Tuesday, September 04, 2007

Latest on Reading Gregory Clark's 'Farewell to Alms'

The deeper I get into ‘A Farewell to Alms’ (Princeton University Press) the outline of Gregory Clark’s main thesis begins to take shape. I cannot anticipate its full form, but I am getting restless with it already. I find the book enjoyable to read, and exasperating in parts at the same time. His main but flawed criticism of Adam Smith, apart from lumping him carelessly with neoclassical economics, jars when he quotes in place of the so-called ‘industrial revolution’ a phrase that could have come direct from both Wealth Of Nations (1776) and Lectures On Jurisprudence (1762-3), namely ‘slowly and gradually’, and while claiming this as a correction to the wilder ideas of 19th century and 20th century economic historians, he also uses it to take a side swipe at Smith, as if he wrote something different.

Smith historical analysis would sit easy with Clark’s ‘brief economic history of the world’. Smith sourced the habits of commercial society right back in the hunter-gatherer ‘rude’ societies, the ‘very slow and gradual consequence’ of ‘the propensity to truck, barter, and trade’. His assessment of each ‘age’ that followed – shepherding and agriculture – was that they increased the productive powers of labour.

Hence, the history of the last ten millennia is not the fact that subsistence levels of consumption did not change (which Smith agreed was the case to the 18th century), but that total output of the ‘necessaries, conveniences, and amusements of life’ did change constantly. To focus on per capital averages and not on gross annual outputs is misleading.

Technology did change and improve constantly, though not year-by-year. Clark is in a hurry – ‘why did it take so long?’, etc. I find asking why Babylon didn’t go on to a massive rise in per capita income a most strange idea. How many ‘hanging gardens’ could they produce and who would invest their non-extistent capital in them elsewhere? Labour is not enough for speeding through to the commercial age.

The pace began to ‘quicken’ (relatively speaking; more like separate strands were converging slowly: think of Smith’s account of the common labourer’s jacket) in the 16th – 18th century. Everything else was dragged along not just by knowledge, but by its dissemination (printing, art, culture, languages, and inter-actions on a scale in Europe). The image that Clark gives by way of criticising standard ‘explanations’ of applying neoclassical rational thinking to all (something Smith could never be accused of) and to history is perfectly justified, though his examples sometimes are quite, er, ‘silly’, for example in respect of the alleged economics of slaves doing a deal with their masters. Isolated examples are not data. Nor does it help, in my view, that Solow’s neoclassical growth theory, with its equilibrium explanations and assumptions, etc., is used to explain history. Growth is a process of disequilibria.

History, since ‘rude’ society is the history of the ruling orders, who built the artefacts of civilisation out of the surplus extracted from the subsistence labour of the majority. This raised poor bright people as well as it gave roles for disinherited rich sons. That innovators did not gain the prizes they are supposed to have lusted after is not germane. They didn’t know they were going to be cheated out of their ‘letters patent’. Think of Harrison’s chronometer and his non-‘prize’ denied to him by rivals for many years, which changed shipping by enabling longitude to be measured on great circles, anywhere on earth, thus raising productivity.

It is not the certainty of prizes, or rewards, that drove them – that prizes didn’t come after the fact cannot be said to have influenced their work beforehand. If James Watt had not been refused the right to work as an instrument maker in Glasgow by the local Guild, and the Senate at Glasgow University, a member of which was Adam Smith, had not appointed him to the University in 1763, which was outside the Guild’s legal rights to prohibition, he would not have been given the University’s model Newcomen steam engine to repair, which he did and then went on the improve it. Such are the tenuous events that led to Britain’s lead in power-driven machinery in the 19th century.

I look forward to the next chapters.


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