In the long run we’re all rich, free and peaceful

It’s intellectually fashionable to be pessimistic, so let me push back with one of my occasional contrarian posts.  I’ll try to defend Fukuyama’s “End of History” hypothesis one more time.  Let’s start with peaceful:

1. A new study shows that the Kellogg-Briand Pact (1928), which outlawed war, has been highly effective. If you took history in high school, you might recall your teacher make fun of the touching naiveté associated with this utopian treaty.  Well it looks like Kellogg and Briand might get the last laugh.  First a bit of background.  The act was intended to change the rules of war.  Previously, countries were allowed to keep territory they conquered.  It was wars of aggression that were outlawed, not civil wars, not wars to prevent proliferation of WMD, not wars aimed at preventing genocide.  And wars of conquest (which were common throughout almost all of human history), have almost stopped happening (with Russia’s recent acquisition of the Crimea a notable exception, and even that was not particularly violent.)

So the world is getting more peaceful.

2.  It’s fashionable to say that freedom is a western concept, and Fukuyama’s prediction doesn’t apply to the rest of the world.  People point to China’s one child policy, or Saudi Arabia’s unwillingness to let women drive.  I’m with Zhou En Lai; it’s too soon to say.  China recently abolished its one child policy, and today Saudi Arabia granted women the right to drive.  Maybe progress will stop and no more freedoms will be achieved in the non-Western world.  But my hunch is that modern technology will gradually make the world more liberal, by beaming images of successful western societies to everyone who has a smart phone.

So the world will get freer, even if the past decade has been a mixed bag.

3.  Here’s Tyler Cowen expressing pessimism about economic progress in poorer areas:

Increasingly, it seems that many parts of the Western world might never “catch up,” including Greece, southern Italy, much of the Balkans and much of Latin America, in addition to Puerto Rico. One of the pleasing features of the 1990s, in retrospect a delusion, was the notion that proper policy and good multilateral institutions would bring most of the world into consistent, steady-state growth at a higher rate than what the wealthier countries could manage.

I agree with most of what Tyler said about Puerto Rico, including his view that’s it’s future currently looks quite bleak.  But I find this paragraph to be far too pessimistic, and not even consistent with the data:

a.  Since 2000, the developing world has grown faster than the rich world.  Yes, that’s partly China, but it also includes lots of other populous Asian countries.  And Asia is perhaps 70% of the developing world.  Parts of Africa have also done pretty well since 2000.  But what makes this claim especially dubious is his reference to “proper policy”.  Most of the developing world rates far below the US in economic freedom (including freedom from corruption).  And those few countries that score high on the good policy scale (such as Chile and Estonia) have had a pretty good couple of decades.  If you want an African example, compare the growth rate of Botswana and Zimbabwe in recent decades.

b.  Yes, there are good reasons (including culture) to be pessimistic about the near term prospects of Greece and southern Italy.  But in 1970 there were good reasons (including culture) to be pessimistic about Ireland.  You might say that the Irish were always capable of much better, as evidenced by their success in America.  But Greeks and southern Italians have also been quite successful in America.  You might argue that corruption will keep Greece and southern Italy poor.  Yes, but for how long?  China is much more corrupt than Singapore, and much poorer.  But Singapore is also ethnically Chinese, and rooted out corruption through a determined effort of the government.  Corruption is not baked into the genes of the Chinese people.  Might the Chinese government be able to root out corruption? I don’t know, but the current leadership seems to be making an effort.

My point here is that “never” is a really long time.  If Tyler had said that Greece and southern Italy would remain relatively poor for another 80 years, I’d have no reason to disagree.  But another 80,000 years?  Who knows?

In the early 1940s the Kellogg-Briand Pact look like a pathetic failure.  Now it looks like a success.  Yesterday, it looked like Saudi women would remain oppressed.  Today there seems to be hope that they might start achieving more equality.  The arrow of history is still pointing toward more wealth, freedom and peace.  The real risk we face is not stagnation, but rather a sudden crisis that catches us unaware, like terrorists getting a WMD.

HT:  Scott Alexander, who also linked to this mind-boggling article:

The number one food exporter in the world is the United States. The number two food exporter in the world is the Netherlands, 1/270th the size and mostly urban.

Update:  Maybe not–check out comment section.



22 Responses to “In the long run we’re all rich, free and peaceful”

  1. Gravatar of Brett Brett
    26. September 2017 at 21:31

    I’m confused by that article. It says the Dutch are the second-largest agricultural exporter by value, but then says they’re the world’s top exporter of potatoes and onions.

