Millennium

by Ian Mortimer

  Population expansion and the consequent need to build more and more houses adds to this competition for land. In England, cities, towns, village centres and urban infrastructure account for 10.6 per cent of the country as a whole.5 Woodland, coastal fringes such as dunes and estuaries, freshwater lakes, rivers, mountains, moorland and heath account for a further 15.9 per cent. The remaining 73.5 per cent is agricultural land. On the face of it, this leaves plenty of space for new housing. However, all the agricultural land at present produces only about 59 per cent of our total food requirements. Of course, some foods are imported because they don’t grow here, but taking these out of the equation, we are only 72 per cent self-sufficient for the foodstuffs that are grown domestically.6 This means that even the crops we farm in abundance, such as wheat, barley, oats, linseed and oilseed rape, are not produced in such quantities that we can afford to reduce production. We had a surplus of wheat in 2008, harvesting 10 per cent more than we needed. That was a good year. In 2012 the reverse was true: a poor crop meant we imported more than we exported.7 We are not self-sufficient for meat either.8 Building on agricultural land may provide roofs over people’s heads but it won’t help to feed them in the long run.

  Some might disagree with that last statement. They would argue that it does help to feed them – by generating the income with which to buy other countries’ surpluses. But this can only be a short-term strategy. Once a piece of land is used for housing, it ceases to be productive for food or fuel. Suppose you were to hand over a small portion of the UK’s agricultural land to be developed as housing every year – an amount equivalent to current population increase. As farmland it was worth about £20,000 per hectare; now, as land for building, it is instantly worth £1,000,000 per hectare or more, depending on the locality. The national balance sheet is thus improved by at least £980,000 per hectare of development land. This extra cash feeds into the economy, supporting jobs and enhancing profits. Now suppose that we keep doing this for the rest of the century. At the current rate of population growth – 0.76 per cent per year – the population of England will almost double by 2100, reaching about 104 million.9 Providing houses, workplaces and infrastructure for an extra 50 million people would require about 6.8 per cent of the country to be developed, depending on how much use can be made of previously developed sites.10 This represents 9 per cent of the productive agricultural land in the UK, suggesting total domestic production would be 9 per cent less than today’s levels, unless the remaining fields were farmed more intensively. But those fields would now have to feed a significantly greater number of mouths. Rather than meeting 72 per cent of our domestic food needs, our reduced agricultural land would only be able to feed 33 per cent. We would be dependent on foreign-grown food. And therein lies the problem, for two thirds of the world’s nations have populations growing faster than England: the current world average is 1.2 per cent per year. All these countries are busily turning agricultural land from fields of production into houses of consumption. This is gradually eating away their ability to produce enough food for their own populations, let alone the extra needed for export. At some point the total volume of staple crops offered for sale on the international markets will reach a maximum and then start to decline rapidly. Prices will escalate worldwide and, inevitably, fewer people will be able to afford them. International aid organisations and charities will come under pressure not to spend their money feeding overseas victims of famine but to alleviate poverty at home. On top of this, the foregoing model does not take into consideration the vast amounts of land needed for electricity generation and biofuel production – and without huge tracts of land being devoted to those forms of energy, there will be no farming, no long-distance travel and no progress towards the Sustainable Future.

  The above case based on England looks 86 years ahead. Only 86 years. We are notionally considering the rest of the millennium here, and many of us hope that there will be thousands of years’ more human health and happiness after that. Hence I have no doubt that Fukuyama’s ‘end of history’ argument – that the whole world will one day enter a permanent state of liberal capitalism – is wrong. The resources necessary to support such a vision just don’t exist. Instead, capitalism will eat the heart out of liberalism. As the demand for land increases, we will have to choose between using it for food, energy or unproductive housing. We shall therefore produce some food, some biofuel, a limited amount of electricity and an ever-decreasing number of houses. But the supply of these things will be insufficient to feed, transport and house everyone to today’s standards. The poorest sectors of every community will lose out, including the poorest sections of relatively wealthy countries, and thus the hierarchical character of pre-industrial society will re-emerge in the post-industrial age.

  Hierarchy seems to be the default position for human society when resources are limited. As we have seen throughout this book, the desires of the wealthy are satisfied before the needs of the rest of the population; the consequent abject poverty of the poor in times of crisis results in the differences between them and the rich becoming more pronounced. Conversely, when there is a glut of resources, there is more left over for the poor and the relative wealth of the rich is lessened. In the nineteenth and twentieth centuries we ruthlessly exploited oil, coal and natural gas – thereby dramatically reducing the risks of famine and disease and lessening the relative inequalities of wealth. Now, as these irreplaceable resources start to diminish, the social structure is beginning to return to where it was before the power of fossil fuels was harnessed.

