WARNING: Summaries are generated by a large language model and may be inaccurate. We suggest that you use the synopsis, short and long summaries only as a loose guide to the topics discussed. The model may attribute to the speaker or other participants views that they do not in fact hold. It may also attribute to the speaker views expressed by other participants, or vice versa. The raw transcript (see the bottom of the page) is likely to be a more accurate representation of the seminar content, except for errors at the level of individual words during transcription.


In this video, we explore how economic growth can lead to peace and stability, challenging the traditional narrative that it is social and institutional factors that drive progress. We examine the implications of this idea, and how reducing energy and material use can lead to social prosperity. We also discuss the ideological lens through which China's rapid economic growth since the 1980s is often viewed in the West, and how special interests can control politics. Degrowth is a risky prescription but may help solve intractable social problems and reduce inequality.

Short Summary

The speaker challenges the traditional narrative that progress is made through social and institutional factors, suggesting that unprecedented economic growth and material prosperity is actually responsible for the peace and stability of the past few generations. They suggest examining the degree to which democracy is a necessary condition for economic growth, and propose unpacking the idea further to consider the implications of this. They also suggest that material and social prosperity do not have to be decoupled, and that social prosperity can be achieved through reducing energy and material use. They draw attention to China's experience of rapid economic growth since the 1980s, and the ideological lens through which it is often viewed in the West, as well as the tendency for special interests to control politics in the US.
The transcript discusses how special interests control countries and focus on fighting over a fixed or shrinking pie, leading to a lack of real growth since the 1970s and 1980s. Degrowth is a prescription for sustainability, but it is risky and requires a change in our societies. Rising populism, social unrest and discontent is a consequence of a static or shrinking pie. There is a perception of an aristocracy forming, with fewer opportunities for upward mobility. Economic growth can move the locus of power away from technocrats and help resolve intractable social problems, but it does not equally benefit everyone.

Long Summary

The speaker discussed the idea that international peace and stability enjoyed for the past few generations may not be due to humanity's collective wisdom increasing, but rather due to unprecedented economic growth and material prosperity. This is a provocative thought that challenges the narrative that progress is being made through social and institutional factors. The speaker suggests that economic growth may be a proxy for other forms of value creation, and that this is what has truly been responsible for the peace and stability we have enjoyed.
The speaker posits that economic growth is a necessary condition for democracy, as anything that curtails economic growth would invite disaster such as social unrest, war, and violence. This has been weighing on the speaker's mind and they want to explore the implications of this idea further. The speaker also acknowledges that the discussion in the economics literature about the degree to which democracy is a necessary condition for economic growth is controversial and fundamentally uninteresting, as it has been disproven by the experience of countries such as China. They suggest unpacking the idea further to see if it is true, and to consider what implications this could have.
The speaker is discussing the idea that democracy and economic growth do not always go hand in hand, and that other forms of social prosperity are possible. They distinguish between material and social prosperity, highlighting that the degrowth paradigm suggests that humans can prosper without material wealth. They go on to suggest that social prosperity can be achieved through reducing energy and material use, and that this is the basis of the degrowth narrative.
The speaker observed that material prosperity and social prosperity are often assumed to be decoupled, but he is now considering the opposite: that material prosperity is the cause of social progress. This insight was prompted by his experience of living in the US for six years and witnessing increasing polarization and dysfunction. He proposes that this assumption should be challenged, and suggests that examining the underlying assumptions could lead to a change in the future.
China has experienced rapid economic growth since the 1980s, due to a strong focus on incentivizing local officials to prioritize growth over solving local problems. This has had many downsides, such as pollution and misallocation of capital, but has also improved human well-being and wealth. In the West, there is a tendency to view this history through an ideological lens. Similarly, in the US, special interests will always be vying for control of politics, and it is important to recognize this in order to understand the political landscape.
The transcript discusses how special interests are often in control of countries and how they are more focused on fighting over a fixed or shrinking pie instead of taking advantage of new opportunities. This has led to a lack of real growth since the 1970s and 1980s, with medium incomes remaining flat. This has had an effect on politics, as people are more focused on applying pressure to win rather than taking advantage of new opportunities. This has been discussed in the economist community, with some arguing that democracy is vulnerable in this situation.
