Sunday, May 18, 2008

Two Books on Progress: "Farewell to Alms" and "Birth of Plenty"

I recently read two more books on the question of progress that had very different approaches to the subject. The two were William Bernstein's The Birth of Plenty , and Gregory Clark's A Farewell to Alms. (Marginal Revolution had a long discussion on the latter book. It's worth reading if you have time.)

Clark's main argument is reasonably straightforward: Before the industrial revolution, the world's economies were all caught in a malthusian trap: any increase in productivity increased population and drove living standards down. The only (short-term) changes that improved living standards were things that reduced population: war, famine, disease. There was a gradual accretion of technological improvements over time, and something switched over in the 16th or 17th century in Europe (and later elsewhere) leading to a situation in which progress was substantial enough that societies left the malthusian trap, and people gradually became richer. The key according to Clark was that in the malthusian era in England, the wealthy were out-reproducing the poor, causing a general downward mobility, which spread the social mores (and possibly the genes) for more productive behavior more widely there. It's crucial to the argument that in England commerce was the road to wealth, so the values and behavior that were spreading were those that are the foundational for commercial and entrepreneurial success.

Bernstein's story isn't as deep; he's interested in intermediate causes rather than root causes. Bernstein argues that economic growth occurs only when four institutions are all present in a society: property rights, the scientific worldview, access to capital, and high-speed communication. He provides a very engaging account of the history of these institutions, and a plausible argument that they are associated with growth, but the evidence that they are both necessary and sufficient is lacking. As history, I found the book to be very well written. Bernstein depicts several episodes in history quite colorfully: the sprint from the invention of telegraphy in the 1830s to stock tickers in 1867 was wonderful. His evidence that the US victory over Japan in the Pacific was dominated by productivity differences is also convincing. The two nations had roughly equal fleets at the beginning of the war, and the early battles caused attrition to each that were due to the vagaries of fate and individual commanders. But four years later, the Japanese had built two new carriers to shore up their losses, and the US had built sixteen. In smaller ships, the US was outproducing the Japanese at a much higher rate. At that point, fate and individual talent stop mattering

Both authors are concerned with the now omnipresent question raised by Diamond in Guns, Germs and Steel: why in some places and not others; why did those particular countries come out on top, and what could the developing countries do to catch up? Bernstein says that development of the four institutions is all it takes. Of course, prescribing it is easier than implementing it, and the biggest step missing from his argument is evidence that it's possible for a country to decide to take this path and succeed. According to the evidence he marshals, it has only happened in the past when the institutional framework was nearly complete, and the missing ingredients fell into place by happenstance. This makes it sound like an experiment worth trying, if there were a country on the verge of having that set of institutions, and the political ability to make the changes. But it doesn't seem like a prescription that can (or ought to, at this point) be forced on all underdeveloped nations wholesale.

Clark's answer is more pessimistic (and less culturally neutral.) Some countries' citizens work more efficiently than others. Clark carefully rules out the obvious possible causes: differences in available capital or in training. He's left saying that the difference is in the workers themselves, though it "can be firmly established" that the differences "stem from the local social environment". Although Clark refuses to use the word himself, the conclusion he leads you to is that poor countries have lazy workers. It takes more workers to do the same amount of work, and no amount of training or social pressure seems to change that. Employers have tried a number of tactics, and the only approach that seems to work reliably is to expect it to take two or three people to carry out the tasks that would be done by one worker in a first-world country. Clark is unhappy with the conclusion, and doesn't proffer any explanations of root causes.

My conclusion? Progress was a complex event historically, and there are lots more details to learn. In the contemporary world, there are significant differences between those who continue to advance and those who don't, and we still haven't found a recipe for bridging the gap. We know that it's sometimes possible, but we don't know of any interventions that could even be said to be "likely" to work. There are changes that seem to lead to improvements (improving access to markets, increasing protections for property ownership, better telecommunications and transportation infrastructure) but they don't work reliably, and these aren't simple to achieve. They take time and significant effort, and can be derailed in a variety of unpredictable ways.

The only good news for those below the curve is that progress is usually much faster for those playing catch-up (once they start on the accelerating path).


William H. Stoddard said...

I'm somewhat uncertain about the idea that all that's needed is adopting a particular set of institutions, though I'd go for those four as a good set.

In a passage in GURPS Infinite Worlds, Ken Hite gives a quick overview of metahistorical theories, summing them up as Great Men, Great Moments, and Great Motherlands—the key to historical developments being the choices made by key innovators, or historical inevitability ("it steam engines when it comes steam engine time"), or geographic constraints on human possibilies. And I think it looks as if there's a lot to be said for the last. It's more or less Diamond's own theory.

For example, a few years back I did some reading up on the Crusades. And, looking at maps of the Crusader states, I found myself thinking that the borders looked oddly similar to those of Israel—and all of a sudden the Muslim complaint about Israel being a "crusader state" looked less obviously absurd. Then I noticed that there were similar boundaries at the Roman Empire's eastern frontier, and even earlier, the Egyptian client states in the Levant occupied the same territory. And it struck me that the obvious causality was that those were the limits to how far inland you could supply an inhabited area by shipping. So you had a region that was supported by maritime links with large economic powers overseas, and then you had a region that was not, and was dominated by local cultures.

I don't advance that as a proof, of course. I'm not a historical scholar. But it certainly makes me wonder.

recursive.genepool said...

Having not read any of the above book(yet), I would just suggest to look also for a correlation between countries with "lazy workers" and countries with high average mean temperatures, or if you can, try doing anything at all in humid 40C weather, and try later to do that same thing in a nice, cool 22C, and see which is easier.