Sapiens: A Brief History of Humankind

Part One: The Cognitive Revolution

About 70,000 years ago, organisms belonging to the species Homo sapiens started to form even more elaborate structures called cultures.

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Three important revolutions shaped the course of history: the Cognitive Revolution kick- started history about 70,000 years ago. The Agricultural Revolution sped it up about 12,000 years ago. The Scientific Revolution, which got under way only 500 years ago, may well end history and start something completely different.

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The most important thing to know about prehistoric humans is that they were insignificant animals with no more impact on their environment than gorillas, fireflies or jellyfish.

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Animals are said to belong to the same species if they tend to mate with each other, giving birth to fertile offspring.

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Species that evolved from a common ancestor are bunched together under the heading ‘genus’

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That evolution should select for larger brains may seem to us like, well, a no- brainer. We are so enamoured of our high intelligence that we assume that when it comes to cerebral power, more must be better.

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The fact is that a jumbo brain is a jumbo drain on the body. It’s not easy to carry around, especially when encased inside a massive skull. It’s even harder to fuel. In Homo sapiens, the brain accounts for about 2– 3 per cent of total body weight, but it consumes 25 per cent of the body’s energy when the body is at rest. By comparison, the brains of other apes require only 8 per cent of rest- time energy.

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Today our big brains pay off nicely, because we can produce cars and guns that enable us to move much faster than chimps, and shoot them from a safe distance instead of wrestling.

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But cars and guns are a recent phenomenon. For more than 2 million years, human neural networks kept growing and growing, but apart from some flint knives and pointed sticks, humans had precious little to show for it. What then drove forward the evolution of the massive human brain during those 2 million years? Frankly, we don’t know.

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Another singular human trait is that we walk upright on two legs.

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Humankind paid for its lofty vision and industrious hands with backaches and stiff necks.

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Women who gave birth earlier, when the infant’s brain and head were still relatively small and supple, fared better and lived to have more children. Natural selection consequently favoured earlier births. And, indeed, compared to other animals, humans are born prematurely, when many of their vital systems are still underdeveloped. A colt can trot shortly after birth; a kitten leaves its mother to forage on its own when it is just a few weeks old. Human babies are helpless, dependent for many years on their elders for sustenance, protection and education.

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neighbours. It takes a tribe to raise a human. Evolution thus favoured those capable of forming strong social ties. In addition, since humans are born underdeveloped, they can be educated and socialised to a far greater extent than any other animal. Most mammals emerge from the womb like glazed earthenware emerging from a kiln– any attempt at remoulding will only scratch or break them. Humans emerge from the womb like molten glass from a furnace. They can be spun, stretched and shaped with a surprising degree of freedom. This is why today we can educate our children to become Christian or Buddhist, capitalist or socialist, warlike or peace- loving.

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Genus Homo’s position in the food chain was, until quite recently, solidly in the middle. For millions of years, humans hunted smaller creatures and gathered what they could, all the while being hunted by larger predators. It was only 400,000 years ago that several species of man began to hunt large game on a regular basis, and only in the last 100,000 years– with the rise of Homo sapiens– that man jumped to the top of the food chain.

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Other animals at the top of the pyramid, such as lions and sharks, evolved into that position very gradually, over millions of years. This enabled the ecosystem to develop checks and balances that prevent lions and sharks from wreaking too much havoc.

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In contrast, humankind ascended to the top so quickly that the ecosystem was not given time to adjust. Moreover, humans themselves failed to adjust. Most top predators of the planet are majestic creatures. Millions of years of dominion have filled them with self- confidence. Sapiens by contrast is more like a banana- republic dictator. Having so recently been one of the underdogs of the savannah, we are full of fears and anxieties over our position, which makes us doubly cruel and dangerous. Many historical calamities, from deadly wars to ecological catastrophes, have resulted from this over- hasty jump.

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A significant step on the way to the top was the domestication of fire.

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Humans now had a dependable source of light and warmth, and a deadly weapon against prowling lions. Not long afterwards, humans may even have started deliberately to torch their neighbourhoods. A carefully managed fire could turn impassable barren thickets into prime grasslands teeming with game. In addition, once the fire died down, Stone Age entrepreneurs could walk through the smoking remains and harvest charcoaled animals, nuts and tubers.

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the best thing fire did was cook. Foods that humans cannot digest in their natural forms– such as wheat, rice and potatoes– became staples of our diet thanks to cooking. Fire not only changed food’s chemistry, it changed its biology as well. Cooking killed germs and parasites that infested food. Humans also had a far easier time chewing and digesting old favourites such as fruits, nuts, insects and carrion if they were cooked. Whereas chimpanzees spend five hours a day chewing raw food, a single hour suffices for people eating cooked food.

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The advent of cooking enabled humans to eat more kinds of food, to devote less time to eating, and to make do with smaller teeth and shorter intestines.

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Most importantly, the power of fire was not limited by the form, structure or strength of the human body. A single woman with a flint or fire stick could burn down an entire forest in a matter of hours. The domestication of fire was a sign of things to come.

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We don’t know exactly where and when animals that can be classified as Homo sapiens first evolved from some earlier type of humans, but most scientists agree that by 150,000 years ago, East Africa was populated by Sapiens that looked just like us.

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Scientists also agree that about 70,000 years ago, Sapiens from East Africa spread into the Arabian peninsula, and from there they quickly overran the entire Eurasian landmass. When Homo sapiens landed in Arabia, most of Eurasia was already settled by other humans. What happened to them? There are two conflicting theories.

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According to the Interbreeding Theory, when Sapiens spread into Neanderthal lands, Sapiens bred with Neanderthals until the two populations merged. If this is the case, then today’s Eurasians are not pure Sapiens. They are a mixture of Sapiens and Neanderthals. Similarly, when Sapiens reached East Asia, they interbred with the local Erectus, so the Chinese and Koreans are a mixture of Sapiens and Erectus.

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The opposing view, called the ‘Replacement Theory’ tells a very different story– one of incompatibility, revulsion, and perhaps even genocide. According to this theory, Sapiens and other humans had different anatomies, and most likely different mating habits and even body odours. They would have had little sexual interest in one another. And even if a Neanderthal Romeo and a Sapiens Juliet fell in love, they could not produce fertile children, because the genetic gulf separating the two populations was already unbridgeable. The two populations remained completely distinct, and when the Neanderthals died out, or were killed off, their genes died with them. According to this view, Sapiens replaced all the previous human populations without merging with them. If that is the case, the lineages of all contemporary humans can be traced back, exclusively, to East Africa, 70,000 years ago. We are all ‘pure Sapiens’.

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A lot hinges on this debate. From an evolutionary perspective, 70,000 years is a relatively short interval. If the Replacement Theory is correct, all living humans have roughly the same genetic baggage, and racial distinctions among them are negligible. But if the Interbreeding Theory is right, there might well be genetic differences between Africans, Europeans and Asians that go back hundreds of thousands of years. This is political dynamite, which could provide material for explosive racial theories.

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It turned out that 1– 4 per cent of the unique human DNA of modern populations in the Middle East and Europe is Neanderthal DNA. That’s not a huge amount, but it’s significant.

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If these results are valid– and it’s important to keep in mind that further research is under way and may either reinforce or modify these conclusions– the Interbreeders got at least some things right. But that doesn’t mean that the Replacement Theory is completely wrong.

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Clearly, they were not completely different species like horses and donkeys. On the other hand, they were not just different populations of the same species, like bulldogs and spaniels. Biological reality is not black and white. There are also important grey areas.

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why did they vanish? One possibility is that Homo sapiens drove them to extinction. Imagine a Sapiens band reaching a Balkan valley where Neanderthals had lived for hundreds of thousands of years. The newcomers began to hunt the deer and gather the nuts and berries that were the Neanderthals’ traditional staples. Sapiens were more proficient hunters and gatherers– thanks to better technology and superior social skills– so they multiplied and spread. The less resourceful Neanderthals found it increasingly difficult to feed themselves. Their population dwindled and they slowly died out, except perhaps for one or two members who joined their Sapiens neighbours.

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Another possibility is that competition for resources flared up into violence and genocide. Tolerance is not a Sapiens trademark. In modern times, a small difference in skin colour, dialect or religion has been enough to prompt one group of Sapiens to set about exterminating another group. Would ancient Sapiens have been more tolerant towards an entirely different human species? It may well be that when Sapiens encountered Neanderthals, the result was the first and most significant ethnic- cleansing campaign in history.

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Whether Sapiens are to blame or not, no sooner had they arrived at a new location than the native population became extinct.