The transcript discusses how consolidated centres of wealth and power can maintain the status quo without major challenge, and that a similar dynamic is seen at the individual level. People are less likely to oppose the status quo if the pie is growing, as everyone is getting a bigger piece of it, compared to when the pie is static or shrinking. This can lead to populism, social unrest and discontent. The idea of a rising tide lifting all boats is discussed in relation to Weber and Dirk Heimi's works in the social sciences and humanities.
The transcript discusses the implications of a deliberate and permanent economic downturn, otherwise known as degrowth. This prescription for sustainability is not without risks, as it could be catastrophic socially and psychologically. It is possible to achieve sustainability without compromising our ethical obligations, however, it requires a change in the structure of our societies. In the US, attempts have already been made to control the movement between classes, and this could be a consequence of refraining from a commitment to growth. Despite this, it is possible to achieve sustainable growth, but only if we are willing to make the necessary changes.
There is a growing perception that an aristocracy is forming in America, where one is either in it or not. Social prosperity is linked to material prosperity and is declining as the middle class shrinks and the underclass grows. This is reflected in contentious mechanisms for transitioning between institutions, such as university admissions and standard exams, with fewer opportunities for upward mobility. These issues are increasingly important, as they are closely linked to who gets access to education, jobs and other forms of social and economic success.
The role of economic growth in resolving difficult problems is often underestimated. Economic growth moves the locus of power away from technocrats, who prefer to focus on managing the economic conditions that may cause growth, to those who create businesses and produce growth directly. This shift in power has been a major factor in the last 20 years, as it has allowed for the resolution of many intractable social problems which were otherwise unable to be solved. Despite this, economic growth is often derided due to the fact that it does not equally benefit everyone, and this is unfortunate.
The conversation revolves around how to continue making progress and solve problems in the future. It is suggested that a technocratic approach may have worked in the past, but it is questioned whether this is really the case. It is suggested that many problems have merely been eroded down, and that this erosion has been mostly a function of economic growth. It is questioned whether this progress can be maintained if economic growth slows down, and whether the progress made is really as much as we think. It is suggested that this should be the central question to ask if we want to continue making progress.

Raw Transcript

if i remember the where we left off uh you sort of you dropped this really provocative thought and i have not been able to get it out of my head for the last several weeks um in fact i was even writing about it today and i was talking with my team about it which is this idea that um uh this is just a piece of what we were talking about but this idea that i had that i've just been dwelling on is the notion that the um that the international peace and stability that we've enjoyed for a couple generations now i mean it hasn't been perfect it's not like there's there has not there has been no war no violent conflict anywhere on the planet but in relative terms there's been no war between great powers um you know certainly not between the superpowers there hasn't been you know you know all-out war and there's been relatively um a relatively small amount of violent conflict and in general uh some judging by historical standards pretty extraordinary peace and stability um that's gone along with the prosperity of the global north and uh you your very provocative question or point was is is is is any of that really down to uh humanity's collective wisdom increasing and you know us becoming better people and improving our institutions and and you know democracy spreading and all of the rest of that noble story that we are you know we almost always that narrative that we almost always tell ourselves or is it really just a matter of you know we've enjoyed unprecedented economic growth and material prosperity and that has just you know kept the wolves uh from the door basically and then we may be deluding ourselves into thinking that that these these other you know social and institutional factors are uh what where we've made progress when in fact the real progress that mattered was just material prosperity and um and economic growth and and and the economic growth being a proxy for other things other things like um well not just material prosperity but but maybe perhaps more subtle dimensions of value creation in general so i have not been able to get that damn idea out of my head this idea that that you know humanity hasn't become necessarily better and it isn't you know perhaps it isn't progress of the kind that we thought that has given us um a uh uh a peaceful and more stable world than our grandparents and great grandparents and great great parents and so on enjoy and uh i think this is really quite profound and and and if it's if that's the case if it's true if that if that if this
