A Farewell To Alms: Why Did The Industrial Revolution Happen Where It Did?

An ambitious and provocative new
book by University of California at Davis economic
historian Gregory Clark,

A Farewell to Alms: A Brief Economic History of the
World
attempts to
explain two huge questions:

  • Why did one part of the human
    race finally break out of the

    "Malthusian trap"
    —in which growth in per
    capita income is washed away by subsequent
    population growth—namely England, at the end of the
    18th Century, through rapid and sustained
    technological advance?

  • And why did the prosperity made
    possible by the Industrial Revolution successfully
    spread to some countries but not to others?

In the process, Clark offers a
stunning rebuke to economists:

"God
clearly created the laws of the economic world in order
to have a little fun at economists` expense. In other
areas of inquiry, such as the

physical sciences
, there has been a steady
accumulation of knowledge over the past four hundred
years. … In economics, however, we see instead that our
ability to describe and predict the economic world
reached a peak around 1800. In the years since the
Industrial Revolution there has been a progressive and
continuing disengagement of economic models from any
ability to predict

differences of income and wealth
across time and

across countries and regions.
"

In other words, economists were
closer to understanding the

wealth of nations
in 1776 when Adam Smith wrote

The Wealth of Nations
than they are today.

The pioneering economic works of
Smith and

Thomas Malthus
(1798) accurately described the world
before the

Industrial Revolution
that was just getting underway
then with the employment of the

steam engine
in cotton mills. By 1817, when

David Ricardo
was pessimistically propounding what
later came to be known as

"the Iron Law of Wages,"
England was moving in a new, liberating
direction unexpected by economists.

In the modern world, a shortage of
cheap labor
turned out to be a blessing rather than
a curse. The future belonged to countries with

high wage, high quality work forces.

But the prestige of the economists
and their

Scroogeonomic
emphasis on cheap labor was so great
that Britain didn`t even effectively outlaw the use of
five-year-old boys as

chimney sweeps
until 1875.

Clark`s book idiosyncratically
combines the strengths and weaknesses of both economists
and historians.

Although economists were long the
butt of

angry jokes
, the improvement of the

economy
after the

early 1980s
has raised their prestige and

self-confidence.
As shown by the

three million copies
sold of Steven Levitt`s Freakonomics,
economists are the hot academics of the moment, the
glamour professors, just as cultural anthropologists
were back in

Margaret Mead
`s heyday in the 1950s.

The strong point of economists is
that they believe in "theory"
in the same sense that

hard scientists
do—as a tool for simplifying our
understanding of reality and for making more accurate
predictions. (In contrast,

professors of English literature
use the word "theory"
to mean the hateful mumbo-jumbo that they wield as a
barrier to entry to their otherwise appealing
profession—a barricade of

bad writing
that repels many of the huge number of
people who love good writing and would otherwise want to
be English professors.)

Yet, because economists have
mastered some theory (they`re particularly proud about
understanding

Ricardo`s concept of comparative advantage
in

international trade
), they tend to view reality not
as what needs to be explained but as a vague inspiration
for the occasional stylized example to illustrate their
theories.

In particular, economists don`t
read much by non-economists. Just as their theory would
predict, economists are driven by self-interest, and
their profession does not much reward curiosity about
anything written by outsiders. So a certain smug
ignorance is widespread among economists (as we`ve seen

repeatedly
in the

immigration debates
).

It`s

become common
recently to describe economists as
"autistic"
.
But there`s no need for that. The word "sophomoric"
already exists.

In sharp contrast to economists,
historians

love facts
and hate theories, a predilection that
has the opposite advantages and disadvantages.
Historians tend to be omnivorously curious and humble
about how much they don`t know. On the other hand, their
love of detail makes them less likely to see the big
patterns. And their emphasis on the uniqueness and
complexity of events makes them prejudiced against
predictions. Which means that while they are less often
wrong than scientists, they are also less often right.

In the uneasy middle reside the

economic historians
.

Economic historian Gregory Clark
begins

A Farewell to Alms
with a description of
Malthusian England from 1200-1800. Due to England`s
wonderful stability, we have legal documents about
property ownership and other economic facts going back
800 years.

Even though

medieval England
had a free market economy with
negligible taxes, and while the lives of the affluent
improved due to inventions such as eyeglasses and the
printing press, farm laborers saw no increase in their
daily calorie intake over these 600 years. Indeed, the
vast working class ate best in the generations after the

Black Death
of the mid-14th Century killed off a
sizable fraction of the population, leaving more land
and thus more of the

roast beef
of merrie olde England per survivor.

It`s important to remember,
however, that life didn`t always seem as depressing to
the English at the time as Clark often makes it sound.
In the depths of the Malthusian trap of the late 16th
Century, for example,

one Englishman
described

his native land
as:

"This
royal throne of kings, this sceptred isle,
This earth of majesty, this seat of Mars,
This other Eden, demi-paradise …
This blessed plot, this earth, this realm, this
England."

