The 100 most influential persons in history according to ...gandalf.fee.urv.cat/professors/AntonioQuesada/Curs1819/XXX.pdf · The most influential man in history? Norman Borlaug:

Socio-economic macedoine ǀ 24 & 29 November 2015 ǀ 1

The100mostinfluentialpersonsinhistoryaccordingtoHart(1993,pp.vii‐x)1.Muhammad 21.ConstantinetheGreat 41.OliverCromwell 61.NikolausAugustOtto 81.JohnF.Kennedy

2.IsaacNewton 22.JamesWattIII42.AlexanderGrahamBell

62.FranciscoPizarro 82.GregoryPincus

3.JesusChrist 23.MichaelFaraday 43.AlexanderFleming 63.HernandoCortes 83.Mani4.Buddha 24.JamesClerkMaxwell 44.JohnLocke 64.ThomasJefferson 84.Lenin

5.Confucius 25.MartinLuther45.LudwigvanBeethoven

65.QueenIsabellaI 85.SuiWenTi

6.St.Paul 26.GeorgeWashington 46.WernerHeisenberg 66.JosephStalin 86.VascodaGama7.Ts'aiLun 27.KarlMarx 47.LouisDaguerre 67.JuliusCaesar 87.CyrustheGreat8.JohannGutenberg 28.Orville/WilburWright 48.SimonBolivar 68.WilliamtheConqueror 88.PetertheGreat9.ChristopherColumbus 29.GenghisKhan 49.ReneDescartes 69.SigmundFreud 89.MaoZedong10.AlbertEinstein 30.AdamSmith 50.Michelangelo 70.EdwardJenner 90.FrancisBacon

11.LouisPasteur31.EdwarddeVere("WilliamShakespeare")

51.PopeUrbanII71.WilliamConradRöntgen

91.HenryFord

12.GalileoGalilei 32.JohnDalton 52.'Umaribnal‐Khattab 72.JohannSebastianBach 92.Mencius13.Aristotle 33.AlexandertheGreat 53.Asoka 73.LaoTzu 93.Zoroaster14.Euclid 34.NapoleonBonaparte 54.St.Augustine 74.Voltaire 94.QueenElizabethI15.Moses 35.ThomasEdison 55.WilliamHarvey 75.JohannesKepler 95.MikhailGorbachev

16.CharlesDarwin36.AntonyvanLeeuwenhoek

56.ErnestRutherford 76.EnricoFermi 96.Menes

17.ShihHuangTi 37.WilliamT.G.Morton 57.JohnCalvin 77.LeonhardEuler 97.Charlemagne18.AugustusCaesar 38.GuglielmoMarconi 58.GregorMendel 78.Jean‐JacquesRousseau 98.Homer19.NicolausCopernicus 39.AdolfHitler 59.MaxPlanck 79.NiccolòMachiavelli 99.JustinianI20.AntoineLavoisier 40.Plato 60.JosephLister 80.ThomasMalthus 100.MahaviraSpanish‐speaking 4% Scientists/physicians 35%Chinese‐speaking 7% Inventors 10% Science/technology 45%AncientGreece 5% Discoverers/conquerors 4%Rome‐Byzantium 7% Philosophers 6% Philosophers/artists 11%Italian‐speaking 5% Rulers/politicalleaders 28%German‐speaking 15% Artists 5%French‐speaking 10% Religiousleaders 12% Leaders 44%English‐speaking 25%55%Russian‐speaking 4% Eurocentriclist?Muslim 2% Non‐European 29%AncientIndia 3% Non‐Western 20%Themostinfluentialmaninhistory?NormanBorlaug:FatheroftheGreenRevolution“Hesavedmorehumanlivesthananyotherpersoninhistory”:hesavedhundredsofmillionsofstarvingpeople.Murty(2009,p.110)ReferencesHart,MichaelH.(1993):The100:Arankingofthemostinfluentialpersonsinhistory,CarolPublishingGroup,NewYork.Murty,KrishnaK.(2009):50TimelessScientists

“The central hypothesis of this book is that genetic differences between human groups (in particular, differences inaveragenativeintelligence)havebeenanimportantfactorinhumanhistory.”MichaelHart


TheresourcecoursethesisDefinitionResource‐richeconomiesappeartogrowless performworse thanlesswell‐endowedeconomies.Example1:thepostwarindustrializationexperienceofdevelopingcountries.“among the largernewly industrializingcountries, thebiggest countries likeChina, India,Brazil andMexicohavemadeslowerprogresswithindustrialdiversificationthanthesmallerresource‐deficientcountrieslikeKoreaandTaiwan.Allsixcountrieswerepursuinganautarkic i.e.stronglyself‐sufficient industrialpolicy AIP inthe1950s,butthetwosmallestcountries abandoned that policy in favour of a more outward‐oriented competitive industrial policy beginning withTaiwanin1958andKoreain1963.”Auty 1993,p.2 “TaiwanandKorearevertedtocompetitivemanufacturedexportssoonerthanthelargercountriesinordertoovercometheirforeignexchangedeficiencies.Thismeantthat,relativetothelargercountries,theyweredeflectedfromtheirnaturalcomparativeadvantageforashorterperiodoftimesothatfewerdistortionsbuiltupintheireconomies.Bythetimethelarger countries encountered the AIP foreign exchange constraint in the late 1960s as their primary product exportsshrank relative to the size of the rest of the economy their industrial policywas difficult to reform. Thiswas due toentrenched powerful vested interests that benefited from the rents returns in excess of normal profits which werecreatedbytheprotectionofmoreandmoreindustrialsectorsfrominternationalcompetition.”Auty 1993,p.2 Example2:mineraleconomies,definedas“developingcountrieswhichgenerateatleast8percentoftheirGDPand40percentoftheirexportearningsfromthemineralsector.Assuchtheycomprisearoundone‐quarterofallthedevelopingcountries.”Auty 1993,p.3 “Thefrequentexistenceofsubstantialrents revenues inexcessofproductioncostsandanormalreturnoncapital onmineralorescan,however,whencapturedbythegovernmentthroughtaxation,destabilizetheeconomy.Inparticular,theimprudent domestic absorption of mining sector rents is capable of rendering much agricultural and manufacturingactivity internationally uncompetitive. This occurs through a process known as ‘Dutch disease’. It results from astrengthening appreciation of the exchange rate as a consequence of the over‐rapid inflow ofmineral rents into thedomesticeconomy.Insomecases,suchasMexico,VenezuelaandNigeriaduringthe1979–81oilboom,virtuallynonon‐miningactivityremainedinternationallycompetitive.”Auty 1993,p.3andp.5 “TheexperienceofthesixhardmineraleconomiesBolivia,Peru,Chile,Jamaica,PapuaNewGuinea,andZambiaconfirmsthelessonsoftheoil‐exportingcountries:mineralboomscancorrodethecompetitivenessofnon‐miningtradeablesanddownswingadjustment tends tobe laggedand inadequate, evenwith cautiouseconomicpolicies … a central tenetofdoctrinalorthodoxpolicy,namelysectoralneutrality,shouldberejected.Rather,themineralsectorshouldberegardedasabonus. … Astrikingfeatureofallsixeconomiesintheearly1970swasthelackofcommitmenttocompetitiveeconomicdiversification.Itwasassumedthattheprimarysectorwouldgeneratesufficientforeignexchangeandrevenuebonusesindefinitely.”Auty 1993,p.257 “Thebasiclessonis … thattheimperfectresponseofthenon‐miningtradeablestoexchangerateshiftsdrivenbymineralpricevolatilitymakesmineraldependencehighcost.Thesustainabledevelopmentofmineraleconomiesliesinsuccessfuldiversificationintocompetitivenon‐miningtradeables.Themineralsectorshouldnotberegardedasthebackboneoftheeconomy;insteaditshouldbeviewedasabonuswithwhichtoaccelerateeconomicgrowthandhealthystructuralchange.Apragmaticorthodoxpolicy,preferablysupportedbyeffectivemarket‐conformingintervention,canachievethis.”Auty 1993,p.258 QuestionDoestheinfluenceofresourceendowmentoneconomicgrowthdeclinewithdevelopment/wealth?ReferenceAuty,RichardM. 1993 :SustainingDevelopmentinMineralEconomies:TheResourceCurseThesis,Routledge,London.


CharacteristicsofindustrialcapitalismFragilityandmutabilityoftheeconomicworld“Two experiences, we believe, characterize the economic life of our age and distinguish it from the immediatelyprecedinghistorythatformedthehorizonofourdeepestexpectations.Thefirstisthesenseoffragility,andespeciallyofinstitutionalfragilityasacontinuing,perhapspermanentfeatureofeconomiclife … thesenseoffragilitygoestotheoncecommonsensicalideathatprogresswouldleadtothegradualconsolidationofparticularformsofeconomicorganization,andhencetoanevermorecertainsenseofhowbesttodeploytechnology,allocatelaborandcapital,andlink supply of particular products to demand. Today, on the contrary, it is commonsensical to believe that thewaymanyofthesethingsaredonedependsonconstantlyshiftingbackgroundconditionswhosealmostinsensiblemutationcanproduceabruptredefinitionsoftheappropriatewaytoorganizeeconomicactivity. … Forhistorians,aswellasforothersocialscientists,thestudyoftheeconomyhasbecomethestudyofadjustmenttoeverchangingcontexts.Thesecondexperienceisoneoftherecombinabilityandinterpenetrationofdifferentformsofeconomicorganization:the rigid and the flexible, the putatively archaic and the certifiably modern, the hierarchical and the market‐conforming, the trustingand themistrustful. … suddenly therepertoireofeconomic formsdeemedappropriate tocurrentconditionscontainstypessuchasthesmallfirmwhichtwentyyearsagowereviewedasclosetoextinctionandcombinations of types ‐ such as the small contractor collaborating as an equalwith amuch larger customer in thedesignofanewproduct‐whichwerequiteliterallyunthinkable.”SabelandZeitlin 1997,pp.1‐3 Isitnecessarytosacrificeflexibilitytoachievemoreefficiency?“The central theme of this book is that the experience of fragility and mutability which seemed so novel anddisorienting todayhasbeen, in fact, thedefinitiveexperienceof theeconomicactors inmanysectors, countriesandepochsinthehistoryof industrialcapitalism.Preciselybecausetheyhavebeenawareofthecomplexdependenceofevery form of economic organization on multiple and shifting background conditions, they have constantlyexperimented with institutional designs … . For the same reasons, they have rarely interpreted economic andtechnological progress as continual and ineluctable progression towards a single set of practices that in their self‐perfectionwouldultimatelypassintoasphereoftranshistoricalpermanency.Whatwefind … isanextraordinarilyjudicious, well‐informed and continuing debate within firms, and between them and public authorities, as to theappropriateresponsestoaneconomywhosefutureisuncertain,butwhoseboundaryconditionsatleastinthemiddletermaretakentobeclear. … wheremanyobserversinthepost‐warperiodsawtheeconomyassteadilyincreasinginefficiencythroughtheevermorespecializeduseofresources,andthereforepayinganacceptableprice in increasedrigidity forpreviouslyunimaginable increases inwell‐being, throughoutmostof thehistoryof industrial capitalism,andagaintoday,theeconomicactorshavetriedwithconsiderablesuccesstoincreaseefficiencywithoutjeopardizingandindeedsometimesevenincreasingflexibility.SabelandZeitlin 1997,p.3 ReferenceSabel, Charles F.; Jonathan Zeitlin 1997 : World of possibilities: Flexibility and mass production in Westernindustrialization,CambridgeUniversityPress,Cambrdige,UK.