even if it's only partially true even if it's it's just a matter of those variables being much more important than they're giving credit for but um but certainly if if they tend to be you know certainly if the situation is such that those tend to be the the dominant variables um then then you know the the there are enormous implications to that uh looking ahead ahead into the future and one of the biggest ones of course would be that anything we do that that curtails economic growth anything that we do to curtail material prosperity this would be just inviting absolute disaster not just economic disaster but like social geopolitical uh disaster in terms of violent conflict you know social unrest war and um and so that adds a a that it adds an enormously um uh significant uh implication to the whole degrowth paradigm the whole degrowth approach to achieving sustainability environmental sustainability for example um and everything that goes along with that entire ideology so uh yeah it's just this has been weighing on my mind a lot recently and it's all you just said it like it was almost like it was a passing thought and it was it was really one of the more profound things i've ideas i've encountered in the last last few years so anyway i was hoping we could talk more about that and explore it and think about you know um uh well just sort of unpack it and and see if we can if we can figure out whether we really think that that's true how we would test it and and um what it's what the implications might be and so forth um that's just an idea that struck me so hard that i want to explore it so i think i made a more uh circumscribed statement than than what you just said but um can you repeat i mean so the i was uh maybe i'll set it up this way so there's often a discussion in the economics literature about the degree to which democracy is a necessary condition for economic growth right this is controversial and fundamentally uninteresting i think clearly false given the experience of china and many other cases so i don't know how this is even an interesting question but it seems to be one that's often discussed what i was doing was posing the question in the opposite direction right is democracy in some sense is it is economic growth a necessary condition now that's well you could say it's just wrong because you could look and say japan in the last decade has had very little economic growth per capita but remains a democracy quite different in some respects to the
us or australia but still unarguably a democracy um economic growth per capita in france i guess has been fairly static as well so if you like you could just say that no the answer is no you can have democracy and not have economic growth at least not per capita economic growth but so i'll come back to maybe formulating a version of my question more precisely but you were not talking only about democracy right uh you were indicating something like the uh geopolitical stability and lack of war and so on i agree with that as well um but maybe it would be worth spelling out exactly the scope of the question so the phenomena that we're talking about is possibly being dependent i mean good things that we want to continue and that we've experienced in the last few decades perhaps as a consequence of economic growth or perhaps not but we wish them to continue and uh what are those factors so i mean i guess democracy is you know uh something that people here probably appreciate i'm not sure it's necessarily high on the agenda for a randomly selected chinese person for example whereas economic growth certainly is so in the hierarchy of positive things in the universe democracy isn't number one on everybody's list uh but maybe let's make a list so apart from sort of geopolitical stability and and uh and lack of war was there anything else you mentioned adam just now uh i guess i was i was being pretty loose and sloppy uh speaking around the general idea of of um of social prosperity is i guess i guess a a a a catch-all term that i would use and and um i i i suppose i would distinguish social prosperity from material prosperity and this dichotomy is something that that i encounter quite quite a lot in the environmental discourse and i think that that the distinction between uh material prosperity and other forms of prosperity all other forms of prosperity which i will just call social prosperity here because we're talking about prosperity from the from an anthropocentric perspective um that that dichotomy is at the center of the degrowth paradigm the growth narrative um it's the idea that we can prosper as human beings without having material prosperity or indeed we can prosper and uh in in the one dimension in the one sense in this in some uh way uh which i'm calling socially uh while at the same time we can we can actually um lose actively lose prosperity in a material sense we can use less energy we can use less materials we can we can have our um uh our our um uh
the throughput of energy and material um of our lives the energy and material throughput in our individual lives that could decrease and it wouldn't necessarily affect the um these other forms of prosperity and that's really the dichotomy that struck me it struck me that that is an assumption that is rooted in uh looking at the last you know several generations of um of human history and uh uh and thinking that that that material prosperity just doesn't have all that much to do with other forms of progress we've made other forms of social progress we've made because the world today is more prosperous in both senses than it was in the past it's yes it's both it's materially more prosperous but in all these other ways we seem to have made progress towards social prosperity as well now if it turns out that well anyway i suppose what i suppose what my my question is there seems to be an orthodoxy in assuming that these can be decoupled or or that the one the social prosperity is what gives rise to the other that there's a causal arrow there and that if you're socially prosperous then it will give you material prosperity or the material prosperity doesn't matter and what i'm thinking now as a again inverting these an assumption that i realize i had been making my entire life my entire adult life which is maybe it's actually entirely the other way around maybe it is the material prosperity that and that alone or or at least in the in the bulk in the majority that has has uh has caused um or made possible all of the social prosperity and that that idea that is a it's the is the really is the opposite of what i realize i have been walking around assuming in my head for as long as i can remember now um and so that's what that's that i guess that's a much larger and more general um uh framing and maybe we could dive into specifics to see what what we can make sense of there but that was this and again that's that that goes back to this formula that my organization uses which dan you you uh uh pointed out very well um in our earlier sessions which is uh to find underlying assumptions that we are making that may not be true or that or perhaps that um that could change and and be be um obviated in the future and uh so this seemed like a very profound one to me yeah maybe i'll set out a couple of reasons why i made the observation uh so i think there's two experiences that led me to think about this one is being in the united states for six years and witnessing the uh increasing polarization and dysfunction
