Slouching Towards Utopia | J. Bradford DeLong

Summary of: Slouching Towards Utopia: An Economic History of the Twentieth Century
By: J. Bradford DeLong

Introduction

Get ready to traverse through a transformative period in economic history, as we delve into ‘Slouching Towards Utopia: An Economic History of the Twentieth Century’ by J. Bradford DeLong. The summary traverses how technology and globalization altered the fabric of society, leading to a new middle class and an age of social democracy. Discover how political ideologies and international relations shaped the century, yielding both catastrophes and significant strides in progress. In shedding light on the successes and failures of this period, insights are provided into the complexities of economic growth and its consequences.

A Technological Boom

Thomas Robert Malthus’s Essay on the Principle of Population highlighted the negative effects of overpopulation. The Industrial Revolution pushed the human population beyond its previous growth limit. However, technological progress couldn’t keep up with this growth rate. But in 1870, the Northern economies began to develop industrial research labs that allowed for systematic and methodical deployment of inventions. This, coupled with new communication technologies, led to a technological and organizational capacity growth rate of 2.1 percent per year. After 1870, technology outran population growth, and working-class people began to benefit from industry advancements. Immigrants flocked to the US for a chance to become a part of the new world, and John Maynard Keynes called this time an “economic Utopia.”

Globalization and Imperialism

The rise of globalization was fueled by technological advancements in transportation and communication, enabling international trade to flourish. By 1913, international trade accounted for 17% of the global economy. However, this also created a sharp international division of labor, with the economies of the Global North prospering, while the Global South was left behind. Imperialism also played a role, with Europe and the British Empire in particular pursuing their own interests and leaving their subjects without the means to set up modern manufacturing industries. As the twentieth century progressed, the logic of empire began to crumble, leading to serious consequences during World War I.

The Tragedy of World War I

The Global North dominated the economy in the twentieth century until a Serbian nationalist assassinated Franz Ferdinand, leading to the outbreak of World War I. The war was cruel and left Europe in ashes, resulting in over 50 million casualties. The devastation led to the fall of the Austro-Hungarian and Ottoman Empires. The remaining countries became more nationalistic and isolated, and globalization retreated. Germany’s attempt at social democracy failed, and the Treaty of Versailles demanded exorbitant reparation payments, leading to the Great Depression.

Reimagining the Economy

This book explores the two schools of thought that have guided the world’s governments since history became economic. The first is Friedrich Hayek’s approach, which advocates for allowing the market to solve problems on its own, while the second, Karl Polanyi’s approach, prioritizes governing the economy to serve society and uphold all rights. Unfortunately, when the Great Depression hit, governments sided with Hayek, leading to hyperinflation and the worst economic crisis in history. The book argues for reimagining the economy based on Polanyi’s principles and avoiding the pitfalls of Hayek’s approach.

The Deadly Battle of Ideologies

In the tumultuous period between the two World Wars, three ideologies emerged, each determined to reshape the world. The Great Depression had exposed the weaknesses of semi-liberal industrial capitalism, leaving the door open for alternatives that proved equally deadly: fascism and socialism.

Socialism, based on the theories of Marx and Engels, called for the working class to rise up and overthrow the capitalist system. When this failed to happen, totalitarian regimes like that of Lenin, Trotsky, and Stalin tried to force it, resulting in inefficiency, corruption, and untold human suffering. Stalin’s brutal forced industrialization campaign led to millions of deaths from famine and labor camps in the gulag.

In Germany, Mussolini’s fascism centered on ethnonationalism, strong leadership, and territorial expansion. Hitler added anti-Semitism to the mix, as well as a vision of global domination. His regime proved tactically superior to the Allied Forces but was ultimately defeated by their superior economic production. The Holocaust and Hitler’s “total war” mentality left 60 million people dead.

Despite falling on opposite sides of the political spectrum, both ideologies sought to impose a utopian vision on their people, ultimately producing dystopian societies. After 1945, humanity was left to pick up the pieces of the disastrous battle of ideologies.

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