THE JOURNEY OF HUMANITY

Insights into two important questions: Why has the world suddenly become so wealthy, and why is there vast inequality between nations?

In 1798, Thomas Malthus wrote that when societies produced a food surplus, the rise in living standards was always temporary because the population also rose and consumed it, so living conditions reverted to the subsistence level. However, soon after his death, living standards rose steadily. Since then, life expectancy more than doubled, birth rates plummeted, and per capita income skyrocketed with no end in sight. Traditional scholarship gives the Industrial Revolution credit, but Brown University professor Galor argues persuasively that the move away from Malthusian theory had less to do with the steam engine than “human capital.” During most of history, laborers put their children to work and earned extra income, which encouraged them to have more children. Consequently, populations rose. By the 19th century, jobs often required workers who could read and calculate. Since so many people were uneducated (“literacy rates over most of human existence were insignificant”), some businesses joined the growing movement for free, compulsory, universal education. Children became human capital that increased in value as they became skilled at higher-paying jobs. With so much invested in each schoolchild, who brought in no income, parents had fewer children. When school attendance rises, fertility drops, and this is happening around the world, even in developing nations. Poverty is declining, and prosperity is increasing to the point where environmental degradation is a persistent problem. Regarding his second theme, Galor explores inequality without delivering a firm explanation of why some societies prosper. That the quarrelsome, fragmented nations of Europe led the way, while other empires stagnated, has produced a sizable amount of scholarship, to which Galor makes a modest contribution. Diversity has long been praised as a promoter of growth, profit, and creativity. The author astutely examines how it can also lead to political instability and social conflict, showing how multicultural societies that don’t work diligently to promote coexistence suffer for it.

Big ideas worth attention.