of democracy there and thinking about the reasons and the debates about the reasons that are going on all the time and the other is just paying close attention to chinese development since you know let's say 1989 or or wherever you want to pin the starting date i think it's very interesting to pay attention to the way in which china developed because some very smart wise people were involved in that i think it's tempting to dismiss it uh because many westerners have a kind of ideological lens through which they perceive the history of china but think about the following there are imagine china in 1980 1989 very poor many severe problems right so simply surviving was difficult for many millions of people uh the severity of many of the problems faced by a government in china uh beyond anything a rich country like australia currently faces did they solve those problems one by one by sitting down with smart people and coming up with some clever solution to each one no they didn't solve almost any of those problems what they did was have the insight that they didn't need to solve those problems they would solve themselves if they had sufficient growth and they really did a very good job on incentivizing local officials to focus on growth that had many downsides right which are the things that people in the west obsess about so it produced a lot of pollution misallocation of capital et cetera et cetera so it was in many ways what not optimal but it's very difficult to propagate information and control through a complicated system on the scale of china right so they recognize that that's a central feature of chinese governance historically that recognition and they just sent this one message grow grow damn it make yourself grow and got local officials to go along with the script and it worked and whatever the side effects china is undoubtedly a much more wealthy place and the human well-being is is much higher than it was in 1989 and what struck me reading that history is that it wasn't a history of 100 difficult local problems that were solved by smart officials doing something clever in each case it was just a maniacal focus on growth and then relying on growth to ameliorate all the other problems because you can just buy off special interest groups and that's that's a feature of american democracy in in 2020 through 2022 that seems uh very important as well right so there will always be special interests that are vying to control politics and we tend not to think about politics in our own
countries very realistically because we have this model of democracy in our heads whereas we should probably think more often about special interests of various kinds as being mostly in control [Music] if you're growing the special interests are kind of distracted by trying to look into and capture as much of the new parts of the pie as they can and they don't spend so much effort undermining destroying and rewriting the rules of the system whereas it seems to me that what's happening very much in the us and maybe soon in australia as well is that if the special interests perceive that the system is remaining more or less fixed in terms of its you know capacity for extracting rents then people start to fight very fiercely over which parts of those rents they can capture for their own faction and then you get very sharp fights and attempts to you know people focus on changing the rules whereas that's not the optimal strategy for becoming wealthy and preserving your status if the system is growing if the system is growing you should become good at whatever it is the growth is about for example you should become a railroad baron or you should figure out how to get into tech or something whereas if things are more or less static that's not the optimal strategy so i think a system like democracy it just you know seems that a system like that which relies on a certain extent of goodwill and following the norms is very vulnerable if the norms become the point at which you can apply pressure in order to win like that's the main place you can apply apply pressure as opposed to taking advantage of new opportunities so you know that's just coming out of it there's quite a long literature and a lot of discussion among some parts of the economist community about the lack of real growth since you know the 1970s 1980s certainly medium incomes have remained flat and what's that what that's meant for politics in terms of people fighting over a fixed or shrinking pie as opposed to trying to take advantage of new opportunities so that's that's where that comment comes from yeah i think that that makes really good sense and this it i sort of see it i sort of see this uh logic making sense on at both a top down from a top down direction and from a bottom up direction what you've described just now was mostly alluded to the very end of the bottom up but what you described mostly when you're at least by read of it um when you say special interests is that um you have these sort of
