Sloppy Utopia – Book Review

By Joakim Book

The Berkeley economist Brad DeLong hates Friedrich Hayek — that much is clear from his oversized 536-page tome, Slouching Towards Utopia: An Economic History of the Twentieth Century, 25 years in the making. And that’s also about the level of scholarship we can expect. The key ingredients in this politically slanted misinterpretation of the “long” century, 1870 to 2010, are taunts, insults, and extreme value judgments. In the first five pages no less, Hayek is both demoted to a “mere” moral philosopher and explicitly called an “extraordinary idiot” — only to be resurrected as “a genius” towards the end of DeLong’s excruciating narrative. It’s anybody’s guess why.

The book inches forward with long asides and biography paragraphs for characters as unremarkable as the man who brought Hitler into his political party. The kindest thing one can say about DeLong’s occasionally humorous rants is that the book’s subtitle is misplaced: This is not an economic history of anything, but a political and ideological one. 

An economic history of the 1940s, say, would involve production, government wartime dirigisme, debt financing, and postwar inflation. It would consider the faulty notion that big government wartime spending brought depressed economies out of the Great Depression of the 1930s. Instead, what DeLong delivers is a dull, textbook-type account of Britain and Germany’s warmongering. It’s the old-fashioned “maps and chaps” type of history — that aristocratic British flavor of academic investigations that look at all the wrong things (warfare, diplomatic correspondence, voting, or politicking).

Western governments of the interwar years — larger and more invasive than they had ever been — were to DeLong’s eyes pursuing “doctrines of orthodoxy and austerity,” with an “insistence on pure laissez-faire, that the government should simply leave the economy alone.”

We’re given many florid phrases about the horrid “anarchy of the market” and how the market “failed” to provide this or that imagined good. DeLong often seems to believe that because things exist in abundance somewhere in the world, we can all have anything we desire — physical distribution, durability, or political and institutional obstacles be damned. That’s an odd thing to publish in 2022, at the tail end of skyrocketing inflation and an energy crisis that, in part, resulted from insufficiently movable energy.

The book’s title refers to what Western society has implicitly aimed for since the mid-nineteenth century: material well-being, abundance, and dignity for all. That’s the “utopia.” DeLong chalks up the wealth of today — which most of our ancestors indeed have called utopian — to three pretty disparate things: world globalization, the industrial research lab, and the modern corporation. None of those are completely immaterial to the progress and economic growth miracles of the last two hundred years, but none of them pack enough punch to have delivered the incredible improvements in the average person’s livelihood, 1850 to today. 

His overarching grand narrative divides the market-friendly Hayekians from the people-rights-proposing followers of Karl Polanyi. It’s no big mystery who DeLong thinks the bad guys are. The Hayekian right-wingers “understood that the market is made for some men, but not all — and likewise that some men, but not all, would benefit.” The Polaniates, in contrast, recognized that people imagine certain rights being owed to them — livelihood, stable social environment, a decent job. If we just say so, we can have nice things.

Though the deployment of new technologies and the corporate organizational form seem to belong to market institutions, and thus the Hayekians, DeLong claims them for his own side: The market “cannot by itself deliver enough research and development, for example, or environmental quality, or indeed, full and stable employment.” That’s another failure for the market, unfixable unless a benevolent politician or bureaucrat balances the erratic tendencies of the marketplace. “A prosperous market economy could only flourish if it was protected by authority.”

The book is irrelevant in the exact meaning of that word: It does not answer the question it sets for itself, does not rise to the task of chronicling the big economic changes of the extended twentieth century, does not adequately and accurately capture a believable grand narrative that characterized this long century. Instead, ramblings. Jabs at this or that conservative or market-friendly character — Charles Murray and George Gilder being some particular favorites.

What we get is a social history of America, pages jam-packed with woke-speak and some fascinating nuggets from America’s failure to live up to its ideals. These are all valuable in small doses, tiring in actual delivery, yet marshal not an iota toward the “economic” topics the author ostensibly set out to capture (except for a few pages that feature Claudia Goldin’s work on the disappearing wage gap). 

We learn that there is enough food on the planet, so nobody must endure hunger; enough shelter, so nobody ought to lack any; enough clothing in our corporate warehouses such that nobody needs to be cold. The market is bad because it creates too-large riches for the wrong people; because it caters only to the rich; and because it rewards only those “lucky enough to control resources that produced things for which the rich had a serious jones.”

In contrast, economists up and down the century, such as Ludwig von Mises, have thought of capitalism as mass production for the masses. DeLong didn’t get the second part of that decades-old memo and instead, surprisingly, lumped Mises in with the fascists — calling him “a darling of the far right.” The citation to Mises is completely out of context, taken from a section in his 1927 book Liberalism that attacks fascism’s adoration of violence and warmongering, not supports it. (Mises is a difficult read, everyone knows who has tried, so we should have some compassion with DeLong’s oversight here.)

In the last few chapters, the message gets blurry. From the three reasons for our wealth, we suddenly get four factors that best define the twentieth century — technology-fueled growth, globalization, American exceptionalism, and “confidence” that humanity could progress by having the government fix market problems. Add to that the two most important moments: Keynes’ Economic Possibilities for our Grandchildren and FDR’s many big government policies of the 1930s.

That would have been a more interesting framing for this book’s “grand narrative.”

In a lecture on the book from around its publication, DeLong confessed that he thinks “at least 20 percent of this book is big-time wrong.”

Let’s just say that’s an optimistic figure.

• About the author: Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a masters degree from the University of Oxford and has been a visiting scholar at the American Institute for Economic Research in 2018 and 2019.
• Source: This article was published by AIER