Invisible Handcuffs: Unchaining Economics
Episode 07: What economists get wrong about risk, technology and progress with Luke Kemp
In what way might economists’ flawed understanding of progress be driving the many risks we face today? This episode's guest is Luke Kemp, Research Affiliate at the Cambridge Center for the Study of Existential Risk and author of the best-selling, critically acclaimed book Goliath’s Curse, The History and Future of Societal Collapse. Luke actually trained and worked as a climate economist. Indeed he was drawn to researching civilisational collapse when he saw that climate economic models were tending to look only at average trajectories and not so-called tail risks — these are the worst case outcomes which may have a smaller probability, but could be potentially catastrophic. But to understand civilisational risk he realised he had to define what civilizations actually are. And this is where his work actually becomes highly relevant for understanding the ways in which economics is going wrong today, and how we might be able to fix it. Many of us, not just economists, equate civilisation with progress. That Hobbesian idea that life was nasty, brutish and short until the civilising force of states and empires came and liberated us. But when Luke started to dig into these periods he found contradictory evidence. Rather than being times of human flourishing, health and wellbeing actually tends to fall overall, while ecological degradation, resource conflicts, inflation, violence all tend to rise. So they were not really civil times in the sense we might understand the word today — but structured around what Luke terms dominance hierarchies - dominance of humans over nature, men over women, rich over poor, master over slave. It might have been good for elites, who got to hoard all the wealth and power — but not the broader population. Indeed, when these civilisations fall, most people tend to be better off. Hence Luke developed his preferred term: Goliaths. Well, today Luke claims we’re living in a Global Goliath, the period that effectively started with the industrial revolution. And this is where we make the link with economics, because much of economics takes the hockey-stick view of human progress as effectively starting a few hundred years ago, with industrialisation, which led to this massive expansion in the global economy, in wealth and so-called progress. And no doubt, a lot of good has come out of it. Especially since WWII life expectancy, nutrition etc has improved. But again, that’s not the whole story. Luke has found that for much of the industrial revolution, like past “Goliaths”, life was pretty terrible for most people, in many ways worse than before. It wasn’t until democratic struggle — labour movements, suffragettes, civil rights movements — that populations more broadly were able to benefit from the innovation, from this “progress”. So what does that mean for today? In my earlier discussion with economist Steve Keen we talked about how economists’ obsession with innovation as the key driver of growth overlooked that all technology requires energy. Luke's analysis helps us see that part of the reason why economists ignored and continue to ignore energy and nature stems from the idea that we can dominate nature, as well as a view of history effectively written by elites who have benefited from innovation and growth. Not only do such models ignore nature, but they ignore the social movements so critical to ensuring that innovations benefit people more broadly. And they also ignore the externalities —because each technology brings new problems. And yet today we still see economic models betting on innovation as the core means of producing growth, with growth overall necessarily assumed to be good, whatever the risks — not least as concerns AI — Luke's latest area of research, which we get to towards the end of the discussion. If you enjoy this episode, please like and share far and wide and consider a free or paid subscription at invisiblehandcuffs.com.