  The hierarchical structure of society is not simply the result of an unsustainable economic cycle coming to an end; it is also due to the tendency of the richer sections of society to adopt exclusive patterns of behaviour – the exclusivity being in proportion to their wealth. This is why economic growth in the twentieth century could only go so far in levelling the inequalities of society: ultimately the key resources were still owned by the rich, who married other wealthy individuals, thereby retaining control of the bulk of the capital. Such patterns of exclusivity are especially significant when the population is increasing. If the population of a country were to double over the course of a century, for instance, the rich would get richer (because they tend to marry other wealthy people and retain their assets in roughly the same number of families) while the per capita wealth of the poor would diminish significantly (as a small amount of capital would have to go around twice as many people). The result is a stretching of the scale of wealth at both ends of the social spectrum: the rich become richer and the poor become both poorer and more numerous.

  Marriage is not the only form of exclusive behaviour that results in this concentration of wealth. Privilege works in conjunction with meritocracy to reinforce class-, wealth- and status-related boundaries. The high achievers of one generation not only pass on their clever genes to the next, they also pay for their children to have the best education, prepare them to engage socially with other wealthy and successful people, and encourage them to pursue significant financial reward in adult life. As a result, the next generation slips smoothly into its predecessor’s shoes. The ‘old boy network’ is another form of exclusive behaviour, as people in positions of authority choose those from similar backgrounds to fill other positions of authority. The plain fact is that, in life, ‘birds of a feather flock together’. Exaggerated forms of such behaviour include corruption and political favouritism. You only have to consider Russia in the aftermath of the breakdown of the Soviet Union to see how a leader might create a hierarchy through rewards paid to his friends. Recently it was reported that 35 per cent of Russia’s wealth is owned by just 110 individuals – most of them associates of Vladimir Putin. At the same time, half a million people in that country are living in slavery.11

  These points about social hierarchy and wealth becoming more pronounced have recently been given an extra economic emphasis by Thomas Piketty in his study Capitalism in the Twenty-First Century. One of Piketty’s
innovations is a means to compare the unequal distribution of capital at different periods – by comparing the ratio of a nation’s total capital to its income in the currency of the time. In nineteenth-century Europe this ratio was above 650 per cent; it dropped to 250 per cent in the mid twentieth century, due to the world wars, but has been rising again since 1950, and currently is about 550 per cent.12 This means that now, as in the nineteenth century, relatively greater earning power is in the hands of those who already have substantial wealth, and by implication, less is in the hands of those who work for a living. Piketty’s explanation for this tendency for capital to grow in peacetime is that the rate of return, in the form of ‘profits, dividends, interest, rents and other income from capital’, which he denotes as r, consistently outstrips economic growth, g.13 His formula of r > g means that the incomes of the capital-laden wealthy make them richer at a greater rate than people who work for a living. This in turn allows those with large amounts of capital to reinvest more and more of their income, whereas workers have to consume all theirs in maintaining their standard of living. Thus large amounts of wealth create ever greater amounts, in a self-perpetuating cycle. He calls the outcome ‘patrimonial capitalism’, because wealth is increasingly concentrated in family dynasties. Furthermore, he sees the gap between overall r and g widening in the future. As he puts it, ‘if fiscal competition proceeds to its logical conclusion – which it may – the gap between r and g will return at some point in the twenty-first century to a level close to what it was in the nineteenth century’.14

  Piketty’s use of statistics has come in for some criticism from those determined to challenge his findings, but his basic formula r > g is sound. Indeed, it could be said to be the hallmark of a developed economy.15 If all the land and natural resources in a region are owned and already being exploited to the full, it is difficult for the economy to grow. If the population is expanding at the same time, there is greater competition for the use of the capital and thus a constant pressure on r to rise. Given the finite resources of the planet, it is likely that Piketty’s rule r > g will be the case in the West for ever more – unless the population collapses and r diminishes as a result of a lack of demand for land and other capital assets. It follows that owners of large amounts of capital will, on average, continue to get richer than the rest of us until the disparity of rich and poor reaches a saturation point – probably equivalent to the inequalities of wealth that prevailed in the nineteenth century.

  The political implications of this growing economic inequality are obvious. As wealth and political power tend to go hand in hand, the rich will once again become the controllers of society. Eastern Europe already seems to be heading back in that direction: Russia, for example, is not what most people would call a liberal democracy. A similar future awaits other wealth-dominated societies. A scholarly study measuring the influence of various interest groups on political policymaking in the USA, to be published about the same time as this book, concludes that ‘economic elites and organized groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence’.16 In short, the USA already shows signs of becoming an oligarchy. In future, this pattern will spread across the West as resource limitations start to bite. Economic hierarchy does not just mean greater disparities of capital between the very wealthy and the poor; it also implies that working people exercise very little power.

