Sunday, December 9, 2007

Survival of the Richest








Does having money really make a difference? Maybe a better question is, what does ¨having money¨ mean? Does it mean being middle class, a cell phone, a DVD player, and cable tv? Or does it mean that you can afford a ticket to the US Open and plan to take your daughter there ¨to meet the right people.¨

There are quirks in these definitions. I was just thinking that there is a group in America that have all these things... the cell phone, their own home, a DVD player, cable or satellite tv.. but, they are undocumented... so does that keep them from being middle class?

The article below talks about the Calvinist ideal of working hard and being ¨successful.¨ the protestant work ethic. Most Americans may be surprised to know that most undocumented immigrants have a better ¨protestant work ethic¨ than u.s. born residents (even white ones)

There is a lot more to say about Gregory Clark´s book - and how the NY Times presented the review.


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A FAREWELL TO ALMS

A Brief Economic History of the World.

By Gregory Clark.

Illustrated. 420 pp. Princeton University Press. $29.95.
Every story has to begin somewhere. Do we think technological progress was responsible for the Industrial Revolution and the astonishing increase in living standards in some countries but not others since then? Fine, but what brought about the new technology? Maybe social and political institutions — democracy, tolerance, the rule of law — played a role in when and where living standards increased. But where did they come from?

After decades of banishment to the realm of sociology and other such disciplines, the idea that a society’s “culture” matters has recently reappeared in economics. David Landes, an economic historian and a living national treasure if there ever was one, began this movement nearly 10 years ago when he looked in part to culture to explain “why some are so rich and some so poor” (the subtitle of his classic overview of world history).

But why not go one step further: If culture is responsible, where does it come from? Why do some countries have an economically helpful culture while others don’t? And, since no society got very far in economic terms before the Industrial Revolution, what caused the culture of the recently successful ones to change?

In “A Farewell to Alms,” Gregory Clark, an economic historian at the University of California, Davis, suggests an intriguing, even startling answer: natural selection. Focusing on England, where the Industrial Revolution began, Clark argues that persistently different rates of childbearing and survival, across differently situated families, changed human nature in ways that finally allowed human beings to escape from the Malthusian trap in which they had been locked since the dawn of settled agriculture, 10,000 years before. Specifically, the families that propagated themselves were the rich, while those that died out were the poor. Over time, the “survival of the richest” propagated within the population the traits that had allowed these people to be more economically successful in the first place: rational thought, frugality, a capacity for hard work — in short the familiar list of Calvinist, bourgeois virtues. The greater prevalence of those traits in turn made possible the Industrial Revolution and all that it has brought. (A lacuna in the argument is that Clark never says just how prevalent this Darwinian process made the traits he has in mind. Would an increase from, say 0.05 percent of the population to 0.50 percent have mattered much?)

Clark’s book is delightfully written, offering a profusion of detail on such seeming arcana as technology in Polynesia and Tasmania before contact with the West,

Sharia-consistent banking practices in the Ottoman Empire and bathing habits (actually, the lack thereof) in 17th-century England. But Clark’s eye is fixed steadily on the idea he’s pushing; the details are fascinating, but they are there because they help make his central argument. Clark is also marvelously adept at drawing out the relevance of many facets of his historical inquiry for present-day concerns. For example: “We think of the Industrial Revolution as practically synonymous with mechanization, with the replacement of human labor by machine labor. Why in high-income economies is there still a robust demand for unskilled labor? Why do unskilled immigrants with little command of English still walk across the deserts of the U.S. Southwest to get to the major urban labor markets to reap enormous rewards for their labor, even as undocumented workers?”

The heart of Clark’s analysis consists of a detailed examination of births, deaths, income and wealth in England between 1250 and 1800, as evidenced primarily by wills. Although the records are scant, he finds that on average richer people were more likely to marry than poorer people, they married at earlier ages, they lived longer once they were married, they bore more children per year of marriage, and their children were more likely to survive and to bear children themselves. The result was centuries of downward mobility, in which the offspring of richer families continually moved into the lower rungs of society. Along the way, their behavioral traits and attitudes became ever more dominant.

