From what I've seen, historians don't respect Diamond or buy his arguments and never did. But historians also don't seem to have any alternative explanation. It may be that society is just too complicated for us to ever have a true explanation.
Professional historians seem to truly hate Diamond while not offering any alternative explanation other than "the West did a racism and everything is bad because of that", so make of that what you will.
An important question, but a distinct one. It may well be the case that the Europeans had key advantages in weaponry and ships that enabled colonization, but that these would not have led to massive divergences in wealth without colonization.
This seems really clear. Furthermore, the book and review ignore the crucial point that colonizers too huge steps to *prohibit* industrialization in the colonies and focus them on resource extraction and as a market for British industrial goods (https://en.wikipedia.org/wiki/Navigation_Acts). American independence was thus a prerequisite for the Hamilton-style development plan, and it's no wonder why India didn't develop similarly.
It seems to be even worse for India : AFAIK they had since antiquity the best steel in the world : crucible steel, then after the English more or less managed to replicate its fabrication in the 18th-19th century, they basically destroyed the Indian steel industry (either directly or indirectly) ?
"This timing only makes sense because India was colonized in the 1700s and China wasn't semi-colonized until the 1800s."
The Chinese population growth was caused by New World crops; the Indian stagnation was due to the collapse of the Mughal Empire, which was not due to imperialism.
"Institutions and wages aren't nearly as important as having the right natural resources and control of colonies and trade routes."
Yes, they are; the Netherlands was closer to Britain than anywhere else in the world. How do you explain the strong correlation between eighteenth century literacy and interest rates (both a product of some mix of institutions and human capital) and future growth?
The collapse of the Mughal Empire is a really puzzling one... what even happened there, for the most powerful country in the world to collapse like this ?!?
I checked the book and saw that it does not deal with the ascension of parliaments as a possible explanation for the great divergence, even though it fits: the first parliamentary countries in Europe were the first to take off. The first continent with parliamentary systems was the first to take off. The first Asian country to incorporate parliamentary model was the first to take off. Parliamentary countries are on average much richer than other countries today. Wish it would deal with it, even if to disprove...
South America's recently independent contries had parliaments. Brazil has a parliament since the early 1820s. It was not always empowered and independent, but was Japan's? And what about China, Taiwan, Korea and Japan? How relevant were their parliaments in their early stages of economic rowth? Having a parliament (even a make-believe one) might be signaling you are trying to imitate Western institutions., but I do not see much besides it.
Having a parliament is a step for making it the main source of power. South America's parliaments were very weak, both de jure and de facto. Japan's parliament really had significant power. There's also statistical evidence, political science theory, etc, which points to benefits of parliamentarism.
"South America's parliaments were very weak, both de jure and de facto."
Weaker than the Chinese, Korean and Taiwanese dictatorships' ones? Weaker than the Japanese one, easily swept away by militarism? It can not be serious. India and Brazil obviously have a stronger parliamentary tradition than pre-1945 Japan and basically all East Asia before it grew rich. It makes more sense to say development brought parliamentarism to Asia than the other way around.
Japan's parliament (the Diet) only came in in 1890, and they'd modernized enough to win the Sino-Japanese War against a nation with more than ten times their population by 1893, so I don't think it can be the main source of its success.
And even after that, it was more like the 17th- or 18th- century English parliament, or the German Imperial diet than it was like the 20th-century one - it had power over the budget, which gave it a lot of importance, but the emperor (or, in practice, the senior ministers) could choose anyone they liked to form a government, provided the new government could (a) get stuff through the diet, and (b) neither the army nor the navy vetoed it.
But parliamentary ideology had been fermenting in Japan for a long time, with implications in its policies. Oligarchies were so enamored of Western ideologies that Torio Koyata, a political thinker of the time was shocked with the "political self-interest of the ruling oligarchy as well as the unpredictable popularity of Western ideals of governance and the discourse on 'civilization and enlightenment.'" as can be read in Chapter 2 of the recent PLANTING PARLIAMENTS IN EURASIA, 1850–1950, by Egas Moniz Bandeira (https://www.taylorfrancis.com/books/oa-edit/10.4324/9781003158608/planting-parliaments-eurasia-1850%E2%80%931950-ivan-sablin-egas-moniz-bandeira)
And this relates to my main argument - what is important is the general direction of the power shifts. Parliamentarism advanced a lot from the second half of the 19th century to the early 20th century, it declined with the concentration of powers on the Emperor which led to Japan being a member of the Axis in WW2, and it increased again after the war, to higher levels than ever before.
Another excerpt: "As a matter of fact, for the most part of the well-nigh 300 years that the Tokugawa government ruled Japan, there are no traces of the intellectual debates having exerted an influence on actual governance. The central government recognized the autonomy of the local governments, and the local governments tacitly recognized the separate authority of the central government. In this regard, the impotence of the intellectuals might be evidence that the fundamental structure of such a political system was not the object of the debates, but a premise for them. However, contact with Western countries changed this situation. Several powerful local governments became aware of the benefits of autonomy, and, contrary to the intentions of the central government, aimed at dealing with Western countries on their own, sometimes being even prepared to go to war. Intellectual debates about hōken and gunken, which had theretofore been empty armchair discussions, became extremely real disputes in that time."
Or this: "It was not the “Meiji” revolutionary government trying to seize the Kinri’s powers which first seriously investigated the introduction of a parliamentary system, but rather the Edo “ancien régime.” In a situation in which the new and old forces were competing with each other and a temporary cease-fire in the form of a “restoration of royal government” (ōsei fukko王政復古) was reached, the aim was to control the momentum of the new powers by proposing a new political system.
It was Nishi Amane 西周 (1829–1897), who had studied in the Netherlands with Simon Vissering (1818–1888), who shouldered a concrete draft for an institutional system.19 As has been described, the Edo government, being a hereditary military government, did not necessarily value intellectuals highly. However, on account of the acute political crisis at the end of this government, the Edo government began to slowly recognize the importance of intellectuals and knowledge. Nishi Amane is a good example thereof."
I agree completely that parliamentary ideology had been fermenting in Japan for a long time. I agree completely that Japanese intellectual leaders were enamored by the idea, and I agree that the tendency towards parliamentarism was increasing in Japan from Perry until the early 20th century.
But I'm not sure about the rest of what you're saying. I don't see how a parliament can do good in the twenty years before it comes into existence. I don't think that power was concentrated in the emperor before WW2 - as far as I can tell by my knowledge of the situation (sourcing: "Japan's Imperial Army - It's Rise and Fall", but also "Japan Under Taisho Tenno," "Imperial Japan: 1926-1928," and, for the early part, "Samurai Revolution,") the emperor had constitutionally infinite power, but the actual exercise of this power was strictly limited by convention, and the only real changes were:
A, when the formation of a Shogunate meant there was a military dictator who could ignore the unwritten constitution,
B, when, after the Meiji restoration, the emperor reigned but left ruling in the hands of his senior ministers, in particular the Genro. (https://en.wikipedia.org/wiki/Genr%C5%8D),
And, C, when the first generation of oligarchs died off, new laws were passed requiring the Minister of War to be an active general and the Minister of the Navy to be an active admiral. If this is what you mean by 'concentrating power on the Emperor', I think that's a strange and misleading term for it; it concentrated power on the army and the navy. If not - Meiji had theoretically unlimited power, and I'm not really convinced that Showa had any more or less in practice: both of them were living gods raised to reign rather than rule, and I don't see any significant change until the end of WW2.
Thanks for the response. I'm using this as a chance to learn more about Japanese history in light of the parliamentary theory. I must look out not to become entrenched in a view. My source of conviction for the parliamentary explanation of the great divergence comes from a combination of evidence and theory from various sources, but it's like smoking and cancer, not all cases will have to fit for the hypothesis to be true.
Still, I believe Japan still has elements that make it fit. Brennan and Hamlin make the distinction of the vertical separation of powers and the horizontal separation of powers. The vertical separation of powers will give full powers over a domain (geographic, thematic). The horizontal separation of powers will divide the powers to decide between various people. The horizontal separation of powers allows societies not to rely on the inefficient vertical separation, where each person will have a little monopoly over specific domains. The horizontal separation allows for the benefits of centralization without the risk of absolute power. I would argue that a) the parliamentary system is characterized by a reliance on division of powers instead of separation and b) that Japan moved decisively in that direction since the Meiji Restoration. The fact that the ruling came from the senior ministers, instead of the power of shoguns over their domains, points to that division of powers. (With respect to the emperor's power, I was quoting from memory, and a search did not leave me convinced of it. So I retract that. )
Clearly this centralization was not a clear-cut thing, since, as mentioned above, local governments also had their own will which often conflicted with central government. These processes almost never are. Interestingly, these local governments had their own assemblies, pointing to the influence of parliamentarism.
Lastly, I would argue that even if the early modernization of Japan had nothing to do with incipient parliamentarism, the fact that Japan kept rising still may.
Consider the situation from the contrary vantage point. Is it evidence _against_ the parliamentary hypothesis that the first country to rise in Asia was the first to adopt parliamentarism?
I am incredibly into Japanese history in this period, basically just because I think 'how do we get third-world countries to westernize' is Really Important, and Japan is the biggest (and most tragic) success story. For the Meiji restoration, I really, really like Romulus Hillsborough and his "Samurai Revolution," but "Japan's Imperial Army - It's Rise and Fall" is interesting but incredibly in-depth.
And I definitely agree that Japan moved in that direction. Pretty clearly, there was a panic among the Japanese elites after Perry; the 'founding myth' of the Shogunate was that the Shogun had the job of defending Japan from foreign intrusion, and when the Shogunate proved itself incapable of doing so, it lost legitimacy and swiftly collapsed. What you got as the new ideology was 'we need to build up our strength and economy as desperately as possible', and the abolition of the entire feudal system (!) did not provoke any kind of revolt until after it was settled (https://en.wikipedia.org/wiki/Abolition_of_the_han_system + https://en.wikipedia.org/wiki/Satsuma_Rebellion), as far as I can tell basically just because everyone in the elite had, by that point, been forced to recognize that feudalism didn't work, and they were looking for something that did.
"Lastly, I would argue that even if the early modernization of Japan had nothing to do with incipient parliamentarism, the fact that Japan kept rising still may."
So... my model is actually that Japan rose because it had an elite that was competent and sensible, and stopped rising because it was replaced by an elite that was incompetent and crazy. As Yudkowsky commented at one point, all organizations tend to devolve into LARPing that organization, as (my words) people pursue the sensation of being important, instead of their organization's goals. There was a very brief period where Japan actually realized, "if we continue the way we have been, our nation will be conquered by foreigners," in which they were desperately scrambling to westernize, and then, well...
Then their initial leadership died off, they won the Russo-Japanese War and WW1, and they stopped thinking "we need to get the right answer" and started thinking "we need to act in a manner befitting our great nation" and it all went to pieces from there.
Because it is worth noting that it all went to pieces. Entering WW2 was not a smart decision for Japan; I haven't found *any* historian who actually thinks it had any chance of winning the war. It was putting more and more of its resources into the army and navy, then looking around for something to do with them, and I actually think that more parliamentarism would have helped it avoid this critical mistake - the Army was relying quite heavily on a near-unlimited ability to censor reports to ensure that it got the support it needed, and if it had had less power, someone might have been able to say "Um, this is stupid" at some point before the Second World War broke out and get away with it.
"Consider the situation from the contrary vantage point. Is it evidence _against_ the parliamentary hypothesis that the first country to rise in Asia was the first to adopt parliamentarism?"
It is evidence that you may be confusing correlation and causation. Japan sent out a massive expedition to study everything that other countries were doing (https://en.wikipedia.org/wiki/Iwakura_Mission), then copy everything that made the most successful countries successful. They tried to copy the German army and British navy, and to hybridize the German and British political systems into one of their own, along with switching to a Western economic model. Some subset of these changes clearly helped, no doubt about it - but we don't know which ones, and saying 'the key change was parliament' might be less accurate than 'the key change was a willingness of (almost) the entire society to westernize behind unified leadership without fighting major civil wars about it'.
I am by no means a specialist in Japanese history, but like you I care a lot about how third world countries may develop. I don't like to say "Westernize" because there are several other things associated with the idea of the West which other countries may not want to adopt. Development is by definition the aspects of Westernization which all countries would want to emulate.
I would agree that it would be a confusion of correlation with causation if that was the only case I was examining. But it is not. As I mentioned, there is theory and evidence from political science, history, economics, auxiliary evidence from local government and from corporations that parliamentarism is behind these advances.
Basically all countries attempted to modernize and get rich. The ones that succeeded in a consistent way invariably relied upon very strong parliaments (yes, even the United States).
If you care deeply about the question, I would suggest you consider parliamentarism as an answer, which I'm not sure you have. You say "we don't know which ones", but I would claim we do. I know it's a bold claim, yet I stand by it...
For the record, something I'm not sure I stated: I actually do think democracy is real, important, and works. I just think that it's a secure method for guaranteeing leaders of at least moderate competence (and preventing civil wars), but that it is also possible for a country to randomly get super-competent leaders who prevent civil wars due to skill and for this country to work fine without being a democracy thanks to getting super lucky with its leadership - until these leaders die.
Did they have parliaments or elected legislatures? AFAIK they mostly imitated the US presidential constitution, which may have been a fast track to strong-man rule.
Whatever they are/were, they are/were certainly stronger than any East Asian Parliament has ever been before Asia grew rich in the second halth of the 20th Century, except maybe the American Occupation-backed one in Japan and Singapore's. Singapore is not exactly my favorite example of parlamentary democracy, and the Japanese Parliament does not explain Japan rise pre-WW II. South Korea, Taiwan and China grew rich(er) under strongman regimes. Even now, Taiwan and South Korea mix aspects of presidential and parlamentary systems.
Why do we even need such a ludicrous hypothesis at all? Chile usually performance better than its South American neighbours. Does anyone think it is a parlamentary democracy? It went from Pinochet's 17-year strongman rule back to a democratic presidential system.
I suspect elected legislatures are a marker of bourgeois influence; ie, if you're country has a parliament then it already has a large and active middle class.
It is an interesting hypothesis, but I don't think it stands up to scrutiny. Did the UK have a large and active middle class in 1689? If the answer is yes, then what countries today do not have a large and active middle class? If the process is endogenous, why did parliamentarism spread by contagion in Europe instead of indepedently all over the world? Why are British former colonies much more likely to retain a parliamentary form of government than former colonies of Portugal and Spain? How can we test this empirically? There tests of parliamentarism, and they do well (see, for instance, McManus and Ozkan, 2019)
Nope. It's all about climate. Before the advent of AC it wasn't really possible to industrialize if it was too hot. Workers just aren't productive enough in Lagos or Nachez for much of the year due to the crippling heat. In the UK, Germany, Japan, northern US you can work productively for much of the year with just rudimentary heating.
Would Houston be Houston or Singapore be Singapore without AC? No. Why?
Any evidence for this? Farming has been as productive in warmer countries as in colder ones, there's lots of evidence of hard work other than industrial development (for example, Egypt building the Pyramids), and India had GDP per capita equal to Europe in the year 1000.
At least indirectly I guess ? : when you need so much firewood for heating that you strip your woods bare, and are forced then to start using underground coal, then happen to invent steam engines and steel for railroads at the same time, creating a self-reinforcing cycle ?
The question however then, is why not China, much earlier ?
- Technological dominance, check
- Stripped down forests, check
- Coal reserves, check ?
- Best in the world wootz steel from their Indian neighbors, check ?
- So, not cold enough, not check ?
(Maybe you also need a lack of waterways, otherwise you won't need to invent rail ?)
Some people say the coal was too dry. No need for steam pumps. The Song dynasty had all sorts of nifty stuff, and China has had industrial-scale workshops for thousands of years, mostly for the state-owned Imperial defense industry.
The Chinese were mass-producing guns and explosives of all sorts waaay back.
> The late Ming military doctrine was to entrench themselves in gigantic wagon forts bristling with cannons, rockets, and handguns and then shit out enough firepower to make the Imperium of Man blush.
Nice !
> Also, after the reign of the Wanli Emperor, Ming China not only imported European cannons, but actually mass-produced their own variants with superior metallurgy. These Chinese variants were apparently so good that Portuguese officials wanted to employ Chinese gunsmiths in their foundaries at Goa so they could import the design to Europe.
Yeah, AFAIK since around 600 BC and until the (late ?) Industrial Revolution, the Chinese were basically the only ones that knew how to make cast iron worth a damn... even if Europeans beat them around early Modern in cannon designs ? (which were bronze-based in Europe)
(Though the bigger cast iron cannons would still need to be reinforced inside with wrought iron... and sometimes very ingenious additions of copper ?
I wonder if the Chinese tried to use wootz steel or would that been too expensive ?)
I think the main reason coal is an enabling resource is that wood fires by themselves are too low a temperature to do much metallurgy, and charcoaling is extremely labor intensive.
Also see in the parallel comment - maybe it was that dry mined coal that allowed the Chinese to reach high enough temperatures to make useful pre-IndRev cast iron ?
I think BronxZooCobra is saying that hot weather is like a tax on work, especially indoors. It's not impossible. Farming can be adapted to weather more easily than human comfort, since the environment is doing most of the work.
That makes sense about the development of SE Asia and the US South since the 1950s.
That would seem to shed some light on part of the "higher wages drives industrialization" argument.
If it's because it incentivizes companies to develop labour saving technologies, then a tax on labour should have the same effect; it shouldn't matter whether the increased cost of labour goes to the labourer or the government or into the environment as waste heat.
It also helps provide an internal market. Developing widespread internal demand is surprisingly tricky since it often involves giving money to people who don't deserve it. England had a small internal market - read your Jane Austen - but a large captive colonial market. The US had cheap land to keep labor costs high. Others simply built tariff walls, but the challenge was always about finding or making customers.
Evidence? Willis Carrier's sales team had a lot of data. For example, "In offices, air conditioning makes us more productive: according to one early study, it made US government typists do 24% more work."
If I had to guess I would say yes, but people who don't have A/C acclimatize to heat. This may be hard to believe but if you go without A/C in a hot summer for a couple weeks, suddenly you will feel a lot less hot. When I was in Mexico I was stunned to see all the Mexicans wearing long sleeve flannel shirts and jeans in 95-degree weather.
Thanks. I was trying to make the point that climate can't explain a lot. With respect to Britain and the Netherlands (as well as other countries) I am convinced it is parliaments. whynotparliamentarism.com
Well, it could be a reunion of things. Parliamentarism certainly looks like it could help ! (Meanwhile Napoleon was supposedly making fun of the engineer that suggested that a ship could be steam-powered ?)
My argument is more to explain why we see industrialization pretty much exclusively in a band between 60°N and 40°N latitude. Above 60° it's too cold. Below 40° it's too hot.
Why was the southern part of the US poor? Was it climate related up to and including the need for slaves? IIRC MS justification for secession included the fact that slaves were the only ones would could work the fields given MSs climate.
The borders are going to be fuzzy, SF is at 37.7, and IIUC more of the water right off the coast tends to be moving south vs north which keeps things cooler than they otherwise would be. I don't know that I would consider it strong evidence in favor of the theory, but I don't think we can count it against.
So why isn't it symmetric, then? Why weren't the regions in the *southern* hemisphere between 40 and 60 S (Argentina, South Africa, parts of Oceania and Australia) also early industrializers?
Argentina was one of the leading industrial economies in the early twentieth century, and Australia was still last time anyone got in to check... For whatever reason (my off-the-top-of-my-head guess is geography: until colonised they weren't in avoid position to build trade networks) this had to wait till Europeans got there, but they do support your hypothesis.
Failure in South Africa to replicate this could reflect the caste/racial concerns that held back most of Latin America apparently (note this possibly explains the lack of real industrialisation in Ireland as well). Oceania is probably just a case of each island being too small to have the required population density to take off.
I think we're talking about the 1600s and 1700s, when industrialization was actually happening. Also, I'm aware that one can construct special pleading for any one country, but if the hypothesis is as simple as "between 40 and 60 degrees latitude is the sweet spot for early industrialization" there needs to be some *simple* explanation why it only works for the northern hemisphere, and there is no trace of an advantage to these latitudes in the southern.
I suggested a good reason why: networks. Europe, with its two almost inland seas and a large archipelago creating sheltered travel across half the intervening ocean coastline, is seriously good for interconnectivity. Then add to that the fact the main east and west running navigable river systems in the main continent come within a few miles of each other and that the North European plain is relatively easy to move across without roads. Now look east and see a succession of other areas in the sweet zone (a bit to the south of the industrialisation one, in the northern hemisphere) for older technologies, all of which are linked by long-established trade routes. The ability to easily exchange goods (so you have markets) and ideas (innovation) requires networks missing in most of South America and Australia where communications are naturally more limited to just the neighbouring areas (almost all coasts are on oceans, and a major physical barrier blocks communication through the middle of both continents).
East-central North America is a more interesting case, since there the physical difficulties of communication are more on a European scale. But I'd suggest that the region's isolation from trans-regional networks caused the problem here. It is pretty certain iron working is a key part of industrialisation (to the point that the development of a new method in seventeenth-century England may be identified as then start of the industrial revolution) and famously this technology only arrived in the Americas and Australia (and more oddly southern Africa) with Eurasian contacts. Within the nexus of centres in Eurasia there was rapid adoption of New technologies, whereas in the relatively isolated Americas and very isolated Australia these technologies were not available (and not independently discovered).
So Europe had two advantages. It was a region of easily-accessible markets (in this respect it probably didn't hurt that it was covered in small states either) but also physically linked into networks through which innovation could also travel. The same also applies the East Asian area complete with sheltered seas and major islands (albeit with less small states most of the time). It was perhaps not sufficient for a region to lie in the climatic ideal: it also needed to have the physical features necessary for trade and longer-range connection to enable shared innovation.
Maybe not simple, but it's a nice hypothesis as to why industrialisation was so limited initially, whereas the US, Australia and Argentina all were able to develop industry in exactly the predicted zone once networks and technologies were in place.
The reason it didn't work between 40 and 60 S latitude is there is very little land there compared to the Northern Hemisphere. Have you heard of the Roaring 40s? Why are they roaring? No land.
Buenos Aires, Santiago, Cape Town, Sidney are all above 35 S. Not much land and few people below 40 S, basically Tasmania and New Zealand (Melbourne is close enough) and a basically empty Patagonia (Argentina expanded south late in the 19th century), the biggest city below 40 S being Comodoro Rivadavia (under 200k) and the "closest" decent sized city is Rio Gallegos (100k), almost 800km away...
I don't see why human civilization, particularly industrialized, should depend at all on the amount of land available. If it did, then why would England industrialize well before the main European continent? Why wouldn't the vast east Asian land mass at the same latitude be the heart of industrialization?
You can't rely on latitude for climate. For instance, New York is at the same latitude than Marseilles (also : Quebec - Paris), yet the European equivalent has a much hotter (milder ?) climate - thanks the Mediterranean (and/or Gulf Stream).
On the other hand, we evolved as a species in the climate of Lagos. I don't think its that obvious why we would function (from a purely animal point of view) better a priori in a climate that is further from our biological roots. Kind of feels like hypothesizing that lions would do better in Scotland than Zambia if they could get there, or that polar bears could replace jaguars in Central America if given the chance.
We evolved the ability to live and reproduce in those climates, but not necessarily to build semiconductor factories and supply chains in the arctic tundra or Subsaharan desert.
Well sure, but the argument as I understand it was based entirely on human comfort, i.e. you work up more of a sweat on the factory floor if it's Miami (with no a/c) than if it's in Buffalo. (Incidentally, I'm not really sure I agree that's true anyway, as factories tend to be hot places no matter where they are because of the power being dissipated by machines and people. Pretty sure a smithy even in Greenland would be pretty hot on account of the forge and the work of beating out nails all day.) So the question is: where do we naturally find it easier to do heavy manual labor all day? I'm not convinced the answer is "London" on account of we evolved in East Africa and primitive life involved no small amount of heavy labor.
Sure, but then you should have said disease, which everyone understands to be a big factor in human civilization, and is not restricted to tropical (cf. the Black Death, plague of Justinian, etc)
My understanding is that Lagos' climate is difficult for any animal, and human ancestors evolved adaptations like hairlessness and sweating in order to hunt their prey until it died of heat exhaustion.
We could be optimized for that climate without it being our optimal climate.
A decent number of South American cities sit high in the andes and don't suffer from crippling heat yet saw limited development, even compared to Buenos Aires and its horrid summers. Average max temperature in the hottest month in La Paz is 17C (63 F), Bogotá 20C (68 F), Quito 22C, Potosi 18C. Within Bolivia and Ecuador the hotter sea level cities Santa Cruz de la Sierra (only 57k population in 1955!) and Guayaquil are the economical centers.
I think there's more to climate than it being insufferably hot. Arid areas can't (reliably) produce enough food to feed the factory workers. Tropical diseases will spread fast in urban areas. (not just a problem for the humans involved but for draft animals too)
It's not just about being hot, it's about being hot and damp : IIRC the wet bulb temperature above which a human needs AC to survive over long amounts of time is merely 36°C at 100% humidity.
This is actually a pretty interesting observation. Namely, you can rephrase "How come all of the mid-20th-century success stories are in East Asia and not somewhere else?" as "Oh look, the other cold nations are catching up". This even manages to include Russia.
This is also able to explain the British Colonies who are all in cold or very temperate areas.
Further, the developed parts of South America (Uruguay and Argentina) are in the far south in the more temperate regions.
The Russian/Soviet case is a little more complex, I believe. I seem to recall reading somewhere that in the late 19th, early 20th century, Russia had the highest growth rate in the world—something like 12% per annum. The war and the Revolution wrecked that, and they then imported a colossal amount of American expertise to build (and partially rebuild) their industrial base in the ’20s and ’30s. But I may be wrong.
Mostly an effect of very low base. It is not hard to grow at 10% if you had a very low start. Just adopting basic mechanisms and building a few railroads could give you 10% a year at the start.
Yes, this is right. Late Romanov Russia was basically the China of its day, industrializing rapidly in the lead-up to WW1. Its peers also thought so — its stock market was booming, and it was largely fears of Russian growth that prompted Germany to push for war in 1914. In 5-10 years, they didn’t think they’d be able to win. Instead Russia basically lived out its worst timeline.
I’m also going to recommend a book that’s partly on the Soviet economy, “Power and Prosperity” by Mancur Olson. It comments on a lot more, and it’s a really fun and easy read for a fairly serious treatise on political economy. IIRC It basically argued, among other things, that the Soviet economy only functioned well under Stalin, who was so all-powerful that he could crush anyone and therefore corrupt cliques weren’t allowed to survive. After his death things slowly started crumbling under the surface, even if under Khrushchev the picture still looked alright.
Didn't it already start working better under the (admittedly brief ?) Lenin's NEP, who basically realized that going full socialist had been a mistake, and decided to pursue more liberal policies ?
I'll be honest, I've never read a book that covered the NEP well. But my understanding is that Lenin saw the NEP as a model for recovering from the chaos of WW1 + RCW, rather than a long-term economic model for the country. He didn't see it as a permanent retreat from socialism, which hadn't really been tried, but a way of buying some breathing room before trying it in earnest. China's Communist Party was able to discard much of Communism, but it required 30 years of failures to do it, and 1920s Russia wasn't there yet.
Communism under Stalin sort of succeeded, and therefore no one really wanted to discard it when Stalin died, unlike the way that Deng and his supporters wanted to discard Maoism. The Soviets just wanted to discard the most oppressive aspects of Stalinism, which unfortunately seem to have been a key ingredient of its economic successes. Stalin was a de facto slave driver for the whole economy. He would routinely and effortlessly take members of the nomenklatura who were suspected of skimming off the top and turn them into unpersons, which later leaders were politically unable to do.
This seems suspicious. While Stalin did have free reign and could crush anyone he wanted for any reason including corruption, I am not sure he really optimized for corruption-free economy. And if you can end up in GULag for no reason or some stupid mistake, your incentive to avoid illegal gains is weaker: it's just one thing to be afraid of in the long list, and at least it improves your quality of life a lot if you don't get caught.
Stalin absolutely optimized first and foremost for holding onto power, but sometimes that looks the same as cracking down on corruption. Later Soviet corruption thrived as a result of alliances and networks among powerful interests within the nomenklatura. Stalin did not tolerate such alliances -- indeed, if he discovered one he would see it as cause to liquidate everyone involved.
Now, members of the nomenklatura absolutely did attempt to engage in corruption under Stalin, but their success was limited by the fact that no one was going to cover for them if they were discovered. The concrete example I recall from Olson is that Stalin at one point noticed that Soviet-made movie projectors kept breaking down. So he had people look into it, and what do you know, the reason was that the manager of the projector factory was skimming off the top and substituting inferior components. So that manager was swiftly made an unperson, and the next manager was said to have operated the place with impeccable efficiency.
But under Brezhnev, that factory manager most likely would have stuck around because he would have an entire network of alliances, people that he was kicking back his profits to and also covering for. Brezhnev's power was limited by the system of corruption that surrounded him. Which, again, is why Stalin optimizing for power also involves cracking down on corruption.
You are correct on both counts. One reason that the German General Staff urged war with Russia was because it was feared that Russian demographics combined with rapid industrialization would soon make Russia unstoppable. Better to fight Russia now while it was still seen as manageable.
The French had a similar view of Germany, and the Austro-Hungarians of Serbia.
And the early Soviet Union did import a great deal of American knowhow, and they also admired and respected American industrialization. As an aside, American engineers in the USSR were irked by the constant barrage of questions about Henry Ford, was he smarter than other Americans or otherwise how did he do it?
Francis Spufford's _Red Plenty_ explores the Khrushchev era, when the USSR's GDP was still growing at double digit rates and the post-Stalin thaw allowed for more open debate about central planning. It's a fascinating piece of historical fiction. The essays about it at Crooked Timber are also well worth your time; I never pass up even a sliver of an opportunity to recommend Cosma Shalizi's "In Soviet Union, Optimization Problem Solves You".
Russia did have a high growth rate, but it had a serious cultural problem, a peasant society, and communism didn't solve the problem. You still had kleptocrats at the top and peasants at the bottom. Peasants know they can't win, and they are lucky to break even. A good book on this is Chanayov's Theory of Peasant Economy. A big problem with peasants is that they make crappy soldiers. It got so bad that the tsar bought out the serfs in hopes of turning serfs into citizens who could fight in a modern war. It didn't help his dynasty all that much, but it was citizen soldiers who fought off the Nazis.
After the war, the economy grew and living standards rose. A lot of the housing stock is still from the 1950s and 1960s. In the 1970s, things changed. I think there were two forces: generational change and the costs of empire. At certain point, you have to move on from The Great Patriotic War, and the Russian leadership was still invoking it well into the 1980s. It was all they had left. Then there were the subsidies to the Warsaw Pact nations. If you looked at the books in the 1980s, as some did, the empire was running in the red. The tanks rolled into Hungary in '56, Czechoslovakia in '68, but not Poland in '80.
As you surmised, it's not true that Catholic Italy is wealthier than Protestant Britain. Of course Northern Italy is wealthier that big swathes of Britain but so what. And the whole premise is dumb, since choosing two countries is hardly definitive. It's also easy to counter since Protestant Norway is much, much wealthier than Catholic Portugal. But again, so what?
GDP is not a measure of wealth, which is a stock. GDP is a flow. It may be true that Italy is wealthier than Great Britain, but I'm not sure how meaningful that is.
True, but GDP per capita is an extremely common basis for comparing wealth. And Britain's GDP per capita is higher than Italy's. But my point is they are just two data points, and the opposite point (to the author's contention that Catholic countries are richer than Protestant) could easily be made by choosing Norway as the Protestant country and Portugal as the Catholic. Or he could have compared Catholic Ireland and Protestant Britain to make his point correctly, since Ireland is richer than Britain. But two data points are hardly sufficient to support an argument.
I think your point is correct. But "GDP per capita is an extremely common basis for comparing wealth" is nonsensical, don't you think? I actually doubt that Ireland is "richer" than Britain since the British probably hold many times more assets?
I think it's a good enough approximation because of things degrading with time and of generally comparisons measured in terms of money becoming too inaccurate anyway over the span of several decades ?
I don't understand what this means: "comparisons measured in terms of money becoming too inaccurate anyway over the span of several decades"
Do you think income is a good measure of wealth for individuals as well? Typically any academic paper referencing wealth would strictly differentiate it from income, in my understanding.
I totally agree with your point that GDP is flow, not stock and therefore not a valid measure of wealth. I just don't think there is another alternative that is readily available across countries.
See also the Progress & Poverty review, which shows that it might be interesting to separate the quantity of wealth (not defined in terms of money) with it's value (in terms of money, but highly subjective and only viable over short time periods).
"True, but GDP per capita is an extremely common basis for comparing wealth."
I have grown to think some of the interpretations of GDP per capita make a subtle but important category error when the word "wealth" is not specified exactly enough to nail it down. GDP per capita is the amount of gross domestic production normalized to size of population. Which may make sense as a measure of "national wealth" as much as it correlated with domestic production. For some other uses of the word "wealth", some other measures are plausibly more meaningful (say, median income).
It might work in this specific example because you're comparing two somewhat similar European countries in the same time period (and even then I have my doubts), but for any wider comparison thinking in terms of money becomes too inaccurate.
If you're using it as a proxy for "human flourishing" or something, then there are probably better indicators available, like maybe distributions of human heights :
We can disagree about anecdata, or the meaningfulness of comparing stocks, but in terms of the reviewer's original comment about trusting the text, it's clear that wealth is a stock and Italy has more of it (even per capita). Whether they will in the future, given the UK's higher GDP per capita, is a different and more speculative question.
Why is it clear that Italy has more wealth per capita than the UK? we know that using the faulty GDP per capita measurement that isn't true. But I also think most people would just guess that Britain is richer than Italy. That would be based on Britain being acknowledged as the richest country in the world in the nineteenth century, and Italy being one of the poorest and the main source of desperately poor immigrants to the US. And it's now known in Europe as the most heavily indebted and slowest growing. It was widely considered the most likely to go bankrupt during the 2008 crisis and that concern hasn't abated. So I'm just curious what you rely on in determining that it's wealthier and that therefore the text is reliable?
Looks like I should retract as I was relying on my pre-2008 memories (I'm old). 2019 data says you're right. But if you scroll down you'll see other commenters showing that Italy had higher GDP per capita in the year the book was written! Even the fact that they fluctuate back and forth in recent memory seriously undermines the Weberian thesis.
There is some truth to the core idea that economic catch-up requires more than just opening up your economy. For the successful Asian countries (China, Malaysia, the tiger states), they did liberate their internal markets. But at the same time they were rather restrictive on imports, so that the new industries were not immediately destroyed by international competition. Only after some time of (external) protectionism and (internal) liberalism, when their industries were competitive enough, they opened their markets to the outside.
> From about 1600 to 1720, the Dutch had the highest per capita income in the world - at least double that of neighbouring countries at the time and about five times higher than that of the poorest countries today.
Compare also to the Ancient Greeks, who had "unlocked Steam Power in their tech tree", but didn't get an Industrial Revolution out of it.
Relatedly, I have a hypothesis about why the modern world popped out of the Netherlands and Britain, places that until recently had been relative civilizational backwaters, rather than say China.
The steam engine had been invented at least twice - in Ancient Greece, as you note, and in the medieval Ottoman empire:
In both of these cases, so far as we can tell, the engines were used chiefly as curiosities for rich people to impress each other with, or as a kinda gee-wiz science experiment. They never seemed to consider using them for practical work.
Thomas Savery, by contrast, in 1698 invented a steam engine and described it as "A new invention for raising of water and occasioning motion to all sorts of mill work by the impellent force of fire, which will be of great use and advantage for draining mines, serving towns with water, and for the working of all sorts of mills where they have not the benefit of water nor constant winds."
This is a different outlook indeed than "Yo, you won't believe this, this wheel thingy spins by itself.' The engineers and inventors of ancient Greece and the Ottoman empire were <I>aristrocrats</I>, far removed from the concern of the working man. No-one else had the education or leisure to fiddle around with metallic bits seeing if they could make something of them. They cared not one fraction of a damn how hard the serfs and slaves had to work to get them food and water, you could always just buy more. The inventors and engineers of the industrial revolution were <I>well-to-do</I> but not typically courtly elites; they were petty landed gentlemen, sons of rich merchants, etc. So when they came up with a thing that could spin itself, they would think 'Huh, I wonder if Aart who tills my fields could use this for anything' or 'Huh, my uncle John was always trying to make a better windmill, maybe he could use this?'
Society was unusually un-stratified. Why? Well, probably lots of reasons, but I think mostly the Black Death.
More than half of Europe had just died. Existing structures hit HARD reset. They still had medieval-level tech to work with, but the calcified structures of hierarchy and nobility that build up over time and make it so that the EMPEROR can use 5 claws on his dragon, but YOU who only has 10,000 soldiers and, like, half a million subjects at <I>best</I> can only use four or you'll be executed, hadn't yet formed again.
Add in some natural resources, maybe a bit of luck tinkering with new types of government, <I>maybe</I> something something culture of logic from Christianity plus culture of optimism to do Age of Sail discoveries, and there ya go.
Right, I was talking a bit too much off the cuff there. My overall point was there were a good three centuries of serious depopulation from a string of plagues.
Yea, a fall in population would raise the cost of human capital relative to capital goods. So yea, I could see how plagues killing off the population could spur technological growth. But the counter-argument seems strong too; humans are the ones that innovate, and fewer humans means less innovation.
We see a few examples of population lapse. Europe's population was 78M in 1600 and lapsed back to 74M by 1650, but these effects were mostly seen in Germany, Spain and Italy. However, the part of Europe where Savery lived, saw very robust population growth. But I think the most significant demographic event of the 1600s was urbanization. People moved to cities and ports, and cities became administrative centers. So my bet is that the concentration of talent in cities had more to do with the technological revolution in England and Holland.
"But the counter-argument seems strong too; humans are the ones that innovate, and fewer humans means less innovation."
Have you ever observed a conversation where someone suggests some kind of wacky way to make things better, and another person shoots it down with "if that actually worked then people would be doing it already"?
That argument only flies if you have a large population.
Such an argument would predict that as the population exploded, innovation would stagnate (because risk-takers would be discouraged). Yet the world didn't reach the middle of the population growth S-curve until right about the year 2000, yet GDP has consistently outpaced population growth. GDP outpacing population growth is technically what productivity means, and that's what innovation is.
So it doesn't look like that effect is strong enough to override the networking effects and economies of scale of cities. Also, people in cities earn vastly more than people outside of cities, and that data is very robust. So yea, popular density is more productive.
I've never heard of any equivalent of a steam engine having been developed in China, curiously. It's not like they weren't experimenting with such things, having invented gunpowder and all.
I'm no expert in this area, but I don't think the Chinese tended to be very dependent on literal slaves. However, serfdom and similar roles being the main source of manual labor serves the same role here of 'a whole bunch of poor people you'll never meet and don't care about do all the work for you' if you're and educated aristocrat.
Also, Industrial Revolution Britain is pretty infamous for its treatment of farmers (enclosures) and then later laborers (among the worst conditions ever seen in history of mankind, according to the study of human heights?), but I guess that was only later, after the most important inventions had already been made ?
Savery's engine had a tendency to crack open from its internal pressure. It would not have worked at all with lower quality steel, which means it would not have worked in any previous era. Steel, like many technologies, advances continuously, even during the Middle Ages.
I would not be sure of that. Savery didn't have access to crucible steel production yet (even though it might have been known in India as early as 300 BCE). So he would have used inferior, welded steel, which probably wouldn't have been significantly better than what Gauls were doing in 450 BCE ?
Note that in both these cases, they were really limited by the efficiency and the size of steel "plates" produced, you need to wait until the mid-19th century Bessemer process to be able to produce steel in industrial quantities.
Cool! A more granular understanding of metallurgy development than I had.
Bullseye does have a point however, and I've wondered myself if improvements in material science may be a point against the hypothesis. Stepping away from steam engines, the Antikythera mechanism seems like it <i>may</i> have had intended practical use in navigation, but reconstructionists believe the machining techniques they had then would have rendered it too inaccurate for long voyages. Maybe; but why then not innovate better ones and <i>make</i> it useful! A navigational computer would have been huge!
I can't shake the sense that rapid technological advance was in many civilization's grasp and it just....didn't happen.
Yeah, I would guess that you would need first to have some high quality steel instruments to be able to precisely machine the copper & brass, which Ancient Greeks could only have gotten as imports from Asia ?
(There's a reason why Steampunk is full of brass !)
I also get the impression that Huntsman's crucible steel wasn't used much for this kind of devices - still too impractical because very hard to reshape after it had solidified ?
Also, it seems like this tendency to "crack open" happened not at the level of the brass itself, but at the level of the soldered joints ?