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Sapiens can produce many more distinct sounds than green monkeys, but whales and elephants have equally impressive abilities. A parrot can say anything Albert Einstein could say, as well as mimicking the sounds of phones ringing, doors slamming and sirens wailing. Whatever advantage Einstein had over a parrot, it wasn’t vocal.

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The most common answer is that our language is amazingly supple. We can connect a limited number of sounds and signs to produce an infinite number of sentences, each with a distinct meaning. We can thereby ingest, store and communicate a prodigious amount of information about the surrounding world.

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When two males are contesting the alpha position, they usually do so by forming extensive coalitions of supporters,

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The alpha male usually wins his position not because he is physically stronger, but because he leads a large and stable coalition. These coalitions play a central part not only during overt struggles for the alpha position, but in almost all day- to- day activities. Members of a coalition spend more time together, share food, and help one another in times of trouble.

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the maximum ‘natural’ size of a group bonded by gossip is about 150 individuals. Most people can neither intimately know, nor gossip effectively about, more than 150 human beings. Even today, a critical threshold in human organisations falls somewhere around this magic number. Below this threshold, communities, businesses, social networks and military units can maintain themselves based mainly on intimate acquaintance and rumour- mongering. There is no need for formal ranks, titles and law books to keep order.

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But once the threshold of 150 individuals is crossed, things can no longer work that way. You cannot run a division with thousands of soldiers the same way you run a platoon. Successful family businesses usually face a crisis when they grow larger and hire more personnel. If they cannot reinvent themselves, they go bust.

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How did Homo sapiens manage to cross this critical threshold, eventually founding cities comprising tens of thousands of inhabitants and empires ruling hundreds of millions? The secret was probably the appearance of fiction. Large numbers of strangers can cooperate successfully by believing in common myths. Any large- scale human cooperation– whether a modern state, a medieval church, an ancient city or an archaic tribe– is rooted in common myths that exist only in people’s collective imagination.

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Yet none of these things exists outside the stories that people invent and tell one another. There are no gods in the universe, no nations, no money, no human rights, no laws and no justice outside the common imagination of human beings.

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What we fail to appreciate is that our modern institutions function on exactly the same basis. Take for example the world of business corporations. Modern businesspeople and lawyers are, in fact, powerful sorcerers.

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In what sense can we say that Peugeot SA (the company’s official name) exists? There are many Peugeot vehicles, but these are obviously not the company. Even if every Peugeot in the world were simultaneously junked and sold for scrap metal, Peugeot SA would not disappear. It would continue to manufacture new cars and issue its annual report. The company owns factories, machinery and showrooms, and employs mechanics, accountants and secretaries, but all these together do not comprise Peugeot. A disaster might kill every single one of Peugeot’s employees, and go on to destroy all of its assembly lines and executive offices. Even then, the company could borrow money, hire new employees, build new factories and buy new machinery. Peugeot has managers and shareholders, but neither do they constitute the company. All the managers could be dismissed and all its shares sold, but the company itself would remain intact.

Notes:

Modern example of myths created to add order and structure to society.

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Peugeot is a figment of our collective imagination. Lawyers call this a ‘legal fiction’. It can’t be pointed at; it is not a physical object. But it exists as a legal entity. Just like you or me, it is bound by the laws of the countries in which it operates. It can open a bank account and own property. It pays taxes, and it can be sued and even prosecuted separately from any of the people who own or work for it.

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Peugeot belongs to a particular genre of legal fictions called ‘limited liability companies’. The idea behind such companies is among humanity’s most ingenious inventions. Homo sapiens lived for untold millennia without them.

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During most of recorded history property could be owned only by flesh- and- blood humans, the kind that stood on two legs and had big brains. If in thirteenth- century France Jean set up a wagon- manufacturing workshop, he himself was the business. If a wagon he’d made broke down a week after purchase, the disgruntled buyer would have sued Jean personally. If Jean had borrowed 1,000 gold coins to set up his workshop and the business failed, he would have had to repay the loan by selling his private property– his house, his cow, his land. He might even have had to sell his children into servitude. If he couldn’t cover the debt, he could be thrown in prison by the state or enslaved by his creditors. He was fully liable, without limit, for all obligations incurred by his workshop. If you had lived back then, you would probably have thought twice before you opened an enterprise of your own. And indeed this legal situation discouraged entrepreneurship. People were afraid to start new businesses and take economic risks. It hardly seemed worth taking the chance that their families could end up utterly destitute.

Notes:

How businesses worked before

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This is why people began collectively to imagine the existence of limited liability companies. Such companies were legally independent of the people who set them up, or invested money in them, or managed them. Over the last few centuries such companies have become the main players in the economic arena, and we have grown so used to them that we forget they exist only in our imagination. In the US, the technical term for a limited liability company is a ‘corporation’, which is ironic, because the term derives from ‘corpus’ (‘ body’ in Latin)– the one thing these corporations lack. Despite their having no real bodies, the American legal system treats corporations as legal persons, as if they were flesh- and- blood human beings.

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If the company borrowed millions of francs and then went bust, Armand Peugeot did not owe its creditors a single franc. The loan, after all, had been given to Peugeot, the company, not to Armand Peugeot, the Homo sapiens.

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Armand Peugeot died in 1915. Peugeot, the company, is still alive and well. How exactly did Armand Peugeot, the man, create Peugeot, the company? In much the same way that priests and sorcerers have created gods and demons throughout history, and in which thousands of French curés were still creating Christ’s body every Sunday in the parish churches. It all revolved around telling stories, and convincing people to believe them.

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In the case of Peugeot SA the crucial story was the French legal code, as written by the French parliament. According to the French legislators, if a certified lawyer followed all the proper liturgy and rituals, wrote all the required spells and oaths on a wonderfully decorated piece of paper, and affixed his ornate signature to the bottom of the document, then hocus pocus– a new company was incorporated. When in 1896 Armand Peugeot wanted to create his company, he paid a lawyer to go through all these sacred procedures. Once the lawyer had performed all the right rituals and pronounced all the necessary spells and oaths, millions of upright French citizens behaved as if the Peugeot company really existed. Telling effective stories is not easy. The difficulty lies not in telling the story, but in convincing everyone else to believe it. Much of history revolves around this question: how does one convince millions of people to believe particular stories about gods, or nations, or limited liability companies? Yet when it succeeds, it gives Sapiens immense power, because it enables millions of strangers to cooperate and work towards common goals. Just try to imagine how difficult it would have been to create states, or churches, or legal systems if we could speak only about things that really exist, such as rivers, trees and lions.

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The kinds of things that people create through this network of stories are known in academic circles as ‘fictions’, ‘social constructs’ or ‘imagined realities’.

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An imagined reality is not a lie. I lie when I say that there is a lion near the river when I know perfectly well that there is no lion there. There is nothing special about lies. Green monkeys and chimpanzees can lie. A green monkey, for example, has been observed calling ‘Careful! A lion!’ when there was no lion around.

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Unlike lying, an imagined reality is something that everyone believes in, and as long as this communal belief persists, the imagined reality exerts force in the world. The sculptor from the Stadel Cave may sincerely have believed in the existence of the lion- man guardian spirit. Some sorcerers are charlatans, but most sincerely believe in the existence of gods and demons. Most millionaires sincerely believe in the existence of money and limited liability companies. Most human- rights activists sincerely believe in the existence of human rights. No one was lying when, in 2011, the UN demanded that the Libyan government respect the human rights of its citizens, even though the UN, Libya and human rights are all figments of our fertile imaginations.

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Ever since the Cognitive Revolution, Sapiens have thus been living in a dual reality. On the one hand, the objective reality of rivers, trees and lions; and on the other hand, the imagined reality of gods, nations and corporations. As time went by, the imagined reality became ever more powerful, so that today the very survival of rivers, trees and lions depends on the grace of imagined entities such as the United States and Google.

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The ability to create an imagined reality out of words enabled large numbers of strangers to cooperate effectively. But it also did something more. Since large- scale human cooperation is based on myths, the way people cooperate can be altered by changing the myths– by telling different stories.

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The behaviour of other social animals is determined to a large extent by their genes. DNA is not an autocrat. Animal behaviour is also influenced by environmental factors and individual quirks. Nevertheless, in a given environment, animals of the same species will tend to behave in a similar way. Significant changes in social behaviour cannot occur, in general, without genetic mutations.

