Economic history: The roots of growth

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Brad DeLong examines a study that places the origins of the Industrial Revolution in fifteenth-century Europe.

A Culture of Growth: The Origins of the Modern Economy

Joel Mokyr Princeton University Press: 2016. ISBN: 9780691168883

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Fine Art Images/Heritage Images/Getty

Adolph Menzel's 1873–75 The Iron Rolling Mill (Modern Cyclops).

What is modern economic growth? Going by the best available measure (it might be more honest to say 'guess'), today's average material living standards and economic productivity levels are some 20 times what they were in the agricultural era (about 6000 BC to AD 1500). And the efficiency with which humanity uses technology and organization to transform resources into useful commodities is currently growing at 2% per year — perhaps 100 times the rate common before the Industrial Revolution.

Some think that the current rate will slow down. But very few see it coming to a rapid end, unless there is a nuclear war or an equivalent catastrophe. The slowing will come as low-hanging fruit is picked and resource scarcities bite; but resource exhaustion followed by crash, as described in Jay Forrester's 1971 World Dynamics (Wright-Allen Press), is likely only in systems in which scarce resources are not rationed by high prices.

What set the stage for industrial expansion and unleashed the virtuous spirals that drive growth? One school of thought sees the causal origins of modern economic growth in Europe as the emergence, from the late fifteenth to the mid-eighteenth centuries, of an elite dominant group focused on applying the cumulative increase of knowledge to human betterment. This school has plausible arguments, but is far from being a rough consensus, a majority opinion or even a plurality. Now one of its leaders, the economic historian Joel Mokyr, has written A Culture of Growth — his most successful brief thus far.

The axis around which Mokyr's argument turns is the “Republic of Letters”: the “market for ideas” that spanned Europe from the era of exploration to the end of the Enlightenment. In it, the continent's intellectuals competed for reputation and patronage. Reputation was gained by creating and disseminating ideas, valued according to their empirical validity. Most patronage followed a beneficiary's reputation, not his or her prowess at flattery. Meanwhile, the political fragmentation of Europe created bolt-holes for rebels whose views offended their rulers — often gaining them the patronage of those rulers' potentially hostile neighbours. Ideas leaked back across borders, so rulers could not suppress thought even within their own realms. This created an ideological unity that spanned the continent among intellectuals of the 'republic'.

In Mokyr's view, the Dutch humanist Desiderius Erasmus launched the republic, in the late fifteenth century. Later, the English philosopher Francis Bacon focused on the value of empirical testing, or “experimental philosophy”, as the best way to generate knowledge. His utopian 1627 New Atlantis provided a template for those who aspired to join the 'republic' — and was the first key that would unlock the door to modern economic growth. The emphasis on mathematics as an analytical tool, championed by Johannes Kepler, Galileo Galilei and Isaac Newton, was the second key.

“Perhaps 10,000 educated Europeans thought of themselves as participants in the search for useful knowledge.”

But more important than any individual — even Newton — was that perhaps 10,000 well-educated Europeans thought of themselves as participants in the search for useful knowledge. Knowledge flowed between them and the tens of thousands of “trained engineers, capable mechanics, and dextrous craftsmen”, the (rather few) industrialist-inventors such as Josiah Wedgwood, and the (rather more) entrepreneurs who had little abstract interest in science or innovation, but found that in a competitive market economy, the dynamic few drag along the inertial many.

As Mokyr shows, no other civilization had ever developed a set of institutional practices — such as academies, or disputes resolved by appeals to experiment — that had been adopted by an intellectual cadre so effective at generating incentives to create, discuss, modify, test, disseminate and use ideas. Before 1500, European intellectuals had not outstripped their counterparts in China, India or the Arab world in terms of numbers, or of ferocity in knowledge acquisition. (Rather the reverse, as English words derived from Arabic, such as algorithm, show.) Yet by 1800, Europe was far ahead in the amount of valid scientific or applicable technological knowledge generated over those three key centuries.

