Capítulo 1
The Economic Revolution That Changed Everything
In the vast sweep of human history, no period has been more consequential than the "long twentieth century" spanning from 1870 to 2010. This remarkable book by J. Bradford DeLong, a former Treasury official and Berkeley economics professor, has become a favorite among tech leaders like Marc Andreessen and Patrick Collison who seek to understand how innovation transforms societies. DeLong's work stands out in the crowded field of economic history for its compelling narrative that explains how humanity finally escaped the Malthusian trap that had constrained prosperity for millennia. The book's cultural impact extends beyond economics, offering insights into why our material abundance hasn't delivered the utopia that earlier generations might have expected. As Bill Gates noted, "Understanding this paradox is essential for anyone hoping to build a better future."
Capítulo 2
Breaking the Chains of Poverty
For most of human history, technological progress moved at a glacial pace-just 0.04% annually between the years 1 and 1500 CE. This remarkably slow advancement meant that a Roman citizen would find daily life in medieval Europe surprisingly familiar. Despite occasional innovations like the heavy plow or water mill, ordinary people lived little better in 1500 than their ancient predecessors because population growth (0.07% annually) consumed nearly all productivity gains. People spent half their resources securing bare minimum calories, living in constant fear of famine. Disease was rampant, literacy rare, and life expectancy hovered around 30 years - truly nasty, brutish, and short.
Then everything changed. Around 1870, three transformative developments converged to create an economic big bang: globalization through steamships and telegraphs connected distant markets, the industrial research laboratory systematized innovation, and the modern corporation marshaled capital and talent at unprecedented scale. These innovations unlocked economic growth at an extraordinary pace-from 0.45% yearly before 1870 to 2.1% after, multiplying wealth 21.5 times over 140 years. The telegraph alone cut communication time between London and New York from weeks to minutes.
This economic revolution-doubling prosperity every 33 years-repeatedly transformed society's technological underpinnings. A London worker's daily wages in 1870 bought 5,000 bread calories; today they buy 2.4 million-nearly 500 times more. The impact reached far beyond mere sustenance. Women no longer needed to spend twenty years pregnant or breastfeeding as infant survival rates soared. Medical advances like antibiotics and vaccines dramatically extended lifespans. Indoor plumbing and electricity revolutionized daily life. By 2010, less than 9% of humanity lived in extreme poverty, down from 70% in 1870 - the greatest reduction in human suffering in history.
Yet this material prosperity remains criminally uneven, with stark disparities between developed and developing nations. Even in wealthy countries, wealth doesn't guarantee happiness. As economist Richard Easterlin observed in his famous paradox, we remain on a hedonic treadmill where material concerns are "as pressing as ever." Despite unprecedented affluence, anxiety, depression, and loneliness plague modern societies. We've crossed a great divide from what humans did throughout history to what we do now-but this is not utopia.
From this wealth explosion flowed five key processes defining the long twentieth century: First, history became predominantly economic, with market forces shaping events more than kings or armies. Second, the world truly globalized through trade, travel, and instantaneous communication. Third, a technological cornucopia drove wealth creation through successive waves of innovation - electricity, internal combustion, computers, and the internet. Fourth, governments consistently mismanaged economic regulation, alternating between harmful interference and dangerous neglect. Finally, the century saw more brutal tyrannies than any previous era, with totalitarian regimes paradoxically enabled by the same industrial and organizational advances driving prosperity.
Capítulo 3
The World Becomes One Market
By 1914, something remarkable had happened-for the first time in human history, available resources more than kept pace with population growth. Despite five people living where four had been a generation before, nutrition standards didn't fall. Malthus's Devil-the specter of population outrunning resources-was chained. This breakthrough was achieved through a combination of agricultural innovations, improved transportation networks, and the opening of vast new farming regions in the Americas and Australia. The development of chemical fertilizers, mechanized farming, and better crop varieties all contributed to this unprecedented achievement.
