Lunchtime Links

  1. Interview with a secessionist
  2. Ducking questions about capitalism
  3. The perverse seductiveness of Fernando Pessoa
  4. Yet in this simple task, a doffer in the USA doffed 6 times as much per hour as an adult Indian doffer.”
  5. Conflicted thoughts on women in medicine
  6. The Devil You Know vs The Market For Lemons (car problems)

The Return of Cyclical Theories of History

“People and states oscillate between peace and war, freedom and slavery, order and disorder. They tire easily. Even happiness soon grows wearisome. No sooner do they begin to enjoy the benefits of wise and just government than they demand more wisdom and a different kind of justice. Factions spring up. Everyone is on the lookout for new privileges. The equilibrium that was so hard to strike crumbles. Wild hopes are embraced. The system collapses. Everything has to be built up anew on the ruins of the past”.

Jean, D’Ormesson, The Glory of the Empire

This, from D’Ormesson’s excellent 1971 fictional history The Glory of the Empire, could stand in for many such statements from thinkers who have held to a cyclical view of political development: Polybius, Machiavelli, Vico, Spengler, and Arthur Schlesinger. Now, after a period of eclipse, cyclical histories are back in fashion. Tyler Cowen in his excellent new book The Complacent Class heralds their return:

The biggest story of the last fifteen years, both nationally and globally, is the growing likelihood that a cyclical model of history will be a better predictor than a model of ongoing progress. (Cowen, 2017, p. 200)

The leading modern day cyclical theorist is undoubtedly Peter Turchin. For my money Turchin’s best book is Secular Cycles (co-authored with  Sergey A. Nefedov). Their innovation (building on an argument made by my GMU colleague Jack Goldstone in his 1991 book Revolution and Rebellion in the Early Modern World) is to take the Malthusian model of economic cycles and add to it a model of elite competition.

Tuchin and Nefedov show that periods of demographic expansion are often associated with the growth of elite incomes and inequality (as population growth causes rents to rise and wages to fall). More elites competing over the surplus, however, puts fiscal pressure on the surplus-extraction machine that we call the state. Elite overproduction thus brings about a political crisis. Secular Cycles applied this model to medieval and early modern England and France, Russia and ancient Rome. Turchin’s most recent book applies it to the United States.

Another recent cyclical account that has caught my attention is that of Bas van Bavel. His recent book The Invisible Hand? (OUP 2016) has been favorably reviewed by Branko Milanovic (strangely Bavel doesn’t cite Turchin). I quote in full from Branko’s review:

Van Bavel’s key idea is as follows. In societies where non-market constraints are dominant (say, in feudal societies), liberating factor markets is a truly revolutionary change. Ability of peasants to own some land or to lease it, of workers to work for wages rather than to be subjected to various types of corvées, or of the merchants to borrow at a more or less competitive market rather than to depend on usurious rates, is liberating at an individual level (gives person much greater freedom), secures property, and unleashes the forces of economic growth. The pace of activity quickens, growth accelerates (true, historically, from close to zero to some small number like 1% per year) and even inequality, economic and above all social, decreases . . .

But the process, Bavel argues, contains the seeds of its destruction. Gradually factor markets cover more and more of the population: Bavel is excellent in providing numerical estimates on, for example, the percentage of wage-earners in Lombardy in the 14th century or showing that in Low Countries wage labor was, because of guilds, less prevalent in urban than in rural areas. One factor market, though, that of capital and finance, gradually begins to dominate. Private and public debt become most attractive investments, big fortunes are made in finance, and those who originally asked for the level playing field and removal of feudal-like constraints, now use their wealth to conquer the political power and impose a serrata, thus making the rules destined to keep them forever on the top. What started as an exercise in political and economic freedom begins to look like an exercise in cementing the acquired power, politically and economically. The economic essor is gone, the economy begins to stagnate and, as happened to Iraq, Northern Italy and Low Countries, is overtaken by the competitors.

This is a great summary of the main idea of the book.  And the idea of endogenous economic cycles is an intriguing one.

But my impression of Bavel’s argument is less favorable. I am more inclined to the views expressed in this more critical review of the book by Peer Vries who lauds the ambition of the project but wishes that the execution was better. Like Vries I think there are issues with defining and measuring the growth of factor markets. I think that purely internalist stories of rise and decline might make sense for some preindustrial societies but are much less compelling for the more interconnected early modern world let alone for the post-1800 period. All in all, the book lacks a clearly laid out theoretical framework and suffers for it.

This said, cyclical patterns in history and in particular what one might call political cycles should get more attention. We should not be looking to date Kondratiev waves or other such pseudo-scientific phenomenon, but we should seek to build models and explanations that explain the pattern of ups and downs, growth efflorescence followed by crises and collapses, that characterized preindustrial history.