Economicdevelopmentandknowledge/technologyAliceAmsden’sofeconomicdevelopment“Economicdevelopment is aprocessofmoving froma set of assetsbasedonprimaryproducts, exploitedbyunskilledlabor, to a set of assets basedon knowledge, exploited by skilled labor. The transformation involves attracting capital,humanandphysical,outofrentseeking,commerce,and‘agriculture’ broadlydefined ,andintomanufacturing,theheartofmoderneconomicgrowth.Itisinthemanufacturingsectorthatknowledge‐basedassetshavebeennurturedandmostintensivelyused.Thegreatersuchassets, theeasier theshift fromprimaryproductproductionto industrialproductionandlatertothesupplyofmodernservices .A‘knowledge‐basedasset’isasetofskillsthatallowsitsownertoproduceand distribute a product at or above prevailing market prices or below market costs . The requisite skills are bothmanagerial and technological in nature. They are science‐based or artisan and are embodied in an individual or firm,dependingon thescaleof thephysicalplantand thecomplexityof theproductionprocess.Threegeneric technologicalcapabilities that nurture knowledge‐based assetsmaybedistinguished: production capabilities the skills necessary totransform inputs intooutputs ; project execution capabilities the skillsnecessary to expand capacity ; and innovationcapabilities theskillsnecessarytodesignentirelynewproductsandprocesses .”Amsden 2001,p.2 Whytechnologyneednotdiffuseeasilyandmaycreatedivergence“The nature of technology itself makes knowledge difficult to acquire. Because the properties of a technology cannotnecessarilybefullydocumented,processoptimizationandproductspecificationremainanart.Themanagerialskillsthatcomprise suchan art are themselves tacit rather thanexplicit. Technological capabilities that createnewproducts andnovelproductiontechniquesarepartofafirm’s‘invisible’assets … .Suchassetsallowafirmtosellbelowcompetitors’costsandabovetheirqualitystandards.Becauseknowledge‐basedassetsareproprietary,intangibleandhencedifficulttocopy,theyleadtoabove‐normalprofitsandearntheirownersmonopolyrents.”Amsden 2001,p.5 “Everylatecomermustlearnfromanestablishedmaster.Butnotalllearnersareequal.Asanecdotalevidenceonprewartechnologytransfersuggests, themorebackwardthe learner, themoredifficult the transfer.This tendencyperpetuatesdivergence in income between rich countries and poor countries attempting to catch upwith theworld technologicalfrontier.”Amsden 2001,p.69 “Countriesthatinvestedheavilyinnationalfirmsandnationalskills—China,India,KoreaandTaiwan—allhadrelativelyequalincomedistributions.Anationaleconomymayberegardedasanorganicwhole.Thegreaterincomeinequality bysocial class, race, religion, or region , themore that organicwhole is fractured, and themoredifficult it is tomobilizesupportfornationalbusinessenterprisesandfirm‐specificnationalskills.”Amsden 2001,p.18 “Prewar manufacturing experience emerges as a necessary condition for postwar industrial expansion given that nosuccessfullatecomercountrymanagedtoindustrializewithoutit.”Amsden 2001,p.121 Inadequatenessofcomparativeadvantagetheory“Given imperfectknowledge,productivityandqualitytendtovarysharplyacross firms inthesameindustry—afortioriacrossfirmsinthesameindustryindifferentcountries.Thepriceofland,labor,andcapitalnolongeruniquelydeterminescompetitiveness. The market mechanism loses status as its sole arbiter, deferring instead to institutions that nurtureproductivity.Becauseapoorcountry’slowerwagesmayproveinadequateagainstarichcountry’shigherproductivity,themodelof ‘comparativeadvantage’no longerbehavespredictably: latecomerscannotnecessarily industrialize simplybyspecializinginalow‐technologyindustry.”Amsden 2001,p.5 TheWestmonopolizedthehighroadtoindustrialdevelopment“The‘rest’followeda‘lowroad’toindustrialdevelopmentbetween1850and1950forlackofproprietarytechnologyandrelatedknow‐howandskills.Althoughmanufacturingexperienceaccumulated,andthegrowthrateofoutputmayevenhaveincreased,‘therest’couldnotindustrializefastenoughjusttokeeppacewiththeNorthAtlantic.Fewfirmshadbeenabletomakethe‘three‐prongedinvestment’towhich ChandlerJr.1990 attributesthesuccessofthemodernbusinessenterprise:inup‐to‐datemachineryandplantsofoptimalscale;inmanagerialhierarchiesandtechnologicalskills;andindistributionnetworks.”Amsden 2001,p.70 “Before World War II, the accumulation of skills and the growth of firms both lagged and undermined one another.Withoutmodernfirms,skillswereslowtodevelop,andwithoutcutting‐edgeskills,modernfirmswereslowtoform.‘Therest’s’small‐scalefirmstendednottobedynamicagentsof industrialchange, incontradistinctiontothedevelopmentalrole theyplayed inEnglandduring theFirst IndustrialRevolution, thesociallyprogressiverole theyplayed inEurope’s‘‘industrialdistricts’’afterWorldWarII … ,andtheinnovativeroletheyplayedintheUnitedStatesinthe1990s.”Amsden 2001,p.71


‘Therest’Comprising China, India, Indonesia, South Korea, Malaysia, Taiwan, and Thailand in Asia; Argentina, Brazil, Chile, andMexicoinLatinAmerica;andTurkeyintheMiddleEast.Thefailureof‘therest’“Without novel products or world‐class skills, ‘the rest’ took a long and halting journey down a low road toindustrialization. Devoid of innovative assets, firms lacked credibility with potential investors. Without capital, it wasdifficulttoundertakethethree‐prongedinvestmentnecessarytocompeteinmodernindustries:inlarge‐scaleplantsandup‐do‐dateequipment,intechnologicalcapabilitiesandmanagementteams,andindistribution.Nordidsmall‐scalefirmscircumvent the need for such investments bymodernizing artisan production systems and substituting them formassproduction.Theextenttowhichthishappenedappearstohavebeennegligible.Small‐scalefirmsbeforeWorldWarII,andfor most of the postwar period, did not act as an agent of late industrial development. Instead, due to the relativeunattractivenessof investinginmanufacturingwithoutproprietaryskills,highbankruptcyratesandlowratesofreturnprevailed, and these encouraged imprudent financial practices, speculation, cheating, and fraud. The relatively liberaleconomicsystemthatprevailedthroughout ‘therest’beforeWorldWarII, therefore,wasembroiledin itsownformsofcorruption.Afteralmostonehundredyears,therewasnoobvious,endogenous,organicsolutionto ‘therest’s’economicpredicament.Itwasinthiscontextofindustrialgrowthwithoutindustrializationthatthedevelopmentalstatewasborn.”Amsden 2001,p.98 ReferenceAmsden, Alice H. 2001 : The rise of ‘’the rest’’: Challenges to the west from late‐industrializing economies, OxfordUniversityPress,NewYork.


Onthenatureofpoverty“1.PovertyIncreasesduringtheInitialPhasesofGrowthThe process of economic growth in the initial stages of development is generally accompanied by amaldistributionofincomeandwealth.Thebeneficiariesof thegrowthprocessaregenerally the active agents in theprocesswho receivebenefitswhiletheeconomicallylessresilientmembersofthesociety,whoconstituteasignificantmajority,getleftbehind.This causes an adverse distribution of income and wealth for those who are already poor and no country that hasdevelopeditseconomyseemstobeanexceptiontothisexperience.”Khusro 1999,p.12 “2.GrowthDoesNotTrickleDownEasilyintothePovertyZonesAnother characteristic of the growth process is that economic growth does not trickle down easily to the masses,especiallyinlow‐growtheconomies.Itisonlyinthehigh‐growtheconomies,suchasthoseoftheASEANregion, beforethedebacleof1998 thatahighpercapitagrowthrateseemstopercolateamongthelowerrungsofthepopulationandinvolvesthemineconomicactivity,oftenthroughthemarketforces.”Khusro 1999,p.13 “3.PriceandQuantityControlsDoNotAugmentSuppliesInfact,economicgrowthtricklesdownintothepovertyzonesmorethroughtheaugmentationofsupplieswiththemarketforcesratherthanthroughthemanagementofdemand,aspractisedinthecontrolledandsemicontrolledeconomies.Ascontrolledpricesandquantitiesdepresssuppliesandprolongthecontrols,thesecreateandmultiplytheshortages.”Khusro 1999,p.13 “…thefactthattherearerichcountriesatallisquitesurprisinginthesensethatitisunusual.Overmostofglobalhistory,povertyhasbeenthenormalstateofaffairsforsocieties.”Vries(2013,p.11)ReferencesKhusro,AliMohammed 1999 :Thepovertyofnations,MacmillanPress,London.Vries, Peer 2013 :Escapingpoverty:Theoriginsofmoderneconomicgrowth,V&Runipress,ViennaUniversityPress,Goettingen,Germany.


WhyEgyptispoorandEnglandrich(orsotheysay)Egypt“Egyptispoorpreciselybecauseithasbeenruledbyanarrowelitethathaveorganizedsocietyfortheirownbenefitattheexpenseofthevastmassofpeople.”AcemogluandRobinson 2012,p.3 GreatBritainandUS“Countries such as Great Britain and the United States became rich because their citizens overthrew the elites whocontrolledpowerandcreatedasocietywherepoliticalrightsweremuchmorebroadlydistributed,wherethegovernmentwas accountable and responsive to citizens, and where the great mass of people could take advantage of economicopportunities.”AcemogluandRobinson 2012,pp.3‐4 England…thereasonthatBritain isricherthanEgypt isbecause in1688,Britain orEngland, tobeexact hadarevolutionthattransformedthepoliticsandthustheeconomicsofthenation.Peoplefoughtforandwonmorepoliticalrights,andtheyused them to expand their economic opportunities. The result was a fundamentally different political and economictrajectory,culminatingintheIndustrialRevolution.”ThateasyAcemogluandRobinson 2012,p.4 ThesecretoftheIndustrialRevolution“The IndustrialRevolution started andmade its biggest strides inEnglandbecause of her uniquely inclusive economicinstitutions. These in turn were built on foundations laid by the inclusive political institutions brought about by theGloriousRevolution.ItwastheGloriousRevolutionthatstrengthenedandrationalizedpropertyrights,improvedfinancialmarkets,underminedstate‐sanctionedmonopoliesinforeigntrade,andremovedthebarrierstotheexpansionofindustry.ItwastheGloriousRevolutionthatmadethepoliticalsystemopenandresponsivetotheeconomicneedsandaspirationsofsociety.”AcemogluandRobinson 2012,p.208 ReferenceAcemoglu, Daron; James A. Robinson 2012 : Why nations fail: the origins of power, prosperity, and poverty, CrownBusiness,NewYork.