A book I was reading on the pre-Black-Death medieval economy (written during the 70s, IIRC) said that the paper mill (as a manufactory) had been in place for China for several hundred years before it traveled to Europe, worked by human or animal labor, and almost the first European mentions of it (14th century) are describing water-powered mills. The book was of the opinion that medieval Europeans were just really, really, really enthusiastic about using water to power things as a means of getting free labor.
Apparently there were gigantic quarrels between cities on the same river over who was allowed to build their dams how high, because every foot of height you build into your dam lowers you build lowers the potential energy for the next dam upstream of you, forcing them to build their dams higher, forcing them...
It was a pretty great book and I should see if I can track down the name.
(Low confidence in the precise accuracy of my summary because I should be asleep, high confidence in the general sense of it.)
That doesn't make sense (dam height) unless the pool above your dam floods all the way back to the foot of the upstream guy's dam and partly submerges its lower reaches. Potential energy is the difference between the water level behind your dam and the water level at its foot, khattam-shud. The state of the river after your dam makes no difference.
Unless I was misunderstanding the book, they did seem to be implying that it flooded all the way back. It might be a mistake on my part? I remember reading about the lawsuits about water levels on IIIRC the Rhone quite clearly. I should see if I can find the book and find out what I'm missing.
A key point about using water power everywhere. Once you already have a machine that converts rotary motion from a river into useful work it's a small step to replace the river with a steam engine.
It's not impossible that the Black Death was a factor, but there are other reasons England and the Netherlands had low stratification even before the plagues. One major one is agricultural economics.
You get highly stratified societies where the geography favors concentration of production in large estates - latifundia. Where it favors small freeholders (one of the extreme cases of this is Switzerland) you get more egalitarianism.
There's a reason Thomas Jefferson believed democracy could only be built on a bedrock of sturdy yeoman farmers - this difference cashed out even in regional variations in what would become the early United States. At around the same rime, England and the Netherlands were getting lucky, not just because of the high cost of labor or coal/peat availability but because their economic geography had prevented them from developing latifundias and the rigid vertical stratification that they drive.
It's written as a response to Stephen Pinker's latest books. Pinker argues that things improved because we got better philosophy; I think there's a strong argument that in reality we got freed from land-to-mouth and the limits of biofuels.
In the US per capita energy use is on the order of 100x pre-industrial levels. You can buy a lot of... everything with that.
Yeah, I have a very hard time to take seriously people like Pinker, who seem to ignore the giant fossil fuel elephant in the room !
It's a shame, really, we first became aware of these issues in the 70s, started the energy transition... then just decided to ignore the issue in the 80s, and basically wasted the 40 next years, 40 years of easier to extract fossil fuels which, considering their exponential growth, probably represent around half (?) of total energy (and CO2 emissions) ever used by mankind so far ?
And the politicians keep ignoring/diverting the issue, because "there's nothing for them in it".
At this point, I'm not even sure that restarting the transition wouldn't make us fall into the energy trap of front-loaded costs :
As for Pinker, why then haven't the Ancient Greeks, which were pretty good at philosophy (and natural sciences : mechanical computers, steam engine...) had followed the same road much earlier ?
Also the Chinese with their invention of printing press and gunpowder, and from what I hear they had pretty good philosophers too, though most of my awareness of them comes from pop culture :
Overall, it's important to understand that someone getting a paper or book published on a topic doesn't mean they're the final word on it. Sometimes talented, intelligent researchers are just wrong, such as Acemoglu in that paper on German industrialization and institutional reform you posted about a while ago. Economic history in particular is a fraught subject with disappointingly little day and live debates on just about every interesting question you can think of.
Yeah, the question of the Great Divergence is a major area of study right now. Even just the question of exactly when it happened is still kind of open, last I knew. When did Lancashire really start looking substantially different from Jiangsu? We often don't even have great data to begin to answer this question! How are we supposed to ask why and how when we can't answer when?
I am not as pessimistic as you are. You don't need to be precise to be insightful. If you use evidence from enough sources, the picture may become clearer.
Maybe. I'm very sensitive to how the discovery of new information or new data can completely overturn old interpretations. I've been reading about early 19th century financial panics in the last few years and the shape of the debate around the 1837 Panic has been determined strongly by the work of Peter Temin done in the 1960s (it wouldn't be entirely wrong to say subsequent work consists of either elaborating on or responding to The Jacksonian Economy). One thing Peter established very strongly was that reserve ratios in state banks never fell, the old canard from before his time that a contributing factor to the Panic was overexpansion of state bank circulation had made the financial system fragile was outright wrong, and that his data showed this conclusively.
I hadn't actually every found a convincing response that challenged this. The balance sheet data that incorporated state banks were required to report showed this as clear as day, how could it be wrong?
Well, one area it could go wrong would be in the data we DON'T have. The data Peter Temin had was for incorporated state banks. While most states had outlawed unincorporated banking by the 1830s, it was nevertheless more widespread than previously thought (the Girard Bank in Philadelphia, for example, had one of the largest circulations in the country for an individual bank as late as the 1840s). And we, for the most part, don't have balance sheet data for these banks. They weren't required to report it to a regulator and much of it has disappeared into the Great wastepaper basket of history.
Does this mean Temin was wrong? Who knows? We literally don't have the data.
I might be more perssimistic than is truly warranted, being a well read amateur, but I think the problem of primary data seriously threatens conclusive answers to any question of economic history.
In case you're not familiar, these "very short introductions" are a series (<a href="https://en.wikipedia.org/wiki/Very_Short_Introductions">Wikipedia link</a>); they have them for a pretty broad range of topics and they're all similarly small. It's not just a subtitle on this one book!
Substack apparently never considered that people writing comments on posts would want to provide their own links, edit comments, or any of the other things we've been complaining about.
I don't want to think we're only supposed to go "Great post, dude!" ❤❤❤❤❤ or "You stink, idiot!" as responses but given that I can use emojis here and not any kind of markup for links - well... 🤷♀️
I still default to what Scott wrote in the introduction whenever I want to learn about a messy sprawling complicated topic:
"I’m not embarassed for choosing Singer’s Marx: A Very Short Introduction as a jumping-off point for learning more leftist philosophy. I weighed the costs and benefits of reading primary sources versus summaries and commentaries, and decided in favor of the latter.
The clincher was that the rare times I felt like I really understand certain thinkers and philosophies on a deep level, it’s rarely been the primary sources that did it for me, even when I’d read them. It’s only after hearing a bunch of different people attack the same idea from different angles that I’ve gotten the gist of it. The primary sources – especially when they’re translated, especially when they’re from the olden days before people discovered how to be interesting – just turn me off."
Is there any chance of you writing a book review of Das Kapital? I would really like to read that.
If you're right, I share some of Scott's misconceptions, and perhaps it's my poor reading skills, but I find passages such as "Feuerbach resolves the essence of religion into the essence of man. But the essence of man is no abstraction inherent in each single individual. In reality, it is the ensemble of the social relations" incredibly hard to parse.
I am replying to you here because I saw you link this comment as particularly important for Scott to reply to, and I thought a couple of the people who reacted to you there were being unfair, so I decided to read your comment and see what I thought. First, I think the comment is rude and dismissive enough that I would be tempted to gloss over it and not reply. But setting that aside, I also think the substance is weak.
I admit that I’m not entirely sure what “But the essence of man is no abstraction inherent in each single individual” is trying to say, but I understood the full quote as meaning that humans don’t have a fundamental nature, in a vacuum—ie the way people are en masse isn’t a, say, biological fact—instead any particular facts you can know about a group of people is fundamentally about the relationships between those people. And the obvious implication is that those relationships are arbitrary and might be any other way, causing what we are incorrectly seeing as “human nature” to end up looking some other, arbitrary way. In this case capitalists seeing humans as being fundamentally capitalist is wrong, because actually humans only act like that when they are born/raised/exist in a capitalist social situation. If they were born/raised/existed in a different system they would be different.
So I think a perfectly fair interpretation of the quote provided is that Marx thinks humans don’t really have fundamental “natures” outside of the social arrangement they happened to find themselves in, ie. they are completely malleable.
I also think it’s a totally normal situation for there to be heated controversies about issues where the canonical text is perfectly clear, so I don’t know why you think Scott is the bad one for thinking it’s perfectly clear but also noting that there is some controversy among Marxists. But you’re right that he didn’t cite the controversies, so I don’t know. Maybe he just means his position is controversial according to Marxists, even though in his view Marx’s words are perfectly clear? If that’s it, then it’s evident from your reply.
So yeah, you’re coming across as an asshole with an axe to grind which isn’t doing you any favors, but on top of that I think you also made a weak point. I think you should pick at maximum one of those, but preferably be nicer and make better points at the same time.
"But the essence of man is no abstraction inherent in each single individual. In reality, it is the ensemble of the social relations"
My gloss of this is:
1: The essence of man is the ensemble of social relations rather than anything inherent in an individual.
2: Therefore if you took a person and embedded them in a totally different social system that they would end up totally different, as anything that could not be changed in this manner *would* be inherent to the individual rather than from the social relations, in contradiction to 1.
3: Therefore man is completely malleable to social conditions.
So I'm another person that thinks you're wrong about this. Maybe there are other similar quotes from Marx that could triangulate it to a different position that's being mistranslated/misread.
I can imagine a similar point as the the quote that is maybe what you think Marx means, like "Many humans have a trait (e.g. greed) that isn't necessarily in *all* humans but affects social relationships so that all humans live in a social environment defined by that greed and creating particular consequences. Those reliably socially caused facts are the thing that should be understood as human nature."
On this read the emphasis is more on the "each single individual" and there's space for particular traits to be both common & inherent. If that's what Marx meant it's IMO not put very well for a 21st century English speaking audience in the quote.
Rereading the quote above, the thing about "it’s only after hearing a bunch of different people attack the same idea from different angles that I’ve gotten the gist of it" got expanded into its own post 3 years later in "Non-Expert Explanation" (https://slatestarcodex.com/2017/11/02/non-expert-explanation/), another SSC classic.
There are 3 well known expert catchup stories in the latter half of the 20th century.
Hong Kong
Singapore
Dubai.
Why did they work?
If we're not addressing the fact that (a) they did work, and (b) other countries of similar size and start point didn't, I think we have to be suspicious of the story being told.
Do you not want to count Taiwan and South Korea as catchup stories as well? They seem like much better cases to me than Dubai.
(Also, I don't know the details, but was Hong Kong actually starting from the broader East Asian level in the middle of the 20th century, or was it already at a higher economic level?)
Taiwan and South Korea were both catch-up-part-way stories.
Singapore and Hong Kong (and maybe Dubai) are catch up and exceed stories.
I know that Singapore and Jamaica had the same GDP per capita in 1960-ish and about the same population. So they're really really good examples of similar countries.
I prefer Taiwan and South Korea as well. Tiny city or island states don't make for the best models, as you can't just tell another country to become a small island instead.
Given that these two countries had essentially _nothing_ but their population to start with, it seems impossible not to introduce culture as a relevant factor.
HK and Singapore are located next to important shipping lanes, Dubai is located on top of an oil field and Mohammed bin Rashid Al Maktoum is smart enough to avoid a resource curse.
Jamaica is as close to the shipping lane through Panama canal as Singapore is to anything. Hong Kong is nicely positioned WRT its neighbor city, but not better than Tijuana/San Diego or a pile of similar options. I'm unconvinced by "good location" as even a partial explanation. Policy is the far better explanation, especially with all 3 places having very similar policies.
Wait. So when USAians say "Latino", do they actually mean "Latino - Native American métis" ? And that's why they aren't always considered "white" ? (But aren't also considered to be a separate "race" ?)
Pretty much. In addition to the majority of the population of the Latin countries being of this group, immigrants to the United States are very disproportionately of this group, so that it's rare for USAians to see people from these countries that visually look as "white" as people from Spain, even if such pale people are a noticeable minority in the Latin American countries.
My impression is that when people in the US say "Latino" or "Hispanic", they're usually thinking of a category closer to "Central American", or even just "Mexican". Ironically, upon first meeting a Spaniard, we're likely to gloss them as "white" over "Hispanic". Either would be apt - but we have an unfortunate penchant to identify both others and ourselves with a single racial group.
As a potential counterpoint, most questionnaires that I've seen (in demographics-gathering contexts, whether by companies or government entities) have two separate questions about race, the first asking about Hispanic identity, and the second asking about race per se. For one implementation of that general schema, consider page 5 of the N-400: https://www.uscis.gov/sites/default/files/document/forms/n-400.pdf
Add in the whole "latinx" debacle, and the constant quibbles among woke elites about who counts as what, and what categories/affinities are important... and let's just say that if and when Americans use the word "Latino", there's no guarantee that they mean any particular thing whatsoever.
And there are a lot of Jews in the USA, aren't there, so where is the checkbox for the semite "race" ? (Which fits most of the "Arabs" too.)
But most importantly : aren't these questions, you know, racist ?
And especially : if the goal is really the ethnic assimilation of the migrant, isn't it a pretty bad idea to single out on this form the ethnicity that you might have to give up, and also the "race" that might potentially make your assimilation harder ?
GREAT questions with no easy answers, but I'll take a stab at why the practice of classification continues, even without a clear rational basis for any particular set of classifiers.
My first draft of an answer would center on the idea that to Americans, race mostly matters because of racism - the prejudice based on the categories precedes the categories themselves. Companies and government agencies gathering demographic data are usually doing it for some reason related to the detection, prevention, or punishment of discrimination. And if you want to measure or counteract racism, it's necessary to understand the lines that racists draw, even when those lines aren't based on sense.
For Arabs and Jews, the relevant prejudice is along religious lines - the term that gets tossed around is "Islamophobia", more frequently than "anti-Arab sentiment", so people don't necessarily ask or care about Arab ethnicity. (Sometimes they do though - I have heard the acronym "MENA", "Middle Eastern or North African", making the rounds as a racial category.) For Jews, the average American sees it as a religion, not a race; if they understand that actual Jews frequently see themselves differently - as a people, not a creed - it's most frequently because they learned it from Jewish friends. When the prejudice is religious, there's no need to ask about these categories as racial.
The category of "Asian" is another fun phenomenon. It encompasses people with origins in vastly different countries, often with deep mutual cultural enmity. But to average Americans, they're all just "Asian" at a glance, so in order to detect American prejudice against them, we create that category. (Wokesters have now expanded it further to "AAPI", it'll change again in another 2 years, whatever.)
Are these questions racist? Yes, in one sense, especially in that they're founded on categories created by the ignorant, since their central purpose is to counteract toxic consequences of that ignorance. But they may also be necessary, if you're really trying to figure out - for example - whether hate crimes against "Asians" have increased recently.
Your question about "assimilation" deserves treatment separately. To start answering it, I'd note that what starts out as description of a category that doesn't really exist, ends up creating that category. As a product of their being taken together on surveys, "Asian-Americans" have genuine collective interests now, most particularly abolishing affirmative action. And as generations pass, people often assimilate "towards" identities that are not strictly "American", but "hyphenated-American", and over time these categories becoming better and better descriptions of a category and identity.
Speaking of which, these days it seems to me that an American (U.S.) ethnicity is not an option any more, and people are being forced to pick between either a "Red" ethnicity and a "Blue" ethnicity ?
I was originally going to disagree, but the more I think about it, the more accurate this seems - at least for white people who didn't immigrate recently, and at least under a certain understanding of "red" and "blue" not unlike the one Scott gave in "I can tolerate...".
I still have quibbles. Most often people don't properly "pick" either, to some degree you're born into them. And there are lots and lots of other categories which are separate to those two, like Scott's "grey tribe". And "ethnicities" definitely wouldn't be the first word I'd use to describe "red" and "blue", I'd use "cultural groups", "tribes", or "classes" first.
But given that we're not dealing with precise categories, if you squint your eyes and glance at white America, your statement isn't a bad first approximation, I'd say.
Since ethnicity is predominantly about culture (religion or lack of it playing the front role), "ethnic groups" and "cultural groups" are synonyms.
(Unless using the definition of "ethnic" nationalists, where "ethnic" is an euphemism for "racist" ? AFAIK that was one of the ways that racism had been smuggled into polite discourse in the 1930s and 1940s ?)
And "tribe" is just the name of a small ethnic group (under the Dunbar number ?)
"Class" is a whole other can of worms that I won't open, but yeah, I see the relation !
Yeah, I was talking about migrants first, "white" or not. When you already have ties it's much harder to switch ethnies, though I guess that in post-modern times "restarting your life" by moving to a completely different region (and therefore neighborhood) is at least an option for most people, even if most won't take it. (But then you're an intra-national migrant ?)
Oh, think about the role of education for ethnic cohesion, and how most people end up as "migrants" in college ! (Even if most will then go back home.)
As Scott himself admitted, his Grey "tribe" is mostly a "desaturated" blue one.
Also "Asian" is a terrible term for an ethnic group.
In America, it mostly means "people from East or South-East Asia, either Christian or following a non-Abrahamic religion". Chinese, Japanese, Filipino, Korean, Vietnamese...
In Britain, it mostly means "people from South Asia, either Muslim, Hindu or Sikh", and British people tend to be uncomfortable classing Chinese or Japanese as Asian (there are quite a lot of people of Chinese ethnic origin in Britain, though nothing like as many as Indians or Pakistanis).
Note that neither country has a large South-East Asian Muslim population (ie Indonesian or Malay - Malaysians in Britain are mostly Chinese and not Muslim)
Arabs are from either Asia or Africa, but if you referred to a child of Moroccan immigrants as "African-American" then I don't think anyone would be happy. A Saudi referred to as "Asian" would be less discomforting, but that's still not really effective communication.
And is anyone going to count white people from Israel as "Asian-Americans"?
Gal Gadot, for instance?
If there are several distinct groups (whether you want to call those "races" or "ethnicities", I honestly don't care) that are from the continent of Asia, then referring to one of them as "Asian" is just going to result in confusion. It would be nice to come up with the half-dozen terms we actually need, but at least knowing that "Asian" is going to confuse people and likely needs clarification is useful.
"Categories and Definitions for Ethnicity and Race
1. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. (NOTE: This category is only included under Ethnicity in Part 7., Item Number 1.)
2. White. A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
3. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
4. Black or African American. A person having origins in any of the black racial groups of Africa.
5. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America (including Central America), and who maintains tribal affiliation or community attachment.
6. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands."
So they nicely sidestep the icky (and hard to define?) issue of "race" by referring instead to "origins" (except for blacks !? ... because it's supposedly easier to see from appearance for them ??), and in the case of "Hispanics/Latinos" and "American Natives" to respectively "Spanish culture" and "tribal affiliation or community attachment"
(hence "ethnicity" is indeed appropriate... but why aren't "American Natives" an ethnic option then ??).
My impression is that Americans think about race in terms of physical appearance. Many or most Mexicans & central Americans coming to the US have a distinct similar appearance (straight dark hair, moderately dark skin), so they're considered a separate race. Middle-Easterners also look somewhat different from Europeans, so many Americans think of them as racially different even if Census forms don't consider them as such. On the other hand, American Jews, being mostly Ashkenazi (https://en.wikipedia.org/wiki/American_Jews#Subgroups), look similar to other white people, so most people think of them as white.
Because Native Americans in the United States have a different relationship to White Americans and a different history. And the purpose of the racial classifications is about how the races relate to the dominant group.
Race is more about us vs. them than biology or even appearance.
The original three races in the U.S. were white, Indian, and Negro. Then we met Mexicans. Most of them were dark enough to be "Indians", but they didn't really seem like the same people. Also some of them are of European descent, but they didn't seem much like us. So we lumped all Mexicans (and people from countries that look like Mexico to us) together into a new category, which we think of as a race even though we know it makes no biological sense to think of them as a race.
Also yes for most of the last sentence. We do think of Latino/Hispanic as a race, despite knowing it doesn't make sense; hence the awkward wording on demographic surveys.
It's over simplifying "white" a lot. White in that era (I assume we mean the 1840s, when we went to war with Mexico) would have meant English, Scots, Welsh, maybe French, maaayyybee German. An Italian would have been a Latin. A Polach or Russian a Slav. An Irishmen a Mick, and since we had a lot them (us?), subject to racist restrictions and cartoons (I would link but don't know how and since I can't preview or edit I'm afraid to mess it up.) None of them would have been part of the default, "white" race.
Also, why are there so many people with at-least-partially-native ancestry in Mexico compared to the US?
Was the pre-Colombian population of Mexico so much higher than the population of the US? Or were the natives further south somehow resistant to the diseases that killed off a lot of those further north?
"Was the pre-Colombian population of Mexico so much higher than the population of the US"
Estimates place the pre-Columbian Mexican population several times higher than that of the U.S. and Canada combined. I also believe that many fewer people immigrated to the New World from Spain than from England. My understanding is the Spanish relied heavily on Native slave labor, while the Natives were more trading partners and nuisances for U.S. colonists.
I've heard two explanations: firstly that Mexico had a much higher population to begin with, and secondly that the British and Spanish had different colonial goals.
The Spanish wanted gold, and they kept the natives around to dig it up. The English wanted land, so they threw the natives out. I have a suspicion, though, that these different goals were driven by pre-existing differences in America.
Yes, the English came to the US wanting gold to catch up to the Spanish, but it didn't work out (see any history of Jamestown). Cahokia was long gone before Europeans showed up in North America, and other native civilizations, whatever their population levels, didn't have the kind of central bureaucracy which craves liquidity and transparency and so hoards gold and silver in ways colonists can easily extract. But I think the supply-side may also have been relevant--with the industrial revolution underway England seemed keen to get rid of a lot of its unskilled lower classes as indentured servants in the colonies, whereas Spain mostly sent higher-class adventurers (like Jamestown). England also had an interesting position on religious pluralism, with dissenters quasi-tolerated in a way that let such sects grow to appreciable numbers but also experience discrimination that led them to want to leave (as founders of MA, RI, PA, and MD) whereas Spain was more religiously uniform and controlled. If they had waited just a few more years to expel the Jews and Moors, maybe they would have been sent to the Americas, with vastly different results for global history.
The old saw goes: "Because the Spaniards screwed the Indians and we just killed them."
If you recognize that the Spanish were not exactly pacifists and diseases killed way more Indians than bullets or swords, there actually is some truth to that old saw. Places like Massachusetts were intended as farm colonies, places you sent your religious cases to settle and dispute amongst themselves whether "presbyteros" in Greek means "elders" or "priests". These people brought their families, as they intended to make this their home. They didn't have much need for the natives, except as souls to convert.
Places like Colombia were intended as places you sent younger sons of minor noblemen to get as rich as they could as quickly as could, so that they could go back home and spend their loot. Obviously, these types needed lots of natives, both as concubines and because doing anything resembling actual work was beneath the station of a nobleman. When the pool of native labor proved insufficient, they imported Africans. They didn't import many Spanish women, as they weren't necessarily trying to establish families or roots, and there was a caste system, based on how "Spanish" you were and how close your family connection to Spain.
Even the haciendas and encomiendas were something very different from the smallholdings one sees in places like Massachusetts.
Per Greg Cochran, it was a bit of both. Pre-Colombian Mexico had a higher population, and urban areas that were on par, at least in size, with European cities. Urbanization selects for stronger immune systems, since diseases can spread fast through a dense and dirty population of unrelated people and do quite a bit of damage. As such, the death rate from European diseases like smallpox was ~95% for native North Americans, but "only" 70% for central Americans. Also, like Finster said above, the Spanish were more likely to intermarry with the natives than the English/Dutch.
I feel like this review lacked framing. I overall liked it as a summary, but it left me wondering why I should care and how I should weigh it against my existing priors, especially given the reviewer's comments on its brief length and perhaps-overly-simplistic narrative. Did the book present a vast amount of data to defend its positions? (Presumably not, given the length.) Was it written by someone (or some group) especially well-positioned to resolve these long-running debates? (If so, hearing more about them would have been wonderful.) Is it considered an especially good source by other experts?
As it is, the review made it sound like the book tells a story, without doing a great job of arguing that it's a particularly good or true version of the story; and without some kind of discussion along those lines, I feel obliged to disregard it as just a "take", just a claim without great backing. That left me feeling disappointed and unenriched.
(Of course, this may just as well stem from me having unrealistic standards and expectations from reviews of economics texts on this blog.)
Can we talk about form? This essay goes too early and too much into what the work doesn’t say, or what the essay writer does or does not understand, instead of describing clearly the thesis of the book.
I'm going to wait until someone writes "Introductions: A Very Short Introduction," which will only be a few pages, and then write "Introduction to Very Short Introductions: A Very Very Short Introduction" which will consist of a single well-chosen six-syllable portmanteau word (plus punctuation).
The problem with reading an introduction to economic history by Robert Allen is that the book mostly contains Robert Allen's views/theories on economic history. For a detailed critique of the high-wage argument and Allen's theory of the industrial revolution, see https://pseudoerasmus.com/2016/12/01/allen/.
His views on Soviet economic performance are detailed in his book 'Farm to Factory' (https://press.princeton.edu/books/paperback/9780691144313/farm-to-factory). I am convinced by his arguments that Soviet economic performance till the 60s was better than most people think. But the post-60s stagnation was a direct consequence of the centrally-directed catchup growth that was unable to generate sufficient innovation or allow obsolete firms/industries to fail. The economy could not adapt because the initial period created special interests (in heavy industries, the military etc) that would not allow their powerbase to be harmed. The canonical reference on this is the work by Joseph Berliner (https://mitpress.mit.edu/books/innovation-decision-soviet-industry) but the broader argument can be found in many books. Chris Miller (https://uncpress.org/book/9781469630175/the-struggle-to-save-the-soviet-economy/) is excellent on the topic of the buildup of special interests.
But seriously, as someone who found "How Asia Works" a good counterbalance to some of my libertarian tendencies, if you're looking for a good counterbalance to some of your libertarian tendencies, then you really might like "How Asia Works". Its explanations are satisfyingly mechanistic in a way that it sounds like GEH:VSI wasn't.
Example: Both South Korean and Malaysian governments in the mid-20th century decided they wanted to jump-start automotive manufacturing in their countries. They both set up massive government-overseen programs to build car plants and get cars sold, spearheaded by brilliant visionary (essentially) dictators. They both dumped huge amounts of money onto car moguls, and both used tariffs and other legal protections to incubate their nascent car economies. South Korea ended up with a globally competitive, massively successful car company (Hyundai) and Malaysia ended up with... a little local company that made bad cars whose name I don't even remember.
The difference? Malaysia (really Prime Minister Mahathir) picked some car companies to be the big car companies, gave them tons of support, and helped plan out how they would all be successful. One company would make small cars; the other would make big cars. That sort of thing.
The South Korean government (really Park Chung Hee) picked several car companies to *compete* for the title of "big South Korean car company". They all received financial support and legal protections, but those protections were (after a startup period) *contingent* on sales into foreign markets (note: sales, not profit. The goal was to make cars good enough that foreigners would be willing to buy them, not necessarily to make money off them). This forced the companies to compete both against each other and against the much better-established foreign market, with their much better cars. The end result was a car company that ruthlessly, tirelessly expanded and learned until it had good cars.
Meanwhile, the Malaysian car companies kind of just made some cars that technically worked, and got paid for it.
Point is, "How Asia Works" gives a nice peak behind the curtain of central economic planning and how it works or doesn't.
Interesting. As a footnote, the Malaysian big car company is called Proton, the small one Perodua. I'm Malaysian, so I grew up seeing these cars everywhere. They were mostly embarrassments. Now however they're surprisingly good (surprising perhaps because my baseline is so low)
John Nye discusses how Britain was better at collecting taxes than France in "War, Wine and Taxes". The former handed out monopolies on making & selling alcohol, then was able to tax those monopolists. The latter had a lot more taxes on other things that everyone did their best to avoid, resulting in less actual revenue.
Pseudoerasmus sometimes discusses the high-wage thesis. My recollection is that he doesn't think it holds up because British wages weren't actually that high early in the IR (particularly compared to productivity).
One of the economic problems with Indian firms seems to be management. And I don't think it's always so simple to just replace management and expect the workers to accept it.
"One of the economic problems with Indian firms seems to be management. And I don't think it's always so simple to just replace management and expect the workers to accept it."
From what I understand about India, and correct me if I am wrong, but if a person becomes successful, you are expected to be a sort of jobs program for your relatives (by blood and marriage), then working your way through less distant relatives, then caste and community, etc.. These may also be the only people you can trust, because if you hire outsiders, they will be expected to put *their* families, communities, etc. first and not necessarily you or your interests.
This is also why an Indian marriage will be as much about the family members as it is about the bride and groom, since your new in-laws will be the people whom you and your family owe obligations to and who owe you and your family obligations in return.
This makes sense, since it's not as if there is much of a social safety net or anything else to fall back on. Your relatives, your caste, etc. are the only people you can count on to have your back, and they expect the same from you.
Source: Indian girlfriend.
But why is it different in, say, South Korea? Or is it?
Acemoglu & Johnson's "The Narrow Corridor" is partly about why India (with the "inclusive" institutions they praised in "Why Nations Fail") has done so much worse than China (which they regard as having "extractive" institutions that cause failure). They decide it's because of the culture which includes things like caste.
I love the "A very short introduction" series by Oxford University Press. I have read a few. These books are written by experts (thus differing from TED talks, open apparantly to anyone to speak on anything). They target intelligent lay people. Unlike present day TED talks, they don't dumb down concepts, and yet they manage to simplify them. I think it takes great skill in writing and expertise in the subject they are writing about.
Second - I have read about a dozen of them so far and have more on my to-read list. I've read a couple on subjects that I'm pretty expert in and still learned something from them.
TEDx is very different from TED, although the popular conception of a TED talk has been hopelessly muddled with TEDx, despite very clear trademark guidance and usage requirements. Whether that this was deliberate in a nudge-nudge-wink-wink sense, is another matter.
I've always paid attention to the TED vs TEDx difference, and I'd agree with your parent comment. There used to be a stark difference between TED and TEDx talks, now it's a matter of "slightly higher probability of a non-bullshit talk with actual content in it".
Without having as much to say about modern development economics, I rather like Nick Szabo's (admittedly rather Libertarian) historical explanations for "why England?" in these posts:
The last two especially go into more detail than the traditional "good property rights + security of being an island" and basically argue that the plague gave some Malthusian "breathing room" and shifted investment to more efficient forms of capital (like converting land that was required for human-feeding crops to pasturage, which lets you keep labor-multiplying horses) combined with some accidents of geography (lots of navigable waterways and being a long, skinny island make it easier to transport bulk goods economically).
Combine that with all the other usual stuff (good institutions like property rights and common law, increasing literacy, cultural factors, and so forth) and you get a pretty interesting composite. The last one also makes some comparisons to China and Japan, but it's been a while since I've read it, and I don't think he touches more modern industrializations.
The problem with culture as an explanation is that it's both incredibly broad and entirely post hoc. Very few people have identified a specific type of culture that leads to growth, and when they do it tends to just be pointing at what the already industrialised countries have in common, which then has to be updated when new countries are added. E.g. At first it was the "protestant work ethic" then a bunch of catholic European countries industrialized so it became "western individualism", then a bunch of Asian countries industrialized. A theory needs to have predictive power to be useful
Any book about human development that attempts to qualify on the basis of completely disparate societal conditions and outcomes, without taking into account predispositions to success (i.e. qualities which set some societies apart from others), will be necessarily convoluted and fall short of a satisfactory explanation.
> If you're 2000s Bangladesh trying to catch up to the West, you want semiconductor factories. Scrounging around a mostly-agrarian economy and eventually cobbling together enough expertise and capital to make a textile mill is one thing. Making a semiconductor factory is a lot harder.
Why do you need to cobble your semiconductor factory builders from the countryside and not other countries? I have a suspicion that foreign investors would love to do this but mostly don't due to various government roadblocks.
If you import labour, materials and parts from other countries, what sense does it make to build a factory in this particular country? How it would be cheaper than competitors? You got to have at least something - and Bangladesh probably doesn't (maybe some raw resources?).
It's a thing I think a lot about regarding Russia. A lot of people say Russia has to diversify its economy away from oil production, but the problem is, it's almost impossible to start any manufacturing here that would be cheaper and/or better (at first, at least) than China's. Even though Russia (unlike Bangladesh) at least has access to resources and way better educated (though less numerous) population. Software development works, because we CAN make software cheaper than most Western countries due to lower cost of living and slightly better than China/India because of better education (though not for long), but it's hard to run a country that large entirely on software start-ups (not that more tax breaks and better laws for IT sector would hurt - it's just I don't see this as THE solution to diversification problem).
"Government roadblocks" do muddle things up additionally, but to bring in investors for manufacturing takes more than clearing them up - you've got to offer some exclusive advantage. China got its start by producing cheap shit, but they're still so good at it that other countries can't really compete in that niche and replace Chinese labourers (that might change in the future as Chinese cost of living continues to rise, but maybe not: robots and 3D printers have a chance to relegate unskilled factory workers to trash pile of history for good).
I wasn't talking about importing all of the labor, materials and parts from other countries, just importing the people who know how to start up a semiconductor factory. You'd have a few highly-paid foreigners but most of the labor would be local.
I'm not sure this would work. How much unskilled labour does a semiconductor factory needs? And educating the locals to the necessary level to make them skilled would probably take quite some time. And you would still be stuck with imported machines, intermediate products and materials, even if you could save on workers' wages. Creating the whole (or a large part of) production chain necessary for semiconductor factory would take even more money and time - I'm not sure any investors would like to commit to such long and uncertain enterprise (at least not in these uncertain times).
Maybe I'm underestimating the cost of importing materials, but I was assuming the cost is fairly low. If you build in a port city / near the coast, you can get things shipped from other countries for less than the cost of shipping them from another city.
I think this is a good critique of Henrich's book (from a comment in Diane Coyle's review):
"Charles P Freeman on February 2, 2021 at 8:25 am said:
Social scientists and cultural psychologists appear to love this book. Historians know the history is rubbish so have probably ignored it. Henrich talks of the world in 400AD being one uniformly of intensive kinship, cousin marriage, and communal landholding (p.315) but is blissfully unaware of Roman civilization ( and others) that were not such. Then most medieval marriages/cohabitation arrangements/pregnancies were not controlled by the Church much though it attempted to do so.
The attributes of WEIRDness are not medieval but recent. Western- well he includes Australia, New Zealand and the US despite their many ethnic native cultures.’Educated’- first universal primary education in Britain 1870 (before that half the children had no education at all). ‘Industry’- mainly a nineteenth century and later phenomenon. ‘Rich’. for the majority of westerners not until the 1960s, for European societies, the advance of global trade post 1800 together with the subservience of the working classes provided most of it. ‘Democracy’. Universal male ,late nineteenth century, for women, not until the twentieth century, So why not concentrate, as most historians do on the ‘divergence’ of the west from the others AFTER 1800. Where did Henrich get this misguided idea that you had to go back to medieval times?
As a historian I am frustrated by the adulation that this book has got and you are right to challenge it!!"
I'm not qualified to critique the historical angle of this (or any of the angles, really) but it strikes me that the second paragraph of this Charles P Freeman post mistakes effect for cause. I don't think Henrich argued that some sort of nascent WEIRDness sprung up in medieval Western Europe and then caused industrialization centuries later. Instead, the earlier and more extensively kinship-based institutions were eliminated in a given region, the more analytical, nonconforming, prosocial, etc., the region's psychology/culture eventually became, which led to those regions becoming Western (in philosophical orientation), Educated, Industrial, Rich, and Democratic. The Freeman post seems to suggest that Henrich argues that being Western, Educated, Industrialized, Rich, and Democratic was a CAUSE of the West's divergence, while I think Henrich argued that these WEIRD characteristics are an EFFECT of the debasing of kinship-oriented institutions. The WEIRDness IS the divergence, not the cause of the divergence (although of course a WEIRD society could then incubate and cause further WEIRDness and its associated outcomes).
I would be interested to learn more about what was going on in Rome in 400 AD that makes it a counterpoint to the Henrich thesis. WIthout looking into it, I would guess that Rome was less tribal and kin-based than other contemporary societies.
That it is a cause for divergence. Furman: "Henrich’s explanation over-simplified: the Catholic Church banned cousin marriage which broke up kinship networks, then Protestant churches emphasized reading and individual interpretation. The combination led to a new “WEIRD (i.e., Western Educated Industrialized Rich Democratic)” psychology that helped lay the foundation for individual rights, democracy, markets, innovation, and the success the West enjoys today. Aspects of this have been imitated elsewhere helping to spread prosperity."
"A dazzling achievement. In the course of explaining how modern Western culture differs from all others past and present, Joseph Henrich has both altered and unified the fields of anthropology, history, psychology and economics. He destroys the assumption, common in psychology and endemic in economics, that human nature is everywhere the same. His account makes it possible to understand why some cultures have readily adopted Western tools to transform their societies, economies and politics while others reject those tools."
―Richard Nisbett, author of Mindware: Tools for Smart Thinking
“Reading this book feels like digging in your backyard and discovering a lost city. What Henrich has unearthed is truly astonishing: The modern West owes its prosperity to strange ways of thinking, created by accident centuries before the European Enlightenment. If that sounds improbable to you, prepare to meet a mountain of evidence, compiled by one of the great systematic thinkers of our time. This book is at once monumental and thrilling."
―Joshua Greene, author of Moral Tribes: Emotion, Reason, and the Gap Between Us and Them
"Written in clear and vivid prose, Joseph Henrich’s new book argues that the psychological characteristics of populations in modern prosperous countries are not universal to human societies. They were the result of institutional changes brought about by the Catholic Church in Europe during the middle ages, and laid the foundation for almost everything else that followed. Whether or not you agree, this bold and original book will shape the debate about the origins of modern society for years to come."
―Paul Seabright, author of The Company of Strangers: A Natural History of Economic Life
This claim seems to ignore the Special Economic Zones (SEZs) and their role in Chinese development,
"For example, China gets a lot of credit for its free-market reforms under Deng Xiaoping, but these reforms just took China from "literally Mao" to "kind of an average level of market freedom for developing countries"."
While China on average might be "average level of market freedom for developing countries," the SEZs, which were explicitly modeled on Hong Kong and Singapore, are much freer than are most developing countries. The authors of the economic freedom indices recognize this and want to create distinctive economic freedom measures for the SEZs to account for this.
In addition, China has been renowned for having the least unionization and labor rights in the world,
"For many years, labor standards existed largely on paper, while collective representation was non-existent. What evolved in this regulatory near-vacuum was a bare-knuckled
laissez faire version of capitalism bearing some resemblance to labor markets and conditions in the era of “liberty of contract” in the U.S. Indeed, some Chinese leaders adhered to a“scientific” understanding of the stages of socialist development that may have foretold, or even prescribed, a period of labor exploitation."
Meanwhile, many nations in the developing world have extensive labor regulation, with the result being that most workers are left out in the informal market where they have no rights at all, leaving a small, over-regulated formal sector.
Perhaps the original book addresses this, but as written any claim that doesn't recognize the radical free market free for all within the SEZs and with respect to labor rights in China is misleading at best.
> How come we are more certain that New California will soon get First World living standards than that India will?
If some of the Americans who move to New California experience less-than-First-World living standards, they'll just move back to wherever they came from, and have their First World living standards back.
In other words, New California will have First World living standards because it is competing against the First World to attract residents, and switching costs are low. (No one is stuck in New California because no one lives there yet.)
If a command economy is an effective catch-up strategy that languishes at the frontier, it would turn the Marxian dialectic on its head. Actually let's be charitable and say Marxian thinkers of the early 20th century were correct that a command economy could provide for the material needs of the populace. They were wrong that meeting material needs is all the populace would want, when in fact the frontier would keep receding past the horizon.
I actually once posed the question about China's development trajectory inverting the Marxian dialectic to a visiting Chinese official when I was a smartass student. The resulting exchange was... tense.
>And this part also isn't very clear. During the 1500s and 1600s, first the Netherlands and then Britain experienced a sort of mini-boom. Probably this was because of the Age Of Discovery in some way, although the book leaves us to fill in the details, including why this didn't happen to fellow Discoverers like France, Spain, and Portugal. Colonial trade goods played a role, but so did Northern European ships trading in various non-colonial ways, eg in the Mediterranean. Whatever the reason, these countries saw increasing wages, increasing literacy, urbanization, and the development of a strong mercantile class.
Bitcoin mining has made me worry a bit we're going down a path like the Spanish Empire.
If you have an isolates small town that uses gold as currency, the blacksmith, the farmer, the baker, etc. all increase the economy when they go to work everyday. Everyday their labor expands the economic pie. But imagine someone finds a goldmine on their property. They then have a huge personal incentive to spend all day mining the gold and thus increasing their share of the economic pie. But the gold mining does nothing to expand the town economy.