Communication transformed dramatically. In 1800, Arthur Wellesley (future Duke of Wellington) took seven months to reach India from Britain. By 1870, submarine telegraph cables connected London to Mumbai, reducing communication time from months to minutes. This revolution in communications extended beyond just Britain and India - by 1900, a vast network of telegraph cables encircled the globe, connecting major commercial centers across continents. This mattered for three crucial reasons: it improved trust in business transactions by allowing rapid verification of credits and contracts; aided technology transfer between distant regions through the quick exchange of technical information and patents; and enabled imperial control-European powers could now command armies anywhere in the world with unprecedented speed and precision.
The single economic world that emerged should have allowed many countries to jump on an "escalator" of modern economic growth. Yet economist W. Arthur Lewis judged that as of 1870, only six countries - Britain, France, Germany, the United States, Canada, and Belgium - were fully on this escalator. The failure of industrialization to spread more rapidly remains puzzling. Various explanations exist: Robert Allen blames imperialism and colonial governments' disinterest in development, pointing to specific policies that actively discouraged local manufacturing; W. Arthur Lewis points to migration patterns and global commodity trade preventing the development of a prosperous middle class, as colonial economies were structured to export raw materials rather than develop finished goods; Joel Mokyr credits European Enlightenment habits of thought, emphasizing the unique cultural and institutional foundations that supported technological innovation.
The market economy, left unmanaged, satisfied the desires of property owners seeking luxury rather than long-term growth, and failed to account for the knowledge benefits of industrial communities. What emerged was a world where the global north industrialized rapidly while the south remained primarily agricultural and extractive, creating patterns of inequality that would persist for generations. This division was reinforced by international trade patterns, financial systems, and educational disparities. The industrialized nations developed sophisticated banking systems, technical education, and research institutions, while colonial regions remained dependent on primary commodity exports and faced significant barriers to developing their own industrial bases. This created a self-reinforcing cycle where initial advantages in industrialization led to increasing returns, while less developed regions struggled to break free from their assigned role in the global economy.
Capítulo 4
The Engine of Innovation Accelerates
The most consequential development after 1870 wasn't globalization itself-it was the unprecedented quadrupling of technological progress to 2% annually between 1870-1914. The advanced North Atlantic economies had effectively "invented invention"-creating not just individual technologies but systematic approaches to innovation through industrial research labs, patent systems, and new organizational structures like the modern corporation. This systematic approach transformed innovation from isolated breakthroughs into a continuous, methodical process.
Before 1870, inventions were typically singular discoveries that incrementally improved existing processes, often emerging from individual craftsmen and tinkerers. However, after 1870, entirely new commodities emerged in rapid succession-telephones, automobiles, electric power, flush toilets, photography, recorded sound, and countless other conveniences that fundamentally transformed daily life. Steel production exemplifies this transformation: the Bessemer-Mushet process reduced costs by over 80%, enabling industrial-scale production that revolutionized everything from railroads to skyscrapers. This breakthrough was quickly followed by the Siemens-Martin process and other innovations that made steel production increasingly efficient and adaptable.
Nikola Tesla's story powerfully illustrates both the brilliance and tragedy of this era's innovation. Despite his notable eccentricities-requiring actions divisible by three, compulsively calculating volumes of dishes, and making sometimes outlandish technological claims-Tesla's genius was undeniable. He and his allies ultimately defeated Edison in the "war of the currents," a technical and commercial battle that would shape the future of electricity. While Edison stubbornly championed direct current (DC) electricity with its intuitive electron flow but limited transmission range, Tesla's alternating current (AC) system allowed efficient long-distance power transmission through its ability to step voltage up and down. The outcome of this contest was decided not just by technical superiority but by financial forces. When powerful financiers J.P. Morgan and George Baker took control during the 1907 financial panic, they pushed out visionaries like Tesla and Westinghouse, replacing them with executives focused on immediate profits and standardization. Tesla, having given Westinghouse royalty-free licenses to his patents to save the company, ultimately impoverished himself while his revolutionary ideas transformed the world.
