What I'm Reading

I finally finished reading A Farewell to Alms by Dr. Gregory Clark. I say finally because Clark's book took me a bit longer to read than I would have anticipated, given its size (377 pp). It took longer for two reasons: Clark's writing style in this book is more academic than many of the popular economics books that have come out recently, thus it wouldn't qualify as beach reading. And his thesis is thought-provoking, as well as controversial.

In the book, Clark investigates one of the great puzzles in economic history - the Industrial Revolution. Considering its impact, economists and historians both are still at a loss to answer the questions of "Why then?" and "Why There?" Specifically, "what factors caused the sudden expansion of economic activity at the end of the 18th century?" And a parallel question, "Why in Great Britain, instead of elsewhere?"

The approach Clark takes is to frame things in a Malthusian context. (For those of you unfamiliar with the ideas of Thomas Malthus, check here.) Clark maintains that, until 1800, the world seemed to be in a classic Malthusian trap. As population grew, it would outpace the ability to feed itself. This would reduce life expectancy, which would reduce demand pressures. As costs fell with decreasing demand, real income would rise and, ultimately, population would rebound. But around 1800, the approximate beginning of the Industrial Revolution, things changed dramatically, especially in Great Britain and the United States.

If I read Clark correctly, the "why then?" is due to some changes in the demography. Clark points out that while the population as a whole had been subject to the pressures outlined by Malthus, the pressures were not distributed evenly. hanges in technology and learning had provided some structural changes. These changes had generally raised living standards, and population was growing. But it did not grow evenly - and that is the crucial point. While birth rates were generally elevated across income groups, child survival rates were not. The upper classes fared better than the lower - as one might expect.

The "why there" seems to me to be a function of institutions, both formal an informal. On the formal side, it was the laws of inheritance; and on the informal side, the appreciation and provision of education. Generally, the inheritance laws provided for the eldest son to inherit most of the estate, with some provision for other siblings. These other siblings are the key. Because they did not inherit a large portion of the estate, they often were forced to seek their fortunes elsewhere, among people of a lower class. Because the siblings came from a higher socio-economic group, they brought certain views and expectations with them. They generally did not fall far in the economic strata, and they brought ideas that would change the views others. This often included a different work ethic and a longer-term appreciation for income and what it could bring. It also meant that they brought an appreciation for education and ideas that could spread within their new circle of contacts.

Dr. Clark's research is excellent. He does not rush to build his argument, rather he spends considerable time developing a strong case, layer by layer, for his thesis. Given the somewhat controversial nature of the thesis, this is prudent. Overall, I found this book interesting. I was able to link much of what Clark discussed with ideas I had when I first came read the works of Fernand Braudel. (For those who would like to know more about Braudel, check here.) Braudel was a historian in the middle of the 20th century. He would develop a unique way of writing history, integrating large aspects of economics and sociology in his work. Dubbed the Annales School, Braudel changed history and historiography from personality and event driven to a longer view, integrating the living conditions, beliefs and structures of the wider population. Economics, particularly on a personal level, played a large part in what Braudel wrote. And I think Braudel's view is certainly compatible with, if not generally supportive of what Clark proposes.

I would recommend this book for anyone interested in general economic theory and the Industrial Revolution. As I said before, I would not go so far as to call this a leisurely read - like some current economics books written for general audiences - I would call it an important read, as I think it will generate some controversy.

As a final note, I would recommend you also check out the book chat for this work on the Marginal Revolution blog. It was done in four parts, and you can find them here, here, here, and here.

I look forward to your comments.