I think at least part of Spain's decline in the Age of Discovery was investing too much of their efforts into literal gold mining (and silver mining). They built fortresses, a giant navy, huge infrastructure, etc. all to accumulate gold. For a while, this is *individually* good as they can get an increasingly large share of global consumption. But *collectively* it's bad as it's turning a large part of the economy into a zero sum game. But as soon as it dries up, they're left with no way to produce more.
In contrast, England missed out on the gold. To be profitable, their colonies had to actually produce things that increased global consumption. They accidently stumbled on a system that aligned individual wealth creation with societal wealth creation. Soon Adam Smith and *Wealth of Nations* came along and people started to understand that producing stuff (or transferring goods around to minimize diminishing marginal utility), not gold accumulation was what made nations wealthy and the rest is history.
But I wonder how much of global economic history can be explained by looking at what percent of the economy isn't things like bitcoins and gold mines. And how much should we be worried about an increasing share of the economy going to those things (although from my calculations bitcoin mining is still much less than 0.01% of GDP)?
And now I'm kind of wondering if I'm just reinventing the concept of rent-seeking. Some quick googling and Dean Baker already made the bitcoin/rent-seeking comparison more than 7 years ago:
"While this can be quite profitable to an individual or firm that successfully claims a substantial portion of the newly created bit coins, it provides nothing of value to the economy as a whole. It is a case of pure rent-seeking, where large amount of resources are devoted to pulling away wealth that is created in other sectors. This is the story of much of the activity in the financial sector, such as high-frequency trading or the tax gaming that is the specialty of the private equity industry, but in few cases is the rent-seeking so clear and unambiguous."
So this probably isn't a very original thought at all, and rent-seeking and economic development seems likely to be fairly well studied, but I'll leave it up in case others are as slow as I was.
We do already have some days with negative electricity prices during the daylight hours when there's too much solar generation and not enough load. So I guess during those times bitcoin is a societal plus.
If California doesn't get its act together soon, there's going to be large hunks of the year with that problem so maybe bitcoin is alright :)
This is probably interdependent with your comment about gold, but even in places like the Far East where the trade sought (spices) was the same, England/Netherlands and Portugal/Spain adopted wildly different corporate structures, with important differences in outcomes. For the Iberians, discovery was run as a closely held crown corporation, and the crown's risk appetite was relatively low. They thus tended to do everything with quite a minimum of manpower and ships, and generally focused on transporting commodities that already had systems of production in place. The English and Dutch, by contrast, invented the modern corporate capital structure and had a middle class with a lot of risk appetite (see: Tulips) who built much larger fleets on a more speculative basis and tried to really found new cities (eg Jakarta, Singapore). These activities involved a lot more labor on all fronts--controlling natives, extracting and refining commodities, building large fleets, assembling commodities into finished goods back in the home country, etc. The Iberian approach didn't involve any of this, so it didn't spread wealth to nearly the same degree on the capital or wage side. That spread wealth was in turn the key to a virtuous cycle of higher domestic wages, larger domestic markets, and higher domestic capital intensity, which also stepped them up the tech tree past the Iberians and allowed them to dominate the colonies, as well as take on much larger colonial projects like India.
Setting aside what you said about Bitcoin, there is something to be said about Britain investing in production during the age of discovery.
In Brazil and Portugal, there’s a general sense that Britain ended up better off for its discoveries and colonies than Portugal did because Britain took the earnings and invested it into production. Meanwhile, Portugal took the earnings and invested it into… buying manufactured goods from Britain. I’ve heard people in Brazil say “The industrial revolution in Britain was funded with Brazilian gold.”
I’m not a historian so I don’t know how accurate this is, but it seems to be a common understanding among Brazilians at least.
“ I was pretty boggled by this: either wages were so low that the machines weren't necessary (in which case these places can outcompete Britain), or these places were being outcompeted by Britain (in which case they would be incentivized to adopt the new machines, which they should be able to do better than Britain given how cheap the operators' wages would be).“. Is this necessarily true? Wouldn’t it be more about productivity and ultimately the marginal cost of goods including the cost of transportation and end market demand?
Me: Wow, this book review writer has really managed to channel Scott's writing style. I wonder if this was conscious or not. It definitely makes for a compelling entry in the book review competition!
As a New Zealander I can attest that artificially high minimum wages do nothing to industrialise your economy (increase productivity).
I also heard recently (on Planet Money podcast) that there was a study of where the money comes from for minimum wage increases at McDonalds, it came from higher prices rather than productivity enhancements.
According to some quick googling, so take with a grain of salt, in 2011 (when the book was published), the GDP per Capita (PPP) of Italy was 43,102, and the GDP per Capita (PPP) of Britain was 42,469. So, it does seem a bit marginal but reasonable-enough as a point. (Much more than if it was reliant on total GDP which is of course nigh-irrelevant to development.)
It gets more reasonable when you realize that the classic exception to the "protestant work ethics" theory is France, which industrialized after Britain and the Netherlands but before some protestant countries and has been part of the group of developed countries ever since. France has been historically explained away somehow, but in addition Italy is alternatively catching up to the pack (occasionally even overtaking Britain or some other country) and then re-falling behind since the 60s. One and a half exception is half an exception too many, so better forgetting the theory.
You can pick countries and compare their GDP per capita throughout history. I don't know how accurate their data (especially historical data) is, but it's fun.
Italy was clearly richer than Britain during the Middle Ages. Britain passed Italy in the 1700s and stayed ahead until about 1980. From 1980-2012, Britain and Italy were effectively tied. Britain has recovered from the financial crisis much better than Italy.
You need some of both central planning and free market to be truly successful, you can only get so far with either one alone.
Your population needs to be literate and most of it must be "on the same team" to be able to trust each other enough to conduct business (e.g. no strong nobles versus commoners clash or population groups that speak different languages or have religious disagreements).
Economic ideologies take 50 years to fully realise and succeed. Once they have though then people will grow discontent as progress slows down, a new plan/ideology to address the gaps of the old one is then required.
The Soviet economy didn't collapse in the 1970s, it just reached the limits of what it could do. Our neoliberal plan is reaching the end of its success about now.
> And this part also isn't very clear. During the 1500s and 1600s, first the Netherlands and then Britain experienced a sort of mini-boom. Probably this was because of the Age Of Discovery in some way, although the book leaves us to fill in the details, including why this didn't happen to fellow Discoverers like France, Spain, and Portugal.
If you read Yuval Noah Harari's "Sapiens", he answers your question this way: the Netherlands and Britain learned the value of capitalism faster than other countries like Spain and Portugal. Dutch and British businessmen learned to always repay debts on time, whereas Spanish monarchs tended to renege on debts, which meant people didn't invest there, which meant the Spanish and Portuguese were slower to develop technology and make discoveries.
I consulted in Turkey twenty years ago. We agreed on a price for my time. I estimated a week. It ended up being three weeks. They wanted to pay me 70% of my invoice. I negotiated them up to 90%. Then they insisted on paying me in cash. Oy vey.
Regarding why New California would have better chances at reaching First World standars of living than India, Scott says "if India invites US companies in, lowers tariffs, and has good institutions - then they too can quickly converge to US standards of living?”.
I think a "Big Push industrialization" would be much harder than just inviting some companies. New California would have access to the whole US supply chain, logistics networks and financial institutions. This is much harder to replicate in other countries.
If you were the Prime Minister of India, would you support lowering all trade barriers so that India has access to the whole US supply chain, logistics network, and financial institutions? If so, do you think India would quickly catch up to the US? If not, why not?
Some of those barriers are outside of the control of the Prime Minister of India. US tariffs and raw physical distance for example (altough the last doesnt seem to hurt Alaska and Hawaii too much so who knows).
But even if those were lifted New California would be populated by Americans, who would only move there if they thought New California was going to have high living standards. Maybe that means only a Wyoming worth of people move in to jumpstart a mostly argiculture based economy. To make an accurate analogy to India we would have to also assume that New California starts out with say 50 million people, and they are not allowed to leave. In that scenario maybe they would become poor??
Perhaps this accounts for the high living standards of English settler-colonies. When they started getting colonised land was extremely abundant. Farmers were therefore guaranteed greater crop yield per labour than in England, where land was scarce. If this hadnt been the case, all the colonies would have failed from the start because people would have returned back to England. This even puts a natural cap on immigration, if wealth where to ever fall below Europe, people would stop coming. To this day Anglophone ex-colonies belong to least densely populated (but fertile) areas of the world. Maybe the USA would have been much more populous (but also a lot poorer) if it had as open borders with everywhere as it did with Europe, allowing it to settle into equilibrium with the word at large.
For those wondering: I dont think this applies in the present anymore, developed economies are way less reliant on argiculture yields right now.
Indian manufacturers would get outcompeted by US corporations, flooded with cheap American goods, and India's economy would get wrecked until the economic dislocations could get worked out. As in, wages plummet to the floor, social services get stripped as taxes dwindle, and India mostly switches to a sweatshop economy like Bangladesh until it can gain enough capital to re-industrialize behind tariff barriers.
Oh, more importantly, you're going to put a billion farmers out of work with cheap US food imports. Those people will riot in short order.
I'm tempted to resort to sarcasm in my response to your ignorance of economics, but instead, may I suggest that you read up about comparative advantage?
yes, Indian comparative advantage would eventually lead to better outcomes for all, with a roaring manufacturing economy like China. All those farmerwill work in factories with higher wages. In the interim, people will riot in the hundreds of millions and the state will be under severe strain. Can it survive the transition?
Do recall Tiananmen was people protesting market reforms and the resulting dislocations, and that the protests were nationwide.
New California would be populated by highly educated people with experience working in semiconductor factories. India has to lure foreign talent with higher pay. And these foreigners don't speak the local language and customs.
Exactly. There are different kinds of culture explanations. One kind says that a certain kind of culture, as a general symbolic-religious-value system is better at innovation (the Weberian route). But even if you don't think that's true (because, eg, Indians who remain strongly Hindu don't underperform in the US), Anton Howes-style network stories still require enough underlying cultural similarity for the network to perform. I lived in Papua New Guinea, and this is one of the sources of tension--often for lower-level positions (bookkeepers, secretaries, electricians, IT desktop support) in multinational corporations there are qualified native candidates, and naturally there is pressure to hire these candidates to create a virtuous cycle in the domestic economy. At the same time, multinational companies often prefer to hire expats for these roles, because even though they are not high-skill they are tightly integrated into the corporate culture, and expats have an easier time in this regard.
That's also true in PNG. But if you read Anton Howes, you'll see that the relevant network effects depend on a lot more than just language ability. It depends on being able to imagine yourself in the other person's shoes and stuff like that.
It's not bad software engineering. It's bad writing of specifications, and then throwing them over the wall. What you get back will comply with the specifications, but then you have to start iterating. Much better to have people who understand the problem do the programming.
The only reason it's associated with India is because with a billion people, a lot of them are going to be programmers, and so a lot of specifications gets thrown at them, most badly written.
New California would also have the benefit of starting from scratch. Sometimes it's a lot more efficient to build on a greenfield site than trying to renovate old structures into what you want. India has centuries of "this is the way things are" already in place, trying to bolt a modern system to set up semiconductor factories on top of that is always going to be harder than "this is an empty space with little to no local government, we can build what we want how we like, set up our most efficient systems, then wait for potential workers to pour in from elsewhere in the country who are already trained and skilled as we want them to be".
Bullcrap. If China's government was utterly incompetent, it would have ended up like India. In 1990, Indian GDP per head was the same as Chinese. Chinese GDP per head is now five times Indian.
Chinese economic performance is not dissimilar to Turkish, over a country twenty times the size, with vast, desperately poor hinterlands. It has outperformed Thailand, Vietnam, and Malaysia, all of which started 1990 with several times Chinese GDP. China is very much overperforming in its size category.
And Chinese coastal regions like Jiangsu Province (100M people) are already hitting GDP per heads of 18,000USD - Grecian levels. Another 100M Cantonese are hitting 14,000USD. That's high income by World Bank standards.
Also, from what I've heard, India's government is fairly bad on economic issues, historically. It's possible for China to be bad and still be better than other bad countries.
I find it interesting that you used semiconductor factories as an example of an industry you don't just plop down. Because the world leader in semiconductor manufacturing is based in Taiwan, and Taiwan was pretty backwards until well after WW2. It got at least somewhat rich before getting into it, and it was cheaper in 1987(when TSMC was founded) than today, but it's not like the Brits or Americans own this one.
And for that matter, the #2 semiconductor manufacturer is South Korea's Samsung, and again South Korea was a brutally exploited Japanese colony until the end of WW2, and then got wrecked up by a war after that, with a hardly-great dictatorship besides. This isn't old money carrying itself forward.
If one has any serious interest in this topic I suggest starting with The Great Divergence: China, Europe, and the Making of the Modern World Economy (The Princeton Economic History of the Western World Book 6) by Kenneth Pomeranz. Discussion this issue without doing the work is like painting a portrait with a 4" brush and just as useful.
Guns, Germs, and Steel is a far more comprehensive take on the whole mess.
China's issue is, and has always been centralized government. Went the centralized government is good, China is amazing. But the ability of a government to do good is the same as its ability to do evil, so when that central government decides to, say, stop building oceangoing ships and go full isolationist, or implements bad policy, China gets screwed for a century.
Regardless of the remainder of Diamonds work, I do think the influence of disease is generally underestimated in most thinking about economic and social development. The Black Death was responsible for a huge rise in wages. There's evidence some European diseases wiped out most of the Amerindians near the time of contact -- which has certainly had a profound effect on the history of North and Central America. The Panama Canal would probably not have been dug without Walter Reed. Then there's the Plague of Justinian...
But the Mongol/Mughal invasion and the resulting Muslim Mughal Empire *was* what what made India the 1rst wold economy !
(Potentially tied for first with the Netherlands, hard to be sure ?)
And by the point that the Brits waltzed in, at least some (?) of the Indians welcomed them, because the Mughal Empire was undergoing full (?) collapse...
(and meanwhile, weakened, had been invaded in turn by Persians and Afghans)
Maybe the cause was the ethnic division - Empires generally (?) don't care about doing ethnic assimilation, as long as their subjects pay their tributes, and AFAIK this was specifically the case in the various Muslim Empires (?).
And there's even a European parallel : the Austro-Hungarian Empire, which would have been the 3rd-4th world power in its own time ?
European colonial empires didnt exactly care about assimilating their colonial subjects either. There were also plenty of wealthy nation-states in India eg Bangal.
Really I think it's dumb luck. Europe just kinda happened to be the first to stumble upon America, kill them with smallpox, and to take all their stuff. Using that as starting capital to snowball into incredible wealth.
This was unexpectedly interesting (I've never been into economics or tech/development models, so that's why it was unexpected on my part.)
It is consistent with some things I've been wondering about since getting into 19c history. It seems like England just had the perfect circumstances to soar ahead, and it soared ahead alone. Part my lack of interest in economics is that I'm inherently suspicion of modeling complex systems and deriving universal rules from them. This strengthened that feeling--it seemed like using one country's experience as a model for another might not make any sense, especially if you're in a different era. There's no reason to think it will evolve in the same way once a model exists to copy, and especially not once a bunch of countries catch up. And circumstances matter. I agree that there was a false sense of security derived from the US's unique situation--it was very favorable to rapid development. It's likely a lot of places missed the boat, although the process may restart. And I agree that while more bottom-up development was definitely the way to go at the beginning, it is likely the case that a period of central planning is needed for countries to develop today (this may be related to globalization and the symbiosis it enables). But I'm thinking this is semi-cyclical. Bottom-up is less effective today in large part because people have radically different expectations/incentives, but those can shift.
I'm guessing that certain cultural factors--ones that go beyond the usual speculations--are indeed key, and which ones will be effective depends on the circumstances of the era. The UK colonies and East Asia were in a perfect position to take advantage of their respective opportunities. The status quo and expectations of the public and elites in each country undoubtedly play a huge role in determining the possibilities, which gets ignored to an absurd degree. As does the fact that success is likely to be uneven, and at the expense of other nations. Access to various resources is also crucial, and that is often a matter of luck. I don't think you can generalize in any systematic way, though you can make observations about each country's development process and draw some broad, common sense conclusions.
The natural contrast to this would be a review of Deirdre McCloskey's economic history books; seems like _Bourgeois Equality_ would be the most direct comparison to this work. If anyone is going to make a strong case for a cultural explanation and against the effectiveness of planned economic development, it'd be McCloskey.
Funnily enough, that was the gist of the comment I very nearly posted but didn't because it seemed pathetically self-centred - that I would subscribe to Scott's blog if he wrote a particular post that I wanted to read. But fair enough - if he did, I would.
In this third volume I try to show that the massively better ideas in technology and institutions, not capital accumulation or institutional interventions or government policies or union organizing, were the explanation. As a wise man put it, humans recently have “invented the method of invention.” The ideas and inventions, I claim, were released for the first time by a new liberty and dignity for commoners, expressed as the “equality” of the title—that is, by the ideology of European liberalism...
A crucial point is that the greatly enriched world cannot be explained by the
accumulation of capital, as to the contrary economists have fervently believed from Adam Smith through Karl Marx to Thomas Piketty, and as the very word “capitalism” implies. The word embodies a scientific mistake. Our riches did not come from piling brick on brick, or bachelor’s degree on bachelor’s degree, or bank balance on bank balance, but from piling idea on idea. The bricks, BAs, and bank balances—the capital accumulations—were of course necessary. But so were a labor force and the existence of liquid water. Oxygen is necessary for a fire. It would be unhelpful, though, to explain the Chicago Fire of October 8-10, 1871 by the presence of oxygen in the earth’s atmosphere. Better: a long dry spell, the city’s wooden buildings, a strong wind from the southwest, and, if you disdain Irish people, Mrs. O’Leary’s cow. The modern world cannot be explained, I show in the second volume, Bourgeois Dignity, by routine brickpiling, such as the Indian Ocean trade, English banking, canals, the British savings rate, the Atlantic slave trade, the enclosure movement, the exploitation of workers in satanic mills, or the original accumulation of capital in European cities, whether physical or human capital. Such routines are too common in world history and too feeble in quantitative oomph to explain the thirty- or one-hundred-fold enrichment per person unique to the past two centuries."
Culture is 100% important to look at when doing economies around the world. I read this book review other day and there are all kinds of cultural reasons for development.
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"Joseph Henrich, professor of evolutionary biology at Harvard .... Henrich presents a dazzling array of evidence to explain why variation exists among societies and why Europe in particular has played such an outsized role in human history."
The idea that Europe has played an 'outsized role in human history' seems very biased towards the recent centuries. Taking human history as a whole, would you say Europe has played an outsized role in human history? I'd say the Middle East was the reigning power not too long ago, at which time Europe had barely any technology or power.
Yes, Europe was the incubator of the Industrial Revolution that thrust the world into modernity. A place full of hyper-competitive warring states is pretty critical for sustained development.
> why did settler colonies (eg Canada, Australia, New Zealand, South Africa) converge to British levels of development so quickly
In the 19th Century, Australia didn't have to develop. The British made stuff and sent it to Australia, and Australians gave them money that grew on trees. Not exactly, but not far off; there was $10 billion in gold lying on the ground in Chewton Forest. Around 1890, Australians were the richest people in the world.
In the 20th Century, the gold ran out, and Australia went backwards. Industry never paid off, but a huge and lucrative service sector eventually made up for it.
Gold was part of the story, but wool was bigger. Wool was Australia's biggest export industry from the 1820s right up to sometime in the 20th century, with the brief interruption of the two gold rushes.
But this raises an important point: industrialisation isn't necessary for prosperity. A nation composed entirely of sheep farmers could be the richest country in the world, if it has a vaguely competent government, has access to the top shearing equipment and husbandry expertise, a strong export market for its goods, and a grazable-land-per-person ratio that allows a huge sheep-per-person ratio.
Poor countries aren't poor because of what they don't have, they're poor because of what they _do_ have, which is too many poor people.
Wait...what? You said "top shearing equipment" -- that seems like a bucket of industrial capital right there. Big complex machines in air-conditioned barns with 240VAC lines. Not to mention as I understand it modern efficient herding techniques require stuff like radios, helicopters, trucks -- another big chunk of industrial capital. I think if you want high relative wages (which is what most people think of as "being prosperous") there isn't any known labor value multiplier *except* industrial technology.
...although I guess we could adduce the existence of labor value *divisors* (things that *destroy* the natural value of labor), like disease, war, racism, and tort lawyers. One might reasonably argue Stage 1 of the history of economic development is getting rid of as many of those as possible, and Stage 2 involved the introduction of labor value multipliers...
Well clearly none of *that* "top shearing equipment" was available in the time period in question, so they managed with a different kind of "top shearing equipment" ?
Well, sheep were hand-sheared until well within my lifetime. OTOH, the shears used were probably made of the best steel in the world, given the descriptions I've heard. But more likely is that the ideology/racism of British colonialism discouraged colonials from industrializing but conveniently encouraged them to export agricultural goods to the motherland. So the highly-productive Australian sheep farms could export duty-free.
I will give the HBD angle. The reason why mainstream developmental economics is full of such stuff is that they refuse to look at the true causes of growth. These are essentially related to having Western European psychological traits. Mostly, having high intelligence. There are some people who have looked at intelligence and growth. Usually they use some kind of euphemism related to human capital, test scores, "school quality" or whatever. The most mainstream person is probably Eric Hanushek. But even he works at some libertarian think tank, not a major research university. 🙃
I already compiled all the major works on intelligence and macroeconomics from 1983 to now.
There's a lot of papers in this area, called deep roots literature. Basically, they look far back in economic history and find generally that places that were doing well a long time ago, like in 1500, are also doing well know, and that most variation since 1500 can be explained by where people in some country are from. This stuff doesn't talk much about what Magic it is that Europeans bring, but the intelligence literature does that.
Not to say some other things don't matter. Communism is bad too. Freer markets good. There is some interaction with national intelligence and freedom of markets. Gregory Christainsen looked into this in recent work.
I have some quibbles. Even accounting for HBD, it's trivial to find obvious examples of where it breaks down as a catch-all explanation (e.g. North Korea vs South Korea). I find Joel Mokyr's books on the cultural background factors to growth to be persuasive. Even if we were to accept HBD as a given, it is clearly not enough to explain why growth suddenly took off a few centuries ago, nor why we still have cases of very similar countries culturally and genetically with wildly different economic outcomes. HBD needs to be complemented with more factors.
As for your comments about free markets. One point that Ha-Joon Chang makes in his books is that today's rich Western countries engaged in blatant protectionism and IP theft (the US was the world's biggest IP thief for a full century) before they got rich. Germany's Friedrich List wrote extensively about Britain's hypocrisy in how they preached free markets but practiced hard-nosed protectionism before their imperial phase (and even substantially during it). This does not exclude the fact that communism is a worse system, just a nuance to keep in mind when we talk about "free markets".
The Euros leapfrogged ahead because they had lots of small states and lots of wars. Competition is how you generate sustained growth. East Asia was too peaceful at the time, and the Chinese (and their vassals) were on the downswing of a 300-year dynastic cycle. Bad time to be hit by Euros with iron-hulled warships.
"is this true? A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work"
Since the UK has a higher population than Italy, this can't possibly be true mathematically.
The Google Of All Wisdom pegs Italy's GDP as of 2019 at around 2 trillion USD versus 2.8 for the UK (and per-capita values are 33K versus 42K)
I guess this might also lower your trust in his work
I wouldnt be so quick to lower your trust: The book was first published in 2011 and up until around that point Italy was actually richer in GDP per capita adjusted for PPP, it also had a larger GDP as measured in local currency units - its not really till the European debt crisis that we see them start to significantly diverge.
All of this is sufficient to make the point that is not clear how much weight we should give Weber's thesis when looking at the world of 2011
> If you're 2000s Bangladesh trying to catch up to the West, you want semiconductor factories. Scrounging around a mostly-agrarian economy and eventually cobbling together enough expertise and capital to make a textile mill is one thing. Making a semiconductor factory is a lot harder.
I am little surprised that Egypt was not mentioned at all as you one of the clearest examples of someone trying to implement top down industrialization and it not being long successful. Under Muhammad Ali, not that one, Egypt used what was effectively export tariffs on cotton to help establish a local industrial base - there were 30 cotton mills in Egypt by 1829 but these were not long term viable and they could not compete in the wake of https://en.wikipedia.org/wiki/Treaty_of_Balta_Liman
One hundred and forty comments and not one of you brings up the fact that maybe Britain's success had something to do with being the biggest empire in human history? When you're violently appropriating a significant percentage of the world's wealth, yeah, you're probably gonna be doing pretty well. Doesn't exactly take a genius to figure that one out.
See my comments above. In Iberia, it really was the monarchy doing the expropriation as a private business. In Britain, it was a whole-of-country effort.
What wealth did Britain violently appropriate from India, Canada, New Zealand, and Australia? And for that matter, if there's some kind of naturally-occurring wealth manna or ore that the Brits mined out from all those places, how come at least the latter 3 are now very wealthy nations themselves? Does the stuff grow back over time or something?
I think we can probably confidently assume that over the time of The Raj the overall net transfer of industrial know-how was from Britain to India. Massively so.
If I take Wikipedia as a credible source, European scientists and manufacturers were indeed fascinated by Indian steel, but an English craftsman invented a separate technique independently to create crucible steel:
"From the mid-17th century onwards, European travellers to the Indian subcontinent wrote numerous vivid eyewitness accounts of the production of steel there. These include accounts by Jean Baptist Tavernier in 1679, Francis Buchanan in 1807, and H.W. Voysey in 1832. The 18th, 19th and early 20th century saw a heady period of European interest in trying to understand the nature and properties of wootz steel. Indian wootz engaged the attention of some of the best-known scientists. One was Michael Faraday who was fascinated by wootz steel. It was probably the investigations of George Pearson, reported at the Royal Society in 1795, which had the most far-reaching impact in terms of kindling interest in wootz amongst European scientists.[44] He was the first of these scientists to publish his results and, incidentally, the first to use the word "wootz" in print.
Another investigator, David Mushet, was able to infer that wootz was made by fusion. David Mushet patented his process in 1800. He made his report in 1805. As it happens, however, the first successful European process had been developed by Benjamin Huntsman some 50 years previously in the 1740s.
Benjamin Huntsman was a clockmaker in search of a better steel for clock springs. In Handsworth near Sheffield, he began producing steel in 1740 after years of experimenting in secret. Huntsman's system used a coke-fired furnace capable of reaching 1,600 °C, into which up to twelve clay crucibles, each capable of holding about 15 kg of iron, were placed."
So while it's fair to say that Indian steel was admired and researched, you can't really say that it was the secret technology the Brits stole for themselves. And that still leaves the question of: if India had an industrial process for making better quality steel, how come it did not industrialise the same way that Britain did?
Yes, I'm aware five seconds of googling could've found me a restatement of your polemic by someone else. I didn't *think* the thought was unique to you.
But let me suggest that had you spent fifty seconds googling, say, you might have come up with a compatriot voice that was slightly less embarassing. Here's where that silly number comes from:
"Between 1765 and 1938, the drain amounted to 9.2 trillion pounds ($45 trillion), taking India's export surplus earnings as the measure, and compounding it at a 5 per cent rate of interest."
By that same "logic" I should be a very rich, for if we take the value of all the goods and services the world has exported to me since my birth, and compound at 5% interest for all my life, it's a very hefty sum.
Perhaps something is starting to sound a little weird about this argument? Like, whatever happened to the value of all the *money* I spent to get those goods and services? Much like the enormous capital *inflow* to India over that same period to pay for those exports? And what's with the randomly compounding of interest? I can think of no rationality to that. Should we randomly compound at 5% interest all the goods and services China has exported to the US since 1950 and conclude that the US is now fabulously wealthy and the Chinese impoverished because of the gigantic transfer? Er...that doesn't quite seem consistent with all those shiny high-rises in Shanghai...
I mean, it's only "Business Today," of course, a half-step above "People" magazine, so it's not clear *they* should be embarrassed by printing such goofball clickbait.
Yeah, but in the 18th century it wasn't quite at its peak yet. Older empires, like Spain (and even Portugal, they were *really* important in the Age of Discovery and the Portuguese had a settlement in Goa that was the headquarters of their own colonial state in India, lasting even into the mid 20th century, something still remembered so that an episode of a comedy-historical drama is about a Portuguese visitor to the Southern Indian empire of Vijaynagar: https://www.youtube.com/watch?v=21GwvpLUh2s) were in existence at their height then. Why did Britain outstrip them is the question being asked. Why the *British* Industrial Revolution, and not the Spanish or German or Italian Industrial Revolution?
Because there was much more wealth to extract from India than from pretty much anywhere else. India's wealth is really the key here. Just the Maratha Confederacy alone, under Shrivaji, was bringing in income that was more than the entirety of western Europe combined.
Whether that disproves the Catholic vs Protestant hypothesis is another matter. For one thing, the richest areas of Germany are disproportionately Catholic and Southern. Nevertheless, Protestant-majority countries are richer in Europe, but it is not clear what is cause and what is effect.
Protestant countries tend to be more liberal, ceteris paribus, just as Catholic countries tend to be more liberal than Orthodox Christian countries. All of this is within Europe. When comparing countries across the globe, religion likely has a much weaker effect than culture, institutions and so on.
The revolution in religion didn't happen on its own, there were other social, cultural and technical/scientific revolutions going on at the same time. And to take one example, the old mediaeval custom of holidays (literally "holy days") because you were celebrating a local saint, or your guild's patron saint, or it was one of the holydays of the Church calendar, all got scrapped by the Protestants. So instead of having a day, or part of a day, off, now you are working that day like normal. If Johann is working eighty days and Mario is working sixty days, Johann is going to make more money be it for himself or his landlord or his master.
I agree wholeheartedly that the religious manifestions were grown out of deeper cultural changes. Disentagling them is extremely difficult - let alone coming to a consensus which factors to consider and how to weigh them in relative importance.
Your point about working longer is interesting to consider. Generally speaking, the countries whose citizens work the longest annual hours today also tend to be less wealthy.
"Just working more" on its own, no. But (a) this starts an evaluation of work as something virtuous and desirable in itself (I know Weber's "The Protestant Ethic and the Spirit of Capitalism" is the ur-text here and I don't know if I agree with it in every detail, but he was on to something), such that Calvinist-influenced societies could see *worldly* success as a signifier of God's favour (b) having the extra money led to the accumulation of capital and the foundation of habits centred on working days rather than time off, and that gave a small but valuable lead.
Modern days it's not about toiling long hours in the coal mines or steel foundries that makes money, but during the Industrial Revolution we weren't yet at the point of "manipulating electronic representations of notional value of intangible shares makes a fortune".
I really don't believe this. I'm sure the author is an established person in his field, but I am kind of bizarrely into Meiji-era Japanese history and I don't buy the focus on tariffs.
The main thing is, I tend to say that Japan is the *only* country to industrialize (or "economically westernize") prior to WW2 that was not, in some strong sense, already western. Each other country to westernize either had its capital west of the Urals, or was the United States of America. So when he says Japan is a weird anomaly, that is setting off my Wait What detector.
In particular, Japan did not have high tariffs. Japan was not allowed to have high tariffs; the Tokugawa shoguns got overthrown in large part because they opened the country to free trade, and the treaties that did that were upheld by the Restoration-era government for reasons of 'did not want to be invaded the way China is being'. See https://en.wikipedia.org/wiki/Treaty_of_Amity_and_Commerce_(United_States%E2%80%93Japan) for a brief summary; that notes that they were compelled to have very low tariffs until 1894, and has a link to the treaty that revised it - which treaty says they were allowed to go as high as five percent on the main goods discussed. Even if I'm misunderstanding that treaty (it's midnight), it still means that for the first 27 years of their westernization, they had practically no tariffs, and are only allowed to install any serious amount of tariffs ten years before they defeat a Great European Power at roughly equal odds.
Second, Russia is treated as a first-rate power consistently from the Napoleonic Wars through to the present day. Britain, France, and Piedmont fail dramatically to attack it in the Crimean War, despite what the Wikipedia page suggests is superior coalition numbers and, even if I'm misunderstanding it, is almost certainly not more than about 2-1 in the Russian's favor. When Britain and France want to invade China - a third-world country with a similar population advantage - they waltz in, victorious despite, again going by Wikipedia, 20-1 odds. (https://en.wikipedia.org/wiki/Second_Opium_War). Asking 'how Russia westernized' is rather like asking how trout became fish; it was one of the Great Powers of Europe, with everything this involves, from the Congress of Vienna onwards.
Third, Great Britain had tariffs during the 18th century; large-scale industrialization took off in the early 19th century, by which time Great Britain had started shifting to free trade. (https://en.wikipedia.org/wiki/Economic_history_of_the_United_Kingdom#The_Age_of_Mercantilism). And Great Britain's 'high taxes' in the 19th century were, again going by that Wikipedia page, seven percent. That was high by 19th-century standards, and is totally outside the Overton Window for lowness today - even Prospera wants a ten percent income tax!
And, fourth... everyone was trying Point Two! All the countries of the world were trying to protect their trade from foreign competition. Since the one that succeeded best in industrializing failed utterly and completely at doing so, I don't see why they would want to put that on the list.
So that is why I don't really buy the Standard Model. Also all the standard Economics 101 stuff about tariffs being bad, but I think it is striking that practically their only test case had low tariffs establishes it really quite clearly.
If I was going to try to describe a formula for success, I would say:
Rule of law, in the sense of not expecting the police/bandits/Afghan raiders to randomly steal your stuff. If the central government can do it, that's much less of an issue than if anyone who feels like it can do it.
Free (internal) markets, most importantly the abolition of guilds and government monopolies.
Not being invaded, fighting a civil war, or expecting one of these things to happen tomorrow, a term which excludes practically all third-world countries.
And either fairly low tariffs or being really, really big.
Given those four elements, in 30 years, Japan went from 'stuck in the 17th century' to 'conquering territories from its neighbors', and in another 10 became the first non-western country ever to defeat a Great Power. And that is the main fact any theory needs to explain, because it is the main case of a country that was not Western in the slightest proving the world wrong, and becoming a Great Power itself.
Uncommunisming in time to become a normal developed country doesn't appear to have worked for many countries in eastern europe and the Balkans which are 10-15 IQ points below the Chinese and are poorer than China now despite being far richer than it 20 years ago. Taiwan and Singapore didn't communism at all during their industrialization (nor the wild west of the US).
Also I'm skeptical of geographical explanations because the west coast of the US was separated from the rest of the industrialized world by thousands of miles of desert and mountains and prairie, and the panama canal didn't even exist yet. Meiji Japan was an island with few natural resources on the opposite side of the world from all the industrialized countries. Australia was also in a very inconvenient location for network effects.
It seems the high IQ countries all get industrialized in spite of their central planning or lack thereof and good geography or lack thereof. Except when the central planners are especially bad and provoke everybody else into trade embargos. North Korea has a high IQ and communisms like crazy but is still poorer than the UK was in 1700 before the beginning of the industrial revolution.
1700AD UK GDP per capita PPP in 1990 international dollars: $1,250
2015 North Korea GDP per capita PPP in 2016 dollars: $1,700
inflation divisor: 1.8363
2015 North Korea GDP per capita PPP in 1990 dollars: $928
Interestingly, when China began its economic reforms in 1978, it was even poorer than North Korea is now, and a great deal poorer than pre-industrial Britain. So apparently it had hardly industrialized at all under communism.
The USSR boasts much more impressive economic numbers than any other communist regime. Lots of other countries tried communism, but only the USSR experienced much industrialization under it. So the book seems maybe too favorable towards central planning.
Being an island is probably more of an advantage than a hindrance starting with the age of Discovery ? (Sea transport is very efficient and being an island helps with defense.)
Yes, maybe sea transport around the world is cheaper than a few hundred miles of overland transport in terms of cost per pound of freight (pre-railroads). I read something to that effect in Sowell. But once railroads are built, it's probably not a big deal. If it were, Utah would be a third world country.
"A quick check shows Italy has higher total GDP but lower GDP per capita [than the UK], which is a weird definition of 'richer' and lowers my trust in this work."
Seems unlikely, as Italy has a smaller population than the UK.
"GEH:VSI isn't very big on prescriptions, but I think it would probably suggest having a pretty heavily planned economy while you're playing catch-up, and then unwinding it once you're close to where you want to be."
This strategy does not work as vested interests built up during the planned period resist being unwound. The only reason Deng Xiaoping was able to do what he did in China is because Mao's Cultural Revolution and its purges prevented any special interests from building up. Stalin's purges also served the same function and the decline in the Soviet Union only really got going during Brezhnev's "stability of the cadres" era.
If your farmers can only produce a surplus of 20% beyond what they need to feed themselves, you can't have more than 17% of your population working in the factories without someone starving. (not that this wasn't seen as an acceptable cost, so long as the ones starving were Irish, Bengali or Ukranian) I don't buy any explanation that doesn't include farmers going from a majority of the population to a small minority. (in the Old World, at least. The Frontier had its own thing going on with bison and plains and cowboys)
The model we were taught at school was that a mix of superior crop rotations, better (and more capital-intensive) types of farming such as more advanced ploughs and seed drilling, and selective breeding were developed. This made much more food per acre and per farmer but the benefits mostly accrued (with dubious legality. see: the Enclosures) to the landowner.
This pool of labour not needed to work the land and forced from the land they traditionally subsistence-farmed was available to operate the woolen mills, mine the coal and build the canals/railways that drove the first indistrial revolution.
Is it even meaningful to argue that high wages in the UK and the low countries drove the IR when most people were primarily subsistance farmers rather than wage labourers?
"For example, why did settler colonies (eg Canada, Australia, New Zealand, South Africa) converge to British levels of development so quickly?" Abundant land --> higher wages? (See: Henry George)
The big question this raises for me is "what comes next"? So, you've gone down the following path:
Stage 1: Strong government: build a solid industrial framework from raw materials, to manufacturing, to production, to retail.
Stage 2: Liberalise and let things take their course, only stepping in if things go wrong
The problem is this assumes there will be no further paradigm shifts beyond industrialisation. But there will be, and we already have an idea what the next step looks like. It's the green technology revolution.
And the Chinese government is currently monopolising all of the raw materials which will be used to produce the next generation of Green tech. They're one step ahead of all the "libertarian" (ish) western governments on this.
So it seems to me that we need more of a synthesis/compromise between libertarianism and a more planned economy. Otherwise we miss out on critical investments for the future which won't necessarily pay off in the short term. Some kind of state capitalism (a la China, Norway, Singapore) seems inevitable for future-proofing.
AFAIK "rare earths" are not particularly rare, it's just that the US (in particular) is unwilling to pay the environmental costs... because it doesn't seem to be profitable enough ?
Otherwise, I'm somewhat skeptical about "green energy" being able to replace fossil fuels. And since we've been basically sitting on our hands since the 80s, I see de-industrialization a more likely future.
I don't consider nuclear to be particularly "green", but I don't see how we can avoid it at this point.
Sadly, politicians don't seem to be particularly interested... but this will probably change the next time oil prices explode... probably during this decade ?
Rare earths are not rare, but they are poorly differentiated from other minerals, and hence time-, energy- and labor-intensive to separate. And anyway there are plenty of ores in the US, but the cost of labor and energy here is sufficiently higher than that in China that even trans-oceanic shipping both ways doesn't compensate
I don't think it makes sense to say China is monopolising all (or any) raw materials. China generally produces raw materials much cheaper than we can, and is quite happy to sell us as much of them as we wish to buy. If the price rises beyond the level at which the materials can be produced in the west, that is where they will be produced - and no, in that case we will not be monopolising them either.
I'm a little dubious about the neat conclusion that industrialisation and automation took off because workers were *too* well-paid. As to French and British textile mills, it was the French https://frenchmoments.eu/textile-history-in-france/ and Belgians https://www.discoveringbelgium.com/medieval-flemish-cloth-industry/ who had the advantages early on in that industry. England grew rich in the mediaeval and early modern period exporting wool to the Continent for the thriving textile industries there. Not to toot my own horn, but to quote from a review I did of a biography of Dame Julian of Norwich:
"Norwich wasn’t some little village or bucolic backwater; it was the capital of the most populous county in England, and had good claim to be the second most important city after London. To quote Wikipedia:
“The engine of trade was wool from Norfolk's sheepwalks. …Throughout this period Norwich established wide-ranging trading links with other parts of Europe, its markets stretching from Scandinavia to Spain and the city housing a Hanseatic warehouse. To organise and control its export to the Low Countries, Great Yarmouth, as the port for Norwich, was designated one of the staple ports under terms of the 1353 Statute of the Staple.
By the middle of the 14th century the city walls had been completed. At around two and a half miles (4 km) long, these walls, along with the river, enclosed a larger area than that of the City of London. …Around this time, the city was made a county corporate and became capital of one of the most densely populated and prosperous counties of England.”