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For example, common chimpanzees have a genetic tendency to live in hierarchical groups headed by an alpha male. Members of a closely related chimpanzee species, bonobos, usually live in more egalitarian groups dominated by female alliances. Female common chimpanzees cannot take lessons from their bonobo relatives and stage a feminist revolution. Male chimps cannot gather in a constitutional assembly to abolish the office of alpha male and declare that from here on out all chimps are to be treated as equals. Such dramatic changes in behaviour would occur only if something changed in the chimpanzees’ DNA.

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species. As long as Homo erectus did not undergo further genetic alterations, its stone tools remained roughly the same– for close to 2 million years!

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In contrast, ever since the Cognitive Revolution, Sapiens have been able to change their behaviour quickly, transmitting new behaviours to future generations without any need of genetic or environmental change.

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In other words, while the behaviour patterns of archaic humans remained fixed for tens of thousands of years, Sapiens could transform their social structures, the nature of their interpersonal relations, their economic activities and a host of other behaviours within a decade or two.

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The global trade network of today is based on our trust in such fictional entities as the dollar, the Federal Reserve Bank, and the totemic trademarks of corporations. When two strangers in a tribal society want to trade, they will often establish trust by appealing to a common god, mythical ancestor or totem animal.

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The immense diversity of imagined realities that Sapiens invented, and the resulting diversity of behaviour patterns, are the main components of what we call ‘cultures’. Once cultures appeared, they never ceased to change and develop, and these unstoppable alterations are what we call ‘history’.

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The Cognitive Revolution is accordingly the point when history declared its independence from biology. Until the Cognitive Revolution, the doings of all human species belonged to the realm of biology, or, if you so prefer, prehistory

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The real difference between us and chimpanzees is the mythical glue that binds together large numbers of individuals, families and groups. This glue has made us the masters of creation.

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the ability to make and use tools. Yet tool- making is of little consequence unless it is coupled with the ability to cooperate with many others.

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For nearly the entire history of our species, Sapiens lived as foragers. The past 200 years, during which ever increasing numbers of Sapiens have obtained their daily bread as urban labourers and office workers, and the preceding 10,000 years, during which most Sapiens lived as farmers and herders, are the blink of an eye compared to the tens of thousands of years during which our ancestors hunted and gathered.

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The instinct to gorge on high- calorie food was hard- wired into our genes.

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There was just one exception to this general rule: the dog. The dog was the first animal domesticated by Homo sapiens, and this occurred before the Agricultural Revolution. Experts disagree about the exact date, but we have incontrovertible evidence of domesticated dogs from about 15,000 years ago. They may have joined the human pack thousands of years earlier.

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The average person lived many months without seeing or hearing a human from outside of her own band,

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In other words, the average forager had wider, deeper and more varied knowledge of her immediate surroundings than most of her modern descendants. Today, most people in industrial societies don’t need to know much about the natural world in order to survive.

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The human collective knows far more today than did the ancient bands. But at the individual level, ancient foragers were the most knowledgeable and skilful people in history.

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There is some evidence that the size of the average Sapiens brain has actually decreased since the age of foraging. 5 Survival in that era required superb mental abilities from everyone. When agriculture and industry came along people could increasingly rely on the skills of others for survival, and new ‘niches for imbeciles’ were opened up. You could survive and pass your unremarkable genes to the next generation by working as a water carrier or an assembly- line worker.

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Varied and constant use of their bodies made them as fit as marathon runners. They had physical dexterity that people today are unable to achieve even after years of practising yoga or t’ai chi.

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The hunter- gatherer way of life differed significantly from region to region and from season to season, but on the whole foragers seem to have enjoyed a more comfortable and rewarding lifestyle than most of the peasants, shepherds, labourers and office clerks who followed in their footsteps.

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While people in today’s affluent societies work an average of forty to forty- five hours a week, and people in the developing world work sixty and even eighty hours a week, hunter- gatherers living today in the most inhospitable of habitats– such as the Kalahari Desert– work on average for just thirty- five to forty- five hours a week.

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Evidence from fossilised skeletons indicates that ancient foragers were less likely to suffer from starvation or malnutrition, and were generally taller and healthier than their peasant descendants. Average life expectancy was apparently just thirty to forty years, but this was due largely to the high incidence of child mortality. Children who made it through the perilous first years had a good chance of reaching the age of sixty, and some even made it to their eighties. Among modern foragers, forty- five- year- old women can expect to live another twenty years, and about 5– 8 per cent of the population is over sixty. 6

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The typical peasant in traditional China ate rice for breakfast, rice for lunch and rice for dinner. If she was lucky, she could expect to eat the same on the following day. By contrast, ancient foragers regularly ate dozens of different foodstuffs. The peasant’s ancient ancestor, the forager, may have eaten berries and mushrooms for breakfast; fruits, snails and turtle for lunch; and rabbit steak with wild onions for dinner. Tomorrow’s menu might have been completely different. This variety ensured that the ancient foragers received all the necessary nutrients.

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Part Two: The Agricultural Revolution

Sapiens too continued to live by gathering wild plants and hunting wild animals. Why do anything else when your lifestyle feeds you amply and supports a rich world of social structures, religious beliefs and political dynamics? All this changed about 10,000 years ago, when Sapiens began to devote almost all their time and effort to manipulating the lives of a few animal and plant species. From sunrise to sunset humans sowed seeds, watered plants, plucked weeds from the ground and led sheep to prime pastures. This work, they thought, would provide them with more fruit, grain and meat. It was a revolution in the way humans lived– the Agricultural Revolution.

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by 3500 BC the main wave of domestication was over. Even today, with all our advanced technologies, more than 90 per cent of the calories that feed humanity come from the handful of plants that our ancestors domesticated between 9500 and 3500 BC– wheat, rice, maize (called ‘corn’ in the US), potatoes, millet and barley. No noteworthy plant or animal has been domesticated in the last 2,000 years. If our minds are those of hunter- gatherers, our cuisine is that of ancient farmers.

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The Agricultural Revolution certainly enlarged the sum total of food at the disposal of humankind, but the extra food did not translate into a better diet or more leisure. Rather, it translated into population explosions and pampered elites. The average farmer worked harder than the average forager, and got a worse diet in return. The Agricultural Revolution was history’s biggest fraud.

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This is the essence of the Agricultural Revolution: the ability to keep more people alive under worse conditions.

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The pursuit of an easier life resulted in much hardship, and not for the last time. It happens to us today. How many young college graduates have taken demanding jobs in high- powered firms, vowing that they will work hard to earn money that will enable them to retire and pursue their real interests when they are thirty- five? But by the time they reach that age, they have large mortgages, children to school, houses in the suburbs that necessitate at least two cars per family, and a sense that life is not worth living without really good wine and expensive holidays abroad. What are they supposed to do, go back to digging up roots? No, they double their efforts and keep slaving away.

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This discrepancy between evolutionary success and individual suffering is perhaps the most important lesson we can draw from the Agricultural Revolution. When we study the narrative of plants such as wheat and maize, maybe the purely evolutionary perspective makes sense. Yet in the case of animals such as cattle, sheep and Sapiens, each with a complex world of sensations and emotions, we have to consider how evolutionary success translates into individual experience. In the following chapters we will see time and again how a dramatic increase in the collective power and ostensible success of our species went hand in hand with much individual suffering.

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THE AGRICULTURAL REVOLUTION is one of the most controversial events in history. Some partisans proclaim that it set humankind on the road to prosperity and progress. Others insist that it led to perdition. This was the turning point, they say, where Sapiens cast off its intimate symbiosis with nature and sprinted towards greed and alienation. Whichever direction the road led, there was no going back. Farming enabled populations to increase so radically and rapidly that no complex agricultural society could ever again sustain itself if it returned to hunting and gathering.

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History is something that very few people have been doing while everyone else was ploughing fields and carrying water buckets.

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It is easy for us to accept that the division of people into ‘superiors’ and ‘commoners’ is a figment of the imagination. Yet the idea that all humans are equal is also a myth. In what sense do all humans equal one another? Is there any objective reality, outside the human imagination, in which we are truly equal? Are all humans equal to one another biologically? Let us try to translate the most famous line of the American Declaration of Independence into biological terms:

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However, an imagined order cannot be sustained by violence alone. It requires some true believers as well.

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How do you cause people to believe in an imagined order such as Christianity, democracy or capitalism? First, you never admit that the order is imagined. You always insist that the order sustaining society is an objective reality created by the great gods or by the laws of nature. People are unequal, not because Hammurabi said so, but because Enlil and Marduk decreed it. People are equal, not because Thomas Jefferson said so, but because God created them that way. Free markets are the best economic system, not because Adam Smith said so, but because these are the immutable laws of nature.

