Two hundred years ago, a seemingly megalomaniac and even hopeless project was started in the West: overcoming poverty by creating more prosperity. This project was called “Progress”. Two hundred years later we can only conclude that this project was more successful than we could have anticipated. However, this project also has some serious shadow sides. As humanity we have to start a new, at first sight almost equally megalomaniac project for the next hundred years: making our prosperity sustainable.

Two hundred years ago, a seemingly megalomaniac and even hopeless project was started in the West: overcoming poverty by creating more prosperity. This project was called “Progress”. Two hundred years later we can only conclude that this project was more successful than we could have anticipated. Even with immense growth in the world’s population, hunger has declined dramatically in recent decades, not only in percentage but also in absolute numbers. Ironically, when we now talk about serious food-related problems, it is more about overfeeding – even obesity. The standard of living has greatly been increasing worldwide. This project is nearing its completion.

However, this project also has some serious shadow sides. As humanity we have to start a new, at first sight almost equally megalomaniac project for the next hundred years: making our prosperity sustainable. The next ten decades will be dominated by “Project II”: fitting the welfare economy within ecological and psycho-social boundaries. It requires a fundamental reorientation of all the frameworks and concepts that we have developed over the past two hundred years.

I will first look back on that first world history project, then look ahead to the second world history project with lessons learned. Mental and technological revolutions are central to both the retrospective and the retrospective view.

Two hundred years from poverty to prosperity: two revolutions (project I)

For millennia, poverty was the normal situation for large parts of the population worldwide. A rich top layer could afford itself a ‘luxurious’ life, the vast majority of people lived on the edge of life and death, on the edge of health and disease, on the edge of enough and too little of everything, especially the first necessities of life. Often this was presented as a kind of state of nature, in which it was decided by the gods or destiny who would be poor and who would be rich.

Poverty

In the ancient East, however, a religion emerged according to which this was not a natural state, but a state of decay. Ancient Israel developed a vision of humanity in which all people are created equal by God and are therefore equal partners for each other. From this vision later developed the Christian faith, which set a rather revolutionary tone; God will someday push the powerful and the rich from their throne and elevate the poor and the simple – that was the message. But at the same time the Christian faith said that it was not time for that yet. We have to accept that there are still major differences between people. However, these differences require the solidarity of the rich with the poor.

In ancient times this idea already led to a comprehensive system of charitable institutions and charitable work. Poverty was distributed a little more fairly – though striking inequality continued to exist, even in areas where Christianity was a major culture-forming influence, such as in the West. Yet an important thought seeped through the minds of people in the West: poverty should not actually be there. In fact, we are dealing here with the beginning of a mental revolution, in which various motives emerge.

The dignity of work

A second thought that seeped from the Christian faith into the Western collective consciousness concerned the dignity of work. In quite a few cultures, certainly in the Greek, Roman and Germanic cultures that preceded Western culture, work was looked down upon, certainly physical work. That was for slaves, for women, for serfs, not for real, successful people. In Christianity, on the contrary, the connection between physical work and the spiritual dignity of people was emphasized. Ora et labora, pray and work, was the adage of Western monasteries in the Benedictine tradition. Labor is even a divine “calling” for every person, even outside the monastery, said the German reformer Luther.

This emphasis on work eventually also had consequences for the care fore the poor: from the late Middle Ages onward the emphasis was placed more and more on the active involvement of the poor. Working on their own, working in poor houses. And those who did not want to work, that is a famous, but perhaps apocryphal story from Amsterdam, were placed in a basement with a large manually operated water pump. The cellar was slowly flooded and then it became a matter of “pumping or drowning”: that would drive the laziness out! That was motive two of the mental revolution: work is good for people and society.

Prosperity can be created

However, the religious emancipation of the common man and his labor did not mean that one could do something about great poverty. As a society, how do you create prosperity for everyone? That big question was hardly asked. The economy was seen as a natural given. You can’t do much about it.

But because of the ‘culture of work’ a third principle was discovered : if we work hard, we can reduce poverty, and together become richer, more prosperous. You can create prosperity, not just distribute it. The ‘economy’ is not a zero-sum game, a cake that you can only divide, but a non-zero-sum game, a cake of which you can bake more, at least when you get started. Motive three of the mental revolution thus became common place.

The free market

We only have to add one more element: the free market as the fourth motive. People must be able to freely exchange what they produce with other people. Only then can people as equal individuals actually serve each other with their talents. “I made something that you need but don’t have; you’ve made something that I need – let’s trade.” Competition is also taking place on the free market: a better idea wins over the lesser idea in terms of higher revenues and profits.

“Four ingredients – poverty is not good, there is nobility in labor, welfare can be created and the free market – form the core of Adam Smith’s thinking”

Mental revolution

These four ingredients – poverty is not good, labor is noble, you can create prosperity and the free market – form the core of the view of the “father of the modern economy,” Adam Smith. In his great work An Inquiry into the Nature and Causes of the Wealth of Nations from 1776, he explains why countries become prosperous and thus escape poverty: through labor, division of labor and trade, is the short answer. With that insight he laid the theoretical foundation for the immense project I was talking about: overcoming poverty, worldwide. His book immediately became a resounding success and had many reprints. It sealed the mental revolution that took place in the West. The hope for a different, better, more just world ever in the distant future became more and more concrete in the here and now: we can make the world better.

Also a technological revolution

Smith’s book, as the fruit of a mental revolution, coincided with another revolution: the technological revolution that we have come to refer to as the Industrial Revolution. Smith sees it happening all around him: making needles becomes much more efficient through labor sharing and the use of machines.

