Yesterday I finally finished Kenneth Pomeranz's The Great Divergence: China, Europe, and the Making of the Modern World Economy. This was no easy read, even at only ~300 pages. Will Ambrosini characterized Greg Clark's Farewell to Alms as a book length response to The Great Divergence, and I can see where he is coming from. Contra Clark and the dominant consensus in economic history Pomeranz marshals the evidence which suggests that China & Japan were basically as wealthy as western Europe during the 18th century, and that many of the presumed necessary preconditions for the economic liftoff which we term the Industrial Revolution after the fact also held for eastern Eurasia. But Pomeranz has his own solution for why the West, and in particular England, rose to prominence when it did: the location of coal near the core economic regions combined with the massive input of land due to the opening up of the New World.


Those of us who are a bit younger no doubt encountered a fair amount of revisionist history. Instead of a "Whiggish" vision where civilization ascended in a linear fashion from Greece, to Rome, to the Middle Ages and onto the culmination of the Anglo-American culture, we were reminded that during the medieval period the West was much less than the rest, while even during the height of Imperial Rome Han China flourished with relative parity. Instead of these impressionistic generalizations the central figures in economic history, such as Angus Madison, emphasize that the revisionism might have been true in economic terms in 1000, but not by 1500. In the year 1000 western Europe was a rather poor region compared to the Islamic societies or China. By 1500 the conventional wisdom seems to be that much of western Europe was at least at parity, and likely one of the wealthier regions of the world on a per capita basis, if not the wealthiest. Because of the raw size of China and India Asia was still the economic center of the world, but by 1500 Europe, in particular its west, was no longer marginal. Between 1500 and 1800 western Europe might have been the wealthiest and most powerful region of the world on a per unit basis, but non-European powers could still operate on the same playing field, as evidenced by the need for European powers such as Britain and France to curry favor with Asian potentates to obtain trading rights. During the 19th century this changed; what was a difference in wealth on the margins transformed into one characterized by a qualitative chasm (symbolized by the maxim machine gun).

The Great Divergence tries to throw some cold water on the metrics used to make the case that Europe was already wealthier, and more well positioned institutionally, to achieve liftoff at the end of the 18th century. It is obvious that Pomeranz is correct when he seems to imply that there are apples to oranges comparisons; much of eastern Europe remained quite poor, so it was not Europe as a whole which was wealthy (there were even extremely large variations within nations, such as the Rhineland vs. eastern Prussia). Additionally, China was characterized by a great deal of the regionalism so that the most dynamic subunits of that civilization are more usefully compared to with France, Britain and the Low Countries, the most advanced subunits of the greater European economic region. All that being said, only someone who is rather well versed in the literature in economic history could appreciate much of the material that Pomeranz references throughout the narration; to a great extent The Great Divergence was argument by filibuster. Those who are familiar with the full body of the literature may be able to evaluate the power of the argument, but for those of us who are relatively uninformed we are simply confronted with an undifferentiated mass of data.

Some of the data and insight was very useful. For example, cultural historians often attempt to claim that one reason that the Chinese imported so little from European nations was because of their own superior attitude. In other words, the dynamics we observe were driven by variations in taste. This is an entirely plausible argument, and one which I accepted. Entire swaths of scholarship are based for example on the contempt which the Chinese government directed at European trade delegations and their wares. Pomeranz makes the argument that the imbalance in trade was a function of the fact that China was re-monetizing their economy with silver, and Europeans were there to provide silver through the opening of New World mines. The difference in value of silver in China and the rest of the world naturally resulted in an arbitrage opportunity so that the Middle Kingdom was a magnet for this metal; naturally the Chinese had to pay for silver with products, ergo, the export in finished goods such as porcelain. This economic argument does not negate the cultural explanation, one might admit that cultural and economic trends often dovetail or play off each other synergistically, but this sort of datum is gold in trying to understand how history plays out.

With that, I'll open up the comments to those who know the literature and what their opinions might be.

Labels: Economics, History

Made in America? The New World, the Old, and the Industrial Revolution. Greg Clark is one of the authors. Robin Hanson has the summary up.

Labels: Economics

A few weeks ago Steve mentioned Raymond Crotty's When Histories Collide: The Development and Impact of Individualistic Capitalism. When I clicked through the link the cover looked familiar; turns out that I'd seen it at my local used book store and had passed on it since I already had a backlog of economic history I was working through. But Steve's post piqued my interest, and Greg also had mentioned Crotty's lactose tolerant-centric theory of history. So I purchased it, and read it over the past week. Even including the foreword and preface this is a short work, around 300 pages, but When Histories Collide is relatively data dense and at times almost inscrutable to anyone not stepped in Irish agricultural economics & cliometrics. The text has a disjointed feel, and Crotty's son who had to edit the work after his father's death notes that he placed the Irish chapters near the end of the narrative despite the fact that they would likely have been interspersed through the text seamlessly if his father had his way. Though the author's death before the final revisions to When Histories Collide might have dampened its public reception somewhat, I have to observe that Crotty's swan song is laced with far more quantitative econometric detail than Greg Clark's Farewell to Alms. Combined with the constant algebra of factors of production and implicit references to comparative statics, I believe that When Histories Collide simply lacks the literary elegance to have had any mass market appeal. That being said, who cares about mass market appeal? I don't. When Histories Collide is larded with just the type of data which keeps you turning the page.

