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August 08, 2007

« Things that Make You Go Ugh | Main | Jurassic School »

Gears 

Dr. Gregory Clark has a new book "A Farewell to Alms" that offers a unique and very interesting explanation of the underlying causes and consequences of the industrial revolution.

The New York Times has a discussion about the book:

Gregory Clark, an economic historian at the University of California, Davis, believes that the Industrial Revolution — the surge in economic growth that occurred first in England around 1800 — occurred because of a change in the nature of the human population. The change was one in which people gradually developed the strange new behaviors required to make a modern economy work. The middle-class values of nonviolence, literacy, long working hours and a willingness to save emerged only recently in human history, Dr. Clark argues.

Generation after generation, the rich had more surviving children than the poor, his research showed. That meant there must have been constant downward social mobility as the poor failed to reproduce themselves and the progeny of the rich took over their occupations. “The modern population of the English is largely descended from the economic upper classes of the Middle Ages,” he concluded.

As the progeny of the rich pervaded all levels of society, Dr. Clark considered, the behaviors that made for wealth could have spread with them. He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer societies to 1800. Work hours increased, literacy and numeracy rose, and the level of interpersonal violence dropped.

Another significant change in behavior, Dr. Clark argues, was an increase in people’s preference for saving over instant consumption, which he sees reflected in the steady decline in interest rates from 1200 to 1800.

Dr. Clark says the middle-class values needed for productivity could have been transmitted either culturally or genetically. But in some passages, he seems to lean toward evolution as the explanation. “Through the long agrarian passage leading up to the Industrial Revolution, man was becoming biologically more adapted to the modern economic world,” he writes. And, “The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality.”

Full story here.

What does this say about today's post-industrial economy?

posted by Kevin Stolarick

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Comments

Richard

Kevin - Great post. I read the book in manuscript form. It is terrific. I strongly recommend it. R

Michael Wells

I'm not an economist and haven't read Clark's book, so I can't comment on it but I like another explanation that talks about the convergence of new behaviors and technologies around 1800. In "The Birth of Plenty", William Bernstein argues that four factors came together to make the modern economy work, starting with the Industrial Revolution:
• Property Rights: Creators must be able to benefit from their creations.
• Scientific Rationalism: The Scientific Method of trial & error, verifying and replicability makes innovation systematic. Innovators must also not fear prosecution for new ideas.
• Capital Markets: Entrepreneurs have to be able to pay to produce more widgets to sell.
• Transportation and Communication: Information and goods have to be able to move rapidly to achieve economy of scale.

Has anybody rebutted this theory? And how does it fit with Clark's ideas?

I am suspicious of the genetic theory for at least two reasons. One is, if it's genetic how did the modern capitalism spread so fast to countries with other genetic lineages? The other is the well known phenomena of wealthy business founders' heirs not having the same skills and behaviors -- the "poor-rich-poor in three generations" syndrome.

tartle

I wrote a blog ( http://snipurl.com/1pc4d )about the birth of the Industrial Revolution in the North West of England. I had just read a book called "Capital and Innovation" which used the records of one families estates in Cheshire to piece together the story of the cultural developments from 1500-1780. The main drivers postulated are the rise of non-conformist religions which meant people stayed in business rather than the Church (of England), the Armed Forces or Administartion. This with the interpretation of land rights meant land stayed in the hands of the "Middle Class" allowing capital to accumulate... in 1771 just around where I live there were 1800 families with £1000+ per year looking for a home. The Spinning Jenny cost around £150,000 to develop and launch... which is the investment of only 50 families over 3 years. In the whole of the North-West there were 5000 business families mainly in engineering.. no wonder Manchester had a head start in industrialisation. The book is fascinating and is another slant on the roots of revolution. (I like the fact the word innovation came into use here circa 1540-50!

Elizabeth

I too am deeply suspicious of this genetic theory. Is there a thriftiness gene out there waiting to be discovered? I certainly hope not. I find the current obsession with finding a genetic basis for behavior to be very distressing. To a large extent, it appears to be basis in a misunderstanding of the science involved. But I am most troubled by the unfortunate underestimation of our capacity (individually and socially) to creatively cope with and adapt to change.

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