Book Summary: “A Farewell to Alms: A Brief Economic History of the World” by Gregory Clark


A Farewell to Alms

Title: A Farewell to Alms: A Brief Economic History of the World
Author: Gregory Clark
Scope: 3 stars
Readability: 4 stars
My personal rating: 5 stars
See more on my book rating system.

Topic of Book

Clark presents a new theory as to why Great Britain industrialized first.

My Comments:

While I disagree with Clark on a number of points, I think this book is worth reading.

Key Take-aways

  • Before 1800 there was no progress or technological advance.
  • During that time, economic growth was mainly channeled into a greater population size.
  • Before 1900 men of high social and economic status had significantly more children than men of low social and economic status. Those children were also more likely to survive and reproduce.
  • This enabled the genetic traits necessary for economic development – patience, hard work, ingenuity, innovativeness – to gradually broaden with each generation.
  • English medieval institutions based upon peaceful conflict resolution and protecting property rights created the stable long-term environment that enabled this to happen.
  • Differences in fertility based upon income were much lower in China, Japan and other societies.

Other books by the same author:

Important Quotes from Book

“The basic outline of world economic history is surprisingly simple… Before 1800 per person – the food, clothing, heat, light, and housing available per head – varied across societies and epochs. But there was no upward trend. A simple but powerful mechanism explained in this book, the Malthusian Trap.” (p1)

“I make no apologies for focusing on income. Over the long run income is more powerful than any ideology or religion in shaping lives.” (p4)

“The crucial factor was the rate of technological advance… before 1800 was well below 0.05 percent, about a thirtieth of the modern era.

In this model, the economy of humans in the years before 1900 turns out to be just the natural economy of all animal species.” (p5)

“For England, we will see compelling evidence of differential survival of types in the years 1250-1800. In particular, economic success translated powerfully into reproductive success. The richest men had twice as many surviving childhood at death as the poorest. The poorest individuals in Malthusian England had so few surviving children that their families were dying out. Given the status nature of the Malthusian economy, the superabundant children of the rich had to, on average, move down the social hierarchy in order to find work… The attributes that would ensure later economic dynamism – patience, hard work, ingenuity, innovativeness, education – were thus spreading biologically throughout the population.” (p7-8)

“At least in England, the emergence of such an institutional stable, capital-intensive economic system created a society that rewarded middle-class values with reproductive success, generation after generation. This selection process was accompanied by changes in the characteristics of the preindustrial economy, due largely to the population’s adoption of more middle-class preferences. Interest rates fell, murder rates declined, work hours increased, the taste for violence declined, and numeracy and literacy spread even to the lower reaches of society.” (p8)

“Societies without such a long experience of settled, pacific agrarian society cannot instantly adopt the institutions and technologies of the more advanced economies, because they have not yet culturally adapted to the demands of productive capitalism” (p14)

“The Malthusian model supplies a mechanism to explain this long-run population stability. In the simplest version there are just three assumptions:

  1. Each society has a birth rate, determined by customs regulating fertility, but increasing with material living standards.
  2. The death rate in each society declines as living standards increase.
  3. Material living standards decline as population increases.” (p20)

“Engel’s Law. The poorer a family, the larger the share of its income was spent on food. This relationship has been confirmed by numerous subsequent studies. For the poorest societies food can represent more than 80 percent or more of all expenditures, while for the richest spending on the actual food of meals is a mere 5-10 percent of income… When people are very poor, so that hunger is ever present, they consume the cheapest form of calories available – grain.” (p52)

“the high share of food expenditures before 1800 ensure that these early societies were largely dispersed and agrarian. If 80 percent of income in the preindustrial world was spent on food, then 80 percent of the population was employed in agriculture, fishing or hunting. Agricultural production also demanded a population that lived close to the fields, so preindustrial societies were rural, with small urban populations.” (p54)

“In terms of wages, stature, diet, and occupations Japan, China and India seem much poorer in 1800 and earlier than Europe” (p69)

“Whereas in the preindustrial world the amount of land per person was a crucial determinant of the wealth of a society, now it is largely irrelevant” (p199)

Capital accumulation only explains about one quarter of economic growth in the industrial era. Innovation explains the other three-quarters. (p200-2)

“this book adopts a particular view of the Industrial Revolution: that it emerged only millennia after the arrival of institutionally stable economies in societies such as ancient Babylonia, because in the interim institutions themselves interacted with a changed human culture. Millennia of living in stable societies, under tight Malthusian pressures that rewarded effort, accumulation, and fertility limitation, encouraged the development of cultural forms – in terms of work outputs, time preferences, and family formation – which facilitated modern economic growth.” (p209)

China’s rapid population growth was largely from the expansion of cultivated land; 62 million acres in 1393 to 158 million acres by 1770. England saw very little expansion after 1300.  (p267)

“income-based differences in fertility seem to have been less pronounced in both Japan and China (compared to England). (267-8)

In the 19th Century many entrepreneurs attempted to establish textile factories and railroads with advanced technology in China and India. They all failed to compete with British firms because the labor was far less productive. Low labor productivity is the major barrier to technology diffusing to poorer countries (p345-350)

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