And despite their poverty,
Malthusian-era English workers at least lived better
than their counterparts in much more crowded

China
and

Japan
. That`s in part because they practiced
population control through self-discipline, postponing
marriage until they could afford it. Women didn`t marry
on average until age 24 to 26, and a minority never
married. (Illegitimate births only made up 3-4 percent
of the total.) As

Jane Austen`s
novels show,

marriage
was a serious business revolving around
love and money.

In contrast, the Chinese tended to
marry in their late teen years. So populations would
rapidly ascend to the maximum that current farming
techniques could support under good government, then
crash during spells of bad government—most recently in
the early 1960s, when tens of millions of

Chinese
starved to death following

Mao`s
misbegotten

Great Leap Forward
.

Clark`s most important original
research involves tabulating a couple of thousand wills
from Will Shakespeare`s era. Although today we expect
the

poor to have more children
than

the rich,
the opposite was true before the
Industrial Revolution. The richest testators` had twice
as many surviving children as the poorest. Therefore,
laborers tended to die out, while the lineages of the
successful flourished.

Thus the modern English are
descended primarily from well-to-do farmers
. In
contrast, nobles

tended to kill each other off
—from 1330 to 1479, 26
percent of male aristocrats died violently—and townsmen
often died of diseases.

So the English are mostly the
offspring of what Clark calls "the strivers" of
generations past: the people who farmed hard and
effectively and saved their money to buy more land.  

From this, Clark deduces an
explanation for the rise and spread of the Industrial
Revolution that has surprised the economics profession.

As Nicholas Wade, the genetics
reporter of the New York Times, explained in his
August 7, 2007 article

In Dusty Archives, a Theory of Affluence
, Clark
believes the Industrial Revolution

"…
occurred because of a change in the nature of the human
population. The change was one in which people gradually
developed the strange new behaviors required to make a
modern economy work. The middle-class values of

nonviolence
,

literacy
, long working hours and a

willingness to save
emerged only recently in human
history, Dr. Clark argues. Because they grew more common
in the centuries before 1800, whether by cultural
transmission or evolutionary adaptation, the English
population at last became productive enough to escape
from poverty, followed quickly by other countries with
the same long agrarian past."

For example, interest rates were
much higher in the past until the last few centuries.
Clark argues that this is because the supply of savings
was lower, due to people being more impulsive.

Clark writes:


"Through the long agrarian passage leading up to the
Industrial Revolution, man was becoming biologically
more adapted to the modern economic world. … The triumph
of capitalism in the modern world thus may lie as much
in our genes as in ideology or rationality."

Is Clark`s Darwinian explanation
plausible?

The crucial thing to realize about
A Farewell to Alms is that Clark is trying to
answer these two very different types of questions with
one response.

  • Why the Industrial Revolution
    happened in England in the late 18th Century—rather
    than in, say, the

    Low Countries,
    or the Ruhr Valley, or

    Japan
    at some other time

This is a historian`s question
because it`s a unique event. There`s no point in
developing a general theory about where and when the
Industrial Revolution is most likely to take place,
because—assuming the entire world does not descend into
a
Mad Max
post-apocalyptic wasteland—it will
never happen again.

Nor does there seem to be much
point in looking for genetic differences that would
explain why the Industrial Revolution happened in
England rather than in, say,

Holland
.

Another researcher
into wills has found the same
pattern of the rich out-reproducing the poor in
centuries past in Austria and southern Germany; it`s
been found among the

Ashkenazi Jews
of medieval Europe; and it probably
will be found in many places at many times when others
bother to look.

Similarly, Northeast Asia`s
offshore islanders, the Japanese, are awfully bourgeois
today, with higher savings rates and

lower crime rates
than the

English
, so I don`t think Clark`s theory of how the
bourgeois virtues were selected for in the English will
serve to explain why the Japanese didn`t invent the
steam engine.

My guess is that the Industrial
Revolution took both middle class habits of mind,
for which the Japanese had evolved plenty of capability,
and a little of the "zigzag
lightning in the brain
"
that the Japanese have
always claimed they lack in comparison to the more
innovative Europeans.

If the question is, "Why did
England rather than mainland Europe invent the modern
world?"
I`d turn once again to

John of Gaunt`s speech
in Richard II in which
he describes the advantages of isolation on an island:


"This fortress built by Nature for herself
Against infection and the hand of war"

Paul Johnson wrote in A History of the English People
that:


"Isolation … is the most consistent single thread
running through the tapestry of English history. … It
does not preclude contacts, exchanges, cooperation: but
it inhibits the systematic involvement with the
land-mass which diminishes, and in the end destroys, the
island privilege."

In contrast, Clark`s second
question—Why have the blessings of the Industrial
Revolution spread to some countries but not to
others?—is more important for the future. It can tell us
something about where we`re all going to live the rest
of our lives—and our children, in their lives.


I`ll review this second question and spell out Clark`s
implications more explicitly than he does next week.


[Steve Sailer (
email
him) is founder of the Human Biodiversity Institute and

movie critic

for

The American Conservative
.
His website


www.iSteve.blogspot.com

features his daily blog.]