Of course, data isn't the only item on the menu here, as an economist Crotty brings some noticeable theoretical baggage. His central thesis is that the rise of individualistic capitalism in West Central Europe¹ is sui generis, as distinct from hunter-gatherer, pastoralist and Asiatic modes of production (he uses the term riverine agriculture, but it's pretty clear that most people would recognize this as Asiatic mode of production). Additionally, there are a few other types, such as the slave based individualistic capitalism of the ancient Mediterranean, and the elite capitalism of post-colonial states (e.g., Latin America). Crotty's macrohistorical model as it applies to development economics is rather straightforward: individualistic capitalism emerged in a particular place and time, and the Great Divergence is a byproduct of those conditions. These means the export of this system of economic development and productivity is going to be problematic; the societies of East Asia are a particular exception because they were not colonized and so their indigenous cultural systems were not extinguished. Rather, these societies integrated Western ideas and tools in an eclectic manner in keeping with their cultural biases and strengths. Crotty labels the East Asian Tigers as "collectivist capitalism." From what little I know of East Asian economic production I don't think this is an unfair characterization, though globalization is making these typologies less relevant when transnational companies span civilizational boundaries.

Despite the editing which places the Irish material toward the end of the book it is quite clearly foreshadowed throughout the book. It is Crotty's deep case study which illustrates just how sui generis individualistic capitalism is, and how difficult, nigh, impossible, it is to export it to colonized societies which are habituated toward a different mode of production (Ireland leans towards pastoralism). Ireland, being the British nation's first large scale colony, and the longest experiment in such a relationship (lasting from the Tudor period down to 1921), is therefore ideally placed to illustrate the general dynamics. Additionally, a few particularities of Ireland such as its proximity to the colonizing country and its later assimilation into the European Economic Community bring into sharper focus the causal factors behind its deviations from the standard post-colonial narrative.

There is unfortunately an awkward problem; the Celtic Tiger. Crotty died in 1994, and he was clearly writing until the end as his statistics are up to date as of 1992. But it is also obvious that a great deal of the material draws upon the author's nearly 40 years of scholarship in the field of agricultural economics, so the echo of the Ireland of 1960 looms large. From what I can tell it seems that Crotty assumed that the economic robusticity of the Ireland of the second half of the 20th century was a credit driven mirage which would ultimately founder on the lack of institutional support; and it seemed that he believed he saw it already occurring by the early 1990s. I am well aware that there is a great deal of debate about Ireland's economic growth and how to interpret the various indices. As with much social science there is plenty of revisionism which attempts to dig out more nuance from the "first look" impressions generated by something like per capita income. I'll grant that on the margins there is something to debate, but I think it's pretty clear at least over the past 15 years Crotty was just not right about Ireland and its inability to join the other nations of Europe on their level and terms. The foreword for When Histories Collide was penned by a colleague of the author in 2001; and I felt his assessment of the Irish economy since Crotty's death was telling, as he made only the most perfunctory attempts to defend his friend's doom & gloom prognostication. It seemed implicitly to be suggesting that prediction is less critical in a work of such grand scope as When Histories Collide, at least over normal human time frames, and the insights which one might gather are still worth an examination of the full structure of the argument.²

I agree with this. Because of my general skepticism of the predictions made in When Histories Collide I will avoid detailing the Georgist prescription which Crotty offers as his ultimate plan for how to ameliorate poverty. But, I want to highlight one more systematic flaw: a general tendency toward historical sloppiness. This seems to be a major feature of economic history in general; the preoccupation with macroeconomic forces tends to sweep aside details of history to the point where falsity and misrepresentation regularly creep in. John Nye's War, Wine, and Taxes: The Political Economy of Anglo-French Trade, 1689-1900 is a nice exception to this general rule, but I suspect the rather narrow purview of this work explains the tight fidelity to reality as opposed to the standard stylized historical sketches borrowed from high school textbooks.

I will offer two examples which illustrates the weakness in the area of historical details which plague When Histories Collide. First, Crotty offers a model for the emergence of ancient Mediterranean civilization predicated on the synthesis of Indo-European pastoralists with indigenous Phoenician agriculturalists. What's the problem here? Phoenicians were a specific group of Semitic speaking peoples who flourished in what is today's Lebanon. As a colonizing people they do not pre-date ~ 1000 BCE. We know that Greek was spoken in Greece by ~1500 BCE; and likely Indo-European languages were extant on the northern shore of the Mediterranean well before 1500 BCE. Additionally, note that I stated on the northern shore of the Mediterranean, Phoenician colonies as it happened were almost all planted in non-Indo-European areas, and mostly on the south shore. By Phoenician Crotty actually means the diverse pre-Indo-European speaking substrate of the northern Mediterranean which the Greeks, Latins and other assorted peoples replaced and assimilated (some of these pre-Indo-European speakers remained down to the Roman period, e.g., Iberian).

