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The Prosperity of Vice

The Prosperity of Vice: A Worried View of Economics

Daniel Cohen
Copyright Date: 2012
Published by: MIT Press
Pages: 240
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  • Book Info
    The Prosperity of Vice
    Book Description:

    What happened yesterday in the West is today being repeated on a global scale. Industrial society is replacing rural society: millions of peasants in China, India, and elsewhere are leaving the countryside and going to the city. New powers are emerging and rivalries are exacerbated as competition increases for control of raw materials. Contrary to what believers in the "clash of civilizations" maintain, the great risk of the twenty-first century is not a confrontation between cultures but a repetition of history. In The Prosperity of Vice, the influential French economist Daniel Cohen shows that violence, rather than peace, has been the historical accompaniment to prosperity. Peace in Europe came only after the barbaric wars of the twentieth century, not as the outcome of economic growth. What will happen this time for today's eagerly Westernizing emerging nations? Cohen guides us through history, describing the European discovery of the "philosopher's stone": the possibility of perpetual growth. But the consequences of addiction to growth are dire in an era of globalization. If a billion Chinese consume a billion cars, the future of the planet is threatened. But, Cohen points out, there is another kind of globalization: the immaterial globalization enabled by the Internet. It is still possible, he argues, that the cyber-world will create a new awareness of global solidarity. It even may help us accomplish a formidable cognitive task, as immense as that realized during the Industrial Revolution--one that would allow us learn to live within the limits of a solitary planet.

    eISBN: 978-0-262-30143-5
    Subjects: Economics, Business

Table of Contents

  1. Front Matter
    (pp. i-viii)
  2. Table of Contents
    (pp. ix-x)
  3. Introduction
    (pp. xi-xx)

    What happened yesterday in the West is today being repeated on a world scale. Millions of peasants in China, in India, and elsewhere are leaving the countryside and going to the city. Industrial society is replacing rural society. New powers are emerging. Yesterday it was Germany and Japan; today it is India and China. Rivalries are exacerbated as competition increases for control of raw materials. Financial crises repeat themselves as in the bad old days of capitalism. Contrary to what believers in “the clash of civilizations” maintain, the great risk of the twenty-first century is less a confrontation between cultures...

  4. I Why the West?

    • 1 Genesis
      (pp. 3-12)

      For a long time, humankind’s sole problem was feeding itself. From the dawn of time until the invention of agriculture (only 10,000 years ago), men and women fed themselves by taking freely what nature offered. Hunting and gathering, two activities that are not socially exacting, sufficed. Then, almost all at once, humankind learned to cultivate the earth and to make its flocks increase. This is the moment when—to parody Jean-Jacques Rousseau—people realized you could enclose a field and say “This is mine.”

      How did this Neolithic revolution take place? The customary thesis comes from the Australian anthropologist Gordon...

    • 2 The Birth of the Modern World
      (pp. 13-24)

      In the tenth century, Europe seemed to have lost everything that had constituted the glory of Rome and Athens. It had lost the essential part of its scientific knowledge, and had regressed to an almost autarkic situation. When it wanted to buy foreign goods, slaves were often all it could export. Five hundred years later, everything had changed. The Asiatic explorations of Vasco da Gama and the “discovery” of America opened the way to domination of the planet by the West, which would last five centuries. What happened? Let us take up the thread of these unexpected transformations.

      In the...

    • 3 Malthus’ Law
      (pp. 25-32)

      Despite its new technological dynamism, Europe constantly ran up against an obstacle recurring from the distant past: food crises. The prosperity of the eleventh, twelfth, and thirteenth centuries was rapidly broken by the return of famine at the start of the fourteenth century. Famine, plague, and war were the three scourges that struck people in various combinations. At the end of the fourteenth century, these scourges had reduced the population by more than one-third since the start of that century. The previous population maximum would not be matched until the start of the seventeenth century. This rupture would cause the...

    • 4 Unbound Prometheus
      (pp. 33-40)

      Around the middle of the eighteenth century, Europe took an important turn, one comparable only to the Neolithic revolution. Upsetting human lives in proportions impossible to imagine a few decades earlier, the Industrial Revolution would gradually, over the course of a century, interrupt the reign of Malthus’ Law. What happened?

      As its name indicates, this rupture was carried along by the emergence of new industrial technologies. The most famous of them was the steam engine of James Watt. It culminated a set of innovations initially aimed at improving the pumping of water from mines, but the world would learn to...

    • 5 Perpetual Growth
      (pp. 41-50)

      Around the middle of the eighteenth century, economists were thinking about the possibility of an economy entirely governed by the functioning of markets.40The author who set the terms in which people still think about the market economy was the Scottish economist Adam Smith, who expounded his theories inAn Inquiry into the Causes of the Wealth of Nations, published in 1776.

      Smith wanted to show that, thanks to the market, each person could specialize in a job, such as that of a doctor, a lawyer, a baker, or a cobbler, without having to worry about lacking merchandise that he...

  5. II Prosperity and Depression

    • 6 The Economic Consequences of the War
      (pp. 53-62)

      InThe Economic Consequences of the Peace, published in 1919, a young British economist, John Maynard Keynes, took the reader into a moribund Paris. Europe had been stripped bare, four empires had fallen, and the center of the world was shifting to the United States. In this ambiance of dust and blood, one old man felt “about France what Pericles felt of Athens—unique value in her, nothing else mattering; but his theory of politics was Bismarck’s. He had one illusion—France; and one disillusion—mankind, including Frenchmen, and his colleagues not least.”

      French Prime Minister Georges Clemenceau, a figure...

