Thursday, September 06, 2007

Gregory Clark responds to Comments on His new book

Over at Marginal Revolution, the debate over Gregory Clark’s A Farewell to Alms’ (Princeton University Press) continues here.

Gregory Clark responds to my earlier efforts:

I do not want to debate Gavin Kennedy on intellectual history (that would be like me challenging Roger Federer to a tennis match).

But I do relish debate him and others on my court, which is economic history.
The widespread impression that between 1300 and 1800 England experienced significant institutional improvements is just wrong. There were changes, yes. But not improvements.

England in 1300 was a highly commercial society, with commodities like grain flowing freely across England, and between England and the rest of Europe. In 1300 in London you could rent storage in granaries for grain on a weekly basis. Court records reveal a web of debt stretching out from London into the Midlands between grain suppliers and London merchants (see the work of Bruce Campbell and his co-authors on the medieval London grain market).

The peasantry rather than being the subjects of abusive overlords, had instead largely expropriated from their supposed masters they land they cultivated, paying rents well below market values in most cases.

Guilds restricted trade and crafts in towns, but there was so much competition between different towns that these restrictions could have only modest effect.
Transport costs in 1300 were no greater than in 1750 (though these costs did fall in the late 18th c).

Taxes and trade restrictions, unlike in 1800, were minimal.
So why was medieval England largely stagnant technologically?”

Posted by: Gregory Clark at Sep 5, 2007 9:30:45 AM

And my reply:

Gregory Clark
You appear to be under the impression that there are wide differences between us and that I reject your hypotheses about the IR (being of long gestation, and not a ‘revolution’), when on that issue we are in complete agreement. Development out of the ‘Malthusian trap’ was, and remains, a long, slow and gradual process, lasting from the revival of commerce in Western Europe, following the near millennia after the fall of Rome.

Your comments about ‘institutions’ address a debate in the profession of which I have no part. By institutions you include all the social arrangements in society from structures of organisations of the state, church, and laws, habits, motives, taxation policies, relative prices, and rewards, net of taxes, and so on.

You may also be addressing a debate among the World Bank, IMF, ‘the Washington Consensus’ and modern neoclassical economics, its equilibrium growth theory and all, of which my comments on your narrative have said nothing (except, en passant to express severe doubts about the applicability of Solow’s neoclassical growth theory to actual growth as it occurred from ‘1800’, which in my humble view was not, and is not, an equilibrium process.

Sweeping generalisations about ‘nothing changed’ between 1300 and 1800 are not proven on the basis of what I have read so far to page 271, or that it is mystery why Babylon did not produce the IR, or China, etc. Cumulative changes did occur over the 500 years you identify, though not in the poorest majority’s subsistence (I believe that focus should be not just about calories). The crudest of produced artefacts entered consumption trends in considerable amounts, via ‘hand-me-downs’ from the discards of richer families and from cheap substitutes (from the evolving pedlar trader networks across Europe (see: Laurance Fontaine, 1996. ‘History of Pedlars in Europe’).

Economic history is not, in my humble view, a history of the subsistence fates of the majority of people (they have that in common with the majority of the history of the human race to the emergence of shepherding, agriculture and commerce and beyond). Economic history is the history of the consumption of the richer members of society. It’s what they, and their intellectual retainers, achieved in terms of creating an evolving economy and in building the knowledge base, while socially keeping the poor in their ‘place’ on subsistence and extracting from them the surplus for what we call civilisation. The economic history of the poor is pretty desperate, then and now. The existence of stone-built Europe could not have been achieved without some of the surplus output to feed rising populations being diverted to today’s ruins across Europe.

The economy that produced the common labourer’s coat, identified by Smith as an example of the existing extent of people’s inter-dependence across commercial societies and the concomitant growing absolute dependence individually, did not suddenly appear in 1800; it took centuries to reach the commercial levels of the 1760-76 examples drawn on by Adam Smith.

You ask why nothing changed ‘technologically’ after 1300. Among other things, including the slowly expanding knowledge base, the commercial market evolved, slowly and gradually. Despite all the set-backs, misleading policies, including mercantile political economy (and colonialism, jealousy of trade, warfare technology, especially marine) gross measures of output increased without raising per capita incomes, except in short periods, from growing populations. States of ‘Free trade’, with not much to trade in large enough volumes to make significant differences, are misleading. There were no regulations on bank credit in 1300 because there were no banks (only wealthy families, some of whom lent money). That England had a grain trade with the rest of Europe was hardly enough to promote what happened four of five centuries later, and which had to happen before what happened was able to happen. Consumption spending rose from Elizabethan times (mainly in new products – starch for fashionable clothes).

Development does not depend on ‘perfect’ institutions, so-called laissez-faire (certainly needed for Solow’s equilibrium growth model), and such like. If anything like perfect liberty were absolutely necessary for growth, paraphrasing Smith, no country in the world would have progressed (which not the same as saying imperfect institutions and economic policies will always create growth).

In summary, what our debate is about is mainly your narrative remarks, not your data. You have made many important points in AFTA (I agree totally with Tyler Cowen on the importance of your book), prompting me to follow up your detailed cases by consulting your multiple references. Presently I am in France to the beginning of October without access to my library and the university’s resources. On my return, you may be assured that I will follow your references up closely. In the meantime, you may do yourself the courtesy of re-reading Adam Smith’s Wealth Of Nations and his Lectures On Jurisprudence. That way we will be both see where each of us is coming from. I don’t think we are all that far apart on fundamentals; but I will know more about that after the next section of AFTA.

Hence, I don’t regard our debate as competitive or akin to tennis match! My differences are with your narrative, so far as I have read it to page 271. From critical discourse there isn’t a ‘winner’ or a ‘loser’; there is only progressive improvement in the knowledge base.

You should go to Marginal Revolution and read the whole debate (38 readers’ comments since yesterday). The standard is high and also informative.

It can be found here:


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