    It sounds like the “salsa and ketchup” situation in the US. The total value of salsa sales has surpassed ketchup (so occasionally you’ll see an article saying that salsa has passed ketchup as the most popular condiment), but what actually has happened is that salsa has a much higher price point that ketchup. In volume, ketchup sales still dwarf salsa sales.

    Similarly, googling “countries by potato production” gives you China as the world’s largest producer of potatoes by tonnage, and it’s not even a close contest.

  2. Gravatar of ChrisA ChrisA
    26. September 2017 at 23:27

    Scott – what is interesting I think is how new technology can be complementary to a particular countries culture and genetic endowment, changing quite significantly economic rankings. This has happened many times in history, for instance Western Europeans somehow were better suited than many other parts of the world to industrialisation so a hitherto not particularly dominant part of the world became the richest part of the world (essentially they were bred to be good factory workers). But even newer technologies could change that. My guess is that the dominant form of economic activity in the future might be in entertainment as more and more of industrial activity becomes automated and thus a commodity. In that case you could see countries like Germany declining (in relative terms) while countries with strong traditions in culture, like Nigeria, become richer. So absolutely I can see a world in 80 years where economic ranking starts to change in all sorts of new ways as technological progress favors one country more than another.

  3. Gravatar of Christian List Christian List
    27. September 2017 at 04:15

    The number two food exporter in the world is the Netherlands,

    How much of that are actual exports of food that are produced in the Netherlands and how much are exports on paper because
    some of the biggest food (and drink) companies of the world got their headquarters in the Netherlands.

    and mostly urban.

    This might be a misunderstanding. “Mostly urban” in the case of the Netherlands means that most Dutchmen live in (confined) urban areas not that most of the Netherlands is one big city with no space for agriculture. Just google “netherlands urbanization” in Google pics, there are 1-2 good maps about it. The land itself is not “mostly urban”.

  4. Gravatar of Benjamin Cole Benjamin Cole
    27. September 2017 at 05:14

    Hard to imagine that potatoes came from the New World!

    And 80,000 years from now, maybe there will chrome-plated statues playing looped recordings of Helen Reddy’s “I am Woman” continuously on every street corner in America.

    I want believe nations and people will move forward, not backward.

    Maybe we are in a 100-year detour now. In the 1950s, a regular Joe could travel (and even enjoy) the Mideast, visit Cairo, Baghdad, Tehran, Damascus, Beirut, even Kabul. Try that now.

    Are Attaturk’s secular reforms in Turkey to be undone?

    China is rapidly getting worse on civil, legal and human rights, especially free speech. The Internet opens the world, and also allows unprecedented spying opportunities. China once moldered for centuries.

    North Korea?



    Argentina was once nearly considered part of Europe. Now a basket case. Latin Americans will never miss an opportunity to miss an opportunity.

    Are not you glad you spend all that tax money to keep Puerto Rico out of Castro’s orbit?

    Perhaps India is a hope. Lots of people, seems to be getting more business-oriented. GDP, as measured, growing.

    The U.S.? No nation lasts forever.

  5. Gravatar of dtoh dtoh
    27. September 2017 at 06:49


    Developing countries generally don’t have very effective governments. More specifically, they’re not very effective at collecting taxes. Maybe that explains the higher growth rates.

  6. Gravatar of Justin Justin
    27. September 2017 at 07:11

    1. I’m not sure how a study can demonstrate that the Kellogg-Briand Pact has any influence whatsoever, and it is too soon to declare that wars of conquest are over. In the two decades after the pact, we had the most destructive wars of conquest in human history, with Germany in particular conquering a swath of territory as expansive as that conquered by Alexander the Great. After 1945, we had one or two superpowers armed with nuclear weapons, which surely limited the prospect for any wars of conquest. This century, we will likely return to the type of scenario in which there are multiple great powers, and we’ll see if wars of conquest are really over.

    2. What was the motive for China and Saudi Arabia? Was it to enhance freedom, or was it to serve some other goal (e.g. for China, the fact that fertility levels are well below replacement and sex ratios are out of whack)? I don’t think we can assume continued increase of freedoms unless freedom was the goal of those liberalizations.

    Anyway, I think the trend of greater liberalization isn’t inherent to humanity, but reflects the geopolitical dominance of Great Britain and the United States for the last two centuries. That dominance is currently ending. At the start of this century, the United States had greater GDP than India and China combined. By the end of this century, I expect both China and India individually will have greater GDP than all of NATO combined. So we’ll see.