‘Institutions’andthewealthofnations“Countriesdifferintheireconomicsuccessbecauseoftheirdifferentinstitutions,therulesinfluencinghowtheeconomyworks,andtheincentivesthatmotivatepeople.”AcemogluandRobinson 2012,p.73 Inclusiveinstitutions“Inclusiveeconomicinstitutions,suchasthoseinSouthKoreaorintheUnitedStates,arethosethatallowandencourageparticipationby the greatmass of people in economic activities thatmake best use of their talents and skills and thatenable individuals to make the choices they wish. To be inclusive, economic institutions must feature secure privateproperty,anunbiasedsystemoflaw,andaprovisionofpublicservicesthatprovidesalevelplayingfieldinwhichpeoplecanexchangeandcontract;italsomustpermittheentryofnewbusinessesandallowpeopletochoosetheircareers.”AcemogluandRobinson 2012,pp.73‐74 “Inclusiveeconomicinstitutionscreateinclusivemarkets,whichnotonlygivepeoplefreedomtopursuethevocationsinlifethatbestsuittheirtalentsbutalsoprovidealevelplayingfieldthatgivesthemtheopportunitytodoso. … Inclusiveeconomic institutions also pave the way for two other engines of prosperity: technology and education. Sustainedeconomic growth is almost always accompanied by technological improvements that enable people labor , land, andexistingcapital buildings,existingmachines,andsoon tobecomemoreproductive. … Intimatelylinkedtotechnologyaretheeducation,skills,competencies,andknow‐howoftheworkforce,acquiredinschools,athome,andonthejob.Weare somuchmoreproductive thana centuryagonot justbecauseofbetter technologyembodied inmachinesbut alsobecause of the greater know‐how that workers possess. … The low education level of poor countries is caused byeconomicinstitutionsthatfail tocreateincentivesforparentstoeducatetheirchildrenandbypolitical institutionsthatfailtoinducethegovernmenttobuild,finance,andsupportschoolsandthewishesofparentsandchildren.”AcemogluandRobinson 2012,pp.76‐78 “The ability of economic institutions to harness thepotential of inclusivemarkets, encourage technological innovation,investinpeople,andmobilizethetalentsandskillsofalargenumberofindividualsiscriticalforeconomicgrowth.”AcemogluandRobinson 2012,p.79 Extractiveinstitutions“There is obviously a close connection between pluralism and inclusive economic institutions. But the key tounderstandingwhy SouthKorea and theUnited States have inclusive economic institutions is not just their pluralisticpolitical institutions but also their sufficiently centralized andpowerful states. … political institutions that distributepowerbroadly in societyandsubject it to constraintsarepluralistic. Insteadofbeingvested ina single individualoranarrow group, political power rests with a broad coalition or a plurality of groups. … We will refer to politicalinstitutions that are sufficiently centralized and pluralistic as inclusive political institutions. When either of theseconditionsfails,wewillrefertotheinstitutionsasextractivepoliticalinstitutions.”AcemogluandRobinson 2012,pp.80‐81 “Extractivepoliticalinstitutionsconcentratepowerinthehandsofanarroweliteandplacefewconstraintsontheexerciseofthispower.Economicinstitutionsarethenoftenstructuredbythiselitetoextractresourcesfromtherestofthesociety.Extractiveeconomic institutions thusnaturally accompanyextractivepolitical institutions. In fact, theymust inherentlydependonextractivepoliticalinstitutionsfortheirsurvival.”AcemogluandRobinson 2012,p.81

ReferenceAcemoglu, Daron; James A. Robinson 2012 : Why nations fail: the origins of power, prosperity, and poverty, CrownBusiness,NewYork.


Whynationsfail“Nations fail economically because of extractive institutions. These institutions keep poor countries poor and preventthemfromembarkingonapathtoeconomicgrowth.ThisistruetodayinAfrica,inplacessuchasZimbabweandSierraLeone; in South America, in countries such as Colombia and Argentina; in Asia, in countries such as North Korea andUzbekistan;andintheMiddleEast,innationssuchasEgypt. … Whattheyallshareisextractiveinstitutions.Inallthesecases the basis of these institutions is an elite who design economic institutions in order to enrich themselves andperpetuatetheirpowerattheexpenseofthevastmajorityofpeopleinsociety.”AcemogluandRobinson 2012,pp.398‐399 “Centraltoourtheoryisthelinkbetweeninclusiveeconomicandpoliticalinstitutionsandprosperity.Inclusiveeconomicinstitutionsthatenforcepropertyrights,createalevelplayingfield,andencourageinvestmentsinnewtechnologiesandskills are more conducive to economic growth than extractive economic institutions that are structured to extractresources fromthemanybythe fewandthatfail toprotectpropertyrightsorprovide incentives foreconomicactivity.Inclusiveeconomic institutionsare in turn supportedby, and support, inclusivepolitical institutions, that is, those thatdistributepoliticalpowerwidelyinapluralisticmannerandareabletoachievesomeamountofpoliticalcentralizationsoas to establish law and order, the foundations of secure property rights, and an inclusivemarket economy. Similarly,extractiveeconomicinstitutionsaresynergisticallylinkedtoextractivepoliticalinstitutions,whichconcentratepowerinthehandsofafew,whowillthenhaveincentivestomaintainanddevelopextractiveeconomicinstitutionsfortheirbenefitandusetheresourcestheyobtaintocementtheirholdonpoliticalpower.Thesetendenciesdonotimplythatextractiveeconomicandpoliticalinstitutionsareinconsistentwitheconomicgrowth.Onthecontrary,everyelitewould,allelsebeingequal,liketoencourageasmuchgrowthaspossibleinordertohavemoretoextract.Extractiveinstitutionsthathaveachievedatleastaminimaldegreeofpoliticalcentralizationareoftenabletogenerate some amount of growth. What is crucial, however, is that growth under extractive institutions will not besustained,fortwokeyreasons.First,sustainedeconomicgrowthrequiresinnovation,andinnovationcannotbedecoupledfromcreativedestruction,whichreplaces theoldwith thenewin theeconomicrealmandalsodestabilizesestablishedpowerrelations inpolitics.Becauseelitesdominatingextractive institutions fearcreativedestruction, theywillresist it,andanygrowth thatgerminatesunderextractive institutionswillbeultimately short lived.Second, theabilityof thosewhodominateextractive institutions tobenefitgreatlyat theexpenseof therestof society implies thatpoliticalpowerunderextractiveinstitutionsishighlycoveted,makingmanygroupsandindividualsfighttoobtainit.Asaconsequence,therewillbepowerfulforcespushingsocietiesunderextractiveinstitutionstowardpoliticalinstability.”AcemogluandRobinson 2012,pp.429‐430 ReferenceAcemoglu, Daron; James A. Robinson 2012 : Why nations fail: the origins of power, prosperity, and poverty, CrownBusiness,NewYork.


WhenwastheGreatDivergencecreated?“TheGreatDivergencedebateisaboutwhyBritainandthentheWesttookoffbutalsoaboutwhysomanycountriesdidnotandfellbehind.”Vries 2013,p.401 “…manyof the supposedly critical distinctionsbetweenEuropeanandnon‐European societiesmelt awaywhen longer‐termtrendsareconsideredandwhenonelookswithequalcareatWesternandnonWesternsocieties.Until1750,changesinpopulation,agriculture,technology,andlivingstandardswerenotfundamentallydifferentineasternAsiafromthoseinwesternEurope.”Goldstone 2009,p.20 “…thehistoryofmateriallifeformostofthelast1,000or2,000yearshasbeenoneoflongupsanddownsbutwithlittleoverallprogress.Aslateas1800,ordinaryworkersinEnglandandHollandreceivedroughlythesameaverageearningsasworkersinthosecountries300yearsearlier.Ordinarypeoplein1800mayhavehadaccesstoagreatervarietyofproductsfromexpandinglocalandinternationaltrade,buttheycouldnotaffordanymorefoodorbettershelterthantheirgreat‐greatgreat‐great‐great‐great‐grandparentscould.”Goldstone 2009,p.25 “Asthecenturiespassed,therewereperiodsofgoodtimesformerchantsandlandlords whoboughtandsoldfoodstuffsanddidbestwhenpriceswererising interspersedwithperiodsofgoodtimesforordinaryworkers whodependedonwagesoronsubsistencefarmingcombinedwithcraftworkanddidbestwhenfoodpriceswerestableorevendeclining .Worldeconomichistorybefore1800showsmanyupsanddowns,differingabitacrossdifferentareasandfordifferentgroupsofpeople,butwithrelativelylittleoverallchange.”Goldstone 2009,p.25 “Ifwelookatbasicmeasuresofthephysicalwell‐beingofthepopulation—suchaslifeexpectancyorthecalorieintakeofanaveragefamily—wefindthattheChineseandtheEnglishwereaboutequal in1800,andthatbothofthosesocietieswerewellaheadofotherregionsinEuropesuchasItalyorGermany.”Goldstone 2009,p.26 “Thebestwaytodescribetechnologicalinnovationandchangebefore1800istosaythatitwassporadic.”Goldstone 2009,p.28 “…becausethoseinnovationsremainedsporadicandisolated,theycouldnotcarrywholesocietiesforwardinleapsandboundsasthelinkedandacceleratingtechnologicalchangesofthepast200yearshavedone.”Goldstone 2009,p.29 “Britain’searlyIndustrialRevolution—until1800—consistedmainlyofasubstantialexpansionoftheproductionofcottonthread by waterpowered spinning factories, increased output and use of coal, the development of a domestic potteryindustrycapableofcreatingqualityporcelain,andtheproductionofawiderangeofironandsteelgoodsfrommediumsizeforges. Thesewere all striking advances for Britain, but inmanywayswere actually a catching upwith the advancedcivilizationsofAsia,whichalreadyproducedhigh‐qualitycottoncloth,porcelain,andcast iron invastquantities … InmostpartsofAsiaduringtheseventeenthandeighteenthcenturies,thesilk,cotton,andporcelainindustriesunderwentahugeexpansionofmanufacturingthatdwarfedanythingseeninEurope.InthesecenturiestheEnglish,Dutch,Portuguese,andSpanishsenthundredsofshipsbearingsilvertoAsia,shipswhosegoalwastoreturnladenwithIndianandChinesecottonclothandwithChinesesilksandporcelains.”Goldstone 2009,p.32 “…by1800,bothBritainandChinahadexperiencedsubstantialchangesintheireconomiesandseenmajorincreasesintheiroutputofbothfoodstuffsandcottontextiles.Yetneitherhadexperiencedanytruebreakthroughtoahigherstandardof living. Both societieswere still operatingwithin the range of the long‐term cycles of prior centuries as to howwellpeoplelived.Long‐termsupsanddownsinclimate,population,andearningsproducedupsanddownsinlivingstandardsaswell.Thetruebreakthroughsthatcreatedadifferentworldstilllayahead.”Goldstone 2009,p.33 “Britain’sriseasanindustrialpowerwasrelativelylateandinmanywaysunique,quitedistinctfromthebroadertrendsin many other countries of Christian and Protestant religion. For most of the last thousand years, it was scholars,craftsmen, and seafarers from China, India, Persia, and the Islamic states in Asia and Africa who were the drivers ofinvention,economicgrowth,andglobaltrade.”Goldstone 2009,pp.46‐47


