A Farewell to Alms: A Brief Economic History of the World (review)

Sustained economic growth began with the Industrial Revolution. As late as 1800, the average standard of living in the world was little higher than in the Stone Age. But according to most estimates, it is now more than eight times higher than in 1800. Understanding the Industrial Revolution is thus a major preoccupation of macroeconomists and economic historians. Clark's book provides a layman's account of the subject, based on his extensive collection of data on the English economy from 1200 to 1870.

Clark accepts the widely held view that prior to the Industrial Revolution the world was in a Malthusian trap, in which advances in living standards that were brought about by technological progress were always dissipated by increased population growth, eventually resulting in more people instead of richer people. But in the late eighteenth century, the pace of technological progress accelerated to the extent that it was able to generate sustained increases in living standards despite attendant increases in population.

The major question with which every student of the Industrial Revolution must wrestle is what caused this technological acceleration. Clark proposes a simple answer, namely, that England's culture promoted the development of the requisite middle-class virtues and skills—such as thrift, prudence, industry, truthfulness, literacy, and numeracy–to enable a society to realize the potential for major technological change.

Broadly speaking, Clark's thesis is neither new nor controversial. Scholars such as Crosby, Jacob, Landes, and Mokyr have previously arrived at similar conclusions, each with his own special emphasis.¹ The controversial element in Clark's argument is an evolutionary twist. Specifically, he argues that the principal mechanism underlying the spread of middle-class virtues was the strong relationship between wealth and reproductive success in England, which allowed the genes and inherited attitudes of the economically successful to constitute an ever-increasing proportion of the population. The argument is similar to that of the theorists Galor and Moav, who focused not on middle-class values but on attitudes toward child rearing and education.²

Clark supports this Darwinian explanation with compelling evidence that correlates wealth and reproductive success. He shows no evidence, however that the children of the rich in the settled agrarian society of eighteenth- and early nineteenth-century England carried the genes and attitudes that were needed to enact the greatest economic transformation that the world has known. The early ancestors of the landed aristocracy had become wealthy not by virtue of their middle-class values but by virtue of their military prowess and capacity for violence, and their descendants had become wealthy by birth.

Despite the importance that Clark seems to place on a debatable evolutionary argument, his central thesis, which he argues convincingly with well-chosen evidence, does not depend critically on it. The notion that the Industrial Revolution depended on culture remains compelling even without a definitive explanation for the evolution of culture. Overall, Clark has provided a sensible and readable account of important frontier research in economic history.