The Banking Executive Magazine - October Issue 2022

Renaissance set the stage for the En- lightenment. And then, of course, there is 1770, when the Industrial Revolution really got into swing. There can be no disputing the impor- tance of what these dates represent. But I chose 1870 because it matters even more. It is when the industrial research lab, the modern corpora- tion, and full globalization fell into place. These were the institutions that would supercharge technologi- cal progress to the point of doubling the size of the global economy every generation – which is generally what it did from 1870 to 2010. That unprecedented pace of techno- logical advance gave humanity the power finally to banish the devil of Malthus. No longer would popula- tion growth cancel out productivity gains to keep the world poor. Inno- vations in technology, method, and organization made it possible to ex- pand the economic pie so that every- one could have enough. This meant that governance would no longer function primarily as a resource-ex- traction machine by which the elite could grab “enough” of the insuffi- ciently sized pie for themselves. In- stead, government and politics could finally be directed toward making a truly human world. The post-1870 technological trajec- tory rapidly surpassed anything that humanity had previously imagined would be necessary for achieving utopia. With the problem of baking a sufficiently large economic pie hav- ing been solved, it seemed that the hard part was over. All humanity had to do next was to figure out how to slice and then taste the pie – that is, how to convert our technological prowess into happy, healthy, safe, and secure lives for all. These prob- lems would be solved even faster, right? In fact, the problems of slicing and tasting the rapidly growing economic pie have consistently flummoxed us. To understand why we have collec- tively been unable to get it right, I would point to four thinkers. The first is the Austrian-born econo- mist Joseph Schumpeter, who ex- plained how modern technology generates immense wealth through a process of “creative destruction.” Technological and economic ISSUE 166 OCTOBER 2022 the BANKING EXECUTIVE 49 Why Can’t We All Be Rich?