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You also educate people thoroughly. From the moment they are born, you constantly remind them of the principles of the imagined order, which are incorporated into anything and everything. They are incorporated into fairy tales, dramas, paintings, songs, etiquette, political propaganda, architecture, recipes and fashions. For example, today people believe in equality, so it’s fashionable for rich kids to wear jeans, which were originally working- class attire.

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Three main factors prevent people from realising that the order organising their lives exists only in their imagination:

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The imagined order is embedded in the material world. Though the imagined order exists only in our minds, it can be woven into the material reality around us, and even set in stone. Most Westerners today believe in individualism. They believe that every human is an individual, whose worth does not depend on what other people think of him or her. Each of us has within ourselves a brilliant ray of light that gives value and meaning to our lives. In modern Western schools teachers and parents tell children that if their classmates make fun of them, they should ignore it. Only they themselves, not others, know their true worth.

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The imagined order shapes our desires. Most people do not wish to accept that the order governing their lives is imaginary, but in fact every person is born into a pre- existing imagined order, and his or her desires are shaped from birth by its dominant myths. Our personal desires thereby become the imagined order’s most important defences.

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Friends giving advice often tell each other, ‘Follow your heart.’ But the heart is a double agent that usually takes its instructions from the dominant myths of the day, and the very recommendation to ‘follow your heart’ was implanted in our minds by a combination of nineteenth- century Romantic myths and twentieth- century consumerist myths.

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Even what people take to be their most personal desires are usually programmed by the imagined order. Let’s consider, for example, the popular desire to take a holiday abroad. There is nothing natural or obvious about this. A chimpanzee alpha male would never think of using his power in order to go on holiday into the territory of a neighbouring chimpanzee band.

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People today spend a great deal of money on holidays abroad because they are true believers in the myths of romantic consumerism. Romanticism tells us that in order to make the most of our human potential we must have as many different experiences as we can. We must open ourselves to a wide spectrum of emotions;

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Romanticism, which encourages variety, meshes perfectly with consumerism. Their marriage has given birth to the infinite ‘market of experiences’, on which the modern tourism industry is founded.

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c. The imagined order is inter- subjective. Even if by some superhuman effort I succeed in freeing my personal desires from the grip of the imagined order, I am just one person. In order to change the imagined order I must convince millions of strangers to cooperate with me. For the imagined order is not a subjective order existing in my own imagination– it is rather an inter- subjective order, existing in the shared imagination of thousands and millions of people.

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In order to understand this, we need to understand the difference between ‘objective’, ‘subjective’, and ‘inter- subjective’.

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An objective phenomenon exists independently of human consciousness and human beliefs. Radioactivity, for example, is not a myth. Radioactive emissions occurred long before people discovered them, and they are dangerous even when people do not believe in them.

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The subjective is something that exists depending on the consciousness and beliefs of a single individual. It disappears or changes if that particular individual changes his or her beliefs.

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The inter- subjective is something that exists within the communication network linking the subjective consciousness of many individuals. If a single individual changes his or her beliefs, or even dies, it is of little importance. However, if most individuals in the network die or change their beliefs, the inter- subjective phenomenon will mutate or disappear.

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Many of history’s most important drivers are inter- subjective: law, money, gods, nations.

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A change of such magnitude can be accomplished only with the help of a complex organisation, such as a political party, an ideological movement, or a religious cult. However, in order to establish such complex organisations, it’s necessary to convince many strangers to cooperate with one another. And this will happen only if these strangers believe in some shared myths. It follows that in order to change an existing imagined order, we must first believe in an alternative imagined order.

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In order to dismantle Peugeot, for example, we need to imagine something more powerful, such as the French legal system. In order to dismantle the French legal system we need to imagine something even more powerful, such as the French state. And if we would like to dismantle that too, we will have to imagine something yet more powerful.

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It is telling that the first recorded name in history belongs to an accountant, rather than a prophet, a poet or a great conqueror.

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The most important impact of script on human history is precisely this: it has gradually changed the way humans think and view the world. Free association and holistic thought have given way to compartmentalisation and bureaucracy.

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Part Three: The Unification of Humankind

If tensions, conflicts and irresolvable dilemmas are the spice of every culture, a human being who belongs to any particular culture must hold contradictory beliefs and be riven by incompatible values. It’s such an essential feature of any culture that it even has a name: cognitive dissonance. Cognitive dissonance is often considered a failure of the human psyche. In fact, it is a vital asset. Had people been unable to hold contradictory beliefs and values, it would probably have been impossible to establish and maintain any human culture.

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In a barter economy, every day the shoemaker and the apple grower will have to learn anew the relative prices of dozens of commodities. If one hundred different commodities are traded in the market, then buyers and sellers will have to know 4,950 different exchange rates. And if 1,000 different commodities are traded, buyers and sellers must juggle 499,500 different exchange rates! 5 How do you figure it out?

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Money is not coins and banknotes. Money is anything that people are willing to use in order to represent systematically the value of other things for the purpose of exchanging goods and services. Money enables people to compare quickly and easily the value of different commodities (such as apples, shoes and divorces), to easily exchange one thing for another, and to store wealth conveniently.

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Money is thus a universal medium of exchange that enables people to convert almost everything into almost anything else.

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Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.

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That’s why counterfeiting money has always been considered a much more serious crime than other acts of deception. Counterfeiting is not just cheating– it’s a breach of sovereignty, an act of subversion against the power, privileges and person of the king. The legal term is lese- majesty (violating majesty), and was typically punished by torture and death. As long as people trusted the power and integrity of the king, they trusted his coins. Total strangers could easily agree on the worth of a Roman denarius coin, because they trusted the power and integrity of the Roman emperor, whose name and picture adorned it.

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Yet why should Chinese, Indians, Muslims and Spaniards– who belonged to very different cultures that failed to agree about much of anything– nevertheless share the belief in gold?

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Economists have a ready answer. Once trade connects two areas, the forces of supply and demand tend to equalise the prices of transportable goods.

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Even if Indians still had no real use for gold, the fact that Mediterranean people wanted it would be enough to make the Indians value it.

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Similarly, the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, even if that person is otherwise hated, despised or ridiculed by us. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.

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Money is based on two universal principles: Universal convertibility: with money as an alchemist, you can turn land into loyalty, justice into health, and violence into knowledge. Universal trust: with money as a go- between, any two people can cooperate on any project.

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Nobody really knows how to solve this thorny question of cultural inheritance. Whatever path we take, the first step is to acknowledge the complexity of the dilemma and to accept that simplistically dividing the past into good guys and bad guys leads nowhere. Unless, of course, we are willing to admit that we usually follow the lead of the bad guys.

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Religion is a system of human norms and values that is founded on belief in a superhuman order. The theory of relativity is not a religion, because (at least so far) there are no human norms and values that are founded on it. Football is not a religion because nobody argues that its rules reflect superhuman edicts. Islam, Buddhism and Communism are all religions, because all are systems of human norms and values that are founded on belief in a superhuman order. (Note the difference between ‘superhuman’ and ‘supernatural’. The Buddhist law of nature and the Marxist laws of history are superhuman, since they were not legislated by humans. Yet they are not supernatural.)

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The Hindsight Fallacy Every point in history is a crossroads. A single travelled road leads from the past to the present, but myriad paths fork off into the future. Some of those paths are wider, smoother and better marked, and are thus more likely to be taken, but sometimes history– or the people who make history– takes unexpected turns.

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To describe ‘how’ means to reconstruct the series of specific events that led from one point to another. To explain ‘why’ means to find causal connections that account for the occurrence of this particular series of events to the exclusion of all others.

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This is one of the distinguishing marks of history as an academic discipline– the better you know a particular historical period, the harder it becomes to explain why things happened one way and not another. Those who have only a superficial knowledge of a certain period tend to focus only on the possibility that was eventually realised. They offer a just- so story to explain with hindsight why that outcome was inevitable. Those more deeply informed about the period are much more cognisant of the roads not taken.

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It is an iron rule of history that what looks inevitable in hindsight was far from obvious at the time.

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History cannot be explained deterministically and it cannot be predicted because it is chaotic. So many forces are at work and their interactions are so complex that extremely small variations in the strength of the forces and the way they interact produce huge differences in outcomes.

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history is what is called a ‘level two’ chaotic system. Chaotic systems come in two shapes. Level one chaos is chaos that does not react to predictions about it.

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Level two chaos is chaos that reacts to predictions about it, and therefore can never be predicted accurately. Markets, for example, are a level two chaotic system.

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Politics, too, is a second- order chaotic system.

