Joe: Most of us think of the 20th century as an era of incredible progress. But what if that progress was a historical accident? And what if, for the last 50 years, we’ve been actively dismantling the very engine that created it? Lewis: Whoa, hold on. Dismantling it? That’s a heavy charge. We have smartphones, the internet, global travel. It feels like we're still on that upward curve. Are you saying we’ve been going backwards? Joe: Not backwards, but maybe sideways. Or, as the title of our book today suggests, we're just… slouching. We’re talking about Slouching Towards Utopia: An Economic History of the Twentieth Century by J. Bradford DeLong. Lewis: And DeLong is no lightweight, right? He's a top economist at UC Berkeley, and this book has been hailed as a 'magisterial history' but also criticized for being pretty opinionated. He's definitely got a strong point of view. Joe: Absolutely. And his central argument is that something truly unique happened in what he calls the "long twentieth century," from 1870 to 2010. For the first time in human history, we solved the problem of baking a big enough economic pie for everyone to have enough. But we completely fumbled the slicing and the tasting. Lewis: The slicing and the tasting… I like that. It’s not just about having enough, but about distributing it fairly and actually enjoying it. Joe: Exactly. And that failure is the core of the story. It all starts with the engine that baked the pie in the first place.

Lewis: Okay, so what was the magic recipe? Why does DeLong start the clock in 1870? I always thought the Industrial Revolution, you know, steam engines and factories, started way before that. Joe: It did, but DeLong argues that from 1770 to 1870, the benefits were tiny. Population growth basically ate up all the gains. Life for the average person didn't change that much. But after 1870, everything accelerated at a mind-boggling pace. And it was thanks to a holy trinity of new forces. Lewis: A holy trinity? I'm listening. Joe: First, the industrial research lab. Think of Thomas Edison's lab at Menlo Park. It wasn't just about one guy having a lightbulb moment. It was a system, a factory for creating inventions. It was the invention of invention itself. For the first time, we could systematically discover and develop new technologies. Lewis: That makes sense. It’s not just waiting for a random genius to appear, it’s building a process to find breakthroughs. What’s the second one? Joe: The modern corporation. You need a vehicle to take those inventions and deploy them at a massive scale. Corporations became incredibly effective at organizing capital, labor, and supply chains to turn a new technology, like the internal combustion engine, into a global industry. Lewis: Okay, so you have the idea factory and the deployment machine. What’s the third piece? Joe: Globalization. Steamships, submarine telegraph cables… the world became smaller and more connected than ever before. This allowed ideas, goods, and capital to flow freely, creating a single global market. Lewis: That sounds powerful. But can you make it more concrete? How did this actually change someone's life? Joe: DeLong has a fantastic example. He calls it "The Unskilled Worker's Bread." In 1600, an unskilled worker in London could buy about 3,000 calories of coarse bread with a day's wages. By 1870, after the first Industrial Revolution, that had only crept up to about 5,000 calories. Not a huge leap in 270 years. Lewis: Right, so still basically subsistence living. Joe: Exactly. But today? That same unskilled worker's daily wage can buy 2.4 million wheat calories. It's an almost incomprehensible jump. That's the power of that engine that kicked into gear around 1870. It wasn't just more of the same; it was a fundamental break from all of human history. Lewis: Wow. 2.4 million. That’s staggering. But was this growth for everyone? I mean, the book's title has "slouching" in it. It doesn't sound like everyone got a ticket on this rocket ship. Joe: That is the perfect question, because that rocket ship hit some serious turbulence. The engine was powerful, but it was also destructive. It led to world wars, the Great Depression, and immense inequality. And after all that chaos, the world stumbled into a temporary, almost accidental solution. DeLong calls it a "shotgun marriage."

Lewis: A shotgun marriage? That sounds… tense. Who was getting forced to the altar? Joe: Three of the 20th century's most powerful, and often opposing, economic thinkers. In one corner, you have Friedrich Hayek, the champion of the free market. His view is essentially, "The market giveth, the market taketh away; blessed be the name of the market." Let it run free, and it will create wealth. Lewis: Okay, he's the gas pedal. Full speed ahead. Joe: A perfect analogy. In the other corner, you have Karl Polanyi. He argued that labor, land, and money are not true commodities. Treating them as such, subject only to market forces, is dehumanizing and destructive. People will inevitably demand protection, community, and fairness—things like unions, social safety nets, and regulations. Lewis: So Polanyi is the brakes and the seatbelts. He’s worried about the car crashing. Joe: Exactly. And the marriage counselor, the one trying to keep these two from killing each other, is John Maynard Keynes. Keynes argued that the market is prone to fits and depressions. The government needs to step in to manage demand, to keep employment high and the economy stable. He’s the driver, with his hands on the wheel, trying to keep the car on the road. Lewis: Gas pedal, brakes, and a driver. I can see how that could work, but you said it was a 'shotgun' marriage. What forced them together? Joe: The trauma of the Great Depression and World War II. It became clear that pure Hayekian laissez-faire was too unstable, and the threat of communism made Polanyian demands for social justice impossible to ignore. So, in the post-war era, especially in the Global North, they were forced into a compromise. Lewis: And did it work? Joe: It worked spectacularly well for about thirty years, from roughly 1945 to 1975. DeLong calls them the "Thirty Glorious Years." This was the era of the strongest, most equitable economic growth in history. And there's a great story that embodies this compromise perfectly: the "Treaty of Detroit." Lewis: The Treaty of Detroit? Tell me more. Joe: In 1950, the United Auto Workers union, led by the fiery socialist Walter Reuther, sat down with General Motors, the biggest corporation in the world. After years of bitter strikes, they hammered out a deal. GM got labor peace and no strikes for five years. In return, the UAW got not just high wages, but company-funded healthcare, pensions, and cost-of-living adjustments. Lewis: Wow. That’s Polanyi’s social protection being provided by Hayek’s market engine. Joe: Precisely. It was a private welfare state. It created a stable, prosperous middle class that could afford to buy the very cars they were building. This was the shotgun marriage in action. It compressed inequality and shared the fruits of economic growth widely. For a generation, it seemed like utopia was actually within reach. Lewis: It sounds perfect. A powerful engine of growth, but with guardrails to make sure everyone benefited and the ride was smooth. Why on earth would anyone want to get out of that car?