By 1914, America had emerged as the global technological leader-the place where the world looked to see the future. While China collapsed into revolution in 1911 following the fall of the Qing Dynasty, and Europe descended into the catastrophe of World War I in 1914, America's remarkable period of progress and industrial development continued uninterrupted from the Civil War's end in 1865 until the Great Depression began in 1929. Even committed communists like Leon Trotsky were struck by America's technological marvels during his brief 1917 stay in New York, where his family marveled at everyday conveniences still rare in Europe: electric lights, gas cooking-ranges, telephones, automatic elevators, and mechanized subway systems. This technological leadership would prove crucial in the coming decades, as America's industrial might became increasingly central to global affairs.
Capítulo 5
The Struggle for Democracy and Economic Justice
The political economic system evolved dramatically in the North Atlantic between 1776-1965. By 1870-1914, democracy had become the political principle causing "the least offense to the greatest number," though pressure to expand the franchise would continue.
While suffrage expanded quickly in many respects, it came unevenly and took much longer for women. France first granted universal male suffrage in 1792, though it didn't permanently return until 1871. Finland became the first European state to offer universal suffrage for both men and women in 1906. American suffragettes like DeLong's great-grandmother Florence Wyman Richardson fought for decades, chaining themselves to statehouses, with the Nineteenth Amendment finally passing in 1920.
The extension of franchise across racial lines took even longer, especially in America. The struggle included horrific violence like the 1873 Colfax Massacre where approximately one hundred Blacks were murdered. Black enfranchisement didn't truly arrive until the 1965 Voting Rights Act.
The conflict over democracy intersected significantly with economic history, exemplified by two Vienna-born thinkers: Friedrich August von Hayek and Karl Polanyi. Hayek argued that questioning whether a market economy's distribution was "fair" constituted a fatal intellectual error. For him, markets give to those in the right place at the right time, not to the deserving. He identified two enemies of a good society: egalitarianism and permissiveness.
Karl Polanyi argued that people have rights beyond property rights: rights to stable communities regardless of market profitability; rights to income commensurate with preparation; and rights to purchasing power as long as they work diligently. People have economic rights that pure market economies won't respect. Society will inevitably intervene through a "double movement"-as the economy tries to disembed itself from social relations, society reasserts itself through government decree or mass action.
To see these forces in action, we can examine Chicago-the fastest industrializing place on pre-WWI earth. Growing from 4,000 people in 1840 to 2 million by 1900 (70% foreign-born), Chicago became ground zero for labor conflicts. The 1886 Haymarket affair exemplified these tensions: during strikes for an eight-hour workday, police killed workers, a bomb killed officers, and eight innocent labor organizers were convicted (five hanged).
Capítulo 6
The Catastrophe of World War I
Despite unprecedented wealth creation and technological advancement in the early 20th century, humanity failed to reach the utopia that people in 1870 might have imagined for our time. Norman Angell's influential 1909 book "The Great Illusion" argued persuasively that war and territorial conquest had become economically irrational in the industrial age, as nations were now interconnected through trade and finance. While Angell was right that war no longer made economic sense, he catastrophically underestimated humanity's capacity for irrational behavior driven by nationalism and military tradition.
The summer of 1914 saw a devastating cascade of nationalist miscalculations that plunged Europe into catastrophe. After Bosnian terrorist Gavrilo Princip assassinated Archduke Franz Ferdinand in Sarajevo, Austria-Hungary sought to punish Serbia with a harsh ultimatum. Russia, seeing itself as the protector of Slavic peoples, began mobilizing its forces, while Germany, fearing encirclement, backed Austria-Hungary unconditionally through the infamous "blank check." Each power calculated based on their experience of previous short, limited wars like the Franco-Prussian War of 1870, fatally misunderstanding how industrialization had transformed warfare's destructive potential.
Germany's fateful decision to attack neutral Belgium through the Schlieffen Plan reflected Prussia's long military tradition of striking first from unexpected directions. This approach nearly succeeded in the war's opening weeks, bringing German forces within 30 miles of Paris. However, when the war became a grinding stalemate along the Western Front, Germany's military and economic systems had to transform completely for total war. By 1916, Britain was directing over one-third of its national product toward the war effort, with similar mobilizations across all combatant nations. The military became industry's largest customer, with market forces replaced by unprecedented systems of rationing, price controls, and command-and-control economic planning.