uh consolidated centers of of um wealth and power and and and influence in the system uh and that that they can focus on uh if they focus on the parts of the system that are growing then this this sort of allows the status quo to persist without major challenges um and i i think i think you may laid that out and made a very compelling argument for that and at the same time um uh i i i should say and um i think also at the same time right down at the at the bottom um of the uh uh you know right down at the individual level it i think you have a similar sort of dynamic going on just with human psycho the human psychology of individuals um and maybe maybe you can move up from there to you know individual organizations or communities or something like that but certainly now at the level of the individual i think i think that something similar is you know operative which is that individuals individual people historically i think certainly in living memory are less likely to um to violently oppose the status quo or or perhaps not even violating but just aggressively uh oppose the status quo if the pie is growing if everybody's uh getting a little bit bigger piece of the pie as time goes on so next year you're going to do a little better than this year if that's happening to everybody then the inequities the unfairness the injustices and so on in the system are perhaps more tolerable just psychologically whereas if the pie is not growing if the pie is static or shrinking then um people an individual's own uh prosperity an individual's own well-being may uh remain static or decline over time and that i think just psychologically sets the ground for discontent and then perhaps um for for things like populism of various stripes you know uh uh across the political spectrum um and just social unrest um and and discontent to to arise and so it seems like that makes pretty good sense and and this you know i i'm i'm not it's not a literature i've read really at all um certainly not since since you know undergraduate days but um i have a a a sort of a a sense a distant memory of reading political economy and um sociology uh uh uh works and thinking sort of weber and dirk heimi all these sort of things from from um uh previous generations and social uh in the social sciences and the in the humanities that talk about that sort of general idea this this rising tide lifts all boats kind of idea this growing pie and you know so forth and and sort of there's a there's a there's a sociology
or a psychology at work there that um that that allows allows um uh the flaws of the system to be masked to be covered up or to be to be ignored as long as uh as as you said you know um the opportunities new opportunities are being created for and the people can focus on those um so anyway i i i think that that makes pretty good sense um uh so i guess the question to ask is do we fully recognize what the implications of a um a deliberate and permanent economic downturn you know degrowth basically um what that would what that would entail like what have we fully appreciated in the risks of that as a um as a prescription for for um well the degrowth part the degr uh uh narrative itself calls it a prescription for sustainability i'm not all that comfortable with that word i think that that that that's loaded it's freighted it's misleading but i mean it's at any rate a a prescription for how to solve problems that we face today of various kinds and not just environmental problems but social ones as well and it may be that this is just completely backwards that this that this would it would be utterly catastrophic on many levels including social uh socially and psychologically so um anyway yeah i think it's uh well it clearly doesn't exist it clearly can be sustainable i mean the old aristocracies were sustainable for hundreds or thousands of years i mean we can do it sustainably but not in a way that's compatible with our other ethical obligations so i think that's it seems pretty clear that what we're experiencing now it seems to me as a consequence of exactly attempting to not grow and see what happens right we didn't do it deliberately but for various reasons we are refraining from the commitment to growth partly because in australia in the us we've become quite wealthy so we don't focus on this as much as we used to but i think the effects on politics are pretty clear i mean of course one can argue about many other causes and they of course exist but i think when i hear people talk about sustainable well there's sustainable growth but when people talk about just not growing or accepting much lower growth rates i think it can be sustainable but only if we change the structure of our societies maybe they remain in principle democratic but i think you can see it already in the the attempts to very finely control the ladders of moving between classes in the us i know talking about class in the u.s is you know maybe a bit offensive but they clearly are classes in the us and
they clearly are mechanisms for transitioning between them and those mechanisms are becoming very contentious right who gets into university who gets to pass standard exams what happens after you graduate from university who gets to go to what universities these are questions that have become very central somehow politically whereas they maybe weren't 10 15 years ago and i think this reflects a growing perception that well this is a question for you americans but i think in a way that probably wasn't true when we were kids adam there's a sense now in america that there will be an aristocracy and you're either in it or you're not and you probably want to be in it the uh yeah this idea that there's a um uh so so i mentioned before this idea of social prosperity um and maybe we can maybe we can just real quickly dig into what that would be because you you have you have psychological dimensions to that you know things at the individual level that you could talk about and then you have things at a high and a larger or more macroscopic unit unit of analysis that you could talk about so this the idea of the large underclass for example um versus uh you know what you called an aristocracy uh uh you know this is sort of a this would be a a an indicator of social prosperity um not necessarily the individual level but but i mean one could imagine that uh you know if you were to if you were to look at at