Joe: That's the billion-dollar question, and it's where the 'slouching' in the title really kicks in. The marriage fell apart in the 1970s, and it was a messy divorce. Lewis: What went wrong? Did the driver fall asleep at the wheel? Joe: In a way, yes. The Keynesian driver got overconfident. Governments thought they could fine-tune the economy to perfection, pushing unemployment lower and lower. But this, combined with the massive oil price shocks of the 1970s, led to runaway inflation. Prices were spiraling out of control, and the stable economic world people had come to expect was crumbling. Lewis: So the system started to feel unstable. The promise of security was broken. Joe: Exactly. And this opened the door for a powerful counter-argument. A new narrative began to take hold, championed by figures like Milton Friedman and later politicians like Margaret Thatcher and Ronald Reagan. They argued that the problem wasn't the market; the problem was the government and the unions—the Keynesian driver and the Polanyian brakes. Lewis: The argument was that the seatbelts and the cautious driving were slowing the car down too much? Joe: That's it. The new idea, which we now call neoliberalism, was to fire the driver, rip out the seatbelts, and put Hayek's free market back in total control. The promise was that deregulation, privatization, and tax cuts would unleash a new era of dynamic growth that would benefit everyone. Lewis: Okay, so they performed a 'great divorce' and gave the car keys back to Hayek. Did it work? Did neoliberalism restart the engine and get us back on the fast track to utopia? Joe: According to DeLong, the answer is a resounding no. Neoliberal policies were very effective at one thing: crushing the inflation of the 1970s. But they failed to deliver on the promise of faster growth. In fact, for most people, growth slowed down. Lewis: But what about all the wealth that was created? The stock market booms, the tech billionaires? Joe: That’s the crucial point. The policies were incredibly effective at something else: transferring wealth and income upwards. The gap between the rich and everyone else exploded. The economic pie was still growing, but a tiny slice of the population was now taking almost all of it. The shared prosperity of the Thirty Glorious Years was over. Lewis: So the 'slouching' is because while the economy on paper looks rich, the lived experience for most people is one of stagnation and insecurity. Joe: You've nailed it. The engine is still running, but it’s no longer lifting everyone up. It’s lifting a few yachts, while the rest of the boats are stuck in the mud. And that, for DeLong, is the great failure of our time.

Lewis: So, if I'm putting this all together, the story of the last 150 years is that we built this incredible engine of prosperity, then we figured out a balanced, humane way to run it for a single generation, and then we got spooked and decided to dismantle that balance. We basically handed the keys to a driver who only cared about speed, not about where we were going or who was being left behind. Is that the story? Joe: That's a fantastic way to put it. DeLong’s ultimate point, I think, is that the market is a powerful servant but a terrible master. During the Thirty Glorious Years, we managed to make it our servant. It created wealth, but it did so within a framework of social values and government oversight. Neoliberalism made the market the master again. Lewis: And we’re living with the consequences. Joe: We are. We have unprecedented wealth on paper, but also a deep and pervasive sense of instability, inequality, and unfairness. We're slouching because we forgot that economic growth alone isn't utopia. Utopia requires a sense of justice, of community, of shared purpose. The market, left to its own devices, simply cannot provide those things. Lewis: It’s a powerful and, honestly, a pretty sobering conclusion. It feels like we're still stuck in the fallout of that 'great divorce.' It makes you wonder, what would a new 'shotgun marriage' for the 21st century even look like? What parts of Hayek, Polanyi, and Keynes do we need today to face challenges like climate change and AI? Joe: That is the question for our generation to answer. DeLong doesn't give us a simple roadmap, but he gives us a history that is essential for figuring it out. Lewis: A history that reminds us that progress isn't inevitable. It has to be built, and it has to be maintained. Joe: And that the slouch towards utopia is a journey we are all on, together. Lewis: This is Aibrary, signing off.