“Thenotionthattheriseof theWestrepresentedagradual increase in thewealthofWesternsocieties—sothatby thesixteenthor seventeenth centuryEuropeanshadalreadybecomesubstantially richer than theyhadbeen in theMiddleAges,andrichertoothanrivalsocietiesinAsia—isnotsupportedbytheevidence.Infact,therewererichandpoorareasinbothEuropeandAsia,andtherichestareasinbothcontinentswerequitecomparableinmostaspectsofmaterialwell‐beinguntilthe1800s.”Goldstone 2009,p.79 “…whenwecomparelivingstandardsacrossEuropeandAsia,wefindthatuntilabout1800,livingstandardswerefairlysimilaracrossthemajornationsofbothcontinents.Indeed,aroundAD1600,Asiansocietiesmayhavebeenslightlyinthelead. But from 1800 to 1950, we see a great divergence. The leading areas of Europe raised their incomes verydramatically,while the lagging areasdeclined, so that by 1900 the richest areas of Europe England, Belgium, and theNetherlands areperhapsthreeorfourtimesricherthanthepoorerareasofsouthernEurope.ThemajorcivilizationsofAsia—Japan,India,andChina—alsoappeartohavestagnatedordeclinedinincomeafter1800,sothatby1900therichestareasofEuropegreatlysurpassedthemajorAsiansocietiesaswell.TheexistenceofarichEuropeandapoorAsiaisthus,historicallyspeaking,arelativelyrecentphenomenon.From1800to1950,explosivegrowthinincomesandurbanizationinnorthwestEuropecombinedwithsubstantialdeclineorstagnationinAsiatoreversetheirrespectivepositionsintheworldeconomyandcreatethedisparitythatbecameknownastheriseoftheWest.… thesecrettothisdivergenceappearsstronglyrootedindomesticproductivity.Thatis,therichestpartsofEuropein1800werethoseinwhichagriculturalproductivityhadcaughtuptoAsianproductivitylevels.Thenafter1800,therichestpartsofEuropewere theregions that industrialized, complementinghigh levelsofagriculturalproductivitywithvastlyincreasedproductivityinmanufacturingandindustry.Inotherwords,therichestEuropeannationsdidnotbecomerichbecausetheytookmoretreasurefromotherpartsoftheworldorbecausetheyhadempiresorslavery … .Rather,itwasbecause workers in the richer countries—especially England, but also the Netherlands and Belgium— became moreproductivethanworkerselsewhereinEuropeandmoreproductivethanworkersanywhereintheworld.”Goldstone 2009,p.95 “Themainmessage of this book has been that the rise of theWestwas not in anyway based on a general Europeansuperiorityoverotherregionsorcivilizationsoftheworld.Europeanswerenotwealthier,moreadvancedtechnicallyorscientifically,orbetteratmanufacturingandcommercethanthemajorsocietiesinAsia.Until1500,Europewassomewhatlagginginwealth,technology,andscience.Evenaslateas1700,itwasjustcatchinguptothemoreadvancedregionsofAsia.”Goldstone 2009,p.166 “…theWesthasalwaysexistedinastateofvariancefromtherestoftheworld’scultures.”Duchesne 2011,p.ix “therootsoftheWest’s‘restless’creativityandlibertarianspiritshouldbetracedbacktothearistocraticwarlikecultureof Indo‐European speakers. The Indo‐Europeans were a distinctively pastoral, horse‐riding, mobile, and war‐orientedculturegovernedbyaspiritofaristocraticegalitarianism … theprimordialbasisforWesternuniquenesslayintheethosofindividualismandstrife.ForIndo‐Europeans,thehighestidealoflifewastheattainmentofhonorableprestigethroughtheperformanceofheroicdeeds.”Duchesne 2011,p.x “…nomatterhowfarbackwemaypushfortheoriginsofcapitalism,industrialcapitalism,inwhichthelarge‐scaleuseofinanimateenergysourcesallowedanescapefromthecommonconstraintsofthepreindustrialworld,emergesonlyinthe1800s.ThereislittletosuggestthatwesternEurope’seconomyhaddecisiveadvantagesbeforethen,eitherinitscapitalstockoreconomicinstitutions,thatmadeindustrializationhighlyprobablethereandunlikelyelsewhere.”Pomeranz 2000,p.16 “Identifying theGreatDivergencewith theemergenceofmoderneconomicgrowthhas some important implications. Itmeansthatexplainingitisnotidenticaltoexplainingcapitalismasisoftensimplyassumedintextsabout'theriseoftheWest'.Notonlybecauseconceptuallymoderneconomicgrowthandcapitalism‐hereforthesakeofconvenienceandtosomeextenterroneouslydefinedas'themarketeconomy'‐aretwodistinctphenomena,evenwhentheyinpracticeareoften related. There are several examples of capitalist societies (a very complex, multi‐facetted and debated conceptanyhow)thatdidnot'automatically'takeoffintomoderneconomicgrowth.”Vries(2013,p.24)ReferencesGoldstone,JackA. 2009 :WhyEurope?TheRiseoftheWestinworldhistory,1500‐1850,McGraw‐Hill,NewYork.Duchesne,Ricardo 2011 :TheuniquenessofWesterncivilization,BRILL,Leiden,TheNetherlands.


Pomeranz, Kenneth (2000): The Great Divergence: China, Europe, and the Making of the Modern World Economy,PrincetonUniversityPress,Princeton,NewJersey.Vries, Peer 2013 :Escapingpoverty:Theoriginsofmoderneconomicgrowth,V&Runipress,ViennaUniversityPress,Goettingen,Germany.


HowMalthusianwasthepast?“…mostAsiansocietiessuccessfullylimitedfertilitywithinmarriage,whereasnorthernEuropeansocietieslimitedfertilitybydelayingaccesstomarriage.Bothsystemsworkedtokeepfertilityandpopulationgrowthatmoderatelevels.”Goldstone 2009,p.76 “… even though societies in Europe and Asia had very different ways of regulating marriage and family life, thesedifferencesdidnotproduceanymarkeddifferencesinoverallratesofpopulationgrowth.Tobemoreprecise,from1500to1750,theincreaseinpopulationinEnglandwasapproximately130percent,whilethatinChinawas125percent.”Goldstone 2009,p.77 “…wefindthatlifeexpectancyinvirtuallyallpreindustrialsocietieswasremarkablylow—lowerthaneveninthepoorestcountriesoftheworldtoday.Thisisbecauseinfantmortality—thepercentofchildrenwhodiedintheirfirstyearoflife—wassoincrediblyhigh.Inpreindustrialsocieties,infantsdiedinlargenumbersfromdiseasesthatareeasilytreatedtoday,suchasdiarrheaormalnutrition.Becausesomanydiedinearlychildhood,averagelifespanswereshort—lifeexpectancywasnotmuchmorethan30years,comparedwith50yearsinthepoorestsocietiestoday.Thisdoesnotmeanthatmostpeople livedtobeonly30yearsold;rather,thismeansthatforeverypersonwhosurvivedtoage60,anotheronediedwithintheirfirstyearoflife,leadingtoanaveragelifespanofabout30years.”Goldstone 2009,pp.77‐78

Goldstone 2009,p.78 “WagesmovedupanddownovertimeinbothEuropeandAsia.Yetoneofthesurprisingthingsaboutthepreindustrialpast isthattheaveragelevelofrealwages—that is,whataworker’searningswouldbuyintermsoffood,clothing,andothernecessities—changedfairlylittleacrossmanycenturies.”Goldstone 2009,p.79 “…wefindthataroundtheworldfrom1500to1800thebasicstorywasmuchthesame—livingstandardswereshapedby agricultural productivity, and agricultural productivity depended on techniques for intensifying agriculture.Whereagricultural intensification was achieved by new crop rotations, new seed varieties, and increased use of fertilizers,productivity and living standards could be raised to, or maintained at, relatively high levels. But without suchintensification,populationincreasesovertimemeantthatproductivityandincomeswouldfall.”Goldstone 2009,p.91 “…economichistoryoftheworldpriorto1800wasoneofcyclesandwavesofmoderatechange.”Goldstone 2009,p.97 “IfthetendencytoreproduceisasstrongasMalthussupposes,thenhowisitthatfamilylinessooftenbecomeextinct?Thisoccurseveninfamilieswherewantisunknown.InanaristocracysuchasEngland,hereditarytitlesandpossessionoffereveryadvantage.YettheHouseofLordsiskeptupoverthecenturiesonlybythecreationofnewtitles.”George(1879,p.60)“In India now, as in times past, only the most superficial view can attribute starvation and want to the pressure ofpopulation on the ability of land to produce subsistence. Vast areas are still uncultivated, vast mineral resourcesuntouched.Ifthefarmerscouldkeepsomecapital,industrycouldreviveandtakeonmoreproductiveforms,whichwouldundoubtedlysupportamuchgreaterpopulation.Thelimitofthesoiltofurnishsubsistencecertainlyhasnotbeenreached.It isclearthatthetruecauseofpovertyinIndiahasbeen,andcontinuestobe,thegreedofman—notthedeficiencyof


nature.WhatistrueofIndiaistrueofChina.AsdenselypopulatedasChinaisinmanyparts,theextremepovertyofthelowerclassesisnotcausedbyoverpopulation.Rather,itiscausedbyfactorssimilartothoseatworkinIndia.”George(1879,p.64)“Neither in India nor China, therefore, can poverty and starvation be charged to the pressure of population againstsubsistence.Millionsarenotkeptonthevergeofstarvation(andoccasionallypushedbeyondit)bydensepopulation—but rather by causes that prevent the natural development of social organization and keep labor from getting its fullreturn.”George(1879,p.65)“…theessenceofthattheoryMalthus’isthatwhateverthecapacityforproduction,thenaturaltendencyofpopulationistopressbeyondit.Thisproducesthatdegreeofviceandmiserynecessarytopreventfurtherincrease.Soasproductivepower increases, population will correspondingly increase. And in a little time, this will produce the same results asbefore. I assert that nowhere is there an example that will support this theory. Nowhere can poverty properly beattributed to population pressing against the power to procure subsistence using the then‐existing degree of humanknowledge. Ineverycase, theviceandmiserygenerallyattributedtooverpopulationcanbetracedtowarfare, tyranny,andoppression.Theseare the true causes thatdeny security,which is essential toproduction, andpreventknowledgefrombeingproperlyutilized.”George(1879,p.65)“Contrarytothelong‐heldviewthattheclassicaleconomywastechnologicallyandeconomicallymoribund(…),itisnowbecomingincreasinglyevident that the level ofproductionandproductivityin AD150wasashighasit wasin1300,andpossiblyashighasin1700.Theevidenceconsistsinthefindingthattheterritoryof westernEuropewasmorethicklysettledwithfarmsandsmalltownsthanwaspreviouslythoughtpossible,andintherecognitionthatthehuge deposits of amphorae employed to transportwine and olive oil imply a correspondingly high degree ofspecialisationintheregionsfromwhichthesecommoditieswereexported.”Grantham(1999,p.222)“Thereisnolongeranydoubtthattheclassicaleconomywasamarketeconomysupportedbyanabundant,thoughnow largely vanished, commercial documentation.When combined with evidence demonstrating the high level ofclassicaltechnologicalachievement(…)thesefindingspointtotheessentialcontinuityoftheperiodstretchingfromtheclassicaleconomytothelateeighteenthcentury.PerhapsthemoststrikingexampleofthiscontinuityistobefoundintheanalysisofleadandcopperaerosolsdepositedintheGreenlandicecap,whichindicatelevelsofproductionthatwereashigharoundAD150astheywerein1750.”Grantham(1999,p.222‐23)“IfonepausestoponderonallthatEuropeaccomplishedintheninecenturiesofherascent,onecannothelpbeingfilledwith amazement and admiration (…) therewas, above all, an endless series of superb accomplishments in all fields ofhumanactivity.Themedievalcathedrals;thepaintingsoftheRenaissance;themusicofMozart,Beethoven,andBach;thepoetryofDante;theproseofBoccaccioandChaucer;thetragediesofShakespeare;thephilosophyofAquinas,Descartes,andKant; thewitofMontaigne andVoltaire; themedieval clocks; thedrawingsofLeonardodaVinci; the innumerabletechnological innovationsof theMiddleAgesandtheRenaissance; thesteamengine; themicroscope; thediscoveriesofmicrobiology,themiraclesofchemistry;theSuezcanal;thebusinesstechniques,fromthechecktothestockexchange;thecondemnationoftorture;theassertionoftheprincipleofhumanfreedomandrights;theparliamentarysystem—thereisnoendtothelistofEurope’saccomplishmentsintheperiodAD1000–1900.”Cipolla(1993p.216)“In all likelihood, the Greek andRoman technological “failure” has been exaggerated. All too oftenwe tend to identifytechnologywithmechanics,becauseourcivilization isessentiallymechanical.Politicalandadministrativeorganization,military organization, architecture and road construction, even artistic products such as frescoes, bear the marks oftechnology,andinnoneofthesefieldscouldtheGreeksandRomansbeconsideredfailures.”Cipolla(1993p.107)“AschematicinventoryofthemaintechnologicaldevelopmentsoftheWestfromthesixthtotheeleventhcenturyshouldinclude:a.fromthesixthcentury:spreadofthewatermillb.fromtheseventhcentury:spread,throughoutnorthernEurope,oftheheavyplow.c.fromtheeighthcentury:spreadofthecroprotationsystemd.fromtheninthcentury:spreadofthehorseshoeandofanewmethodforharnessingdraftanimalsIn relation to these developments three points should be made: First, the innovations just listed were not, properlyspeaking, inventions. (…) What the Europeans displayed from the sixth to the eleventh centuries was not so muchinventiveingenuityasaremarkablecapacityforassimilation.Theyknewhowtoseizeongoodideasandapplythemtolarge‐scaleproductiveactivity.PerhapsthisattitudewasinfluencedbythefreshoutlookoftheGermaninvaders:thepride


whichdrovetheRomansandtheChinesetodescribeasbarbariansall thosewhodidnotbelongtotheirempiresmadethemunreceptivetoforeignideas.Second,theinnovationsmentionedabovewerealllinkedtoagriculturalactivityand,incombination, strengthenedeachother. (…)Finally, someof these innovationsallowed foramoreeffectiveuseofhorsepower.”Cipolla(1993p.108)“Theproliferation and increasingpower ofwatermills andwindmills, like the increaseduseof horses,made availablemore energy for productive uses. Unlike horses, however, themills supplied inanimate energy. Their widespread usemarked thebeginning of thebreakdownof the traditionalworld inwhichmanhad todepend for power on animal orvegetablesourcesofenergy.ItwasthedistantannouncementoftheIndustrialRevolution.”Cipolla(1993p.112)ReferenceCipolla,C.M.1993:BeforetheIndustrialRevolution:EuropeanSocietyandEconomy,1000–1700,3rdedition,Routledge,London.George,Henry(1879):ProgressandPovertyGoldstone,JackA.(2009):WhyEurope?TheRiseoftheWestinworldhistory,1500‐1850,McGraw‐Hill,NewYork.Grantham,George(1999):“Onthemacroeconomicsofpre‐industrialeconomies”,EuropeanReviewofEconomicHistory3(2),199‐232.


