Why have we progressed more in the last few hundred years than in the previous tens of thousands before?
Johan Norberg has written a magnificent book that gives insights into our current world, the state we are with all the polarisations and conflicts but also how fragile our success is, and why it is not guaranteed to last.
He discovered that the traditional way of studying history from the reverse-order, starting from the present and going backwards, also called as “a golden nugget theory of history”, does not give the proper explanations for our current state of civilisation.
There are periods in history where different cultures with different religions, ethnicities and locations had rule of law, rapid economic growth and scientific progress. These upturns were often sudden, unexpected and very expansive with population and income growth.
There are examples from the Phoenicians, Athens, the Hanseatic League, the Dutch Republic, the Muslim world before the Mongol invasion, India under Ashoka the Great, Singapore, Hong Kong, China in the Song dynasty era and after Mao’s death, among many others.
All of them have commonalities that are the basic message of the book: people were open to new and different ideas, innovations, cultures, habits, foreigners, technologies, business models and more importantly to the uncertainty that the opening up to something different and strange bring.
We have our current Western development because those things happened, and as Nordberg illustrates it was not because of lack of trying to prevent them from happening but because of failure to keep those elements away unsuccessfully. Europe was too fragmented for any single ruler to impose strict controls over the whole continent unlike what happened earlier with China after the Song dynasty.
The battle between open and closed does not happen between people or institutions. That is too easy an explanation. It happens within all of us, every day.
The flourishing eras were the result of open borders, open societies where people were free to experiment, argue and exchange without permissions from the top or controlling agendas that tried to shape the society or pick the winners.
Our societies are too complex for any human to comprehend. We cannot control complex systems and this makes us uncomfortable. We don’t tolerate well uncertainty and it is perceived as a risk. Therefore, the natural instinct is to close up and try to impose restrictions and controls to change. This bottling up does not remove the uncertainty but it can make us feel more comfortable that we are handling the situation.
Ruling classes, elites, and incumbent institutions have always tried to slow-down or prevent progress to happen. They have much to lose with the change, and the current status quo enables them to stay in power and enjoy their privileges.
In times of turmoil, societies tend to close up in order to seek stability and security. This vicious cycle feeds itself with populists and those that gain from the current stability. Often, those, who will lose the first and have the most at stake, are the very people who are enabling the closing up process en masse.
Protectionist measures will hit the hardest the low-income and unskilled people when their productivity cannot be sustained by the slowing down or even reversing of economic growth.
People have always cooperated. We have trucked, bartered and exchanged at least the last 300 000 years. Homo sapiens have unique traits that make us different from Neanderthals: intelligence, language and cooperation. The game theory experiments have shown that less time we have to make a decision the more we cooperate. Homo sapiens had an advanced division of labour from early on. Raw materials and goods were exchanged from great distances.
The more people trade between each other the less ruthless they are. Big cities are examples of this in practice. They are the wealthiest and the residents are more open to globalisation and new ideas. The interaction between different people and ideas is seen as mutually beneficial, and we extend our openness and cooperation to new, strange people.
Why are the earliest found written records transactions, prices of goods and ownership titles if they were not crucial to humans? First things first, and all the rest including philosophical and religious writings came afterwards. It may not be the most thrilling moments to realise that the first written historical records are written by some ancient accountants.
The paradox is that the only way forward is to tolerate uncertainty and hold back the controlling urges for the unpredictable and unforeseeable to happen. Progress happens when many people do individual decisions and experiments and someone gets through with new discoveries and solutions, often by lucky coincidence like Matt Ridley has described recently in his latest book.
The more people we have in this complex system interacting in unpredictable ways the greater the total outcome for the whole society. The benefits are distributed unevenly between the original innovator and the rest of the populace. On average, a new innovation benefits the founder only around 2,2 per cent and the rest of the social value goes to the society. Just think about the iPhone, the Internet or any other wonders we have now but that did not exist a few decades ago.
The reverse is also true. The less people we have that can gain insights and knowledge, be productive and creative the less opportunities there are for progress, well-being, and total advancement in society to happen and materialise.
Norberg argues that because we have so strong tendencies to tribalism by our very nature we need an open world to counter-balance those forces within.
The economist Bryan Caplan has concluded that trade and immigration are some the most polar opposite topics among the majority of people from the conclusions of economic scholars. They are perceived as zero-sum games instead of generators of vast mutual gains for parties involved.
Voluntary interaction and open economy are complex systems that we cannot perceive. It is impossible to keep track who has contributed what and how everyone is getting their share of the wealth created. Most of our human history the zero-sum has been the norm when we did not experience progress, innovations and economic growth.
False instincts come in many forms. The physical fallacy states that objects have constant and true values instead of subjective values based on people’s preferences. This feels wrong to our equality-matching brain that does not perceive things as fair when circumstances have changed, and valuations as well. What was valuable yesterday may not be in demand today. 2020 has provided many examples of this after coronavirus effects have totalled many industries that flourished before.
It is easy to repeat human history and close up after hardship and yield to the fight or flight response. It’s harder to acknowledge what Nobel laureate Friedrich Hayek once said:
“Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen”.
And it takes even more wisdom to appreciate the fact that we cannot stop the clock or stay still. There is no one who can come and rescue us from our current predicament but us, together. The less we cooperate the bigger the challenges in future, and more chances there are that we will lose what we have and even forget some of the knowledge and wisdom we have attained so far.
Progress is a messy process of continuous problem-solving that can be easily curtailed. The prevention of progress to happen has been so successful that there is only one experiment left, our current one. Will it last or end like all the previous ones is for us to decide: Open or closed?