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Unlike physics or economics, history is not a means for making accurate predictions. We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable, and that we consequently have many more possibilities before us than we imagine.

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According to this approach, cultures are not conspiracies concocted by some people in order to take advantage of others (as Marxists tend to think). Rather, cultures are mental parasites that emerge accidentally, and thereafter take advantage of all people infected by them. This approach is sometimes called memetics. It assumes that, just as organic evolution is based on the replication of organic information units called ‘genes’, so cultural evolution is based on the replication of cultural information units called ‘memes’. 1 Successful cultures are those that excel in reproducing their memes, irrespective of the costs and benefits to their human hosts.

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Game theory explains how in multi- player systems, views and behaviour patterns that harm all players nevertheless manage to take root and spread.

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Part Four: The Scientific Revolution

But modern science differs from all previous traditions of knowledge in three critical ways:

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The willingness to admit ignorance. Modern science is based on the Latin injunction ignoramus– ‘we do not know’.

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The centrality of observation and mathematics. Having admitted ignorance, modern science aims to obtain new knowledge. It does so by gathering observations and then using mathematical tools to connect these observations into comprehensive theories. The acquisition of new powers. Modern science is not content with creating theories. It uses these theories in order to acquire new powers, and in particular to develop new technologies.

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The Scientific Revolution has not been a revolution of knowledge. It has been above all a revolution of ignorance. The great discovery that launched the Scientific Revolution was the discovery that humans do not know the answers to their most important questions.

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Most scientific studies are funded because somebody believes they can help attain some political, economic or religious goal. For example, in the sixteenth century, kings and bankers channelled enormous resources to finance geographical expeditions around the world but not a penny for studying child psychology. This is because kings and bankers surmised that the discovery of new geographical knowledge would enable them to conquer new lands and set up trade empires, whereas they couldn’t see any profit in understanding child psychology.

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In 1775 Asia accounted for 80 per cent of the world economy. The combined economies of India and China alone represented two- thirds of global production. In comparison, Europe was an economic dwarf. 3

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The global centre of power shifted to Europe only between 1750 and 1850, when Europeans humiliated the Asian powers in a series of wars and conquered large parts of Asia. By 1900 Europeans firmly controlled the world’s economy and most of its territory. In 1950 western Europe and the United States together accounted for more than half of global production, whereas China’s portion had been reduced to 5 per cent. 4 Under the European aegis a new global order and global culture emerged. Today all humans are, to a much greater extent than they usually want to admit, European in dress, thought and taste. They may be fiercely anti- European in their rhetoric, but almost everyone on the planet views politics, medicine, war and economics through European eyes, and listens to music written in European modes with words in European languages. Even today’s burgeoning Chinese economy, which may soon regain its global primacy, is built on a European model of production and finance.

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The Chinese and Persians did not lack technological inventions such as steam engines (which could be freely copied or bought). They lacked the values, myths, judicial apparatus and sociopolitical structures that took centuries to form and mature in the West and which could not be copied and internalised rapidly. France and the United States quickly followed in Britain’s footsteps because the French and Americans already shared the most important British myths and social structures. The Chinese and Persians could not catch up as quickly because they thought and organised their societies differently.

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This explanation sheds new light on the period from 1500 to 1850. During this era Europe did not enjoy any obvious technological, political, military or economic advantage over the Asian powers, yet the continent built up a unique potential, whose importance suddenly became obvious around 1850.

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What potential did Europe develop in the early modern period that enabled it to dominate the late modern world? There are two complementary answers to this question: modern science and capitalism. Europeans were used to thinking and behaving in a scientific and capitalist way even before they enjoyed any significant technological advantages.

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The discovery of America was the foundational event of the Scientific Revolution. It not only taught Europeans to favour present observations over past traditions, but the desire to conquer America also obliged Europeans to search for new knowledge at breakneck speed. If they really wanted to control the vast new territories, they had to gather enormous amounts of new data about the geography, climate, flora, fauna, languages, cultures and history of the new continent.

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These European explore- and- conquer expeditions are so familiar to us that we tend to overlook just how extraordinary they were. Nothing like them had ever happened before. Long- distance campaigns of conquest are not a natural undertaking. Throughout history most human societies were so busy with local conflicts and neighbourhood quarrels that they never considered exploring and conquering distant lands. Most great empires extended their control only over their immediate neighbourhood– they reached far- flung lands simply because their neighbourhood kept expanding.

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Modern science and modern empires were motivated by the restless feeling that perhaps something important awaited beyond the horizon– something they had better explore and master. Yet the connection between science and empire went much deeper. Not just the motivation, but also the practices of empire- builders were entangled with those of scientists.

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For modern Europeans, building an empire was a scientific project, while setting up a scientific discipline was an imperial project. When the Muslims conquered India, they did not bring along archaeologists to systematically study Indian history, anthropologists to study Indian cultures, geologists to study Indian soils, or zoologists to study Indian fauna. When the British conquered India, they did all of these things. On 10 April 1802 the Great Survey of India was launched. It lasted sixty years. With the help of tens of thousands of native labourers, scholars and guides, the British carefully mapped the whole of India, marking borders, measuring distances, and even calculating for the first time the exact height of Mount Everest and the other Himalayan peaks. The British explored the military resources of Indian provinces and the location of their gold mines, but they also took the trouble to collect information about rare Indian spiders, to catalogue colourful butterflies, to trace the ancient origins of extinct Indian languages, and to dig up forgotten ruins.

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the Mauryas, nor the Guptas, nor the Delhi sultans, nor the great Mughals– had given the ruins a second glance. But a British archaeological survey took notice of the site in 1922. A British team then excavated it, and discovered the first great civilisation of India, which no Indian had been aware of.

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Thanks to the work of people like William Jones and Henry Rawlinson, the European conquerors knew their empires very well. Far better, indeed, than any previous conquerors, or even than the native population itself. Their superior knowledge had obvious practical advantages. Without such knowledge, it is unlikely that a ridiculously small number of Britons could have succeeded in governing, oppressing and exploiting so many hundreds of millions of Indians for two centuries. Throughout the nineteenth and early twentieth centuries, fewer than 5,000 British officials, about 40,000– 70,000 British soldiers, and perhaps another 100,000 British business people, hangers- on, wives and children were sufficient to conquer and rule up to 300 million Indians.

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No less important was the fact that science gave the empires ideological justification. Modern Europeans came to believe that acquiring new knowledge was always good. The fact that the empires produced a constant stream of new knowledge branded them as progressive and positive enterprises.

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In truth, neither the narrative of oppression and exploitation nor that of ‘the White Man’s burden’ completely matches the facts. The European empires did so many different things on such a large scale, that you can find plenty of examples to support whatever you want to say about them. You think that these empires were evil monstrosities that spread death, oppression and injustice around the world? You could easily fill an encyclopedia with their crimes. You want to argue that they in fact improved the conditions of their subjects with new medicines, better economic conditions and greater security? You could fill another encyclopedia with their achievements. Due to their close cooperation with science, these empires wielded so much power and changed the world to such an extent that perhaps they cannot be simply labelled as good or evil. They created the world as we know it, including the ideologies we use in order to judge them.

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For most of history the economy stayed much the same size. Yes, global production increased, but this was due mostly to demographic expansion and the settlement of new lands. Per capita production remained static. But all that changed in the modern age. In 1500, global production of goods and services was equal to about $ 250 billion; today it hovers around $ 60 trillion. More importantly, in 1500, annual per capita production averaged $ 550, while today every man, woman and child produces, on the average, $ 8,800 a year. 1 What accounts for this stupendous growth?

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Current US banking law permits the bank to repeat this exercise seven more times. The contractor would eventually have $ 10 million in his account, even though the bank still has but $ 1 million in its vaults. Banks are allowed to loan $ 10 for every dollar they actually possess, which means that 90 per cent of all the money in our bank accounts is not covered by actual coins and notes. 2 If all of the account holders at Barclays Bank suddenly demand their money, Barclays will promptly collapse (unless the government steps in to save it). The same is true of Lloyds, Deutsche Bank, Citibank, and all other banks in the world.

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It sounds like a giant Ponzi scheme, doesn’t it? But if it’s a fraud, then the entire modern economy is a fraud. The fact is, it’s not a deception, but rather a tribute to the amazing abilities of the human imagination. What enables banks– and the entire economy– to survive and flourish is our trust in the future.

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In the present, she has a lot of dreams, but no tangible resources. The only way she could get her bakery built would be to find a contractor willing to work today and receive payment in a few years’ time, if and when the bakery starts making money. Alas, such contractors are rare breeds. So our entrepreneur is in a bind. Without a bakery, she can’t bake cakes. Without cakes, she can’t make money. Without money, she can’t hire a contractor. Without a contractor, she has no bakery.

