Wednesday, April 14, 2010

Blame (or praise) your ancestors

Gregory Clark thinks he knows why some parts of the world enjoy great wealth and others seem permanently mired in poverty. Clark is an economic historian at UC Davis and the author of A Farewell to Alms: A Brief Economic History of the World. As the title suggests, this book is ambitious history, "big history."

I'm not going to try to do much in the way of a short summary. Clark's argument is too rich and too unconventional to subject quick summary. When someone proposes a new way of thinking about human history, we have to work to take it in. Scholars need to argue about the hypothesis; many voices need chip away at the evidence. In time, ideas stand or fall.

Suffice to say, Clark is proposing that in England and Northern Europe in the period 1200-1800 members of the upper classes produced more children than the poor, forcing ongoing downward mobility from the upper classes. This implanted bourgeois values -- thrift, discipline, etc. -- in the general population. These social changes allowed the technical and social innovations we call the Industrial Revolution to result, not as in the past in merely a temporary increase in human population followed by famine, but in the "take-off" that characterizes modern life. The previous long era when economic success led inexorably to overpopulation which in turn destroyed any long term gains in the standard of living is labeled "Malthusian" after the Reverend Thomas Robert Malthus who first laid out this analysis around 1800. Outside northern Europe and its overseas extensions (like us), Clark maintains the phenomenon of upper class high fertility and subsequent downward mobility that created the social prerequisite for a wealthy technical society hadn't happened -- and still hasn't -- so these societies can use modern technology, but this doesn't make for widely shared gains in living standards.

Yes, this is counter-intuitive in more ways than I can list. And also darned interesting. Here's Clark's basic graph of human history:

Note that, in addition to the enormous gains of modern winner societies, there are also modern loser societies. Here's a Clark observation that gives the flavor of the originality and audacity of this book:

Within any society the rich are happier than the poor. But, as was first observed by Richard Easterlin in 1974, rapidly rising incomes for everyone in successful economies since 1950 have not produced greater happiness. In Japan for example, from 1958 to 2004, income per person rose nearly seven fold, while self-reported happiness, instead of rising, declined modestly. It is evident that our happiness depends not on our well-being, but instead on how we are doing relative to our reference group. Each individual -- by acquiring more income, by buying a larger house, by driving a elegant car -- can make herself happier, but happier only at the expense of those with less income, meaner housing, and junkier cars. Money does not buy happiness, but that happiness is transferred from someone else, not added to the common pool.

That is why, despite the enormous income gap between rich and poor societies today, reported happiness is only modestly lower in the poorest societies. And this despite the fact that the citizens of poor nations, through the medium of television, can witness almost firsthand the riches of successful economies. It thus might be that there is no absolute effect of income on happiness, even at the lowest income levels. The people of the world of 1800, in which all societies were relatively poor and communities were much more local in scope, were likely just as happy as the wealthiest nations of the world today, such as the United States.

Since we are for the most part the descendants of the strivers of the pre-industrial world, those driven to achieve greater economic success than their peers, perhaps these findings reflect another cultural or biological heritage from the Malthusian era. The contented may well have lost out in the Darwinian struggle that defined the world before 1800. Those who were successful in the economy of the Malthusian could well have been driven by a need to have more than their peers in order to be happy. Modern man might not be designed for contentment. The envious have inherited the earth.

Not for nothing was economics called "the dismal science" in Malthus' time.

Do I think Clark's evolutionist explanation of the triggers for a successful modern industrial society is true? Apart of the thesis' many counterintuitive elements, many of which Clark addresses exhaustively with massive evidence from pre-industrial records, there is something that doesn't feel quite nailed down here. I hope this book will be subjected to serious academic consideration, even if the entire thesis doesn't hold up. Bold big history deserves big discussion -- even it is not quite as comprehensively explanatory as it aspires to be.

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