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A Farewell to Alms, through p.272
Clark reconceptualizes what the Industrial Revolution was all about. It wasn't a huge spurt of technology, circa 1780-1830, but rather there was a prior period of slow and gradual improvement in living standards. That contribution completely revises the "rise of the West debate." While Clark is not the first "gradualist" on this topic, he makes the best and most conceptual case for throwing out previous understandings of the Industrial Revolution.
That point alone makes this one of the most important books of recent times. My main difference with Clark, in these sections...
...comes again on the question of science. He points out correctly that most of the major technological innovators did not get much for their efforts. Clark therefore does not see the late 18th century or early 19th century as giving special incentives for science. I agree as far as he goes, but I view the incentives for science more broadly.
Core Europe, starting in late medieval times, developed a new and still poorly understood organizational technology. This was, very roughly, the ability to work in groups, cumulate technologies and advances, and learn from each other in competitive environments. Most notably, this new technology led the Florentine and Venetian Renaissances, especially in the visual arts. But there was more. The rise of printing. The rise of classical music, starting in 1685 or whenever. The rise of early modern philosophy. Europe goes crazy with inventiveness, albeit in splats and bursts. (Clark's own chapter 12 gives good evidence for this tendency, though it will play a less central role in his version of the story.)
It is also the case that most of these bursts of inventiveness didn't do much for the average standard of living. Yes mastering oil paint technique made Florence richer but not so much.
It just so happened that one of these bursts came in science, technology, and engineering. And it came in England, mostly for reasons of "national character." It just so happened that the English burst did more for the standard of living, for reasons of external benefits. But having had such a burst was not unique to England. England was just one spoke on a more broadly turning wheel, and a European distribution of bursts was well in place prior to most of the special conditions we might find in England.
England, by the way, also had the literary revolution of the 18th century, and England plus Scotland drove the rise of modern economics. There is no Chinese Adam Smith and that is because that Europe was pulling decisively ahead in ideas production. I consider this a fact of great importance whereas for Clark it is a sideshow to some other story.
Most generally, I see the historical problem of growth through the lens of culture -- in the sense of the history of the arts, music, and letters -- more than through the economic history literature. I am very taken by Max Weber's writing on Western music and also his conception of the broader style of Western rationality. And I see the rise of these organizational improvements as a central -- the central? -- story of early modern Europe and the move to prosperity. It simply took a long time to apply these organizational movements to science, and to turn that science into concrete technical advances.
None of this need contradict Clark and indeed you will find parts of this narrative in his book. But unlike Clark I would not superimpose this on a broader Malthusian story or an emphasis on the long run. Nor am I putting much stock in genetic evolution. So these organizational/technological improvements, in my view, move closer to the center of the story of European progress.
Unlike Clark, I think incentives to create matter greatly, but not through patents or other direct pecuniary rate of return effects. The great creators have a burning desire to create, provided they have the opportunity to do so. This new European technology of organization (whatever it should be called), combined with growing wealth for the upper classes, meant that such creative opportunities were far more available than ever before. And powerful intellects grabbed them, for reasons of psychic incentives. So incentives are paramount to the European story, while Clark remains correct in criticizing the standard account of how those incentives might have mattered.
I also see England has having innovated with the quality of its state in particular its fiscal grounding. I wish this played a larger role in Clark's account although of course I understand why it does not. Institutions are not allowed to become a competing force on center stage. The economic returns from colonies might be given more play as well.
Overall I am willing to accept many of Clark's arguments, but I always go back to wanting to superimpose a broader institutional story on his microfoundations.
He resists that move, and that is the major place where I part company with him. I think he is too intent on pushing institutional and ideological factors off the stage; I am happy to allow Clark's factors on the stage -- most of all gradual growth downward mobility and quality of labor -- but I want a very busy and cluttered stage.
I believe, by the way, that if Clark's vision were correct, Australia and New Zealand would be stronger economic powerhouses than has turned out to be the case.
Posted by Tyler Cowen on September 4, 2007 at 06:49 AM in Books | Permalink
Comments
Tyler: I agree that internal motivations, status, opportunity, etc are far more important drivers for high quality innovation and creation than monetary incentives are, and that the monetary incentives rarely ever go to the great innovators anyway. This and history tend fairly strongly to make me think that patents and copyright don't increase, and possibly greatly decrease society's level of creativity and innovation, while an unconditional basic income would drive an unprecedented hyper-renaissance. Do you agree with these economic predictions?
Posted by: michael vassar at Sep 4, 2007 8:15:04 AM
Isn't the main thing that the "ideas production" produced was a relatively libertarian spirit and understanding in Britain?
Isn't what the "technology" and "organization" of idea production achieved was an persuasive explanation that our ingrained, ever-present moral responsibility to others is unsullied when we let our acquisitive penchants and creative passions go, within the grammar of commutative justice?
Isn't it the case that there were a few thousand people in Britain who thought that way, and wrote and adjudicated and ruled that way (relative to other places), and consequently led the culture to be more libertarian than other countries?
Isn't it the case that we should be talking about culture?
Posted by: Daniel Klein at Sep 4, 2007 9:02:56 AM
The deeper I get into ‘A Farewell to Arms’ the outline of Gregory Clark’s main thesis begins to take shape. I cannot anticipate its full form, but I am getting restless with it already. I find the book enjoyable to read, and exasperating in parts at the same time. His main but flawed criticism of Adam Smith, apart from lumping him carelessly with neoclassical economics, jars when he quotes in place of the so-called ‘industrial revolution’ a phrase that could have come direct from both Wealth Of Nations (1776) and Lectures On Jurisprudence (1762-3), namely ‘slowly and gradually’, and while claiming this as a correction to the wilder ideas of 19th century and 20th century economic historians, he also uses it to take a side swipe at Smith, as if he wrote something different.
Smith historical analysis would sit easy with Clark’s ‘brief economic history of the world’. Smith sourced the habits of commercial society right back in the hunter-gatherer ‘rude’ societies, the ‘very slow and gradual consequence’ of ‘the propensity to truck, barter, and trade’. His assessment of each ‘age’ that followed – shepherding and agriculture – was that they increased the productive powers of labour.
Hence, the history of the last ten millennia is not the fact that subsistence levels of consumption did not change (which Smith agreed was the case to the 18th century), but that total output of the ‘necessaries, conveniences, and amusements of life’ did change constantly. To focus on per capital averages and not on gross annual outputs is misleading.
Technology did change and improve constantly, though not year-by-year. Clark is in a hurry – ‘why did it take so long?’, etc. I find asking why Babylon didn’t go on to a massive rise in per capita income a most strange idea. How many ‘hanging gardens’ could they produce and who would invest their non-extistent capital in them elsewhere? Labour is not enough for speeding through to the commercial age.
The pace began to ‘quicken’ (relatively speaking; more like separate strands were converging slowly: think of Smith’s account of the common labourer’s jacket) in the 16th – 18th century. Everything else was dragged along not just by knowledge, but by its dissemination (printing, art, culture, languages, and inter-actions on a scale in Europe). The image that Clark gives by way of criticising standard ‘explanations’ of applying neoclassical rational thinking to all (something Smith could never be accused of) and to history is perfectly justified, though his examples sometimes are quite, er, ‘silly’, for example in respect of the alleged economics of slaves doing a deal with their masters. Isolated examples are not data. Nor does it help, in my view, that Solow’s neoclassical growth theory, with its equilibrium explanations and assumptions, etc., is used to explain history. Growth is a process of disequilibria.
