Number fo words – 754<\/p>\n\n\n\n
The modern pursuit of power is fuelled by the alliance between scientific progress and economic growth. For most of history science progressed at a snail\u2019s pace, while the economy was in deep freeze. The gradual increase in human population did lead to a corresponding increase in production, and sporadic discoveries sometimes resulted even in per capita growth, but this was a very slow process. If in AD 1000 a hundred villagers produced a hundred tons of wheat, and in AD 1100, 105 villagers produced 107 tons of wheat, this growth didn\u2019t change the rhythms of life or the socio-political order.<\/p>\n\n\n\n
Whereas today everyone is obsessed with growth, in the premodern era people were oblivious to it. Princes, priests and peasants assumed that human production was more or less stable, that one person could enrich himself only by pilfering somebody else and that their grandchildren were unlikely to enjoy a better standard of living. This stagnation resulted to a large extent from the difficulties involved in financing new projects. Without proper funding, it wasn\u2019t easy to drain swamps, construct bridges and build ports \u2013 not to mention engineer new wheat strains, discover new energy sources or open new trade routes. Funds were scarce because there was little credit in those days; there was little credit because people had no belief in growth; and people didn\u2019t believe in growth because the economy was stagnant. Stagnation thereby perpetuated itself.<\/p>\n\n\n\n
Suppose you live in a medieval town that suffers from annual outbreaks of dysentery. You resolve to find a cure. You need funding to set up a lab, buy medicinal herbs and exotic chemicals, pay assistants and travel to consult with famous doctors. You also need money to feed yourself and your family while you are busy with your research. But you don\u2019t have much money. You can approach the local lumberjack, blacksmith and baker and ask them to fulfil all your needs for a few years, promising that when you finally discover the cure and become rich, you will pay your debts. Unfortunately, the lumberjack, blacksmith and baker are unlikely to agree.<\/p>\n\n\n\n
They need to feed their families today, and they have no faith in miracle medicines. They weren\u2019t born yesterday, and in all their years they have never heard of anyone finding a new medicine for some dreaded disease. If you want provisions \u2013 you must pay cash. But how can you have enough money when you haven\u2019t discovered the medicine yet, and all your time is taken up with research? Reluctantly, you go back to tilling your field, dysentery keeps tormenting the townsfolk, nobody tries to develop new remedies, and not a single gold coin changes hands. That\u2019s how the economy froze, and science stood still. The cycle was eventually broken in the modern age thanks to people\u2019s growing trust in the future, and the resulting miracle of credit. Credit is the economic manifestation of trust. Today, if I want to develop a new drug but I don\u2019t have enough money, I can get a loan from the bank, or turn to private investors and venture capital funds. When Ebola erupted in West Africa in the summer of 2014, what do you think happened to the shares of pharmaceutical companies that were busy developing anti- Ebola drugs and vaccines? They skyrocketed. Tekmira shares rose by 50 per cent and Bio Cryst shares by 90 per cent. In the Middle Ages, the outbreak of a plague caused people to raise their eyes towards heaven, and pray to God to forgive them for their sins. Today, when people hear of some new deadly epidemic, they pick up the phone and call their broker. For the stock exchange, even an epidemic is a business opportunity.<\/p>\n\n\n\n
If enough new ventures succeed, people\u2019s trust in the future increases, credit expands, interest rates fall, entrepreneurs can raise money more easily and the economy grows. People consequently have even greater trust in the future, the economy keeps growing and science progresses with it. It sounds simple on paper. Why, then, did humankind have to wait until the modern era for economic growth to gather momentum? For thousands of years people had little faith in future growth not because they were stupid, but because it contradicts our gut feelings, our evolutionary heritage and the way the world works. Most natural systems exist in equilibrium, and most survival struggles are a zero-sum game in which one can prosper only at the expense of another.<\/p>\n\n\n\n