Britain was perhaps peculiarly well-positioned to be the heartland of the Industrial Revolution; iron and coal were its begetters, and Britain was fortunately rich in these resources. But there were other hampering factors than "plagues killed off everybody, this meant that wages rose for those who remained alive to be workers, high wages = high costs = budding capitalist entrepreneurs need to invent machines to do the work". From Charlotte Bronte's novel "Shirley", written in but set in 1812 during the Napoleonic Wars and at the height of Luddites and frame-smashing:
"Shirley, A Tale is a social novel by the English novelist Charlotte Brontë, first published in 1849. It was Brontë's second published novel after Jane Eyre (originally published under Brontë's pseudonym Currer Bell). The novel is set in Yorkshire in 1811–12, during the industrial depression resulting from the Napoleonic Wars and the War of 1812. The novel is set against the backdrop of the Luddite uprisings in the Yorkshire textile industry.
The novel's popularity led to Shirley's becoming a woman's name. The title character was given the name that her father had intended to give a son. Before the publication of the novel Shirley was an uncommon but distinctly male name. Today it is regarded as a distinctly female name."
(1) An exchange between a mill-owner and another man helping him defend against workers coming to smash the new machinery:
"Helstone says these three are your gods; that the 'Orders in Council' are with you another name for the seven deadly sins; that Castlereagh is your Antichrist, and the war-party his legions."
"Yes; I abhor all these things because they ruin me. They stand in my way. I cannot get on. I cannot execute my plans because of them. I see myself baffled at every turn by their untoward effects."
"But you are rich and thriving, Moore?"
"I am very rich in cloth I cannot sell. You should step into my warehouse yonder, and observe how it is piled to the roof with pieces. Roakes and Pearson are in the same condition. America used to be their market, but the Orders in Council have cut that off."
(2) Backstory!
Trade was Mr. Moore's hereditary calling: the Gérards of Antwerp had been merchants for two centuries back. Once they had been wealthy merchants; but the uncertainties, the involvements, of business had come upon them; disastrous speculations had loosened by degrees the foundations of their credit. The house had stood on a tottering base for a dozen years; and at last, in the shock of the French Revolution, it had rushed down a total ruin. In its fall was involved the English and Yorkshire firm of Moore, closely connected with the Antwerp house, and of which one of the partners, resident in Antwerp, Robert Moore, had married Hortense Gérard, with the prospect of his bride inheriting her father Constantine Gérard's share in the business.
...When he came to Yorkshire, he — whose ancestors had owned warehouses in this seaport, and factories in that inland town, had possessed their town-house and their country-seat — saw no way open to him but to rent a cloth-mill in an out-of-the-way nook of an out-of-the-way district; to take a cottage adjoining it for his residence, and to add to his possessions, as pasture for his horse, and space for his cloth-tenters, a few acres of the steep, rugged land that lined the hollow through which his mill-stream brawled. All this he held at a somewhat high rent (for these war times were hard, and everything was dear) of the trustees of the Fieldhead estate, then the property of a minor.
...As to the mill, which was an old structure, and fitted up with old machinery, now become inefficient and out of date, he had from the first evinced the strongest contempt for all its arrangements and appointments. His aim had been to effect a radical reform, which he had executed as fast as his very limited capital would allow; and the narrowness of that capital, and consequent check on his progress, was a restraint which galled his spirit sorely. Moore ever wanted to push on. "Forward" was the device stamped upon his soul; but poverty curbed him. Sometimes (figuratively) he foamed at the mouth when the reins were drawn very tight.
In this state of feeling, it is not to be expected that he would deliberate much as to whether his advance was or was not prejudicial to others. Not being a native, nor for any length of time a resident of the neighbourhood, he did not sufficiently care when the new inventions threw the old workpeople out of employ. He never asked himself where those to whom he no longer paid weekly wages found daily bread; and in this negligence he only resembled thousands besides, on whom the starving poor of Yorkshire seemed to have a closer claim.
The period of which I write was an overshadowed one in British history, and especially in the history of the northern provinces. War was then at its height. Europe was all involved therein. England, if not weary, was worn with long resistance — yes, and half her people were weary too, and cried out for peace on any terms. National honour was become a mere empty name, of no value in the eyes of many, because their sight was dim with famine; and for a morsel of meat they would have sold their birthright.
The "Orders in Council," provoked by Napoleon's Milan and Berlin decrees, and forbidding neutral powers to trade with France, had, by offending America, cut off the principal market of the Yorkshire woollen trade, and brought it consequently to the verge of ruin. Minor foreign markets were glutted, and would receive no more. The Brazils, Portugal, Sicily, were all overstocked by nearly two years' consumption. At this crisis certain inventions in machinery were introduced into the staple manufactures of the north, which, greatly reducing the number of hands necessary to be employed, threw thousands out of work, and left them without legitimate means of sustaining life. A bad harvest supervened. Distress reached its climax. Endurance, overgoaded, stretched the hand of fraternity to sedition. The throes of a sort of moral earthquake were felt heaving under the hills of the northern counties. But, as is usual in such cases, nobody took much notice. When a food-riot broke out in a manufacturing town, when a gig-mill was burnt to the ground, or a manufacturer's house was attacked, the furniture thrown into the streets, and the family forced to flee for their lives, some local measures were or were not taken by the local magistracy. A ringleader was detected, or more frequently suffered to elude detection; newspaper paragraphs were written on the subject, and there the thing stopped. As to the sufferers, whose sole inheritance was labour, and who had lost that inheritance—who could not get work, and consequently could not get wages, and consequently could not get bread—they were left to suffer on, perhaps inevitably left. It would not do to stop the progress of invention, to damage science by discouraging its improvements; the war could not be terminated; efficient relief could not be raised. There was no help then; so the unemployed underwent their destiny—ate the bread and drank the waters of affliction.
Misery generates hate. These sufferers hated the machines which they believed took their bread from them; they hated the buildings which contained those machines; they hated the manufacturers who owned those buildings. In the parish of Briarfield, with which we have at present to do, Hollow's Mill was the place held most abominable; Gérard Moore, in his double character of semi-foreigner and thorough-going progressist, the man most abominated."
Back in 2002 the Discovery Channel had a good introductory series called "Industrial Revelations" hosted by Mark Williams; the first episode puts the beginnings of the Industrial Revolution back to the 18th century, when the cloth-weaving towns of the North were boomtowns and there was a need to supply them and export the goods. Coal was the wonder fuel of the day, and that led to mines, and that led to the need for machinery to pump out the mines, and that led to steam engines, and that led to...
> Overall there was a lot in this book that was unsatisfying.
Other people have noted that *A Very Short Introduction* is a series. The way I've seen them used is as replacements for introductory classes.
Basically, if a graduate student wants to take Advanced Thing, but never took Introduction to Thing, they can read the relevant *A Very Short Introduction* book carefully and come out with an understanding roughly equivalent to what's left over in the average undergrad's brain who took the class a year ago. The books aren't really meant to have a strong thesis or definitively answer the controversial questions of the discipline.
> A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work.
I think this is missing the point. Some people say that the reason the UK, Germany, and US are rich is the Protestant Work Ethic. Allen's just pointing out that this can't be the *main* explanation because Italy is about as rich as these countries.
If Protestantism vs. Catholicism were the real culprit, we'd expect Catholic Italy and France to be closer to Catholic Mexico in development. What we actually see is that the UK, Germany, France, and Italy are all roughly in the same place despite their different traditions. That means there's got to be something else going on.
> Maybe it shouldn't have thrown culture out so quickly?
Perhaps Allen's unstated assumption is that culture is shaped by economic development, and not the other way around?
"Alexander Hamilton in the US. They and others independently converged on a four-pronged plan:[...] 4. Establish mass education to speed the adoption and invention of technology.
The USA and most of Western Europe tried this in the early 1800s, and it went pretty well."
I think this might be the nicest thing you've ever said about mass education.
The somewhat dark undercurrent is that AFAIK modern schooling is based on the Prussian school, whose goal was to make soldiers and war-industry factory workers.
Shameless book review suggestion: Joel Mokyr's "Culture of Growth", which looks at endogenous factors specific to culture as the primary explanation of the Great Divergence.
It very much rejects geographic determism, colonialism et al. Not very popular in our current zeitgeist but a faboulous and thought-provoking read (plus a great deal of intellectual history to boot).
A lot of this discussion, and the discussion in the comments, seems to assume that Europe is somehow significantly better than the rest of the world (Europe, specifically) and this needs to be explained. I'd like to point out that this is a recent trend - before Europe, the Middle East was the fount of knowledge and innovation, with contributions from places like China (and this knowledge was what was carried over to Europe, in part). Just because Britain happened to industrialise and invade a bunch of countries for wealth doesn't imply that Europeans have always been superior to everyone else.
Because we live in the present, and we judge value by the social mythology of the present, and don't really give a shit about whether Shlomo had more good-looking healthy cattle than Umberto, back in the day, or whatever burned in the envious hearts of men 1,000 years ago. We will *always* judge what is admired today as what is self-evidently the acme of human achievement, and so necessarily those who are near the peak will have reached it recently.
Let's say, for example, that the reason for Europe's superiority is the "Western Church". That explanation falls down unless it can somehow account for why medieval Europe, with that Church, lagged behind other civilizations of the day. And if we care about why stuff happened, then we have to care about things that happened a long time ago.
I don't think there's "one simple weird trick", it was a combination of a wide selection of things that all just happened to fall the right way at the right time. We can certainly investigate and interrogate the past, but reducing it down to "This particular thing is why" isn't the full answer. And this is really an introductory book, not an overview of the whole field.
Civilisations arise, come to a peak, generally form empires, then decay and a new civilisation takes over. There's no reason that won't happen with current Western civilisation in its turn.
We certainly live in the present, but 'this one section of the world has always been much richer and more knowledgable than the rest' and 'this one section became richer through some recent events' are very different situations. The first demands an explanation, the second might be a coincidence (or at least just part of the usual patterns of rise and fall of cultures over the world).
Might also be a lack of knowledge : before this discussion, I had no idea that the Indian Muslim Mughal Empire was the 1rst world power (perhaps tied with the Netherlands ?) circa 1700 !
Regarding the tariff question, there is an important paper by Doug Irwin that shows the relationship between industrial development and import tariffs is not really straightforward as the book reviewed implies.
From the abstract: "The paper shows that: (i) late nineteenth century growth hinged more on population expansion and capital accumulation than on productivity growth; (ii) tariffs may have discouraged capital accumulation by raising the price of imported capital goods; (iii) productivity growth was most rapid in non-traded sectors (such as utilities and services) whose performance was not directly related to the tariff."
I've read this book too and it tackles a subject for too big for its size.
The Hanging With History podcast (that's me) has the causes of the Industrial Revolution as the core idea around which it is organized. It's a big subject if you want to look at all the angles.
Culture, religion and technology are certainly possible contributors and need a careful look.
As just one example, a lot of the comments here have looked at religion at the level of Protestant vs Catholic. The Protestant religion in England underwent a lot of development and fracturing. A possible contribution was late 16th/early 17th century Puritan psychology, which I find is poorly understood these days. And that particular outlook only lasted a few decades, changing into something else, something we are more familiar with today. Also, the rise of Methodism and similar during the time of various labor movements had some interesting effects I'm still working on teasing out.
I've done over 300,000 words on the subject and haven't even reached the 18th century yet. And I hope I'm not particularly long winded. McCloskey is halfway through a 6 volume approach to the subject that mainly emphasizes changes in culture and values. So yeah, a little book like GEH is just for those who want to dip their toes in. When it comes to culture I've spent hours developing my "minimally murdery" theme.
Pseudoerasmus and Anton Howes are great sources for people who want to follow developments in economic history as they occur today.
"Catholic Italy [is richer than] Protestant Britain" (is this true? A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work.)
British GDP (and currency valuations if you're working on dollar rather than PPP comparisons) has been doing weird things lately because of Brexit so it's very hard to be certain until it stabilises. Also the UK population is higher than Italy, which should make it impossible for Italy to have higher total but lower per-cap.
I have probably read 50 to 100 books on the IR and the "Great Divergence", and my take on most of the "one big theory narratives" is that they tend to point out something which is necessary and try to imply that it is sufficient.
Some common themes:
Intermediate levels of state fragmentation and competition
Good institutions (markets, prop rights, rep democracy, rule of law)
This is just a partial list off the top of my head, and most of these sub causes have various, sometimes even contradictory takes on the issue (for example which institutions are essential?j
I don’t agree they are all even necessary, but most probably are, which leads us to a more complex picture where there are countless ways of NOT seeing sustainable growth rates and improvements in problem solving. But there are also various ways which ARE possible for human progress. Great Britain led the charge in proving that advances in human prosperity are possible. Other nations at other times took this general recipe and built upon it or adapted it in their own special ways to their conditions and history and culture. In some cases the adaptation was easy and the environment conducive (North America). In other places it is a more drastic adaptation (China). And of course there is the topic of catch up vs lead growth and how the fundamentals for one may be very different than the other.
Central planning doesn't work. It never has. It never will. The information necessary to centrally plan is not available (because it's only in people's heads), and cannot be gathered in a timely manner.
And yet.
The price system *is* the central planning that you want. It requires free markets, though, and people doubt that markets can arise from nothing. People are, in their heart of hearts, economic creationists. And we all know how accurate creationism is.
Systems basically equivalent to evolution (eg the free market) can get stuck in poor equilibria if they don't have enough slack to get out of them. It sounds like Allen is saying that the "development state" produces slack by subsidizing them until they can get off the ground. Just like half an eye might not be evolutionarily adaptive, a steel mill that's halfway to being competitive with other country's steel mills isn't profitable. But you've got to go through that step, there might not be enough private investment to make it happen, and the state can help.
The state *can* help. But does it? At what cost (not just money)? And while it's helping you, who is it hurting with the same power it has to help?
Everything the state does is based on coercion. That has a cost. That cost has to be overcome by doing more good things than bad things. But it has more incentives to do bad things than good things.
That's why you don't want your state to have the power to do good things. Separation of state and market. It's the only way.
Yes, I know that's a "crazy idea". But so was separation of state and church, back in the day. It was thought to be insane to allow people to choose their own religion. What if they chose the wrong one, and imperiled their eternal soul?!?! No, you needed the government to pick the right religion.
<i>The author is most impressed with China, which seems to have gotten this part right (maybe by accident): they communismed until they reached the technological frontier, then uncommunismed in time to get on the path to being a normal developed country. GEH:VSI isn't very big on prescriptions, but I think it would probably suggest having a pretty heavily planned economy while you're playing catch-up, and then unwinding it once you're close to where you want to be.</i>
How's this compare with India? Haven't they come a pretty long way in the last 30 years with comparatively less centralized planning? Or maybe they haven't come as far, and therefore the China approach still looks better?
"Do artificially high wages through eg minimum wage policies or UBI help as much as naturally high wages?"
Are there "naturally high wages", or generally, any kind of "natural wages", arrived at through some pure perfect market self-corrective calculations, or there are just wages, subject to all kinds of non-market pressures (from monopolies, laws, culture, negotiating power, zoning, racism, sexism, optics, all the way to pure violence - e.g. the terrorizing, firing, beating, and sometimes even downright murder of workers asking for more, all-too-common in developing countries, but common in the US as well in the 20th century) - that those pretending to see a "free market at play" conveniently overlook?
I think this is Fallacy of Grey - if the government declared everyone would be paid exactly $20/hour, would this be exactly as "natural" as supply and demand? If you say no, you've already admitted that it's fair to talk about wages being natural, even if it's not the sort of perfect crisp bright-line category that nothing is.
If I say "no" to your hypothetical question, it only proves that I admit that it's fair to talk about naturalness as a spectrum. Which I do.
That we're closer to the "natural" side of the spectrum than the artificially-keep-wages-low side, is what I'm arguing against though.
If we're not, it can be semantically disingenuous and politically exploitative to call our current situation "natural".
The Fallacy of Grey is not about being satisfied to call a dark muddy grey "white" because "well, nothing is perfect anyway".
I see libertarians as all to eager to recognize and condemn artificially-keep-wages-high schemes (like minimum wages and union bargaining), but sidestepping and ignoring artificially-keep-wages-low ones, even though they're everywhere.
In that sense, I see things like minimum wage laws as counter-balances to that artificially-keep-wages-low pressure.
Whereas if we someone is blind to the artificially-keep-wages-low schemes, minimum wages laws are merely distortions to what they see as the "natural" baseline.
"A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work."
It was true from 1976 to 2011. Northern Italy is still richer than Britain.
"By the early 20th century, a clear gap had emerged between Europe, North America, and Japan (on one side), and everyone else (on the other)."
Much of Latin America was doing well at the time, as well -thus Japanese emigration to Brazil.
" Given that the average developing country has an average-for-developing-countries level of market freedom, but does not experience a China-level economic miracle,"
China is around the world average in GDP/capita.
"This wasn't a very conclusive section, but I appreciated the confirmation that the Soviet economy actually worked pretty okay until 1970 or so, then became a basketcase for kind of unclear reasons."
Soviet slowdown started in the early 1960s; Soviet GDP per capita became surpassed by Italy in 1951, Japan in 1962, and Portugal in 1967.
"The Mystery of Capital" by Hernando de Soto, covers much of the same territory. He concluded that developing countries have tons of entrepreneurial spirit, and a fantastic work ethic, but are hamstrung by a weak, ineffective, corrupt, and byzantine bureaucracy. It is almost impossible for an entrepreneur in many parts of Latin America to start a business, get a loan, buy a piece of property with a title, and to enforce claims on that property in court. In theory, these countries have laws on the books that let you do these things, but in practice, the system is so corrupt and difficult to navigate that only large (usually foreign) corporations with lots of lawyers and government contacts can do them.
The conclusion is that you need both (1) free markets, and (2) a strong and effective central government that enforces the rule of law and makes investments in public infrastructure. Libertarians like to focus on (1), while ignoring (2), although "state capacity libertarianism" is beginning to catch on. Early Soviet Russia did well with (2) early on, but then the bureaucracy metastasized into a purely parasitic organ, because there was no (1) to reign it in. China has so far done well at balancing both (1) and (2), which is why it's booming.
There is a cultural element at play here. China and Japan had long traditions of powerful autocratic central governments, and experience with managing complex bureaucracies. They were thus able to create strong and effective government institutions, which allowed them to transition from a feudal system to a more modern economy. Other areas are still contending with various tribal/sectarian/religious/warlord/gangster divisions. Because of these divisions, the central government is weak and ineffective, laws are not enforced, infrastructure is terrible, and doing business involves a lot more bribes and favors, and a lot less investing in actual industrial capacity.
I'm having trouble figuring out whether you're thinking of (2) as following from the first paragraph. Is the idea that only a strong central government can rein in corruption among local officials?
There are several ways in which the central government can be "weak". In an extreme case like Afghanistan, it is literally impossible for the central government to enforce its will, because local tribes/warlords have more military/economic/cultural power than it does. I tend to think that people have an innate tendency to organize themselves and exert power and dominance over other people. If the central government does not fulfill that role, it leaves a vacuum of power that will be filled by other (often selfish or malicious) actors.
A central government can be weak economically, in that it does not have the funds to provide sufficient services. Bureaucracy is a form of infrastructure; if the courts don't have enough judges and clerks to handle the case load, then people will be forced to circumvent them to conduct their business. These "side channels" lead to shadow government (e.g. mafia) that competes with the real one.
A central government can be weak politically, in that it is unable to enforce its vision/goals/ethics on local officials, so internal corruption is rampant. This often leads to economic weakness, since money gets siphoned off at every point along the chain from "tax" to "providing a service".
Western-style industrialized economies have a strong, well-funded government, in which other actors (e.g. private corporations) are clearly subservient to law and the courts. The political culture emphasizes "government as a service to the people", corruption is looked down upon, and frequent elections help keep politicians at least somewhat oriented to the needs of their constituents.
China has certainly struggled with corruption, but through crackdowns etc. it has largely been able to enforce the will of the central government on local officials. It can also enforce its will on all of the other private actors that might otherwise usurp power. Perhaps most interestingly, the "will" of the central government has, for the most part, been laser-focused on economic growth, which is key to err... well... growth.
Putin's Russia has a strong central government, but it functions as a kleptocracy, strengthened by a public/private partnership which is engaged in large-scale fleecing of the populace. It's just as effective as China, at exerting its will, but its goals are different.
I think China is the anomaly here. While it has been effective thus far, there is no obvious internal mechanism that I can see which would prevent it from backsliding into something like Putin's Russia. Thus far, the government seems to believe that the best way to stay in power is to make sure that the populace keeps getting richer. If it ever stops believing in that, then I think the "Chinese miracle" will end.
You might also have to in (2) insist on the *willingness* of said strong and effective central government to get actually get rid of corruption rather than pursuing it for themselves : see Putin's Russia.
(Since (1) is there, but doesn't seem to be working... or maybe is still held down too much by (2) ?)
I think a combination of Escape from Rome and the Catholic Church's family and marriage project does a lot to explain the West's head start on the Industrial Revolution. Export-led growth explains much of the catch up of Japan, China, and others.
This graph looks to me like Italy had a higher GDP per capita than the UK for about 20 years up until 2011, when the book was written – then the UK has been doing better since. It lowers my trust in the review that it lowered the reviewer's trust in the book that the author was using current data instead of data from the author's future.
If you're interested in development, you should really read how Asia works by Joe Studwell. Despite the title it's mostly about economic development and industrial policy, and the differences between countries that got it right and those that didn't.
Scott, this is completely off topic, but related generally to book reviews:
I'd love to know whether you write or take notes as you read, that you later refine into the review, or whether you read the whole thing and summarize your impressions and recollections at the end.
This is partly quite absurd. You talk about "China." "China" includes Taiwan and Hong Kong. Arguably it includes Singapore in some senses (dominant Chinese ethnic group, language, traditions). These massively succeeded, far beyond the PRC, without "communism" in any sense. At one point HK's total GDP was bigger than the PRC's GDP. So what sense does it make to say China benefited economically from communism bringing it up to speed?
What in the world do you think that you are talking about? Reality or this one little book you just read? Do you have any idea what happened economically under Mao? Any at all? The mass starvation? The businesses destroyed--basically, all of them? The bizarre backyard steel foundries melting down tools to make crap steel to meet quotas? The ruinous collective farms that destroyed agriculture? Do you know anything at all about industrial policy under the Republic of China? And now you are announcing that this terrible state of affairs, the destruction of an entire nation and its people and its culture and its economy, was beneficial to lay the foundation for a modern industrial economy? Because you read one book and it contradicted some vague notions you acquired along the way, so, eh, maybe yeah communism works well if you just exit at the right time. Ugh, read Dikotter or "Tombstone." Read something, not this one little halfwitted book you bought on a whim and decided to muse about publicly over an idle hour.
As far as the USSR is concerned, you'd really have to stand in the snow of Moscow for an hour waiting for a lump of "bread" that's heavy enough to build with to understand Soviet economic "development." Pre-Bolshevik Russia had a very fast-growing economy and exported vast amounts of food. Red Russia had mass starvation. A pair of jeans was but a distant dream. It wasn't just a starving waste dump, pre-communist Russia. It had factories and scientific journals and advanced education. It was growing fast. The communists didn't just destroy culture and freedom to speak and think. They destroyed Russian business and agriculture. Hence, mass starvation. Hence, shortages of all kinds. No consumer goods. Dreary cities with stacks of identical towers stretching into the waste.
Okay, I'm done. This review is a work of staggering ignorance. It's embarrassing, or should be.
"At one point HK's total GDP was bigger than the PRC's GDP."
No, it wasn't.
Modern Russia relative to the U.S. is still worse off than it was under the Soviet peak GDP per capita wise, but there is greater convergence in overall living standards.
One of the problems I (as a historian, alas not an economic historian) have with basically all explanations is this: they all seem to perfectly explain why the industrial revolution took place where it took place, but not really why not earlier somewhere else. There were always regions with higher wages, more innovation, larger iron or coal repositories, a specific mercantile/industrious culture etc. We probably all know by now that rudimentary steam engines were used in ancient Greece, Medieval Middle Eastern tinkerers built elaborate automata etc. So why did they not go the next step and made them into large scale industrial machinery?
I think this is also why many researchers still hold up the influence of colonialism/imperialism so highly. Not primarily for political reasons (to prove a debt of the West or so), but because it was a scale of connection and domination that had never been reached before and thus could be responsible for this singularity. But I have to admit that even this seems ultimately unconvincing to me....
As I recall, another puzzle is that England was itself 'ready' for industrial revolution in the early-mid 17th century, but things don't actually get into motion until early-mid 18th century -- Adam Smith's Wealth of Nations (1776) being taken as a fairly explicit documentation of the changing structures of work and tech as things get taken.
The preface to Hazlitt's _Time Will Run Back_ argued in the mid-60s that the Soviet economy was already a basket-case (and indeed had been so more-or-less continuously since about 1928). Of course, the whole theme of his novel was that a centrally-planned economy would _necessarily_ be a basket-case, but even so — it remains my suspicion that all that really changed in the ’70s was that the West-at-large became generally _aware_ of Soviet basketude, or perhaps were more willing to see it (rather than pleasant fictions) after the highly visible crises and failures of socialist economic policies the West experienced during that decade.
Oh, and you might be interested in my pet theory that the high British wages that kicked off the Industrial Revolution were caused by the Corn Laws, and that this is the only time in history protectionism has actually been good for a country (and then only accidentally by way of unintended consequences).
No, I don't; I think that they succeeded in spite of that. They had all our cultural advantages (often in distilled form — I think it was de Tocqueville who said "the American is the Englishman left to himself") plus an open frontier / plentiful land that prevented them from replicating our cultural _disadvantages_.
(The trouble with protectionism is that while "economically optimal" tariffs are possible, they are not the ones that any real government will enact. Public choice theory an' a' that.)
In the literature, New England's rapid industrialization tends to be ascribed in part to significant but also limited accumulation of wealth... Eli Whitney has just enough capital to tinker with and deploy gears, pistons, and pulleys, but not so much as to be tempted to sit on his porch and scribble Jeffersonian political philosophy.
The note on wages is a bit circular. If wages are high then that means there is surplus-value in the system, and therefore room to justify investment in innovation. In other words, Britain was already successful by some metric before the Industrial Revolution turned it into a visible economic boom.
"The reluctance to invoke colonialism too heavily is even less well-explained"
What? It is perfectly explained by the fact that the question to be answered is, to a large extent, exactly "{why did the West / why was the West able to} colonize most of the globe, as opposed to a different one of the dozens of similarly-sized geographic regions of the globe?".
"[e.g. Britain] the high taxes paid for infrastructure, and the poor property rights let governments use eminent domain to build canals, railroads, et cetera."
What? British canals and railways were built by private companies. They usually had an act of Parliament giving them the right to use eminent domain along the planned route (broadly written into the act). The government did regulate the companies heavily (including a huge reorganization of the railways, merging dozens of mostly-independent companies into four, still privately-owned regional railways in 1923), with somewhat inconsistent results (as usual), but e.g. the railways were only nationalized in 1948. Similar things can be said about turnpikes (often converted from previously free-to-use public roads).
"only in Britain was it worth actually building machinery" -- funny, that. The stories of early mechanization attempts, particularly in textiles (flying shuttle, spinning jenny) are full of "and then an angry mob of competing weavers/spinners broke into his house/workshop and smashed the machinery"; a good number of early threshing machines were burned, too. Perhaps this is part of why a strong central government mattered?
3. "Create banks to stabilize the currency and provide businesses with capital"
What? Banks 1) also were private companies (which is why they could go bankrupt and why runs on banks happened so often), 2) extended the government currency, at the time still largely based in silver or gold, 3) on the business financing side, usually mostly restricted themselves to discounting relatively short-term bills of exchange, otherwise they would be exposed to too high a risk of a run; long-term investment (stocks and bonds) took place outside banks. There is actually a decent case that rather than stabilizing the currency, these local banks tended to at the very least exacerbate "naturally-occurring" liquidity shortages, or indeed outright destabilized the currency by generally amplifying liquidity swings.
This book is useless because it avoids the admittedly crude essentialist explanations for prosperity. Attempting to explain why China is richer than DR Congo when China's population has an average IQ 20+ points higher than DR Congo will inevitably lead to contrived explanations and motivated reasoning. We can argue about the origin of or solution for population IQ differences, but removing them from your model of how the world works will only prevent you from understanding.
I don't believe this was true in 2011 when the book was published, either in absolute or per-capita terms. Historically, I don't think it has been true for several centuries. (Probably since an inflection point some time in the Early Modern period.) Certainly Italy today is also a developed, wealthy G8 nation (their debt ratio nonwithstanding), which is probably the broader point.
Not to get into a discussion of "Protestant work ethic" (a theory I'm not a huge fan of), but that's part of the econometric background behind it.
Your last paragraph carries a hidden assumption which I think you need to question. Try this alternative hypothesis:
"If a development-economics problem can't be solved with free markets and free people, it can't be solved at all."
Yes, that does mean that societies which failed to catch the first wave are kinda fscked. But how do you know reality isn't like that?
When you look at apparent exceptions like Japan closely, I think you find that the "strong central government" was smart enough to keep its hands off economic life and offer the implied contract that as long as nobody overtly threatened the elite at the very top said elite would continue to allow effectively laissez-faire conditions.
I also think that no account of the wealth of nations can ignore the distribution of Spearman's g. Whatever you think that's measuring, the correlation between IQ averages and post-Industrial-Revolution success seems far too strong to ignore.
* I think one could distinguish usefully between partial planning (South Korea) and total planning (USSR, Mao.) If you pay attention to *all* of Econ 101 you learn that government can have many useful roles. But markets are useful too. As for the USSR doing well, it was importing grain from at least the 1960s, despite containing a world breadbasket (Ukraine); launching satellites but having trouble feeding your people despite having the means isn't "doing well" IMO.
* http://www.lowtechmagazine.com/2011/09/peat-and-coal-fossil-fuels-in-pre-industrial-times.html argues that the Dutch Golden Age was fueled by cheap energy -- peat (which ran out) and wind power (which didn't, also cheap water transport.) Likewise Britain was using a lot of coal for domestic heating and probably industry even before the Industrial Revolution -- steam engines started life pumping water out of coal mines.
* It's probable to me that Japan and Korea had more cohesion and government legitimacy than some ex-colony with effectively random borders and conflicting interest groups. The newly independent countries had to try to work out things Japan did back in the 1600s.
* New California would likely be filled by high know-how and -trust Americans and the legitimacy of a democratic territorial government overseen by Congress.
It's worth noting that GEH's thesis: high-wages>>innovation/industrialization/Industrial Revolution 1.0 is familiar to me from undergraduate economic history I took in the 1980s. Seems like this is a fairly standard publication intended for economic history survey courses.
Weird: "The Soviet economy actually worked pretty okay until 1970." No, the "Soviet economy" produced mass starvation of millions. Literally millions. You stood in the line in the snow for two hours for a lump of inedible "bread." It did not work "pretty okay."
The Russian economy before Bolshevism was one of the fastest-growing in the world.
Right but why was India colonizing Britain vs. the other way around? Why weren't the Aztecs plundering and subjugating Spain?
Has "Guns, Germs and Steel" stood the test of time ?
From what I've seen, historians don't respect Diamond or buy his arguments and never did. But historians also don't seem to have any alternative explanation. It may be that society is just too complicated for us to ever have a true explanation.
Professional historians seem to truly hate Diamond while not offering any alternative explanation other than "the West did a racism and everything is bad because of that", so make of that what you will.
An important question, but a distinct one. It may well be the case that the Europeans had key advantages in weaponry and ships that enabled colonization, but that these would not have led to massive divergences in wealth without colonization.
This seems really clear. Furthermore, the book and review ignore the crucial point that colonizers too huge steps to *prohibit* industrialization in the colonies and focus them on resource extraction and as a market for British industrial goods (https://en.wikipedia.org/wiki/Navigation_Acts). American independence was thus a prerequisite for the Hamilton-style development plan, and it's no wonder why India didn't develop similarly.
It seems to be even worse for India : AFAIK they had since antiquity the best steel in the world : crucible steel, then after the English more or less managed to replicate its fabrication in the 18th-19th century, they basically destroyed the Indian steel industry (either directly or indirectly) ?
I was at least partially wrong :
https://astralcodexten.substack.com/p/book-review-global-economic-history#comment-1802708
"This timing only makes sense because India was colonized in the 1700s and China wasn't semi-colonized until the 1800s."
The Chinese population growth was caused by New World crops; the Indian stagnation was due to the collapse of the Mughal Empire, which was not due to imperialism.
"Institutions and wages aren't nearly as important as having the right natural resources and control of colonies and trade routes."
Yes, they are; the Netherlands was closer to Britain than anywhere else in the world. How do you explain the strong correlation between eighteenth century literacy and interest rates (both a product of some mix of institutions and human capital) and future growth?
Note that they were closer in both senses.
The collapse of the Mughal Empire is a really puzzling one... what even happened there, for the most powerful country in the world to collapse like this ?!?
Also... did you know what was Secret Service's codename for Trump ?
Mogul ! XD
You might be using an inaccurate Hollywoodian image of "illiterate warrior nomads" ?
https://acoup.blog/2020/12/04/collections-that-dothraki-horde-part-i-barbarian-couture/
My guess is that you would have to be *quite* coordinated to be able to pull off parthian shots from waves after waves of riders !
I checked the book and saw that it does not deal with the ascension of parliaments as a possible explanation for the great divergence, even though it fits: the first parliamentary countries in Europe were the first to take off. The first continent with parliamentary systems was the first to take off. The first Asian country to incorporate parliamentary model was the first to take off. Parliamentary countries are on average much richer than other countries today. Wish it would deal with it, even if to disprove...
South America's recently independent contries had parliaments. Brazil has a parliament since the early 1820s. It was not always empowered and independent, but was Japan's? And what about China, Taiwan, Korea and Japan? How relevant were their parliaments in their early stages of economic rowth? Having a parliament (even a make-believe one) might be signaling you are trying to imitate Western institutions., but I do not see much besides it.
Having a parliament is a step for making it the main source of power. South America's parliaments were very weak, both de jure and de facto. Japan's parliament really had significant power. There's also statistical evidence, political science theory, etc, which points to benefits of parliamentarism.
"South America's parliaments were very weak, both de jure and de facto."
Weaker than the Chinese, Korean and Taiwanese dictatorships' ones? Weaker than the Japanese one, easily swept away by militarism? It can not be serious. India and Brazil obviously have a stronger parliamentary tradition than pre-1945 Japan and basically all East Asia before it grew rich. It makes more sense to say development brought parliamentarism to Asia than the other way around.
Japan's parliament (the Diet) only came in in 1890, and they'd modernized enough to win the Sino-Japanese War against a nation with more than ten times their population by 1893, so I don't think it can be the main source of its success.
And even after that, it was more like the 17th- or 18th- century English parliament, or the German Imperial diet than it was like the 20th-century one - it had power over the budget, which gave it a lot of importance, but the emperor (or, in practice, the senior ministers) could choose anyone they liked to form a government, provided the new government could (a) get stuff through the diet, and (b) neither the army nor the navy vetoed it.
But parliamentary ideology had been fermenting in Japan for a long time, with implications in its policies. Oligarchies were so enamored of Western ideologies that Torio Koyata, a political thinker of the time was shocked with the "political self-interest of the ruling oligarchy as well as the unpredictable popularity of Western ideals of governance and the discourse on 'civilization and enlightenment.'" as can be read in Chapter 2 of the recent PLANTING PARLIAMENTS IN EURASIA, 1850–1950, by Egas Moniz Bandeira (https://www.taylorfrancis.com/books/oa-edit/10.4324/9781003158608/planting-parliaments-eurasia-1850%E2%80%931950-ivan-sablin-egas-moniz-bandeira)
And this relates to my main argument - what is important is the general direction of the power shifts. Parliamentarism advanced a lot from the second half of the 19th century to the early 20th century, it declined with the concentration of powers on the Emperor which led to Japan being a member of the Axis in WW2, and it increased again after the war, to higher levels than ever before.
Another excerpt: "As a matter of fact, for the most part of the well-nigh 300 years that the Tokugawa government ruled Japan, there are no traces of the intellectual debates having exerted an influence on actual governance. The central government recognized the autonomy of the local governments, and the local governments tacitly recognized the separate authority of the central government. In this regard, the impotence of the intellectuals might be evidence that the fundamental structure of such a political system was not the object of the debates, but a premise for them. However, contact with Western countries changed this situation. Several powerful local governments became aware of the benefits of autonomy, and, contrary to the intentions of the central government, aimed at dealing with Western countries on their own, sometimes being even prepared to go to war. Intellectual debates about hōken and gunken, which had theretofore been empty armchair discussions, became extremely real disputes in that time."
Or this: "It was not the “Meiji” revolutionary government trying to seize the Kinri’s powers which first seriously investigated the introduction of a parliamentary system, but rather the Edo “ancien régime.” In a situation in which the new and old forces were competing with each other and a temporary cease-fire in the form of a “restoration of royal government” (ōsei fukko王政復古) was reached, the aim was to control the momentum of the new powers by proposing a new political system.
It was Nishi Amane 西周 (1829–1897), who had studied in the Netherlands with Simon Vissering (1818–1888), who shouldered a concrete draft for an institutional system.19 As has been described, the Edo government, being a hereditary military government, did not necessarily value intellectuals highly. However, on account of the acute political crisis at the end of this government, the Edo government began to slowly recognize the importance of intellectuals and knowledge. Nishi Amane is a good example thereof."
I agree completely that parliamentary ideology had been fermenting in Japan for a long time. I agree completely that Japanese intellectual leaders were enamored by the idea, and I agree that the tendency towards parliamentarism was increasing in Japan from Perry until the early 20th century.
But I'm not sure about the rest of what you're saying. I don't see how a parliament can do good in the twenty years before it comes into existence. I don't think that power was concentrated in the emperor before WW2 - as far as I can tell by my knowledge of the situation (sourcing: "Japan's Imperial Army - It's Rise and Fall", but also "Japan Under Taisho Tenno," "Imperial Japan: 1926-1928," and, for the early part, "Samurai Revolution,") the emperor had constitutionally infinite power, but the actual exercise of this power was strictly limited by convention, and the only real changes were:
A, when the formation of a Shogunate meant there was a military dictator who could ignore the unwritten constitution,
B, when, after the Meiji restoration, the emperor reigned but left ruling in the hands of his senior ministers, in particular the Genro. (https://en.wikipedia.org/wiki/Genr%C5%8D),
And, C, when the first generation of oligarchs died off, new laws were passed requiring the Minister of War to be an active general and the Minister of the Navy to be an active admiral. If this is what you mean by 'concentrating power on the Emperor', I think that's a strange and misleading term for it; it concentrated power on the army and the navy. If not - Meiji had theoretically unlimited power, and I'm not really convinced that Showa had any more or less in practice: both of them were living gods raised to reign rather than rule, and I don't see any significant change until the end of WW2.
Thanks for the response. I'm using this as a chance to learn more about Japanese history in light of the parliamentary theory. I must look out not to become entrenched in a view. My source of conviction for the parliamentary explanation of the great divergence comes from a combination of evidence and theory from various sources, but it's like smoking and cancer, not all cases will have to fit for the hypothesis to be true.
Still, I believe Japan still has elements that make it fit. Brennan and Hamlin make the distinction of the vertical separation of powers and the horizontal separation of powers. The vertical separation of powers will give full powers over a domain (geographic, thematic). The horizontal separation of powers will divide the powers to decide between various people. The horizontal separation of powers allows societies not to rely on the inefficient vertical separation, where each person will have a little monopoly over specific domains. The horizontal separation allows for the benefits of centralization without the risk of absolute power. I would argue that a) the parliamentary system is characterized by a reliance on division of powers instead of separation and b) that Japan moved decisively in that direction since the Meiji Restoration. The fact that the ruling came from the senior ministers, instead of the power of shoguns over their domains, points to that division of powers. (With respect to the emperor's power, I was quoting from memory, and a search did not leave me convinced of it. So I retract that. )
Clearly this centralization was not a clear-cut thing, since, as mentioned above, local governments also had their own will which often conflicted with central government. These processes almost never are. Interestingly, these local governments had their own assemblies, pointing to the influence of parliamentarism.
Lastly, I would argue that even if the early modernization of Japan had nothing to do with incipient parliamentarism, the fact that Japan kept rising still may.
Consider the situation from the contrary vantage point. Is it evidence _against_ the parliamentary hypothesis that the first country to rise in Asia was the first to adopt parliamentarism?
I am incredibly into Japanese history in this period, basically just because I think 'how do we get third-world countries to westernize' is Really Important, and Japan is the biggest (and most tragic) success story. For the Meiji restoration, I really, really like Romulus Hillsborough and his "Samurai Revolution," but "Japan's Imperial Army - It's Rise and Fall" is interesting but incredibly in-depth.