Of course, I will admit that to some extent the error doesn't truly undermine the structure of the author's thesis: that there was a synthesis between these two broad cultural types (whatever you may term them) which resulted in the civilization of the Mediterranean. The second argument is specifically about the economic motor of the ancient Mediterranean, and I believe it to be a more telling error. In short, Crotty argues that the creativity of ancient Mediterranean capitalism was contingent upon the ubiquity of slavery. Slavery was a normal institution before the modern period; all societies had some forms of slaves, but different societies practiced slavery to different quantitative extents. The cultures of the ancient Mediterranean, specifically Greece and Rome, as well as the more recent race-based slave societies of North America and the Caribbean, are exceptional in the centrality of slavery in terms of economic production (in many societies slaves are luxuries or a trivial demographic). Though slaves were only a minority in the Roman world (around 25% of the population) Crotty argues that their economic productivity was the engine which drove the efflorescence of ancient civilization. Slaves could not consume the fruit of their own labors, so their productivity so sequestered freed up ancient elites as surplus for leisure and warfare. The structure of the argument here is plausible, but the problem is when Crotty makes the argument about where the slaves came from: the steppe. Here Crotty his going back to his history where Indo-Europeans and Phoenicians came together to produce Mediterranean civilization; the steppe is a region where the need for labor is minimal because of the pastoral lifestyles, it is land that is limiting, and so the excess population is driven into the cauldron of civilization. Here, they are enslaved and their productivity drives Mediterranean society. The problem is that it seems to me totally implausible that the steppe had a large enough population that it could ever have supplied enough human beings to replenish the constantly dying 1/4 of the Roman Empire's population which consisted of slaves. As a point of fact it seems that Northern Europeans, especially those from beyond the limes, were the primary exogenous source of slaves. But, I also have read that the Romans bred slaves on farms in Sicily, so there was also endogenous production. Crotty's argument is that when the Roman Empire reached its natural limit and was no longer sucking in slaves through wars it naturally collapsed because of the diminishing of its economic engine. I don't believe this, it oversimplifies some real complexities of the period between Augustus (the early Empire) and Late Antiquity, when the classical state collapsed. The consensus scholarship seems to be that the Roman Empire recovered from a near collapse in the 3rd century in the 4th, and though society was reconstituted so that we could see the vaguest of outlines of the medieval system already in the post-Diocletian period, it may be only that repeated exogenous shocks in the 5th century succeeded where those of the late 2nd and 3rd failed. Instead of a historical deterministic process, what we have is historical contingency which would have lead to a fall probabilistically at some point.

I've harped on the negative points of the book to this point because I don't want people to purchase this assuming that they'll get a literary tour de force on the scale of Guns, Germs and Steel; rather, When Histories Collide exhibits all the strengths and weaknesses of Farewell to Alms magnified. But what are those strengths? Here's a sample of what I think is worth reading through all the issues above for:

...Very roughly, the same pastoral resources will, in a year produce 400 gallons of milk (the yield from a mediocre cow) or 250 lbs. liveweight gain from a bullock, or ox.

The milk, which weighs roughly 10 lbs. per gallon and has about 12 percent dry matter content, gives 400 X 10 X 0.12 = 480 lbs. of digestible dry matter. The bullock liveweight gain will convert into carcass at around 55 lbs. carcass per 100 lbs. liveweight. The carcass has about 70 percent meat and fat (the balance being inedible bone), of which the dry matter content is about 50 percent. The bullock liveweight gain gives therefore 250 X 0.55 X 0.70 X 0.5 = 48 lbs. (approx.) of digestible dry matter

Thus the acquisition through natural selection under these crop-less circumstances of the ability to consume milk from other species beyond infancy and, indeed, as in the case of the Tutsi in Rwanda, to live on an almost exclusively milk diet, made it possible for more people, therefore more efficient and powerful people, to live on given pastoral resources.

Consider that. The milking of cows can increase the agricultural productivity of a unit of land by an order of magnitude! (assuming that the land is not arable) No wonder lactose tolerance swept across many populations so fast! Crotty identifies three general cow-cultures:

1) The pastoralist model

2) The South Asian model, the "apotheosis of the cow"

3) The European model; in particular, the model associated with the rise of individualistic capitalism

The pastoralist model is pretty straightforward; man have cow, man milk cow, man defend cow from enemy. This way of life puts a premium on land but requires little labor or capital inputs; you put the cattle out to pasture and make sure that they do their thing and protect them from predators and rustlers. Crotty presumes that this was the culture which arose among the Proto-Indo-Europeans on the steppe, and it is what exists among the Nilotic peoples of Africa, and also was the norm among the pre-modern Irish. The apotheosis of the cow doesn't need much description, everyone knows that South Asians (Hindus and affinal groups specifically) do not consume beef and hold the cow to be sacred. The standard economic explanation here is that cows are more efficient bundles of calories integrated over time through milk extraction than as a one time item for slaughter. But there's a twist to this in India which I only know because of Marvin Harris' Cows, Pigs, Wars, and Witches: The Riddles of Culture: the cows which wander the cities and countryside of India are generally cows, that is, female. Where are all the bulls? They're being used as draught animals! South Asian agriculture is obviously extremely intensive in labor, and cattle serve the role that water buffalo do in the moister regions of Asia (including the margins of South Asia). Crotty doesn't mention this, but I think that's another part of the puzzle. And it fits in which another datum which plays a role in the thesis of how and why individualistic capitalism arose: Indian cows need to have their young reared to give milk. Obviously you couldn't kill the calf which was the reason for the milk production.