History, since ‘rude’ society is the history of the ruling orders, who built the artefacts of civilisation out of the surplus extracted from the subsistence labour of the majority. This raised poor bright people as well as it gave roles for disinherited rich sons. That innovators did not gain the prizes they are supposed to have lusted after is not germane. They didn’t know they were going to be cheated out of their ‘letters patent’. Think of Harrison’s chronometer and his non-‘prize’ denied to him by rivals for many years, which changed shipping by enabling longitude to be measured on great circles, anywhere on earth, thus raising productivity. Joan Thirsk has written about the Elizabethan attempts to kick start economic development and get the poor to work, and how its many gains were sullied by the attendant corruption that set in. (Economic Policy and Projects: the development of consumer society in Early Modern England, OUP,1978).
It is not the certainty of prizes, or rewards, that drove them – that prizes didn’t come after the fact cannot be said to have influenced their work beforehand. If James Watt had not been refused the right to work as an instrument maker in Glasgow by the local Guild, and the Senate at Glasgow University, a member of which was Adam Smith, had not appointed him to the University in 1763, which was outside the Guild’s legal rights to prohibition, he would not have been given the University’s model Newcomen steam engine to repair, which he did and then went on the improve it. Such are the tenuous events that led to Britain’s lead in power-driven machinery in the 19th century.
I look forward to the next chapters.
Posted by: Gavin Kennedy at Sep 4, 2007 9:23:47 AM
Since virtually all of the innovators were men, maybe something changed in the way of sexual incentives. Maybe a cultural change took place which allowed innovators more fame (if not fortune), which in turn led to other innovators joining the fray. Clark's thesis is that the population was getting smarter over time, so the change in question could have been just a generally greater appreciation of intelligence in others, i.e. women came to appreciate male intelligence more.
Posted by: Dennis Mangan at Sep 4, 2007 10:07:00 AM
That's one of the (many) reasons I read this blog every day - Gavin Kennedy that's probably the best blog post I've ever read. I'm waiting to read the book as I'm currently away from my amazon delivery address, but I can't wait now...
Viva la (Marginal) Revolution!
Posted by: nick at Sep 4, 2007 10:46:07 AM
It is of course worth noting that an explosion in innovation had happened before but not an explosion of scientific/technological innovation. The explanation for that might be as simple though as saying that the previous explosion never expanded beyond the Greek population, which was very small compared to the population of Western Europe in 1400 or so.
Of course, no-one has answered the question of what these institutions were that Greece had but Persia and Rome lacked or that England had and China lacked. Given the first example, they don't seem to be due to evolutionary change. Printing has often been seen as a very big deal, but not big enough to spread European institutions to China.
Posted by: michael vassar at Sep 4, 2007 10:50:02 AM
Clark’s most important piece of evidence, at least relative to my priors, is the table on p. 235 in which he shows that many of the inventors of important technologies did not have their intellectual property rights protected. This will be grist for the mill (pun intended) of Julio Cole, Jeff Hummel, and others who think that the importance of intellectual property rights has been way overstated. Clark also points out (p. 236) that of the 379 people who died in Britain in the 1860s leaving estates of more than half a million pounds, only 17 were in textiles. I find this second piece of evidence interesting but only somewhat persuasive. Half a million pounds back then translates into somewhere between $10 million and $20 million today. So could there have been many textile people dying in the 1860s who left estates of a quarter of a million pounds? The equivalent of $5 million would have been a strong incentive to innovate, especially given the high marginal utility of money then compared to now—remember his own Malthusian trap that Clark has leaned on throughout the book.
I also think Clark too quickly dismisses Kremer’s population argument (p. 228). He states, “Under Kremer’s argument, the growth rate of ideas would be at best just proportionate to population size.” I think this is false. My own hunch is that it would be proportionate to the square of population density: with more people around there is more interaction and linearity doesn’t apply. And since, for a given land area, population density is proportional to population, then the growth rate of ideas would be proportional to the square of population. If I’m right then the solid line graph on p. 227 does fit Kremer’s story.
Two great sections of writing and thinking to highlight before I get to some smaller criticisms:
First one, p. 211:
Yet this approach exerts its powerful hold over the economics profession in part because of the limited historical knowledge of most economists. The caricature many modern economists have of the world before the Industrial Revolution is a mixture of all the bad movies ever made about early societies. Vikings pour out of long ships to loot and pillage defenseless peasants and burn the libraries of monasteries. Etc.
Second one, p. 230. (Adam Smith couldn’t have said it better):
As the [French] revolutionaries fed on each other, revolutionary equality soon yielded to a vainglorious military dictatorship that led hundreds of thousands to their starving, frozen end on the Russian steppes. Meanwhile a “nation of shopkeepers,” incapable it seemed of vision beyond their next beef pudding, was transforming the possibilities for all humanity. And in the process, as we shall see, they ushered in more egalitarian societies than had been witnessed for thousands of years.
Finally, three critical comments:
1. On p. 205, Clark makes an amazing statement about causality. He states, “When two variables are so closely correlated one must cause the other.” His only hedge is a footnote that states, “Or there could be a single independent cause for both.” This is absolutely false. What happened to what we point out in introductory econometrics classes: correlation does not necessarily imply causation.
2. Clark misuses the term “beg the question.” (p. 259). What he means is “raise the question.”
3. I must agree with Gavin Kennedy that reading this book is frustrating. Clark sprinkles astounding bits of information that make me glad I read the book while at the same time not steering a clear path. Or, more correctly, maybe he’s steering a clear path but he seems to get sidetracked.
Posted by: David R. Henderson at Sep 4, 2007 11:19:01 AM
I’m not sure I see the relationship between the developments in high culture Tyler and Dan Klein point to as decisive, and the cultural evolution toward middle class habits that resulted from downward mobility of the economically successful – the primary cultural development for Clark.
Are these two aspects of the same thing? They certainly don’t sound very similar. What do they have in common, except the spread of literacy and numeracy?
Did the flowering of high culture cause the other? This doesn’t seem plausible. The burst of high culture in the Hellenic world didn’t do much for work habits or economic growth, as Tyler points out. Or was the short-run effect of high culture primarily on the institutions, as Tyler and Klein both suggest? That just takes us back to Clark’s skepticism about the importance of those institutions. Could those changes in high culture brought about the IR, even if they affected institutions, without the other kind of cultural evolution emphasized by Clark?
Clark doesn’t say much about just what this bourgeois ethos was in concrete terms, but if it had a lot to do with willingness to work long and hard at boring and repetitive tasks, it’s hard to relate that to a Mozart or David Hume. More often than not people contrast the bourgeois ethos with the drive to create. If you are saying they are essentially the same thing, as a good Randroid would, then I don’t see it as a critique of Clark.
Dan Klein suggests we should be talking about culture – but isn’t that what Clark is talking about? The cultural evolution toward the bourgeois way of life? Maybe we should be talking more about the details of that change.