And I definitely agree that Japan moved in that direction. Pretty clearly, there was a panic among the Japanese elites after Perry; the 'founding myth' of the Shogunate was that the Shogun had the job of defending Japan from foreign intrusion, and when the Shogunate proved itself incapable of doing so, it lost legitimacy and swiftly collapsed. What you got as the new ideology was 'we need to build up our strength and economy as desperately as possible', and the abolition of the entire feudal system (!) did not provoke any kind of revolt until after it was settled (https://en.wikipedia.org/wiki/Abolition_of_the_han_system + https://en.wikipedia.org/wiki/Satsuma_Rebellion), as far as I can tell basically just because everyone in the elite had, by that point, been forced to recognize that feudalism didn't work, and they were looking for something that did.
"Lastly, I would argue that even if the early modernization of Japan had nothing to do with incipient parliamentarism, the fact that Japan kept rising still may."
So... my model is actually that Japan rose because it had an elite that was competent and sensible, and stopped rising because it was replaced by an elite that was incompetent and crazy. As Yudkowsky commented at one point, all organizations tend to devolve into LARPing that organization, as (my words) people pursue the sensation of being important, instead of their organization's goals. There was a very brief period where Japan actually realized, "if we continue the way we have been, our nation will be conquered by foreigners," in which they were desperately scrambling to westernize, and then, well...
Then their initial leadership died off, they won the Russo-Japanese War and WW1, and they stopped thinking "we need to get the right answer" and started thinking "we need to act in a manner befitting our great nation" and it all went to pieces from there.
Because it is worth noting that it all went to pieces. Entering WW2 was not a smart decision for Japan; I haven't found *any* historian who actually thinks it had any chance of winning the war. It was putting more and more of its resources into the army and navy, then looking around for something to do with them, and I actually think that more parliamentarism would have helped it avoid this critical mistake - the Army was relying quite heavily on a near-unlimited ability to censor reports to ensure that it got the support it needed, and if it had had less power, someone might have been able to say "Um, this is stupid" at some point before the Second World War broke out and get away with it.
"Consider the situation from the contrary vantage point. Is it evidence _against_ the parliamentary hypothesis that the first country to rise in Asia was the first to adopt parliamentarism?"
It is evidence that you may be confusing correlation and causation. Japan sent out a massive expedition to study everything that other countries were doing (https://en.wikipedia.org/wiki/Iwakura_Mission), then copy everything that made the most successful countries successful. They tried to copy the German army and British navy, and to hybridize the German and British political systems into one of their own, along with switching to a Western economic model. Some subset of these changes clearly helped, no doubt about it - but we don't know which ones, and saying 'the key change was parliament' might be less accurate than 'the key change was a willingness of (almost) the entire society to westernize behind unified leadership without fighting major civil wars about it'.
I am by no means a specialist in Japanese history, but like you I care a lot about how third world countries may develop. I don't like to say "Westernize" because there are several other things associated with the idea of the West which other countries may not want to adopt. Development is by definition the aspects of Westernization which all countries would want to emulate.
I would agree that it would be a confusion of correlation with causation if that was the only case I was examining. But it is not. As I mentioned, there is theory and evidence from political science, history, economics, auxiliary evidence from local government and from corporations that parliamentarism is behind these advances.
Basically all countries attempted to modernize and get rich. The ones that succeeded in a consistent way invariably relied upon very strong parliaments (yes, even the United States).
If you care deeply about the question, I would suggest you consider parliamentarism as an answer, which I'm not sure you have. You say "we don't know which ones", but I would claim we do. I know it's a bold claim, yet I stand by it...
I wrote a book which is freely available on whynotparliamentarism.com
If you want a summary, Robin Hanson wrote this post: https://www.overcomingbias.com/2020/09/yay-parliaments.html
For the record, something I'm not sure I stated: I actually do think democracy is real, important, and works. I just think that it's a secure method for guaranteeing leaders of at least moderate competence (and preventing civil wars), but that it is also possible for a country to randomly get super-competent leaders who prevent civil wars due to skill and for this country to work fine without being a democracy thanks to getting super lucky with its leadership - until these leaders die.
But democracies are not all the same. Some types of democracies, i.e., parliamentary, are much better than others
Did they have parliaments or elected legislatures? AFAIK they mostly imitated the US presidential constitution, which may have been a fast track to strong-man rule.
Whatever they are/were, they are/were certainly stronger than any East Asian Parliament has ever been before Asia grew rich in the second halth of the 20th Century, except maybe the American Occupation-backed one in Japan and Singapore's. Singapore is not exactly my favorite example of parlamentary democracy, and the Japanese Parliament does not explain Japan rise pre-WW II. South Korea, Taiwan and China grew rich(er) under strongman regimes. Even now, Taiwan and South Korea mix aspects of presidential and parlamentary systems.
Why do we even need such a ludicrous hypothesis at all? Chile usually performance better than its South American neighbours. Does anyone think it is a parlamentary democracy? It went from Pinochet's 17-year strongman rule back to a democratic presidential system.
If this is the case how do you explain Poland-Lithuania?
I wrote about that. https://whynotparliamentarism.com/f/counterpoint-to-ogilvie-and-carus---poland
I suspect elected legislatures are a marker of bourgeois influence; ie, if you're country has a parliament then it already has a large and active middle class.
It is an interesting hypothesis, but I don't think it stands up to scrutiny. Did the UK have a large and active middle class in 1689? If the answer is yes, then what countries today do not have a large and active middle class? If the process is endogenous, why did parliamentarism spread by contagion in Europe instead of indepedently all over the world? Why are British former colonies much more likely to retain a parliamentary form of government than former colonies of Portugal and Spain? How can we test this empirically? There tests of parliamentarism, and they do well (see, for instance, McManus and Ozkan, 2019)
Nope. It's all about climate. Before the advent of AC it wasn't really possible to industrialize if it was too hot. Workers just aren't productive enough in Lagos or Nachez for much of the year due to the crippling heat. In the UK, Germany, Japan, northern US you can work productively for much of the year with just rudimentary heating.
Would Houston be Houston or Singapore be Singapore without AC? No. Why?
Any evidence for this? Farming has been as productive in warmer countries as in colder ones, there's lots of evidence of hard work other than industrial development (for example, Egypt building the Pyramids), and India had GDP per capita equal to Europe in the year 1000.
At least indirectly I guess ? : when you need so much firewood for heating that you strip your woods bare, and are forced then to start using underground coal, then happen to invent steam engines and steel for railroads at the same time, creating a self-reinforcing cycle ?
The question however then, is why not China, much earlier ?
- Technological dominance, check
- Stripped down forests, check
- Coal reserves, check ?
- Best in the world wootz steel from their Indian neighbors, check ?
- So, not cold enough, not check ?
(Maybe you also need a lack of waterways, otherwise you won't need to invent rail ?)
A lot of China is plenty cold.
Some people say the coal was too dry. No need for steam pumps. The Song dynasty had all sorts of nifty stuff, and China has had industrial-scale workshops for thousands of years, mostly for the state-owned Imperial defense industry.
The Chinese were mass-producing guns and explosives of all sorts waaay back.
https://forums.spacebattles.com/threads/when-did-western-europe-surpass-china.645385/#post-47161222
Thanks, that was very interesting !
> The late Ming military doctrine was to entrench themselves in gigantic wagon forts bristling with cannons, rockets, and handguns and then shit out enough firepower to make the Imperium of Man blush.
Nice !
> Also, after the reign of the Wanli Emperor, Ming China not only imported European cannons, but actually mass-produced their own variants with superior metallurgy. These Chinese variants were apparently so good that Portuguese officials wanted to employ Chinese gunsmiths in their foundaries at Goa so they could import the design to Europe.
Yeah, AFAIK since around 600 BC and until the (late ?) Industrial Revolution, the Chinese were basically the only ones that knew how to make cast iron worth a damn... even if Europeans beat them around early Modern in cannon designs ? (which were bronze-based in Europe)
(Though the bigger cast iron cannons would still need to be reinforced inside with wrought iron... and sometimes very ingenious additions of copper ?
I wonder if the Chinese tried to use wootz steel or would that been too expensive ?)
http://donwagner.dk/cice/cice.html#mozTocId153983
http://www.handgonne.com/gonne_7.html
I think the main reason coal is an enabling resource is that wood fires by themselves are too low a temperature to do much metallurgy, and charcoaling is extremely labor intensive.
Yeah, see also spinning, which was supposedly the largest (wo)manpower-heavy task from the early antiquity to the late modern period ?
https://acoup.blog/2021/03/19/collections-clothing-how-did-they-make-it-part-iii-spin-me-right-round/
Also see in the parallel comment - maybe it was that dry mined coal that allowed the Chinese to reach high enough temperatures to make useful pre-IndRev cast iron ?
I think BronxZooCobra is saying that hot weather is like a tax on work, especially indoors. It's not impossible. Farming can be adapted to weather more easily than human comfort, since the environment is doing most of the work.
That makes sense about the development of SE Asia and the US South since the 1950s.
That would seem to shed some light on part of the "higher wages drives industrialization" argument.
If it's because it incentivizes companies to develop labour saving technologies, then a tax on labour should have the same effect; it shouldn't matter whether the increased cost of labour goes to the labourer or the government or into the environment as waste heat.
It also helps provide an internal market. Developing widespread internal demand is surprisingly tricky since it often involves giving money to people who don't deserve it. England had a small internal market - read your Jane Austen - but a large captive colonial market. The US had cheap land to keep labor costs high. Others simply built tariff walls, but the challenge was always about finding or making customers.
There was a 2017 article on how switching to cooler LED lighting improved factory productivity in India. http://ceepr.mit.edu/files/papers/2017-019.pdf
Evidence? Willis Carrier's sales team had a lot of data. For example, "In offices, air conditioning makes us more productive: according to one early study, it made US government typists do 24% more work."
https://www.bbc.com/news/business-39735802
In a world without AC do you put your factory in Rochester or Houston? Detroit or Atlanta?
How much confidence do we have in the studies of A/C sales teams?
Do you think if I turned off the AC in Houston or Atlanta productivity wouldn't' fall in August?
If I had to guess I would say yes, but people who don't have A/C acclimatize to heat. This may be hard to believe but if you go without A/C in a hot summer for a couple weeks, suddenly you will feel a lot less hot. When I was in Mexico I was stunned to see all the Mexicans wearing long sleeve flannel shirts and jeans in 95-degree weather.
So your claim is that if we had an un-air conditioned factory in the Yucatán and we air conditioned it we wouldn’t see an increase in productivity?
Even if true that bad climate would impede development, why in Britain and the Netherlands and not France? Or Asia?
See here for Netherlands (and probably Britain?) :
https://astralcodexten.substack.com/p/book-review-global-economic-history#comment-1791554
Thanks. I was trying to make the point that climate can't explain a lot. With respect to Britain and the Netherlands (as well as other countries) I am convinced it is parliaments. whynotparliamentarism.com
Well, it could be a reunion of things. Parliamentarism certainly looks like it could help ! (Meanwhile Napoleon was supposedly making fun of the engineer that suggested that a ship could be steam-powered ?)
Sure, many factors count. Didn't get the Napoleon reference, though
https://www.goodreads.com/quotes/442305-you-would-make-a-ship-sail-against-the-winds-and
Poland with a powerful parliament got repeatedly partitioned by nations that did not care about parliaments all that much.
I wrote about that. The Sejm was not powerful, no parliament is strong of it depends on unanimity. "Counterpoint to Ogilvie and Carus - Poland" https://whynotparliamentarism.com/f/counterpoint-to-ogilvie-and-carus---poland
My argument is more to explain why we see industrialization pretty much exclusively in a band between 60°N and 40°N latitude. Above 60° it's too cold. Below 40° it's too hot.
Yes, I think there's a lot to it, but still misses a bit
Half of the U.S. and China are below 40°N latitude and about the same latitude as North Africa, the Middle East, and Northern India.
Japan is also mostly below 40°N latitude
And the half of the US below 40 was traditionally the very poorest part of the US, right? That's my point.
Was it? Obviously it does not include much of the NorthEast, but Virginia, Texas, Colorado, Pennsylvania, San Francisco?
Why was the southern part of the US poor? Was it climate related up to and including the need for slaves? IIRC MS justification for secession included the fact that slaves were the only ones would could work the fields given MSs climate.
The borders are going to be fuzzy, SF is at 37.7, and IIUC more of the water right off the coast tends to be moving south vs north which keeps things cooler than they otherwise would be. I don't know that I would consider it strong evidence in favor of the theory, but I don't think we can count it against.
So why isn't it symmetric, then? Why weren't the regions in the *southern* hemisphere between 40 and 60 S (Argentina, South Africa, parts of Oceania and Australia) also early industrializers?
Argentina was one of the leading industrial economies in the early twentieth century, and Australia was still last time anyone got in to check... For whatever reason (my off-the-top-of-my-head guess is geography: until colonised they weren't in avoid position to build trade networks) this had to wait till Europeans got there, but they do support your hypothesis.
Failure in South Africa to replicate this could reflect the caste/racial concerns that held back most of Latin America apparently (note this possibly explains the lack of real industrialisation in Ireland as well). Oceania is probably just a case of each island being too small to have the required population density to take off.
I think we're talking about the 1600s and 1700s, when industrialization was actually happening. Also, I'm aware that one can construct special pleading for any one country, but if the hypothesis is as simple as "between 40 and 60 degrees latitude is the sweet spot for early industrialization" there needs to be some *simple* explanation why it only works for the northern hemisphere, and there is no trace of an advantage to these latitudes in the southern.
I suggested a good reason why: networks. Europe, with its two almost inland seas and a large archipelago creating sheltered travel across half the intervening ocean coastline, is seriously good for interconnectivity. Then add to that the fact the main east and west running navigable river systems in the main continent come within a few miles of each other and that the North European plain is relatively easy to move across without roads. Now look east and see a succession of other areas in the sweet zone (a bit to the south of the industrialisation one, in the northern hemisphere) for older technologies, all of which are linked by long-established trade routes. The ability to easily exchange goods (so you have markets) and ideas (innovation) requires networks missing in most of South America and Australia where communications are naturally more limited to just the neighbouring areas (almost all coasts are on oceans, and a major physical barrier blocks communication through the middle of both continents).
East-central North America is a more interesting case, since there the physical difficulties of communication are more on a European scale. But I'd suggest that the region's isolation from trans-regional networks caused the problem here. It is pretty certain iron working is a key part of industrialisation (to the point that the development of a new method in seventeenth-century England may be identified as then start of the industrial revolution) and famously this technology only arrived in the Americas and Australia (and more oddly southern Africa) with Eurasian contacts. Within the nexus of centres in Eurasia there was rapid adoption of New technologies, whereas in the relatively isolated Americas and very isolated Australia these technologies were not available (and not independently discovered).
So Europe had two advantages. It was a region of easily-accessible markets (in this respect it probably didn't hurt that it was covered in small states either) but also physically linked into networks through which innovation could also travel. The same also applies the East Asian area complete with sheltered seas and major islands (albeit with less small states most of the time). It was perhaps not sufficient for a region to lie in the climatic ideal: it also needed to have the physical features necessary for trade and longer-range connection to enable shared innovation.
Maybe not simple, but it's a nice hypothesis as to why industrialisation was so limited initially, whereas the US, Australia and Argentina all were able to develop industry in exactly the predicted zone once networks and technologies were in place.
The reason it didn't work between 40 and 60 S latitude is there is very little land there compared to the Northern Hemisphere. Have you heard of the Roaring 40s? Why are they roaring? No land.
Buenos Aires, Santiago, Cape Town, Sidney are all above 35 S. Not much land and few people below 40 S, basically Tasmania and New Zealand (Melbourne is close enough) and a basically empty Patagonia (Argentina expanded south late in the 19th century), the biggest city below 40 S being Comodoro Rivadavia (under 200k) and the "closest" decent sized city is Rio Gallegos (100k), almost 800km away...
This is presumably at least part of the answer: https://www.reddit.com/r/dataisbeautiful/comments/a1sk0v/ratio_of_land_and_sea_at_different_latitudes_oc/
I don't see why human civilization, particularly industrialized, should depend at all on the amount of land available. If it did, then why would England industrialize well before the main European continent? Why wouldn't the vast east Asian land mass at the same latitude be the heart of industrialization?
You can't rely on latitude for climate. For instance, New York is at the same latitude than Marseilles (also : Quebec - Paris), yet the European equivalent has a much hotter (milder ?) climate - thanks the Mediterranean (and/or Gulf Stream).
In a very rough sense you can. Yes the Vancouver or Reykjavik throw things off a bit but that's just being pedantic.
On the other hand, we evolved as a species in the climate of Lagos. I don't think its that obvious why we would function (from a purely animal point of view) better a priori in a climate that is further from our biological roots. Kind of feels like hypothesizing that lions would do better in Scotland than Zambia if they could get there, or that polar bears could replace jaguars in Central America if given the chance.
We evolved the ability to live and reproduce in those climates, but not necessarily to build semiconductor factories and supply chains in the arctic tundra or Subsaharan desert.
Well sure, but the argument as I understand it was based entirely on human comfort, i.e. you work up more of a sweat on the factory floor if it's Miami (with no a/c) than if it's in Buffalo. (Incidentally, I'm not really sure I agree that's true anyway, as factories tend to be hot places no matter where they are because of the power being dissipated by machines and people. Pretty sure a smithy even in Greenland would be pretty hot on account of the forge and the work of beating out nails all day.) So the question is: where do we naturally find it easier to do heavy manual labor all day? I'm not convinced the answer is "London" on account of we evolved in East Africa and primitive life involved no small amount of heavy labor.
The answer might be in your comment : factories are much hotter than the environment, therefore they're most suited to humans in colder climates ?
There is a lot more to it. Tropical disease is also a huge issue.
Sure, but then you should have said disease, which everyone understands to be a big factor in human civilization, and is not restricted to tropical (cf. the Black Death, plague of Justinian, etc)
My understanding is that Lagos' climate is difficult for any animal, and human ancestors evolved adaptations like hairlessness and sweating in order to hunt their prey until it died of heat exhaustion.
We could be optimized for that climate without it being our optimal climate.
A decent number of South American cities sit high in the andes and don't suffer from crippling heat yet saw limited development, even compared to Buenos Aires and its horrid summers. Average max temperature in the hottest month in La Paz is 17C (63 F), Bogotá 20C (68 F), Quito 22C, Potosi 18C. Within Bolivia and Ecuador the hotter sea level cities Santa Cruz de la Sierra (only 57k population in 1955!) and Guayaquil are the economical centers.
I think there's more to climate than it being insufferably hot. Arid areas can't (reliably) produce enough food to feed the factory workers. Tropical diseases will spread fast in urban areas. (not just a problem for the humans involved but for draft animals too)
It's not just about being hot, it's about being hot and damp : IIRC the wet bulb temperature above which a human needs AC to survive over long amounts of time is merely 36°C at 100% humidity.
This is actually a pretty interesting observation. Namely, you can rephrase "How come all of the mid-20th-century success stories are in East Asia and not somewhere else?" as "Oh look, the other cold nations are catching up". This even manages to include Russia.
This is also able to explain the British Colonies who are all in cold or very temperate areas.
Further, the developed parts of South America (Uruguay and Argentina) are in the far south in the more temperate regions.
The Russian/Soviet case is a little more complex, I believe. I seem to recall reading somewhere that in the late 19th, early 20th century, Russia had the highest growth rate in the world—something like 12% per annum. The war and the Revolution wrecked that, and they then imported a colossal amount of American expertise to build (and partially rebuild) their industrial base in the ’20s and ’30s. But I may be wrong.
Mostly an effect of very low base. It is not hard to grow at 10% if you had a very low start. Just adopting basic mechanisms and building a few railroads could give you 10% a year at the start.
Yes, this is right. Late Romanov Russia was basically the China of its day, industrializing rapidly in the lead-up to WW1. Its peers also thought so — its stock market was booming, and it was largely fears of Russian growth that prompted Germany to push for war in 1914. In 5-10 years, they didn’t think they’d be able to win. Instead Russia basically lived out its worst timeline.
I’m also going to recommend a book that’s partly on the Soviet economy, “Power and Prosperity” by Mancur Olson. It comments on a lot more, and it’s a really fun and easy read for a fairly serious treatise on political economy. IIRC It basically argued, among other things, that the Soviet economy only functioned well under Stalin, who was so all-powerful that he could crush anyone and therefore corrupt cliques weren’t allowed to survive. After his death things slowly started crumbling under the surface, even if under Khrushchev the picture still looked alright.
Didn't it already start working better under the (admittedly brief ?) Lenin's NEP, who basically realized that going full socialist had been a mistake, and decided to pursue more liberal policies ?
I'll be honest, I've never read a book that covered the NEP well. But my understanding is that Lenin saw the NEP as a model for recovering from the chaos of WW1 + RCW, rather than a long-term economic model for the country. He didn't see it as a permanent retreat from socialism, which hadn't really been tried, but a way of buying some breathing room before trying it in earnest. China's Communist Party was able to discard much of Communism, but it required 30 years of failures to do it, and 1920s Russia wasn't there yet.
Communism under Stalin sort of succeeded, and therefore no one really wanted to discard it when Stalin died, unlike the way that Deng and his supporters wanted to discard Maoism. The Soviets just wanted to discard the most oppressive aspects of Stalinism, which unfortunately seem to have been a key ingredient of its economic successes. Stalin was a de facto slave driver for the whole economy. He would routinely and effortlessly take members of the nomenklatura who were suspected of skimming off the top and turn them into unpersons, which later leaders were politically unable to do.
This seems suspicious. While Stalin did have free reign and could crush anyone he wanted for any reason including corruption, I am not sure he really optimized for corruption-free economy. And if you can end up in GULag for no reason or some stupid mistake, your incentive to avoid illegal gains is weaker: it's just one thing to be afraid of in the long list, and at least it improves your quality of life a lot if you don't get caught.
Stalin absolutely optimized first and foremost for holding onto power, but sometimes that looks the same as cracking down on corruption. Later Soviet corruption thrived as a result of alliances and networks among powerful interests within the nomenklatura. Stalin did not tolerate such alliances -- indeed, if he discovered one he would see it as cause to liquidate everyone involved.
Now, members of the nomenklatura absolutely did attempt to engage in corruption under Stalin, but their success was limited by the fact that no one was going to cover for them if they were discovered. The concrete example I recall from Olson is that Stalin at one point noticed that Soviet-made movie projectors kept breaking down. So he had people look into it, and what do you know, the reason was that the manager of the projector factory was skimming off the top and substituting inferior components. So that manager was swiftly made an unperson, and the next manager was said to have operated the place with impeccable efficiency.
But under Brezhnev, that factory manager most likely would have stuck around because he would have an entire network of alliances, people that he was kicking back his profits to and also covering for. Brezhnev's power was limited by the system of corruption that surrounded him. Which, again, is why Stalin optimizing for power also involves cracking down on corruption.
You are correct on both counts. One reason that the German General Staff urged war with Russia was because it was feared that Russian demographics combined with rapid industrialization would soon make Russia unstoppable. Better to fight Russia now while it was still seen as manageable.
The French had a similar view of Germany, and the Austro-Hungarians of Serbia.
And the early Soviet Union did import a great deal of American knowhow, and they also admired and respected American industrialization. As an aside, American engineers in the USSR were irked by the constant barrage of questions about Henry Ford, was he smarter than other Americans or otherwise how did he do it?
Francis Spufford's _Red Plenty_ explores the Khrushchev era, when the USSR's GDP was still growing at double digit rates and the post-Stalin thaw allowed for more open debate about central planning. It's a fascinating piece of historical fiction. The essays about it at Crooked Timber are also well worth your time; I never pass up even a sliver of an opportunity to recommend Cosma Shalizi's "In Soviet Union, Optimization Problem Solves You".
https://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you/
Scott actually wrote a really good review of Red Plenty on his old blog: https://slatestarcodex.com/2014/09/24/book-review-red-plenty/
Russia did have a high growth rate, but it had a serious cultural problem, a peasant society, and communism didn't solve the problem. You still had kleptocrats at the top and peasants at the bottom. Peasants know they can't win, and they are lucky to break even. A good book on this is Chanayov's Theory of Peasant Economy. A big problem with peasants is that they make crappy soldiers. It got so bad that the tsar bought out the serfs in hopes of turning serfs into citizens who could fight in a modern war. It didn't help his dynasty all that much, but it was citizen soldiers who fought off the Nazis.
After the war, the economy grew and living standards rose. A lot of the housing stock is still from the 1950s and 1960s. In the 1970s, things changed. I think there were two forces: generational change and the costs of empire. At certain point, you have to move on from The Great Patriotic War, and the Russian leadership was still invoking it well into the 1980s. It was all they had left. Then there were the subsidies to the Warsaw Pact nations. If you looked at the books in the 1980s, as some did, the empire was running in the red. The tanks rolled into Hungary in '56, Czechoslovakia in '68, but not Poland in '80.
As you surmised, it's not true that Catholic Italy is wealthier than Protestant Britain. Of course Northern Italy is wealthier that big swathes of Britain but so what. And the whole premise is dumb, since choosing two countries is hardly definitive. It's also easy to counter since Protestant Norway is much, much wealthier than Catholic Portugal. But again, so what?
GDP is not a measure of wealth, which is a stock. GDP is a flow. It may be true that Italy is wealthier than Great Britain, but I'm not sure how meaningful that is.
True, but GDP per capita is an extremely common basis for comparing wealth. And Britain's GDP per capita is higher than Italy's. But my point is they are just two data points, and the opposite point (to the author's contention that Catholic countries are richer than Protestant) could easily be made by choosing Norway as the Protestant country and Portugal as the Catholic. Or he could have compared Catholic Ireland and Protestant Britain to make his point correctly, since Ireland is richer than Britain. But two data points are hardly sufficient to support an argument.
I think your point is correct. But "GDP per capita is an extremely common basis for comparing wealth" is nonsensical, don't you think? I actually doubt that Ireland is "richer" than Britain since the British probably hold many times more assets?
I think it's a good enough approximation because of things degrading with time and of generally comparisons measured in terms of money becoming too inaccurate anyway over the span of several decades ?
I don't understand what this means: "comparisons measured in terms of money becoming too inaccurate anyway over the span of several decades"
Do you think income is a good measure of wealth for individuals as well? Typically any academic paper referencing wealth would strictly differentiate it from income, in my understanding.
I totally agree with your point that GDP is flow, not stock and therefore not a valid measure of wealth. I just don't think there is another alternative that is readily available across countries.
I'm saying that neither of them is good, and that they're approximately about as bad.
See also the Progress & Poverty review, which shows that it might be interesting to separate the quantity of wealth (not defined in terms of money) with it's value (in terms of money, but highly subjective and only viable over short time periods).
"True, but GDP per capita is an extremely common basis for comparing wealth."
I have grown to think some of the interpretations of GDP per capita make a subtle but important category error when the word "wealth" is not specified exactly enough to nail it down. GDP per capita is the amount of gross domestic production normalized to size of population. Which may make sense as a measure of "national wealth" as much as it correlated with domestic production. For some other uses of the word "wealth", some other measures are plausibly more meaningful (say, median income).
It might work in this specific example because you're comparing two somewhat similar European countries in the same time period (and even then I have my doubts), but for any wider comparison thinking in terms of money becomes too inaccurate.
If you're using it as a proxy for "human flourishing" or something, then there are probably better indicators available, like maybe distributions of human heights :
https://ehsthelongrun.net/2019/05/02/anthropometric-history-and-the-measurement-of-wellbeing/
We can disagree about anecdata, or the meaningfulness of comparing stocks, but in terms of the reviewer's original comment about trusting the text, it's clear that wealth is a stock and Italy has more of it (even per capita). Whether they will in the future, given the UK's higher GDP per capita, is a different and more speculative question.
Why is it clear that Italy has more wealth per capita than the UK? we know that using the faulty GDP per capita measurement that isn't true. But I also think most people would just guess that Britain is richer than Italy. That would be based on Britain being acknowledged as the richest country in the world in the nineteenth century, and Italy being one of the poorest and the main source of desperately poor immigrants to the US. And it's now known in Europe as the most heavily indebted and slowest growing. It was widely considered the most likely to go bankrupt during the 2008 crisis and that concern hasn't abated. So I'm just curious what you rely on in determining that it's wealthier and that therefore the text is reliable?
Looks like I should retract as I was relying on my pre-2008 memories (I'm old). 2019 data says you're right. But if you scroll down you'll see other commenters showing that Italy had higher GDP per capita in the year the book was written! Even the fact that they fluctuate back and forth in recent memory seriously undermines the Weberian thesis.
"As you surmised, it's not true that Catholic Italy is wealthier than Protestant Britain."
It was true between 1976 and 2011; the book was written in 2011. Since then, Italy has fallen behind Japan and Britain.
There is some truth to the core idea that economic catch-up requires more than just opening up your economy. For the successful Asian countries (China, Malaysia, the tiger states), they did liberate their internal markets. But at the same time they were rather restrictive on imports, so that the new industries were not immediately destroyed by international competition. Only after some time of (external) protectionism and (internal) liberalism, when their industries were competitive enough, they opened their markets to the outside.
> During the 1500s and 1600s, first the Netherlands and then Britain experienced a sort of mini-boom.
> (the fact that [the UK] was full of giant coal and iron deposits didn't hurt)
Yep. Netherlands' (proto-?) Industrial Revolution was powered by another fossil fuel : water-transported peat :
https://www.lowtechmagazine.com/2011/09/peat-and-coal-fossil-fuels-in-pre-industrial-times.html
> From about 1600 to 1720, the Dutch had the highest per capita income in the world - at least double that of neighbouring countries at the time and about five times higher than that of the poorest countries today.
Compare also to the Ancient Greeks, who had "unlocked Steam Power in their tech tree", but didn't get an Industrial Revolution out of it.
Relatedly, I have a hypothesis about why the modern world popped out of the Netherlands and Britain, places that until recently had been relative civilizational backwaters, rather than say China.
The steam engine had been invented at least twice - in Ancient Greece, as you note, and in the medieval Ottoman empire:
https://en.wikipedia.org/wiki/Taqi_ad-Din_Muhammad_ibn_Ma%27ruf
In both of these cases, so far as we can tell, the engines were used chiefly as curiosities for rich people to impress each other with, or as a kinda gee-wiz science experiment. They never seemed to consider using them for practical work.
Thomas Savery, by contrast, in 1698 invented a steam engine and described it as "A new invention for raising of water and occasioning motion to all sorts of mill work by the impellent force of fire, which will be of great use and advantage for draining mines, serving towns with water, and for the working of all sorts of mills where they have not the benefit of water nor constant winds."
This is a different outlook indeed than "Yo, you won't believe this, this wheel thingy spins by itself.' The engineers and inventors of ancient Greece and the Ottoman empire were <I>aristrocrats</I>, far removed from the concern of the working man. No-one else had the education or leisure to fiddle around with metallic bits seeing if they could make something of them. They cared not one fraction of a damn how hard the serfs and slaves had to work to get them food and water, you could always just buy more. The inventors and engineers of the industrial revolution were <I>well-to-do</I> but not typically courtly elites; they were petty landed gentlemen, sons of rich merchants, etc. So when they came up with a thing that could spin itself, they would think 'Huh, I wonder if Aart who tills my fields could use this for anything' or 'Huh, my uncle John was always trying to make a better windmill, maybe he could use this?'
Society was unusually un-stratified. Why? Well, probably lots of reasons, but I think mostly the Black Death.
More than half of Europe had just died. Existing structures hit HARD reset. They still had medieval-level tech to work with, but the calcified structures of hierarchy and nobility that build up over time and make it so that the EMPEROR can use 5 claws on his dragon, but YOU who only has 10,000 soldiers and, like, half a million subjects at <I>best</I> can only use four or you'll be executed, hadn't yet formed again.
Add in some natural resources, maybe a bit of luck tinkering with new types of government, <I>maybe</I> something something culture of logic from Christianity plus culture of optimism to do Age of Sail discoveries, and there ya go.
The black death was in the mid 1300s though? That's 350 years before Savery's steam engine.
He probably confused it with the Great Plague ?
(Not to mention the ~30 different plagues in-between...)
Right, I was talking a bit too much off the cuff there. My overall point was there were a good three centuries of serious depopulation from a string of plagues.
Yea, a fall in population would raise the cost of human capital relative to capital goods. So yea, I could see how plagues killing off the population could spur technological growth. But the counter-argument seems strong too; humans are the ones that innovate, and fewer humans means less innovation.
We see a few examples of population lapse. Europe's population was 78M in 1600 and lapsed back to 74M by 1650, but these effects were mostly seen in Germany, Spain and Italy. However, the part of Europe where Savery lived, saw very robust population growth. But I think the most significant demographic event of the 1600s was urbanization. People moved to cities and ports, and cities became administrative centers. So my bet is that the concentration of talent in cities had more to do with the technological revolution in England and Holland.
"But the counter-argument seems strong too; humans are the ones that innovate, and fewer humans means less innovation."
Have you ever observed a conversation where someone suggests some kind of wacky way to make things better, and another person shoots it down with "if that actually worked then people would be doing it already"?
That argument only flies if you have a large population.
Such an argument would predict that as the population exploded, innovation would stagnate (because risk-takers would be discouraged). Yet the world didn't reach the middle of the population growth S-curve until right about the year 2000, yet GDP has consistently outpaced population growth. GDP outpacing population growth is technically what productivity means, and that's what innovation is.
So it doesn't look like that effect is strong enough to override the networking effects and economies of scale of cities. Also, people in cities earn vastly more than people outside of cities, and that data is very robust. So yea, popular density is more productive.
Thanks, I wasn't aware of the steam engine in the Ottoman Empire ! (Technically, it's part of the modern period, not middle ages.)
Yeah, that makes sense.
Any ideas about whether the Chinese had invented the steam engine too ?
How reliant were they on slaves ?
I've never heard of any equivalent of a steam engine having been developed in China, curiously. It's not like they weren't experimenting with such things, having invented gunpowder and all.
I'm no expert in this area, but I don't think the Chinese tended to be very dependent on literal slaves. However, serfdom and similar roles being the main source of manual labor serves the same role here of 'a whole bunch of poor people you'll never meet and don't care about do all the work for you' if you're and educated aristocrat.
Supposedly rice farmers were getting a better deal than wheat farmers because they were less reliant on big landholder's capital ?
https://acoup.blog/2020/09/04/collections-bread-how-did-they-make-it-addendum-rice/
Also, Industrial Revolution Britain is pretty infamous for its treatment of farmers (enclosures) and then later laborers (among the worst conditions ever seen in history of mankind, according to the study of human heights?), but I guess that was only later, after the most important inventions had already been made ?
Savery's engine had a tendency to crack open from its internal pressure. It would not have worked at all with lower quality steel, which means it would not have worked in any previous era. Steel, like many technologies, advances continuously, even during the Middle Ages.
I would not be sure of that. Savery didn't have access to crucible steel production yet (even though it might have been known in India as early as 300 BCE). So he would have used inferior, welded steel, which probably wouldn't have been significantly better than what Gauls were doing in 450 BCE ?
https://acoup.blog/2020/10/09/collections-iron-how-did-they-make-it-part-iva-steel-yourself/
Note that in both these cases, they were really limited by the efficiency and the size of steel "plates" produced, you need to wait until the mid-19th century Bessemer process to be able to produce steel in industrial quantities.
Cool! A more granular understanding of metallurgy development than I had.
Bullseye does have a point however, and I've wondered myself if improvements in material science may be a point against the hypothesis. Stepping away from steam engines, the Antikythera mechanism seems like it <i>may</i> have had intended practical use in navigation, but reconstructionists believe the machining techniques they had then would have rendered it too inaccurate for long voyages. Maybe; but why then not innovate better ones and <i>make</i> it useful! A navigational computer would have been huge!
I can't shake the sense that rapid technological advance was in many civilization's grasp and it just....didn't happen.
Yeah, I would guess that you would need first to have some high quality steel instruments to be able to precisely machine the copper & brass, which Ancient Greeks could only have gotten as imports from Asia ?
EDIT : Forged iron & steel couldn't be easily made into random shapes necessary for things like pipes, so he used brass instead ?
https://en.wikipedia.org/wiki/Thomas_Savery#First_steam_engine_mechanism
(There's a reason why Steampunk is full of brass !)
I also get the impression that Huntsman's crucible steel wasn't used much for this kind of devices - still too impractical because very hard to reshape after it had solidified ?
Also, it seems like this tendency to "crack open" happened not at the level of the brass itself, but at the level of the soldered joints ?
(Electric welding was only invented in 1800 and didn't became practical until ~1900 ? https://en.wikipedia.org/wiki/Welding#History )
A book I was reading on the pre-Black-Death medieval economy (written during the 70s, IIRC) said that the paper mill (as a manufactory) had been in place for China for several hundred years before it traveled to Europe, worked by human or animal labor, and almost the first European mentions of it (14th century) are describing water-powered mills. The book was of the opinion that medieval Europeans were just really, really, really enthusiastic about using water to power things as a means of getting free labor.
Apparently there were gigantic quarrels between cities on the same river over who was allowed to build their dams how high, because every foot of height you build into your dam lowers you build lowers the potential energy for the next dam upstream of you, forcing them to build their dams higher, forcing them...
It was a pretty great book and I should see if I can track down the name.
(Low confidence in the precise accuracy of my summary because I should be asleep, high confidence in the general sense of it.)
That doesn't make sense (dam height) unless the pool above your dam floods all the way back to the foot of the upstream guy's dam and partly submerges its lower reaches. Potential energy is the difference between the water level behind your dam and the water level at its foot, khattam-shud. The state of the river after your dam makes no difference.
Unless I was misunderstanding the book, they did seem to be implying that it flooded all the way back. It might be a mistake on my part? I remember reading about the lawsuits about water levels on IIIRC the Rhone quite clearly. I should see if I can find the book and find out what I'm missing.
Whoa. That's a lotta dams!
A key point about using water power everywhere. Once you already have a machine that converts rotary motion from a river into useful work it's a small step to replace the river with a steam engine.
It's not impossible that the Black Death was a factor, but there are other reasons England and the Netherlands had low stratification even before the plagues. One major one is agricultural economics.
You get highly stratified societies where the geography favors concentration of production in large estates - latifundia. Where it favors small freeholders (one of the extreme cases of this is Switzerland) you get more egalitarianism.
There's a reason Thomas Jefferson believed democracy could only be built on a bedrock of sturdy yeoman farmers - this difference cashed out even in regional variations in what would become the early United States. At around the same rime, England and the Netherlands were getting lucky, not just because of the high cost of labor or coal/peat availability but because their economic geography had prevented them from developing latifundias and the rigid vertical stratification that they drive.
I think this is an important clue; that article about peat in the Netherlands inspired my take posted here: https://fiveislandsorchard.wordpress.com/2020/01/10/energy-enlightenment-and-the-better-angels-of-our-exotherm/
It's written as a response to Stephen Pinker's latest books. Pinker argues that things improved because we got better philosophy; I think there's a strong argument that in reality we got freed from land-to-mouth and the limits of biofuels.
In the US per capita energy use is on the order of 100x pre-industrial levels. You can buy a lot of... everything with that.
That's a great blogpost, it reminds me of the websites that I learned these things from :
https://jancovici.com/en/energy-transition/energy-and-us/what-is-energy-actually/
Yeah, I have a very hard time to take seriously people like Pinker, who seem to ignore the giant fossil fuel elephant in the room !
It's a shame, really, we first became aware of these issues in the 70s, started the energy transition... then just decided to ignore the issue in the 80s, and basically wasted the 40 next years, 40 years of easier to extract fossil fuels which, considering their exponential growth, probably represent around half (?) of total energy (and CO2 emissions) ever used by mankind so far ?
And the politicians keep ignoring/diverting the issue, because "there's nothing for them in it".
At this point, I'm not even sure that restarting the transition wouldn't make us fall into the energy trap of front-loaded costs :
https://dothemath.ucsd.edu/2011/10/the-energy-trap/
As for Pinker, why then haven't the Ancient Greeks, which were pretty good at philosophy (and natural sciences : mechanical computers, steam engine...) had followed the same road much earlier ?
Also the Chinese with their invention of printing press and gunpowder, and from what I hear they had pretty good philosophers too, though most of my awareness of them comes from pop culture :
https://www.youtube.com/watch?v=0N_RO-jL-90
Pseudoerasmus has some specific things to call attention to with respect to high British wages:
https://pseudoerasmus.com/2016/12/01/allen/
Overall, it's important to understand that someone getting a paper or book published on a topic doesn't mean they're the final word on it. Sometimes talented, intelligent researchers are just wrong, such as Acemoglu in that paper on German industrialization and institutional reform you posted about a while ago. Economic history in particular is a fraught subject with disappointingly little day and live debates on just about every interesting question you can think of.
