Greg Clark‘s book could easily be called “An Inquiry into the Nature, Causes, and Effects of the Industrial Revolution.” But that’s a boring title, unfit for the world-altering subject matter. So instead the book’s titled A Farewell to Alms, which sounds like the title of an adventure story — which of course, it is.
A Brief Economic History of the World
A Farewell to Alms focuses on three questions: What caused the Industrial Revolution? What were the Industrial Revolution’s positive outcomes? And what were the bad effects of the Industrial Revolution? Answers to these questions follow below.
1. What caused the Industrial Revolution
Clark’s analysis is generally limited to the past 800 years, though on occasion he reaches back as far as the Roman Empire. Thus, the causes that preceded the Christian era are not addressed. Books such as Before the Dawn or potentially Guns, Germs, and Steel better serve to lay the deep-foundations for why some places have more advanced civilization than others.
Thus, A Farewell to Alms focuses on comparing Europe, China, and Japan. In the centuries preceding the Industrial Revolution both the European states and the Chinese empire experienced territorial growth, through the use of navies to settle distant colonies or the settling of agricultural lands by Han under the late Ming and the Qing. Technologies improvements allowed Japan to outpace Europe during this time, in spite of being confined to a few islands.
| Period | England | Japan | China |
| ca. 1300 | 5.9 million | 6 million | 72 million |
| ca. 1750 | 6.2 million | 31 million | 270 million |
Clark argues that by about the time of the American Revolution, an Industrial Revolution was inevitable in all three cultures. Europe, China, and Japan were all undergoing population growth limited by starvation. This meant that there was a constant downward selection, meaning that even if there was no variation in thrift, prudence, and other virtuous traits at the beginning, these traits would be selected over time. (Clark does not go into the genetics, but these traits are highly heritable).
Higher European birthrates, according to Clark, just made this process faster in the West than the East.
Using literacy rates and interest rates, Farewell argues that China and Japan were on the same path towards industry, but were a few centuries behind.
2. What good came of the industrial Revolution
The first casualty of the Industrial Revolution was the landed class. Agriculture rent as a portion of the gross domestic product has plummeted throughout the west. While this started before the Industrial Revolution and indeed may be a cause of it, return on capital and return on skills also fell in this period.
There has never been a better time to be a propertyless worker with minimum marketable skills than right now, at least in the industrialized world.
Similarly, Industrialization led to massive building subsidies in much of the world. India benefited, for instance, from Western technology, capital, infrastructure, telecommunications, and management in spite of having a workforce much less efficient than Europe’s. Similarly, most of the benefits of the industrial production of England at the start of the revolution went to industrialized countries — such as the Netherlands and the United States — and the customers of the factories, rather than the Industrial Magnates.
Over the long run, economic growth has been a major force for lessening inequalities in the industrialized world since the Industrial Revolution.
3. What were the bad effects of the Industrial Revolution?
Some countries have been harmed by the Industrial Revolution. Clark emphasizes here the misery of some states in sub-Saharan Africa. For them, the major consequence of the Industrial Revolution is that modern medicine low allows people to be kept alive at a lower level of subsistence than was formerly the case. Drugs, in other words, substitute for calories.
A Farewell to Alms is written at a level appropriate for an introductory, graduate-level seminar outside of economics. The book is denser than most, similar to The Blank Slate in its density of coverage. still, it’s not an economic ext, and the “technical appendix” doesn’t go much beyond algebra.
I just started reading this book over the weekend. It is fascinating.
I'm about a third of the way through it. It is a really interesting read. However, Clark does say some pretty wild things. I'm not going to dismiss him as a crank, but his position on (economic) institutions, for e.g., seems to be at odds with most of his profession.
Here's Robert Solow defending institutional economics:
Clark's pessimism about closing the gap between the successful and less successful economies may derive from the belief that nothing much can change unless and until the mercantile and industrial virtues seep down into a large part of the population, as he thinks they did in preindustrial England. That could be a long wait. 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.
http://blogs.ft.com/crookblog/2007/11/solow-on-clark.html
Bryan Caplan's series of reviews / posts in response are well worth the read:
http://econlog.econlib.org/archives/2007/09/a_farewell_to_a.html
Also, institutional economics explicitly recognises the role that norms and values have in gestating and supporting institutions. For instance, to quote North et al from their paper, “Order, disorder and economic change”:
“The place to begin is the beliefs held by the members of society, because it is the beliefs which translate into the institutions which shape performance. Shared mental models reflecting a common belief system will translate into a set of institutions broadly conceived to be legitimate.”
Right — I assume that's the Skeptic Magazine stuff he mentions in the talk. Not familiar with that at all, I'm afraid. I was mentioning him really as someone who melds science and economics with perhaps more success (though perhaps less verve) than Clark.
He actually accuses the economics profession of peddling un-provable idiocies, myths that institutions affect growth.
For instance, have a look at this conversation between Clark and James Robinson of Harvard.
Clark: Jim's statement is a spirited summary of economists' beliefs, but not an appeal to any compelling facts. It is a statement of faith, a Nicene Creed. It shows the yearning, the longing, of economists for eventual salvation through institutions. The facts, however, are that the Industrial Revolution was the result of cultural changes in England, not better incentives. By 1800 in successful economies people had embraced “thrift, prudence, negotiation, and hard work.” In most failed economies it is the failure of people to embrace these bourgeois values that explains economic failure.
http://online.wsj.com/article/SB119135743412446729.html
Are you familiar with Michael Shermer? He works along similar vectors, but is less anti-economics and doesn't rely on such a contentious reading of Malthus. There's a good recording of a recent talk at Cato on their website here:
http://www.cato.org/event.php?eventid=4297
Presume that the Greens are correct, and we can no longer sustain a high energy civilization: do we now return to the conditions described by Clark? Is there any way to sustain an industrial civilization or is the Industrial Revolution a mere blip, like the Black Plague?
“An identical argument could have been made against the interstate highway system. Reductio ad Hitlerum doesn’t impress me.”
I’d love to see a valid argument that leads from interstate highways to death camps.
I think maybe you are just bomb throwing here to get my gander up. You called for eugenics and death panels, but you have made no real defense of that.
So, four questions:
1) Do you support the USGOV implementing explicit eugenics programs?
2) Do you think that a guy from South Dakota or a guy from Wisconsin neither of whom went to the “correct” Ivy league schools will be on the receiving end or administrating end of a USGOV eugenics program?
3) Do you support the USGOV implementing explicit Death Panels?
4) Do you think that a guy from South Dakota or a guy from Wisconsin neither of whom went to the “correct” Ivy league schools will be on the receiving end or administrating end of Death Panels?