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Solow on Gregory Clark

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Clive Crook quotes from Robert Solow's review of Gregory Clark's book.


Clark's pessimism about closing the gap between the successful and less successful economies may derive from the belief that nothing much can change unless and until the mercantile and industrial virtues seep down into a large part of the population, as he thinks they did in preindustrial England. That could be a long wait. If that is his basic belief, it would seem to be roundly contradicted by the extraordinary sustained growth of China and, a bit more recently, India. Embarrassingly for Clark, both of those success stories seem to have been set off by institutional changes, in particular moves away from centralized control and toward an open-market economy.

Overall, the tone of the review is quite negative. In Solow's view, where Clark is being sound he is not being new and where he is being new he is not being sound. It is amusing to see Solow rise to the defense of Douglass North, who can hardly be Solow's favorite economist.

Clark's own pugnaciousness probably helps provoke this sort of reaction. If Clark were more generous to other economists, then other economists would be more inclined to be generous to him.

When all is said and done, I think that Clark's observation that India did not develop a cotton manufacturing industry in spite of having access to British capital and British management is worth pondering. He provides both direct and indirect evidence for his quality-of-labor story.

On the other hand, I agree with Solow that Clark's claim that Britain's industrial revolution reflected the bourgeoisie outbreeding the other classes is a large conjecture resting on rather flimsy evidence. I think that Clark succeeds in putting labor quality into play. He fails if he thinks that he has driven every other causal factor off the field.

UPDATE: A commenter points to Samuel Bowles, who makes a number of critical comments on Clark, including


if h2 = 0.26 the correlation across 4 generations (great grandfather-great grandson) is 0.032. If we estimate h2 from the observed intergenerational correlation of traits (r) as above, then the correlation of a genetically transmitted trait across n generations is just r/2n -2. Thus the statistical association across generations becomes vanishingly small over the course of a single century, whether the trait is culturally or genetically transmitted.

I sense that this argument is a swindle, but I cannot find the flaw.


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COMMENTS (10 to date)
Barkley Rosser writes:

Regarding India, there is also the minor detail that the "free trade" policy of Britain involved the colonial ruler selling its Lancashire textile products to India, while Indian producers were not allowed to sell theirs in Britain...

gaddeswarup writes:

There is an interesting review by Sam Bowles in science magazine with a supplement here:
http://3quarksdaily.blogs.com/3quarksdaily/2007/10/comments-on-gre.html

Mr. Econotarian writes:

The only problem is that there was a time when China was a massive mercantile country, as technologically advanced or even more advanced than the West, and probably more rich.

There was also a time when much of India was similarly comparatively as rich as the west, but not quite in the same league with China.

I'm not sure one can say the same for sub-Saharan Africa, but I'll plead ignorance on just how economically advanced any of the major kingdoms there were...I suspect none rivaled Indian or Chinese pre-industrial economies.

China was definately sidetracked by bad institutions that were xenophobic and later socialist.

interested writes:

'Clark's claim that Britain's industrial revolution reflected the bourgeoisie outbreeding the other classes'

Im afraid this is a highly speculative hypothesis. The British Isles are in the process of having their genetic history studied in depth. The effects of the Roman invasion in the first century AD can now be clearly seen to cite but one example. Ireland is unusual in Europe as it is seemingly related to the Basques. There have been numerous genetic interchanges since these isles were settled circa 10,000 years.

If there was such a significant 'selective sweep' as Clark suggests this would leave a sizable genetic signature. No one has found any such signature to date.

This suggestion harks back to the idea that the European population was relatively rapidly replaced by farmers from the Middle East. What is now known is that the farming culture spread and the population remained fairly static. This effect is being seen in India and China at the minute - cultural spread rather than population movement and replacement.

Before anyone suggests that the speed of information flow was the limiting factor I suggest they look at the creation of grave mounds. These appeared 500-1000 years before the Pyramids. They are even by modern standard significant engineering projects that required several years to complete. 1/3 of all of them are found in Ireland. Dating isnt quite sorted yet but it looks like Ireland was their origin. They became widespread across Europe within a century. No internet, no telephone no nothing. Information and culture can spread very rapidly.

Concerning free trade and England. The Tory Government of Robert Peal fell over a free trade issue - allowing non British ships to import grain. Much of British's Empire wealth revolved around control of imports from and exports to from the Dominions.

Concerning sub Saharan Africa. West Africa established a number of large empires between 500-1000 AD that could bear comparison with most of the rest of the world at that time. Records are very patchy but it appears that things went seriously downhill after that mostly due to wars.

Matt writes:

Clark is taking some heat.

All of the theories have to deal with very significant reorganization of society within one or two generations, from 1680 to 1750.

What tipping point could occur in two generations? Genetics is a hard explanation.

We have to question whether that amount of time is too short for institution building unless institutions are a lot easier built than we think.

Something happened to the kids. One generation they were intended to be blacksmiths and the next they were intended to become engineers.

Steve Sailer writes:

My impression is that China's growth is mostly happening in a huge industrial sector with less growth in the peasant and the knowledge worker segments at the top and bottom of society.

In contrast, India's growth is U-shaped -- the peasants have been increasing their productivity from the abysmal levels reigning until recently and at the high end, some Indians are doing well in knowledge worker fields.

Judging from the experience of Hong Kong and Singapore, I would presume that China's growth from a broad working class into high end knowledge worker jobs will occur in due course. We've seen this kind of economic development before in Europe, so it's nothing new, just happening very rapidly and on a more massive scale.

India's future is harder to judge, since this U-shaped growth is rather novel. Most successful modern economies went through a period of broad industrialization. Can India skip it and take the masses straight from peasantry to knowledge work? I don't know.

Also, overseas Indian communities that weren't selected for brainpower as in America are moderately successful (e.g., Trinidad or Fiji) but not in the Singapore Hong Kong class.

IQ testing shows a fairly big advantaged for China over India, but India would be the hardest country in the world to find a nationally representative sample, so I don't know how much credence to give these results. Most people who have thought about it assume the variance of IQ is greater in India than in China, but I've never seen any quantitative measures of that.

Punditus Maximus writes:

Isn't a far simpler explanation that certain institutions make industrialization more likely, and Britain happened to be the country with reasonably good odds that got the good die roll?

Fundamentalist writes:
Matt: "What tipping point could occur in two generations? Genetics is a hard explanation."

Good point! Also, I like to test theories such as Clark's against other countries and ask why something similar didn't happen here? For example, why didn't such genetic change happen in France?

My pet answer for why England developed rapidly during that period is the Dutch invasion of 1688, which brought with it Dutch free markets.

Matt writes:

Define he age of survival, that age in a kid when the parents know he has outlasted the fatal diseases. My theory says it dropped from 15 in 1650 to 8 years in 1700.

Parents and markets began to invest earlier in the kids, earlier education, earlier nutritional concern. The kids became valuable, so did the mothers.

The earlier you educate, the longer the outlook, the more accurate the yield curve, the more efficient the economy.

Heather writes:

In regards to the h^2 argument, the problem with it is that people are likely to marry and have children with someone who is similar to them, more so now. This leads to the stratification that has been talked about many times here. And while the statistical association of one great-grandparent to great-grandchild is small, the correlation between both great-grandparents leads to a stronger cultural and genetic transmission that would be expected if assuming random selection of mates.

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