The final cattle culture is that of Western Central Europe; the region of northern France, the Low Countries and Western Germany characterized by 3-crop rotation and draft animals with mouldboard plough by the medieval period. I can't do justice to the detail of Crotty's argument here, and to some extent I don't think it all fits together, but there are many intriguing pieces. Lactose tolerance comes into the picture because when the Proto-Indo-Europeans brought the cow and their ability to digest milk into Central Europe they opened up the possibility for a new lifestyle. Because of the low agricultural productivity in this region in regards to cereals, using these crops as fodder for cattle was attractive. Middle Eastern cereals were simply not well adapted during the early phases to the Northern European climatic regime. Additionally, low quality or unpalatable crops like oats were sometimes the only option, and these were more productively fed to cattle to convert into more palatable nutritional items (whether as milk or meat). But there's a problem here: European winters mean that there's no pasturage to keep the cattle alive through the winter. So fodder is of the essence. Because this is relatively limited Europeans would have to kill most calves so as to maximize the feed for the adult cows. After you kill an animal, of course you eat it since to do otherwise would waste valuable protein and fat, so there is no apotheosis of the cow in a society where the cow may nevertheless be a central fixture.

The production and generation of fodder for cattle by smallholders is a critical part of the story of the generation of individualistic capitalism. In short, it habituates the average person toward low time preference as an interlocking set of agricultural operations are set into motion to maintain subsistence in an ecologically marginal environment. For Crotty the "bottom up" nature of this societal shift is critical as the emphasis on capital over land or labor as the factor of production which would increase marginal product is what will lead to the takeoff of the Great Divergence thousands of years into the future. Unlike classical Mediterranean civilization Western European individualistic capitalism can weather famine, pestilience, and other exogenous shocks of God. Capital persists while slaves die. The dispersal of technological initiative through society gives it a redundant robusticity lacking in other top-down civilizations. In our modern world the power of capital in the form of technological innovation in perpetuating a world of plentitude always outrunning the Malthusian Trap is obvious, but only Central West Europe managed to hit upon that formula in the pre-modern world because of the confluence of particular ecological and cultural parameters at a particular moment in time. Crotty argues that the capital intensive post-Malthusian Developed World was not inevitable, but a contingent fact of history.

Ecological constraints play a large role in explaining why Ireland is different in this model; the mildness of Ireland's maritime regime means that winter fodder is unnecessary. Transhumance and semi-pastoralism is feasible in this scenario; and, critically it is important to note that pre-modern Irish cattle were more like their South Asian cousins than continent European lineages. They only gave milk when with calf! The selection process whereby only the best milk producing lineages were kept and most calves killed in the fall did not apply to Ireland. From this ecological difference flows the great differences between the folkways of the Irish and those of peoples to the East. Speaking of which, When Histories Collide takes occasional forays into Eastern Europe, where it is explained that autocratic capitalism developed along the Slavic frontier. Here obviously land was not limited, and labor was at a premium, but capital intensive methods from the West could be introduced periodically to push the frontiner outward. By the time of the gunpowder empires the steppe ascendency in terms of arms was finally banished and a synergistic alliance of peasants (labor) and boyars (capital) swept across the land. But the fundamental distribution of techniques remained distinct from those of Western Europe, where technological innovation bubbled up from below rather than horizontally via elites. In the north, in Scandinavia, the local human capital was well equipped to leverage the horizontally transmitted suite of the Western European economic system, replicating individualistic capitalism once the technological wavefront had pushed far enough to overcome ecological hurdles.

Obviously this is only a small slice of the arguments presented in Raymond Crotty's magnum opus, but it's a representative taste. Clearly I think there are some serious issues with the depth of the scholarship on the margins, but the details of history which I think are rather embarrassing in the ignorance that they bespeak is not entirely out of place in the corpus of economic history. That being said, as I noted above some of the arguments about the slave-based individualistic capitalism of the ancient Mediterrean are premised on unrealistic assumptions which derive directly from the lack of a dense network of historical priors. Crotty's analytic tools were ones of mathematical economics, and his empirical database was one of agricultural economics, in particular Irish agricultural econometrics and history. The limits to his disciplinary horizons often shows. Nevertheless, I don't believe that Crotty falsified the tables or the quantitative data he repeats, and those alone are worth perusing this book. Who knew that for most of history the per unit productivity of agriculture in China was about twice that of South Asia? Crotty did, and I didn't. I don't think that the grand theoretical arguments should be taken without some major salting and curing; as I said recent history seems to have proved him wrong in Ireland, and to a lesser extent the post-colonial world as a whole. His model of the past has great descriptive flaws and would have been better served with a more robust cliometric framework. But by & large When Histories Collide is a good complement to more polished recent works such as Farewell to Alms and The Great Divergence.

Related: 10 Questions for Greg Clark, A World of Difference: Richard Lynn Maps World Intelligence, Group lifespan differences? Maybe it's agriculture and The Horse, the Wheel, and Language: How Bronze-Age Riders from the Eurasian Steppes Shaped the Modern World. Do note that Amazon is telling me that those who purchased When Histories Collide also bought The Horse, the Wheel, and Language: How Bronze-Age Riders from the Eurasian Steppes Shaped the Modern World. Not surprising, but shows the general slant of Crotty's macrohistory.

1 - By West Central Europe one can imagine the lands which are just to the West and East of the Rhine; northern France, the Low Countries and western Germany.

2 - Crotty also asserts that post-colonial poverty will increase in the future do the poor fit between individualistic capitalism and most societies. I think on the balance Crotty has again been proven wrong; even removing China from the equation it seems that on the whole the world has not seen economic retrogression with the possible exception of large swaths of Africa. Despite the Asian flu of '98 and rollback from the Washington Consensus, both Southeast Asia and Latin America seem to be better off than they were a generation ago.

