Friday, August 26, 2011

What caused the Industrial Revolution?

I am reproducing the whole of an article by Prof. Boudreaux below as it is itself a very condensed treament of a big topic. I follow the article, however, with what I believe is a better argument
Few questions in economic history are discussed and debated as much as this one. Even if you happen to be among the small number of people who regret what historian (and Freeman columnist) Steve Davies calls “the wealth explosion” of the past couple of centuries, you must nevertheless find this question intriguing, for it asks about the causes of what is surely the single greatest change in human history.

For at least 70 millennia the standard of living of the vast majority of us humans was at, or very near, subsistence. Then all of a sudden (in the great sweep of history)—boom! Starting in the eighteenth century living standards shot upward not only for royalty and the landed nobility but for everyone. And to this very day our standard of living—including our life expectancy and measures of healthfulness—continues to rise.

Why? A question so momentous elicits plenty of answers. Among the well-known answers that have been offered over the years are capitalist exploitation of workers; capitalist exploitation of colonies; religious beliefs that promoted savings and risk-taking; and England’s 1688 Glorious Revolution, which is said to have made property rights more secure. And new answers continue to be offered, such as economist Gregory Clark’s thesis, explained in his book A Farewell to Alms, that genes equipping human beings especially well for carrying out enterprise and commerce were passed down from the English nobility into the English middle classes—thus equipping the bourgeoisie finally to do its thing.

Some of these answers are more plausible than others (with Clark’s being among the least plausible). But not a single one is satisfactory. None explains why the Industrial Revolution began where it began (northwestern Europe) or why it began when it began (the eighteenth century). Another explanation is needed.

And another explanation has indeed just been offered: a change in rhetoric. This rhetoric-based thesis comes from the great economist and historian Deirdre McCloskey in her 2010 book Bourgeois Dignity. It’s a book that, like only three or four others I’ve read, caused a major change in my thinking.

McCloskey reviews with awesome thoroughness all the major (and many not-so-major) explanations for the Industrial Revolution. She finds them all wanting.

Some of these explanations are more obviously flawed than others. Capitalist exploitation of workers, for instance, fails spectacularly as an explanation on a variety of fronts, not the least of which is that the very people from whom the newly created wealth is supposedly extracted (the masses) are the same people who have benefitted most from this wealth explosion.

If capitalist wealth was wrenched from the bent backs and sweaty brows of the working class, then surely workers as a group would today be much poorer rather than (depending on how you count) 10 to 100 times wealthier than were their pre-industrial peasant ancestors. As McCloskey emphasizes, “[M]odern economic growth did not and does not and cannot depend on the scraps to be gained by stealing from poor people. It is not a good business plan.”

A more plausible explanation is one associated most familiarly with the Nobel economist Douglass North and his frequent coauthor Barry Weingast. It’s an explanation I once accepted. According to North and Weingast, the replacement of the Stuart monarchs by William and Mary in the late seventeenth century resulted in more secure property rights in England, which in turn sparked the Industrial Revolution.

While everyone with a modicum of sense understands that the Industrial Revolution would not have happened if private property rights in England weren’t secure, McCloskey argues persuasively that the Glorious Revolution—for all of its undoubted benefits—did not bring about much of a change in England’s property laws or in the security of private property rights. Here’s what McCloskey writes on page 318:

England when at peace, which was the usual case throughout its history, was a nation of ordinary property laws, no more or less corrupt than Chicago in 1925 or the American South under segregation, places in which innovation flourished. It was so, for example, even when the Stuart kings were undermining the independence of the judiciary in order to extract the odd pound with which to have a foreign policy in a new age of standing armies and floating navies. And the amounts extracted, contrary to the Northian suggestion that the king owned everything, were by modern standards pathetically small. The figures offered by North and Weingast themselves imply that total government expenditure under James I and Charles I was at most a mere 1.2 to 2.4 percent of national income. . . .

"[T]he Stuart kings, grasping though they were, and emboldened (as were many monarchs at the time) by the newly asserted divine right of kings, were nothing like as efficient in predation as modern governments—or indeed as were the Georgian kings of Great Britain and Ireland who eventually succeeded the Stuarts."