  7. Gravatar of thd33 thd33
    27. September 2017 at 07:38

    The Netherlands agriculture export stats are suspect because all Dutch trade statistics are inflated by the fact that Rotterdam serves as the leading port for the EU. Most of their exports are to neighboring countries, e.g. Germany, and they have really high import numbers too.

    Nominal GDP of $750b, but imports worth $400b and exports worth $480b.

    Los Angeles County would have really impressive “export” statistics too if it were a separate country from the rest of the U.S.

  8. Gravatar of Jim Jim
    27. September 2017 at 08:55

    Caption to one of the photos of the article

    “The Netherlands is second only to the United States in global food exports thanks in part to modern processing companies like Greenpack, which ships fresh fruits and vegetables around the clock to markets around the world. Much of the produce is grown in other countries, shipped in bulk to the Dutch port of Rotterdam, packaged for consumers, then moved to markets by air, rail, and sea.”

  9. Gravatar of Bob Bob
    27. September 2017 at 08:57

    The variations in borders draw all kinds of arbitrary lines in the near term. Instead of looking at the US as a unit, or even US states, look at the country level: How much of the US starts to resemble Greece and southern Italy? How much growth do we have outside of top 10, metro areas? top 20?

    The separation of political power and economic power is going to be the question of our lfietimes.

  10. Gravatar of Christian List Christian List
    27. September 2017 at 08:59

    Very good point, that’s it.

    And as I said most of the land use is agriculture instead of urbanization. Not the other way round:

    Suprisingly there’s a lot of extensive farming in the Netherlands as well. It seems to be at least 50:50 between extensive and intensive farming. Normally you would expect extensive farming in countries like the US, Canada, Australia but not in the Netherlands, because extensive farming needs so much land. But hey, the Netherlands is “mostly urban”, isn’t it?

  11. Gravatar of Alec Fahrin Alec Fahrin
    27. September 2017 at 09:09

    1. Nuclear weapons and a bipolar world led directly to the massive decrease in wars of conquest. The 1928 agreement had no effect on the 1931-1945 period. After that time most people and governments probably didn’t even know or think about this rather minor and idiotic 1928 agreement. Hence, most political scientists (including the ones teaching me) are scoffing at this new research published ar Harvard. Furthermore, in a relative sense wars of conquest and death counts to war have been falling rapidly since the early 1600’s. Finally, the world may have fewer wars of aggression while also not be more “peaceful”. Having a gun to someone’s head might keep the peace, but it’s not peaceful.
    2. I’d agree that, on the whole, freedoms are increasing around the world. Yet, I would caution two nuances. First; these changes are mostly civil rights. Democracy, especially liberal democracy, has fallen about 10-15% since 2005 in the world according to freedom house. Second; I give credit for those changes to technology and not to some enlightened political thinkers. Far more Chinese are freer today because they are not starving and can read, not because the political system now is freer. Much of this increase in civil rights is related to economics or demographics as well. A benefit of globalization if you might say.
    Yet, in the long-term, I’d expect to see fewer political rights but more civil rights worldwide.
    3. Here’s an interesting article for Sumner related to the “number of years at current growth rates required to catch up to the USA’s living standards”.
    Maybe not 80,000 years, but much closer to 100-200.

  12. Gravatar of msgkings msgkings
    27. September 2017 at 09:10

    Always appropriate for this topic:

    “The Rational Optimist” by Matt Ridley

  13. Gravatar of ssumner ssumner
    27. September 2017 at 10:25

    Brett, There is a difference between producer and exporter. China consumes lots of potatoes.

    ChrisA, Good point.

    dtoh, I very much doubt that ineffective governments explain high growth rates. The correlation probably goes the other way, holding other things constant.

    thd33 and Jim, Thanks. I guess all mind-boggling facts need to be double checked.

  14. Gravatar of Todd Kreider Todd Kreider
    27. September 2017 at 15:03

    Scott wrote: ” If Tyler had said that Greece and southern Italy would remain relatively poor for another 80 years, I’d have no reason to disagree. But another 80,000 years? Who knows?”


    You’d have no reason to disagree 80 years out the year 2097??

    Here is a conservative estimate for Bangladesh, which has a GDP per capita of $3,500 in today’s dollars and has steadily grown at 5.4% per capita for the past ten years:

    If 5.4% holds for 80 years then Bengladesh, which probably won’t be around as a country, will have a GDP per capita of $225,000. That would be amost the same as the U.S. maintaing a 2% per capita increase from $50,000 today to $245,000 by 2097.

    The last thing to worry about is how wealthy a person anyhwere will be in the year 2097.