Vincent Geloso's lecture on the industrial revolution is also really good to get an understanding of the state of the art https://www.youtube.com/watch?v=pe4hzSxxBAk
Yeah, the question of the Great Divergence is a major area of study right now. Even just the question of exactly when it happened is still kind of open, last I knew. When did Lancashire really start looking substantially different from Jiangsu? We often don't even have great data to begin to answer this question! How are we supposed to ask why and how when we can't answer when?
I am not as pessimistic as you are. You don't need to be precise to be insightful. If you use evidence from enough sources, the picture may become clearer.
Maybe. I'm very sensitive to how the discovery of new information or new data can completely overturn old interpretations. I've been reading about early 19th century financial panics in the last few years and the shape of the debate around the 1837 Panic has been determined strongly by the work of Peter Temin done in the 1960s (it wouldn't be entirely wrong to say subsequent work consists of either elaborating on or responding to The Jacksonian Economy). One thing Peter established very strongly was that reserve ratios in state banks never fell, the old canard from before his time that a contributing factor to the Panic was overexpansion of state bank circulation had made the financial system fragile was outright wrong, and that his data showed this conclusively.
I hadn't actually every found a convincing response that challenged this. The balance sheet data that incorporated state banks were required to report showed this as clear as day, how could it be wrong?
Well, one area it could go wrong would be in the data we DON'T have. The data Peter Temin had was for incorporated state banks. While most states had outlawed unincorporated banking by the 1830s, it was nevertheless more widespread than previously thought (the Girard Bank in Philadelphia, for example, had one of the largest circulations in the country for an individual bank as late as the 1840s). And we, for the most part, don't have balance sheet data for these banks. They weren't required to report it to a regulator and much of it has disappeared into the Great wastepaper basket of history.
Does this mean Temin was wrong? Who knows? We literally don't have the data.
I might be more perssimistic than is truly warranted, being a well read amateur, but I think the problem of primary data seriously threatens conclusive answers to any question of economic history.
In case you're not familiar, these "very short introductions" are a series (<a href="https://en.wikipedia.org/wiki/Very_Short_Introductions">Wikipedia link</a>); they have them for a pretty broad range of topics and they're all similarly small. It's not just a subtitle on this one book!
Ugh, I guess I can't use HTML here... anyone know what I can use? Markdown? (*Testing*, **testing**, [link testing](http://example.com/)...)
I would suggest just doing links like this in the in mean time. [1] It keeps things cleaner when reading at least, though it is inconvenient.
== Links ==
[1] http://example.com/
Substack apparently never considered that people writing comments on posts would want to provide their own links, edit comments, or any of the other things we've been complaining about.
I don't want to think we're only supposed to go "Great post, dude!" ❤❤❤❤❤ or "You stink, idiot!" as responses but given that I can use emojis here and not any kind of markup for links - well... 🤷♀️
Maybe you're addressing the wider SSC/ACX audience, but I'm pretty sure Scott is familiar with them, seeing as he wrote a review of Peter Singer's "Marx: A Very Short Introduction" back in 2014 https://slatestarcodex.com/2014/09/13/book-review-singer-on-marx/
I still default to what Scott wrote in the introduction whenever I want to learn about a messy sprawling complicated topic:
"I’m not embarassed for choosing Singer’s Marx: A Very Short Introduction as a jumping-off point for learning more leftist philosophy. I weighed the costs and benefits of reading primary sources versus summaries and commentaries, and decided in favor of the latter.
The clincher was that the rare times I felt like I really understand certain thinkers and philosophies on a deep level, it’s rarely been the primary sources that did it for me, even when I’d read them. It’s only after hearing a bunch of different people attack the same idea from different angles that I’ve gotten the gist of it. The primary sources – especially when they’re translated, especially when they’re from the olden days before people discovered how to be interesting – just turn me off."
Is there any chance of you writing a book review of Das Kapital? I would really like to read that.
If you're right, I share some of Scott's misconceptions, and perhaps it's my poor reading skills, but I find passages such as "Feuerbach resolves the essence of religion into the essence of man. But the essence of man is no abstraction inherent in each single individual. In reality, it is the ensemble of the social relations" incredibly hard to parse.
= "We live in a society."
(I'm not even joking, this seems to be basically his point : human nature is an emergent phenomenon of human beings living in a society ?)
I would also be interested in this.
I am replying to you here because I saw you link this comment as particularly important for Scott to reply to, and I thought a couple of the people who reacted to you there were being unfair, so I decided to read your comment and see what I thought. First, I think the comment is rude and dismissive enough that I would be tempted to gloss over it and not reply. But setting that aside, I also think the substance is weak.
I admit that I’m not entirely sure what “But the essence of man is no abstraction inherent in each single individual” is trying to say, but I understood the full quote as meaning that humans don’t have a fundamental nature, in a vacuum—ie the way people are en masse isn’t a, say, biological fact—instead any particular facts you can know about a group of people is fundamentally about the relationships between those people. And the obvious implication is that those relationships are arbitrary and might be any other way, causing what we are incorrectly seeing as “human nature” to end up looking some other, arbitrary way. In this case capitalists seeing humans as being fundamentally capitalist is wrong, because actually humans only act like that when they are born/raised/exist in a capitalist social situation. If they were born/raised/existed in a different system they would be different.
So I think a perfectly fair interpretation of the quote provided is that Marx thinks humans don’t really have fundamental “natures” outside of the social arrangement they happened to find themselves in, ie. they are completely malleable.
I also think it’s a totally normal situation for there to be heated controversies about issues where the canonical text is perfectly clear, so I don’t know why you think Scott is the bad one for thinking it’s perfectly clear but also noting that there is some controversy among Marxists. But you’re right that he didn’t cite the controversies, so I don’t know. Maybe he just means his position is controversial according to Marxists, even though in his view Marx’s words are perfectly clear? If that’s it, then it’s evident from your reply.
So yeah, you’re coming across as an asshole with an axe to grind which isn’t doing you any favors, but on top of that I think you also made a weak point. I think you should pick at maximum one of those, but preferably be nicer and make better points at the same time.
"But the essence of man is no abstraction inherent in each single individual. In reality, it is the ensemble of the social relations"
My gloss of this is:
1: The essence of man is the ensemble of social relations rather than anything inherent in an individual.
2: Therefore if you took a person and embedded them in a totally different social system that they would end up totally different, as anything that could not be changed in this manner *would* be inherent to the individual rather than from the social relations, in contradiction to 1.
3: Therefore man is completely malleable to social conditions.
So I'm another person that thinks you're wrong about this. Maybe there are other similar quotes from Marx that could triangulate it to a different position that's being mistranslated/misread.
I can imagine a similar point as the the quote that is maybe what you think Marx means, like "Many humans have a trait (e.g. greed) that isn't necessarily in *all* humans but affects social relationships so that all humans live in a social environment defined by that greed and creating particular consequences. Those reliably socially caused facts are the thing that should be understood as human nature."
On this read the emphasis is more on the "each single individual" and there's space for particular traits to be both common & inherent. If that's what Marx meant it's IMO not put very well for a 21st century English speaking audience in the quote.
Rereading the quote above, the thing about "it’s only after hearing a bunch of different people attack the same idea from different angles that I’ve gotten the gist of it" got expanded into its own post 3 years later in "Non-Expert Explanation" (https://slatestarcodex.com/2017/11/02/non-expert-explanation/), another SSC classic.
Commenting before I read the other comments.
There are 3 well known expert catchup stories in the latter half of the 20th century.
Hong Kong
Singapore
Dubai.
Why did they work?
If we're not addressing the fact that (a) they did work, and (b) other countries of similar size and start point didn't, I think we have to be suspicious of the story being told.
Do you not want to count Taiwan and South Korea as catchup stories as well? They seem like much better cases to me than Dubai.
(Also, I don't know the details, but was Hong Kong actually starting from the broader East Asian level in the middle of the 20th century, or was it already at a higher economic level?)
Taiwan and South Korea were both catch-up-part-way stories.
Singapore and Hong Kong (and maybe Dubai) are catch up and exceed stories.
I know that Singapore and Jamaica had the same GDP per capita in 1960-ish and about the same population. So they're really really good examples of similar countries.
I don't know about HK's starting point.
I prefer Taiwan and South Korea as well. Tiny city or island states don't make for the best models, as you can't just tell another country to become a small island instead.
Given that these two countries had essentially _nothing_ but their population to start with, it seems impossible not to introduce culture as a relevant factor.
And unlike the ones listed, they're also _political_ success stories, have managed to democratize, which is more than you can say for the first trio.
Catsup stories are all about economies that come from be Heinz.
*slow clap*
Do they follow the behaviour described by Ogden Nash?
If you shake the bottle
First none'll come
Then a lot'll
HK and Singapore are located next to important shipping lanes, Dubai is located on top of an oil field and Mohammed bin Rashid Al Maktoum is smart enough to avoid a resource curse.
Jamaica is as close to the shipping lane through Panama canal as Singapore is to anything. Hong Kong is nicely positioned WRT its neighbor city, but not better than Tijuana/San Diego or a pile of similar options. I'm unconvinced by "good location" as even a partial explanation. Policy is the far better explanation, especially with all 3 places having very similar policies.
> mestizos are ~80% of Mexicans
Wait. So when USAians say "Latino", do they actually mean "Latino - Native American métis" ? And that's why they aren't always considered "white" ? (But aren't also considered to be a separate "race" ?)
Pretty much. In addition to the majority of the population of the Latin countries being of this group, immigrants to the United States are very disproportionately of this group, so that it's rare for USAians to see people from these countries that visually look as "white" as people from Spain, even if such pale people are a noticeable minority in the Latin American countries.
They're even a majority in Argentina and Chile.
My impression is that when people in the US say "Latino" or "Hispanic", they're usually thinking of a category closer to "Central American", or even just "Mexican". Ironically, upon first meeting a Spaniard, we're likely to gloss them as "white" over "Hispanic". Either would be apt - but we have an unfortunate penchant to identify both others and ourselves with a single racial group.
As a potential counterpoint, most questionnaires that I've seen (in demographics-gathering contexts, whether by companies or government entities) have two separate questions about race, the first asking about Hispanic identity, and the second asking about race per se. For one implementation of that general schema, consider page 5 of the N-400: https://www.uscis.gov/sites/default/files/document/forms/n-400.pdf
Add in the whole "latinx" debacle, and the constant quibbles among woke elites about who counts as what, and what categories/affinities are important... and let's just say that if and when Americans use the word "Latino", there's no guarantee that they mean any particular thing whatsoever.
Yeah, that's the weirdness I was talking about.
And why is the Latino ethnicity singled out ?
And there are a lot of Jews in the USA, aren't there, so where is the checkbox for the semite "race" ? (Which fits most of the "Arabs" too.)
But most importantly : aren't these questions, you know, racist ?
And especially : if the goal is really the ethnic assimilation of the migrant, isn't it a pretty bad idea to single out on this form the ethnicity that you might have to give up, and also the "race" that might potentially make your assimilation harder ?
Talk about a bad first impression !
GREAT questions with no easy answers, but I'll take a stab at why the practice of classification continues, even without a clear rational basis for any particular set of classifiers.
My first draft of an answer would center on the idea that to Americans, race mostly matters because of racism - the prejudice based on the categories precedes the categories themselves. Companies and government agencies gathering demographic data are usually doing it for some reason related to the detection, prevention, or punishment of discrimination. And if you want to measure or counteract racism, it's necessary to understand the lines that racists draw, even when those lines aren't based on sense.
For Arabs and Jews, the relevant prejudice is along religious lines - the term that gets tossed around is "Islamophobia", more frequently than "anti-Arab sentiment", so people don't necessarily ask or care about Arab ethnicity. (Sometimes they do though - I have heard the acronym "MENA", "Middle Eastern or North African", making the rounds as a racial category.) For Jews, the average American sees it as a religion, not a race; if they understand that actual Jews frequently see themselves differently - as a people, not a creed - it's most frequently because they learned it from Jewish friends. When the prejudice is religious, there's no need to ask about these categories as racial.
The category of "Asian" is another fun phenomenon. It encompasses people with origins in vastly different countries, often with deep mutual cultural enmity. But to average Americans, they're all just "Asian" at a glance, so in order to detect American prejudice against them, we create that category. (Wokesters have now expanded it further to "AAPI", it'll change again in another 2 years, whatever.)
Are these questions racist? Yes, in one sense, especially in that they're founded on categories created by the ignorant, since their central purpose is to counteract toxic consequences of that ignorance. But they may also be necessary, if you're really trying to figure out - for example - whether hate crimes against "Asians" have increased recently.
Your question about "assimilation" deserves treatment separately. To start answering it, I'd note that what starts out as description of a category that doesn't really exist, ends up creating that category. As a product of their being taken together on surveys, "Asian-Americans" have genuine collective interests now, most particularly abolishing affirmative action. And as generations pass, people often assimilate "towards" identities that are not strictly "American", but "hyphenated-American", and over time these categories becoming better and better descriptions of a category and identity.
Speaking of which, these days it seems to me that an American (U.S.) ethnicity is not an option any more, and people are being forced to pick between either a "Red" ethnicity and a "Blue" ethnicity ?
I was originally going to disagree, but the more I think about it, the more accurate this seems - at least for white people who didn't immigrate recently, and at least under a certain understanding of "red" and "blue" not unlike the one Scott gave in "I can tolerate...".
I still have quibbles. Most often people don't properly "pick" either, to some degree you're born into them. And there are lots and lots of other categories which are separate to those two, like Scott's "grey tribe". And "ethnicities" definitely wouldn't be the first word I'd use to describe "red" and "blue", I'd use "cultural groups", "tribes", or "classes" first.
But given that we're not dealing with precise categories, if you squint your eyes and glance at white America, your statement isn't a bad first approximation, I'd say.
Since ethnicity is predominantly about culture (religion or lack of it playing the front role), "ethnic groups" and "cultural groups" are synonyms.
(Unless using the definition of "ethnic" nationalists, where "ethnic" is an euphemism for "racist" ? AFAIK that was one of the ways that racism had been smuggled into polite discourse in the 1930s and 1940s ?)
And "tribe" is just the name of a small ethnic group (under the Dunbar number ?)
"Class" is a whole other can of worms that I won't open, but yeah, I see the relation !
Yeah, I was talking about migrants first, "white" or not. When you already have ties it's much harder to switch ethnies, though I guess that in post-modern times "restarting your life" by moving to a completely different region (and therefore neighborhood) is at least an option for most people, even if most won't take it. (But then you're an intra-national migrant ?)
Oh, think about the role of education for ethnic cohesion, and how most people end up as "migrants" in college ! (Even if most will then go back home.)
As Scott himself admitted, his Grey "tribe" is mostly a "desaturated" blue one.
Also "Asian" is a terrible term for an ethnic group.
In America, it mostly means "people from East or South-East Asia, either Christian or following a non-Abrahamic religion". Chinese, Japanese, Filipino, Korean, Vietnamese...
In Britain, it mostly means "people from South Asia, either Muslim, Hindu or Sikh", and British people tend to be uncomfortable classing Chinese or Japanese as Asian (there are quite a lot of people of Chinese ethnic origin in Britain, though nothing like as many as Indians or Pakistanis).
Note that neither country has a large South-East Asian Muslim population (ie Indonesian or Malay - Malaysians in Britain are mostly Chinese and not Muslim)
Arabs are from either Asia or Africa, but if you referred to a child of Moroccan immigrants as "African-American" then I don't think anyone would be happy. A Saudi referred to as "Asian" would be less discomforting, but that's still not really effective communication.
And is anyone going to count white people from Israel as "Asian-Americans"?
Gal Gadot, for instance?
If there are several distinct groups (whether you want to call those "races" or "ethnicities", I honestly don't care) that are from the continent of Asia, then referring to one of them as "Asian" is just going to result in confusion. It would be nice to come up with the half-dozen terms we actually need, but at least knowing that "Asian" is going to confuse people and likely needs clarification is useful.
Well, I looked at the instructions :
"Categories and Definitions for Ethnicity and Race
1. Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. (NOTE: This category is only included under Ethnicity in Part 7., Item Number 1.)
2. White. A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
3. Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
4. Black or African American. A person having origins in any of the black racial groups of Africa.
5. American Indian or Alaska Native. A person having origins in any of the original peoples of North and South America (including Central America), and who maintains tribal affiliation or community attachment.
6. Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands."
So they nicely sidestep the icky (and hard to define?) issue of "race" by referring instead to "origins" (except for blacks !? ... because it's supposedly easier to see from appearance for them ??), and in the case of "Hispanics/Latinos" and "American Natives" to respectively "Spanish culture" and "tribal affiliation or community attachment"
(hence "ethnicity" is indeed appropriate... but why aren't "American Natives" an ethnic option then ??).
My impression is that Americans think about race in terms of physical appearance. Many or most Mexicans & central Americans coming to the US have a distinct similar appearance (straight dark hair, moderately dark skin), so they're considered a separate race. Middle-Easterners also look somewhat different from Europeans, so many Americans think of them as racially different even if Census forms don't consider them as such. On the other hand, American Jews, being mostly Ashkenazi (https://en.wikipedia.org/wiki/American_Jews#Subgroups), look similar to other white people, so most people think of them as white.
But why don't we classify Mexican and Central American immigrants as Native Americans? By blood that's mostly what they are, and they look it.
Because Native Americans in the United States have a different relationship to White Americans and a different history. And the purpose of the racial classifications is about how the races relate to the dominant group.
We think of Irish and Italians as white ..... now.
The US government tracks one ethnic distinction (Hispanic or Non-Hispanic), but doesn't include "Mestizo" as a racial category.
Race is more about us vs. them than biology or even appearance.
The original three races in the U.S. were white, Indian, and Negro. Then we met Mexicans. Most of them were dark enough to be "Indians", but they didn't really seem like the same people. Also some of them are of European descent, but they didn't seem much like us. So we lumped all Mexicans (and people from countries that look like Mexico to us) together into a new category, which we think of as a race even though we know it makes no biological sense to think of them as a race.
Is this actually true?
"Yes" for my first two sentences, "probably" for the rest.
Also yes for most of the last sentence. We do think of Latino/Hispanic as a race, despite knowing it doesn't make sense; hence the awkward wording on demographic surveys.
It's over simplifying "white" a lot. White in that era (I assume we mean the 1840s, when we went to war with Mexico) would have meant English, Scots, Welsh, maybe French, maaayyybee German. An Italian would have been a Latin. A Polach or Russian a Slav. An Irishmen a Mick, and since we had a lot them (us?), subject to racist restrictions and cartoons (I would link but don't know how and since I can't preview or edit I'm afraid to mess it up.) None of them would have been part of the default, "white" race.
Also, why are there so many people with at-least-partially-native ancestry in Mexico compared to the US?
Was the pre-Colombian population of Mexico so much higher than the population of the US? Or were the natives further south somehow resistant to the diseases that killed off a lot of those further north?
"Was the pre-Colombian population of Mexico so much higher than the population of the US"
Estimates place the pre-Columbian Mexican population several times higher than that of the U.S. and Canada combined. I also believe that many fewer people immigrated to the New World from Spain than from England. My understanding is the Spanish relied heavily on Native slave labor, while the Natives were more trading partners and nuisances for U.S. colonists.
I've heard two explanations: firstly that Mexico had a much higher population to begin with, and secondly that the British and Spanish had different colonial goals.
The Spanish wanted gold, and they kept the natives around to dig it up. The English wanted land, so they threw the natives out. I have a suspicion, though, that these different goals were driven by pre-existing differences in America.
Yes, the English came to the US wanting gold to catch up to the Spanish, but it didn't work out (see any history of Jamestown). Cahokia was long gone before Europeans showed up in North America, and other native civilizations, whatever their population levels, didn't have the kind of central bureaucracy which craves liquidity and transparency and so hoards gold and silver in ways colonists can easily extract. But I think the supply-side may also have been relevant--with the industrial revolution underway England seemed keen to get rid of a lot of its unskilled lower classes as indentured servants in the colonies, whereas Spain mostly sent higher-class adventurers (like Jamestown). England also had an interesting position on religious pluralism, with dissenters quasi-tolerated in a way that let such sects grow to appreciable numbers but also experience discrimination that led them to want to leave (as founders of MA, RI, PA, and MD) whereas Spain was more religiously uniform and controlled. If they had waited just a few more years to expel the Jews and Moors, maybe they would have been sent to the Americas, with vastly different results for global history.
The old saw goes: "Because the Spaniards screwed the Indians and we just killed them."
If you recognize that the Spanish were not exactly pacifists and diseases killed way more Indians than bullets or swords, there actually is some truth to that old saw. Places like Massachusetts were intended as farm colonies, places you sent your religious cases to settle and dispute amongst themselves whether "presbyteros" in Greek means "elders" or "priests". These people brought their families, as they intended to make this their home. They didn't have much need for the natives, except as souls to convert.
Places like Colombia were intended as places you sent younger sons of minor noblemen to get as rich as they could as quickly as could, so that they could go back home and spend their loot. Obviously, these types needed lots of natives, both as concubines and because doing anything resembling actual work was beneath the station of a nobleman. When the pool of native labor proved insufficient, they imported Africans. They didn't import many Spanish women, as they weren't necessarily trying to establish families or roots, and there was a caste system, based on how "Spanish" you were and how close your family connection to Spain.
Even the haciendas and encomiendas were something very different from the smallholdings one sees in places like Massachusetts.
Per Greg Cochran, it was a bit of both. Pre-Colombian Mexico had a higher population, and urban areas that were on par, at least in size, with European cities. Urbanization selects for stronger immune systems, since diseases can spread fast through a dense and dirty population of unrelated people and do quite a bit of damage. As such, the death rate from European diseases like smallpox was ~95% for native North Americans, but "only" 70% for central Americans. Also, like Finster said above, the Spanish were more likely to intermarry with the natives than the English/Dutch.
pre-Columbian U.S. == pre-Medieval Germany+Russia.
I feel like this review lacked framing. I overall liked it as a summary, but it left me wondering why I should care and how I should weigh it against my existing priors, especially given the reviewer's comments on its brief length and perhaps-overly-simplistic narrative. Did the book present a vast amount of data to defend its positions? (Presumably not, given the length.) Was it written by someone (or some group) especially well-positioned to resolve these long-running debates? (If so, hearing more about them would have been wonderful.) Is it considered an especially good source by other experts?
As it is, the review made it sound like the book tells a story, without doing a great job of arguing that it's a particularly good or true version of the story; and without some kind of discussion along those lines, I feel obliged to disregard it as just a "take", just a claim without great backing. That left me feeling disappointed and unenriched.
(Of course, this may just as well stem from me having unrealistic standards and expectations from reviews of economics texts on this blog.)
Can we talk about form? This essay goes too early and too much into what the work doesn’t say, or what the essay writer does or does not understand, instead of describing clearly the thesis of the book.
Very Short Introductions is a whole series, there's hundreds of them, generally by leading scholars, published by Oxford University Press. https://global.oup.com/academic/content/series/v/very-short-introductions-vsi/
e.g. "Evolution: A Very Short Introduction" is by Brian and Deborah Charlesworth; "Dreaming: A Very Short Introduction" is by J. Allan Hobson; etc.
I'm going to wait until someone writes "Introductions: A Very Short Introduction," which will only be a few pages, and then write "Introduction to Very Short Introductions: A Very Very Short Introduction" which will consist of a single well-chosen six-syllable portmanteau word (plus punctuation).
The problem with reading an introduction to economic history by Robert Allen is that the book mostly contains Robert Allen's views/theories on economic history. For a detailed critique of the high-wage argument and Allen's theory of the industrial revolution, see https://pseudoerasmus.com/2016/12/01/allen/.
His views on Soviet economic performance are detailed in his book 'Farm to Factory' (https://press.princeton.edu/books/paperback/9780691144313/farm-to-factory). I am convinced by his arguments that Soviet economic performance till the 60s was better than most people think. But the post-60s stagnation was a direct consequence of the centrally-directed catchup growth that was unable to generate sufficient innovation or allow obsolete firms/industries to fail. The economy could not adapt because the initial period created special interests (in heavy industries, the military etc) that would not allow their powerbase to be harmed. The canonical reference on this is the work by Joseph Berliner (https://mitpress.mit.edu/books/innovation-decision-soviet-industry) but the broader argument can be found in many books. Chris Miller (https://uncpress.org/book/9781469630175/the-struggle-to-save-the-soviet-economy/) is excellent on the topic of the buildup of special interests.
Yes. The editors might wanted to choose someone who represented a more mainstream view for a book with that purpose.
Mumble mumble "How Asia Works" mumble mumble....
But seriously, as someone who found "How Asia Works" a good counterbalance to some of my libertarian tendencies, if you're looking for a good counterbalance to some of your libertarian tendencies, then you really might like "How Asia Works". Its explanations are satisfyingly mechanistic in a way that it sounds like GEH:VSI wasn't.
Example: Both South Korean and Malaysian governments in the mid-20th century decided they wanted to jump-start automotive manufacturing in their countries. They both set up massive government-overseen programs to build car plants and get cars sold, spearheaded by brilliant visionary (essentially) dictators. They both dumped huge amounts of money onto car moguls, and both used tariffs and other legal protections to incubate their nascent car economies. South Korea ended up with a globally competitive, massively successful car company (Hyundai) and Malaysia ended up with... a little local company that made bad cars whose name I don't even remember.
The difference? Malaysia (really Prime Minister Mahathir) picked some car companies to be the big car companies, gave them tons of support, and helped plan out how they would all be successful. One company would make small cars; the other would make big cars. That sort of thing.
The South Korean government (really Park Chung Hee) picked several car companies to *compete* for the title of "big South Korean car company". They all received financial support and legal protections, but those protections were (after a startup period) *contingent* on sales into foreign markets (note: sales, not profit. The goal was to make cars good enough that foreigners would be willing to buy them, not necessarily to make money off them). This forced the companies to compete both against each other and against the much better-established foreign market, with their much better cars. The end result was a car company that ruthlessly, tirelessly expanded and learned until it had good cars.
Meanwhile, the Malaysian car companies kind of just made some cars that technically worked, and got paid for it.
Point is, "How Asia Works" gives a nice peak behind the curtain of central economic planning and how it works or doesn't.
Sounds interesting! Adding it to my list
Interesting. As a footnote, the Malaysian big car company is called Proton, the small one Perodua. I'm Malaysian, so I grew up seeing these cars everywhere. They were mostly embarrassments. Now however they're surprisingly good (surprising perhaps because my baseline is so low)
John Nye discusses how Britain was better at collecting taxes than France in "War, Wine and Taxes". The former handed out monopolies on making & selling alcohol, then was able to tax those monopolists. The latter had a lot more taxes on other things that everyone did their best to avoid, resulting in less actual revenue.
Pseudoerasmus sometimes discusses the high-wage thesis. My recollection is that he doesn't think it holds up because British wages weren't actually that high early in the IR (particularly compared to productivity).
https://pseudoerasmus.com/2016/12/01/allen/
One of the economic problems with Indian firms seems to be management. And I don't think it's always so simple to just replace management and expect the workers to accept it.
"One of the economic problems with Indian firms seems to be management. And I don't think it's always so simple to just replace management and expect the workers to accept it."
From what I understand about India, and correct me if I am wrong, but if a person becomes successful, you are expected to be a sort of jobs program for your relatives (by blood and marriage), then working your way through less distant relatives, then caste and community, etc.. These may also be the only people you can trust, because if you hire outsiders, they will be expected to put *their* families, communities, etc. first and not necessarily you or your interests.
This is also why an Indian marriage will be as much about the family members as it is about the bride and groom, since your new in-laws will be the people whom you and your family owe obligations to and who owe you and your family obligations in return.
This makes sense, since it's not as if there is much of a social safety net or anything else to fall back on. Your relatives, your caste, etc. are the only people you can count on to have your back, and they expect the same from you.
Source: Indian girlfriend.
But why is it different in, say, South Korea? Or is it?
Acemoglu & Johnson's "The Narrow Corridor" is partly about why India (with the "inclusive" institutions they praised in "Why Nations Fail") has done so much worse than China (which they regard as having "extractive" institutions that cause failure). They decide it's because of the culture which includes things like caste.
I love the "A very short introduction" series by Oxford University Press. I have read a few. These books are written by experts (thus differing from TED talks, open apparantly to anyone to speak on anything). They target intelligent lay people. Unlike present day TED talks, they don't dumb down concepts, and yet they manage to simplify them. I think it takes great skill in writing and expertise in the subject they are writing about.
Second - I have read about a dozen of them so far and have more on my to-read list. I've read a couple on subjects that I'm pretty expert in and still learned something from them.
TEDx is very different from TED, although the popular conception of a TED talk has been hopelessly muddled with TEDx, despite very clear trademark guidance and usage requirements. Whether that this was deliberate in a nudge-nudge-wink-wink sense, is another matter.
I've always paid attention to the TED vs TEDx difference, and I'd agree with your parent comment. There used to be a stark difference between TED and TEDx talks, now it's a matter of "slightly higher probability of a non-bullshit talk with actual content in it".
Without having as much to say about modern development economics, I rather like Nick Szabo's (admittedly rather Libertarian) historical explanations for "why England?" in these posts:
https://unenumerated.blogspot.com/2007/08/why-industrial-revolution.html
https://unenumerated.blogspot.com/2006/01/letter-from-industrial-revolution.html
https://unenumerated.blogspot.com/2010/10/malthus-and-capital.html
https://unenumerated.blogspot.com/2010/12/some-conjectures-and-facts-regarding.html
The last two especially go into more detail than the traditional "good property rights + security of being an island" and basically argue that the plague gave some Malthusian "breathing room" and shifted investment to more efficient forms of capital (like converting land that was required for human-feeding crops to pasturage, which lets you keep labor-multiplying horses) combined with some accidents of geography (lots of navigable waterways and being a long, skinny island make it easier to transport bulk goods economically).
Combine that with all the other usual stuff (good institutions like property rights and common law, increasing literacy, cultural factors, and so forth) and you get a pretty interesting composite. The last one also makes some comparisons to China and Japan, but it's been a while since I've read it, and I don't think he touches more modern industrializations.
I'm not saying it's culture . . . but it's culture.
It's the precious industrial fluid! !
The problem with culture as an explanation is that it's both incredibly broad and entirely post hoc. Very few people have identified a specific type of culture that leads to growth, and when they do it tends to just be pointing at what the already industrialised countries have in common, which then has to be updated when new countries are added. E.g. At first it was the "protestant work ethic" then a bunch of catholic European countries industrialized so it became "western individualism", then a bunch of Asian countries industrialized. A theory needs to have predictive power to be useful
Any book about human development that attempts to qualify on the basis of completely disparate societal conditions and outcomes, without taking into account predispositions to success (i.e. qualities which set some societies apart from others), will be necessarily convoluted and fall short of a satisfactory explanation.
> If you're 2000s Bangladesh trying to catch up to the West, you want semiconductor factories. Scrounging around a mostly-agrarian economy and eventually cobbling together enough expertise and capital to make a textile mill is one thing. Making a semiconductor factory is a lot harder.
Why do you need to cobble your semiconductor factory builders from the countryside and not other countries? I have a suspicion that foreign investors would love to do this but mostly don't due to various government roadblocks.
If you import labour, materials and parts from other countries, what sense does it make to build a factory in this particular country? How it would be cheaper than competitors? You got to have at least something - and Bangladesh probably doesn't (maybe some raw resources?).
It's a thing I think a lot about regarding Russia. A lot of people say Russia has to diversify its economy away from oil production, but the problem is, it's almost impossible to start any manufacturing here that would be cheaper and/or better (at first, at least) than China's. Even though Russia (unlike Bangladesh) at least has access to resources and way better educated (though less numerous) population. Software development works, because we CAN make software cheaper than most Western countries due to lower cost of living and slightly better than China/India because of better education (though not for long), but it's hard to run a country that large entirely on software start-ups (not that more tax breaks and better laws for IT sector would hurt - it's just I don't see this as THE solution to diversification problem).
"Government roadblocks" do muddle things up additionally, but to bring in investors for manufacturing takes more than clearing them up - you've got to offer some exclusive advantage. China got its start by producing cheap shit, but they're still so good at it that other countries can't really compete in that niche and replace Chinese labourers (that might change in the future as Chinese cost of living continues to rise, but maybe not: robots and 3D printers have a chance to relegate unskilled factory workers to trash pile of history for good).
I wasn't talking about importing all of the labor, materials and parts from other countries, just importing the people who know how to start up a semiconductor factory. You'd have a few highly-paid foreigners but most of the labor would be local.
I'm not sure this would work. How much unskilled labour does a semiconductor factory needs? And educating the locals to the necessary level to make them skilled would probably take quite some time. And you would still be stuck with imported machines, intermediate products and materials, even if you could save on workers' wages. Creating the whole (or a large part of) production chain necessary for semiconductor factory would take even more money and time - I'm not sure any investors would like to commit to such long and uncertain enterprise (at least not in these uncertain times).
Maybe I'm underestimating the cost of importing materials, but I was assuming the cost is fairly low. If you build in a port city / near the coast, you can get things shipped from other countries for less than the cost of shipping them from another city.
Joseph Henrich's WEIRD book presents an interesting psychological/behavioral theory that perhaps impacts global economic divergence.
Great review of the book on Less Wrong here: https://www.lesswrong.com/posts/kYJ6RvS9zJ3WrGP7o/book-review-weirdest-people
I think this is a good critique of Henrich's book (from a comment in Diane Coyle's review):
"Charles P Freeman on February 2, 2021 at 8:25 am said:
Social scientists and cultural psychologists appear to love this book. Historians know the history is rubbish so have probably ignored it. Henrich talks of the world in 400AD being one uniformly of intensive kinship, cousin marriage, and communal landholding (p.315) but is blissfully unaware of Roman civilization ( and others) that were not such. Then most medieval marriages/cohabitation arrangements/pregnancies were not controlled by the Church much though it attempted to do so.
The attributes of WEIRDness are not medieval but recent. Western- well he includes Australia, New Zealand and the US despite their many ethnic native cultures.’Educated’- first universal primary education in Britain 1870 (before that half the children had no education at all). ‘Industry’- mainly a nineteenth century and later phenomenon. ‘Rich’. for the majority of westerners not until the 1960s, for European societies, the advance of global trade post 1800 together with the subservience of the working classes provided most of it. ‘Democracy’. Universal male ,late nineteenth century, for women, not until the twentieth century, So why not concentrate, as most historians do on the ‘divergence’ of the west from the others AFTER 1800. Where did Henrich get this misguided idea that you had to go back to medieval times?
As a historian I am frustrated by the adulation that this book has got and you are right to challenge it!!"
From:
http://www.enlightenmenteconomics.com/blog/index.php/2021/02/is-weird-wonderful/
I'm not qualified to critique the historical angle of this (or any of the angles, really) but it strikes me that the second paragraph of this Charles P Freeman post mistakes effect for cause. I don't think Henrich argued that some sort of nascent WEIRDness sprung up in medieval Western Europe and then caused industrialization centuries later. Instead, the earlier and more extensively kinship-based institutions were eliminated in a given region, the more analytical, nonconforming, prosocial, etc., the region's psychology/culture eventually became, which led to those regions becoming Western (in philosophical orientation), Educated, Industrial, Rich, and Democratic. The Freeman post seems to suggest that Henrich argues that being Western, Educated, Industrialized, Rich, and Democratic was a CAUSE of the West's divergence, while I think Henrich argued that these WEIRD characteristics are an EFFECT of the debasing of kinship-oriented institutions. The WEIRDness IS the divergence, not the cause of the divergence (although of course a WEIRD society could then incubate and cause further WEIRDness and its associated outcomes).
I would be interested to learn more about what was going on in Rome in 400 AD that makes it a counterpoint to the Henrich thesis. WIthout looking into it, I would guess that Rome was less tribal and kin-based than other contemporary societies.
It is the prevailing interpretation, even among people who liked the book. See Jason Furman's review: https://www.goodreads.com/review/show/3477764004
What interpretation is the prevailing interpretation?
That it is a cause for divergence. Furman: "Henrich’s explanation over-simplified: the Catholic Church banned cousin marriage which broke up kinship networks, then Protestant churches emphasized reading and individual interpretation. The combination led to a new “WEIRD (i.e., Western Educated Industrialized Rich Democratic)” psychology that helped lay the foundation for individual rights, democracy, markets, innovation, and the success the West enjoys today. Aspects of this have been imitated elsewhere helping to spread prosperity."
"A dazzling achievement. In the course of explaining how modern Western culture differs from all others past and present, Joseph Henrich has both altered and unified the fields of anthropology, history, psychology and economics. He destroys the assumption, common in psychology and endemic in economics, that human nature is everywhere the same. His account makes it possible to understand why some cultures have readily adopted Western tools to transform their societies, economies and politics while others reject those tools."
―Richard Nisbett, author of Mindware: Tools for Smart Thinking
“Reading this book feels like digging in your backyard and discovering a lost city. What Henrich has unearthed is truly astonishing: The modern West owes its prosperity to strange ways of thinking, created by accident centuries before the European Enlightenment. If that sounds improbable to you, prepare to meet a mountain of evidence, compiled by one of the great systematic thinkers of our time. This book is at once monumental and thrilling."
―Joshua Greene, author of Moral Tribes: Emotion, Reason, and the Gap Between Us and Them
"Written in clear and vivid prose, Joseph Henrich’s new book argues that the psychological characteristics of populations in modern prosperous countries are not universal to human societies. They were the result of institutional changes brought about by the Catholic Church in Europe during the middle ages, and laid the foundation for almost everything else that followed. Whether or not you agree, this bold and original book will shape the debate about the origins of modern society for years to come."
―Paul Seabright, author of The Company of Strangers: A Natural History of Economic Life
I think we are understanding each other. Thanks for the clarification, Tiago.
This claim seems to ignore the Special Economic Zones (SEZs) and their role in Chinese development,
"For example, China gets a lot of credit for its free-market reforms under Deng Xiaoping, but these reforms just took China from "literally Mao" to "kind of an average level of market freedom for developing countries"."
While China on average might be "average level of market freedom for developing countries," the SEZs, which were explicitly modeled on Hong Kong and Singapore, are much freer than are most developing countries. The authors of the economic freedom indices recognize this and want to create distinctive economic freedom measures for the SEZs to account for this.
In addition, China has been renowned for having the least unionization and labor rights in the world,
"For many years, labor standards existed largely on paper, while collective representation was non-existent. What evolved in this regulatory near-vacuum was a bare-knuckled
laissez faire version of capitalism bearing some resemblance to labor markets and conditions in the era of “liberty of contract” in the U.S. Indeed, some Chinese leaders adhered to a“scientific” understanding of the stages of socialist development that may have foretold, or even prescribed, a period of labor exploitation."
https://dokumen.pub/a-new-deal-for-chinas-workers-2016017881-9780674971394.html
Meanwhile, many nations in the developing world have extensive labor regulation, with the result being that most workers are left out in the informal market where they have no rights at all, leaving a small, over-regulated formal sector.
Perhaps the original book addresses this, but as written any claim that doesn't recognize the radical free market free for all within the SEZs and with respect to labor rights in China is misleading at best.
> How come we are more certain that New California will soon get First World living standards than that India will?
If some of the Americans who move to New California experience less-than-First-World living standards, they'll just move back to wherever they came from, and have their First World living standards back.
In other words, New California will have First World living standards because it is competing against the First World to attract residents, and switching costs are low. (No one is stuck in New California because no one lives there yet.)
Or am I missing something?
If a command economy is an effective catch-up strategy that languishes at the frontier, it would turn the Marxian dialectic on its head. Actually let's be charitable and say Marxian thinkers of the early 20th century were correct that a command economy could provide for the material needs of the populace. They were wrong that meeting material needs is all the populace would want, when in fact the frontier would keep receding past the horizon.
I actually once posed the question about China's development trajectory inverting the Marxian dialectic to a visiting Chinese official when I was a smartass student. The resulting exchange was... tense.
>And this part also isn't very clear. During the 1500s and 1600s, first the Netherlands and then Britain experienced a sort of mini-boom. Probably this was because of the Age Of Discovery in some way, although the book leaves us to fill in the details, including why this didn't happen to fellow Discoverers like France, Spain, and Portugal. Colonial trade goods played a role, but so did Northern European ships trading in various non-colonial ways, eg in the Mediterranean. Whatever the reason, these countries saw increasing wages, increasing literacy, urbanization, and the development of a strong mercantile class.
Bitcoin mining has made me worry a bit we're going down a path like the Spanish Empire.
If you have an isolates small town that uses gold as currency, the blacksmith, the farmer, the baker, etc. all increase the economy when they go to work everyday. Everyday their labor expands the economic pie. But imagine someone finds a goldmine on their property. They then have a huge personal incentive to spend all day mining the gold and thus increasing their share of the economic pie. But the gold mining does nothing to expand the town economy.