Posted by: Kent Guida at Sep 4, 2007 11:31:57 AM
I am enjoying these comments - even the more critical ones. I do want to respond, but will be out of action for the next 3 hours with some daily life business.
Posted by: Gregory Clark at Sep 4, 2007 11:32:47 AM
Read a biography of Mr. Tesla. There was an interesting story on incentives.
I imagine the late 19th century the way I do the late 20th century. You had a lot of people who had a lot of venture capital to invest in "science," In the 1990s it was the "internet" and "ebuisness." Development will go in the direction of what venture capitalists think will be next big thing.
Posted by: Jacob at Sep 4, 2007 1:26:14 PM
All right, I should not be commenting here as I have not read the book, but I see
no contradiction between established stories about the Industrial Revolution in Britain
from many sources and the claim of a gradual rise in living standards there between 1780
and 1830. This strikes me as simply being a matter of a simple mathematical confusion,
that between a discontinuity in a level and a discontinuity in a rate of change.
So, people like Alexander Gerschenkron and Simon Kuznets, who set out to document when
the Industrial Revolution started in various countries, observed its takeoff (to use
Rostowian langugage) as coinciding with a discontinuity in the rate of growth, usually
from near zero in per capita terms to something noticeably positive, with Gerschenkron's
famous law of relative backwardness arguing that the later a country takes off, the more
rapidly it grows (or can grow), at least at first after the takeoff due to being able to leapfrog
over greater degrees of technological differentiation and productivity as compared to the
leading edge of the world economy. Given Britain's role as the starting country, its takeoff
was the least dramatic and the slowest as there was no such possibility of any accelerated
leapfrogging, although still a discontinuity in the rate of growth supposedly occurred around 1780.
So, a discontinuity in the rate of growth that moves it from near zero to about 1-1 1/2% results
in a gradual rise in living standards over the next 50 years. But what triggered that discontinuity?
Does Clark deny that there was a major wave of technological innovations in the period around
1780 in Britain, with the justly famous Watt steam engine of 1776 being a crucially important one
and with a bunch of others clustered in a short period of time in what most historians have long
identified as the technologically leading sector, the textile industry?
I apologize for commenting on this without having read the book, but I would be curious to read
how the book refutes this rather standard story that I have just laid out above. What has been
presented so far both by Tyler and the discussants does not even begin to do so, and the claim
that the story of a gradual increase in living standards in Britain between 1780 and 1830 is
somehow enormously important strikes me as enormously exaggerated. It is simply the logical and
obvious outcome of the standard story of a technologically induced upward ratcheting of the
long rate of economic growth in Britain, if not as sharp a one as would happen in other countries
later that went through the same "Revolution," as explained by Gerschenkron (1962).
Posted by: Barkley Rosser at Sep 4, 2007 1:37:26 PM
Kent Guida comments about what I wrote, and prompts me to say more.
What I think must be a crucial part of the story of the institutions and widespread belief systems that emerged is the (relatively) libertarian character achieved by what I would call the (relatively) enlightened thinking among an influential minority of the population. That body of enlightened thinking came to be called "liberalism".
Certain ideas are both important and rather true, and they have a force by virtue of the combination of those two characteristic. That force should be part of the historical narrative. The name we give to that force is "enlightenment." Talking about that force, substantively, however, requires that one take a stand about what is both important and true--something that ninnies and nincompoops shrink from doing. Also, scholars and others will often get the substance of enlightenment wrong, which doesn't do much to advance the inclusion of enlightenment as a historical force.
Ludwig von Mises was a crank, but nonetheless I think there is something to the following paragraph:
"The most amazing thing concerning the unprecedented change in earthly conditions brought about by capitalism is the fact that it was accomplished by a small number of authors and a hardly greater number of statesmen who had assimilated their teachings. Not only the sluggish masses but also most of the businessmen who, by their trading, made the laissez-faire principles effective failed to comprehend the essential features of their operation. Even in the heyday of liberalism only a few people had a full grasp of the functioning of the market economy. Western civilization adopted capitalism upon recommendation on the part of a small élite."
(from Mises, The Anti-Capitalist Mentality, p. 21 of new edition, and online).
Schumpeter, in his own nincompoopish way, says something highly congruent on pp. 136-37 of Capitalism, Socialism and Democracy.
Like Kent Guida, I would have a hard time seeing how Mozart helped to advance liberalism. But, I have an easy time seeing what David Hume, Adam Smith, et al had to do with it. They enlightened people.
We should talk about enlightenment as an historical force--unfortunately, not a supreme one.
What explains modern prosperity? To some extent it is that the powers that be sufficiently figured out, smiled on, or acquiesced to the necessary moral, ethical, political, and legal reforms, and that was partly because they absorbed the ideas, directly or indirectly, represented by the great liberal writers.
(BTW, I confess to not having opened Clark's book.)
Posted by: Daniel Klein at Sep 4, 2007 1:45:26 PM
Much of the recent commentary focuses on the relation between what Tyler calls Clark's "microfoundations" (the material/demographic trends of the Malthusian regime) and the specific cultural or institutional changes traditionally used to explain the location and timing of the breakout from the Trap. This is -- as I pointed out in an earlier post -- analogous to the "infrastructure/superstructure" debate among Marxist historians of the rise of capitalism.
Part of the problem is caused by the very different time frames inherent in the two levels of analysis. Clark's mechanisms can explain why all settled agricultural regimes subject to the Malthusian pressures would eventually create human beings capable of making the breakthrough to modern economic growth, thereby explaining its global spread -- regardless of whether the selection processes involved were cultural, genetic or, most likely, both (what recent theory calls "co-evolution). But with these processes working over long periods and relatively slowly (the unit time of transmission being a generation), it's hard to explain with Clark's framework alone the "precociousness" of England. Why was the supply of innovators so large in 18th century England? Why did the latest theoretical and experimental science get readily incorporated into the work of these innovators (as shown by Margaret Jacob and Joel Mokyr). Why England before the rest of Europe and Europe before China and India?
To answer these questions, what we need to "superimpose" (as Tyler puts it) on top of Clark's framework is not so much institutions of governance or property, but the kind of developments outlined in Weber's Sociology of Religion and Merton's Sociology of Science, which can explain why English society could generate -- and incorporate -- the innovators and why China, India and the Islamic world had no equivalents of Bacon, Newton, Smith, and Malthus himself.
Posted by: David H. Levey at Sep 4, 2007 2:13:01 PM
Dan,
I think one of the key points of Clark's book is that many of the "necessary moral, ethical, political, and legal reforms" that we often think of as being necessary for laissez-faire had already existed for hundreds of years in England without spurring an Industrial Revolution. Property rights and limited government had been around a while, with the miracles of increasing prosperity nowhere in sight.
So perhaps those laissez-faire reforms were necessary but not sufficient--and if so, then what else was needed on top of laissez-faire to create the IR? I think this is where Tyler's point about the culture of creativity comes in--something that is often considered quite separate from laissez-faire. Mokyr's book Gifts of Athena makes a good case for a new cultural shift that was prima facie unrelated to property rights and personal freedom: It was a spirit of inquiry.
