenly had a very good reason to seek new knowledge, which opened up the scientific road to progress.
With each passing generation science helped discover fresh sources of energy, new kinds of raw material, better machinery and novel production methods. Consequently, in 2016 humankind commands far more energy and raw materials than ever before, and production skyrockets. Inventions such as the steam engine, the internal combustion engine and the computer have created whole new industries from scratch. As we look twenty years into the future, we confidently expect to produce and consume far more in 2036 than we do today. We trust nanotechnology, genetic engineering and artificial intelligence to revolutionise production yet again, and to open whole new sections in our ever-expanding supermarkets.
We therefore have a good chance of overcoming the problem of resource scarcity. The real nemesis of the modern economy is ecological collapse. Both scientific progress and economic growth take place within a brittle biosphere, and as they gather steam, so the shock waves destabilise the ecology. In order to provide every person in the world with the same standard of living as affluent Americans, we would need a few more planets – but we have only this one. If progress and growth do end up destroying the ecosystem, the cost will be dear not merely to vampires, foxes and rab
bits, but also to Sapiens. An ecological meltdown will cause economic ruin, political turmoil, a fall in human standards of living, and might threaten the very existence of human civilisation.
We could lessen the danger by slowing the pace of progress and growth. If this year investors expect to get a 6 per cent return on their portfolios, in ten years they could learn to be satisfied with a 3 per cent return, in twenty years with only 1 per cent, and in thirty years the economy will stop growing and we’ll be happy with what we already have. Yet the creed of growth firmly objects to such a heretical idea. Instead, it suggests we should run even faster. If our discoveries destabilise the ecosystem and threaten humanity, then we should discover something to protect ourselves. If the ozone layer dwindles and exposes us to skin cancer, we should invent better sunscreen and better cancer treatments, thereby also promoting the growth of new sunscreen factories and cancer centres. If all the new industries pollute the atmosphere and the oceans, causing global warming and mass extinctions, then we should build for ourselves virtual worlds and hi-tech sanctuaries that will provide us with all the good things in life even if the planet becomes as hot, dreary and polluted as hell.
Beijing has already become so polluted that people avoid the outdoors, and wealthy Chinese pay thousands of dollars for indoor air-purifying systems. The super-rich build protective contraptions even over their yards. In 2013 the International School of Beijing, which caters to the children of foreign diplomats and upper-class Chinese, went a step further, and constructed a gigantic $5 million dome over its six tennis courts and its playing fields. Other schools are following suit, and the Chinese air-purification market is booming. Of course most Beijing residents cannot afford such luxuries in their homes, nor can they afford to send their kids to the International School.3