  15. Gravatar of Scott H. Scott H.
    27. September 2017 at 17:23

    But another 80,000 years?

    Hoowaaa! You really nailed TC with that one!

  16. Gravatar of Uday Uday
    28. September 2017 at 08:13

    I honestly believe that technology and globalization have much to do with the world getting better, even if we keep electing crooks and cronies to office. Part of the reason why Saudi Arabia has been increasing freedoms for women in the past few years is thanks to pressures from globalization.

    Previously, high oil prices allowed S.A. to maintain a bloated government and welfare state that would provide many essentials to wealthy Saudi natives and various interest groups, have come down, forcing the government to make several cuts. On top of that, their various restrictions on labor (women and non-natives are barred from working, although I don’t know the specifics too well) drove up the cost of labor. Obviously, if you can only hire a male, native worker for various tasks, that will create a labor shortage. Plus, globalization has forced the government to reconcile the fact that they can’t keep advertising a vision of a backward culture and in order to encourage more foreign investment, they will have to appear more open.

    Another African country that has been (kind of) following the Singapore model is Rwanda. Most people’s first impression of that country is the infamous genocide that resulted in the deaths of millions of innocent lives. However, since the early 2000s, Paul Kagame, the president of Rwanda has been promoting economic liberalization, but I’ve also heard that he’s a corrupt and brutal autocrat (which was one of the criticisms of Lee Kuan Yew).

  17. Gravatar of ssumner ssumner
    28. September 2017 at 21:31

    Todd, I said “relatively”. And please don’t tell me you think Bangladesh will maintain that growth rate for 80 years.

  18. Gravatar of Todd Kreider Todd Kreider
    28. September 2017 at 21:41

    Here ya go: Bangladesh will maintain at least that growth rate for 80 years.

    Why wouldn’t it? I know full well that neither you nor Tyler Cowen had a clue that China would grow at 8% for 40 years back in 1980. Oui?

  19. Gravatar of Scott Sumner Scott Sumner
    29. September 2017 at 08:37

    Todd, Tyler was wrong about China, but I’ve been almost exactly right since 1980. Back then I predicted that China would grow at 10%/year for many decades, based on the fact that it was adopting free markets, and based on the growth rates in places like South Korea and Taiwan. How would you describe that prediction today? Was I right?

    Don’t assume that you know what I believe about something, without evidence.

  20. Gravatar of Todd Kreider Todd Kreider
    29. September 2017 at 11:06

    Then that was a misunderstanding on my part as I thought both you and Tyler wrote you were surprised by China’s rapid growth from a 1980 perspective.

    Your examples were of Southern Italy, where I can’t find regional data for and Greece, which grew strongly for years before imploding at the beginning of the Great Recession. I used Bangladesh instead because it is truly a poor country that has had steady growth from 1990 (as far back as I have data for) and an acceleration from 2000.

    GDP/capita growth rate from 1990 to 2000: 2.6%
    GDP/capita growth rate from 2000 to 2016: 6.3%

    Bangladesh has also been repeatedly used by global warming alarmists as a “poor country” that will be hit the hardest in 2090. Yet they will be much wealthier than the US is today. What is so hard to believe about growth over 5% for decades given their recent 25 year track record? Won’t they also get all of those robots and powerful “near AI” systems running throughout their economy by 2030 to say nothing of 2097?

    Economists who forecast long term growth almost never factor in the essentials. It is great to see that you are no longer one of them!

  21. Gravatar of ssumner ssumner
    1. October 2017 at 16:22

    Todd, I do agree that Bangladesh will grow at 5% for many more decades, just not as many decades as you think.

    Numbers matter.

  22. Gravatar of Todd Kreider Todd Kreider
    1. October 2017 at 17:50

    Of course numbers matter. And?

    Bangladesh with a population of 163 million has about 125 mobile phones. Smartphone statistics are only estimates but looks like around 16 million subscribers. Their GDP per capita is growing at 6% to 7% a year and smart phone subscribers are increasing at around 30% a year.

    As smartphone prices continue to drop, you agree that within a few and as sales of smartphones increase by 30% a year, there will be 130 million such subscribers by 2025, right?

    And the same exponential rise will occur with virtual reality systems and at the same time health care will become vastly superior by 2027 – everywhere.

    And we are only at 2030 when the technology available to almost all Banladeshians will blow away technology Americans use today.

    What reason besides the end of civilization would there be for Bangladesh to just stop adopting and producing high tech in 2020, 2030, 2045, etc and even at 2045 there are still 52 more years until your maybe Greece and South Italy will be rich, maybe not 2097 year arrives.

Leave a Reply