Book Title: Sapiens: A Brief History of Humankind Author: Yuval Noah Harari Publishers: Vintage, London Year: 2011 ISBN: 9780099590088 Pages: 498 Terhemba Wuam
In 2011 Yuval Noah Harari published his wonderful book on the story of Homo Sapiens. Due to its impact and influence, we recall it more than a decade after.
Yuval Noah Harari in 498 pages he all but recounts the history of mankind. From the Cognitive Revolution to the Industrial and Technological Revolution the account of humankind’s achievements unravel at a very fast pace. Harari provides many key insights. One of which is his exposition on how humanity became rich and materially better within the last 500 years of their 70,000 year old history. How this came to happen is the sole focus of this review essay.
To Harari, growth is what explains the modern economy and economic history since the sixteenth century. His argument is that for most of history, the economy stayed much the same size and only increased with demography or settlement of new land. With per capita production remaining static for a larger part of human history before the modern era.
It was only with the foundations of the modern capitalist economy from the sixteenth to the twenty-first century that the global economy exponentially went from $250 billion in 1500 to $60 trillion by 2009. With such growth per capita income moved from $550 to $8,800 within the same period.
Harari implies that this acceleration of economic growth occurred because the modern economy is guided by trust in the system. People in the modern economy understand that the future will be better and that the pie will continue to be enlarged.
This outlook according to Harari was a largely modern phenomenon and clashed against the age long logic that hamstrung economic growth in the past, which was that the pie was static. In the former reality and logic, if one’s pie was getting bigger, it meant it got bigger, because of a reduction in the share of someone else. Due to this perception, the determined pursuit and accumulation of wealth was termed to be sinful.
The foundations upon which things will change and a new economy would emerge and flourish came with the Scientific Revolution. The Scientific Revolution highlighted the idea of progress as an attainable goal. The crux of the Scientific Revolution was that improvements could be made on the basis of clearly discerning human material challenges and identifying and applying solutions based on knowledge gained through purposeful research to bring forth improvement upon the status quo.
Beginning from 1500 AD and continuing over the next 500 years, the idea of progress as realizable convinced more and more people to put more trust in an earthly future that could and would be better. Such trust laid the basis for the creation of credit as a financial tool with which to invest in the future.
The utilization of credit as an economic tool, according to Harari, brought about real and sustained economic growth. The consequential economic growth would then have profound positive impact and create a virtuous circle whereby trust in the future was strengthened and alongside it the realization of the value of even more credit.
Through his reading of Adam Smith, Harari showed how the classical economist laid the foundations that opened the gates of heaven to the rich and made being prosperous a moral virtue. Adam Smith at the midway point of the sixteenth century and the twenty-first century in the Wealth of Nation, published in 1776, established that increases in profit led to more individual wealth and collective prosperity. And that this outcome of enlightened self-interest was something good.
Adam Smith taught Renaissance Europe to think of the economy as a “win-win.” Smith rationalized that the increase in the pie size of an individual depended on the mutual increases of all pies. For if members of society were generally poor, it meant that all will be poor. The intuition was that a society composed of poor people will mean that the poor will not be able to buy products or services of others.
Smith was able to deny the traditional contradiction between wealth and morality and emphasized that being rich meant to be moral. The new cardinal commandment was that the rich must reinvest the profits of production both for their increased wealth and for the benefit of society. This was “capitalism.”
The capitalism that arose with the Industrial Revolution in the eighteenth century distinguished “capital” from mere “wealth.” Capital in this sense consisted of money, goods and resources reinvested in production for profit. This state of affair was for most of history alien to the people. In medieval Europe, noblemen were known for their generosity and conspicuous consumption. Such generosity and conspicuous consumption was expressed through tournaments, banquets, palaces, wars, cathedrals and charity.
In the post-medieval world of capital, however, attention shifted to business dealings, how to invest capital, how to get government to provide business infrastructure by building new ports for trade and providing education for all. In this way, capitalism played a major role in the rise of modern science and European imperialism.
While in Asia, for instance, at the same historical period, merchants and bankers were despised by kings and generals, the case in Europe was quite different due to the mercantile way of thinking that state and society embraced. This, ultimately led to merchants and bankers becoming a central component of the ruling elite in the West. The impact of this was the development of sophisticated financial systems in Europe and the funding of imperial ventures by capitalists.
Thus according to Sapiens: A Brief History of Humankind, the world which humankind now inherits, of increased production and consumption occurred on the back of a trust in the future that they believed to continue getting better on the basis of knowledge and investments that credit could help make possible. In this way emerged a self-perpetuating circle of society trusting in a better future and using credit to make that happen.
Credit helped entrepreneurs take the leap to engage in new ventures that were beneficial to the economy. With credit, entrepreneurs created and generated more economic goods for the individual and societal benefit. In the 500 years of capital and capitalism, profits were continually re-invested into production and did generate a progressive virtuous circle of a world that has kept on getting rich and richer.
The story of capitalism as told by Harari is, however, not without its bitter fruits such as the dehumanization and exploitation of workers that probably reached its zenith during the heydays of the Industrial Revolution. A situation that Karl Marx will chronicle and warn against. Increasingly it is seen that capitalism should not be left to the sole control of the unseen hand of the market, but that the state as a necessity should regulate and control the activities of capitalists and ensure that the fruits of capitalism are shared broadly to the benefit of the national society.
Terhemba Wuam is a Professor with the Department of History, Kaduna State University, Kaduna, Nigeria. He is co-editor of Challenges and Prospects of Development in Twenty-First Nigeria (Bahiti and Dalila Publishers, 2019).
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