The German Social Democratic Party's capitulation to war fever in 1914 powerfully demonstrates nationalism's overwhelming ability to override deeply held ideological principles. Despite being Europe's largest socialist party, founded on principles of international worker solidarity and steadfast opposition to militarism, when war came, only 13 of 110 SPD deputies opposed funding it. This decision proved catastrophic - had the SPD maintained its pacifist stance and successfully hobbled Germany's war effort through strikes and resistance, the nation might have avoided the devastating defeat, hyperinflation, and near-starvation that followed four years later.
The war's staggering human toll included 10 million dead soldiers, 10 million permanently maimed, and another 10 million seriously injured. Beyond the human cost, it resulted in the collapse of four great empires - German, Austro-Hungarian, Ottoman, and Russian - and shattered the Victorian era's confidence in progress, reason, and statecraft. The conflict's unprecedented industrial slaughter, featuring machine guns, artillery, poison gas, and tanks, demonstrated how individual choices, nationalist fervor, and military momentum could catastrophically derail humanity's march toward prosperity and peace. World War I stands as history's stark warning about how quickly civilization can descend into mechanized barbarism.
Capítulo 7
The Great Depression and the Rise of Totalitarianism
The Great Depression began with a cyclical downturn in June 1929, after the Federal Reserve's attempts to control stock market speculation backfired. When money becomes scarce and people stop spending to hoard cash, a devastating cycle begins as counterparties lose markets, income and work, widening the gap between economic potential and aggregate demand.
At its nadir, the Depression manifested as collective insanity: workers sat idle because firms wouldn't hire them; firms wouldn't hire because they saw no market for goods; and there was no market because idle workers had no income to spend. As George Orwell described in Britain, desperate people risked their lives scrabbling for coal chips in slag heaps while the machinery that could have mined tons in minutes stood idle.
Faced with economic collapse, governments and central banks initially did nothing, expecting the recession to self-correct through price and wage decreases as in previous downturns. This do-nothing approach was supported by eminent economists like Schumpeter and Hayek, who viewed depressions as necessary "liquidations" that purged inefficient businesses.
The Depression's length fundamentally reshaped political systems across the world. George Orwell eloquently captured how it changed perceptions of unemployment and work itself-no longer were the unemployed to blame for their condition, but victims of market failure. Roosevelt's election proved exceptionally consequential-he broke tradition by appearing at the convention and pledging "to break foolish traditions" with a New Deal that would see him elected four times.
The Great Depression convinced many that both the global economic order and individual countries' political systems had fundamentally failed. With the old pseudo-classical, semi-liberal order discredited, two alternatives emerged: fascism and socialism.
Lenin's regime represented the first seizure of power by Marx's disciples attempting to implement socialism on earth. The "dictatorship of the proletariat" originally meant a temporary suspension of checks and balances to overcome reactionary opposition and make necessary changes. By the mid-1930s, Stalin's Soviet Union had become a brutal totalitarian state that executed millions and sent countless more to the Gulag concentration camp system.
Meanwhile, fascism offered a critique of semi-liberal industrial capitalism and parliamentary government as failed systems. Mussolini positioned himself as Il Duce, arguing people needed to be commanded rather than represented. Hitler's ideology was deeply rooted in a deadly serious interpretation of Thomas Robert Malthus's theories about population outrunning food supply, leading him to advocate territorial expansion eastward to create "living space" for Germans.
Capítulo 8
World War II and the Cold War World
When Hitler invaded Poland on September 1, 1939, Britain and France honored their commitments to defend Polish sovereignty. Despite their declarations of war, the Western allies had no concrete military plans for fighting Germany and remained largely passive as Poland fell within a month. This period, known as the "Phoney War," revealed the allies' unpreparedness. In just six weeks starting May 10, 1940, France fell to Nazi Germany through the innovative Blitzkrieg tactics, which combined rapid mechanized warfare with air support to overwhelm traditional defenses.