  The concentration of wealth and political power in the hands of relatively few families is one way in which capitalism will undermine liberalism. The greater impoverishment of the poor themselves is another. The crucial issue here is that the small percentage of assets owned by the poorest half of the population have to be stretched even more thinly with every new person born. A flat or house in some parts of Europe is already so expensive that most young people are priced out of the market. The average price of a house in England is seven times the average salary; in some parts of the country it is much higher still. The reason is not hard to find: too many people are competing for too little land. The population density is 410 people per square kilometre – a level more than three times that of France (120 people per square kilometre), nearly three times that of China (145) and almost on a level with India (416).17 Holland is the only European nation with a higher population density (497 people per square kilometre). In such densely settled countries as England and Holland it is not just ownership of houses that is affected. Rented property also increases in price as landlords have to charge a commensurately greater sum to reflect the value of their investment. The wealthy, who own their homes outright, are sitting pretty: they have all their income to spend on whatever they like while those renting and those newly buying are obliged to spend up to a third of their income simply on maintaining the roof over their heads. Thus the limited supply of land impoverishes those who don’t own any, just as it did in the days before artificial fertilisers and cheap transport. If you were to offer all those who do not own their own home the choice of a cheap mortgage for life or the vote, many would choose the cheap mortgage. It would represent greater financial security and personal freedom. In this way it can be seen that the civilisation curve of social reform is not necessarily a one-way street. The degree of political power that people enjoy, like their investments, can go down as well as up.

  I suspect that when it comes to it, universal suffrage will remain a token of liberty for a long time, centuries even, maintained by wealthy Western countries as an indicator of their acceptance of certain commonly shared values. No government will want to break the pattern – at least not in an obvious way. Instead the power of the vote will be watered down, through electoral systems controlled by political parties. The threat to liberalism here is that the political parties will increasingly be dominated by the oligarchs who bankroll them; they will tailor their agendas to the requirements of that unelected political elite. As the American study mentioned above shows, ordinary people have no means of introducing government policies; they simply participate in a system that selects spokesmen connected to the unelected political elite to approve initiatives put forward by that same elite. Partly as a consequence, the other social reforms and improvements of the nineteenth and twentieth centuries will prove even more vulnerable. As the per capita wealth of the poor diminishes, their living conditions can be expected to deteriorate. Workers desperate for cash will take on greater risks and more dangerous trades. Families who cannot afford high rents will end up living in squalid conditions. In severe economic downturns governments will turn to extreme measures: cutting the benefits paid to the poor, as well as healthcare and other social services.

  Karl Marx would weep. In his lifetime he argued vehemently against Malthus’s Essay on the principle of population but ultimately his vision is set to be crushed by the forces that Malthus described. Although many people, including Marx, regarded Malthus as fundamentally wrong, the basis for their doing so was that Malthus failed to foresee the effects that technology would have on the world’s food supply. As is now evident, technological innovation only delays Malthusian checks, it does not end them. If technological change allows us to obtain exponentially improved results from land for another two hundred years, the population will grow commensurately until eventually the ratio of people to resources reaches a critical level; then all the self-protective, exclusive behaviour mentioned above will start rapidly to divide the rich further from the poor and starving. Even if the world population stabilised now, at just over seven billion, it would still be increasing in relation to our diminishing ability to transport food surpluses around the globe. But the world’s population is far from stable: it is expected to reach 9.5 billion within the next forty years. Nor are we likely to be able to stop this: China, the one large country that has tried to restrict its population growth in the modern era, through a one-child policy introduced in 1979, has seen its numbers increase by more than 30 pe
r cent over that time, from less than a billion to more than 1.355 billion. Therefore we can be reasonably confident that, barring a serious worldwide epidemic, the population will continue to grow, the means of production will become concentrated in proportionally fewer hands, and the social hierarchy will become even more pronounced. It is likely that there will be revolutions of desperation, not ambition, in order to redistribute wealth. But revolutions in themselves do not feed people; they merely reallocate assets. As oil grows increasingly expensive and food prices continue to rise, the poorest citizens will not be able to afford to eat properly, will not be able to travel and will not be able to rent a home, let alone fill it with heat and light. Maybe they will still have the vote. Many will not care. Democracy will be seen as an irrelevance if it fails to deliver a reasonable standard of living. For some, helping to bring enough food into a poor household will once more become a higher priority than schooling. Prostitution will again be rife, especially among the poor, leading to a dwindling of respect for women. In such circumstances a de facto slave class is likely to re-emerge across the whole of the West. The truth is that many people would rather exchange their freedom for food and shelter than see their families starve to death. The political smile of democracy, in which economic growth is confidently presented as ‘normal’, will increasingly turn into the anguished grimace of the disenchanted and disappointed.