Ancient Greek philosophy and culture are widely recognized as the source of many of the noblest ideals and pursuits of mankind. Throughout history, our cultural and scientific heroes—from Shakespeare, to Newton, to famous artists and athletes—have emerged from fields with roots in ancient Greece. While we still honor the intellectual and artistic excellence of the greats, we often overlook another important Greek ideal, namely, the pursuit of “the good life.”
This ideal, embodied in the Greek word “eudaemonia,” is at the center of Homi Kharas’s The Rise of the Global Middle Class. As explained in the book, achieving eudaemonia in the ancient world involved “exercising virtue, the ultimate end in itself,” and having “as many pleasurable experiences as possible.” These ideal outcomes were within reach whenever people could find suitable employment and earn comfortable incomes. Kharas states that, throughout history, poverty and the mental anguish associated with it have been obstacles to happiness. For the wealthy, courtly intrigues and power politics have likewise blunted the pursuit of a happier life.
Kharas continues his narrative by stating that the Greek notion of pursuing the good life in material and emotional ways has permeated the ideas of subsequent generations of philosophers. In describing these ideas, the author focuses on the philosophy of Adam Smith and his followers, explaining the social and technological innovations that have shaped our working lives. Smith formally identified the first rules of economics, beginning with the thesis that “specialization and division of labor could drive economic progress as market size grew.” Although it remains unclear whether Smith consciously drew on the Greek philosophical idea of eudaemonia (a historical question not discussed in the book), he was the first proponent of free markets as a “driver of economic growth” and, hence, satisfaction, self-determination, and happiness.
But does the material well-being implied by Smith’s theory of economic progress and free markets constitute a fundamental good? Kharas’s answer is a resounding yes. And can that good be inclusive, providing the same satisfaction to all people? Again, the answer is affirmative. According to the author, people around the globe can confidently hope to increase their happiness by pursuing material gains. Throughout history, the populations of nations which have succeeded in that pursuit have been richly rewarded by entering the global middle class.
Kharas acknowledges that poverty is not a social ill confined to the past. Although it may have run its course in some places, it still lingers in many corners of the world. However, the author shows that sound economic policies have brought previously nonexistent levels of satisfaction and well-being to workers and families, creating a global middle class. The book offers several detailed examples of how specific policies of the past 300 years have improved the lot of many nations. Providing a steady salary to workers and protecting private property rights have given rise to new concepts of security for individuals and households, and the same is true for various regulations governing universal education and child labor. These improvements in the social and working lives of people were previously unthinkable and nonexistent.
Kharas states that billions of people have joined the global middle class, a process that will persist as long as economic policies continue to deliver rising levels of wealth. In modern times, economic policies espousing Smith’s economic theory of wealth creation have improved the living and working conditions of people in Eastern and Central Europe, Latin America, Asia, India, and China. In many Latin American countries, for example, progress was achieved by stabilizing prices and using indigenous natural resources. In post-Cold War eastern Germany, wealth creation was spurred by promoting private ownership and free markets. Likewise, smaller economies in Asia engaged in successful and lucrative product innovation by building on the technology of other Asian countries. All these positive developments were based on the capitalist ideals of free markets and self-determination. According to Kharas, these ideals, and the policies encapsulating them, have caused an economic revolution unfolding in waves, with each successive wave lifting a billion people out of poverty and into the global middle class.
Although the author provides many good examples of the positive global impact of free-market policies, he does not fully discuss the inevitable competition these policies entail. How will advanced economies adapt to the competitive pressures posed by a new, vibrant middle class in emerging economies? What would greater competition mean for pay parities and the protection of private and intellectual property rights? While I agree with the author’s assertion that the world’s middle class has been expanding rapidly, at a rate of a billion people at a time, I also think that he has set the stage for a much deeper discussion. One wonders what the future may hold for Central America, Africa, and the Middle East, or how developed economies will cope with the wage pressures of change.
Adam Smith is the brightest star in The Rise of the Global Middle Class. By reading this book, I could see the chain of events that started in the Industrial Revolution in Great Britain and mainland Europe and helped the modern world refocus on the ancient Greek ideal of living the good life. This modern focus echoes Thomas Jefferson’s vision of reviving the ancient democracies in the New World—a vision that, I would argue, has now been seeded throughout the whole world. As the middle class expands globally, diverse groups of people in both emerging and advanced economies will continue to gain from the pursuit of the good life. Will this trend continue? What comes next? What then? The floor is open.
United States Department of Labor