Labels: Economics

This is a post for Google. A post I wish had been there for me during my periods of confusion on this topic. I notice that Chris Roach recently referred to Robert J. Samuelson as a "Respected economist." He isn't. Robert J. Samuelson is a financial and economic journalist. He has bachelor's degree in government from Harvard, so one assumes he has taken an economics course or two or three. Samuelson has a column in Newsweek which often focuses on economics; this means that he is a major public figure in this area. I had assumed that Robert J. Samuelson was a prominent economist who was moonlighting as a journalist until a few years ago when I was curious if he was related to Larry Summers. I knew Summers was related to an economist with the last name Samuelson. I think this is a reason that people assume that Robert J. Samuelson is an economist. Paul A. Samuelson is obviously an economist, to some extent the economist of the 20th century (along with Kenneth Arrow and a few others). When I didn't know anything about economics I too believed that Robert J. Samuelson was an economist partly because I vaguely knew Paul A. Samuelson was the economist, which says a lot about how eminent Paul A. Samuelson must be if I had any awareness of the man!

Labels: Economics

I've been reading a fair amount of economic history and political economy recent (e.g., A Concise Economic History of the World, The Moral Consequences of Economic Growth and Angus Maddison's substantial body of work). I've read a few micro & macro texts so I come into this with some vague theoretical understanding of the framework which economists are marinated in, and of course I know about comparative advantage and am broadly sympathetic to globalization. The analytic sharpness that economics brings to broad historical questions is illuminating. That being said, on occasion there are comments which make me wonder about the excessive simplicity of the economic narrative.

Consider the case of two nations which trade with each other. One nation starts out far wealthier. Businesses in the wealthier nation relocate some factories to the poorer nation. This increases aggregate utility, consumers in the wealthy nation can now purchase cheaper products, while a substantial number of workers in the poorer nation are more well off than they otherwise would be. But, there's an issue here, inequality is likely to increase within the nations. Overall inequality in the aggregate has decreased, the poorer nation is now far wealthier and so the income gap is not as stark across national boundaries. But a minority of those who had factory jobs in the wealthy nation now might have to shift to lower paying service sector employment. Additionally, income inequality might initially also increase in the poorer nation as some are left behind (though as economic development proceeds one might suppose that the lower orders would catch up).

As someone who lives in a relatively wealthy nation let's just consider that case. I'm not sure if I'm particularly reassured that aggregate utility has increased across the world while a bunch of factory workers now go unemployed or are marginally employed. It's not that I'm a particularly empathetic person, I'm not, but perhaps I'll run into these people in the subway or at the shopping mall. It's great that people in a far off country are now wealthier and also increase my own access to more baskets of goods; but I can't but help be a little worried about idle hands and potential riots in the streets from the "victims" of the redistribution of economic activity. More immediately, what's the point in my being able to purchase more bling if it only invites a mugging at hands of the victims of globalization?

I have Joseph Stiglitz's Making Globalization Work on my "to read" list, so perhaps my qualms will be addressed at some point. So far I'm not reassured that economists truly internalize the structural biases in human psychology when talking about these macro-level issues. It seems that in universal suffrage democracies the political class always has to pretend as if comparative advantage doesn't exist and mouth populist slogans, but they always favor globalization when it comes to implementing policy (at least over the long term). At this point most humans understand that the the earth is not at the center of the solar system; but it seems to me that that is an easier concept to grasp than the logic of economics, in part because human intuitions about social facts and dynamics are very strong and persistent in the face of intellectual persuasion.

Note: Feel free to recommend books on economic history in the comments. Douglass North is also on my "to read."

Labels: Economics

Two interesting articles out in the PNAS early release feed.

Molecular insights into human daily behavior:

Human beings exhibit wide variation in their timing of daily behavior. We and others have suggested previously that such differences might arise because of alterations in the period length of the endogenous human circadian oscillator. Using dermal fibroblast cells from skin biopsies of 28 subjects of early and late chronotype (11 "larks" and 17 "owls"), we have studied the circadian period lengths of these two groups, as well as their ability to phase-shift and entrain to environmental and chemical signals. We find not only period length differences between the two classes, but also significant changes in the amplitude and phase-shifting properties of the circadian oscillator among individuals with identical "normal" period lengths. Mathematical modeling shows that these alterations could also account for the extreme behavioral phenotypes of these subjects. We conclude that human chronotype may be influenced not only by the period length of the circadian oscillator, but also by cellular components that affect its amplitude and phase. In many instances, these changes can be studied at the molecular level in primary dermal cells.

Weird. ScienceNow notes some implications:

...raises the possibility of an inexpensive and objective test of a person's "owlness" or "larkness." Such a test would be no small matter, given the prevalence of sleep disorders and the fact that many drugs, including cholesterol medications and chemotherapy, work more effectively if administered at certain points in a person's sleep/wake cycle. Pinpointing individual clock cycles could pave the way for personalized sleep and drug therapies, says Achim Kramer, a Free University chronobiologist who helped design the study.

Selectivity of Black Death mortality with respect to preexisting health:

Was the mortality associated with the deadliest known epidemic in human history, the Black Death of 1347-1351, selective with respect to preexisting health conditions ("frailty")? Many researchers have assumed that the Black Death was so virulent, and the European population so immunologically naive, that the epidemic killed indiscriminately, irrespective of age, sex, or frailty. If this were true, Black Death cemeteries would provide unbiased cross-sections of demographic and epidemiological conditions in 14th-century Europe. Using skeletal remains from medieval England and Denmark, new methods of paleodemographic age estimation, and a recent multistate model of selective mortality, we test the assumption that the mid-14th-century Black Death killed indiscriminately. Skeletons from the East Smithfield Black Death cemetery in London are compared with normal, nonepidemic cemetery samples from two medieval Danish towns (Viborg and Odense). The results suggest that the Black Death did not kill indiscriminately-that it was, in fact, selective with respect to frailty, although probably not as strongly selective as normal mortality.