Indeed so. This explanation fails.

The mainstream economist’s long-preferred explanation is capital accumulation. It fares no better than does the capitalist-exploitation thesis and the North-Weingast thesis.

According to the capital-accumulation thesis, people (for any of a variety of different reasons) began to save more. These savings were transformed into capital goods whose use increased the productivity of labor. And so the Industrial Revolution happened.

But as McCloskey points out, history is full of instances in which people saved just as much as in northwestern Europe at the dawn of the Industrial Revolution, but without unleashing any revolutionary industrial forces. Moreover—and contrary to a thesis still fondly held by many people from Marxists to Reagan Republicans—economic growth does not require substantial capital accumulation. It can be, and has been, funded largely out of retained earnings.

What does best explain why the Industrial Revolution began in northwestern Europe in the eighteenth century is that for the first time in history people then and in that part of the world began to talk about the bourgeoisie with respect. This new “habit of the lip” (as McCloskey calls it) replaced the older habit of talking about entrepreneurs and merchants as being, at best, contemptible functionaries whose services society might need in some measure but whose importance to society fell far below the services supplied by warriors, royalty, noblemen, and priests.

With merchants and entrepreneurs in eighteenth-century Holland and England finally accorded widespread dignity, society’s best and brightest no longer avoided the world of private business to pursue careers at court or on the battlefield. The power of the bourgeoisie in these countries with tolerably secure private property rights was thus finally unleashed to revolutionize the economy—first in northwestern Europe and, continuing to today, the rest of the world.


The question discussed above is of immense interest to those of us who are interested in history. But I think the explanation in terms of rhetoric favored above by Prof. Boudreaux is at best a very partial explanation. One immediately asks WHY the rhetoric about the bourgeoisie changed. No answer is given.

Prof. Boudreaux seems to be a pretty thoroughgoing libertarian and, as is common in such circles, sees genetics as of only minor importance. That is presumably why he so airily dismisses Gregory Clark’s thesis in terms of genetics and natural selection (i.e. in pre-modern times the rich and powerful had greater reproductive success).

But why he so airily dismissed the Weberian explanation in terms of Calvinism ("religious beliefs that promoted savings and risk-taking") is mysterious. I can however provide my own reasons for dismissing Weber's thesis (at least in its narrowest sense of applying to Calvinists only) so I will not dwell on that.

I, on the other hand can see no reason to doubt the process that Clark describes (briefly outlined here) except in one important respect: The same thing must have happened in Tokugawa Japan but the same result was certainly not observed.

I take it as given that no one factor is alone sufficient to account for the industrial revolution. Prof. Boudreaux mentions above a number of factors that could have had a facilitatory effect (security of property rights, capital accumulation, a long period of peace etc.) and it seems obvious to me that when you have a lot of those factors present at the one time and in the one place you then reach what we know from nuclear physics as a "critical mass": There is a long buildup with nothing obviously changing and then suddenly it all does change in a big way. A "tipping point" is a similar concept, one much relied upon by Warmists but which anybody who has ever seen an oldfashioned set of counterweighted scales in use will readily understand. You keep adding weights to one side of the scale and nothing happens. But add that last weight and the scale suddenly tips up.

And it seems to me that the genetic process described by Clark is an important one of those crucial factors which together gave rise to the industrial revolution.

But surely the favourable factors came together somewhere else at some time? And Tokugawa Japan would seem to be such an instance. It had the longest period of peace of any country in history, the genetic process described by Clark should have occurred and it was a very orderly law-bound society.

So we have to look at factors beyond the Clark thesis. And I think that the responsible factors are easy to see. Merchants were NOT respected, no religious innovation akin to Calvinism was allowed and the laws were very unequally applied. A Samurai had far greater rights than a farmer, for instance.

So Clark's process cannot stand alone but, seen as a tributary joining with others to form a mighty river of change, it surely has an important place.

