02 October 2008

What I'm Reading

A Farewell to Alms: A Brief Economic History of the World, by Gregory Clark. A fascinating new entry into the debate about (1) why there was an unprecedented explosion of wealth around 1800AD, and (2) why some places got so much wealthier than other places. Clark's intriguing suggestion is that culture--not, e.g., institutional structures or geographical features--is the most important single factor explaining both (1) and (2).

A remarkable passage from the book:

". . . much of modern quantitative economic history has been a search for empirical confirmation of his [Adam Smith's] vision of growth. These empirical studies of past societies, however, rather than confirming Smith's hypothesis, systematically find that many early societies had all the prerequisites for economic growth, but no technological advance and hence no growth. [. . .]

"Economic historians thus inhabit a strange netherworld. Their days are devoted to proving a vision of progress that all serious empirical studies in the field contradict." (pp. 146-7)

And later:

"Indeed, based on the Smithian conception, it is not clear why economic activity has not completely ground to a halt [in today's many countries with "high taxes on economic activity, combined with generous provision of income and services independent of effort"]." (p. 150)

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