“The best and most accurate review”

The Social Darwinism pseudo-thesis of Farewell to Alms has generated the most heat, but the book’s discussion of the causes and timing of the Industrial Revolution generates the most light. To that point, NotSneaky nominates this as “the best and most accurate review” of Clark’s book:

I learned several very important insights from this book. I will list a few:
1- The typical dating of the transition out of the Malthusian equilibrium is probably off by a century or two. This is so because the high productivity growth sectors had a very low weight in output (because productivity increases in the largest sector – agriculture – were low). Weighting growth by the sectoral weights of a later date reveals a break in productivity trends somewhere back in the 17th century. To me this is interesting because I think that what was key was the emergence of activities much less intensive in land and so more scalable. But at low levels of income people spend most of their income in food, thus trapping the economy in an agricultural-centered process, where the Malthusian mechanism of population growth causing declines in income more chance to work. This opens up other explanations for the Industrial Revolution that remain to be explored.

2- It is hard to argue that the lack of diffusion of the industrial revolution in the XIX century was any of the usual suspects in today’s most wanted list: poor institutions, lousy finance, lack of human capital. Within the British empire (e.g. in India) property rights were secure, financial markets were pretty open and efficient and there was quite massive transfers of managerial know-how through out-migration of British managers and skilled workers. The slow spread of the industrial revolution in the XIX century is an important puzzle to which the current development debate – which gets most of its intuitions from the post 1960 datasets needs to propose a convincing explanation. Contrary to Dani’s opinion, I do find Clark’s evidence of the textile industry in the XIXth century interesting, even if today cars in South Africa or textiles in China are produced with world-class productivity. It points, in my mind, to some other missing factor that is not a usual suspect.

Sorry gnxp, the genetic (or more likely cultural) drift suggested in the book is not its most important contribution. It is suggestive and it will be interesting to see how people pick up this thread ((I’ve been reading Richerson and Boyd for theories on cultural transmission.)), but Clark’s lasting contribution is his annoying habit of knocking down theories. Defenders of human capital or institutional explanations of the Industrial Revolution, and growth in general, will have no choice but to address Clark’s data and reasoning.

1 thought on ““The best and most accurate review””

  1. Sorry gnxp, the genetic (or more likely cultural) drift suggested in the book is not its most important contribution.

    agreed. but the genetics is all i can speak to with any competence.

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