And those tributaries started flowing much sooner than is popularly believed. The birth of scientific thinking was surely important in sparking things like the invention of the steam engine and scientific thinking goes back a very long way. It started of course with the ancient Greeks but was lost for a time. The Renaissance is often seen as the revival of Greek learning which in turn sparked the beginning of modern science with Galileo and his telescope etc.

On closer examination, however, the Renaissance was not such a sudden change. There was a continuing quiet evolution of thinking even in the "dark" ages and much that is attributed to the Renaissance came in fact from Medieval times. See here.

Which leads me to my final point: That the whole of history led up to the Industrial revolution. Human capabilities continually expanded in fits and starts and even occasionally gave rise to real civilizations such as ancient Athens and Rome. But, to re-use again the "critical mass" concept, none of the advances in capability and understanding were quite enough to ignite a great change. When enough capability and understanding had built up, however, the scales tipped (to change the metaphor). The industrial revolution seemed sudden but it was in fact the accumulation of thousands of years of social evolution. Everything finally came together at last.

Thursday, August 04, 2011

Was Breivik inevitable?

Leftists are very keen to identify the "root cause" of various social ills. And the root cause identified in most cases is "poverty". They even sang that song for some time after the events of 9/11/2001. It was allegedly Muslim poverty that caused those events. It took several months of people reminding the Left that Osama bin Laden was actually a billionaire before the Left abandoned that song. About a third of them went on after that to say that George Bush did it anyway -- and the remainder said that GWB was at least to blame in some way.

And we remember recently the Arizona massacre by Jared Loughner. That was allegedly caused by hate speech from Right-wing radio hosts, despite the fact that Loughner was a reader of such "conservative" works as the Communist Manifesto and was clearly mad (psychotic). After many people reminded the Left that plenty of furious hate speech emanated from them also, that one petered out too.

And now of course most of the Left is convinced that conservatives are to blame for Breivik's massacre. The fact that no conservative mentioned by Breivik actually recommended anything like what Breivik did is no problem, apparently. Conservatives created a "climate" (surely one of the Left's favourite words) conducive to Breivik's deeds.

That the "climate" seems to have influenced nobody but Breivik would however be seen as problematical by rational beings. Hundreds of millions of people read the sort of writers that Breivik quotes but no others of them go on murderous rampages. If conservative speech were a drug and I was submitting it to the FDA for approval, the FDA would wave it through -- on the grounds that a drug safely taken by millions with only one bad reaction had to be evaluated for safety by reference to the hundreds of millions of cases rather than the one isolated exception.

So it is clear that even if the frenzied claims of root causes made by Leftists are totally addled, they do set a precedent for others to look at root causes too -- but hopefully in a more rational manner. And if Leftists say that conservatism is the root cause of Breivik's deeds, why should I not make the case that Leftism is the root cause of Breivik's deeds? What's good for the goose is surely good for the gander.

So I contend that the root cause of Breivik's onslaught is not to be found in Breivik's head (though the proximate cause lies there) but rather in the long-term policies of the antisemitic and Muslim-loving Norwegian Left.

And those policies have been destructive indeed. Norway now has Muslim ghettoes where the police rarely go and crimes such as rape have become a Muslim specialty -- with ANY crime by Muslims being rarely prosecuted and punished. The Norwegian Left has inflicted grave harm on Norwegian society. And adding insult to injury, you will usually be abused as a racist if you even mention any of that harm (but calling for Israel to be bombed is perfectly respectable, of course). An excerpt from just one report of what the Norwegian Left has wrought, by way of example:
I live in Oslo, Norway. We have lots of problems with muslim immigrants. Official crime statistics over a three year period shows 49 of 49 assault rapes in Oslo was made by a person from a "non-western background" which is basically government code for muslim immigrants. Just yesterday Aftenposten; on of Norway's most respected newspapers, interviewed the police chief in Oslo where she advised Norwegian women not to walk the streets alone at night, the police have basically given up combating the problem with crime.