WhydidtheWestrise?“TounderstandwhattrulylaybehindtheriseoftheWest,wethereforeneedtolookmorecloselyattwomajorfactorsthatledtotheriseofmodernindustry:thepowerofthestate,andthedevelopmentofindustrialtechnology…”Goldstone 2009,p.95 “If therewasonekey ingredienttocreatinganewlevelofproductivitygrowthandnewkindsofeconomicactivitythatbrokefromthecyclesofagrariansocietiesthathaddominatedthelast10centuries,thatingredientwasnewideas.”Goldstone 2009,p.116 “Theenforcementofrigidorthodoxyledtostagnationandeventhelossofknowledge.Previousadvancesinmathematicswere lost and—despite the ending of serfdom, the growth ofmarket towns, the expansion ofmanufacturing, and thesubstantialagriculturalgrowthinChinathathadoccurredundertheManchus—newscientificandmechanicalinventions,whichhadmarkedeverypreviousdynasticperiodinChinesehistory,werealmostentirelyabsent.InSpain,Portugal,andItaly,theCatholicCounter‐Reformationtoobegantosetitselfagainstinnovationinthoughtandlearning.”Goldstone 2009,p.118 “From the early 1600s onward Europe experienced a striking increase in the number of scientific and technologicalinnovations,becomingtheworld’sleadingcenteroftechnicalchange.”Goldstone 2009,p.121 “Inwasonlyfromabout1850onwardthatsteam‐poweredfactories,farmmachinery,constructionequipment,railways,andsteamshipssochangedthefaceofproductionastocreatewidespreadimprovements in livingstandardsinEurope,while out‐competing manufacturing and production elsewhere. Also, it was only from about 1850 onward that newinventionsinchemistry,communications thetelegraphandtelephone ,electricalandgaspower,andnewconstructionmaterialsandtechniqueschangedoursenseofwhatwaspossibleinmateriallife.”Goldstone 2009,p.123 Tradenotdeterminant“…thenotionthatan industrialrevolutiongrewup inaBritisheconomythatwasbasedon lowtaxesandfree trade isquitemistaken. The Industrial Revolution developed in a British economy thatmanaged to grow at remarkable ratesdespitefacingthehighesttaxrates,thehighesttariffs,andoneofthestiffestregulatoryregimesonshippinginEurope,ifnottheentireworld.ThebigdifferenceinBritain’seconomywasnottheleveloftaxesortariffs,buthowtheywerespent.After1688,theParliament—andtheBankofEngland,whichParliamentestablishedtomanagetheroyaldebt—wasabletomakesure that thesehigh tax revenueswerenot squanderedonpalacesandplaythings for thekingandqueen,butwereinsteaddirectedtopaymentonstatedebtsandfundingfortheRoyalNavy.”Goldstone 2009,p.113

Goldstone 2009,p.100


Politicalcompetitionnotdeterminant“…bothEuropeandAsiahaddozensofcompetingstates.Inbothareasthelargenumberofstatesledtoconstantmilitarycompetitionandalloweddiverseviewsandreligionstoflourishdespitetheeffortsofindividualrulerstofosterreligiousuniformitywithintheirowncountries.”Goldstone 2009,p.102 “Thechangesbegan inahandfulof industries thatwereconcentratedmainly in thenorthernandmidlandscountiesofEngland; thenextendingtoScotland,Cornwall,andWales;and later toBelgium,Switzerland,France,andotherpartsofEurope.These industries includedproducersof cotton textiles, ironand steel (includingmetalproducts fromknives tobuckles toenginesandrailways),andpottery;companies thatminedcoalandotherminerals;andtransportationfirmsthatbuiltandoperatedcanals,railroads,steamboats,andsteamengines.Foralloftheseitems,newtechnologychangedoneofthebasictenetsofeconomics—thelawofdiminishingreturns.”Goldstone 2009,p.125 “Whatcreatedrealchangeduringthenineteenthcenturywasthat,asthesenewandtransformedindustriesspreadtheirimpactthroughoutBritain,furtherinnovationsspreadtootherindustries(agriculture,foodprocessing,construction),andthenwholenewindustries(chemicals,electricity,telephoneandtelegraph,rubber)arose.Thesewerethencomplementedbyimprovementsininsurance,financing,security,andinformationexchangethatfurtherexpandedthescopeoftradeandlowered the costs of transactions, creatingworldwidemarkets for legions of products.As thesenew industries spreadthrough Europe and then the world, they changed the character of the global economy and raised living standardswherevertheycametodominate.”Goldstone 2009,p.126 “Whatwascommontothisentireprocess,beginningaround1700,wastheaccelerationofinnovation.Thepowersbehindthisvastarmyofindustrializationweremany—improvementsintheeducationandtrainingofworkers,theuseoffinanceand capital to fund new industries, and new legal and corporate forms for business entities. But behind everymajorimprovement in technique lay successful innovations—the results of searching formore efficient, powerful, and novelwaysofmakingandmovinggoods.”Goldstone 2009,p.128 “What transformedEurope, and then theworld,was a constantly growingand linked set of innovations in agriculture,transport,manufacturing,financing,machining,education,andmarketing.Thepaceofchangenotonlybegantoincreaseinthelatereighteenthandearlynineteenthcenturies,butithascontinuedtoincreasetothepresentday.Whenwethinkof the pattern of innovation responsible for the rise of theWest, we should not think in terms of a series of discreteinventions, but instead of waves of continually advancing change in many fields, each amplifying the effects of otherchanges.”Goldstone 2009,p.128 “Insum,toexplaintheriseoftheWest,wecannotidentifyanyoverall‘Europeanadvantage’priorto1700inmaterialwell‐beingortechnology.Norcanwepointtoahandfulofsignificantinventions.Rather,economicandindustrialadvancewasbroaderanddeeper,sweepingawayolderwaysofdoingthings.Whatweneedtoexplainistheemergenceofaremarkablywidespreaddesireandabilitytoinnovate,resultinginthousandsofinnovations.”Goldstone 2009,p.129 “What createdadifferentpath forEuropewas a combinationof sixunusual factors. First, a clusterof remarkablenewdiscoveriesledEuropeanstoquestionandeventuallyrejecttheauthorityoftheirancientandreligioustextstoadegreenot found in any other major civilization. … Second, Europeans developed an approach to science that combinedexperimental researchandmathematicalanalysisof thenaturalworld … The thirdkey factorwas the infusionof theBritish Lord Chancellor Francis Bacon’s ideas regarding evidence, demonstration, and the purpose of scientificinvestigation. … A fourth key factor was the development of an instrument‐driven approach to experiment andobservation. … Afifthkeyfactorwasaclimateoftoleranceandpluralism,ratherthanofconformityandstate‐imposedorthodoxy, and of Anglican Church support for the new science. … The sixth key factor was the easy support forentrepreneurshipandtheclosesocialrelationsamongentrepreneurs,scientists,engineers,andcraftspeople.”Goldstone 2009,pp.167‐169 “Given that somanydifferent conditions had to come together, it should be no surprise that the Industrial Revolutionstartedonlyinonetimeandplace. … ThusthedevelopmentofmoderneconomicgrowthinBritainmustbeseenasacontingentprocess”Goldstone 2009,p.170 “Only after the British had demonstrated the importance of pluralism, technical education, experimental science, andbusiness innovations based on scientific engineering to economic advance did the rest of Europe set out to imitate it.


Modern economic growth, based on an educated workforce, freedom of ideas, technological innovation, and theapplicationofscientificengineeringtoindustry,begantospread.”Goldstone 2009,p.172 “The question is why was the West so dynamic and original in empire‐making, warfare, political theory, philosophy,architecture,andpoetry?WhywasitthatthesameEnglandthatcreatedthegreatestmaritimeempireinhistorycultivatedreligioustoleration,freedomofexpression,andrepresentativegovernment?”Duchesne 2011,p.93 “In1807theBritishParliamentoutlawedslaveryintheEmpire;thefirstnationtodosoinhistory.Why?”Duchesne 2011,p.94 “OurbookoffersanewexplanationforthedistinctivepatternsofeconomicchangeinChinaandEurope.Wearguethatconventional arguments are either unfounded or can be reduced to the consequences of differences in political scale:although both China and Europe experienced long periods of unifi cation and fragmentation, empirewas the norm inChina,whiledivisionprevailedmoreofteninEurope.Formuchofitshistory,Europewaspoorbecauseitwasatwar.Theriseofcapital‐intensivemethodsofproductioninEuropewastheunintendedconsequenceofpersistentpoliticalstrife.Incontrast,China,whichwasoftenpeacefulandunified,developedlarge‐scalemarketsandtookadvantageofthedivisionoflabor. It was only after 1750 that the advantages of machine‐based, capital‐intensive methods of production becameapparent. Before that time the recipes for growth of theQing emperorswere commonsense everywhere: promote theexpansionofagriculture,keeptaxeslow,anddonotinterferewithinternalcommerce.”LaurentandWong(2011,pp.x‐xi)“What critics like Hobson refuse to accept is the cumulative, self‐reinforcing process of assimilation, innovation, andinventionsetinmotioninEuropefromaboutthetwelfthcenturyonwardinallfacetsoflife.Europenotonlylearnedandimprovedupon thepractical sciencesand techniquesofChina, italsoabsorbedandbettered the theoretical sciencesofIslamiccivilization.”Duchesne(2006,p.79)“It would be a deep misjudgment to conceive the rise of the West as a cultural process consisting essentially in theassimilationofinventionsandideasdiffusedfromthemoreadvancedEast.Bytheearlymodernera,Europeancivilizationwas about to affirm itself in a continuous sequence of intellectual and religious convulsions—the Renaissance, theReformation, the ScientificRevolution, the Enlightenment—thatwould bringWestern peoples unprecedented freedom,power,worldly expansion, breadthof knowledge, anddepthof insight. (…)What requires explanation iswhyWesternculture, in contrast to the virtues of calmness, beatitude, and serene acceptance of the order of being (deemed to bebeyond the ability of man to alter) one finds in Eastern religions, has always been charged with tension, has alwaysinsistedthattheunderstandingofbeinglieswithinourgraspandthatthenatureoftheuniversecanbepenetratedwiththeinstrumentofhumancognition.”Duchesne(2006,pp.88‐89)“…whileinKoreamorethanahundredbookswereprintedduringthethirty‐two‐yearreignoftheemperorSejongwhoassumedthethronetwodecadesafterthemetal‐typepresswasinventedin1403,andwhodecidedtodeviseascriptmoresuitabletoprinting,therefollowednorevolution(…)InEurope,bycontrast,therewasanexplosionofbooksprintedbymovabletypethemomentGutenbergpublishedthefirstprintedbook,hisBiblein1452–1455.”Duchesne(2006,p.83)“TheriseoftheWesternworldwastheascendancyofarelativelybackwardpartoftheworldtoworldhegemonybetweenthetenthandtheeighteenthcenturies.”North(2005,p.127)“Thecountriesinwhichcapitalismtookrootearlyweremiddle‐sizedpowerscharacterizedbylimitedmonarchy,notablyVenice,theNetherlands,andEngland.Thesesmallercountrieshadtofreeuptheircapitalmarketsinordertobetterraisefundsformilitarypurposes,developinginstitutionssuchasacentralbankthatgavetheirgovernmentsthecredibilitytoborrowmoney at about 1/3 the interest cost of France and Spain. In the long run, this facilitated the development ofcapitalism in these countries. (…) Unlike Europe, many other geographical areas, such as China, India, Japan, and theOttomanEmpire,wereruledbyasinglepower(…)thenecessaryconditionsforearlycapitalistsuccessseemtoinclude(1)limitedmonarchyor rule of law combinedwith (2) considerable existential challenges, and (3) relatively scarce factorendowments.”Scott(2011,p.601‐602)“ThecentralthemeofthebookisthattheriseoftheWestcanbeexplainedbydecentralization.Thatis,therewasagradualevolutionofasetofinstitutionsthatpermittedtheeconomicspheretobecomeautonomousfromthepolitical‐militarysphere.Thedevelopmentoffavorableinstitutionspromotedafreedomtoexperimentindeveloping


