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It’s a funny thing; during the build up to the financial crisis of 2008/09, this publication received a number of emails accusing us of being too pessimistic. “If ever there is good news,” went the gist of the complaint, “you always try to put a negative spin on it.” Looking back with the benefit of hindsight, we can now retort: well, that was because back then it was not generally understood how awful the economic outlook was.

Why do we say this? Well, three years on, the criticism seems to be the polar opposite. Any article that presents a hint of optimism is slated.

Earlier this week we ran a piece on why technology presents an opportunity for the global economy. In a nutshell, the article said that we keep reading about doom and gloom, and yet take a look at the world of technology, and the extraordinary speed at which things are changing, and there is surely room for optimism.

Of course the best way to benefit from this potential is open to debate. Is it via government spending maintaining aggregate demand? Or is it via public sector cuts which create space for the more dynamic private sector, and which is more likely to embrace new technology? What we would say is that the reaction against risk is a danger, and lack of funding for business investment, and soaring savings rates across the globe, all pose threats.

But there is another criticism levelled at us. The article in question was referred to on other websites, and criticisms seemed to fall into two camps. And one person attempted to comment on our article on our website, but the comment consisted of just one word which was too rude for it be published.

So what are the criticisms? Criticism number one is that growth is a bad concept anyway; that we put too much emphasis on growth, and the world needs to slow down. We will deal with this criticism on another occasion.

The other criticism relates to the view that all the economic success of the last 200 years has been down to one factor. This anti argument suggests that this factor is surely set to go into reverse, and that therefore we are set to return to the economic dark ages.

So what is this factor?

Well, it’s the burning of fossil fuels. The argument goes like this: the burning of fossil fuels has underpinned virtually all economic growth. The last 200 years have been unique in history because it is just about the only period which has seen sustained economic growth. Your average peasant in Britain at the end of the eighteenth century was only marginally better off than your average peasant in Roman times. And then something remarkable happened, and everything changed. The economy boomed for two centuries. And the poor, at least the poor in Europe, got richer.

“Economic growth is like a fragile coating, beneath which is a seething mass of economic myopia,” or so said our article: “The two words economists forget”

It is essential, then, that we look at what was unique to this period. We fear that much of the fashion at the moment for austerity, for bringing back savings and ending what is called fiat money (a banking system that expands the money supply via debt), poses the risk we could be sent back to that pre-1820 period, in which any form of economic growth above 0.1 per cent would be considered good. We are not saying austerity equals no growth. We are saying this is an important discussion, and yet it is rarely mentioned.

So what triggered this golden era of economic growth? Here are three candidates. Firstly, the invention of the printing press was the main precursor. Okay, it took a few centuries before this had a significant effect, but in those days the relationship between cause and effect was on a slow burn. Secondly, the trade union movement pushed up wages for workers, which in turn ensured sufficient aggregate demand to keep pace with growing capacity. Thirdly, a banking system based on debt provided the funding for the investment required during this era.

There is a fourth candidate: growing levels of specialisation. The more we specialise, the better we get at doing. And this in turn charges innovation. And specialisation needs growing consumer demand – to create economies of scale; debt – in order to create both demand and new money for investment; and finally specialisation requires improving communication.

The anti camp have two favourite arguments. One is that the precursor to this golden era was the slave trade. That the UK’s Industrial Revolution could never have occurred without the slave trade, and in particular the import of cotton from slave-dominated farms in the New World. We would counter that argument by saying that if you look at the broad sweep of economic history, slavery seemed to get in the way of progress. The Roman Empire, for example, saw tiny growth in GDP per capita. In fact we might go further and say the end of slavery may have been an important step in allowing the growth spurt to occur, because it meant more consumer demand was created.

The other argument cynics make is that all our growth was down to fossil fuels. That it was steam power, powered by the burning of coal, and later electricity created predominantly from burning coal, and then of course black gold itself, which underpinned growth.

So who is right? The optimists or the cynics?

This morning an interesting news development supports the case for the optimists.  See: The cost of solar power crashes