I think at least part of Spain's decline in the Age of Discovery was investing too much of their efforts into literal gold mining (and silver mining). They built fortresses, a giant navy, huge infrastructure, etc. all to accumulate gold. For a while, this is *individually* good as they can get an increasingly large share of global consumption. But *collectively* it's bad as it's turning a large part of the economy into a zero sum game. But as soon as it dries up, they're left with no way to produce more.
In contrast, England missed out on the gold. To be profitable, their colonies had to actually produce things that increased global consumption. They accidently stumbled on a system that aligned individual wealth creation with societal wealth creation. Soon Adam Smith and *Wealth of Nations* came along and people started to understand that producing stuff (or transferring goods around to minimize diminishing marginal utility), not gold accumulation was what made nations wealthy and the rest is history.
But I wonder how much of global economic history can be explained by looking at what percent of the economy isn't things like bitcoins and gold mines. And how much should we be worried about an increasing share of the economy going to those things (although from my calculations bitcoin mining is still much less than 0.01% of GDP)?
And now I'm kind of wondering if I'm just reinventing the concept of rent-seeking. Some quick googling and Dean Baker already made the bitcoin/rent-seeking comparison more than 7 years ago:
"While this can be quite profitable to an individual or firm that successfully claims a substantial portion of the newly created bit coins, it provides nothing of value to the economy as a whole. It is a case of pure rent-seeking, where large amount of resources are devoted to pulling away wealth that is created in other sectors. This is the story of much of the activity in the financial sector, such as high-frequency trading or the tax gaming that is the specialty of the private equity industry, but in few cases is the rent-seeking so clear and unambiguous."
So this probably isn't a very original thought at all, and rent-seeking and economic development seems likely to be fairly well studied, but I'll leave it up in case others are as slow as I was.
But think of all the semiconductor and (hopefully) renewable industry scaling up to make all these bitcoins ! (Only half-joking.)
We do already have some days with negative electricity prices during the daylight hours when there's too much solar generation and not enough load. So I guess during those times bitcoin is a societal plus.
If California doesn't get its act together soon, there's going to be large hunks of the year with that problem so maybe bitcoin is alright :)
This is probably interdependent with your comment about gold, but even in places like the Far East where the trade sought (spices) was the same, England/Netherlands and Portugal/Spain adopted wildly different corporate structures, with important differences in outcomes. For the Iberians, discovery was run as a closely held crown corporation, and the crown's risk appetite was relatively low. They thus tended to do everything with quite a minimum of manpower and ships, and generally focused on transporting commodities that already had systems of production in place. The English and Dutch, by contrast, invented the modern corporate capital structure and had a middle class with a lot of risk appetite (see: Tulips) who built much larger fleets on a more speculative basis and tried to really found new cities (eg Jakarta, Singapore). These activities involved a lot more labor on all fronts--controlling natives, extracting and refining commodities, building large fleets, assembling commodities into finished goods back in the home country, etc. The Iberian approach didn't involve any of this, so it didn't spread wealth to nearly the same degree on the capital or wage side. That spread wealth was in turn the key to a virtuous cycle of higher domestic wages, larger domestic markets, and higher domestic capital intensity, which also stepped them up the tech tree past the Iberians and allowed them to dominate the colonies, as well as take on much larger colonial projects like India.
Kind of the flip side of the resources curse, aka "Dutch Disease."
Setting aside what you said about Bitcoin, there is something to be said about Britain investing in production during the age of discovery.
In Brazil and Portugal, there’s a general sense that Britain ended up better off for its discoveries and colonies than Portugal did because Britain took the earnings and invested it into production. Meanwhile, Portugal took the earnings and invested it into… buying manufactured goods from Britain. I’ve heard people in Brazil say “The industrial revolution in Britain was funded with Brazilian gold.”
I’m not a historian so I don’t know how accurate this is, but it seems to be a common understanding among Brazilians at least.
“ I was pretty boggled by this: either wages were so low that the machines weren't necessary (in which case these places can outcompete Britain), or these places were being outcompeted by Britain (in which case they would be incentivized to adopt the new machines, which they should be able to do better than Britain given how cheap the operators' wages would be).“. Is this necessarily true? Wouldn’t it be more about productivity and ultimately the marginal cost of goods including the cost of transportation and end market demand?
Me: Wow, this book review writer has really managed to channel Scott's writing style. I wonder if this was conscious or not. It definitely makes for a compelling entry in the book review competition!
...scrolls to the top. Oh.
Me: read the whole post in *not* Scott's voice, and was sure it was an entry for the review competition until I read your comment
I thought it was a contest entry until seeing this comment. Scott sure is sneaky, posting his own reviews in the middle of a bunch of contest entries.
As a New Zealander I can attest that artificially high minimum wages do nothing to industrialise your economy (increase productivity).
I also heard recently (on Planet Money podcast) that there was a study of where the money comes from for minimum wage increases at McDonalds, it came from higher prices rather than productivity enhancements.
According to some quick googling, so take with a grain of salt, in 2011 (when the book was published), the GDP per Capita (PPP) of Italy was 43,102, and the GDP per Capita (PPP) of Britain was 42,469. So, it does seem a bit marginal but reasonable-enough as a point. (Much more than if it was reliant on total GDP which is of course nigh-irrelevant to development.)
It gets more reasonable when you realize that the classic exception to the "protestant work ethics" theory is France, which industrialized after Britain and the Netherlands but before some protestant countries and has been part of the group of developed countries ever since. France has been historically explained away somehow, but in addition Italy is alternatively catching up to the pack (occasionally even overtaking Britain or some other country) and then re-falling behind since the 60s. One and a half exception is half an exception too many, so better forgetting the theory.
There is some great data visualization here:
https://ourworldindata.org/grapher/gdp-per-capita-maddison-2020?yScale=log&time=1502..latest&country=GBR~ITA
You can pick countries and compare their GDP per capita throughout history. I don't know how accurate their data (especially historical data) is, but it's fun.
Italy was clearly richer than Britain during the Middle Ages. Britain passed Italy in the 1700s and stayed ahead until about 1980. From 1980-2012, Britain and Italy were effectively tied. Britain has recovered from the financial crisis much better than Italy.
Nice review. This was my favorite review so far, although it appears the you may not have reviewed the best book. :-)
You need some of both central planning and free market to be truly successful, you can only get so far with either one alone.
Your population needs to be literate and most of it must be "on the same team" to be able to trust each other enough to conduct business (e.g. no strong nobles versus commoners clash or population groups that speak different languages or have religious disagreements).
What kind of central planning has been successful?
Economic ideologies take 50 years to fully realise and succeed. Once they have though then people will grow discontent as progress slows down, a new plan/ideology to address the gaps of the old one is then required.
The Soviet economy didn't collapse in the 1970s, it just reached the limits of what it could do. Our neoliberal plan is reaching the end of its success about now.
> And this part also isn't very clear. During the 1500s and 1600s, first the Netherlands and then Britain experienced a sort of mini-boom. Probably this was because of the Age Of Discovery in some way, although the book leaves us to fill in the details, including why this didn't happen to fellow Discoverers like France, Spain, and Portugal.
If you read Yuval Noah Harari's "Sapiens", he answers your question this way: the Netherlands and Britain learned the value of capitalism faster than other countries like Spain and Portugal. Dutch and British businessmen learned to always repay debts on time, whereas Spanish monarchs tended to renege on debts, which meant people didn't invest there, which meant the Spanish and Portuguese were slower to develop technology and make discoveries.
I consulted in Turkey twenty years ago. We agreed on a price for my time. I estimated a week. It ended up being three weeks. They wanted to pay me 70% of my invoice. I negotiated them up to 90%. Then they insisted on paying me in cash. Oy vey.
Regarding why New California would have better chances at reaching First World standars of living than India, Scott says "if India invites US companies in, lowers tariffs, and has good institutions - then they too can quickly converge to US standards of living?”.
I think a "Big Push industrialization" would be much harder than just inviting some companies. New California would have access to the whole US supply chain, logistics networks and financial institutions. This is much harder to replicate in other countries.
If you were the Prime Minister of India, would you support lowering all trade barriers so that India has access to the whole US supply chain, logistics network, and financial institutions? If so, do you think India would quickly catch up to the US? If not, why not?
[epistemic status: pure speculation]
Some of those barriers are outside of the control of the Prime Minister of India. US tariffs and raw physical distance for example (altough the last doesnt seem to hurt Alaska and Hawaii too much so who knows).
But even if those were lifted New California would be populated by Americans, who would only move there if they thought New California was going to have high living standards. Maybe that means only a Wyoming worth of people move in to jumpstart a mostly argiculture based economy. To make an accurate analogy to India we would have to also assume that New California starts out with say 50 million people, and they are not allowed to leave. In that scenario maybe they would become poor??
Perhaps this accounts for the high living standards of English settler-colonies. When they started getting colonised land was extremely abundant. Farmers were therefore guaranteed greater crop yield per labour than in England, where land was scarce. If this hadnt been the case, all the colonies would have failed from the start because people would have returned back to England. This even puts a natural cap on immigration, if wealth where to ever fall below Europe, people would stop coming. To this day Anglophone ex-colonies belong to least densely populated (but fertile) areas of the world. Maybe the USA would have been much more populous (but also a lot poorer) if it had as open borders with everywhere as it did with Europe, allowing it to settle into equilibrium with the word at large.
For those wondering: I dont think this applies in the present anymore, developed economies are way less reliant on argiculture yields right now.
Hard. India has a culture of government corruption. Like to the point where some wag printed up a R$0 bill to pay your bribes with.
"If so, do you think India would quickly catch up to the US? If not, why not?"
Yes, but it would only catch up to Mexico.
Indian manufacturers would get outcompeted by US corporations, flooded with cheap American goods, and India's economy would get wrecked until the economic dislocations could get worked out. As in, wages plummet to the floor, social services get stripped as taxes dwindle, and India mostly switches to a sweatshop economy like Bangladesh until it can gain enough capital to re-industrialize behind tariff barriers.
Oh, more importantly, you're going to put a billion farmers out of work with cheap US food imports. Those people will riot in short order.
I'm tempted to resort to sarcasm in my response to your ignorance of economics, but instead, may I suggest that you read up about comparative advantage?
yes, Indian comparative advantage would eventually lead to better outcomes for all, with a roaring manufacturing economy like China. All those farmerwill work in factories with higher wages. In the interim, people will riot in the hundreds of millions and the state will be under severe strain. Can it survive the transition?
Do recall Tiananmen was people protesting market reforms and the resulting dislocations, and that the protests were nationwide.
Reform is hard.
And how is comparative advantage working out for rural America right now, and what have the political consequences been?
This basically happened in Puerto Rico, right? And GDP per capita there is still about half what it is in the US as a whole.
New California would be populated by highly educated people with experience working in semiconductor factories. India has to lure foreign talent with higher pay. And these foreigners don't speak the local language and customs.
Exactly. There are different kinds of culture explanations. One kind says that a certain kind of culture, as a general symbolic-religious-value system is better at innovation (the Weberian route). But even if you don't think that's true (because, eg, Indians who remain strongly Hindu don't underperform in the US), Anton Howes-style network stories still require enough underlying cultural similarity for the network to perform. I lived in Papua New Guinea, and this is one of the sources of tension--often for lower-level positions (bookkeepers, secretaries, electricians, IT desktop support) in multinational corporations there are qualified native candidates, and naturally there is pressure to hire these candidates to create a virtuous cycle in the domestic economy. At the same time, multinational companies often prefer to hire expats for these roles, because even though they are not high-skill they are tightly integrated into the corporate culture, and expats have an easier time in this regard.
Everybody who matters in India speaks fluent English. Some are native English speakers born and raised in India.
That's also true in PNG. But if you read Anton Howes, you'll see that the relevant network effects depend on a lot more than just language ability. It depends on being able to imagine yourself in the other person's shoes and stuff like that.
Indeed. "We will do this" means "We will give it the good old college try" in India. Same words, different meaning.
This kind of conflicts with the cliché of bad Indian software engineering. Why ?
It's not bad software engineering. It's bad writing of specifications, and then throwing them over the wall. What you get back will comply with the specifications, but then you have to start iterating. Much better to have people who understand the problem do the programming.
The only reason it's associated with India is because with a billion people, a lot of them are going to be programmers, and so a lot of specifications gets thrown at them, most badly written.
I'd note that AFAIK Anglo-Saxons in general skew towards the "We will give it the good old college try" too ? ("Protestant Ethic")
Perhaps my explanation was not clear. In this case, failure *is* an option.
New California would also have the benefit of starting from scratch. Sometimes it's a lot more efficient to build on a greenfield site than trying to renovate old structures into what you want. India has centuries of "this is the way things are" already in place, trying to bolt a modern system to set up semiconductor factories on top of that is always going to be harder than "this is an empty space with little to no local government, we can build what we want how we like, set up our most efficient systems, then wait for potential workers to pour in from elsewhere in the country who are already trained and skilled as we want them to be".
There is no empty space in India. Every bit of land has at least two claimants: the legal property owner, and the people living there.
Bullcrap. If China's government was utterly incompetent, it would have ended up like India. In 1990, Indian GDP per head was the same as Chinese. Chinese GDP per head is now five times Indian.
Chinese economic performance is not dissimilar to Turkish, over a country twenty times the size, with vast, desperately poor hinterlands. It has outperformed Thailand, Vietnam, and Malaysia, all of which started 1990 with several times Chinese GDP. China is very much overperforming in its size category.
And Chinese coastal regions like Jiangsu Province (100M people) are already hitting GDP per heads of 18,000USD - Grecian levels. Another 100M Cantonese are hitting 14,000USD. That's high income by World Bank standards.
Malaysia is still substantially richer than China, and Thailand is slightly higher. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
Also, from what I've heard, India's government is fairly bad on economic issues, historically. It's possible for China to be bad and still be better than other bad countries.
Malaysia is ten percent richer than China now; it was five times richer than China in 1990. Thailand is a 7,800 as per google (nominal, not PPP).
China is doing very well.
Oh, also, the world average GDP per capita ($4000) was ten times Chinese ($320) in 1990. It is now equal to Chinese.
Chinese performance is manifest.
And isn't it easier for a small country like Malaysia to raise GDP? And PPP should be taken into account.
China gave up on socialism sooner than India.
??? India has a capitalist market economy!
It does now. It was pretty terrible before Bombay became Mumbai.
I find it interesting that you used semiconductor factories as an example of an industry you don't just plop down. Because the world leader in semiconductor manufacturing is based in Taiwan, and Taiwan was pretty backwards until well after WW2. It got at least somewhat rich before getting into it, and it was cheaper in 1987(when TSMC was founded) than today, but it's not like the Brits or Americans own this one.
And for that matter, the #2 semiconductor manufacturer is South Korea's Samsung, and again South Korea was a brutally exploited Japanese colony until the end of WW2, and then got wrecked up by a war after that, with a hardly-great dictatorship besides. This isn't old money carrying itself forward.
If one has any serious interest in this topic I suggest starting with The Great Divergence: China, Europe, and the Making of the Modern World Economy (The Princeton Economic History of the Western World Book 6) by Kenneth Pomeranz. Discussion this issue without doing the work is like painting a portrait with a 4" brush and just as useful.
Guns, Germs, and Steel is a far more comprehensive take on the whole mess.
China's issue is, and has always been centralized government. Went the centralized government is good, China is amazing. But the ability of a government to do good is the same as its ability to do evil, so when that central government decides to, say, stop building oceangoing ships and go full isolationist, or implements bad policy, China gets screwed for a century.
Standard dangers-of-autocracy stuff.
Regardless of the remainder of Diamonds work, I do think the influence of disease is generally underestimated in most thinking about economic and social development. The Black Death was responsible for a huge rise in wages. There's evidence some European diseases wiped out most of the Amerindians near the time of contact -- which has certainly had a profound effect on the history of North and Central America. The Panama Canal would probably not have been dug without Walter Reed. Then there's the Plague of Justinian...
But why did India not become a large colonial power? It was hostorically more relevant than Europe, but also usually not united.
And when it got united, it supposedly became the 1rst economy in the world.
But why no colonies indeed ?
No corporations ?
No will to Christianize the world ?
Insufficient competition, a few Mongol/Mughal invasions, and then the Brits came and wrecked the place.
But the Mongol/Mughal invasion and the resulting Muslim Mughal Empire *was* what what made India the 1rst wold economy !
(Potentially tied for first with the Netherlands, hard to be sure ?)
And by the point that the Brits waltzed in, at least some (?) of the Indians welcomed them, because the Mughal Empire was undergoing full (?) collapse...
(and meanwhile, weakened, had been invaded in turn by Persians and Afghans)
I mean, what even happened there ?!?
Actually, maybe I have an idea.
Maybe the cause was the ethnic division - Empires generally (?) don't care about doing ethnic assimilation, as long as their subjects pay their tributes, and AFAIK this was specifically the case in the various Muslim Empires (?).
And there's even a European parallel : the Austro-Hungarian Empire, which would have been the 3rd-4th world power in its own time ?
European colonial empires didnt exactly care about assimilating their colonial subjects either. There were also plenty of wealthy nation-states in India eg Bangal.
Really I think it's dumb luck. Europe just kinda happened to be the first to stumble upon America, kill them with smallpox, and to take all their stuff. Using that as starting capital to snowball into incredible wealth.
Right, I had forgotten about it, but the triangular trade did probably play an important role...
Taking the Austro-Hungarian Empire example again : did they even have large colonies, and how big was their fleet ?
Europe usually isn't united either.
Yep, supposedly that is the key to succes. But India had the same advantage, plus it had a better spawnpoint (the most fertile valleys in the world).
This was unexpectedly interesting (I've never been into economics or tech/development models, so that's why it was unexpected on my part.)
It is consistent with some things I've been wondering about since getting into 19c history. It seems like England just had the perfect circumstances to soar ahead, and it soared ahead alone. Part my lack of interest in economics is that I'm inherently suspicion of modeling complex systems and deriving universal rules from them. This strengthened that feeling--it seemed like using one country's experience as a model for another might not make any sense, especially if you're in a different era. There's no reason to think it will evolve in the same way once a model exists to copy, and especially not once a bunch of countries catch up. And circumstances matter. I agree that there was a false sense of security derived from the US's unique situation--it was very favorable to rapid development. It's likely a lot of places missed the boat, although the process may restart. And I agree that while more bottom-up development was definitely the way to go at the beginning, it is likely the case that a period of central planning is needed for countries to develop today (this may be related to globalization and the symbiosis it enables). But I'm thinking this is semi-cyclical. Bottom-up is less effective today in large part because people have radically different expectations/incentives, but those can shift.
I'm guessing that certain cultural factors--ones that go beyond the usual speculations--are indeed key, and which ones will be effective depends on the circumstances of the era. The UK colonies and East Asia were in a perfect position to take advantage of their respective opportunities. The status quo and expectations of the public and elites in each country undoubtedly play a huge role in determining the possibilities, which gets ignored to an absurd degree. As does the fact that success is likely to be uneven, and at the expense of other nations. Access to various resources is also crucial, and that is often a matter of luck. I don't think you can generalize in any systematic way, though you can make observations about each country's development process and draw some broad, common sense conclusions.
The natural contrast to this would be a review of Deirdre McCloskey's economic history books; seems like _Bourgeois Equality_ would be the most direct comparison to this work. If anyone is going to make a strong case for a cultural explanation and against the effectiveness of planned economic development, it'd be McCloskey.
I would pay good money (or any kind of money..) to read Scott's take on McCloskey's Bourgeois trilogy.
You *could* just subscribe to ACX.
Funnily enough, that was the gist of the comment I very nearly posted but didn't because it seemed pathetically self-centred - that I would subscribe to Scott's blog if he wrote a particular post that I wanted to read. But fair enough - if he did, I would.
The exordium pdf is a good 20 page summary: https://www.deirdremccloskey.com/docs/pdf/BourgeoisEquality_FFFFrontMatter.pdf
The thesis:
In this third volume I try to show that the massively better ideas in technology and institutions, not capital accumulation or institutional interventions or government policies or union organizing, were the explanation. As a wise man put it, humans recently have “invented the method of invention.” The ideas and inventions, I claim, were released for the first time by a new liberty and dignity for commoners, expressed as the “equality” of the title—that is, by the ideology of European liberalism...
A crucial point is that the greatly enriched world cannot be explained by the
accumulation of capital, as to the contrary economists have fervently believed from Adam Smith through Karl Marx to Thomas Piketty, and as the very word “capitalism” implies. The word embodies a scientific mistake. Our riches did not come from piling brick on brick, or bachelor’s degree on bachelor’s degree, or bank balance on bank balance, but from piling idea on idea. The bricks, BAs, and bank balances—the capital accumulations—were of course necessary. But so were a labor force and the existence of liquid water. Oxygen is necessary for a fire. It would be unhelpful, though, to explain the Chicago Fire of October 8-10, 1871 by the presence of oxygen in the earth’s atmosphere. Better: a long dry spell, the city’s wooden buildings, a strong wind from the southwest, and, if you disdain Irish people, Mrs. O’Leary’s cow. The modern world cannot be explained, I show in the second volume, Bourgeois Dignity, by routine brickpiling, such as the Indian Ocean trade, English banking, canals, the British savings rate, the Atlantic slave trade, the enclosure movement, the exploitation of workers in satanic mills, or the original accumulation of capital in European cities, whether physical or human capital. Such routines are too common in world history and too feeble in quantitative oomph to explain the thirty- or one-hundred-fold enrichment per person unique to the past two centuries."
Does he completely forget about natural resources ?
Also if he's really saying that "ideas and inventions" are a *sufficient* condition, then what about Ancient Greece and "Medieval" (?) China ?
Culture is 100% important to look at when doing economies around the world. I read this book review other day and there are all kinds of cultural reasons for development.
-----------
"Joseph Henrich, professor of evolutionary biology at Harvard .... Henrich presents a dazzling array of evidence to explain why variation exists among societies and why Europe in particular has played such an outsized role in human history."
https://www.city-journal.org/religious-origins-of-western-difference
The idea that Europe has played an 'outsized role in human history' seems very biased towards the recent centuries. Taking human history as a whole, would you say Europe has played an outsized role in human history? I'd say the Middle East was the reigning power not too long ago, at which time Europe had barely any technology or power.
quite agree! But I'm not sure if they directly influenced the rest of the world as much as the Middle Eastern cultures did (I may be wrong).
"I'd say the Middle East was the reigning power not too long ago"
Only from around 400 to, generously, 1200, and, before that, before 700 BC.
Its capital was in Europe.
The U.S. is a huge part of the Middle Eastern power game today. Doesn't mean we're Middle Eastern.
Most of the Ottoman Empire's territory was unambiguously non-European.
The Chinese were far superior to the dinky little empires of Southwest Asia.
But then there's the Mughal Empire, which circa 1700 was the 1rst world power (perhaps tied with Netherlands ?)
Yes, Europe was the incubator of the Industrial Revolution that thrust the world into modernity. A place full of hyper-competitive warring states is pretty critical for sustained development.
As already pointed out, "culture" is just too wide as a satisfactory explanation.
(It's literally anything that is not "nature" ! Though it's not like you can completely separate the two...)
Culture is heavily shaped by geographical factors.
> why did settler colonies (eg Canada, Australia, New Zealand, South Africa) converge to British levels of development so quickly
In the 19th Century, Australia didn't have to develop. The British made stuff and sent it to Australia, and Australians gave them money that grew on trees. Not exactly, but not far off; there was $10 billion in gold lying on the ground in Chewton Forest. Around 1890, Australians were the richest people in the world.
In the 20th Century, the gold ran out, and Australia went backwards. Industry never paid off, but a huge and lucrative service sector eventually made up for it.
Gold was part of the story, but wool was bigger. Wool was Australia's biggest export industry from the 1820s right up to sometime in the 20th century, with the brief interruption of the two gold rushes.
But this raises an important point: industrialisation isn't necessary for prosperity. A nation composed entirely of sheep farmers could be the richest country in the world, if it has a vaguely competent government, has access to the top shearing equipment and husbandry expertise, a strong export market for its goods, and a grazable-land-per-person ratio that allows a huge sheep-per-person ratio.
Poor countries aren't poor because of what they don't have, they're poor because of what they _do_ have, which is too many poor people.
Wait...what? You said "top shearing equipment" -- that seems like a bucket of industrial capital right there. Big complex machines in air-conditioned barns with 240VAC lines. Not to mention as I understand it modern efficient herding techniques require stuff like radios, helicopters, trucks -- another big chunk of industrial capital. I think if you want high relative wages (which is what most people think of as "being prosperous") there isn't any known labor value multiplier *except* industrial technology.
...although I guess we could adduce the existence of labor value *divisors* (things that *destroy* the natural value of labor), like disease, war, racism, and tort lawyers. One might reasonably argue Stage 1 of the history of economic development is getting rid of as many of those as possible, and Stage 2 involved the introduction of labor value multipliers...
Well clearly none of *that* "top shearing equipment" was available in the time period in question, so they managed with a different kind of "top shearing equipment" ?
Well, sheep were hand-sheared until well within my lifetime. OTOH, the shears used were probably made of the best steel in the world, given the descriptions I've heard. But more likely is that the ideology/racism of British colonialism discouraged colonials from industrializing but conveniently encouraged them to export agricultural goods to the motherland. So the highly-productive Australian sheep farms could export duty-free.
Weirdly reminded of this old classic Poul Anderson story:
https://archive.org/stream/Astounding_v45n03_1950-05_cape1736#page/n5/mode/2up
I will give the HBD angle. The reason why mainstream developmental economics is full of such stuff is that they refuse to look at the true causes of growth. These are essentially related to having Western European psychological traits. Mostly, having high intelligence. There are some people who have looked at intelligence and growth. Usually they use some kind of euphemism related to human capital, test scores, "school quality" or whatever. The most mainstream person is probably Eric Hanushek. But even he works at some libertarian think tank, not a major research university. 🙃
I already compiled all the major works on intelligence and macroeconomics from 1983 to now.
https://emilkirkegaard.dk/en/2020/08/economists-and-intelligence-a-collection/
Some other people prefer instead to look at ancestry, and they proceed to talking about the "European origins of economic growth", and so on.
https://link.springer.com/article/10.1007/s10887-016-9130-y
There's a lot of papers in this area, called deep roots literature. Basically, they look far back in economic history and find generally that places that were doing well a long time ago, like in 1500, are also doing well know, and that most variation since 1500 can be explained by where people in some country are from. This stuff doesn't talk much about what Magic it is that Europeans bring, but the intelligence literature does that.
Not to say some other things don't matter. Communism is bad too. Freer markets good. There is some interaction with national intelligence and freedom of markets. Gregory Christainsen looked into this in recent work.
https://www.researchgate.net/publication/341736066_Rushton_Jensen_and_the_Wealth_of_Nations_Biogeography_and_Public_Policy_as_Determinants_of_Economic_Growth
I have some quibbles. Even accounting for HBD, it's trivial to find obvious examples of where it breaks down as a catch-all explanation (e.g. North Korea vs South Korea). I find Joel Mokyr's books on the cultural background factors to growth to be persuasive. Even if we were to accept HBD as a given, it is clearly not enough to explain why growth suddenly took off a few centuries ago, nor why we still have cases of very similar countries culturally and genetically with wildly different economic outcomes. HBD needs to be complemented with more factors.
As for your comments about free markets. One point that Ha-Joon Chang makes in his books is that today's rich Western countries engaged in blatant protectionism and IP theft (the US was the world's biggest IP thief for a full century) before they got rich. Germany's Friedrich List wrote extensively about Britain's hypocrisy in how they preached free markets but practiced hard-nosed protectionism before their imperial phase (and even substantially during it). This does not exclude the fact that communism is a worse system, just a nuance to keep in mind when we talk about "free markets".
The question is why Japan, Korea, and the leading parts of China were so far behind the West as of 1800.
The Euros leapfrogged ahead because they had lots of small states and lots of wars. Competition is how you generate sustained growth. East Asia was too peaceful at the time, and the Chinese (and their vassals) were on the downswing of a 300-year dynastic cycle. Bad time to be hit by Euros with iron-hulled warships.
"is this true? A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work"
Since the UK has a higher population than Italy, this can't possibly be true mathematically.
The Google Of All Wisdom pegs Italy's GDP as of 2019 at around 2 trillion USD versus 2.8 for the UK (and per-capita values are 33K versus 42K)
I guess this might also lower your trust in his work
I wouldnt be so quick to lower your trust: The book was first published in 2011 and up until around that point Italy was actually richer in GDP per capita adjusted for PPP, it also had a larger GDP as measured in local currency units - its not really till the European debt crisis that we see them start to significantly diverge.
All of this is sufficient to make the point that is not clear how much weight we should give Weber's thesis when looking at the world of 2011
> If you're 2000s Bangladesh trying to catch up to the West, you want semiconductor factories. Scrounging around a mostly-agrarian economy and eventually cobbling together enough expertise and capital to make a textile mill is one thing. Making a semiconductor factory is a lot harder.
I am little surprised that Egypt was not mentioned at all as you one of the clearest examples of someone trying to implement top down industrialization and it not being long successful. Under Muhammad Ali, not that one, Egypt used what was effectively export tariffs on cotton to help establish a local industrial base - there were 30 cotton mills in Egypt by 1829 but these were not long term viable and they could not compete in the wake of https://en.wikipedia.org/wiki/Treaty_of_Balta_Liman
One hundred and forty comments and not one of you brings up the fact that maybe Britain's success had something to do with being the biggest empire in human history? When you're violently appropriating a significant percentage of the world's wealth, yeah, you're probably gonna be doing pretty well. Doesn't exactly take a genius to figure that one out.
In that case why did it happen in the UK and not Spain?
See my comments above. In Iberia, it really was the monarchy doing the expropriation as a private business. In Britain, it was a whole-of-country effort.
What wealth did Britain violently appropriate from India, Canada, New Zealand, and Australia? And for that matter, if there's some kind of naturally-occurring wealth manna or ore that the Brits mined out from all those places, how come at least the latter 3 are now very wealthy nations themselves? Does the stuff grow back over time or something?
Yea, if we are going down this route then we should probably also get some actual data to bear on the relevant terms of trade and capital flows
From India : the knowledge of crucible steel... and maybe exploiting it for cotton ?
I think we can probably confidently assume that over the time of The Raj the overall net transfer of industrial know-how was from Britain to India. Massively so.
Yeah, I kind of messed up my timelines there...
(The British Raj was a century later.)
If I take Wikipedia as a credible source, European scientists and manufacturers were indeed fascinated by Indian steel, but an English craftsman invented a separate technique independently to create crucible steel:
"From the mid-17th century onwards, European travellers to the Indian subcontinent wrote numerous vivid eyewitness accounts of the production of steel there. These include accounts by Jean Baptist Tavernier in 1679, Francis Buchanan in 1807, and H.W. Voysey in 1832. The 18th, 19th and early 20th century saw a heady period of European interest in trying to understand the nature and properties of wootz steel. Indian wootz engaged the attention of some of the best-known scientists. One was Michael Faraday who was fascinated by wootz steel. It was probably the investigations of George Pearson, reported at the Royal Society in 1795, which had the most far-reaching impact in terms of kindling interest in wootz amongst European scientists.[44] He was the first of these scientists to publish his results and, incidentally, the first to use the word "wootz" in print.
Another investigator, David Mushet, was able to infer that wootz was made by fusion. David Mushet patented his process in 1800. He made his report in 1805. As it happens, however, the first successful European process had been developed by Benjamin Huntsman some 50 years previously in the 1740s.
Benjamin Huntsman was a clockmaker in search of a better steel for clock springs. In Handsworth near Sheffield, he began producing steel in 1740 after years of experimenting in secret. Huntsman's system used a coke-fired furnace capable of reaching 1,600 °C, into which up to twelve clay crucibles, each capable of holding about 15 kg of iron, were placed."
So while it's fair to say that Indian steel was admired and researched, you can't really say that it was the secret technology the Brits stole for themselves. And that still leaves the question of: if India had an industrial process for making better quality steel, how come it did not industrialise the same way that Britain did?
https://www.businesstoday.in/current/economy-politics/this-economist-says-britain-took-away-usd-45-trillion-from-india-in-173-years/story/292352.html
Five seconds of Googling, man. I'm sure you could find more if you tried.
Yes, I'm aware five seconds of googling could've found me a restatement of your polemic by someone else. I didn't *think* the thought was unique to you.
But let me suggest that had you spent fifty seconds googling, say, you might have come up with a compatriot voice that was slightly less embarassing. Here's where that silly number comes from:
"Between 1765 and 1938, the drain amounted to 9.2 trillion pounds ($45 trillion), taking India's export surplus earnings as the measure, and compounding it at a 5 per cent rate of interest."
By that same "logic" I should be a very rich, for if we take the value of all the goods and services the world has exported to me since my birth, and compound at 5% interest for all my life, it's a very hefty sum.
Perhaps something is starting to sound a little weird about this argument? Like, whatever happened to the value of all the *money* I spent to get those goods and services? Much like the enormous capital *inflow* to India over that same period to pay for those exports? And what's with the randomly compounding of interest? I can think of no rationality to that. Should we randomly compound at 5% interest all the goods and services China has exported to the US since 1950 and conclude that the US is now fabulously wealthy and the Chinese impoverished because of the gigantic transfer? Er...that doesn't quite seem consistent with all those shiny high-rises in Shanghai...
I mean, it's only "Business Today," of course, a half-step above "People" magazine, so it's not clear *they* should be embarrassed by printing such goofball clickbait.
Did you actually click through to the Columbia University study itself? It goes into much more detail than the gloss you've put on it. Here's a good summary: https://www.aljazeera.com/opinions/2018/12/19/how-britain-stole-45-trillion-from-india
The logic described there is sound (that's what Empires are for !), but the "measuring" method in current money is still ridiculous.
(Where are the uncertainty calculations ?!)
This is the kind of astrology-style behavior that, when pushed, makes economy a pseudoscience.
I was wrong : https://astralcodexten.substack.com/p/book-review-global-economic-history#comment-1802708
Yeah, but in the 18th century it wasn't quite at its peak yet. Older empires, like Spain (and even Portugal, they were *really* important in the Age of Discovery and the Portuguese had a settlement in Goa that was the headquarters of their own colonial state in India, lasting even into the mid 20th century, something still remembered so that an episode of a comedy-historical drama is about a Portuguese visitor to the Southern Indian empire of Vijaynagar: https://www.youtube.com/watch?v=21GwvpLUh2s) were in existence at their height then. Why did Britain outstrip them is the question being asked. Why the *British* Industrial Revolution, and not the Spanish or German or Italian Industrial Revolution?
Because there was much more wealth to extract from India than from pretty much anywhere else. India's wealth is really the key here. Just the Maratha Confederacy alone, under Shrivaji, was bringing in income that was more than the entirety of western Europe combined.
This doesn't fit with the more powerful Mughal Empire of ~1700 being probably tied for 1rst in the world with Netherlands alone ?
The divergence in favor of Britain started around 1700, when Britain didn't have especially many colonies compared to other European powers.
On Italy vs Britain, the author's statement was true as of publication.
https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=IT-GB
Whether that disproves the Catholic vs Protestant hypothesis is another matter. For one thing, the richest areas of Germany are disproportionately Catholic and Southern. Nevertheless, Protestant-majority countries are richer in Europe, but it is not clear what is cause and what is effect.
Protestant countries tend to be more liberal, ceteris paribus, just as Catholic countries tend to be more liberal than Orthodox Christian countries. All of this is within Europe. When comparing countries across the globe, religion likely has a much weaker effect than culture, institutions and so on.
The revolution in religion didn't happen on its own, there were other social, cultural and technical/scientific revolutions going on at the same time. And to take one example, the old mediaeval custom of holidays (literally "holy days") because you were celebrating a local saint, or your guild's patron saint, or it was one of the holydays of the Church calendar, all got scrapped by the Protestants. So instead of having a day, or part of a day, off, now you are working that day like normal. If Johann is working eighty days and Mario is working sixty days, Johann is going to make more money be it for himself or his landlord or his master.
I agree wholeheartedly that the religious manifestions were grown out of deeper cultural changes. Disentagling them is extremely difficult - let alone coming to a consensus which factors to consider and how to weigh them in relative importance.
Your point about working longer is interesting to consider. Generally speaking, the countries whose citizens work the longest annual hours today also tend to be less wealthy.
https://en.wikipedia.org/wiki/List_of_countries_by_average_annual_labor_hours
I wouldn't subscribe to the notion that just working more was as decisive.
"Just working more" on its own, no. But (a) this starts an evaluation of work as something virtuous and desirable in itself (I know Weber's "The Protestant Ethic and the Spirit of Capitalism" is the ur-text here and I don't know if I agree with it in every detail, but he was on to something), such that Calvinist-influenced societies could see *worldly* success as a signifier of God's favour (b) having the extra money led to the accumulation of capital and the foundation of habits centred on working days rather than time off, and that gave a small but valuable lead.
Modern days it's not about toiling long hours in the coal mines or steel foundries that makes money, but during the Industrial Revolution we weren't yet at the point of "manipulating electronic representations of notional value of intangible shares makes a fortune".
I really don't believe this. I'm sure the author is an established person in his field, but I am kind of bizarrely into Meiji-era Japanese history and I don't buy the focus on tariffs.
The main thing is, I tend to say that Japan is the *only* country to industrialize (or "economically westernize") prior to WW2 that was not, in some strong sense, already western. Each other country to westernize either had its capital west of the Urals, or was the United States of America. So when he says Japan is a weird anomaly, that is setting off my Wait What detector.
In particular, Japan did not have high tariffs. Japan was not allowed to have high tariffs; the Tokugawa shoguns got overthrown in large part because they opened the country to free trade, and the treaties that did that were upheld by the Restoration-era government for reasons of 'did not want to be invaded the way China is being'. See https://en.wikipedia.org/wiki/Treaty_of_Amity_and_Commerce_(United_States%E2%80%93Japan) for a brief summary; that notes that they were compelled to have very low tariffs until 1894, and has a link to the treaty that revised it - which treaty says they were allowed to go as high as five percent on the main goods discussed. Even if I'm misunderstanding that treaty (it's midnight), it still means that for the first 27 years of their westernization, they had practically no tariffs, and are only allowed to install any serious amount of tariffs ten years before they defeat a Great European Power at roughly equal odds.
Second, Russia is treated as a first-rate power consistently from the Napoleonic Wars through to the present day. Britain, France, and Piedmont fail dramatically to attack it in the Crimean War, despite what the Wikipedia page suggests is superior coalition numbers and, even if I'm misunderstanding it, is almost certainly not more than about 2-1 in the Russian's favor. When Britain and France want to invade China - a third-world country with a similar population advantage - they waltz in, victorious despite, again going by Wikipedia, 20-1 odds. (https://en.wikipedia.org/wiki/Second_Opium_War). Asking 'how Russia westernized' is rather like asking how trout became fish; it was one of the Great Powers of Europe, with everything this involves, from the Congress of Vienna onwards.
Third, Great Britain had tariffs during the 18th century; large-scale industrialization took off in the early 19th century, by which time Great Britain had started shifting to free trade. (https://en.wikipedia.org/wiki/Economic_history_of_the_United_Kingdom#The_Age_of_Mercantilism). And Great Britain's 'high taxes' in the 19th century were, again going by that Wikipedia page, seven percent. That was high by 19th-century standards, and is totally outside the Overton Window for lowness today - even Prospera wants a ten percent income tax!
And, fourth... everyone was trying Point Two! All the countries of the world were trying to protect their trade from foreign competition. Since the one that succeeded best in industrializing failed utterly and completely at doing so, I don't see why they would want to put that on the list.
So that is why I don't really buy the Standard Model. Also all the standard Economics 101 stuff about tariffs being bad, but I think it is striking that practically their only test case had low tariffs establishes it really quite clearly.
If I was going to try to describe a formula for success, I would say:
Rule of law, in the sense of not expecting the police/bandits/Afghan raiders to randomly steal your stuff. If the central government can do it, that's much less of an issue than if anyone who feels like it can do it.
Free (internal) markets, most importantly the abolition of guilds and government monopolies.
Not being invaded, fighting a civil war, or expecting one of these things to happen tomorrow, a term which excludes practically all third-world countries.
And either fairly low tariffs or being really, really big.
Given those four elements, in 30 years, Japan went from 'stuck in the 17th century' to 'conquering territories from its neighbors', and in another 10 became the first non-western country ever to defeat a Great Power. And that is the main fact any theory needs to explain, because it is the main case of a country that was not Western in the slightest proving the world wrong, and becoming a Great Power itself.
I miss the 'edit' button.
Uncommunisming in time to become a normal developed country doesn't appear to have worked for many countries in eastern europe and the Balkans which are 10-15 IQ points below the Chinese and are poorer than China now despite being far richer than it 20 years ago. Taiwan and Singapore didn't communism at all during their industrialization (nor the wild west of the US).