newformsoforganizationandofinnovation.Inaddition,thedevelopmentofamoralityonthepartofthosewhoengagedineconomicactivityinducedtrustandcontractfulfillment.”RosenbergandBirdzell(1986)“…theevolving,competitivestructureofwesterneconomiesandthegradualemancipationoftheeconomicspherefromthepoliticsofmercantilismpermittedandencouragedrapideconomicgrowth.”RosenbergandBirdzell(1986)“The rise of theWesternworldwas, in effect, a success story inwhich the sequential evolution of beliefsmodified byexperiences gradually resulted in the changes producing modern economic growth. It was a trial and error processinterlacedwithgoodluck.”North(2005,p.146)“Market dependency, market imperatives and the social property form of capital (…) emerged as the unintendedconsequencesofalong‐termprocessofeconomicagentspursuingshort‐termeconomicends.”Žmolek(2013,p.5)“Western rule itselfwasneither locked‐innoraccidental. Itwouldmakemore sense to call itprobable, themost likelyresult.”Morris(2010,p.572)“The fact that the overwhelmingmilitarymight of various nomadic forces did not penetrateWesternEurope after theMagyar invasionswas a crucial variable the gradual transition from feudalism to capitalism.The dynamic of recurringnomadicinvasions,whichonlyoccasionallybroughtaboutthedestructionofEmpires(e.g.,SungChinainthe13thcenturyor theSultanateofDelhi in the late14thcentury),sappedenormousamountsofenergyandresourcesoutof theAsianstatepolities,which in the longrun limited their resources foroverseasexpansionand toa certainextent,also limitedtheirabilitytoeffectivelyresisttheirfutureincorporationintothecapitalistworld‐economy.”Mielants(2007,pp.159‐160)“TheWestrulesbecauseofgeography.Biologytellsuswhyhumanspushsocialdevelopmentupward;sociologytellsushowtheydothis(exceptwhentheydon't);andgeographytellsuswhytheWest,ratherthansomeotherregion,hasforthelasttwohundredyearsdominatedtheglobe.Biologyandsociologyprovideuniversallaws,applyingtoallhumansinalltimesandplaces;geographyexplainsdifferences.”Morris(2010,p.557)“Addingsociologytobiologyexplainsmuchoftheshapeofhistory,tellingushowpeoplehavepushedsocialdevelopmentupward,whyitrisesquicklyatsometimesandslowlyatothers,andwhyitsometimesfalls.Yetevenwhenweputthemtogether,biologyandsociologydonottelluswhytheWestrules.Toexplainthat,weneedgeography.Ihavestressedatwo‐way relationship between geography and social development: the physical environment shapes how socialdevelopmentchanges,butchangesinsocialdevelopmentshapewhatthephysicalenvironmentmeans.”Morris(2010,p.560)“EasternerscouldhavediscoveredAmericainthefifteenthcentury(…)butgeographyalwaysmadeitmore likelythatWesternerswouldgettherefirst.EasternershadfarmoretogainbysailingtowardtherichesoftheIndianOceanthanintotheemptyPacificandbypushinginlandintothesteppes(…).Intheseventeenthcenturytheexpansionofthecoreschangedthemeaningsofgeographymoredramaticallythaneverbefore.CentralizedempireswithmusketsandcannonsclosedtheInnerAsiansteppehighwaythatlinkedEastandWest,endingnomadicmigrationandeffectivelykillingoneofthehorsemenoftheapocalypse.OntheAtlantic,bycontrast,theoceanichighwaythatwesternEuropeanmerchantshadopenedfueledtheriseofnewkindsofmarketsandraisedentirelynewquestionsabouthowthenaturalworldworked.By1700socialevelopmentwasagainpressing thehardceiling,but this time(…)disasterwasheldatbay longenoughforwesternEuropeanentrepreneurstorespondtotheincentivesoftheoceanichighwaybyunleashingtheawesomepowersof coal and steam. Givenenough time,Easternerswouldprobablyhavemade the samediscoveriesandhad theirownindustrialrevolution,butgeographymadeitmucheasierforWesterners…”Morris(2010,p.564‐5)“Anothervariable thatwascrucial to the “Riseof theWest” fromthe13thcenturyonwardwas thegrowingstrengthofmultiple city‐states,which indirectly increased the bargaining power of tenants, employees, and peasants vis‐à‐vis theruralnobility.”Mielants(2007,p.157)“Theoriginsofmodernity—capitalismandcitizenship—canbeproperlylocatedwithintheEuropeancity‐statesandthesubsequentnation‐statesthatwereformedoutof imperialismandwarfare(…)withinthedynamicsofceaselesscapital


accumulation,andnotamongthegreatcivilizationsofNorthernAfrica,India,orChina.Thoughitistruethatuptothelate18thcentury,livingstandards,degreesofcommercialization,agriculturalyields,andprotoindustrializationwerenomoreadvanced inWesternEurope than inmanyotherpartsof theworld,andone thereforecanspeaktoacertainextentof“multipleearlymodernities”(…),militarypowergraduallyconcentratedinthehandsofEuropean(mercantile)elitesfirstenabled,andthensubsequentlyguaranteed,increasingreturnsandmarketexpansionbothwithinEuropeandultimatelyinthenon‐Europeanworld.”Mielants(2007,p.161)“… western Europe, was able to escape the proto‐industrial cul de sac and transfer handicraft workers into modernindustriesasthetechnologybecameavailable. Itcoulddothis, in largepart,becausetheexploitationoftheNewWorldmadeitunnecessarytomobilizethehugenumbersofadditionalworkerswhowouldhavebeenneededtouseEurope’sownlandinmuchmoreintensiveandecologicallysustainableways.”Pomeranz(2000,p.264)“ ‘why, within Europe, it was its Northwestern part that spearheaded the rise of Europe’? The conclusion from thisinvestigationis:‘Becauseofphysicalgeography,whichhadendowednorth‐westernEurope–morebroadlycalledlowlandEurope here – with easier and cheaper transportation.’ Hopefully, we have by now established that link betweengeography and economic integration. In Acemoglu’s account, the decisive geographic determinant for early economicdevelopmentisaccesstotheAtlantic,whilethetradethatarguablyinducedinstitutionalchangewastheoverseastradewith the colonies. Here, a similar argument can bemade, in which the geographical determinant is not access to theAtlantic,butbeingpartof lowlandEuropemoregenerally.And insteadofcolonial trade, it is thehigher levels in intra‐Europeantradethattriggeredinstitutionalchangeandeconomicchange.”Studer(2009)“MyviewwouldbethatwithcoalandespeciallysteamBritainenteredaneweconomicregimewithunheardofpotentialforgrowth,whereastheDutchRepublicwithallitsinstitutionalmodernity'only'presentedthehighestbutfinitelaststageoftraditionaleconomicgrowth.”Vries(2013,p.24)“Modern civilization owes its superiority to the growth of equality with the growth of association. Two great causescontributedtothis–thesplittingupofconcentratedpowerintoinnumerablelittlecentersbytheinfluxoftheNorthernnations,andtheinfluenceofChristianity.WithoutthefirsttherewouldhavebeenthepetrifactionandslowdecayoftheEasternEmpire,where church and statewere closelymarried and loss of external powerbrought no relief of internaltyranny.Andbut for theother therewouldhavebeenbarbarism,withoutprincipleof associationoramelioration.Thepettychiefsandallodiallordswhoeverywheregraspedlocalsovereigntyheldeachotherincheck.”George(1917,p.75)“In her efforts for the abolition of slavery; in her Truce of God; in hermonastic orders; in her councils which unitednations,andheredictswhichranwithoutregardtopoliticalboundaries;inthelowbornhandsinwhichsheplacedasignbeforewhich the proudest knelt; in her bishopswho by consecration became the peers of the greatest nobles; in her"Servantof Servants," for sohis official title ran,who, by virtue of the ring of a simple fisherman, claimed the right toarbitratebetweennations,andwhosestirrupwasheldbykings;theChurch,inspiteofeverything,wasyetapromoterofassociation,awitnessforthenaturalequalityofmen.”George(1917,p.76)“ItisnottheabundanceofcompetitionorentrepreneurshiporideasfortechnologicalinnovationsthatallowedtheWesttoacceleratethegrowthratesofproductivitybyanorderofmagnitude;itisfirstandforemosttheabundanceofsavingsandinvestmentthatresultedfromgrowingincomeinequalitiesandallowedanincreaseinthecapital/labourratioandthecasting inmetal of ideas for newproducts and technologies. To put it differently, theWest became rich not due to itsinventiveness and entrepreneurial spirit, but due to the cruel andmerciless dismantling of community that previouslyprovidedsocialguaranteestothepoorest.”Popov(2015,p.2)“…ifthereisasingleconjuncturalfactorormomentexplainingBritain’s–andlaterEurope’s–risetoglobalsupremacy,itwasBritain’scolonisationofIndia.”AnievasandNişancıoğlu(2015,p.247)“My thesis—echoing but extending that of Blaut—is that the West first bought itself a third‐class seat on the Asianeconomictrain,thenleasedawholerailwaycarriage,andonlyinthenineteenthcenturymanagedtodisplaceAsiansfromthelocomotive.”Frank(1998,p.37)


