In Dusty Archives, a Theory of Affluence
Review - A Farewell to Alms - Industrial Revolution - Human Population - New York Times
By NICHOLAS WADE Published: August 7, 2007
For thousands of years, most people on earth lived in abject poverty,
first as hunters and gatherers, then as peasants or laborers. But with
the Industrial Revolution, some societies traded this ancient poverty
for amazing affluence.
Historians and economists have long struggled to understand how this
transition occurred and why it took place only in some countries. A
scholar who has spent the last 20 years scanning medieval English
archives has now emerged with startling answers for both questions.
Gregory Clark, an economic historian at the University of California,
Davis, believes that the Industrial Revolution — the surge in economic
growth that occurred first in England around 1800 — 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.
Dr. Clark’s
ideas have been circulating in articles and manuscripts for several
years and are to be published as a book next month, “A Farewell to
Alms” (Princeton University Press). Economic historians have high
praise for his thesis, though many disagree with parts of it.
“This is a great book and deserves attention,” said Philip Hoffman, a historian at the California Institute of Technology.
He described it as “delightfully provocative” and a “real challenge” to
the prevailing school of thought that it is institutions that shape
economic history.
Samuel Bowles, an economist who studies
cultural evolution at the Santa Fe Institute, said Dr. Clark’s work was
“great historical sociology and, unlike the sociology of the past, is
informed by modern economic theory.”
The basis of Dr. Clark’s
work is his recovery of data from which he can reconstruct many
features of the English economy from 1200 to 1800. From this data, he
shows, far more clearly than has been possible before, that the economy
was locked in a Malthusian trap _ — each time new technology increased
the efficiency of production a little, the population grew, the extra
mouths ate up the surplus, and average income fell back to its former
level.
This income was pitifully low in terms of the amount of
wheat it could buy. By 1790, the average person’s consumption in
England was still just 2,322 calories a day, with the poor eating a
mere 1,508. Living hunter-gatherer societies enjoy diets of 2,300
calories or more.
“Primitive man ate well compared with one of the richest societies in the world in 1800,” Dr. Clark observes.
The
tendency of population to grow faster than the food supply, keeping
most people at the edge of starvation, was described by Thomas Malthus
in a 1798 book, “An Essay on the Principle of Population.” This
Malthusian trap, Dr. Clark’s data show, governed the English economy
from 1200 until the Industrial Revolution and has in his view probably
constrained humankind throughout its existence. The only respite was
during disasters like the Black Death, when population plummeted, and
for several generations the survivors had more to eat.
Malthus’s
book is well known because it gave Darwin the idea of natural
selection. Reading of the struggle for existence that Malthus
predicted, Darwin wrote in his autobiography, “It at once struck me
that under these circumstances favourable variations would tend to be
preserved, and unfavourable ones to be destroyed. ... Here then I had
at last got a theory by which to work.”
Given that the English
economy operated under Malthusian constraints, might it not have
responded in some way to the forces of natural selection that Darwin
had divined would flourish in such conditions? Dr. Clark started to
wonder whether natural selection had indeed changed the nature of the
population in some way and, if so, whether this might be the missing
explanation for the Industrial Revolution.
The Industrial
Revolution, the first escape from the Malthusian trap, occurred when
the efficiency of production at last accelerated, growing fast enough
to outpace population growth and allow average incomes to rise. Many
explanations have been offered for this spurt in efficiency, some
economic and some political, but none is fully satisfactory, historians
say.
Dr. Clark’s first thought was that the population might
have evolved greater resistance to disease. The idea came from Jared
Diamond’s book “Guns, Germs and Steel,” which argues that Europeans
were able to conquer other nations in part because of their greater
immunity to disease.
In support of the disease-resistance idea,
cities like London were so filthy and disease ridden that a third of
their populations died off every generation, and the losses were
restored by immigrants from the countryside. That suggested to Dr.
Clark that the surviving population of England might be the descendants
of peasants.
A way to test the idea, he realized, was through
analysis of ancient wills, which might reveal a connection between
wealth and the number of progeny. The wills did that, , but in quite
the opposite direction to what he had expected.
Generation after
generation, the rich had more surviving children than the poor, his
research showed. That meant there must have been constant downward
social mobility as the poor failed to reproduce themselves and the
progeny of the rich took over their occupations. “The modern population
of the English is largely descended from the economic upper classes of
the Middle Ages,” he concluded.
As the progeny of the rich
pervaded all levels of society, Dr. Clark considered, the behaviors
that made for wealth could have spread with them. He has documented
that several aspects of what might now be called middle-class values
changed significantly from the days of hunter gatherer societies to
1800. Work hours increased, literacy and numeracy rose, and the level
of interpersonal violence dropped.
Another significant change in
behavior, Dr. Clark argues, was an increase in people’s preference for
saving over instant consumption, which he sees reflected in the steady
decline in interest rates from 1200 to 1800.
“Thrift, prudence,
negotiation and hard work were becoming values for communities that
previously had been spendthrift, impulsive, violent and leisure
loving,” Dr. Clark writes.
Around 1790, a steady upward trend in
production efficiency first emerges in the English economy. It was this
significant acceleration in the rate of productivity growth that at
last made possible England’s escape from the Malthusian trap and the
emergence of the Industrial Revolution.
In the rest of Europe and
East Asia, populations had also long been shaped by the Malthusian trap
of their stable agrarian economies. Their workforces easily absorbed
the new production technologies that appeared first in England.