Also I'm skeptical of geographical explanations because the west coast of the US was separated from the rest of the industrialized world by thousands of miles of desert and mountains and prairie, and the panama canal didn't even exist yet. Meiji Japan was an island with few natural resources on the opposite side of the world from all the industrialized countries. Australia was also in a very inconvenient location for network effects.
It seems the high IQ countries all get industrialized in spite of their central planning or lack thereof and good geography or lack thereof. Except when the central planners are especially bad and provoke everybody else into trade embargos. North Korea has a high IQ and communisms like crazy but is still poorer than the UK was in 1700 before the beginning of the industrial revolution.
1700AD UK GDP per capita PPP in 1990 international dollars: $1,250
2015 North Korea GDP per capita PPP in 2016 dollars: $1,700
inflation divisor: 1.8363
2015 North Korea GDP per capita PPP in 1990 dollars: $928
Interestingly, when China began its economic reforms in 1978, it was even poorer than North Korea is now, and a great deal poorer than pre-industrial Britain. So apparently it had hardly industrialized at all under communism.
The USSR boasts much more impressive economic numbers than any other communist regime. Lots of other countries tried communism, but only the USSR experienced much industrialization under it. So the book seems maybe too favorable towards central planning.
"The USSR boasts much more impressive economic numbers than any other communist regime."
Bulgaria, Romania, Yugoslavia, and Hungary were similar.
Yugoslavia was ~half as rich as the USSR circa 1970. The others you listed were USSR satellite regimes so I don't consider them separately.
~half still seems to be much more than I would have expected ?
Or do you mean per capita ?
per capita
Being an island is probably more of an advantage than a hindrance starting with the age of Discovery ? (Sea transport is very efficient and being an island helps with defense.)
Yes, maybe sea transport around the world is cheaper than a few hundred miles of overland transport in terms of cost per pound of freight (pre-railroads). I read something to that effect in Sowell. But once railroads are built, it's probably not a big deal. If it were, Utah would be a third world country.
You can also see it on a smaller scale for the Roman Empire :
https://acoup.blog/2020/08/21/collections-bread-how-did-they-make-it-part-iv-markets-and-non-farmers/
(Scroll down to the map.)
"A quick check shows Italy has higher total GDP but lower GDP per capita [than the UK], which is a weird definition of 'richer' and lowers my trust in this work."
Seems unlikely, as Italy has a smaller population than the UK.
"GEH:VSI isn't very big on prescriptions, but I think it would probably suggest having a pretty heavily planned economy while you're playing catch-up, and then unwinding it once you're close to where you want to be."
This strategy does not work as vested interests built up during the planned period resist being unwound. The only reason Deng Xiaoping was able to do what he did in China is because Mao's Cultural Revolution and its purges prevented any special interests from building up. Stalin's purges also served the same function and the decline in the Soviet Union only really got going during Brezhnev's "stability of the cadres" era.
Is this part of the readers book reviews series? It doesn't have the normal disclaimer, so I assume it's by Scott, but confusing in the context
Has nobody mentioned agriculture yet?
If your farmers can only produce a surplus of 20% beyond what they need to feed themselves, you can't have more than 17% of your population working in the factories without someone starving. (not that this wasn't seen as an acceptable cost, so long as the ones starving were Irish, Bengali or Ukranian) I don't buy any explanation that doesn't include farmers going from a majority of the population to a small minority. (in the Old World, at least. The Frontier had its own thing going on with bison and plains and cowboys)
The model we were taught at school was that a mix of superior crop rotations, better (and more capital-intensive) types of farming such as more advanced ploughs and seed drilling, and selective breeding were developed. This made much more food per acre and per farmer but the benefits mostly accrued (with dubious legality. see: the Enclosures) to the landowner.
This pool of labour not needed to work the land and forced from the land they traditionally subsistence-farmed was available to operate the woolen mills, mine the coal and build the canals/railways that drove the first indistrial revolution.
Is it even meaningful to argue that high wages in the UK and the low countries drove the IR when most people were primarily subsistance farmers rather than wage labourers?
"For example, why did settler colonies (eg Canada, Australia, New Zealand, South Africa) converge to British levels of development so quickly?" Abundant land --> higher wages? (See: Henry George)
What happened to South African natives ?
The big question this raises for me is "what comes next"? So, you've gone down the following path:
Stage 1: Strong government: build a solid industrial framework from raw materials, to manufacturing, to production, to retail.
Stage 2: Liberalise and let things take their course, only stepping in if things go wrong
The problem is this assumes there will be no further paradigm shifts beyond industrialisation. But there will be, and we already have an idea what the next step looks like. It's the green technology revolution.
And the Chinese government is currently monopolising all of the raw materials which will be used to produce the next generation of Green tech. They're one step ahead of all the "libertarian" (ish) western governments on this.
So it seems to me that we need more of a synthesis/compromise between libertarianism and a more planned economy. Otherwise we miss out on critical investments for the future which won't necessarily pay off in the short term. Some kind of state capitalism (a la China, Norway, Singapore) seems inevitable for future-proofing.
AFAIK "rare earths" are not particularly rare, it's just that the US (in particular) is unwilling to pay the environmental costs... because it doesn't seem to be profitable enough ?
Otherwise, I'm somewhat skeptical about "green energy" being able to replace fossil fuels. And since we've been basically sitting on our hands since the 80s, I see de-industrialization a more likely future.
nuclear
I wish.
I don't consider nuclear to be particularly "green", but I don't see how we can avoid it at this point.
Sadly, politicians don't seem to be particularly interested... but this will probably change the next time oil prices explode... probably during this decade ?
Rare earths are not rare, but they are poorly differentiated from other minerals, and hence time-, energy- and labor-intensive to separate. And anyway there are plenty of ores in the US, but the cost of labor and energy here is sufficiently higher than that in China that even trans-oceanic shipping both ways doesn't compensate
I don't think it makes sense to say China is monopolising all (or any) raw materials. China generally produces raw materials much cheaper than we can, and is quite happy to sell us as much of them as we wish to buy. If the price rises beyond the level at which the materials can be produced in the west, that is where they will be produced - and no, in that case we will not be monopolising them either.
I'm a little dubious about the neat conclusion that industrialisation and automation took off because workers were *too* well-paid. As to French and British textile mills, it was the French https://frenchmoments.eu/textile-history-in-france/ and Belgians https://www.discoveringbelgium.com/medieval-flemish-cloth-industry/ who had the advantages early on in that industry. England grew rich in the mediaeval and early modern period exporting wool to the Continent for the thriving textile industries there. Not to toot my own horn, but to quote from a review I did of a biography of Dame Julian of Norwich:
"Norwich wasn’t some little village or bucolic backwater; it was the capital of the most populous county in England, and had good claim to be the second most important city after London. To quote Wikipedia:
“The engine of trade was wool from Norfolk's sheepwalks. …Throughout this period Norwich established wide-ranging trading links with other parts of Europe, its markets stretching from Scandinavia to Spain and the city housing a Hanseatic warehouse. To organise and control its export to the Low Countries, Great Yarmouth, as the port for Norwich, was designated one of the staple ports under terms of the 1353 Statute of the Staple.
By the middle of the 14th century the city walls had been completed. At around two and a half miles (4 km) long, these walls, along with the river, enclosed a larger area than that of the City of London. …Around this time, the city was made a county corporate and became capital of one of the most densely populated and prosperous counties of England.”
Britain was perhaps peculiarly well-positioned to be the heartland of the Industrial Revolution; iron and coal were its begetters, and Britain was fortunately rich in these resources. But there were other hampering factors than "plagues killed off everybody, this meant that wages rose for those who remained alive to be workers, high wages = high costs = budding capitalist entrepreneurs need to invent machines to do the work". From Charlotte Bronte's novel "Shirley", written in but set in 1812 during the Napoleonic Wars and at the height of Luddites and frame-smashing:
"Shirley, A Tale is a social novel by the English novelist Charlotte Brontë, first published in 1849. It was Brontë's second published novel after Jane Eyre (originally published under Brontë's pseudonym Currer Bell). The novel is set in Yorkshire in 1811–12, during the industrial depression resulting from the Napoleonic Wars and the War of 1812. The novel is set against the backdrop of the Luddite uprisings in the Yorkshire textile industry.
The novel's popularity led to Shirley's becoming a woman's name. The title character was given the name that her father had intended to give a son. Before the publication of the novel Shirley was an uncommon but distinctly male name. Today it is regarded as a distinctly female name."
(1) An exchange between a mill-owner and another man helping him defend against workers coming to smash the new machinery:
"Helstone says these three are your gods; that the 'Orders in Council' are with you another name for the seven deadly sins; that Castlereagh is your Antichrist, and the war-party his legions."
"Yes; I abhor all these things because they ruin me. They stand in my way. I cannot get on. I cannot execute my plans because of them. I see myself baffled at every turn by their untoward effects."
"But you are rich and thriving, Moore?"
"I am very rich in cloth I cannot sell. You should step into my warehouse yonder, and observe how it is piled to the roof with pieces. Roakes and Pearson are in the same condition. America used to be their market, but the Orders in Council have cut that off."
(2) Backstory!
Trade was Mr. Moore's hereditary calling: the Gérards of Antwerp had been merchants for two centuries back. Once they had been wealthy merchants; but the uncertainties, the involvements, of business had come upon them; disastrous speculations had loosened by degrees the foundations of their credit. The house had stood on a tottering base for a dozen years; and at last, in the shock of the French Revolution, it had rushed down a total ruin. In its fall was involved the English and Yorkshire firm of Moore, closely connected with the Antwerp house, and of which one of the partners, resident in Antwerp, Robert Moore, had married Hortense Gérard, with the prospect of his bride inheriting her father Constantine Gérard's share in the business.
...When he came to Yorkshire, he — whose ancestors had owned warehouses in this seaport, and factories in that inland town, had possessed their town-house and their country-seat — saw no way open to him but to rent a cloth-mill in an out-of-the-way nook of an out-of-the-way district; to take a cottage adjoining it for his residence, and to add to his possessions, as pasture for his horse, and space for his cloth-tenters, a few acres of the steep, rugged land that lined the hollow through which his mill-stream brawled. All this he held at a somewhat high rent (for these war times were hard, and everything was dear) of the trustees of the Fieldhead estate, then the property of a minor.
...As to the mill, which was an old structure, and fitted up with old machinery, now become inefficient and out of date, he had from the first evinced the strongest contempt for all its arrangements and appointments. His aim had been to effect a radical reform, which he had executed as fast as his very limited capital would allow; and the narrowness of that capital, and consequent check on his progress, was a restraint which galled his spirit sorely. Moore ever wanted to push on. "Forward" was the device stamped upon his soul; but poverty curbed him. Sometimes (figuratively) he foamed at the mouth when the reins were drawn very tight.
In this state of feeling, it is not to be expected that he would deliberate much as to whether his advance was or was not prejudicial to others. Not being a native, nor for any length of time a resident of the neighbourhood, he did not sufficiently care when the new inventions threw the old workpeople out of employ. He never asked himself where those to whom he no longer paid weekly wages found daily bread; and in this negligence he only resembled thousands besides, on whom the starving poor of Yorkshire seemed to have a closer claim.
The period of which I write was an overshadowed one in British history, and especially in the history of the northern provinces. War was then at its height. Europe was all involved therein. England, if not weary, was worn with long resistance — yes, and half her people were weary too, and cried out for peace on any terms. National honour was become a mere empty name, of no value in the eyes of many, because their sight was dim with famine; and for a morsel of meat they would have sold their birthright.
The "Orders in Council," provoked by Napoleon's Milan and Berlin decrees, and forbidding neutral powers to trade with France, had, by offending America, cut off the principal market of the Yorkshire woollen trade, and brought it consequently to the verge of ruin. Minor foreign markets were glutted, and would receive no more. The Brazils, Portugal, Sicily, were all overstocked by nearly two years' consumption. At this crisis certain inventions in machinery were introduced into the staple manufactures of the north, which, greatly reducing the number of hands necessary to be employed, threw thousands out of work, and left them without legitimate means of sustaining life. A bad harvest supervened. Distress reached its climax. Endurance, overgoaded, stretched the hand of fraternity to sedition. The throes of a sort of moral earthquake were felt heaving under the hills of the northern counties. But, as is usual in such cases, nobody took much notice. When a food-riot broke out in a manufacturing town, when a gig-mill was burnt to the ground, or a manufacturer's house was attacked, the furniture thrown into the streets, and the family forced to flee for their lives, some local measures were or were not taken by the local magistracy. A ringleader was detected, or more frequently suffered to elude detection; newspaper paragraphs were written on the subject, and there the thing stopped. As to the sufferers, whose sole inheritance was labour, and who had lost that inheritance—who could not get work, and consequently could not get wages, and consequently could not get bread—they were left to suffer on, perhaps inevitably left. It would not do to stop the progress of invention, to damage science by discouraging its improvements; the war could not be terminated; efficient relief could not be raised. There was no help then; so the unemployed underwent their destiny—ate the bread and drank the waters of affliction.
Misery generates hate. These sufferers hated the machines which they believed took their bread from them; they hated the buildings which contained those machines; they hated the manufacturers who owned those buildings. In the parish of Briarfield, with which we have at present to do, Hollow's Mill was the place held most abominable; Gérard Moore, in his double character of semi-foreigner and thorough-going progressist, the man most abominated."
Back in 2002 the Discovery Channel had a good introductory series called "Industrial Revelations" hosted by Mark Williams; the first episode puts the beginnings of the Industrial Revolution back to the 18th century, when the cloth-weaving towns of the North were boomtowns and there was a need to supply them and export the goods. Coal was the wonder fuel of the day, and that led to mines, and that led to the need for machinery to pump out the mines, and that led to steam engines, and that led to...
https://www.dailymotion.com/video/x26nszh
> Overall there was a lot in this book that was unsatisfying.
Other people have noted that *A Very Short Introduction* is a series. The way I've seen them used is as replacements for introductory classes.
Basically, if a graduate student wants to take Advanced Thing, but never took Introduction to Thing, they can read the relevant *A Very Short Introduction* book carefully and come out with an understanding roughly equivalent to what's left over in the average undergrad's brain who took the class a year ago. The books aren't really meant to have a strong thesis or definitively answer the controversial questions of the discipline.
> A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work.
I think this is missing the point. Some people say that the reason the UK, Germany, and US are rich is the Protestant Work Ethic. Allen's just pointing out that this can't be the *main* explanation because Italy is about as rich as these countries.
If Protestantism vs. Catholicism were the real culprit, we'd expect Catholic Italy and France to be closer to Catholic Mexico in development. What we actually see is that the UK, Germany, France, and Italy are all roughly in the same place despite their different traditions. That means there's got to be something else going on.
> Maybe it shouldn't have thrown culture out so quickly?
Perhaps Allen's unstated assumption is that culture is shaped by economic development, and not the other way around?
Yeah, just look at Protestantism : it comes straight out of the printing press !
Enter, Benedict Anderson/Imagined Communities
"Alexander Hamilton in the US. They and others independently converged on a four-pronged plan:[...] 4. Establish mass education to speed the adoption and invention of technology.
The USA and most of Western Europe tried this in the early 1800s, and it went pretty well."
I think this might be the nicest thing you've ever said about mass education.
The somewhat dark undercurrent is that AFAIK modern schooling is based on the Prussian school, whose goal was to make soldiers and war-industry factory workers.
Shameless book review suggestion: Joel Mokyr's "Culture of Growth", which looks at endogenous factors specific to culture as the primary explanation of the Great Divergence.
It very much rejects geographic determism, colonialism et al. Not very popular in our current zeitgeist but a faboulous and thought-provoking read (plus a great deal of intellectual history to boot).
A lot of this discussion, and the discussion in the comments, seems to assume that Europe is somehow significantly better than the rest of the world (Europe, specifically) and this needs to be explained. I'd like to point out that this is a recent trend - before Europe, the Middle East was the fount of knowledge and innovation, with contributions from places like China (and this knowledge was what was carried over to Europe, in part). Just because Britain happened to industrialise and invade a bunch of countries for wealth doesn't imply that Europeans have always been superior to everyone else.
This is an important point. Any explanation for Europe's superiority needs to explain why that superiority is so recent.
Because we live in the present, and we judge value by the social mythology of the present, and don't really give a shit about whether Shlomo had more good-looking healthy cattle than Umberto, back in the day, or whatever burned in the envious hearts of men 1,000 years ago. We will *always* judge what is admired today as what is self-evidently the acme of human achievement, and so necessarily those who are near the peak will have reached it recently.
Let's say, for example, that the reason for Europe's superiority is the "Western Church". That explanation falls down unless it can somehow account for why medieval Europe, with that Church, lagged behind other civilizations of the day. And if we care about why stuff happened, then we have to care about things that happened a long time ago.
I don't think there's "one simple weird trick", it was a combination of a wide selection of things that all just happened to fall the right way at the right time. We can certainly investigate and interrogate the past, but reducing it down to "This particular thing is why" isn't the full answer. And this is really an introductory book, not an overview of the whole field.
Civilisations arise, come to a peak, generally form empires, then decay and a new civilisation takes over. There's no reason that won't happen with current Western civilisation in its turn.
We certainly live in the present, but 'this one section of the world has always been much richer and more knowledgable than the rest' and 'this one section became richer through some recent events' are very different situations. The first demands an explanation, the second might be a coincidence (or at least just part of the usual patterns of rise and fall of cultures over the world).
I fear that we might be entering here a confusion over values.
It was pretty clear to me that this discussion is about sheer power -
(which has a military "point" and a political economy "core" - but having healthy cattle is part of that !)
- which is closely related to the physical kind of power.
And it's not like military success is only a recent Western value !
More about the role of cattle leading up to the Industrial Revolution :
https://unenumerated.blogspot.com/2010/12/some-conjectures-and-facts-regarding.html
Might also be a lack of knowledge : before this discussion, I had no idea that the Indian Muslim Mughal Empire was the 1rst world power (perhaps tied with the Netherlands ?) circa 1700 !
Regarding the tariff question, there is an important paper by Doug Irwin that shows the relationship between industrial development and import tariffs is not really straightforward as the book reviewed implies.
From the abstract: "The paper shows that: (i) late nineteenth century growth hinged more on population expansion and capital accumulation than on productivity growth; (ii) tariffs may have discouraged capital accumulation by raising the price of imported capital goods; (iii) productivity growth was most rapid in non-traded sectors (such as utilities and services) whose performance was not directly related to the tariff."
Link: https://www.nber.org/papers/w7639
I've read this book too and it tackles a subject for too big for its size.
The Hanging With History podcast (that's me) has the causes of the Industrial Revolution as the core idea around which it is organized. It's a big subject if you want to look at all the angles.
Culture, religion and technology are certainly possible contributors and need a careful look.
As just one example, a lot of the comments here have looked at religion at the level of Protestant vs Catholic. The Protestant religion in England underwent a lot of development and fracturing. A possible contribution was late 16th/early 17th century Puritan psychology, which I find is poorly understood these days. And that particular outlook only lasted a few decades, changing into something else, something we are more familiar with today. Also, the rise of Methodism and similar during the time of various labor movements had some interesting effects I'm still working on teasing out.
I've done over 300,000 words on the subject and haven't even reached the 18th century yet. And I hope I'm not particularly long winded. McCloskey is halfway through a 6 volume approach to the subject that mainly emphasizes changes in culture and values. So yeah, a little book like GEH is just for those who want to dip their toes in. When it comes to culture I've spent hours developing my "minimally murdery" theme.
Pseudoerasmus and Anton Howes are great sources for people who want to follow developments in economic history as they occur today.
"Catholic Italy [is richer than] Protestant Britain" (is this true? A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work.)
British GDP (and currency valuations if you're working on dollar rather than PPP comparisons) has been doing weird things lately because of Brexit so it's very hard to be certain until it stabilises. Also the UK population is higher than Italy, which should make it impossible for Italy to have higher total but lower per-cap.
I have probably read 50 to 100 books on the IR and the "Great Divergence", and my take on most of the "one big theory narratives" is that they tend to point out something which is necessary and try to imply that it is sufficient.
Some common themes:
Intermediate levels of state fragmentation and competition
Good institutions (markets, prop rights, rep democracy, rule of law)
Good norms/mindsets/rhetoric
Individualism vs Clans
Fossil fuels
Scientific method and mathematical advance
Open acreage
Relaxed Malthusian pressures
Freedom and openness
Wage levels
Proper underlying technologies (printing, transportation, clocks, gunpowder)
Philosophy (Enlightenment)
Culture
Genetic factors (intelligence, cooperativeness, patience)
Colonial exploitation
This is just a partial list off the top of my head, and most of these sub causes have various, sometimes even contradictory takes on the issue (for example which institutions are essential?j
I don’t agree they are all even necessary, but most probably are, which leads us to a more complex picture where there are countless ways of NOT seeing sustainable growth rates and improvements in problem solving. But there are also various ways which ARE possible for human progress. Great Britain led the charge in proving that advances in human prosperity are possible. Other nations at other times took this general recipe and built upon it or adapted it in their own special ways to their conditions and history and culture. In some cases the adaptation was easy and the environment conducive (North America). In other places it is a more drastic adaptation (China). And of course there is the topic of catch up vs lead growth and how the fundamentals for one may be very different than the other.
Yes, this exactly. Well put.
Good point, made well.
Central planning doesn't work. It never has. It never will. The information necessary to centrally plan is not available (because it's only in people's heads), and cannot be gathered in a timely manner.
And yet.
The price system *is* the central planning that you want. It requires free markets, though, and people doubt that markets can arise from nothing. People are, in their heart of hearts, economic creationists. And we all know how accurate creationism is.
See https://slatestarcodex.com/2020/05/12/studies-on-slack/
Systems basically equivalent to evolution (eg the free market) can get stuck in poor equilibria if they don't have enough slack to get out of them. It sounds like Allen is saying that the "development state" produces slack by subsidizing them until they can get off the ground. Just like half an eye might not be evolutionarily adaptive, a steel mill that's halfway to being competitive with other country's steel mills isn't profitable. But you've got to go through that step, there might not be enough private investment to make it happen, and the state can help.
The state *can* help. But does it? At what cost (not just money)? And while it's helping you, who is it hurting with the same power it has to help?
Everything the state does is based on coercion. That has a cost. That cost has to be overcome by doing more good things than bad things. But it has more incentives to do bad things than good things.
That's why you don't want your state to have the power to do good things. Separation of state and market. It's the only way.
Yes, I know that's a "crazy idea". But so was separation of state and church, back in the day. It was thought to be insane to allow people to choose their own religion. What if they chose the wrong one, and imperiled their eternal soul?!?! No, you needed the government to pick the right religion.
<i>The author is most impressed with China, which seems to have gotten this part right (maybe by accident): they communismed until they reached the technological frontier, then uncommunismed in time to get on the path to being a normal developed country. GEH:VSI isn't very big on prescriptions, but I think it would probably suggest having a pretty heavily planned economy while you're playing catch-up, and then unwinding it once you're close to where you want to be.</i>
How's this compare with India? Haven't they come a pretty long way in the last 30 years with comparatively less centralized planning? Or maybe they haven't come as far, and therefore the China approach still looks better?
"Do artificially high wages through eg minimum wage policies or UBI help as much as naturally high wages?"
Are there "naturally high wages", or generally, any kind of "natural wages", arrived at through some pure perfect market self-corrective calculations, or there are just wages, subject to all kinds of non-market pressures (from monopolies, laws, culture, negotiating power, zoning, racism, sexism, optics, all the way to pure violence - e.g. the terrorizing, firing, beating, and sometimes even downright murder of workers asking for more, all-too-common in developing countries, but common in the US as well in the 20th century) - that those pretending to see a "free market at play" conveniently overlook?
The first one.
I think this is Fallacy of Grey - if the government declared everyone would be paid exactly $20/hour, would this be exactly as "natural" as supply and demand? If you say no, you've already admitted that it's fair to talk about wages being natural, even if it's not the sort of perfect crisp bright-line category that nothing is.
If I say "no" to your hypothetical question, it only proves that I admit that it's fair to talk about naturalness as a spectrum. Which I do.
That we're closer to the "natural" side of the spectrum than the artificially-keep-wages-low side, is what I'm arguing against though.
If we're not, it can be semantically disingenuous and politically exploitative to call our current situation "natural".
The Fallacy of Grey is not about being satisfied to call a dark muddy grey "white" because "well, nothing is perfect anyway".
I see libertarians as all to eager to recognize and condemn artificially-keep-wages-high schemes (like minimum wages and union bargaining), but sidestepping and ignoring artificially-keep-wages-low ones, even though they're everywhere.
In that sense, I see things like minimum wage laws as counter-balances to that artificially-keep-wages-low pressure.
Whereas if we someone is blind to the artificially-keep-wages-low schemes, minimum wages laws are merely distortions to what they see as the "natural" baseline.
"A quick check shows Italy has higher total GDP but lower GDP per capita, which is a weird definition of 'richer' and lowers my trust in this work."
It was true from 1976 to 2011. Northern Italy is still richer than Britain.
"By the early 20th century, a clear gap had emerged between Europe, North America, and Japan (on one side), and everyone else (on the other)."
Much of Latin America was doing well at the time, as well -thus Japanese emigration to Brazil.
" Given that the average developing country has an average-for-developing-countries level of market freedom, but does not experience a China-level economic miracle,"
China is around the world average in GDP/capita.
"This wasn't a very conclusive section, but I appreciated the confirmation that the Soviet economy actually worked pretty okay until 1970 or so, then became a basketcase for kind of unclear reasons."
Soviet slowdown started in the early 1960s; Soviet GDP per capita became surpassed by Italy in 1951, Japan in 1962, and Portugal in 1967.
"Is it still possible to succeed?"
It's easier to succeed than ever.
Northern Italy, if it were a separate nation, would be the richest country in Europe. That's why those Lega Nord guys are so mad.
"The Mystery of Capital" by Hernando de Soto, covers much of the same territory. He concluded that developing countries have tons of entrepreneurial spirit, and a fantastic work ethic, but are hamstrung by a weak, ineffective, corrupt, and byzantine bureaucracy. It is almost impossible for an entrepreneur in many parts of Latin America to start a business, get a loan, buy a piece of property with a title, and to enforce claims on that property in court. In theory, these countries have laws on the books that let you do these things, but in practice, the system is so corrupt and difficult to navigate that only large (usually foreign) corporations with lots of lawyers and government contacts can do them.
The conclusion is that you need both (1) free markets, and (2) a strong and effective central government that enforces the rule of law and makes investments in public infrastructure. Libertarians like to focus on (1), while ignoring (2), although "state capacity libertarianism" is beginning to catch on. Early Soviet Russia did well with (2) early on, but then the bureaucracy metastasized into a purely parasitic organ, because there was no (1) to reign it in. China has so far done well at balancing both (1) and (2), which is why it's booming.
There is a cultural element at play here. China and Japan had long traditions of powerful autocratic central governments, and experience with managing complex bureaucracies. They were thus able to create strong and effective government institutions, which allowed them to transition from a feudal system to a more modern economy. Other areas are still contending with various tribal/sectarian/religious/warlord/gangster divisions. Because of these divisions, the central government is weak and ineffective, laws are not enforced, infrastructure is terrible, and doing business involves a lot more bribes and favors, and a lot less investing in actual industrial capacity.
I'm having trouble figuring out whether you're thinking of (2) as following from the first paragraph. Is the idea that only a strong central government can rein in corruption among local officials?
There are several ways in which the central government can be "weak". In an extreme case like Afghanistan, it is literally impossible for the central government to enforce its will, because local tribes/warlords have more military/economic/cultural power than it does. I tend to think that people have an innate tendency to organize themselves and exert power and dominance over other people. If the central government does not fulfill that role, it leaves a vacuum of power that will be filled by other (often selfish or malicious) actors.
A central government can be weak economically, in that it does not have the funds to provide sufficient services. Bureaucracy is a form of infrastructure; if the courts don't have enough judges and clerks to handle the case load, then people will be forced to circumvent them to conduct their business. These "side channels" lead to shadow government (e.g. mafia) that competes with the real one.
A central government can be weak politically, in that it is unable to enforce its vision/goals/ethics on local officials, so internal corruption is rampant. This often leads to economic weakness, since money gets siphoned off at every point along the chain from "tax" to "providing a service".
Western-style industrialized economies have a strong, well-funded government, in which other actors (e.g. private corporations) are clearly subservient to law and the courts. The political culture emphasizes "government as a service to the people", corruption is looked down upon, and frequent elections help keep politicians at least somewhat oriented to the needs of their constituents.
China has certainly struggled with corruption, but through crackdowns etc. it has largely been able to enforce the will of the central government on local officials. It can also enforce its will on all of the other private actors that might otherwise usurp power. Perhaps most interestingly, the "will" of the central government has, for the most part, been laser-focused on economic growth, which is key to err... well... growth.
Putin's Russia has a strong central government, but it functions as a kleptocracy, strengthened by a public/private partnership which is engaged in large-scale fleecing of the populace. It's just as effective as China, at exerting its will, but its goals are different.
I think China is the anomaly here. While it has been effective thus far, there is no obvious internal mechanism that I can see which would prevent it from backsliding into something like Putin's Russia. Thus far, the government seems to believe that the best way to stay in power is to make sure that the populace keeps getting richer. If it ever stops believing in that, then I think the "Chinese miracle" will end.
You might also have to in (2) insist on the *willingness* of said strong and effective central government to get actually get rid of corruption rather than pursuing it for themselves : see Putin's Russia.
(Since (1) is there, but doesn't seem to be working... or maybe is still held down too much by (2) ?)
See also (post-Napoleon ?) France :
Strong, *very* centralized government,
Pretty good free market, because though there are *lots* of red tape, there also are relatively very low levels of corruption ?
(Because I guess the culture of public servants is strongly anti-corruption ?)
I think a combination of Escape from Rome and the Catholic Church's family and marriage project does a lot to explain the West's head start on the Industrial Revolution. Export-led growth explains much of the catch up of Japan, China, and others.
This graph looks to me like Italy had a higher GDP per capita than the UK for about 20 years up until 2011, when the book was written – then the UK has been doing better since. It lowers my trust in the review that it lowered the reviewer's trust in the book that the author was using current data instead of data from the author's future.
https://ourworldindata.org/grapher/gdp-per-capita-worldbank?tab=chart&country=GBR~ITA
If you're interested in development, you should really read how Asia works by Joe Studwell. Despite the title it's mostly about economic development and industrial policy, and the differences between countries that got it right and those that didn't.
Scott, this is completely off topic, but related generally to book reviews:
I'd love to know whether you write or take notes as you read, that you later refine into the review, or whether you read the whole thing and summarize your impressions and recollections at the end.
This is partly quite absurd. You talk about "China." "China" includes Taiwan and Hong Kong. Arguably it includes Singapore in some senses (dominant Chinese ethnic group, language, traditions). These massively succeeded, far beyond the PRC, without "communism" in any sense. At one point HK's total GDP was bigger than the PRC's GDP. So what sense does it make to say China benefited economically from communism bringing it up to speed?
What in the world do you think that you are talking about? Reality or this one little book you just read? Do you have any idea what happened economically under Mao? Any at all? The mass starvation? The businesses destroyed--basically, all of them? The bizarre backyard steel foundries melting down tools to make crap steel to meet quotas? The ruinous collective farms that destroyed agriculture? Do you know anything at all about industrial policy under the Republic of China? And now you are announcing that this terrible state of affairs, the destruction of an entire nation and its people and its culture and its economy, was beneficial to lay the foundation for a modern industrial economy? Because you read one book and it contradicted some vague notions you acquired along the way, so, eh, maybe yeah communism works well if you just exit at the right time. Ugh, read Dikotter or "Tombstone." Read something, not this one little halfwitted book you bought on a whim and decided to muse about publicly over an idle hour.
As far as the USSR is concerned, you'd really have to stand in the snow of Moscow for an hour waiting for a lump of "bread" that's heavy enough to build with to understand Soviet economic "development." Pre-Bolshevik Russia had a very fast-growing economy and exported vast amounts of food. Red Russia had mass starvation. A pair of jeans was but a distant dream. It wasn't just a starving waste dump, pre-communist Russia. It had factories and scientific journals and advanced education. It was growing fast. The communists didn't just destroy culture and freedom to speak and think. They destroyed Russian business and agriculture. Hence, mass starvation. Hence, shortages of all kinds. No consumer goods. Dreary cities with stacks of identical towers stretching into the waste.
Okay, I'm done. This review is a work of staggering ignorance. It's embarrassing, or should be.
"At one point HK's total GDP was bigger than the PRC's GDP."
No, it wasn't.
Modern Russia relative to the U.S. is still worse off than it was under the Soviet peak GDP per capita wise, but there is greater convergence in overall living standards.
One of the problems I (as a historian, alas not an economic historian) have with basically all explanations is this: they all seem to perfectly explain why the industrial revolution took place where it took place, but not really why not earlier somewhere else. There were always regions with higher wages, more innovation, larger iron or coal repositories, a specific mercantile/industrious culture etc. We probably all know by now that rudimentary steam engines were used in ancient Greece, Medieval Middle Eastern tinkerers built elaborate automata etc. So why did they not go the next step and made them into large scale industrial machinery?
I think this is also why many researchers still hold up the influence of colonialism/imperialism so highly. Not primarily for political reasons (to prove a debt of the West or so), but because it was a scale of connection and domination that had never been reached before and thus could be responsible for this singularity. But I have to admit that even this seems ultimately unconvincing to me....
As I recall, another puzzle is that England was itself 'ready' for industrial revolution in the early-mid 17th century, but things don't actually get into motion until early-mid 18th century -- Adam Smith's Wealth of Nations (1776) being taken as a fairly explicit documentation of the changing structures of work and tech as things get taken.
The preface to Hazlitt's _Time Will Run Back_ argued in the mid-60s that the Soviet economy was already a basket-case (and indeed had been so more-or-less continuously since about 1928). Of course, the whole theme of his novel was that a centrally-planned economy would _necessarily_ be a basket-case, but even so — it remains my suspicion that all that really changed in the ’70s was that the West-at-large became generally _aware_ of Soviet basketude, or perhaps were more willing to see it (rather than pleasant fictions) after the highly visible crises and failures of socialist economic policies the West experienced during that decade.
Oh, and you might be interested in my pet theory that the high British wages that kicked off the Industrial Revolution were caused by the Corn Laws, and that this is the only time in history protectionism has actually been good for a country (and then only accidentally by way of unintended consequences).
You don't think that, for instance, US protectionism is what allowed them to eventually beat the British Empire ?
No, I don't; I think that they succeeded in spite of that. They had all our cultural advantages (often in distilled form — I think it was de Tocqueville who said "the American is the Englishman left to himself") plus an open frontier / plentiful land that prevented them from replicating our cultural _disadvantages_.
(The trouble with protectionism is that while "economically optimal" tariffs are possible, they are not the ones that any real government will enact. Public choice theory an' a' that.)
No; it was population growth. America was richer than Britain before the revolution (though New England was poorer).
There are plenty of countries richer than Britain but still suffering from the "resource curse" ?
Interesting issue, of course, is that New England is the cockpit of the American industrial revolution.
(I commute over the result of Eli Whitney's waterworks every day.)
In the literature, New England's rapid industrialization tends to be ascribed in part to significant but also limited accumulation of wealth... Eli Whitney has just enough capital to tinker with and deploy gears, pistons, and pulleys, but not so much as to be tempted to sit on his porch and scribble Jeffersonian political philosophy.
The note on wages is a bit circular. If wages are high then that means there is surplus-value in the system, and therefore room to justify investment in innovation. In other words, Britain was already successful by some metric before the Industrial Revolution turned it into a visible economic boom.
If nothing else, this review does a great job of matching Scott’s writing style.
This is actually Scott.
"The reluctance to invoke colonialism too heavily is even less well-explained"
What? It is perfectly explained by the fact that the question to be answered is, to a large extent, exactly "{why did the West / why was the West able to} colonize most of the globe, as opposed to a different one of the dozens of similarly-sized geographic regions of the globe?".
"[e.g. Britain] the high taxes paid for infrastructure, and the poor property rights let governments use eminent domain to build canals, railroads, et cetera."
What? British canals and railways were built by private companies. They usually had an act of Parliament giving them the right to use eminent domain along the planned route (broadly written into the act). The government did regulate the companies heavily (including a huge reorganization of the railways, merging dozens of mostly-independent companies into four, still privately-owned regional railways in 1923), with somewhat inconsistent results (as usual), but e.g. the railways were only nationalized in 1948. Similar things can be said about turnpikes (often converted from previously free-to-use public roads).
"only in Britain was it worth actually building machinery" -- funny, that. The stories of early mechanization attempts, particularly in textiles (flying shuttle, spinning jenny) are full of "and then an angry mob of competing weavers/spinners broke into his house/workshop and smashed the machinery"; a good number of early threshing machines were burned, too. Perhaps this is part of why a strong central government mattered?
3. "Create banks to stabilize the currency and provide businesses with capital"
What? Banks 1) also were private companies (which is why they could go bankrupt and why runs on banks happened so often), 2) extended the government currency, at the time still largely based in silver or gold, 3) on the business financing side, usually mostly restricted themselves to discounting relatively short-term bills of exchange, otherwise they would be exposed to too high a risk of a run; long-term investment (stocks and bonds) took place outside banks. There is actually a decent case that rather than stabilizing the currency, these local banks tended to at the very least exacerbate "naturally-occurring" liquidity shortages, or indeed outright destabilized the currency by generally amplifying liquidity swings.
Wise post.
This book is useless because it avoids the admittedly crude essentialist explanations for prosperity. Attempting to explain why China is richer than DR Congo when China's population has an average IQ 20+ points higher than DR Congo will inevitably lead to contrived explanations and motivated reasoning. We can argue about the origin of or solution for population IQ differences, but removing them from your model of how the world works will only prevent you from understanding.
You should read 'Why Nations Fail', Acemoglu/Robinson.
Indeed.
``` (is this true? Britain has higher GDP today, but Italy was higher when this book was written) ```
https://knoema.com/mhrzolg/historical-gdp-by-country-statistics-from-the-world-bank-1960-2019
https://countryeconomy.com/countries/compare/italy/uk?sc=XE05
I don't believe this was true in 2011 when the book was published, either in absolute or per-capita terms. Historically, I don't think it has been true for several centuries. (Probably since an inflection point some time in the Early Modern period.) Certainly Italy today is also a developed, wealthy G8 nation (their debt ratio nonwithstanding), which is probably the broader point.
Not to get into a discussion of "Protestant work ethic" (a theory I'm not a huge fan of), but that's part of the econometric background behind it.
Your last paragraph carries a hidden assumption which I think you need to question. Try this alternative hypothesis:
"If a development-economics problem can't be solved with free markets and free people, it can't be solved at all."
Yes, that does mean that societies which failed to catch the first wave are kinda fscked. But how do you know reality isn't like that?
When you look at apparent exceptions like Japan closely, I think you find that the "strong central government" was smart enough to keep its hands off economic life and offer the implied contract that as long as nobody overtly threatened the elite at the very top said elite would continue to allow effectively laissez-faire conditions.
I also think that no account of the wealth of nations can ignore the distribution of Spearman's g. Whatever you think that's measuring, the correlation between IQ averages and post-Industrial-Revolution success seems far too strong to ignore.
Interesting review. Without reading comments:
* I think one could distinguish usefully between partial planning (South Korea) and total planning (USSR, Mao.) If you pay attention to *all* of Econ 101 you learn that government can have many useful roles. But markets are useful too. As for the USSR doing well, it was importing grain from at least the 1960s, despite containing a world breadbasket (Ukraine); launching satellites but having trouble feeding your people despite having the means isn't "doing well" IMO.
* http://www.lowtechmagazine.com/2011/09/peat-and-coal-fossil-fuels-in-pre-industrial-times.html argues that the Dutch Golden Age was fueled by cheap energy -- peat (which ran out) and wind power (which didn't, also cheap water transport.) Likewise Britain was using a lot of coal for domestic heating and probably industry even before the Industrial Revolution -- steam engines started life pumping water out of coal mines.
* It's probable to me that Japan and Korea had more cohesion and government legitimacy than some ex-colony with effectively random borders and conflicting interest groups. The newly independent countries had to try to work out things Japan did back in the 1600s.
* New California would likely be filled by high know-how and -trust Americans and the legitimacy of a democratic territorial government overseen by Congress.
Bit why would New California be more successful than Puerto Rico? Culture?
It's worth noting that GEH's thesis: high-wages>>innovation/industrialization/Industrial Revolution 1.0 is familiar to me from undergraduate economic history I took in the 1980s. Seems like this is a fairly standard publication intended for economic history survey courses.
Weird: "The Soviet economy actually worked pretty okay until 1970." No, the "Soviet economy" produced mass starvation of millions. Literally millions. You stood in the line in the snow for two hours for a lump of inedible "bread." It did not work "pretty okay."
The Russian economy before Bolshevism was one of the fastest-growing in the world.