I found The Lessons of History, by Will and Ariel Durant, courtesy of Ray Dalio. (Okay, actually a Reddit ask-me-anything chat featuring Ray Dalio) The Durants are best known for their epic eleven volume history, The Story of Civilization, for which they received a Pulitzer Prize in 1968 and a Presidential Medal of Freedom in 1977.
The Lessons of History is a distillation of the key themes of the longer work. It’s the cliffs notes for The Story of Civilization.
As you read, a couple of key premises emerge: 1) history is a competitive evolutionary process, and 2) that process is cyclical.
A key driver of these cycles is the tendency for market systems to create wealth inequality over time. There isn’t anything nefarious about that. I don’t read it as a pejorative, either. It’s just the way things work. Mostly because wealth, when managed properly, compounds over time. It’s not just compound interest I’m talking about here. It’s economic opportunity more generally.
The Durants sum this up in a single, beautiful little paragraph (my favorite in the whole book):
We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.
An entire chapter on socialism follows. “[H]istory so resounds with with protests and revolts against the abuses of industrial mastery, price manipulation, business chicanery, and irresponsible wealth,” the Durants observe. “These abuses must be hoary with age, for there have been socialistic experiments in a dozen countries and centuries.”
One example, from China:
Wang Mang (r. A.D. 9-23) was an accomplished scholar, a patron of literature, a millionaire who scattered his riches among his friends and the poor. Having seized the throne, he surrounded himself with men trained in letters, science, and philosophy. He nationalized the land, divided it into equal tracts among the peasants, and put an end to slavery. Like Wu Ti, he tried to control prices by the accumulation or release of stockpiles. He made loans at low interest to private enterprise. The groups whose profits had been clipped by his legislation united to plot his fall; they were helped by drought and flood and foreign invasion. The rich Liu family put itself at the head of a general rebellion, slew Wang Mang, and repealed his legislation. Everything was as before.
“Skin in the game,” Taleb might comment.
The relationship between free market capitalism and socialism is cyclical. It’s a yin and yang type of deal. When inequality under capitalism causes enough friction, and social cohesion decays enough, people gravitate toward the utopian promises of socialism. Then, as the socialist system ossifies under the dual pressures of complexity and inefficiency, it becomes vulnerable to unexpected shocks. Eventually, people overturn the socialist system and return to free market capitalism. The cycle begins again.
The last bit of the book is devoted to the idea of “progress.” If all history is cyclical, does progress actually exist? If so, how do we measure it? I won’t spoil it for you, since this last chapter does a nice job of tying everything together.
Who Should Read This Book?
Literally everyone should read this book. It is a short read, easy to follow and relevant to every human being on the planet. This is the type of “Big Idea” book that helps you see the world as it is, rather than how you want to see it.