I think Clark's discussion of the hundreds of years between laissez-faire (at least as conventionally understood) and the IR is a fascinating, well-made point.
Our new GMU colleague Gary Richardson argues in ongoing research that there's a good reason why it took hundreds of years: It took Parliament that long to tinker with property rights in a Coasian fashion to get the kinds of property rights that actually created value. That seems well worth considering....
Your first post on cultural change got me thinking about Robert Lucas's "A Million Mutinies" essay. Lucas argues that economic change, like cultural change, requires a willingness to abandon hidebound tradition. He talks about Naipaul's novel A House for Mr. Biswas as an illustration. It's quite a nice piece:
http://www.minneapolisfed.org/pubs/region/01-12/lucas.cfm
Posted by: Garett Jones at Sep 4, 2007 6:02:37 PM
So, fine, I agree that "culture of creativity" is probably necessary, especially for an initial
industrial revolution, with a bunch of institutional and other stuff lying behind it. But is not
the standard story still true at the immediate point, that an outburst of linked technological
innovations in the late 1700s in Britain triggered a discontinuous increase in the long run growth
rate that then led to a gradual increase in living standards? Does Clark's book deny this, and if
so on what grounds?
Posted by: Barkley Rosser at Sep 4, 2007 6:08:51 PM
Let me comment a little on how I arrived at the story of the Industrial Revolution given in the book - and through that perhaps generate some understanding about why what is proposed in the book seems the only possible story.
Despite the fact that the IR in England in 1800 is THE great event of economic history, and perhaps of human history, there are surprisingly few people who directly study it any longer (Joel Mokyr, and also to some degree Joachim Voth and Anthony Wrigley). The topic has been largely abandoned in economic history (as opposed to theory where it is alive, but they tend not to explain any actually observed Industrial Revolution).
Deirdre McCloskey, for example, wrote a wonderful essay on the Industrial Revolution in the Cambridge Economic History of Britain circa 1983. But when that work was revised in the 1990s in the revised essay she essentially throws up her hands and says in effect "This stuff is just inexplicable."
The reason it is largely abandoned is that the IR is a huge, glaring challenge that mocks the pretensions of modern economics to understand economic growth.
One of the reasons this book took so long to finish was that I could not see for the longest time any way forward on the IR.
As I thought about it I came to the conclusion that, given how little was happening in England institutionally in the run up to the IR, and how little incentives changed in the IR, the process would only become explicable if
(1) The Industrial Revolution was really much more gradual than the conventional history assumes. Accidents, demography, etc all conspired to make 1800 seem like a much more sudden break than it was.
(2) Britain was less unique in this period than conventional histories assume. The IR was geographically also much more diffuse.
One of the big empirical contributions of the book is to try to make that case.
That made it possible that some kind of evolutionary development of the economy could explain the IR.
Posted by: Gregory Clark at Sep 4, 2007 8:17:31 PM
I agree with Tyler Cowen and David H. Levey. I am not a monist and don't suppose that there is a single answer. But I think the most important thing by far was that the Renaissance was capped in England by Francis Bacon. It is remarkable how many people in our time have forgotten what a huge turnabout in cultural outlook was programmed by that man, nearly in a moment. He was cited continuously for 200 years.
Bacon wrote down the rule that instrumental rationality was applicable across the board -- across the entire range of human endeavors. Splitting, weighing, rejoining materials was a general strategy that could be pursued everywhere; material improvements could be sought everywhere; life might be improved everywhere. It wasn't merely "science" as now defined -- occultism and magic were also instrumental pursuits. And Bacon and his followers singled-out the artisans and manufacture, as ripe for scrutiny and improvement.
Bacon described and called for an "institutional" change in the broadest sense of a mental redirection. He called it the "instauration." Given the enormous mental inertia that was still to be overcome, perhaps we ought be surprised that the Industrial Revolution followed in only 150 years.
There had been NO statement of this program before this time, anywhere. The religious teaching was that the world had fallen from a perfect state into degeneration.
Of course there was medieval preparation for the instauration: in thinking with objects, strength of materials, and diagrammatic and mathematical invention such as the "latitude of forms." Much of this, such as some of Leonardo and Galileo, had come out of practical orientation. And the Renaissance was already noted for, among other things, a huge acceleration in the number of Aristotelian commentaries: 6653 commentaries were written between 1500 and 1650 A.D. (That was an elevenfold increase from the prior century.)
Although he was the closest precursor to Bacon in generality of program, of course Aristotle did not call for the general rule of experimental improvements in the mechanical arts, so far as we know. Although, from around 150-100 B.C. (150 years after Aristotle,) we have THIS show-stopping little number!:
http://en.wikipedia.org/wiki/Antikythera_mechanism
Posted by: Lee A. Arnold at Sep 4, 2007 8:45:46 PM
Gavin Kennedy seems to think that the view of the pre-industrial world in the book is not that much different from Adam Smith's.
I disagree.
Smith is all about Smithian Growth in the millenia leading to 1776 - the expansion of the economy by reducing the impediments to trade, and thus extending the division of labor. This growth thus has at its base institutional improvements. Some modern economists, such as Avner Greif, give great weight to an extension of this vision whereby the key to growth is the devising of institutions which allow trade.
AFTA argues these processes, at least in the years 1200-1800 in England, were inconsequential. Trade possibilities were probably as good in 1300 as in 1800. The economy had improved somewhat, but technological advance dominated throughout.
AFTA thus argues for many purposes, Smith was a minor figure. The great intellectual figure of the era was Malthus, whose thinking was much more attuned to the realities of the pre-industrial world.
Posted by: Gregory Clark at Sep 4, 2007 9:02:05 PM
As a physicist with little former knowledge of economics, perhaps I can contribute an outsider's perspective on the book thus far.
1. Before the IR, humankind was in a quasi-static ecological equilibrium. The rate at which efficiency grew was slow with respect to the time scale of population growth. Easy enough.
2. What was the IR? The best answer I can glean is found in Figure 12.8, which shows a population growth which did not push down income per person. It held steady for a while, than actually started to increase. Seems to me this would be driven by an increased rate of efficiency growth (to offset and eventually overcome the decreasing marginal output per worker). Once the threshold is crossed the geometric nature of population growth takes over.
3. Even before getting to the presentation of Pomerantz's theory on pg 260, I asked myself the question: what allows our immensely greater efficiency then pre-IR society? I answered: fossil fuels. What would happen to efficiency or income per person if we ran out of oil tomorrow?
4. Can we really say we have escaped the "Malthusian Trap?" After all, death rates must eventually equal or surpass birth rates. We have been in a far-from-equilibrium condition for 200 years, a blip in geological time. This cannot last forever. In order to maintain a high income per person, we need to continue to have external sources of energy and limit fertility. Is it even possible to equilibrate at close to the present value of income per person, or will this era combust as quickly as its energy source?
5. The idea that evolved cultural traits are required to establish a modern economy seems like a no-brainier. A portion of this is probably biological, but I expect cultural is more important (given how the variations between individuals swamps variations between populations). Precisely what these traits are (and how heritable they are) is an important question and should be explored directly, rather than indirectly inferred and theorized about.
