Inequality and the cycle of civilization

Keynes, retiring in 1945 after 33 years editing the Economic Journal, gave a toast at a dinner given in his honor. He toasted economists:

economists, who are the trustees not of civilization, but of the possibility of civilization.

Economists, he was saying, are responsible for making civilization possible. Should they fail at the task, civilization becomes impossible. The economy must be good, Keynes was saying, or civilization cannot endure.

Long-term slowing of economic growth is indistinguishable from the decline of civilization.

In my view, the cycle of civilization is an economic cycle driven by wealth: If the growth of wealth outpaces the concentration of wealth, times are good; otherwise, they are not.

What woke me up was the sudden thought that trade goes all the way back in human history. There has always been trade. There is always this force at work, concentrating wealth. And here's the thing: When wealth grows faster than it concentrates, wealth spreads. You get the upswing of an economic cycle. But when wealth concentrates faster than it grows, you get the downswing.

If you read me, you can guess where my mind takes these thoughts: A cycle ... since the beginning of human history ... driven by the concentration and distribution of wealth: A cycle of civilization.

Ordinarily, stopping the concentration of wealth might stop the decline of civilization. But things have now progressed too far: To preserve civilization, the concentration of wealth must be reversed. Keep in mind, ye preserver of civilization, that concentrated gains outweigh widely distributed gains:

Concentrated gains tend to lift the few and lower the many. Given the increase of inequality, there is a point beyond which the gains from economically viable choices are not sufficiently distributed to permit us to say that "humanity" is lifted. It is only below this determining point that the distribution of gains assures the lifting of humanity.

The ageing of capitalism increases economic inequality. This suggests that reducing inequality might help reverse the ageing process and restore the health and vigor of our economy, and of our civilization.

Britannica says that after the fall of Rome there was "a virtual disappearance of urban life" for three or four centuries.

The growth and decline of cities is a useful indicator of the growth and decline of civilization. The fall of New York's Twin Towers is a benchmark in our decline.

Carroll Quigley, on page 266 of The Evolution of Civilizations, lays out the "process" by which civilization "dies" and is "reborn". His process of decline includes the decline of cities:

there is a general exodus from the towns as people try to find a place in which they can be attached in some stable social and economic relationship to the food-producing earth...

We are not there yet. But we can judge by our cities, and say the decline of our civilization is under way.

Here, Timothy Taylor quotes Paul Cheshire, from the Housing Watch Newsletter:

... cities are the most welfare enhancing human innovation in history: they empowered the division of labour, the invention of money, trade and technical inventions like the wheel – let alone government, the arts or culture.

Welfare-enhancing? Sure: The growth of cities is part of the process of the growth of civilization. But to me, Cheshire's statement lacks context. It lacks the context that would be provided by thinking in terms of the cycle of civilization. 

Does Cheshire discuss the decline of cities? He does not. Not in the interview. The closest he comes is when he says

Another endemic problem of urban policy is what I have called ‘faith-based displacement activity’ – spending resources on problems urban policy cannot solve, such as societal inequality.

He calls inequality a "truly serious problem". But he complains about "spending resources" on such problems, problems that arise in the decline phase of the cycle of civilization. Problems that "urban policy cannot solve". But he does not see these problems in context. He does not see the rise of such problems as part of the decline of civilization.

He only sees the bright side. Cities, he says, are "welfare enhancing". Evaluating trends, he sees "the resurgence of large cities." Policy that "restricts the supply of urban land" is the problem, he says. It's lucky that "cities are so resilient because urban policy is generally so bad!" he says. Policy is "not useful for facilitating urban growth", he says.

It's all one-sided. Cheshire's view is all policy-related and all pro-city. Yes, he admits, cities give rise to incidental problems, but the real problems of cities (he says) are imposed on them by policy. Policies interfere with city growth, he says. It's lucky cities are so resilient. And that's it: That's his whole argument. 

But cities do not only decline because their policies are less than perfect. Big picture, cities decline with civilization.

Take a city out of the "rise" of civilization and drop it into the "decline" phase. Do the city's problems increase? Of course the problems increase. That's what I'm saying: Cheshire's argument lacks the context that the cycle of civilization could provide. He was "brought up in London and was always fascinated by it" -- and that is really all that his argument shows.

Our declining cities are evidence of the decline of our civilization.

For me, the problems of cities suggest 1. rise, and 2. decline. Cheshire sees 1. rise, and nothing beyond that. I am reminded of another Tim Taylor article: Macaulay on Economic Progress, 100 Years Before Keynes where Taylor asks a question:

"Yes, maybe economic progress is about to stop and reverse itself. Maybe we will be immiserated by new technology. Maybe the future is one of mass starvation from overpopulation. But looking back at the historical experience of the last several hundred years, what can be the basis for having any confidence in such pessimistic claims?"

The basis for such claims is the cycle of civilization. The "last several hundred years" were the upswing and the peak of the cycle. 

Taylor asks his question, I'd say, because he thinks it has no answer. He sees no answer to it because he excludes the possibility of the decline of civilization. I don't often invent views and attribute them to other people, but in this case I can see no reason to ask the question Taylor asks, except that he excludes the possibility of the decline of civilization.

Civilizations decline. This time is not different. Toynbee maintained that the fate of civilizations is determined by their response to the challenges facing them. We must rise to the challenge, and we must have the right response.

Accepting the idea that civilization runs in cycles does not mean we must accept every bad thing that happens as proof "the end is near". It only means we are willing to consider such an ending as possible, should events and logic demand it.

The irony here is that dismissing the concept of the Cycle of Civilization is the best way to assure that the decline phase runs its course.