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Humankind was trapped in this predicament for thousands of years. As a result, economies remained frozen. The way out of the trap was discovered only in the modern era, with the appearance of a new system based on trust in the future. In it, people agreed to represent imaginary goods– goods that do not exist in the present– with a special kind of money they called ‘credit’. Credit enables us to build the present at the expense of the future. It’s founded on the assumption that our future resources are sure to be far more abundant than our present resources. A host of new and wonderful opportunities open up if we can build things in the present using future income.

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Credit arrangements of one kind or another have existed in all known human cultures, going back at least to ancient Sumer. The problem in previous eras was not that no one had the idea or knew how to use it. It was that people seldom wanted to extend much credit because they didn’t trust that the future would be better than the present. They generally believed that times past had been better than their own times and that the future would be worse, or at best much the same. To put that in economic terms, they believed that the total amount of wealth was limited, if not dwindling. People therefore considered it a bad bet to assume that they personally, or their kingdom, or the entire world, would be producing more wealth ten years down the line. Business looked like a zero- sum game. Of course, the profits of one particular bakery might rise, but only at the expense of the bakery next door. Venice might flourish, but only by impoverishing Genoa. The king of England might enrich himself, but only by robbing the king of France. You could cut the pie in many different ways, but it never got any bigger.

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If the global pie stayed the same size, there was no margin for credit. Credit is the difference between today’s pie and tomorrow’s pie. If the pie stays the same, why extend credit? It would be an unacceptable risk unless you believed that the baker or king asking for your money might be able to steal a slice from a competitor. So it was hard to get a loan in the premodern world, and when you got one it was usually small, short- term, and subject to high interest rates. Upstart entrepreneurs thus found it difficult to open new bakeries and great kings who wanted to build palaces or wage wars had no choice but to raise the necessary funds through high taxes and tariffs. That was fine for kings (as long as their subjects remained docile), but a scullery maid who had a great idea for a bakery and wanted to move up in the world generally could only dream of wealth while scrubbing down the royal kitchen’s floors.

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Then came the Scientific Revolution and the idea of progress. The idea of progress is built on the notion that if we admit our ignorance and invest resources in research, things can improve. This idea was soon translated into economic terms. Whoever believes in progress believes that geographical discoveries, technological inventions and organisational developments can increase the sum total of human production, trade and wealth.

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Over the last 500 years the idea of progress convinced people to put more and more trust in the future. This trust created credit; credit brought real economic growth; and growth strengthened the trust in the future and opened the way for even more credit. It didn’t happen overnight– the economy behaved more like a roller coaster than a balloon. But over the long run, with the bumps evened out, the general direction was unmistakable. Today, there is so much credit in the world that governments, business corporations and private individuals easily obtain large, long- term and low- interest loans that far exceed current income.

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In 1776 the Scottish economist Adam Smith published The Wealth of Nations, probably the most important economics manifesto of all time. In the eighth chapter of its first volume, Smith made the following novel argument: when a landlord, a weaver or a shoemaker has greater profits than he needs to maintain his own family, he uses the surplus to employ more assistants, in order to further increase his profits. The more profits he has, the more assistants he can employ. It follows that an increase in the profits of private entrepreneurs is the basis for the increase in collective wealth and prosperity. This may not strike you as very original, because we all live in a capitalist world that takes Smith’s argument for granted. We hear variations on this theme every day in the news. Yet Smith’s claim that the selfish human urge to increase private profits is the basis for collective wealth is one of the most revolutionary ideas in human history– revolutionary not just from an economic perspective, but even more so from a moral and political perspective. What Smith says is, in fact, that greed is good, and that by becoming richer I benefit everybody, not just myself. Egoism is altruism.

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In Smith’s story, people become rich not by despoiling their neighbours, but by increasing the overall size of the pie. And when the pie grows, everyone benefits. The rich are accordingly the most useful and benevolent people in society, because they turn the wheels of growth for everyone’s advantage.

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All this depends, however, on the rich using their profits to open new factories and hire new employees, rather than wasting them on non- productive activities. Smith therefore repeated like a mantra the maxim that ‘When profits increase, the landlord or weaver will employ more assistants’ and not ‘When profits increase, Scrooge will hoard his money in a chest and take it out only to count his coins.’ A crucial part of the modern capitalist economy was the emergence of a new ethic, according to which profits ought to be reinvested in production. This brings about more profits, which are again reinvested in production, which brings more profits, et cetera ad infinitum. Investments can be made in many ways: enlarging the factory, conducting scientific research, developing new products. Yet all these investments must somehow increase production and translate into larger profits. In the new capitalist creed, the first and most sacred commandment is: ‘The profits of production must be reinvested in increasing production.’

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That’s why capitalism is called ‘capitalism’. Capitalism distinguishes ‘capital’ from mere ‘wealth’. Capital consists of money, goods and resources that are invested in production. Wealth, on the other hand, is buried in the ground or wasted on unproductive activities. A pharaoh who pours resources into a non- productive pyramid is not a capitalist. A pirate who loots a Spanish treasure fleet and buries a chest full of glittering coins on the beach of some Caribbean island is not a capitalist. But a hard- working factory hand who reinvests part of his income in the stock market is. The idea that ‘The profits of production must be reinvested in increasing production’ sounds trivial. Yet it was alien to most people throughout history.

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Over the last few years, banks and governments have been frenziedly printing money. Everybody is terrified that the current economic crisis may stop the growth of the economy. So they are creating trillions of dollars, euros and yen out of thin air, pumping cheap credit into the system, and hoping that the scientists, technicians and engineers will manage to come up with something really big, before the bubble bursts. Everything depends on the people in the labs. New discoveries in fields such as biotechnology and nanotechnology could create entire new industries, whose profits could back the trillions of make- believe money that the banks and governments have created since 2008. If the labs do not fulfil these expectations before the bubble bursts, we are heading towards very rough times.

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The king of Portugal declined. Like a present- day start- up entrepreneur, Columbus did not give up. He pitched his idea to other potential investors in Italy, France, England, and again in Portugal. Each time he was rejected. He then tried his luck with Ferdinand and Isabella, rulers of newly united Spain. He took on some experienced lobbyists, and with their help he managed to convince Queen Isabella to invest. As every schoolchild knows, Isabella hit the jackpot. Columbus’ discoveries enabled the Spaniards to conquer America, where they established gold and silver mines as well as sugar and tobacco plantations that enriched the Spanish kings, bankers and merchants beyond their wildest dreams.

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This was the magic circle of imperial capitalism: credit financed new discoveries; discoveries led to colonies; colonies provided profits; profits built trust; and trust translated into more credit.

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How exactly did the Dutch win the trust of the financial system? Firstly, they were sticklers about repaying their loans on time and in full, making the extension of credit less risky for lenders. Secondly, their country’s judicial system enjoyed independence and protected private rights– in particular private property rights. Capital trickles away from dictatorial states that fail to defend private individuals and their property. Instead, it flows into states upholding the rule of law and private property.

Notes:

A really nice example is given just after this paragraph in the book

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The Dutch merchants financed conquest by getting loans, and increasingly also by selling shares in their companies that entitled their holders to receive a portion of the company’s profits. Cautious investors who would never have given their money to the king of Spain, and who would have thought twice before extending credit to the Dutch government, happily invested fortunes in the Dutch joint- stock companies that were the mainstay of the new empire. If you thought a company was going to make a big profit but it had already sold all its shares, you could buy some from people who owned them, probably for a higher price than they originally paid. If you bought shares and later discovered that the company was in dire straits, you could try to unload your stock for a lower price. The resulting trade in company shares led to the establishment in most major European cities of stock exchanges, places where the shares of companies were traded.

Notes:

beginning of the stock market

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in the early modern age it was common for private companies to hire not only soldiers, but also generals and admirals, cannons and ships, and even entire off- the- shelf armies.

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a large part of Indonesia became a VOC colony. VOC ruled Indonesia for close to 200 years. Only in 1800 did the Dutch state assume control of Indonesia, making it a Dutch national colony for the following 150 years.

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Today some people warn that twenty- first- century corporations are accumulating too much power. Early modern history shows just how far that can go if businesses are allowed to pursue their self- interest unchecked.

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In order to control trade on the important Hudson River, WIC built a settlement called New Amsterdam on an island at the river’s mouth. The colony was threatened by Indians and repeatedly attacked by the British, who eventually captured it in 1664. The British changed its name to New York. The remains of the wall built by WIC to defend its colony against Indians and British are today paved over by the world’s most famous street– Wall Street.