Posted by: Eric Preston at Sep 4, 2007 9:34:39 PM
Gregory Clark,
So, I have not read your book, but I have read several accounts of your supposed Malthusian mechanism.
I am not going to dispute that there may have been some change in either culture or genetics or both
that fed into the propensity for supportive institutions for both technological change and capital
investment and entrepreneurship (although a lot of the latter at the time of the IR was concentrated
among religious minorities in Britain). However, when I read that you are arguing for these demographic
factors to simply predominate over everything else, I find this unconvincing, although perhaps I would
feel differently if I read your book.
First of all, regarding some crucial institutional frameworks, they predated the period of which I gather you
write. I am thinking of such things as the Magna Carta dating from the 1200s. Granted, it in itself was not
clearly or directly tied to economic factors or behavior, but many would say that the parliamentary system
put in place during the Glorius Revolution was, a view supported by both Joel Mokyr and John Nye. And a lot
of historians see the Glorious Revolution as the lineal descendant of the Magna Carta. So, it would seem that
at least some of the favorable cultural/genetic trends were already going on or in place prior to the period
you focus on, if that is what lies behind such favorable developments.
Now, I see you stating above that technological change is the key to what was going on. So, presumably all these
favorable demographic changes were supposed to feed into some tendency to carry out technological changes. Now, I
can think of some other factors that favored England with respect to the specific tech changes that were involved
in the IR. In particular, I am thinking about the presence of lots of coal in England and how that may have given
England an edge in the development of the crucial steam engine. What is involved is both that coal is what feeds steam
engines and gives them the sufficient power to drive more substantial machinery and industrial processes, as well as
the fact that the early steam engines were developed and used in the very process of mining coal. I am thinking of
the Newcomen steam engine dating to around 1700, which was first used to pump water out of coal mines, with the coal
conveniently right there to be used to help in its own mining. Following path dependence kinds of arguments, it
could be argued that the later emergence of the Watt engine at the crucial point in time of the discontinuity in the
growth rate, was fundamentally derived from this rather fortuitous earlier historical accident, which was partly based
on a convenient geographical fact, the large amount of coal and its usage in Britain.
Posted by: Barkley Rosser at Sep 4, 2007 11:12:23 PM
Garett,
Thank you for the focus on why the IR didn't come earlier.
You suggest that Britain in, say, 1400, had property rights and limited government. I don't know, let's say they did.
But did they have moral authorization to go out and get rich? Did they have moral authority to abandon hidebound traditions?
My historical knowledge is meager, but my impression is that they had no such moral authorization.
As I understand it, they weren't enlightened in that way. That only came later, notably by virtue of individuals who made a profound and elegant case for the moral warrant to go out and get rich, within the grammar of commutative justice.
/Dan
Posted by: Daniel Klein at Sep 5, 2007 1:15:09 AM
Gregory Clark neatly summarises his impression of the differences between our approaches. Let me be clear: I have no axe to grind for forcing Adam Smith as a ‘major’, nor resisting an assessment that he was a ‘minor’, figure. It seems to me as a reader of Greg’s book (rigorously following Tyler’s ‘rules’ to read and debate in restricted order to page 272), that much of what Gregory asserts as ‘new’, ‘last 70 years research’, about the period to 1800 (itself an arbitrary watershed) was discussed in detail by Adam Smith (WON, and LOJ), and indeed formed much of his distinct contribution, and was in place before 1763. That is all I have been saying in this debate. Greg rejects these statements, but so far in AFTA (what a brilliant contraction!) I read nothing to contradict the view that Greg has a view of Adam Smith heavily influenced by The Neoclassical Distortion. It would be better if he demonstrated he had read WON and LOJ.
That ‘Trade possibilities were probably as good in 1300 as in 1800’, I find breathtaking. I have noted his references and will read these on my return to Edinburgh from France in October. But I find it weird (‘exasperating’ even) that Greg make these sorts of grand statements. Exactly what were people in 1300 going to trade (and with who?) in 1300 comparable to what many more of them they could trade in 1800 among themselves and with Europe and north America (Europe couldn’t even sail to America until the end of the 15th century).
Feudal agriculture was not a place that potential traders could wander off their Lord’s lands (with what?) and go to the mainly miserable collection of hovels, called ‘towns’, and take advantage of hardly existent trade potentials. This was not the American ‘west’. In find references to that period being ‘laissez-faire’ problematical (it wasn’t in France, the source of the laissez-faire phrase in 1690). Trade fairs expanded in location across Europe (Braudel, et al) and were controlled locally.
There were pedlars travelling long distances across Europe with what they could carry for petty trades a few centuries after 1300. This was part of the long and slow (and dangerous) process of the re-emergence of the age of commerce, and it had a long way to go before trade became significant. The Elizabethan government adopted a policy of encouraging domestic manufacture (early import substitution of ‘luxury’ goods and ‘secret’, i.e., ‘stolen’ technologies), to reward the people who established them (often, incidentally ‘merchant’ adventurers who were the younger sons of well-off local people!) and to set to work ‘indigent’ and unemployed familes, children included. Employment kept them alive and their children survived too. From the early 1600s to the mid-18th century, local dispersed commercial process continued in fits and starts, often suppressed by the town guilds, letters patent, and outright corruption, otherwise known as mercantile political economy, to establish the markets that Greg claims were always there since 1300.
So my ‘axe’ is not so much to heap praise on Adam Smith as to question Greg’s narrative supporting his impressive and interesting data. My only comment on Malthus, writing in the early 1800s, is that his major idea – the ‘Malthusian trap’ – appeared at the moment it was being thwarted.
As stated, I look forward to reading the next chapters. If I am wrong I shall be happy to concede to it. So far I think Greg has to have a ‘big finish’.
Posted by: Gavin Kennedy at Sep 5, 2007 2:39:44 AM
@michael vassar:
Why would an unconditional basic income spur a hyper-rennaissance? wouldn't it, with todays methods of "having fun"/distraction, actually do the opposite?
You take it for granted that more free time and less ordeal in general life would increase time spent on creative activities. However, regard people on unemployment pays and do you see them miraculously invent new principles/ideas or even works of art?
I think maybe one of the conditions that also brought up invention in Britain was the need to invent. Why are the Jewish people always been rich and inventive, because they always were a minority that had to suffer from the societies majorities and thus became inventive out of the need to survive.
So, I think a basic income as it is already implemented in Germany or France, actually decreases invention and creativity.
And I tend to agree, if I have to look at myself at the moment, rather writing an over-long comment instead of working properly...
Posted by: Max at Sep 5, 2007 5:32:05 AM
A large number of scholars including Greg Clark have in fact demonstrated that the industrial revolution was a much more gradual process than was previously thought. This was a live area of debtate 15 -20 years ago but was largely settled by the work of Nick Crafts and Knick Harley. See the debate in the Economic History Review, volumes 44 and 46, 1992 between Maxine Berg and Pat Hudson on the one hand and Crafts and Harley on the other for instance. As a result I find the claim that this is the book's biggest contribution slightly odd.