It
is puzzling that the Industrial Revolution did not occur first in the
much larger populations of China or Japan. Dr. Clark has found data
showing that their richer classes, the Samurai in Japan and the Qing
dynasty in China, were surprisingly unfertile and so would have failed
to generate the downward social mobility that spread
production-oriented values in England.
After the Industrial
Revolution, the gap in living standards between the richest and the
poorest countries started to accelerate, from a wealth disparity of
about 4 to 1 in 1800 to more than 50 to 1 today. Just as there is no
agreed explanation for the Industrial Revolution, economists cannot
account well for the divergence between rich and poor nations or they
would have better remedies to offer.
Many commentators point to
a failure of political and social institutions as the reason that poor
countries remain poor. But the proposed medicine of institutional
reform “has failed repeatedly to cure the patient,” Dr. Clark writes.
He likens the “cult centers” of the World Bank and International Monetary Fund to prescientific physicians who prescribed bloodletting for ailments they did not understand.
If
the Industrial Revolution was caused by changes in people’s behavior,
then populations that have not had time to adapt to the Malthusian
constraints of agrarian economies will not be able to achieve the same
production efficiencies, his thesis implies.
Dr. Clark says the
middle-class values needed for productivity could have been transmitted
either culturally or genetically. But in some passages, he seems to
lean toward evolution as the explanation. “Through the long agrarian
passage leading up to the Industrial Revolution, man was becoming
biologically more adapted to the modern economic world,” he writes.
And, “The triumph of capitalism in the modern world thus may lie as
much in our genes as in ideology or rationality.”
What was being
inherited, in his view, was not greater intelligence — being a hunter
in a foraging society requires considerably greater skill than the
repetitive actions of an agricultural laborer. Rather, it was “a
repertoire of skills and dispositions that were very different from
those of the pre-agrarian world.”
Reaction to Dr. Clark’s thesis
from other economic historians seems largely favorable, although few
agree with all of it, and many are skeptical of the most novel part,
his suggestion that evolutionary change is a factor to be considered in
history.
Historians used to accept changes in people’s behavior
as an explanation for economic events, like Max Weber’s thesis linking
the rise of capitalism with Protestantism. But most have now swung to
the economists’ view that all people are alike and will respond in the
same way to the same incentives. Hence they seek to explain events like
the Industrial Revolution in terms of changes in institutions, not
people.
Dr. Clark’s view is that institutions and incentives have
been much the same all along and explain very little, which is why
there is so little agreement on the causes of the Industrial
Revolution. In saying the answer lies in people’s behavior, he is
asking his fellow economic historians to revert to a type of
explanation they had mostly abandoned and in addition is evoking an
idea that historians seldom consider as an explanatory variable, that
of evolution.
Most historians have assumed that evolutionary
change is too gradual to have affected human populations in the
historical period. But geneticists, with information from the human genome
now at their disposal, have begun to detect ever more recent instances
of human evolutionary change like the spread of lactose tolerance in
cattle-raising people of northern Europe just 5,000 years ago. A study
in the current American Journal of Human Genetics finds evidence of
natural selection at work in the population of Puerto Rico since 1513.
So historians are likely to be more enthusiastic about the medieval
economic data and elaborate time series that Dr. Clark has
reconstructed than about his suggestion that people adapted to the
Malthusian constraints of an agrarian society.
“He deserves kudos
for assembling all this data,” said Dr. Hoffman, the Caltech historian,
“but I don’t agree with his underlying argument.”
The decline
in English interest rates, for example, could have been caused by the
state’s providing better domestic security and enforcing property
rights, Dr. Hoffman said, not by a change in people’s willingness to
save, as Dr. Clark asserts.
The natural-selection part of Dr.
Clark’s argument “is significantly weaker, and maybe just not
necessary, if you can trace the changes in the institutions,” said
Kenneth L. Pomeranz, a historian at the University of California,
Irvine. In a recent book, “The Great Divergence,” Dr. Pomeranz argues
that tapping new sources of energy like coal and bringing new land into
cultivation, as in the North American colonies, were the productivity
advances that pushed the old agrarian economies out of their Malthusian
constraints.
Robert P. Brenner, a historian at the University of
California, Los Angeles, said although there was no satisfactory
explanation at present for why economic growth took off in Europe
around 1800, he believed that institutional explanations would provide
the answer and that Dr. Clark’s idea of genes for capitalist behavior
was “quite a speculative leap.”
Dr. Bowles, the Santa Fe
economist, said he was “not averse to the idea” that genetic
transmission of capitalist values is important, but that the evidence
for it was not yet there. “It’s just that we don’t have any idea what
it is, and everything we look at ends up being awfully small,” he said.
Tests of most social behaviors show they are very weakly heritable.
He
also took issue with Dr. Clark’s suggestion that the unwillingness to
postpone consumption, called time preference by economists, had changed
in people over the centuries. “If I were as poor as the people who take
out payday loans, I might also have a high time preference,” he said.
Dr.
Clark said he set out to write his book 12 years ago on discovering
that his undergraduates knew nothing about the history of Europe. His
colleagues have been surprised by its conclusions but also interested
in them, he said.
“The actual data underlying this stuff is
hard to dispute,” Dr. Clark said. “When people see the logic, they say
‘I don’t necessarily believe it, but it’s hard to dismiss.’ ”
August 7, 2007 at 10:21 PM in Consumer trends | Permalink
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