The Long-Run Economic Trend Is Our Friend: No Longer so Fresh at Project Syndicate

Must-Read: Ernesto Dal Bo, Pablo Hernandez, and Sebastian Mazzuca: The Paradox of Civilization: Pre-Institutional Sources of Security and Prosperity:

The rise of civilizations involved the dual emergence of economies that could produce surplus (“prosperity”) and states that could protect surplus (“security”)...

...But the joint achievement of security and prosperity had to escape a paradox: prosperity attracts predation, and higher insecurity discourages the investments that create prosperity. We study the trade-offs facing a proto-state on its path to civilization through a formal model informed by the anthropological and historical literatures on the origin of civilizations. We emphasize pre-institutional forces, such as physical aspects of the geographical environment, that shape productive and defense capabilities.

The solution of the civilizational paradox relies on high defense capabilities, natural or man-made. We show that higher initial productivity and investments that yield prosperity exacerbate conflict when defense capability is fixed, but may allow for security and prosperity when defense capability is endogenous. Some economic shocks and military innovations deliver security and prosperity while others force societies back into a trap of conflict and stagnation.

We illustrate the model by analyzing the rise of civilization in Sumeria and Egypt, the first two historical cases, and the civilizational collapse at the end of the Bronze Age.

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