I am interested in the relationship between culture in England becoming `more middle class' and in the innovations of period 1770- 1830. Joel Moykr's proposed industrial enlightenment is one such `bridge'. The idea of self-interest being liberated in the eighteenth century when it was hidebound or constrained by social norms is another possible bridge - though it seems close to Weber's hypothesis about religion.
On the institutional differences between England in 1300 and 1800, personally I find the evidence presented by Greg in his book, fascinating and important but certainly not decisive. For example unlike land rights, property rights in capital or commerce were not well understood or recognised in the medieval period - look at Edward III interventions in the wool industry in the mid-14th century. In this sense I think the Smithian story described by Gavin Kennedy cannot simply be dismissed.
Posted by: Mark Koyama at Sep 5, 2007 5:53:40 AM
I do not want to debate Gavin Kennedy on intellectual history (that would be like me challenging Roger Federer to a tennis match).
But I do relish debate him and others on my court, which is economic history.
The widespread impression that between 1300 and 1800 England experienced significant institutional improvements is just wrong. There were changes, yes. But not improvements.
England in 1300 was a highly commercial society, with commodities like grain flowing freely across England, and between England and the rest of Europe. In 1300 in London you could rent storage in granaries for grain on a weekly basis. Court records reveal a web of debt stretching out from London into the Midlands between grain suppliers and London merchants (see the work of Bruce Campbell and his co-authors on the medieval London grain market).
The peasantry rather than being the subjects of abusive overlords, had instead largely expropriated from their supposed masters they land they cultivated, paying rents well below market values in most cases.
Guilds restricted trade and crafts in towns, but there was so much competition between different towns that these restrictions could have only modest effect.
Transport costs in 1300 were no greater than in 1750 (though these costs did fall in the late 18th c).
Taxes and trade restrictions, unlike in 1800, were minimal.
So why was medieval England largely stagnant technologically?
Posted by: Gregory Clark at Sep 5, 2007 9:30:45 AM
The reason it is largely abandoned is that the IR is a huge, glaring challenge that mocks the pretensions of modern economics to understand economic growth
Does modern economics pretend to understand economic growth?
I know there are some economists who, judging by their statements, fervently believe that they understand anything about it, but they all disagree with each other about what causes it.
My macroeconomics lecturer at university went through a large number of economic models that purport to explain economic growth in the following way:
- He'd write up the economic model on the board.
- He'd derive some result from the model at blaring disjoint to the real world (eg the return on capital in Indoensia should be 4x that in the USA)
- He'd sniff dismissively and say "Enough said".
Then I worked for the NZ Treasury where there were massive debates about what the Government could do to increase economic growth.
I really don't get the impression that modern economics pretends to understand what causes economic growth. As far as I can tell, modern economics now has a long list of ways not to achieve economic growth. I had a workmate who said, at one stage, that if a government came to power that wanted to ruin economic growth and wanted an economy with hyperinflation, mass unemployment, negative investment, etc, economists would be well-placed to advise on achieving these aims, but otherwise was rather lost.
For these reasons I don't believe the statement that modern economics pretends to understand economic growth. Some modern economists may do so, but the profession as a whole does not.
Posted by: Tracy W at Sep 5, 2007 9:31:38 AM
Tracy W.
NZ is actually used as an example in the book of an economy where in the last 20 years the government did everything that economists would advise to stimulate growth, yet NZ has been described by Tim Kehoe (from Minnesota) as having experienced one of the "Great Depressions" of the modern world - slow growth compared to the rest of the advanced economies.
Greg
Posted by: Gregory Clark at Sep 5, 2007 10:03:44 AM
Looking at the population and income dynamics, I am still not convinced that the character of the innovations (energy/urban) is not a significant part of the explanation- allowing income to grow faster than the population could respond.
In particular, the fact that the source of income in the industrial revolution was so concentrated in cities seems to serve as a natural limiter on population growth- for reasons of both health and increased rent costs for living space. I would be curious to see if the data show a change in the birth rate differential between rural and urban environments during the IR.
I really do enjoy the argument that the IR opened up additional sources of both great wealth and steady work that were not associated with land ownership or individual productivity via trades. The motivation to achieve this wealth/security seems to drive people to greater individual productivity, even though it is by no means assured. This is my greatest learning from the book (and the forum- thanks geniuses!) thus far- the escape from the Malthusian trap was achieved when people were motivated to work harder than they had to in pursuit of... That the IR opened that avenue to many people seems like a good thing to remember.
Posted by: matt m at Sep 5, 2007 10:08:33 AM
Greg, the evidence you're discovered on the level of market integration and development in medieval England is certainly important and will force economists to rethink their views of the pre-industrial economy.
Nevertheless, in 1300 a far higher proportion of the population lived off the land than did in 1800 or 1750, and urbanization levels were much higher in England in 1800 or 1750 than they were in 1300. And if we think of market development and integration not just in terms of competitive prices for certain goods (like grain) but in terms of the range of goods available, the extent and complexity of the division of labour then 1750 wins over 1300. Of course this does not necessary undermine the case made in the book but it does add caveats.
Another caveat: even if Greg was right and the number of trading opportunities in 1300 was comparable to the number in 1750, this statement could not hold for intervening period. This is because of the famines of the 1320s and the Black Death which reduced the population from circa 6 milllion in 1300 to 2 million in 1450.
Posted by: Mark Koyama at Sep 5, 2007 11:24:18 AM
I want to add to my comment above, that magic and occultism survived Bacon's criticism of them (i.e., that they do not work) by nearly a hundred years more. That delay hindered, until the beginning of the 18th century, the social expectation of general, ongoing technological improvements. And that expectation, born of a proven method, would be psychologically necessary for incentives to invest.
It is important to understand that magic was part of the worldview until very late in the 17th century. And magic was NOT religion. It too came out of the search toward instrumental practice. C.S. Lewis writes in The Abolition of Man that magic was not part of the religious world view, and not big in medieval times: "There was very little magic in the Middle Ages: the sixteenth and seventeenth centuries are the high noon of magic. The serious magical endeavor and the serious scientific endeavor are twins: one was sickly and died, the other strong and throve. But they were twins. They were born of the same impulse... to subdue reality to the wishes of men: the solution is a technique..."
We now know for example that Newton wrote almost a million words on astrology. But his search for control over nature found a big key in his Principia (1687). That book was generally received not only as a step to philosophical truth: it suggested, for all who had been searching for it, the method for practical results. Those results weren't long in coming. How could we expect the huge and ongoing technological change of the IR before this enormous turn in philosophic thought?
Posted by: Lee A. Arnold at Sep 5, 2007 11:51:07 AM
Was the Principia necessary for the invention of the steam engine? Was there anything lacking in the knowledge of, say, Archimedes that would have precluded a Newcomen or even a Watts steam engine? Just asking. We may need Newton for lots of things in the modern industrial era, but not so much for the early innovations of the IR. That seems to me to be one of the points Clark is making.