    • 7 The Great Crisis and Its Lessons
      (pp. 63-74)

      The crisis that began in the fall of 1929 is the blackest moment ever experienced by world capitalism—so far. Starting on Wall Street, the crisis reached Europe and then the rest of the world. The specter of 1929 continues to haunt world leaders today. During the subprime crisis of 2007, the chairman of the Federal Reserve System, Ben Bernanke, explicitly tried to avoid a recurrence. And the many resemblances between these two exceptional crises are indeed astonishing.

      The crisis of 1929 in the United States interrupted a decade of growth known today as the Roaring Twenties. The factors producing...

    • 8 The Golden Age and Its Crisis
      (pp. 75-82)

      In 1946, in a village called Duelle in southwest France, one had to work 24 minutes to buy a kilogram of bread, 45 minutes for a kilogram of sugar, 7 hours for a kilogram of butter, and 8 hours for a kilogram of chicken. Food accounted for three-fourths of total consumption, and half of that was bread and potatoes. Only once a week, on average, did people buy meat from a butcher. Butter was almost unknown. Half the remainder of personal spending was on clothes. Apart from military service, the great majority of the inhabitants made a trip only for...

    • 9 The End of Solidarities
      (pp. 83-96)

      In November of 1940, Winston Churchill commissioned a report about how to fight against both the consequences of the crisis of the 1930s and those entailed by the war then underway. The Beveridge Report, made public in 1942, expounded principles that are still current in Europe today, and which underlie a state’s obligations to combat five social evils that Sir William Beveridge enumerated: “Want, Disease, Ignorance, Squalor and Idleness.”

      Convinced by Keynes that a society cannot become poorer except by not spending enough, Beveridge based his report on the idea that this social expenditure should be guaranteed by the state....

    • 10 War and Peace
      (pp. 97-106)

      People’s happiness depends on the gap between their aspirations and the reality they discover in real life. Transposed to the geopolitical order, this raises the following question: Are wars engendered by misery or by boredom, by crises, or by prosperity? The two world wars of the twentieth century suggest different answers.

      World War I arrived during a time of prosperity; World War II was engendered by the crisis of 1929. Each war illuminates one aspect of the question of how wars start. To grasp the nature of the problem, let us follow the chronology, both insightful and whimsical, established 60...

  6. III The Time of Globalization

    • 11 The Return of India and China
      (pp. 109-130)

      Twentieth-century history resumed its march. Between the death of Mao and the fall of the Berlin Wall, a new phenomenon calledglobalizationreset the counter of human history to zero. What instituted it can be summarily expressed as the return of India and China to the game of world capitalism. Despite ideas that circulated a few years earlier, the cultural specificities of those countries didnotpose insurmountable resistance to the reign of the market. To grasp the exceptional scope of this turning point, let us return to the reasons why these two great civilizations had been eclipsed by Europe...

    • 12 The End of History and the West
      (pp. 131-144)

      The entry of India and China into the game of world capitalism is inseparable from another major episode: the disappearance of the USSR. As its crisis was becoming patent, the USSR, which had adhered to the idea of state socialism, gradually changed its strategy. The fall of the Berlin Wall made some think that the world had reached (in a term borrowed from Hegel and taken up by Francis Fukuyama) “the end of history.”19According to that theory, all countries now tended toward the same destination: the market economy and representative democracy. The universal peace dreamed of by Kant had...

    • 13 The Ecological Crash
      (pp. 145-156)

      The industrialization of the whole world upsets the rules that prevailed when industrialization was limited to Western countries and Japan. A new threat hovers over nations, weighing on the planet itself, the last common good. This is the terrain onto which the danger of collective suicide has now been displaced.

      The emerging countries take paths patterned after those of the West, for they intend to profit in their turn from the promises of modern economic growth. On average, this process of convergence is indeed underway, especially in Asia. Jeffrey Sachs provides many insightful figures in his bookCommonwealth. Extrapolating from...

    • 14 The Financial Crash
      (pp. 157-172)

      The production of wealth requires raw materials, labor, and capital. Globalization tends to give a geographic definition to these categories. Labor is in Asia, the raw materials are in Africa and the Middle East. And capital remains the privilege of rich countries. In the language of Marx, capital in economics has a double meaning: an advance on the funds necessary to buy machinery and rent manpower, and supervising the process of production. This idea remains insightful but the form in which it is exercised has changed. Capital has become an “immaterial” good. Intangibles—research and development, advertising, fashion, finance—now...

    • 15 The Weightless Economy
      (pp. 173-184)

      Among the aberrant traits of contemporary capitalism that the subprime crisis threw into relief were the salaries of company directors who are paid as much as rock stars and the reckless risks they take as a result of their Panglossian outlook. There was now no doubt in the eyes of most commentators that the “empire of greed” should be policed. If it were still just a matter of financial problems strictly speaking, the solution would be simple: impose sufficiently strict and prudent norms on all the actors in finance, within and outside their balance sheets. But the breadth of the...

  7. Conclusion
    (pp. 185-188)

    Since the dawn of time, humanity has walked a tightrope between two opposing forces. The number of human beings never ceases to grow, regularly running up against the scarceness of land to feed them. But by their very number, people multiply the number of discoveries, pushing back the frontiers of knowledge, and continue their course, augmenting the density and complexity of social life. Sometimes civilizations die, falling on the wrong side of this equation. Powerless to understand what is happening to them, they are consumed, either slowly (as the Roman Empire was) or suddenly (as the Mayans were). Forgetting about...

  8. Notes
    (pp. 189-210)
  9. Index
    (pp. 211-216)