Random Variable

MarginalRevolution is hosting a book forum on Gregory Clark’s “A Farewell to Alms”. Clark attempts to explain how up until recent history, economies existed in a state of Malthusian equilibrium. High downward mobility made rich children poor. The values of the rich filtered into the poor, kick starting massive economic growth and an escape from the Malthusian trap.

We are concentrating on the first few chapters.

Clark explains how Malthusian economies meant that the quality of life in Japan and China was much lower than England’s than the 1800s. Most of human history can be understood in terms of a Malthusian trap, until England escaped it.

I have never been sold on Malthus, especially the way it is instrumentalised by those who I deem the “fatalist left,” a significant and growing group of people who believe we’re all doomed by looming ecological disaster, and anything to reduce the population of the planet, short of outright genocide is a good thing.

Clark first points out how hunter-gather societies were egalitarian. This is generally the case in subsistence economies. Inequality seems to appear whenever there is significant division of labour, as was certainly the case by 1800. Clark also points out how countries, who we can refer to as the bottom billion, have levels of consumption below preindustrial levels. I expect that this is to be explained in terms of cultural values later:

“Countries such as Malawi or Tanzania would be better off in material terms had they never had contact with the industrialized world and instead continued in their preindustrial state. Modern medicine, airplanes, gasoline, computers – the whole technological cornucopia of the past two hundred year – have succeeded in producing among the lowest material living standards ever experienced. These African societies have remained trapped in the Malthusian era, where technological advances merely produce more people and living standards are driven down to subsistence.”

What is missing from the list of what the West has given Malawi or Tanzania, is poor colonial governance, weapons, dire land management. If anything, the modern Malthusian era is a production of Western interference.

Farewell to Alms will explain how the Industrial Revolution became possible. Clark suggests early is that the answer as to why growth exploded in the Industrial era is to do with the Malthusian processes he describes. He suggests this is the only explanation which makes the revolution inevitable. However, I am not sure that it is inevitable. I’m guessing that the institutional progenitors that influenced the Industrial Revolution were in competition with other institutions that could have fundamentally shaped progress.

“China and Japan did not move as rapidly along the path as England simply because the members of their upper social strata were only modestly more fecund than the mass of the population. Thus there was not the same cascade of children from the educated classes down the social scale.”

Manuel Castells (2000) pinpoints the Industrial Revolution on structures of states between different countries. China for example, didn’t have an Industrial Revolution (though it was capable of doing so in 1400), because it practiced isolationism and was extremely bureaucratic, with a culture disinterested in technological innovation. This would suggest that downward mobility of the upper classes would not have had much effect anyway. It can also be argued that Japan escaped the Malthusian trap after the 1868 Ishin Meiji (Meiji Restoration). The lower starting point of postcolonial independence countries should also be a strong force in the great divergence.

Clark’s Malthusian model contains a component called the technology schedule. The schedule is designed to show how affordances in technological advance only increase population, but do not raise the standard of living. There may be truth to that (p=0.5), but one of the advances of the Industrial Revolution was food production over and above the ability for reproduction to catch up (p=0.8).

Finally, as Malthusian economy requires population pressure to be reduced, Clark looks at fertility and mortality rates. This seems robust, though to think that infanticide was so widely practiced in forager societies seems extreme to us. I defer to Clark and the anthropologists on the matter.

So far, Clark has offered a significant amount of evidence to back up his Malthusian model of preindustrial England. However, Malthusian theory appears to be essentially untestable. This was one of Nathan Sayre’s (2006) major complaints about people who keep reverting to statements about the carrying capacity of the Earth in the modern age. Power relations and state structures seem more compelling factors for the Great Divergence so far.

Bibliography

Sayre, N. F. (2006). [Lecture] Geo 130 - Natural Resources and Population. Berkeley, California, US.

Castells, M. (2000). The Information Age: Economy, Society and culture - Volume I: The Rise of the Network Society (Second Edition). Oxford: Blackwell Publishers.