Despite their tactical brilliance and early successes, the Nazis suffered from catastrophic strategic errors, particularly Hitler's micromanagement of military operations. In November 1942, Hitler dispersed his forces across Eastern Europe, attempting to maintain control of too vast a territory. This created critical vulnerabilities that the Soviets brilliantly exploited in Operation Uranus, encircling and destroying the entire German Sixth Army at Stalingrad. This decisive victory marked a crucial turning point, as Germany couldn't sustain monthly losses of 50,000 soldiers from its limited manpower pool. The Eastern Front became a meat grinder that would eventually consume over 80% of German military casualties.
By 1944, Allied war production had completely overwhelmed the Axis powers. American industrial might, combined with Soviet manufacturing and British innovation, resulted in Allied production exceeding Nazi Germany and Japan's by more than 6:1. The United States alone produced 300,000 aircraft and 87,000 tanks during the war. The war ended in 1945 with Germany's defeat and Japan's surrender following the atomic bombings of Hiroshima and Nagasaki-a technology the Nazis couldn't develop after dismissing "Jewish science" and driving their best physicists, including Albert Einstein and Enrico Fermi, into exile.
Paradoxically, while the Cold War emerged as a nightmarish manifestation of militarism and imperialism after World War II, it didn't block human progress toward prosperity-it likely accelerated it through technological competition and increased research funding. The period from 1938 to 1973 brought unprecedented economic growth despite the devastation of World War II. The G-7 countries advanced at an astounding 3% annual pace-enough to double material wealth every 23 years-making them three times wealthier by 1973 than in 1938. This "Golden Age of Capitalism" saw the rise of the middle class, suburban expansion, and technological innovations from computers to jet travel.
For Hayek's market vision to succeed in this new world order, three prerequisites were necessary: first, a clear divorce from Ayn Rand-style theories that celebrated monopolies rather than genuine market competition; second, Keynes's blessing-the recognition that markets only direct resources to their best uses when sufficient aggregate spending exists to maintain full employment; and third, marriage to Karl Polanyi's insight that people demand certain fundamental rights-stable land use, fair incomes, and job security-that markets deliver only if profitable. This synthesis of economic thought helped create the post-war mixed economy that balanced free enterprise with social protection.
Capítulo 9
The End of the Long Twentieth Century
After 1973, civilization's confidence remained high despite slowing growth. Yet the center didn't hold, and by 1979, cultural and political energy shifted rightward as social democracy was broadly seen to have failed. The extraordinary prosperity of the Thirty Glorious Years had raised expectations too high-people had come to expect equally distributed incomes doubling every generation with minimal economic uncertainty.
The neoliberal turn found its economic instrument in Paul Volcker's Federal Reserve. After Fed chairs Arthur Burns and G. William Miller both resisted using tight monetary policy to fight inflation at the cost of recession, Jimmy Carter inadvertently changed course. Volcker believed he had a mandate to fight inflation regardless of the cost and proceeded to raise interest rates dramatically. By 1982, unemployment reached 11 percent, creating the worst economic downturn since the Great Depression.
Despite neoliberalism's failure to outperform social democracy, it remarkably persisted as conventional wisdom across the political spectrum. The pattern of empirical failure followed by ideological doubling down resembled religious fundamentalism. The neoliberal turn successfully restored growth rates for those at the top. America's true upper class, the top 0.01% of households, went from 100 to 500 times average income. Everyone below the top 10% saw their shares of national income fall.
Four developments definitively ended the long twentieth century: Germany and Japan challenging America's technological edge in 1990; religious fanaticism resurging in 2001; the 2008 Great Recession revealing forgotten Keynesian lessons; and the failure to address global warming despite clear science. Trump's 2016 election confirmed this end, revealing that economic growth had slowed, globalization reversed, American exceptionalism vanished, and confidence in the future diminished.
Despite humanity achieving technological powers beyond the imagining of previous centuries, we failed to build anything approaching utopia. The market economy proved both solution and problem, recognizing property rights but not Polanyian rights to community, deserved income, and economic stability. Material wealth proved necessary but insufficient for building utopia.
Perhaps the long twentieth century didn't have to end in 2010. Maybe different leadership could have revived it, but instead, a new story requiring a different grand narrative has begun-one that we are still writing today.