We've all read Farewell to Alms, so we know the argument that quick die offs can be good for standards of living by relieving some of the Malthusian pressure. Though if you ever took a normal medieval history course you'd probably be told about the premium on labor which emerged after the Black Death due to shortages and its affect on the collapse of the old manorial system (I was). But this data is interesting because it confirms that the most economically productive proportion a society where muscle power might was of essence have increased as a proportion of the population after these sorts of epidemics swept through. Perhaps these are the sorts of shocks that social systems need to shift toward another equilibrium? (I know, morbid)

Labels: Behavior Genetics, Economics, History

Economists Oded Galor of Brown and Omer Moav of Hebrew U. argue in a new paper that the Agricultural Revolution created longer lifespans. A simple version of their model goes like this:

Agriculture-->Disease-->Somatic Investment in stronger bodies-->Longer lifespans once things settle down.

This result hoists Jared Diamond on his own petard: If the Agricultural Revolution really did make life worse (as he frequently argues), then the forces of evolution would have noticed that fact and reacted in some way. Galor and Moav argue that evolution would respond by building stronger bodies in high-disease environments, and the result would be longer lifespans once those dangers of disease recede in the modern world.

More importantly, Galor and Moav argue that we're still living through the Agricultural Revolution: Groups that went agricultural early on went thorough bigger genetic changes. That means that early agriculture should cause longer lifespans.

An interesting theory, but what's the evidence? They use Putterman's new estimates of the year that countries went agricultural, control for a lot of the usual suspects, and find this:

[C]ontrolling for geographical and continental characteristics of each country, as well as income, education and health expenditure per capita, every 1000 years of earlier Neolithic transition contributes to life expectancy 1.6-1.9 years.

A couple of facts about the agricultural transition: The differences across countries are big, according to Putterman:

The average country went agricultural about 4500 years ago (mean and median within a couple of hundred years).

Standard deviation: 2400 years.

10th percentile: 1500 years ago (mostly sub-Saharan countries, plus some New World countries)

90th percentile: 8000 years ago (Eastern and Southern European countries--the Middle East was earlier).

So the cross-country differences appear big enough to be evolutionarily important a priori.

But back to Galor and Moav's big result: Almost 2 years of life for a thousand years of agriculture: Maybe that number will become a new stylized fact in the economics-and-evolution literature. It'll be interesting to see if this result comes up in political debates over health care reform.....

Labels: Economics, Evolution

Steve has a review of Farewell to Alms up (part I). Interesting stuff, but I think he misreads one section:

And despite their poverty, Malthusian-era English workers at least lived better than their counterparts in much more crowded China and Japan. That's in part because they practiced population control through self-discipline, postponing marriage until they could afford it. Women didn't marry on average until age 24 to 26, and a minority never married. (Illegitimate births only made up 3-4 percent of the total.) As Jane Austen's novels show, marriage was a serious business revolving around love and money.

In contrast, the Chinese tended to marry in their late teen years. So populations would rapidly ascend to the maximum that current farming techniques could support under good government, then crash during spells of bad government-most recently in the early 1960s, when tens of millions of Chinese starved to death following Mao's misbegotten Great Leap Forward.

On page 77 Greg Clark states:

These patterns imply that, despite early and nearly universal marriage, the average woman in China or Japan around 1800 gave birth to fewer than 5 children, less than the half the biological possibility, resulting in a birth rate similar to that for eighteenth-century Europe.

The English women who married had more children than the Chinese or Japanese women who married because they stayed in the game far longer. So the average worked out to be about the same, which is why Clark focuses on mortality rates to explain the population density differences. Search for the keywords "china number of children" on Amazon and check page 77 to see what I'm saying (page forward and backward to get full context). I remember this clearly because the similar birthrates surprised me.

Labels: Economics

Bryan Caplan has initiated a series of posts where he will critique some aspects of Greg Clark's book A Farewell to Alms. Caplan starts by disputing Clark's implication that the Four Horsemen can increase per capita income simply by reducing population. I would say he makes some good points, but he does leave an opening:

...A plague might do the trick - it kills some outright, and weakens the rest. In the long-run, the survivors will have a higher material level of living. But this hardly makes the plague a "friend of mankind." All it means is that after mass death, the frail, disfigured survivors will get to eat some extra calories beside the graves of their families. With friends like this, mankind doesn't need enemies.

The after effects of disease vary quite a bit from pathogen to pathogen and person to person. Additionally, to some extent plague might be a partly exogenous variable, on occasion cutting through populations like a scythe for a few short years and then abating mysteriously for decades. I think this is why the conditions after the Black Death are a good case study which probably leans toward Clark's contention. 25% of Europe's population disappeared, but the survivors were not 25% less healthy or productive. In any case, add Econlog to your RSS to keep track of the debate.

Update: Arnold Kling is feeling Clark more than Caplan.

