Friday, December 21, 2007

Vacation reading: Gregory Clark's A Farewell to Alms

A Farewell to Alms: A Brief Economic History of the World



Clark's book is an ambitious look at world economic history. The first half of the book is an excellent discussion of the Malthusian trap, in which increases in standard of living only lead to increases in population, which then (over generations) lead to declines in standard of living. The only stable point of this dynamics is at subsistence-level income. I need to think more about it, but I suspect Clark overstates the case for how well the Malthusian model applied in early human history. My impression is that there were wide disparities in levels of development that can't be easily explained in that context.

The second half of the book concerns the industrial revolution, and advances his (controversial) thesis that one of the main causes for this qualitative shift in the rate of human advancement was genetic. By analyzing historical demographic data he argues that by 1800 almost all residents of England were descended from previous generations of wealthy strivers -- reproduction rates correlated highly with family wealth in the previous Malthusian era, and the wealthy literally replaced the poor over time (less favored offspring of the rich often become the poor of future generations). Therefore, traits which are positive for commerce, long term planning, wealth accumulation, market organization, etc. had become much more widespread thanks to natural selection. I find this effect plausible -- it is consistent with recent genetic data on accelerated human evolution -- but am not as convinced that it dominates over cultural factors (at least, the two would work hand in hand). His case that it was a priori likely for England to be the first to have an industrial revolution doesn't seem particularly convincing (see Kenneth Pomeranz's Great Divergence for another set of arguments based on geography and natural resources).

Clark makes the interesting connection between modern man's descent from the strivers of previous generations and the hedonic treadmill: our happiness seems to correlate more with our position relative to perceived peers than with absolute levels of wealth.

I like the following quote from the final chapter of the book. I always found it very amusing that modern economic models can't do much better than to treat technological change as an exogenous, stochastic variable. (Yes, I know about Romer and growth theory, but would lump that in the "can't do much better" category.)

God clearly created the laws of the economic world in order to have a little fun at economists' expense. In other areas of inquiry, such as the physical sciences, there has been a steady accumulation of knowledge over the past four hundred years. Earlier theories proved inadequate. But those that replaced them encompassed the earlier theories and gave practitioners greater ability to predict outcomes across a wider range of conditions. In economics, however, we see instead that our ability to describe and predict the economic world reached a peak around 1800. In the years since the Industrial Revolution there has been a progressive and continuing disengagement of economic models from any ability to predict differences of income and wealth across time and across countries and regions.

2 comments:

Roger Bigod said...

I know the book only from the summary and discussion on DeLong's site. I have noticed that ignorance of the primary sources has rarely
prevented me from commenting on a subject.

It changed my thinking about the Malthusian limit. I'd been used to thinking of this as a future threat the good parson was warning about. I had to revise my model to think of it as a good first approximation to the human condition for most of history. But the departure from the approximation
is very important. The interesting bits of history represent resources taken from the lower
orders and handed over to scribes, priests and artisans.

The idea that the British were pre-evolved for the Industrial Revolution seems unsound. The same conditions prevailed throughout Europe, and in
other parts of the planet at different times. It's also naive to assume that selection pressures were uniform in the population and favored what we think of as middle-class sobriety.

I think one testable example is the Borderlands history. For 500 years or more the area between England and Scotland wasn't reliably controlled by either central government. The culture was characterized by dependence on family and clan, high levels of physical violence and resentment of central authority, including religious authority. At one point some of the males signed a document of religious dissent using their blood and commemorated this by wearing a red cloth around their necks, a meme which defiantly survives. There's some evidence that personality traits associated with submission to authority have a
genetic component (paper in Science back in the 90's). If and when the genes are specified, it will be possible to look at the alleles in the Borderlands folk and their descendants in the West Virginia hollows.

I speculate that there were two processes going on. One was straightforward selection. Rule-following people are at a disadvantage
in a situation of social disorder. Also, people would migrate in and out depending on their personality traits, some of which had a genetic
basis.

Obviously, Borderlands culture does not predispose to high SAT scores and the motivation to pursue postgraduate degrees. But if the world's
great economic and physical support systems fail, the folkways of the hollow might be hardier than those of the great conurbations..

dave.s. said...

comment by dave.s.
I haven't read Clark's book, but I remember that, when I was 11, girls were dog-meat, and by the time I was 12, I was enormously interested in the bumps appearing under their blouses, and I bicycled to Palmer's Drug Store every month when Playboy came out to look at the new issue. And I felt a combination of shame and excitement about photos of naked 20-year-olds which I think has some commonality with people's feelings about publications which allege heredity for human social history.

Not that there's anything wrong with that! But, red-heads from Neanderthal matings, and Jensen and Murray and pop evo-bio notions on dating sites - it does sort of run together.

I just finished How The West Grew Rich, by Rosenberg and Birdzell, Basic Books 1986. Good book. Worth a look, covers a lot of the same ground - doesn't feel any need to hypothesize 'good stock'. They talk about institutions, how to raise capital, invention of new types of sailing ships, insurance. They talk about why the mandarinate kept China (surely everyone has noticed that Chinese people are AT LEAST as smart as English people?) from taking off. As a professor with access to a swell university library, I recommend that you search it out.
All that said, Clark is personally interesting. My father's mother was English, scrabbling poor with pretensions, and had a savings / education ethic ('you NEVER spend your capital') which got her through the teens and twenties and the Depression. And her family had notions of descent from swells - the old younger sons of nobility business.

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