Originally published September 14, 2007 at 12:00 AM | Page modified September 14, 2007 at 2:05 AM
A by-the-numbers look at why countries prosper
Any 420-page book that subtitles itself "A Brief Economic History of the World" has to choose what to leave out. In "A Farewell to Alms,"...
Special to The Seattle Times
Author appearance
Gregory Clark will discuss "A Farewell to Alms" at 7:30 p.m. Monday, Town Hall, 1119 Eighth Ave., Seattle, sponsored by the Town Hall Center for Civic Life and the Elliott Bay Book Co; $5 (206-652-4255 or www.townhallseattle.org).Any 420-page book that subtitles itself "A Brief Economic History of the World" has to choose what to leave out. In "A Farewell to Alms," (Princeton University Press, 420 pp., $29.95), Gregory Clark, chairman of the economics department at the University of California, Davis, has left out the his-story part of history and offers a data-directed explanation of human progress.
Clark begins with the question of why some nations become rich while others remain poor. To answer it, he focuses on the first Industrial Revolution, and asks: Why did it happen in England? Britain had no corner on coal, iron ore, seaports or capitalism. The Netherlands had political stability and a market economy. China and Japan had a version of it. But until about 1800, says Clark, it was a Malthusian world. Economic growth was slow everywhere, and tended merely to create more mouths to feed.
Then innovation quickened, and for the first time in the world, the average wage grew, and kept growing. The change came first to England, and spread to Europe and Japan. In our time, it is happening in China — but not everywhere.
Why? Economists focus on institutions such as private property and the rule of law. That assumes, Clark says, "that the desires and rationalities of people" are the same from one culture to another. And they aren't. Business wants a certain kind of culture.
What matters, Clark argues, is that the culture promotes the habits of mind of those who invent, build and work. Among ordinary workers, this shows itself as precision and reliability. You might call it a mindset of non-sloppiness.
The cultural explanation is an old one. A century ago, Max Weber had a version called "the Protestant ethic." In 1998 in his book "The Wealth and Poverty of Nations," David Landes of Harvard summed up the keys to prosperity as "work, thrift, honesty, patience, tenacity." Clark's view in "A Farewell to Alms" is a version of this.
The difference is in how he argues for it. Landes did it with history. Clark leans much more heavily on data and charts. Unfortunately he wanders occasionally into mathematical equations for things that aren't quantifiable. When he wants to say a nation increases its wealth based on what it knows, what it does, what it earns and what it learns, he sums it up as "G{-y}<a*g{-k}{-*}." Economists do this all the time in their journals, but they should not do it in public.
This is a book that tries to prove a big idea, and offers some evidence that is fascinating and new. Most notable are the charts showing the Malthusian world, with its "iron law of wages," and the rise that begins around 1800. But the quarry the author hunts — proof that culture matters in the creation of national wealth — is not game best hunted in forests of statistics. He spends too much time among his charts and graphs, and there are better ways to make the case.
Bruce Ramsey is a Seattle Times editorial writer.
Copyright © 2007 The Seattle Times Company
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