Not all economic historians agree with Mokyr's analysis. Robert Allen's impressive The British Industrial Revolution in Global Perspective (Cambridge University Press, 2009) places the origins of the Industrial Revolution in the British Midlands in the eighteenth and early nineteenth centuries. In Allen's view, the only route to modern economic growth required an array of elements never seen together before in Britain. Among them were high, imperialism-driven wages; cheap coal next to an ample canal network; and an open trading network allowing for a vast expansion of textile exports.

There are other well-argued views. Michael Kremer holds that the roots of economic growth lie in the drift of the long run of history: growing populations intent on improving productive efficiency added to the accumulated knowledge behind technological innovation, adaptation and deployment. Avner Greif, Daron Acemoglu, Simon Johnson and James Robinson maintain that a virtuous circle of growth was set in motion by British institutions that emerged between 1500 and 1800, making economic cooperation and exchange more attractive than extracting wealth at the point of a spear (or a writ). It might have been luck. Or it might have been a combination of factors that do not correspond neatly to how subdiscipline-focused historians and social scientists have conceptualized the issues.

Is Mokyr's argument correct? For me, the balance of probabilities favours Allen's explanation above. Yet I do not think there will be consensus on this issue. And I would not be greatly surprised if I were wrong, and Mokyr's brief — for it is a brief, and not a balanced presentation of the live possible theories — turned out to be the most broadly correct analysis.

Mokyr concludes with a broadside. He accuses most of us concerned with the causal factors of the Industrial Revolution of taking too narrow a view of what it actually consisted of. To him, the mechanisms through which early European intellectuals affected technological progress are deeper and more complex than simply, 'How much science was needed to build a spinning jenny?'. Industrialization also heralded waves of science; they grew in tandem. Ultimately, without the impetus of science, economic growth would have fizzled out after 1815. A Culture of Growth is certainly making me rethink.


  1. Report this comment #68871

    Michael Lardelli said:

    It is not actually true to state that, "Some think that the current rate will slow down. But very few see it coming to a rapid end, unless there is a nuclear war or an equivalent catastrophe. The slowing will come as low-hanging fruit is picked and resource scarcities bite; but resource exhaustion followed by crash, as described in Jay Forrester's 1971 World Dynamics (Wright-Allen Press), is likely only in systems in which scarce resources are not rationed by high prices."

    There are actually many of us out there who believe that economic contraction (a "crash") must occur in a resource-limited future, especially when that most important resource – net energy – is involved. Possibly De Long lives in a self-reinforcing and self-validating intellectual circle of economic theorists where most people he talks to believe that the price mechanism can allow humanity to escape from the limits placed on the human species inhabiting a finite planet? The idea that growth can continue in the face of resource declines is another way of framing the idea that we can decouple economic growth from environmental impact. This is an idea that has, unfortunately, been promoted in Nature but that is obviously false. This is demonstrated conclusively in the following article (that, I have been told, was submitted to Nature but rejected). Once again, Nature ignores inconvenient truths and publishes texts written by economists that contradict physical laws:

    "Is Decoupling GDP Growth from Environmental Impact Possible?" by James D. Ward , Paul C. Sutton, Adrian D. Werner, Robert Costanza, Steve H. Mohr, Craig T. Simmons

  2. Report this comment #68877

    Roger Albin said:

    DeLong's characterization of Robert Allen's work is incorrect. Allen's book is devoted in part to the issue of why industrialization arose in Britain, as opposed to another part of Europe. He is clear that he regards the general intellectual culture of western Europe as crucial, not very different from Mokyr's point of view. Allen remarks specifically of the steam engine that its development was predicated on scientific work performed in the 17th century. An even more important and convincing contributor to this discussion is Margaret Jacob, whose interesting series of books directly address this issue. In prior books, Mokyr has been careful to single out Jacob's work as supporting his conclusions. There is actually considerably more consensus on this point that DeLong's comments suggest.

  3. Report this comment #68891

    James Biscoe said:

    The roots of economic growth lie in the agricultural revolution which preceded it. The results of agriculture becoming much more productive were that capital accrues to landowners and resources (land and labour mostly) could be redirected to other economic enterprises. The same occurred for instance in Japan. Why history is not used as a guide to promote economic development in other countries remains unclear.

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