A UC Davis Economics Professor, Gregory Clark, recently published a book that has created quite a sensation among the professoriate. Catchingly titled “A Farewell To Alms” it takes aim at the question of economic growth: What is the cause of economic growth? Why do some countries make economic progress while other stagnate and regress?
A decade ago, the most popular book on this subject was Jared Diamond’s “Guns, Germs And Steel”. In that book, Diamond argued that the economic success of the West was a product of geography. The West had abundant natural resources, a low burden of disease, etc… Take any other people and put them in Western Europe and America and the same flowering of knowledge, technology and economic progress would have followed.
In “A Farewell To Alms”, Clark explains the economic success of the West differently. He says that it was the culture of hard work, discipline, saving, etc… that emerged in England prior to The Industrial Revolution.
What is new is his argument that this “work ethic” was the product of genetics rather than ideas. Examining births, deaths, income and wealth in England from 1250 to 1800, Clark concludes that the rich, who naturally had this work ethic, reproduced at a far higher rate than the rest of society, eventually fililng the population with a genetically programmed bunch of hard workers (See “Industrial Evolution”, Benjamin Friedman, The New York Times, Sunday December 9).
Well, at least he got half right.
But isn’t the most obvious and plausible explanation that people adapted the work ethic because of the ideas that were gaining sway in the culture from the Scientific Revolution and The Enlightenment?
Copernicus, Galileo and Newton used reason to understand the physical world.
Philosophers like Hobbes and Locke tried to follow their example by applying reason to human affairs and the rational organization of society. Ideas like freedom, equality and happiness were in the air. Economics was a rising field of inquiry with thinkers investigating the causes of wealth and prosperity.
A powerful piece of evidence that this is the case are the contemporary examples of China and India. Is the best explanation of their rapid economic progress genetic? Or is it that new policies opened up opportunities and possibilities that until recently have been blocked, unleashing the enormous energies and aspirations of their populations?
Nobel Prize winning economist Robert Solow echoed these sentiments in a New York Times Book Review review of Clark’s book:
If that is his basic belief, it would seem to be roundly contradicted by the extraordinary sustained growth of China and, a bit more recently, India. Embarrassingly for Clark, both of those success stories seem to have been set off by institutional changes, in particular moves away from centralized control and toward an open market economy.
Is it so hard to believe that ideas have consequences that we must always look for physical causes?