Posted by: Kent Guida at Sep 5, 2007 12:27:11 PM
In a key section, "When was the Industrial Revolution" (pp. 239-242), Greg Clark ends by acknowledging that the data we presently have don't allow us to distinguish betwen a "gradualist" view of the IR and what we might call -- by analogy to debates in evolutionary biology -- a "punctuated" view. Figure 12.5 (p. 240) in fact shows that the 1600-1760 trend in efficiency had brought England back to the previous mid-15th century peak. But the late 18th century saw declining efficiency and, without the wave of innovations associated with the traditional picture, it is possible that the Malthusian Trap would have closed again, leaving another long wave of rising and declining efficiency around a static long-run equilibrium. In this interpretation, there may still be a "sudden" quality to the IR, even if preceded by a long period of gradual preparation of preconditions.
From this perspective, it is all the more important to explain the appearance of a strong cluster of innovations in late 18th century England. I agree with Clark that we should look to the supply side, rather than to any change in the institutions governing rewards to innovators, but in Chapter 12 he rather leaves us hanging on that point. He begs the question by arguing that nothing would have changed had Arkwright "opened a fish shop" or Watt "trained for the ministry". True, if it had not been those particular individuals, it would likely have been others; but that still leaves us needing an explanation of why such entrepreneurs -- as a socio-psychological category or type, not as specific individuals -- emerged in such numbers at that time.
Here I would like to reference a recent contribution that puts much greater emphasis than Clark is willing to allow on the effect of the growth of modern mechanical science on industrial innovation -- "Practical Matter" by Margaret Jacob and Larry Stewart. They show that the industrialists of 18th century England were increasingly well-versed in the fundamentals of Newtonian mechanics -- whether or not they had read the Principia -- and used it in the perfecting of their inventions. A scientific worldview and set of experimental procedures had been created, which heavily influenced the middle-class industrialists for whom Clark's cultural/genetic selection processes had paved the way.
Posted by: David H. Levey at Sep 5, 2007 1:24:22 PM
Professor Clark,
Of course I continue to be completely out of line here, but I have just read your paper on Coal and the Industrial Revolution. In it you minimize the role of technological change in the coal industry to the IR. But the issue is that it stimulated the technological development of steam power, which was crucial to the IR, and its ready presence in the UK gave it an advantage in this beyond all the cultural/genetic stuff, much as Pomeranz argues with regard to why China did not have the IR (somebody was going to).
Furthermore, I think you make a crucial error in that paper. Wood was not a substitute for coal in fully mechanized industrial processes. It does not have the sufficient specific heat in fires, even from charcoal, to match what coal produces. Steam engines simply will run a lot more efficiently and with much greater power to be able to run much more powerful machines if they are run by coal-fired steam engines. That is not captured by your cliometric analysis.
Regarding the gradualism issue, I confess to being a saltationalist Schumpeterian, with the major breaks in world history being driven by clusters of crucial innovations. The effects of these show up only gradually over time later as they fully diffuse, such as the gradual rise in living standards in Britain after the wave of late 18th century inventions and innovations.
BTW, one piece of support for your argument regarding the early development of commercial culture in England, I will note that the world's first futures markets originated in England in the 12th century, innovated by Cistercian monks for the wool industry, and predating the futures markets for rice developed a few centuries later in Japan.
Posted by: Barkley Rosser at Sep 5, 2007 3:01:56 PM
I thought lots of countries other than England had large coal reserves, but England was just early in putting them to good use.
Posted by: TGGP at Sep 5, 2007 3:29:19 PM
TGGP.
In northwestern Europe where by the 1700s it was pretty clear that the IR was going to break out in one or another of the countries, Britain was far ahead of any of its continental rivals in coal supplies, with France being next, followed by Germany, but both way behind it.
Posted by: Barkley Rosser at Sep 5, 2007 5:29:08 PM
Kent, I only meant to say that the Principia cleared the intellectual decks, amputating the occult wing of the program. Certainly the 17th century before the Principia saw improvements in the steam engine, but also still, efforts in magic.
It would be very interesting to read "A History of Capital Investment Lost on Magic from Bacon to Newton." Because if Newton's one million words on astrology are any indication, (that's a lot of human capital down the drain right there,) many smart people were trying lots of things, and some of them probably tapped into funds for it. Lead into gold, and so on.
Posted by: Lee A. Arnold at Sep 5, 2007 10:04:56 PM
Tracy W.
NZ is actually used as an example in the book of an economy where in the last 20 years the government did everything that economists would advise to stimulate growth, yet NZ has been described by Tim Kehoe (from Minnesota) as having experienced one of the "Great Depressions" of the modern world - slow growth compared to the rest of the advanced economies.
Indeed. However, you claimed that The reason it is largely abandoned is that the IR is a huge, glaring challenge that mocks the pretensions of modern economics to understand economic growth. This implies that you think that modern economics pretends to understand economic growth. This is a rather different claim to saying that 1980s economics was wrong about how to get an economy to grow.
The failure of NZ to grow strongly has provoked a great deal of debate amongst NZ economists and even outside NZ. I have participated in this debate myself. Rather than resulting in "pretensions to understand economic growth", the experience of NZ has created even more uncertainty about what causes economic growth amongst modern economists. NZ is often cited as an example by economists of how we don't know what causes economic growth, including by my lecturers at university.
Therefore I don't think that modern economics as a whole has any pretensions to understand economic growth. Specific economists may, but not the profession as a whole.
Posted by: Tracy W at Sep 6, 2007 5:45:11 AM
Gregory Clark
You appear to be under the impression that there are wide differences between us and that I reject your hypotheses about the IR (being of long gestation, and not a ‘revolution’), when on that issue of IR we are in complete agreement. Development out of the ‘Malthusian trap’ was, and remains, a long, slow and gradual process, lasting from the revival of commerce in Western Europe, following the near millennia after the fall of Rome.
Your comments about ‘institutions’ address a debate in the profession of which I have no part. By institutions you include all the social arrangements in society from structures of organisations of the state, church, and laws, habits, motives, taxation policies, relative prices, and rewards, net of taxes, and so on.
You may also be addressing a debate among the World Bank, IMF, ‘the Washington Consensus’ and modern neoclassical economics, its equilibrium growth theory and all, of which my comments on your narrative have said nothing (except, en passant to express severe doubts about the applicability of Solow’s neoclassical growth theory to actual growth as it occurred from ‘1800’, which in my humble view was not, and is not, an equilibrium process.
Sweeping generalisations about ‘nothing changed’ between 1300 and 1800 are not proven on the basis of what I have read so far to page 271, or that it is mystery why Babylon did not produce the IR, or China, etc. Cumulative changes did occur over the 500 years you identify, though not in the poorest majority’s subsistence (I believe that focus should not just be about calories). The crudest of produced artefacts entered consumption trends in considerable amounts, via ‘hand-me-downs’ from the discards of richer families and from cheap substitutes (from the evolving pedlar trader networks across Europe (see: Laurance Fontaine, 1996. ‘History of Pedlars in Europe’).
Economic history is not, in my humble view, a history of the subsistence fates of the majority of people (they have that in common with the majority of the history of the human race to the emergence of shepherding, agriculture and commerce and beyond). Economic history is the history of the consumption of the richer members of society. It’s what they, and their intellectual retainers, achieved in terms of creating an evolving economy and in building the knowledge base, while socially keeping the poor in their ‘place’ on subsistence and extracting from them the surplus for what we call civilisation. The economic history of the poor is pretty desperate, then and now. The existence of stone-built Europe could not have been achieved without some large share of the surplus output to feed rising populations being diverted to today’s ruins across Europe.