Labels: Economics

In his new book A Farewell to Alms, Greg Clark, an economic historian at the University of California, Davis, contends that "[t]he New World after the Neolithic Revolution offered economic success to a different kind of agent than had been typical in hunter-gatherer society: Those with patience, who could wait to enjoy greater consumption in the future. Those who liked to work long hours. And those who could perform formal calculations in a world of many types of inputs and outputs...."

Clark also provides archival evidence that in medieval Britain (and to a lesser extent in China and Japan) the wealthy-who presumably had those "middle class" skills in abundance-raised more children than the average person. If you put these pieces together-a system that rewards a new set of abilities, plus greater reproductive success for those who have those abilities-then all you need to get some form of selection is one more link: A transmission mechanism. On the nature of the mechanism, Clark leaves the door wide open. Could be parent-to-child cultural transmission, could be genes, could be both.

While much of the discussion of Clark's book has focused on his "survival of the richest" hypothesis, Clark himself appears to be equally devoted to demolishing the widely-held view that economic institutions are the key to modern economic growth. He notes that the British people had solid property rights, limited government, and sound currency for centuries before they had their Industrial Revolution. Drawing on early work by Nobel Prize-winner Douglass North, he argues that economic institutions are largely endogenous and relatively efficient, at least when we're talking about time horizons lasting a century or more. If institutional change wasn't the driving force behind modern economic growth, then what was? In Clark's view, the driving force was change within human beings themselves.



1. In some early work, you wondered why workers in British cotton mills were so much more productive than workers in Indian cotton mills. You discuss this in the last chapter of A Farewell to Alms. You looked at a lot of the usual explanations-incentives, management, quality of the machines-and none of them really seemed to explain the big gap in productivity. Finally, you seemed to turn to the idea that it's differences between the British and Indian workers themselves-maybe their culture, maybe their genes-that explained the difference. How did you come to that conclusion?

Clark: I came to economics as an undergraduate expecting, as is the central view of economics, that the explanation for wealth and poverty would ultimately be located in social institutions and that people everywhere have basically the same aspirations and abilities.

But unlike most of my colleagues in economics I have always been interested in the mechanisms, and the fine details, of how things actually function. Much of modern economics is entirely theoretical, and even most empirical work in economics involves just looking at very high level correlations between variables such as income per person and education, or democracy, or the openness of trade.

When I set out in my PhD thesis to try and explain differences in income internationally in 1910 I found that asking simple questions like "Why could Indian textile mills not make much profit even though they were in a free trade association with England which had wages five times as high?" led to completely unexpected conclusions. You could show that the standard institutional explanation made no sense when you assembled detailed evidence from trade journals, factory reports, and the accounts of observers. Instead it was the puzzling behavior of the workers inside the factories that was the key.


2. Your book is clearly a call for a new research agenda in the fields of economic growth and economic history, one focusing less on institutions and more on what we might broadly call "labor quality." But your key hypotheses seem to turn on the question of how and why entire workforces change across the centuries, and involve questions of culture, child-rearing methods, and perhaps human genetics-fields quite outside the expertise of most economists. If you could command an army of, say, biologists, anthropologists, and neuroscientists to test your hypotheses about long-term changes in labor quality, what would you have them work on?

Clark: That is a great question. If, as is possible, the pre-industrial era changed people genetically to be better adapted to market economies, then a systematic comparison of the DNA of societies should find correlations between gene frequencies and the histories of these societies. If genetic change was also occurring in historical time, as opposed to the pre-historic era, then we would expect these changes to be incomplete even in societies with a long history of settled agriculture. In that case we would actually predict class differences genetically! The rich in these societies would differ genetically from the poor in certain systematic ways! All this should be testable at some point.

If the change was purely cultural, then we still might be able to discover systematic behavioral differences between poor and rich in modern capitalist society, such as over time preference rates, that correlate with differences between rich and poor societies.


3. What do you think are the weakest links in the now-conventional "Institutions Matter" chain of reasoning?

Clark: The book challenges the modern orthodoxy of economics - that people are essentially the same everywhere, and with the right set of institutions, growth is inevitable - in three ways. First by showing that there were societies like medieval England where the institutional structure provided every incentive for growth, yet there was no growth. Second by pointing out that by objective measures the institutions of many highly successful modern economies, such as in Scandinavia, provide much poorer incentives to individuals than those of very poor economies. And lastly by showing that in the long run economic institutions that would prevent growth tend to get replaced endogenously by ones that are pro-growth.


4. You provide a variety of evidence that interest rates have fallen over the centuries; this is a fascinating set of data that we've discussed before at Gene Expression. Should economic historians still be searching for transaction cost stories to explain this fall in interest rates-e.g., lenders needed a high return in ancient Rome to compensate them for the high cost of searching for safe borrowers-or is that search likely to hit a dead end?

Clark: Interest rates on safe assets like houses and land fell from 25% or more in Ancient Babylon, to 10% in Ancient Greece, Roman Egypt and medieval Western Europe, to 4% in the eighteenth century in the Netherlands and England. Most economic historians assume this just represents transaction costs. But I can show in cases such as medieval England that transaction costs have nothing to do with this - the real return on investments as safe as modern Treasury Bonds was 10% or more. So I am confident that something much more fundamental was changing over these years.

5. You use data on British wills to argue that the British people of today are by and large the descendants not of peasants and not of the violent medieval aristocracy-both groups failed to reproduce themselves. Instead, the British people of today are largely the descendants of the bourgeoisie of the middle ages. Nowadays, that seems to be a testable hypothesis; have you run into genetic evidence bearing on what you call the "survival of the richest?"