assad as a society over time and see that its middle class was shrinking and its underclass were was growing that that would be an indication of a decline in some sense in some sort of some sort in uh something that you that that one would wish for a form of prosperity that would seem to be declining um that there are fewer people are uh as well off or for example um uh children are less well-off than their parents or they're more they're less likely to be upwardly mobile they're or are more likely likely to um have fewer opportunities or uh backslide um uh socially and economically and then their parents did and so those they'll strike me as very important forms of uh social prosperity and that that seem to be coupled pretty tightly with material prosperity um and uh yeah i think it's really really quite profound what you said that that and as an american you know this is something that we're sort of we're enculturated to to not really uh think about too much but this idea that that who gets into university um uh and where which ones and and what jobs go to which graduates you know and
and so forth that these are more politicized now than they were in the past i think that that's absolutely the case um yeah we'll have to yeah yeah yeah i have to wrap up in a few minutes i guess um but there's yeah i wanted to make one comment which is i think maybe people don't sufficiently pay attention to the role of economic growth in resolving otherwise very difficult problems because it reduces the agency of technocrats i think this is an underestimated feature of why things are the way they are in the world right so people want there to be a lot to do managing things because they like the existence of those jobs and if it's simply growth then that moves the locus of power away from technocrats towards the kind of people who produce growth and to be clear that's not me right i'm in a university i don't contribute much to economic growth beyond my activities as a lecturer but the political power of the kinds of people who create businesses and create economic growth directly as opposed to just managing the economic conditions that may cause it to arise if those people don't have i mean if their power is outweighed by the sort of technocratic power then you will tend to see a society which believes that [Music] there are all sorts of things you can do to solve problems that don't involve just bluntly exerting some sort of very indirect pressure to increase economic growth which isn't sexy to the technocrats at least many of them and i think that's my potted version of history in the last 20 years is the rise of the power of those kinds of people as opposed to the kind who just want to focus on simple growth that's you know obviously not a universally shared view but i think one should be a what i think the people who who believe that many complicated problems can be solved by other means need to demonstrate historically where that's worked if i look at many of the problems that we had i mean just reading the detailed history of australia since 1788 and think about all the intractable social problems that were faced along the way very few of them were resolved really right it's just they went away and they went away because the country overall got richer not equally and not evenly and in many ways unfairly and many of the problems still persist but i think it's fashionable to deride the role of economic growth in solving problems that don't look like they have anything to do with economic growth simply because some people get richer than others i think that's unfortunate
that people don't with caveats accept that as a basic feature of what we've experienced since the industrial revolution it seems like a myopic understanding of how we solve problems in the past and therefore how we might solve them in the future yeah absolutely and this idea that that i mean it gets us back to the real uh the real substance of of this and com this conversation and others like it which is you know how do we do better in the future how do we continue to solve problems how do we how do we continue to make progress where where should we be putting the emphasis uh you know where should we be uh spending the most time and energy and resources and focus of attention and all of that sort of thing and is it does is does it make more sense to take a more technocratic approach and try to solve you know 101 different problems with with different um uh different strategies and tactics and and you know um uh and and does history bear out the idea that that is the strategy that has worked that we've we've sort of chipped away at multiple many multiple different problems simultaneously and we've just sort of uh cracked many of those nuts with with you know uh an increasing collective wisdom we've made institutional pride well we've made intellectual and moral and philosophical progress and then we've slowly institutionalized that progress and then we've solved problems um that our ancestors just couldn't figure out how to solve so you know it made life better for for people um is that really the story is that valid or has it like like you sort of suggested with with the history of australia i think as an example that many of these problems perhaps have not been solved to the extent that we imagine they have that they're sort of lurking in the background they've simply been eroded down so they their edges are softer and you know their features are more blurry um and that that erosion has been mostly perhaps uh to its to an underappreciated extent a function of economic growth um and uh that you know the hard corners of those problems come back into relief once you know that the engine of economic growth starts to slow down a little bit um and it's uh this may be mixing some metaphors here this in not a helpful way but that does strike me as a a central question to ask if you know we want to know how can we continue to make progress and you know have we made what progress have we made and how have we made it and it just strikes me as suspicious now that i challenge the