The muslims in Norway are just as hatefull as in Sweden, which has the same problem but in a much worse degree. From a young age they openly call Norwegian women for whores, their own sisters are locked inside the home to protect them from the Norwegian society. The young muslim men often date Norwegian girls, but do not marry them because they are perceived as whores; they are ok to have sex with but too filthy to marry, basically.

Muslims in Norway also are not very interested in their kids learning to read or write in Norwegian, making them losers in the educational system from an early age. This is also true for second and third generation immigrants. Across my streets lives the only muslim family in my neighborhood, all the kids (they have like 5 of them with one 1/2 to 2 years between them) talk Arabic and never Norwegian.

While Norwegian kids are more quiet and reserved the muslim kids seem to be more violent, usually carrying sticks and shouting all the time where Norwegian kids are more silent and withdrawn. When growing up in Oslo I experienced the same violent behaviour with my muslim peers, personally I believe that their whole culture is more based around the "power of the strong", where if you are strong you are perceived to have more power; which the muslims look up to as something good.

My impression from dealing with immigrants is that they feel Norway owes them something, even though it is *them* who don't fit in. Many muslims don't like Norwegians or Norwegian rule, but they rarely move back to a muslim country and change citizenship.

The worst thing is when that the socialists, who are the major political force in Norway, hear these arguments they immediately call you racist or Islamophobe. They also have concealed crime statistics for years by refusing to publish crime numbers based on origins. Once when they did it was found that 10% of the population, the immigrants, stood for 90% of the crime and more specifically 100% of assault rapes in Oslo! I personally am against any religion or ideology that spreads separation and hate, be it Islam or Christian fundamentalism.

So am I blaming the victim? Am I blaming the Leftist elite whom Breivik targeted? I certainly am. If someone initiates an assault and gets hurt in the reaction, then they are certainly to blame for the hurt they suffer. And the Norwegian Left has inflicted great harm on ordinary Norwegians. And even before Breivik, Norwegians had begun to wake up to that. Despite their long domination of Norwegian politics, the Labour party lost the last election and had to form a Red/Green coalition with two other parties to stay in government.

And this disillusionment with the pro-Muslim policies of the Norwegian Left has led -- as we are repeatedly told by Norwegian experts themselves (a recent example here) -- to views such as Breivik's becoming widespread among Norwegians. So Breivik was quite normal in his beliefs and different only in doing something about them.

In those circumstances it seems clear to me that if Breivik had not struck then somebody else would eventually have done so. There was a head of steam building up in Norway that would eventually have burst out somewhere. The Viking genes can't entirely have died out there.

Monday, August 01, 2011

Breivik wins again

In typical Leftist kneejerk fashion, the first appearance in court by Breivik was held in secret, which is contrary to Norwegian custom, as I understand it.

So the government of Norway itself has confirmed Breivik's complaint that Norway and other European countries suppress speech of which they disapprove. They were so afraid of Breivik's "loony" ideas that they forbad Norwegians from hearing anything about them.

So they're not even smart Fascists. It confirms my contention that the ultimate cause of Breivik's appalling rampage was not Breivik's mental limitations but rather the Leftist government of Norway. If words are suppressed, bullets may be the only thing that can replace them.

If only Norway had a First Amendment .....

Another writer looks ahead to Breivik's next court appearance:
"There has been widespread support within Norway for a closed trial, to deny Breivik the platform he appears to be seeking. Given the scale of what has happened there is unquestionably something obscene about the prospect of watching him expound his lunatic worldview to an international audience.

But the fear that such exposure would necessarily boost Breivik’s cause, and encourage likeminded bigots elsewhere, must be resisted. In fact it is precisely on occasions like these that a vibrant public sphere matters most.

The belief that freedom of expression is the fundamental requirement of an open society is based on the idea that grievances like those which animate racist and xenophobic political groups throughout Europe are better aired in the context of civilized debate rather than allowed to fester in private societies.

Distasteful as it may seem to many of us, it is better in the long run for prejudices to be openly debated and defeated by better arguments. Otherwise the hatreds of these groups become self-reinforcing.

Prejudice and paranoia never survive the rigours of open debate, and the horrors of the massacre in Norway should not be allowed to obscure this important truth.