Clark: I agree that, in principle, this is a completely testable hypothesis. If there was genetic change in the Malthusian era then we will find systematic differences in genes that influence behavior such as patience and propensity to violence between groups such as the British and those such as Australian Aboriginals that had no experience with settled agriculture.

However, as far as I am aware, the identification of genes that influence such behaviors is at a very early and tentative stage. The only such studies I have seen reported are those of differences across ethnic groups in variants of genes encoding monoamine oxidase enzymes.


6. How are economists reacting to the book? In particular, are there any misunderstandings that you'd like to address?


Clark: I expected a hostile and perhaps even dismissive reaction, given the controversy that the "survival of the richest" argument was bound to create, and given the attack on the modern orthodoxy amongst economists about institutions being the key to wealth and poverty. But economists who have read the book, even when they remain skeptical of the conclusions, have generally found it interesting and challenging. They have been surprised to learn in particular that the history of economies is not anything like the implicit assumptions they have, based on modern economic doctrine.


7. One implication of your model is that human populations that haven't been through the full Neolithic Revolution are going to fail miserably when they try to build a modern market-oriented society. If people turn out to as hard to change as they appear to be-if neither culture nor genes prove to be all that malleable in the medium-run-then how would you recommend improving the lives of these people? Do you think economists can design institutions that can help make these populations productive?

Clark: Anyone who reads history cannot fail to be impressed by the difficulties that hunter-gatherers, or societies with only limited experience of settled agriculture, have in successfully incorporating into the modern capitalist economy. I spent a week in Australia this summer, and the plight of Australian Aboriginals is very sad. The surviving Aboriginal communities have seen tremendous rates of poverty, alcoholism, drug use, violence and sexual assaults.

But an important point in the book is that while some of this cultural variation may be due to the long histories of societies, there is a lot of cultural variation within these constraints that produces dramatic differences in wealth in modern societies. So there is no ground for fatalism on the possibilities for any society. The problem is that measures to reform the cultures of societies seem difficult to devise. Look at the lack of success the Chinese Communist Party had in remaking Chinese Culture. China has emerged from a period of extreme ideological indoctrination seemingly with its pre-communist love of individual wealth and status completely intact.


8. You emphasize that "[t]he argument is not that agrarian life was making people smarter." But you also emphasize that agrarian life placed greater value on verbal and mathematical skills than hunter-gatherer life. Let's set aside for the moment the question of whether these skill changes were cultural, environmental, or genetic. Are you claiming that the rise in math and verbal skills was counterbalanced by an equal loss of some similarly valuable hunter-gatherer mental skills? In other words, were the mental effects of the Malthusian process zero-sum? If so, what process within your model would make that occur?

Clark: I wanted to emphasize in the book that I was not advocating any kind of Social Darwinism. The long Malthusian economy that preceded the Industrial Revolution changed people, but there is no evidence it made them "better" or "smarter." Indeed there is evidence that we did not become any happier as result of economic growth.

Anthropological accounts of forager societies suggest that people in these communities have strikingly developed powers of observation and memory (as well as an amazing ability to endure pain) - they are just not abilities that the modern market economy places much value upon.


9. Bowles, Camerer, and an interdisciplinary research team led a series of ultimatum-game studies in pre-modern societies; the found incredibly diverse outcomes. By contrast, across modern societies, ultimatum game play is much more similar, so it looks like the modern world really is a world of conformity, at least on this topic. How do you think their experimental evidence bears on your question of whether the "long Malthusian night," as you call it, selected for a certain set of behaviors and attitudes?

Clark: I have seen these results reported, but had not thought of relating them to the arguments of the book. I would have expected that pre-modern societies would have had a common response, but potentially a different response than in modern societies. So I do not think I could call this any kind of vindication of the hypothesis in the book.


10. What's the next project?

Clark: I always have several going at the same time. One is a follow up to the "survival of the richest" study for England reported in the book which will look more closely at the intergenerational transmission of economic success with a much larger set of data, and seek to show through examination of the effects of family size that the mechanism is indeed almost entirely the transmission of culture or genes. This study will also look over the whole period 1600-1914 and examine when and why richer men ceased to have more children than average and began to have less. I would love to use this data to try to tease out whether we have just cultural evolution as opposed to genetic - I just cannot think of any way to do that!

Labels: culture, Economics, History, human biodiversity

David Warsh does not like A Farewell to Alms. Warsh is the author of Knowledge and Wealth of Nations (I have the book, haven't gotten to it, but will probably read it before Greg Clark's book). Here is a copy of Clark's Genetically Capitalist. Via Tyler Cowen, who is also hosting a Book Forum on the topic.

Update: The Ambrosini Critique keeps posting on Greg Clark's work. Also, Michael Stastny smacks up Warsh a bit.

Labels: Economics

Nick Wade of The New York Times has an article up on Greg Clark's A Farewell to Alms: A Brief Economic History of the World. I haven't gotten to Clark's book because I've set myself the goal of reading Hal Varian's Intermediate Microeconomics (halfway through) before I touch another pop or historical econ book, but I'll get to it (population genetics textbooks are are good prep for microeconomics!). I'm cautiously skeptical, though I think Clark's ambitious but heterodox ideas are a good thing (ambitious but orthodox I am less interested in).

Related: Clark's Survival of the Richest meets Mokyr's Industrial Enlightenment, The British: More patient than the Greeks?.

Labels: Economics