“CLIMBINGUPONASIANSHOULDERS.SohowdidtheWestrise?Theanswer(…)isthattheEuropeansboughtthemselvesaseat,andthenevenawholerailwaycar,ontheAsiantrain(…)theEuropeanssomehowfoundand/orstole,extorted,orearnedthemoneytodoso.Again,howso?(…)ThemostimportantansweristhatEuropeansobtainedthemoneyfromthegoldandsilverminestheyfoundintheAmericas.Thesecondaryansweristhatthey“made”moremoney,intheverygoodbusinessfirstofdiggingupthatsilver—ormoreaccurately,obligingtheindigenouspeoplesoftheAmericastodigitupfortheEuropeans.TheEuropeansalsoengagedinavarietyofotherprofitablebusinessestheyranin—andto—theAmericas.ThesewerefirstandforemosttheslaveplantationsinBrazil,theCaribbean,andtheNorthAmericanSouth;and,ofcourse,theslavetradeitselftosupplyandruntheseplantations.(…)EuropeanswereabletomakestillmoremoneysellingtheirownEuropean‐madeproducts to these andotherpeople in theAmericas, products forwhichEuropeotherwisewouldhavefoundnoothermarket,sincetheywerenotcompetitivelysalableinAsia.”Frank(1998,pp.277‐278)“Without that [theAmerican] silver—and, secondarily,without thedivisionof labor andprofits it generated inEuropeitself—the Europeanswould not have had a leg, or even a single toe, to stand onwithwhich to compete in the Asianmarket.OnlytheirAmericanmoney,andnotany“exceptional”European“qualities,”which,asSmithrealizedevenin1776,hadnotbeenevenremotelyup toAsianstandards,permitted theEuropeans tobuy their ticketon theAsianeconomictrainand/ortotakeathird‐classseatonit.”Frank(1998,p.282)“Certainly, the Europeans had no exceptional, let alone superior, ethnic, rational, organizational, or spirit‐of‐capitalistadvantagestooffer,diffuse,ordoanythingelseinAsia.WhattheEuropeansmayhavehad(…)issome(…)advantagesof“backwardness” afforded by their position (…) at the (semi‐)periphery of the world economy! So how is it that thisotherwiseapparentlyhopelessEuropeangambleinAsiapannedout—andfinallyhitthejackpot?OnlybecausewhiletheEuropeansweregatheringstrengthfromtheAmericasandAfrica,aswellasfromAsiaitself,Asianeconomiesandpolitieswerealsobecomingweakenedduringpartof theeighteenth century—somuchso that thepaths finally crossed (…)atabout1815.”Frank(1998,p.283)“…thesetechnologicaldevelopmentsoftheindustrialrevolutionshouldnotberegardedasonlyEuropeanachievements.Instead, theymustbeunderstoodmoreproperlyasworlddevelopmentswhosespatial locusmovedtoandthroughtheWest at that timeafterhaving longmovedabout theEast.The relevantquestion isnot somuchwhat the “distinctive”EuropeanfeaturesorfactorsareoftheindustrialrevolutionashowandwhythisindustrialshifttookplacefromEasttoWest (…) theanswers to thereasons for thisshiftmustbesought inboth thedeclineof theEastand in theriseof theWest.”Frank(1998,p.285)“Theargument—andtheevidence—isthatworlddevelopmentbetween1400and1800reflectsnotAsia'sweaknessbutitsstrength,andnotEurope'snonexistentstrengthbutratheritsrelativeweaknessintheglobaleconomy.Foritwasalltheseregions'jointparticipationandplaceinthesinglebutunequallystructuredandunevenlychangingglobaleconomythatresultedalsoinchangesintheirrelativepositionsintheworld.Thecommonglobaleconomicexpansionsince1400benefitedtheAsiancentersearlierandmorethanmarginalEurope,Africa,andtheAmericas.However,thisveryeconomicbenefitturnedintoagrowingabsoluteandrelativedisadvantageforoneAsianregionafteranotherinthelateeighteenthcentury.Productionand tradebegan toatrophyasgrowingpopulationand income, andalso their economicand socialpolarization,exertedpressureonresources,constrainedeffectivedemandatthebottom,andincreasedtheavailabilityofcheaplaborinAsiamorethanelsewhereintheworld.EuropeandthenalsoNorthAmerica(andifwewishtoseparateitout, also Japan at the other endof Eurasia)were able to take advantage of this pan‐Asian crisis in thenineteenth andtwentieth centuries. Theymanaged to becomeNewly Industrializing Economies, first through import substitution andincreasinglyalsobyexportpromotiontoandwithintheglobalworldmarket.Yetthissuccess,whichwasbasedontheirpreviousmarginalityandrelative“backwardness”intheglobaleconomy,mayalsoprovetoberelativelyshort‐lived.”Frank(1998,pp.318‐319)“Modernindustryhasestablishedtheworldmarket,forwhichthediscoveryofAmericapavedtheway.Thismarkethasgivenanimmensedevelopmenttocommerce,tonavigation,tocommunicationbyland.Thisdevelopmenthas,initsturn,reactedontheextensionofindustry;andinproportionasindustry,commerce,navigation,railwaysextended,inthesameproportion thebourgeoisie developed, increased its capital, andpushed into thebackgroundevery class handeddownfromtheMiddleAges.”MarxandEngels(1848)“Thebourgeoisiecannotexistwithoutconstantlyrevolutionisingtheinstrumentsofproduction,andtherebytherelationsofproduction, andwith them thewhole relationsof society. Conservationof theoldmodesofproduction inunalteredform,was,on thecontrary, the firstconditionofexistence forallearlier industrial classes (…).Theneedofaconstantlyexpandingmarketforitsproductschasesthebourgeoisieoverthewholesurfaceoftheglobe.Itmustnestleeverywhere,settleeverywhere,establishconnexionseverywhere.”


MarxandEngels(1848)“Modernbourgeoissocietywith itsrelationsofproduction,ofexchangeandofproperty,asociety thathasconjuredupsuchgiganticmeansofproductionandofexchange,islikethesorcerer,whoisnolongerabletocontrolthepowersofthenetherworldwhomhehascalledupbyhisspells.”MarxandEngels(1848)“The Ricardian account of Europe's history stresses technological change, population movements and diminishingreturns as the springs of economic change. The market account puts the emphasis on coordination failure andincreasingreturns.Nodoubtbotheffectshavebeenalwayspresent,butthereisreasontothinkthattheeconomicsof increasing returns dominated those of diminishing returns in the history of the western economy during itsagrarianphase.Becausethiseconomicsimpliessignificantsensitivitytoshocksaffectingthecostsoftrade,aneconomichistorythatincorporatesthemmustbeattentivetofiscal,politicalandmonetaryeventsthatinfluencedtheabilityofmerchantstoorganiseproductionoveralargearea.Thiskindofeconomichistoryreopensthedoortoanintegrationofpoliticalandeconomichistorybyre‐emphasisingtheroleofpoliticalintegrationanddynasticconflictinmakingandunmakingEurope'seconomicspace.Inthissense,thehighlyendogenisedsearch‐equilibriumparadigmholdsoutthepromiseofanewnarrativeofthe'riseoftheWest'.”Grantham(1999,p.226)“Overtheperiod1700–1800,mostofWesternEuropewasonatrajectoryawayfromtheMalthusianlimitationsoftheoldregimeasaresultofsustainedimprovementsinbothlandandlaborproductivity,andsustainedinnovationsintheuseofmachinescapableofconvertingmineralheatintowork.RatherthaninsistingwithFrank,Goldstone,Wong,andPomeranzthatthe“greatdivergence”occurredonlyafterabout1820–1850,becauseitwasonlythenthatfastandsustainedgrowthratesinGDPpercapitawerediscernibleinEngland,IwouldagreewithJoelMokyrthatthesourcesofthesegrowthratesgobacktothescientificcultureandinstitutionalchangesoftheEnlightenment.”Duchesne(2006,p.81)“TheoperativeprincipleintheriseofEuropeisthegenerationofacontinuing,self‐sustainingprocessofculturalchange.”Duchesne(2006,p.83)“IliketosummarizethechangetheriseoftheWestinonetell‐taleevent:thePortuguesepenetrationintotheIndianOceanledbyVascodaGamain1498.Thiswasanextraordinaryachievement.Somescholarswilltellyouthatitwassomekindofaccident(…)Don'tyoubelieveit.”Landes(2006,p.3)“Thedynamic,unlike the IndustrialRevolution inwhich itculminated,wasnotsudden,discontinuous,orqualitative. Itwasa long‐drawn‐out,cumulative,andperhapssomewhatunsteadyprocess,butneverthelessaprocessratherthananevent,lastingforsix,seven,oreveneightcenturies.”Mann(1986,p.500)“(The dynamic)was not due fundamentally to the twelfth‐century town, or thirteenth‐ to fourteenth‐century strugglesbetweenpeasantsandlords,orfourteenth‐centurycapitalistaccountingmethods,orthefourteenth‐tofifteenth‐centuryRenaissance, or the fifteenth‐century navigational revolution, or the scientific revolutions of the fifteenth to theseventeenth century, or sixteenth‐century Protestantism, or seventeenth‐century Puritanism, or seventeenth‐ toeighteenth‐century English capitalist agriculture –the list could be continued. Each and everyone of these isweak as ageneralexplanationoftheEuropeanmiracle,foronereason:Theystarttoolateinhistory.”Mann(1986,pp.500‐501)“The European dynamic was the accidental conjunction of two macropatterns (…) political blockage to the east andagricultural‐cum‐trading opportunity to thewest. (…) In themedieval era, agricultural‐cum‐navigational opportunitieswereexploitablebyahistoricallyconjunctural,butinternallypatterned,setofoverlappingpowernetworks.Thesewere(1)thenormativepacificationofChristendom,laterlargelyreplacedbyadiplomaticallyregulatedmultistatecivilization;(2)small,weakpoliticalstates,growingincentralized‐territorialcoordinatingandorganicpowers,butneverinternallyorgeopoliticallyhegemonic;and(3)amultiplicityofpart‐autonomous,competitive,localeconomic‐powernetworks‐peasantcommunities, lordly manors, towns, and merchant and artisan guilds –whose competition gradually settled in to thatsingle,universal,diffusesetofprivate‐propertypowerrelationsweknowascapitalism.By1477 thesepowernetworkswere developing into their simpler, modern form: a multistate, capitalist civilization (…). This conjunction of part‐patternedprocessesandpart‐historicalaccidentsisascloseaswecancometoanoveralltheoryofEuropeandynamismusinghistoricalformsofexplanation.”Mann(1986,p.510)“The'miracle'ofmassiveeconomicdevelopmentoccurred'spontaneously'inEurope,andnowhereelse.”Mann(1988,p.6)