The economy that produced the common labourer’s coat, identified by Smith as an example of the existing extent of people’s inter-dependence across commercial societies and the concomitant growing absolute dependence individually, did not suddenly appear in 1800; it took centuries to reach the commercial levels of the 1760-76 examples drawn on by Adam Smith.
You ask why nothing changed ‘technologically’ after 1300. Among other things, including the slowly expanding knowledge base, the most important changes were dispersed in the commercial market that evolved, slowly and gradually. Despite all the set-backs, misleading policies, including mercantile political economy (and colonialism, jealousy of trade, warfare technology, especially marine) gross measures of output increased without raising per capita incomes, except in short periods, from growing populations. States of ‘Free trade’, with not much to trade in large enough volumes to make significant differences, are misleading. There were no regulations on bank credit in 1300 because there were no banks (only wealthy families, some of whom lent money). That England had a grain trade with the rest of Europe was hardly enough to promote what happened four of five centuries later, and wbut hich had to happen before what happened was able to happen. Consumption spending rose from Elizabethan times (mainly in new products – e,g., starch for fashionable clothes).
Development does not depend on ‘perfect’ institutions, so-called laissez-faire (certainly needed for Solow’s equilibrium growth model), and such like. If anything like perfect liberty were absolutely necessary for growth, paraphrasing Smith, no country in the world would have progressed (which is not the same as saying imperfect institutions and economic policies will always create growth).
In summary, what our debate is about is mainly your narrative remarks, not your data. You have made many important points in AFTA (I agree totally with Tyler Cowen on the importance of your book), prompting me to follow up your detailed cases by consulting your multiple references. Presently I am in France to the beginning of October without access to my library and the university’s resources. On my return, you may be assured that I will follow your references up closely. In the meantime, you may do yourself the courtesy of re-reading Adam Smith’s Wealth Of Nations and his Lectures On Jurisprudence. That way we will be both see where each of us is coming from. I don’t think we are all that far apart on fundamentals; but I will know more about that after the next section of AFTA.
Hence, I don’t regard our debate as competitive or akin to tennis match! My differences are with your narrative, so far as I have read it to page 271. From critical discourse there isn’t a ‘winner’ or a ‘loser’; there is only progressive improvement in the knowledge base.
Posted by: Gavin Kennedy at Sep 6, 2007 10:19:25 AM
Some important institutional changes -- some of them arguably radical improvements -- in England between 1300 and 1800:
* The mechanical clock, 14th century. The resulting rise of clock culture and the time wage may have slowly but radically improved the coordination and work habits of Europeans. Earlier adaptation to clock culture, a process that may take centuries to evolve, may explain the large discrepencies between European and many non-European laborer work habits that Clark cites.
* The printing press and the rise of book consciousness, which radically decreased the costs of teaching economically important knowledge to both children and adults. The rise of book consciosness, reflected in the literacy and book cost data Clark graphs, explains the most prominent puzzle revealed by Clark's data: the fact that skills and innovation rose dramatically even as the rewards to skills were stagnant or declined.
* Nationalization the Church in England and secularization of family law, 16th century.
* The incorporation of the Lex Mercatoria into the common law, and the resulting rise of modern contract law, 18th century. Indeed, much of this occured in the same decades as the start of the industrial revolution.
* The "Romanization" of property law, rendering land more freely saleable, divisible, and mortgageable, which Adam Smith noted was an important improvement still in process at his time.
* The rise of marine insurance (e.g. Lloyd's of London) and the associated rise of colonialism and world trade, 17th-18th century.
* The decline of guilds and monopolies, 16th-18th centuries. Medieval England was certainly not a highly competitive market economy. Commerce in goods was dominated rather by monopolies and a variety of price and quality controls instituted by guilds and towns.
Posted by: nick at Sep 6, 2007 9:17:06 PM
One thing that immediately occured to me when you mention the comparison of 1300 england to 1800 england, since I'm such a peacenik is wars.
Looking at the history of english wars, it's pretty darned full for most of the period of 1300-1800. There was hardly any time when they weren't in the middle of a major conflict. In fact, it's not at all surprising that 1300 might have been a big local maximum in living standards, considering that the next 150 years contained the disastrously pyrrhic first hundred years war, the black plague, and the wars of the roses.
That's a lot to come back from, and the near constant conflict between european states for the next 350 years probably did not help things.
There's also a huge shadow side element to consider in the run-up to 1800: the slave trade. It was booming. England and the US were the primary beneficiaries of this monstrous appropriation of human capital. Isn't it just possible that stealing the labor of millions of africans and their descendants gave rise to a critical mass of capital formation?
Posted by: Michael Sullivan at Sep 7, 2007 11:55:30 AM
I think France, Spain and Portugal were also involved in the same slave trade to a similar extent (Thomas Sowell says most slaves were sent east from africa rather than west, but they were used as servants rather than agricultural laborers), so England doesn't seem to stand out there. The last country in the western hemisphere to abolish slavery was Brazil.
Posted by: TGGP at Sep 7, 2007 1:23:06 PM
Although I unfortunately haven’t read Mr. Clark’s book, I would like to add some ideas to one of the main contentions discussed: that the Industrial Revolution was part of a larger trend. I would like to add several developments to those detailed by ‘nick’s excellent post.
In fact I don’t know where Mr. Clark discusses it, but a major milestone in the timespan from 1300 to 1800 is the ‘revolution’ in ship technology in the period from 1450 to 1650 in in Portugal, Spain, Italy and the Netherlands-Belgium (territories linked to the Habsburg-Spanish Empire of the day).
Of course this development in technology is linked to the incentives (i.e. expected profits) to apply this technology: First, the impulse by the Portuguese kings and merchants to circumnavigate the African continent and reach India and China and then the massive expected rewards from the exploration and conquest of the American continent (and thereafter, commercial endeavours linked to it).
One of the many benefits of this, as was beautifully stated by the great writer Stefan Zweig, may have been that most food ceased to be insipid thanks to the generalization of the use of spices. However, this is impossible to measure in ‘cardinal welfare’ terms…
I have also read that there was a major change in the legislation of commerce with the colonies in the 17th century, at least in Spanish and French colonies, although this could be checked for accuracy. I suppose also in English and Dutch ones. They could have benefited from more open and safer trade –although piracy and state-granted monopolies were still rampant until the 19th century. This could have added enormously to the Smithian opportunities for the division of labour, and therefore to incentives to apply the Watt engine. It should also be noted in this respect that a major element for the development of the textile industry in Britain was the ready availability of cheap cotton from the Southern british colonies of North America.
Finally, regarding the emergence of such a revolution in Western Europe, some ideas with Tullockian flavour: it might have had something to do with the intense competition of several nation states since the 15th century for a better development of commerce –which was understood more and more as the source of power. England, in fact, could have learnt a lot from its successful neighbour Holland, who had set the ‘best practices’ for an environment favourable to commercial endeavours. The ‘monopolistic’ Chinese government, instead, had no competitors (no better-performing neighbours) and no incentive to change…
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