“The tandem of a mental and technological revolution has enabled an immense rise in prosperity in two hundred years that has even survived world wars”

This tandem of a mental and technological revolution has enabled an immense rise in prosperity in two hundred years that has even survived the world wars in the beginning of the 20th century. This, what I call “Project I” here, has made a much more comfortable life possible for all social classes. Smith wrote in his own time that “the accommodation of an industrious and frugal peasant […] exceeds that of many an African king, the absolute master of the lives and liberties of ten thousand naked savages.”

A hundred years onward: from growth to circularity – two new revolutions (Project II)

Our whole thinking about the economy and technology is completely determined by this background: growth is needed to escape poverty, technology makes it possible to increase labor productivity. As said: this breathtaking project is now nearing completion. That alone makes it possible to explore other directions. We no longer need to move full speed ahead on ‘project progress’.

There is even an urgent need to start a new project. It is not the first time in human history that people, in order to solve a particular problem, create another problem that is sometimes even as serious or more serious as the original one. The large irrigation works around Euphrates and Tigris were needed to stimulate the fertility of the soil, but eventually led to the same soil becoming salty, so that this highly developed culture came to an end. People could no longer live there. Anthropologists have used the term “involution” for such developments: a development that turns against itself, a kind of autoimmune disease.

With the successful completion of “Project I”, the victory of poverty, we have also entered a trail of involution: the earth, our ecosystem, can no longer sustain our economic and technological growth. Our development is now turning against us. Not only is it not necessary to continue on the same path for an additional two hundred years, it is simply impossible.

Something similar seems to apply to the psycho-social costs of economic development. Although it was once expected that we would be able to work less, the opposite seems to be the case. Worldwide people work more and more, and  harder, and more and more we are being assessed on our output. This creates great uncertainty for large groups of people. What happens if I can no longer work so hard, due to illness, due to old age? Who takes care of me?

“The next hundred years will have to be focused on “Project II “: fitting the welfare economy within ecological and psycho-social limits.”

All this means that the next hundred years will have to be dominated by “Project II”: fitting the welfare economy within ecological and psychosocial boundaries. Again, both a mental and a technological revolution are needed for this. It is not difficult to outline the contours of these revolutions – what is very difficult is the adaptation of our theories and especially institutional systems to make them suitable for Project II.

Outlines of a mental and technological revolution

The contours are clear. The term “growth” as a central category will have to be replaced by a term such as sustainability, or rather, because it is more concete, by ‘circularity’. This will have far-reaching consequences for the way in which we measure: what is ‘profit’? What is a good development of GDP? Completely new standards will have to be developed for this – and luckily that process is already in full swing. We are now talking about “integrated reporting” and about a broad concept of prosperity.

It is striking how much the speed of economic development evokes feelings of despair and gloom and progress and hope are more closely associated with ‘sustainability’. The clinging to old paradigms by an older generation of policymakers and CEOs, which is often still appreciated by shareholders, is increasingly seen by the younger generation as cowardly and selfish.

In the background we will have to work on revitalizing notions of man’s connection with nature that are present in many cultures and religions. These notions can also be found in Western Christianity with Francis of Assisi and Hildegard van Bingen.

Our thinking about work will also have to change radically. Now work is still defined economically, as a cost item; Labour can be replaced by cheaper resources if possoble: machines or robots. Important forms of work that have less possibilities for productivity increases – for example in care and education, but also in commercial relationship management – therefore face hard times. They are the ‘slow’ sectors. We will have to define and measure labor and labor productivity differently, so that the slow side of labor counts in the books and keeping employees employed becomes more important than mechanically defined productivity now allows.

At the same time, in the West too, the emphasis on labor and the value of labor has been accompanied by a view that downplays the importance of labor. Yes, work six days, but then take one day off. Calculations indicate that in the Middle Ages and well beyond, the number of holidays was such that people were free for about a third of the days. We could rediscover aspects of this – perhaps forced by an advancing process of robotisation.

In short: we will have to pay attention both to meaningful work and to leisure time. A new balance is essential here: both because of the ecology – there is only so many busy bees that earth can handle – and because of the psycho-social aspects: more and more people cannot bear the pressure of work.

Both the remuneration structures and the tax structures are still very strongly linked to labor. We may have to move to very different structures on this point. A tax on capital combined with a basic income or participation wage, which is not directly linked to labor productivity as we have now defined it and allows people to participate in the market economy and the prosperity created therein.

Technological revolution: from Industrial to digital revolution

A technological revolution is also needed for Project II. The Industrial Revolution that Adam Smith witnessed has now become a digital revolution. It is inconceivable that Project II can succeed without major technological innovation. The greening of the economy is an unparalleled technological challenge. New energy sources must be discovered and become commercially attractive. Old energy sources will have to be handled many times more efficient. There is a lot to be gained by technological “progress” that is no longer dominated by “more” but “less” – a whole new definition of progress.

“We will have to pay attention to both meaningful work and free time”

In conclusion: an exciting but hopeful transition

Two hundred years ago, in fact, only forty years ago, it was almost unthinkable that Project I would ever come to an end. People really had to have “faith”, hope for a different future to be involved in this. But then again, this seems to have been achieved.

Something similar applies to Project II: it seems almost impossible to get the mammoth tanker of the current world economy in a different direction than the current course of quantitative growth. But if we are really serious about the development of new concepts, and thus unleash a new mental revolution and connect technological innovation in an intelligent way, this is a fully doable project. But let’s not underestimate how much effort it will take to leave our old habits and patterns behind and to make real new progress.