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But in its extreme form, belief in the free market is as naive as belief in Santa Claus. There simply is no such thing as a market free of all political bias. The most important economic resource is trust in the future, and this resource is constantly threatened by thieves and charlatans. Markets by themselves offer no protection against fraud, theft and violence. It is the job of political systems to ensure trust by legislating sanctions against cheats and to establish and support police forces, courts and jails which will enforce the law. When kings fail to do their jobs and regulate the markets properly, it leads to loss of trust, dwindling credit and economic depression. That was the lesson taught by the Mississippi Bubble of 1719, and anyone who forgot it was reminded by the US housing bubble of 2007, and the ensuing credit crunch and recession.

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Adam Smith taught that the shoemaker would use his surplus to employ more assistants. This implies that egoistic greed is beneficial for all, since profits are utilised to expand production and hire more employees. Yet what happens if the greedy shoemaker increases his profits by paying employees less and increasing their work hours? The standard answer is that the free market would protect the employees. If our shoemaker pays too little and demands too much, the best employees would naturally abandon him and go to work for his competitors. The tyrant shoemaker would find himself left with the worst labourers, or with no labourers at all. He would have to mend his ways or go out of business. His own greed would compel him to treat his employees well.

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This sounds bulletproof in theory, but in practice the bullets get through all too easily. In a completely free market, unsupervised by kings and priests, avaricious capitalists can establish monopolies or collude against their workforces. If there is a single corporation controlling all shoe factories in a country, or if all factory owners conspire to reduce wages simultaneously, then the labourers are no longer able to protect themselves by switching jobs. Even worse, greedy bosses might curtail the workers’ freedom of movement through debt peonage or slavery.

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This is the fly in the ointment of free- market capitalism. It cannot ensure that profits are gained in a fair way, or distributed in a fair manner. On the contrary, the craving to increase profits and production blinds people to anything that might stand in the way. When growth becomes a supreme good, unrestricted by any other ethical considerations, it can easily lead to catastrophe.

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After 1908, and especially after 1945, capitalist greed was somewhat reined in, not least due to the fear of Communism. Yet inequities are still rampant. The economic pie of 2014 is far larger than the pie of 1500, but it is distributed so unevenly that many African peasants and Indonesian labourers return home after a hard day’s work with less food than did their ancestors 500 years ago. Much like the Agricultural Revolution, so too the growth of the modern economy might turn out to be a colossal fraud. The human species and the global economy may well keep growing, but many more individuals may live in hunger and want. Capitalism has two answers to this criticism. First, capitalism has created a world that nobody but a capitalist is capable of running. The only serious attempt to manage the world differently– Communism– was so much worse in almost every conceivable way that nobody has the stomach to try again. In 8500 BC one could cry bitter tears over the Agricultural Revolution, but it was too late to give up agriculture. Similarly, we may not like capitalism, but we cannot live without it. The second answer is that we just need more patience– paradise, the capitalists promise, is right around the corner. True, mistakes have been made, such as the Atlantic slave trade and the exploitation of the European working class. But we have learned our lesson, and if we just wait a little longer and allow the pie to grow a little bigger, everybody will receive a fatter slice. The division of spoils will never be equitable, but there will be enough to satisfy every man, woman and child– even in the Congo.

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There are, indeed, some positive signs. At least when we use purely material criteria– such as life expectancy, child mortality and calorie intake– the standard of living of the average human in 2014 is significantly higher than it was in 1914, despite the exponential growth in the number of humans. Yet can the economic pie grow indefinitely? Every pie requires raw materials and energy. Prophets of doom warn that sooner or later Homo sapiens will exhaust the raw materials and energy of planet Earth. And what will happen then?

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Whereas in 1700 carts were built mainly by the muscle power of carpenters and smiths, today the machines in Toyota and Boeing factories are powered by petroleum combustion engines and nuclear power stations. A similar revolution has swept almost all other fields of industry. We call it the Industrial Revolution.

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An even bigger problem was that people didn’t know how to convert one type of energy into another. They could harness the movement of wind and water to sail ships and push millstones, but not to heat water or smelt iron. Conversely, they could not use the heat energy produced by burning wood to make a millstone move.

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Humans had only one machine capable of performing such energy conversion tricks: the body. In the natural process of metabolism, the bodies of humans and other animals burn organic fuels known as food and convert the released energy into the movement of muscles. Men, women and beasts could consume grain and meat, burn up their carbohydrates and fats, and use the energy to haul a rickshaw or pull a plough.

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The minute the water boiled, the lid of the kettle or the pot jumped. Heat was being converted to movement. But jumping pot lids were an annoyance, especially if you forgot the pot on the stove and the water boiled over. Nobody saw their real potential.

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About 600 years passed between the invention of gunpowder and the development of effective artillery. Even then, the idea of converting heat into motion remained so counter- intuitive that another three centuries went by before people invented the next machine that used heat to move things around.

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Petroleum had been known for thousands of years, and was used to waterproof roofs and lubricate axles. Yet until just a century ago nobody thought it was useful for much more than that. The idea of spilling blood for the sake of oil would have seemed ludicrous. You might fight a war over land, gold, pepper or slaves, but not oil.

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The career of electricity was more startling yet. Two centuries ago electricity played no role in the economy, and was used at most for arcane scientific experiments and cheap magic tricks. A series of inventions turned it into our universal genie in a lamp.

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At heart, the Industrial Revolution has been a revolution in energy conversion. It has demonstrated again and again that there is no limit to the amount of energy at our disposal. Or, more precisely, that the only limit is set by our ignorance. Every few decades we discover a new energy source, so that the sum total of energy at our disposal just keeps growing.

Notes:

industrial revolution : energy conversion :: computer revolution : information exchange

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During the Industrial Revolution, we came to realise that we are actually living alongside an enormous ocean of energy, one holding billions upon billions of exajoules of potential power. All we need to do is invent better pumps.

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The Industrial Revolution yielded an unprecedented combination of cheap and abundant energy and cheap and abundant raw materials. The result was an explosion in human productivity. The explosion was felt first and foremost in agriculture. Usually, when we think of the Industrial Revolution, we think of an urban landscape of smoking chimneys, or the plight of exploited coal miners sweating in the bowels of the earth. Yet the Industrial Revolution was above all else the Second Agricultural Revolution.

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Even plants and animals were mechanised. Around the time that Homo sapiens was elevated to divine status by humanist religions, farm animals stopped being viewed as living creatures that could feel pain and distress, and instead came to be treated as machines. Today these animals are often mass- produced in factory- like facilities, their bodies shaped in accordance with industrial needs. They pass their entire lives as cogs in a giant production line, and the length and quality of their existence is determined by the profits and losses of business corporations.

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Just as the Atlantic slave trade did not stem from hatred towards Africans, so the modern animal industry is not motivated by animosity. Again, it is fuelled by indifference. Most people who produce and consume eggs, milk and meat rarely stop to think about the fate of the chickens, cows or pigs whose flesh and emissions they are eating. Those who do think often argue that such animals are really little different from machines, devoid of sensations and emotions, incapable of suffering.

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that mammals and birds have a complex sensory and emotional make- up. They not only feel physical pain, but can also suffer from emotional distress.

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Humans now produce far more steel, manufacture much more clothing, and build many more structures than ever before. In addition, they produce a mind- boggling array of previously unimaginable goods, such as light bulbs, mobile phones, cameras and dishwashers. For the first time in human history, supply began to outstrip demand. And an entirely new problem was born: who is going to buy all this stuff?

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The modern capitalist economy must constantly increase production if it is to survive, like a shark that must swim or suffocate. Yet it’s not enough just to produce. Somebody must also buy the products, or industrialists and investors alike will go bust.

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To prevent this catastrophe and to make sure that people will always buy whatever new stuff industry produces, a new kind of ethic appeared: consumerism.

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Consumerism sees the consumption of ever more products and services as a positive thing. It encourages people to treat themselves, spoil themselves, and even kill themselves slowly by overconsumption. Frugality is a disease to be cured.

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Consumerism has worked very hard, with the help of popular psychology (‘ Just do it’) to convince people that indulgence is good for you, whereas frugality is self- oppression.

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In the affluent world of today one of the leading health problems is obesity, which strikes the poor (who stuff themselves with hamburgers and pizzas) even more severely than the rich (who eat organic salads and fruit smoothies).

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Obesity is a double victory for consumerism. Instead of eating little, which will lead to economic contraction, people eat too much and then buy diet products– contributing to economic growth twice over.