Clark’s hypothesis is interesting for at least two reasons. First, it provides an internal mechanism to explain the Industrial Revolution. No deus ex machina, like James Watt’s improving the steam engine, or the Whigs’ overthrow of James II leading to England’s Glorious Revolution, is necessary. Given the conditions at work in England nearly a millennium ago, changes naturally occurred that made an industrial revolution probable, if not inevitable.

Second, Darwinian evolution is usually seen as a process that works over very long periods of time, with consequences for humans that we can observe only by looking far into the past. By contrast, Clark’s explanation for the Industrial Revolution is a change in “our very nature — our desires, our aspirations, our interactions” — that occurred within recorded history, indeed within the last half-dozen centuries. His idea also stands in contrast to the entire orientation of Enlightenment thinking, including Adam Smith’s, toward accepting human nature as it is and asking what social institutions would allow humankind with that nature to flourish (as Rousseau put it, “men as they are and laws as they should be”).

One frustrating aspect of Clark’s argument is that while he insists on the “biological basis” of the mechanism by which the survival of the richest fostered new human attributes and insists on the Darwinian nature of this process, he repeatedly shies away from saying whether the changes he has in mind are actually genetic. “Just as people were shaping economies,” he writes in a typical formulation, “the economy of the preindustrial era was shaping people, at least culturally and perhaps also genetically” (emphasis added). Nor does he introduce any evidence, of the kind that normally lies at the core of such debates, that traits like the capacity for hard work are heritable in the sense in which biologists use the term.

The issue here is not merely a matter of too often writing “perhaps” or “maybe.” If the traits to which Clark assigns primary importance in bringing about the Industrial Revolution are acquired traits, rather than inherited ones, there are many non-Darwinian mechanisms by which a society can impart them, ranging from schools and churches to legal institutions and informal social practices. But if the traits on which his story hinges are genetic, his account of differential childbearing and survival is necessarily central. (Experts on medieval demography may also raise questions about Clark’s reliance on wills, rather than parish records of births and deaths, but that is a different issue.)

Another troubling aspect of Clark’s book is the tension between his portrayal of the Industrial Revolution as a gradual development, as it would have to have been if it were the consequence of an evolutionary process — “the suddenness of the Industrial Revolution in England was more appearance than reality,” he claims — and his emphasis in early chapters on the iron grip of the Malthusian economy from which the Industrial Revolution finally allowed humanity to break free. Clark is thorough in explaining the perverse mechanics of the Malthusian world, in which food production and therefore population are strictly limited, together with the perverse implications that follow. (Catastrophes like the Black Death or failed harvests make people — those who survived, that is — better off by reducing the numbers competing for limited resources; improvements like sanitation or new medicines, or even charity, make everyone miserable.) And he repeatedly insists that this was the world in which humans, everywhere, lived for eons: “Living standards in 1800, even in England,” he writes, “were likely no higher than for our ancestors of the African savannah.” After this prelude, however, discovering that the Industrial Revolution is consistent with a Darwinian explanation because it occurred so gradually comes as something of a surprise.


Clark’s hypothesis also raises a troubling question about the future, albeit one he doesn’t mention. If the key to economic progress in the past was the survival of the richest, what is in store now that the richest no longer outbreed everyone else? As he notes in passing, in most high-

income countries today family income bears no systematic relation to the number of children produced. Further, the populations of some rich countries in Europe are shrinking, apart from immigration, and the United Nations Population Division projects that 97 to 98 percent of the entire increase in the world’s population between now and 2050 will be in the developing world.

Right or wrong, or perhaps somewhere in between, Clark’s is about as stimulating an account of world economic history as one is likely to find. Let’s hope that the human traits to which he attributes economic progress are acquired, not genetic, and that the countries that grow in population over the next 50 years turn out to be good at imparting them. Alternatively, we can simply hope he’s wrong.

Benjamin M. Friedman is an economics professor at Harvard. His most recent book is “The Moral Consequences of Economic Growth.¨



article:http://www.nytimes.com/2007/12/09/books/review/Friedman-t.html?_r=1&oref=slogin
image: http://www.nytimes.com/2007/12/09/books/review/Friedman-t.html?_r=1&oref=slogin

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