The Wealth and Poverty of Nations
Encyclopedia
The Wealth and Poverty of Nations (ISBN 0-393-04017-8), published in 1998 (with an epilogue added to the 1999 paperback edition), is a book by David Landes
, currently Emeritus Professor of Economics and former Coolidge Professor of History at Harvard University. In it, Landes explains the 'European Miracle', or why European societies experienced a period of explosive growth when the rest of the world did not.
In doing so, he revives, at least in part, several theories he believes have been unfairly discarded by academics over the last 40 years. Among them:
He also spends a good deal of time in the effort to debunk claims that this miracle did not happen, was not significant, or was financed by European colonialism.
In short, he argues that the vast economic growth of Industrial Revolution was no accident--that several qualities of Europe (its climate, political competition, attitude towards science and religion, etc) and especially certain countries in Europe (firstly England
, but also to an extent the Netherlands
, with other countries left to copy their advances with varying degrees of success)
in his analysis, a charge which Landes himself does not deny--in fact, he embraces it explicitly, arguing that an explanation for an economic miracle that happened originally only in Europe (though he deals with the later 'Asian miracle' in Wealth and Poverty) must of necessity be a Eurocentric analysis, thus siding at least at some level with thinkers such as Bernard Lewis
. Following Daniel Bell, knowledge is the necessary link between 'The European miracle' and the American post-industrial society.
Recent Work by Tabellini (2007, 2008), Guiso (2006), Inglehart (1996), Marini (2005) and Platteu (2000), in addition to Work by Banfield (1958), provides strong econometric evidence in support of the Landes conclusion. Finding among other things that Africans and South Americans value thrift and entrepreneurship, on average, much less than North American and Northern Europeans and that the levels of trust in these countries are substantially lower than in the West. Trust is important in a society because it lowers transaction costs.
Landes' disdain for mono-causal explanations has also caused his theory to be labeled as confused or contradictory. Landes does give several 'causes' and does not go into much detail explaining what he sees to be their relative weights. This is done, however, by the authors mentioned in the previous paragraph.
For an opposing viewpoint that emphasizes geography rather than culture as the main cause for differences of prosperity among peoples, see Jared Diamond
's book Guns, Germs, and Steel: The Fates of Human Societies. Guns, Germs and Steel, according to some economists, fails to account for, or analyze, the failure of the Incan Empire and the Chinese Empires to develop and industrialize sooner. Nor does it address the question of why some countries in Europe have fared much better than others. Lastly, the book also does not offer an explanation of the rise, or the fall, of the Mongolian Empire, which had all, if not more, of the environmental advantages that he ascribes to Europe. The approach used by Landes would explain these occurrences based upon the culture and the governmental models that were employed to foster technology and development.
David Landes
David S. Landes is a professor emeritus of economics at Harvard University and retired professor of history at George Washington University. He is the author of Revolution in Time, The Unbound Prometheus, The Wealth and Poverty of Nations, and Dynasties...
, currently Emeritus Professor of Economics and former Coolidge Professor of History at Harvard University. In it, Landes explains the 'European Miracle', or why European societies experienced a period of explosive growth when the rest of the world did not.
In doing so, he revives, at least in part, several theories he believes have been unfairly discarded by academics over the last 40 years. Among them:
- The 'cultural thesis' or 'Protestant work ethicProtestant work ethicThe Protestant work ethic is a concept in sociology, economics and history, attributable to the work of Max Weber...
' of Max WeberMax WeberKarl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
- The 'hydraulic thesis'Hydraulic empireA hydraulic empire is a social or government structure which maintains power and control through exclusive control over access to water...
or 'Oriental Despotism thesis' of Karl A. Wittfogel
- The 'climate thesis' that posits that tropical climes are, ceteris paribusCeteris paribusor is a Latin phrase, literally translated as "with other things the same," or "all other things being equal or held constant." It is an example of an ablative absolute and is commonly rendered in English as "all other things being equal." A prediction, or a statement about causal or logical...
, poor candidates for development.
- Many of the theories of Adam SmithAdam SmithAdam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
, whose Wealth of Nations is borrowed from for the title. But this does not necessarily mean a doctrinaire neoclassicismNeoclassical economicsNeoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
, as Landes notes that 'comparative advantage' can change over time, and also that developed countries, contrary to neoclassical theory, typically developed in an environment of protectionismProtectionismProtectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
against foreign trade.
He also spends a good deal of time in the effort to debunk claims that this miracle did not happen, was not significant, or was financed by European colonialism.
In short, he argues that the vast economic growth of Industrial Revolution was no accident--that several qualities of Europe (its climate, political competition, attitude towards science and religion, etc) and especially certain countries in Europe (firstly England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
, but also to an extent the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, with other countries left to copy their advances with varying degrees of success)
Criticism and response
Critics have charged Landes with EurocentrismEurocentrism
Eurocentrism is the practice of viewing the world from a European perspective and with an implied belief, either consciously or subconsciously, in the preeminence of European culture...
in his analysis, a charge which Landes himself does not deny--in fact, he embraces it explicitly, arguing that an explanation for an economic miracle that happened originally only in Europe (though he deals with the later 'Asian miracle' in Wealth and Poverty) must of necessity be a Eurocentric analysis, thus siding at least at some level with thinkers such as Bernard Lewis
Bernard Lewis
Bernard Lewis, FBA is a British-American historian, scholar in Oriental studies, and political commentator. He is the Cleveland E. Dodge Professor Emeritus of Near Eastern Studies at Princeton University...
. Following Daniel Bell, knowledge is the necessary link between 'The European miracle' and the American post-industrial society.
Recent Work by Tabellini (2007, 2008), Guiso (2006), Inglehart (1996), Marini (2005) and Platteu (2000), in addition to Work by Banfield (1958), provides strong econometric evidence in support of the Landes conclusion. Finding among other things that Africans and South Americans value thrift and entrepreneurship, on average, much less than North American and Northern Europeans and that the levels of trust in these countries are substantially lower than in the West. Trust is important in a society because it lowers transaction costs.
Landes' disdain for mono-causal explanations has also caused his theory to be labeled as confused or contradictory. Landes does give several 'causes' and does not go into much detail explaining what he sees to be their relative weights. This is done, however, by the authors mentioned in the previous paragraph.
For an opposing viewpoint that emphasizes geography rather than culture as the main cause for differences of prosperity among peoples, see Jared Diamond
Jared Diamond
Jared Mason Diamond is an American scientist and author whose work draws from a variety of fields. He is currently Professor of Geography and Physiology at UCLA...
's book Guns, Germs, and Steel: The Fates of Human Societies. Guns, Germs and Steel, according to some economists, fails to account for, or analyze, the failure of the Incan Empire and the Chinese Empires to develop and industrialize sooner. Nor does it address the question of why some countries in Europe have fared much better than others. Lastly, the book also does not offer an explanation of the rise, or the fall, of the Mongolian Empire, which had all, if not more, of the environmental advantages that he ascribes to Europe. The approach used by Landes would explain these occurrences based upon the culture and the governmental models that were employed to foster technology and development.
External links
- Book review
- Information on Landes and a short critique of theory from David Cosandey, a Swiss-American thinker and critic of theories on the European Miracle
- Bradford DeLong on this book http://econ161.berkeley.edu/Econ_Articles/Reviews/landes.html#anchor2077092