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How can we square the consumerist ethic with the capitalist ethic of the business person, according to which profits should not be wasted, and should instead be reinvested in production? It’s simple. As in previous eras, there is today a division of labour between the elite and the masses.

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In medieval Europe, aristocrats spent their money carelessly on extravagant luxuries, whereas peasants lived frugally, minding every penny. Today, the tables have turned. The rich take great care managing their assets and investments, while the less well- heeled go into debt buying cars and televisions they don’t really need.

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The capitalist and consumerist ethics are two sides of the same coin, a merger of two commandments. The supreme commandment of the rich is ‘Invest!’ The supreme commandment of the rest of us is ‘Buy!’

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Today, humankind is driving many species into extinction and might even annihilate itself. But other organisms are doing quite well. Rats and cockroaches, for example, are in their heyday. These tenacious creatures would probably creep out from beneath the smoking rubble of a nuclear Armageddon, ready and able to spread their DNA. Perhaps 65 million years from now, intelligent rats will look back gratefully on the decimation wrought by humankind, just as we today can thank that dinosaur- busting asteroid.

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Still, the rumours of our own extinction are premature. Since the Industrial Revolution, the world’s human population has burgeoned as never before. In 1700 the world was home to some 700 million humans. In 1800 there were 950 million of us. By 1900 we almost doubled our numbers to 1.6 billion. And by 2000 that quadrupled to 6 billion. Today there are just shy of 7 billion Sapiens.

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The Industrial Revolution turned the timetable and the assembly line into a template for almost all human activities.

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In 1847, British train companies put their heads together and agreed that henceforth all train timetables would be calibrated to Greenwich Observatory time, rather than the local times of Liverpool, Manchester or Glasgow. More and more institutions followed the lead of the train companies.

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The Industrial Revolution brought about dozens of major upheavals in human society. Adapting to industrial time is just one of them. Other notable examples include urbanisation, the disappearance of the peasantry, the rise of the industrial proletariat, the empowerment of the common person, democratisation, youth culture and the disintegration of patriarchy.

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from the earliest times, more than a million years ago, humans lived in small, intimate communities, most of whose members were kin. The Cognitive Revolution and the Agricultural Revolution did not change that.

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First and foremost, the price of war has gone up dramatically. The Nobel Peace Prize to end all peace prizes should have been given to Robert Oppenheimer and his fellow architects of the atomic bomb. Nuclear weapons have turned war between superpowers into collective suicide, and made it impossible to seek world domination by force of arms.

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Secondly, while the price of war soared, its profits declined. For most of history, polities could enrich themselves by looting or annexing enemy territories. Most wealth consisted of material things like fields, cattle, slaves and gold, so it was easy to loot it or occupy it. Today, wealth consists mainly of human capital and organisational know- how. Consequently it is difficult to carry it off or conquer it by military force.

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While war became less profitable, peace became more lucrative than ever.

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In modern capitalist economies, foreign trade and investments have become all- important. Peace therefore brings unique dividends.

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Ours is the first time in history that the world is dominated by a peace- loving elite– politicians, business people, intellectuals and artists who genuinely see war as both evil and avoidable.

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THE LAST 500 years have witnessed a breathtaking series of revolutions. The earth has been united into a single ecological and historical sphere. The economy has grown exponentially, and humankind today enjoys the kind of wealth that used to be the stuff of fairy tales. Science and the Industrial Revolution have given humankind superhuman powers and practically limitless energy. The social order has been completely transformed, as have politics, daily life and human psychology.

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Most current ideologies and political programmes are based on rather flimsy ideas concerning the real source of human happiness. Nationalists believe that political self- determination is essential for our happiness. Communists postulate that everyone would be blissful under the dictatorship of the proletariat. Capitalists maintain that only the free market can ensure the greatest happiness of the greatest number, by creating economic growth and material abundance and by teaching people to be self- reliant and enterprising.

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The first step is to define what is to be measured. The generally accepted definition of happiness is ‘subjective well- being’. Happiness, according to this view, is something I feel inside myself, a sense of either immediate pleasure or long- term contentment with the way my life is going. If it’s something felt inside, how can it be measured from outside? Presumably, we can do so by asking people to tell us how they feel. So psychologists or biologists who want to assess how happy people feel give them questionnaires to fill out and tally the results.

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One interesting conclusion is that money does indeed bring happiness. But only up to a point, and beyond that point it has little significance. For people stuck at the bottom of the economic ladder, more money means greater happiness.

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Another interesting finding is that illness decreases happiness in the short term, but is a source of long- term distress only if a person’s condition is constantly deteriorating or if the disease involves ongoing and debilitating pain. People who are diagnosed with chronic illness such as diabetes are usually depressed for a while, but if the illness does not get worse they adjust to their new condition and rate their happiness as highly as healthy people do.

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Family and community seem to have more impact on our happiness than money and health. People with strong families who live in tight- knit and supportive communities are significantly happier than people whose families are dysfunctional and who have never found (or never sought) a community to be part of. Marriage is particularly important. Repeated studies have found that there is a very close correlation between good marriages and high subjective well- being, and between bad marriages and misery. This holds true irrespective of economic or even physical conditions. An impecunious invalid surrounded by a loving spouse, a devoted family and a warm community may well feel better than an alienated billionaire, provided that the invalid’s poverty is not too severe and that his illness is not degenerative or painful.

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But the most important finding of all is that happiness does not really depend on objective conditions of either wealth, health or even community. Rather, it depends on the correlation between objective conditions and subjective expectations. If you want a bullock- cart and get a bullock- cart, you are content. If you want a brand- new Ferrari and get only a second- hand Fiat you feel deprived. This is why winning the lottery has, over time, the same impact on people’s happiness as a debilitating car accident. When things improve, expectations balloon, and consequently even dramatic improvements in objective conditions can leave us dissatisfied.

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If happiness depended only on objective conditions such as wealth, health and social relations, it would have been relatively easy to investigate its history. The finding that it depends on subjective expectations makes the task of historians far harder.

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Even if the other guys at school are an ugly lot, you don’t measure yourself against them but against the movie stars, athletes and supermodels you see all day on television, Facebook and giant billboards. So maybe Third World discontent is fomented not merely by poverty, disease, corruption and political oppression but also by mere exposure to the First World standards.

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Like all other mental states, our subjective well- being is not determined by external parameters such as salary, social relations or political rights. Rather, it is determined by a complex system of nerves, neurons, synapses and various biochemical substances such as serotonin, dopamine and oxytocin.

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People are made happy by one thing and one thing only– pleasant sensations in their bodies. A person who just won the lottery or found new love and jumps from joy is not really reacting to the money or the lover. She is reacting to various hormones coursing through her bloodstream, and to the storm of electric signals flashing between different parts of her brain.

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Some scholars compare human biochemistry to an air- conditioning system that keeps the temperature constant, come heatwave or snowstorm. Events might momentarily change the temperature, but the air- conditioning system always returns the temperature to the same set point.

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Human happiness conditioning systems also differ from person to person. On a scale from one to ten, some people are born with a cheerful biochemical system that allows their mood to swing between levels six and ten, stabilising with time at eight.

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It could be that happiness causes marriage. Or more correctly, that serotonin, dopamine and oxytocin bring about and maintain a marriage. People who are born with a cheerful biochemistry are generally happy and content. Such people are more attractive spouses, and consequently they have a greater chance of getting married. They are also less likely to divorce, because it is far easier to live with a happy and content spouse than with a depressed and dissatisfied one.

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the findings demonstrate that happiness is not the surplus of pleasant over unpleasant moments. Rather, happiness consists in seeing one’s life in its entirety as meaningful and worthwhile. There is an important cognitive and ethical component to happiness. Our values make all the difference to whether we see ourselves as ‘miserable slaves to a baby dictator’ or as ‘lovingly nurturing a new life’.

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As Nietzsche put it, if you have a why to live, you can bear almost any how.

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A meaningful life can be extremely satisfying even in the midst of hardship, whereas a meaningless life is a terrible ordeal no matter how comfortable it is.

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However, if they believed the promise of everlasting bliss in the afterlife, they may well have viewed their lives as far more meaningful and worthwhile than modern secular people, who in the long term can expect nothing but complete and meaningless oblivion. Asked ‘Are you satisfied with your life as a whole?’, people in the Middle Ages might have scored quite highly in a subjective well- being questionnaire. So our medieval ancestors were happy because they found meaning to life in collective delusions about the afterlife? Yes.

Notes:

Interesting perspective

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