“…the capitalist revolution in agriculture and industry of the eighteenth and nineteenth centurieswas the singlemostimportantboosttohumancollectivepowerinhistory.”Mann(1986,p.373)“InseekingtoexplainEuropeaneconomicdevelopmentfromtheninteenthcenturyonwardsbyconsideringiteitherasanaberrationorasaturningpointinhistory,thebestwaytostartisbyidentifyingthemostgeneralconditionsofpossibilityof the phenomenon. These can be reduced to three: the definition of property rights, which guarantee to the variousfactors returns proportional to their contribution to the production ofwealth; regulatedmarkets that are as fluid aspossible,inwhichtransactionsleadtotheoptimalallocationofresources;entrepreneurswho,onthelook‐outforanyopportunity for profit, are constantly looking for new combinations of factors in order to replenish supply. Theseconditionsofeconomicprogressinturnrestupon(…)apoliticalregimewhoselogicisdemocratic.”Baechler(1988,p.60)Internationalcompetitionfortechnologicaldevelopment“The eighteenth centurywas the criticalmoment forboth science and economicdevelopment. In that century literateWesternersembracedscienceasneverbefore.FirstinBritain,thengraduallythroughoutWesternEurope,theylearneditin schools and lecture halls; they picked up its contents from general textbooks; they read about scientists and theirexploitsinnewspapersandjournals;theycametobelieveinscienceanditspower.Governmentssentspies‐generallytoBritain‐ to findout the latest technologicalbreakthroughs inmanufacturingormining.By theearlynineteenthcenturyministersofstateencouragedtheteachingofscienceandmathematicsingrammarandsecondaryschoolsforbothboysandgirls.Aninternationalcompetitionfortechnologicaldevelopmenthadbegunandcontinuestothisday.”Jacob(1997,p.6)“…thekeytothestoryisthevarietyoftheoptionspursuedandtheincreasedlikelihood(ascomparedtoasingleunifiedpolicy)thatsomewouldturnouttoproduceeconomicgrowth.(…)Itwasthedynamicconsequencesofthecompetitionamongfragmentedpoliticalbodiesthatresultedinanespeciallycreativeenvironment.”North(2005,p.138)“In capsule form our explanation is that changes in relative product and factor prices, initially induced byMalthusian populationpressure, and changes in the size of markets induced a set of fundamental institutionalchanges which channelled incentives towards productivity‐raising typesof economic activity.By the eighteenthcenturytheseinstitutionalinnovationsandaccompanyingchangesinpropertyrightsbuiltproductivitychangesintothesystemenablingWesternmantofinallyescapetheMalthusiancycle.Theso‐called"IndustrialRevolution"issimplyalatersurfacemanifestationofinnovativeactivityreflectingthisredirectionofeconomicincentives.”NorthandThomas(1970,p.1) IndustrialRevolution ↑Malthusian→changesin innovativeactivitypopulationpressure relativeprices↘ institutional→productivity‐raising↗ ↑ changes economicactivities↘endofMalthusianchangesinthesizeofmarkets↗ ↘ ↗cycles changesinpropertyrightsReferencesAnievas,Alex;KeremNişancıoğlu(2015):HowtheWestCametoRule:TheGeopoliticalOriginsofCapitalism,PlutoPress,London.Baechler,Jean(1988):Theoriginsofmodernity:Casteandfeudality(Europe,IndiaandJapan),inJeanBaechler,JohnA.Hall,andMichaelMann;eds.:Europeandtheriseofcapitalism,Blackwell,Oxford,UK,pp.39‐65.Duchesne,Ricardo(2006):Asiafirst?,TheJournalofTheHistoricalSociety6(1),69‐91.Duchesne,Ricardo(2011):TheuniquenessofWesterncivilization,BRILL,Leiden,TheNetherlands.Frank,AndreGunter(1998):Re‐ORIENT:GlobaleconomyintheAsianage,UniversityofCaliforniaPress,Berkeley,CA.George,Henry(1917):Thelawofhumanprogress(1stedition1879),J.Fels,InternationalCommission,NewYork.Goldstone,JackA.(2009):WhyEurope?TheRiseoftheWestinworldhistory,1500‐1850,McGraw‐Hill,NewYork.Grantham,George(1999):“Onthemacroeconomicsofpre‐industrialeconomies”,EuropeanReviewofEconomicHistory3(2),199‐232.Jacob,MargaretC.(1997):ScientificcultureandthemakingoftheindustrialWest,OxfordUniversityPress,NewYork.Landes,DavidS.(2006):“WhyEuropeandtheWest?WhynotChina?”,JournalofEconomicPerspectives20(2),3‐22.Mann, Michael (1986): The sources of social power, Volume I: A history of power from the beginning to AD 1760,CambridgeUniversityPress,Cambridge,UK.Mann,Michael(1988):“Europeandevelopment:Approachingahistoricalexplanation”,inJeanBaechler,JohnA.Hall,andMichaelMann;eds.:Europeandtheriseofcapitalism,Blackwell,Oxford,UK,pp.6‐19Marx,Karl,FriedrichEngels(1848):Thecommunistmanifesto.


Mielants,EricH.(2007):TheOriginsofCapitalismandthe“RiseoftheWest”,TempleUniversityPress,Philadelphia.Morris,Ian(2010):WhytheWestrules—forNow.ThePatternsofHistoryandWhatTheyRevealabouttheFuture,Profile

Books,London.North,DouglassCecil(2005):UnderstandingtheProcessofEconomicChange,PrincetonUniversityPress,Princeton,New

Jersey.North, Douglass Cecil; Robert Paul Thomas (1970): “An Economic Theory of the Growth of theWesternWorld”, The

EconomicHistoryReview23(1),1‐17.Pomeranz, Kenneth (2000): The Great Divergence: China, Europe, and the Making of the Modern World Economy,

PrincetonUniversityPress,Princeton,NewJersey.Popov,Vladimir (2015):MixedFortunes:AnEconomicHistoryofChina,Russia, and theWest,OxfordUniversityPress,Oxford,UK.Rosenberg,Nathan;L.E.Birdzell,Jr.(1986):HowtheWestGrewRich:TheEconomicTransformationofthe

IndustrialWorld,BasicBooks,NewYork.Rosenthal,Jean‐Laurent;R.BinWong(2011):Beforeandbeyonddivergence:ThepoliticsofeconomicchangeinChinaand

Europe,HarvardUniversityPress,Cambridge,Massachussetts.Scott,BruceR.(2011):Capitalism.ItsOriginsandEvolutionasaSystemofGovernance,Springer,NewYork.Studer,Roman(2009):DoesTradeExplainEurope’sRise?Geography,MarketSizeAndEconomicDevelopment,Working

PapersNo.129/09,LondonSchoolofEconomics.Vries, Peer 2013 :Escapingpoverty:Theoriginsofmoderneconomicgrowth,V&Runipress,ViennaUniversityPress,Goettingen,Germany.Žmolek, Michael Andrew (2013): Rethinking the Industrial Revolution. Five Centuries of Transition from Agrarian to

IndustrialCapitalisminEngland,BRILL,Leiden,TheNetherlands.


EurocentricargumentsfortheriseoftheWest“Thechecklistofargumentswillbepresentedasanumberedseriesofpropositions,and,foreach,thehistorianswhoputforwardthatargumentwillbenamed(…)

1. Peopleofthewhiteracehaveaninheritedsuperiorityoverthepeopleofotherraces.(Weberarguedthisway;butnoneofthesevencontemporaryhistoriansexpressesracistviews.)

2. TheclimateofEurope,ornorthwestEurope,isuniquelyfavorableforagriculture.(Jones,Mann,Hall,Landes)Or:Europe,alongwithChina,possessesaclimate that ismore favorable foragriculture thanaretheclimatesofallotherregions,especiallythehumidtropics.(Diamond)

3. The climateof Europe is better for human comfort andproductivity than are the climatesof all other regions.(Jones,Landes)

4. ThesoilsofEuropeareuniquelyfertile.(Jones,Mann,Hall,Landes)5. The landform structure of Europe is uniquely favorable for communication and the diffusion of ideas. (Jones,

Diamond,Landes)6. ThelandformsofEuropedifferentiatethecontinentintoseparateecologicalcores,andthisexplainsinlargepart

thefactthatEuropehasmanymoderate‐sizedstatesinsteadofanempire.(Jones,Hall,Diamond,Landes)7. The indented coastline of Europe partly explains the linguistic, ethnic, and political differentiation of Europe.

(Jones,Mann,Diamond)8. The forestvegetationofEuropehistorically contributed to thedevelopmentof individualisticpeopleand small

families, hence led Europe toward private property and capitalism (Weber, Mann, Hall, Landes) and helpedEuropeuniquelytoavoidoverpopulationandiandisasters.(Mann,Hall,Landes)

9. Europe's environment is less subject to natural disasters than are other regions, and this encourageddevelopment.(Jones,Hall)

10. Europewas,historically,lessdisease‐riddenthanallotherplaces.(Jones,Diamond,Landes)11. Europeans,historically,werebetternourishedthanotherpeople.(White,Jones,Landes)12. Europeanswereuniquelyinventive.(Weber,White,Brenner,Jones,Mann,Hall,Landes)13. Europeans were uniquely rational in the practice of sexual self‐restraint and so avoided overpopulation and

Malthusiandisasters.(Jones,Hall,Landes)14. Europeans were uniquely innovative and progressive. (Weber, White, Brenner, Jones, Mann, Hall, Diamond,

Landes)15. Europeanswereuniquelycapableofcreativeandscientificthought.(Weber,White,Mann,Hall,Landes)16. Europeanshelduniquelydemocratic,ethicalvalues.(Weber,White,Mann,Hall,Landes)17. Thedevelopmentofclassesand/orclassstrugglewasmost fullydeveloped inEurope. (Weber,Brenner,Mann,

Hall,Landes)18. TheChristianreligion,asdoctrine,ledtouniqueEuropeandevelopment.(Weber,White,Mann,Hall)19. TheChristianChurch,asinstitution,ledtouniqueEuropeandevelopment.(Weber,White,Mann,Hall,Landes)20. TheEuropeanfamilywasuniquelysuitedtodevelopment.(AlsoseeNo.8.)(Jones,Mann,Hall,Landes)21. Europeansuniquely,inancientand/ormedievaltimes,developedtheconceptandinstitutionofprivateproperty.

(Weber,White,Brenner,Jones,Mann,Hall,Diamond,Landes)22. Europeans uniquely, in ancient and/or medieval times, developed the institution of the market. (Jones, Hall,

Diamond,Landes)23. Urbanization, in Europe, was more favorable for development than elsewhere; European cities were more

progressiveand/ormorefreethancitieselsewhere.(Weber,Jones,Hall,Diamond,Landes)24. Thestate,inEurope,developedtowardmodernpoliticsmorerapidlythanelsewhere.(AlsoseeNos.25,and26)

(Weber,Jones,Mann,Hall,Diamond,Landes)25. The empire as a political form hobbled development in non‐European regions. (Weber, Jones, Mann, Hall,

Diamond,Landes)26. Oriental despotism hobbled social and technological development in non‐European regions. (Also see No. 25)

(Weber,Jones,Mann,Hall,Diamond,Landes)27. Europe was uniquely capable of avoiding Malthusian disasters for many reasons. (Also see Nos. 8 and 13)

(Brenner,Jones,Mann,Hall,Landes)28. Thepracticeof,anddependenceon,irrigationslowedorstoppeddevelopmentinhydraulicorirrigatingsocieties.

(AlsoseeNo.26)(Weber,Jones,Mann,Hall,Landes)29. ThedevelopmentoffeudalisminEuropeuniquelyfavoredtheriseofdemocracyandprivateproperty.(Alsosee

No.21)(Weber,Jones,Mann,Landes)30. Europeans were uniquely venturesome, uniquely given to exploration and overseas expansion. (Jones, Mann,

Landes)”“… the favorite argument is the superiority of Europe's environment for agriculture. Landes, Diamond, and Jones areparticularlyprone touse the argumentsof environmentaldeterminism.TheMalthusianargumentsare also among thefavorites. But the overwhelmingly important arguments are Weberian, invoking claims about the superiority of theEuropean mind: its rationality, inventiveness, innovativeness, venturesomeness, and so on. Max Weber is still thegodfatherofEurocentrichistoriography.”


“… in nearly all non‐Western civilizations, pastand present, the principal feature has been, and remains, that they areculturesdesignedfor,andlimitedintheirusefulnessto,rulingelites.By‐and‐largeapowerfulfewchartthecourseandenjoy thebenefitsof cultureandcivilization, andnearlyalwaysat theexpenseof theweakandpassivemany. In theseculturesknowledge, that essential stockofa civilization’s ideasabout itself and theworld,hasbeencontrolledby, andrestrictedto,anaristocraticcadrewhoviewitasawaytopromotethemselvesanddominateothers.Oftentheirgoalhasbeen to preserve the people’s ignorance and subordination by the superstitions of noble character and superiority ofinheritedvirtueoftherulers.”Kelley(1999,p.9)“Cultures like these are, and always have been, stagnant and moribund, neither developing nor progressing in anybeneficialwayforthepeopleasawhole.Theeliteswhodominatethemhaveastronginterestinmaintainingthestatusquo.”Kelley(1999,p.10)“Comparedtothesenon‐Westerncultural traits,Westerncivilizationcameeventuallytoembodythebelief thatnomenareinnatelysuperiortoothers.This,innosmallmeasure,isattributabletotheinfluenceofChristianitywhichsawinmanaminiaturereflectionofhisMaker.”Kelley(1999,p.10)“…onlyintheWestdidthenotionofhistory,astherecordofacivilization’sadvanceorregression,self‐consciouslyshapethewayapeoplevieweditselfanditsaccomplishments.Westernman,forthemostpart,hasnotthoughtofhiscultureasafinishedproduct,butasanon‐goingenterpriseinwhichpresentachievements,althoughbuiltontheaccumulateddeedsofpastgenerations,furnishbuttheopportunitiesforgreaterbenefitsfortomorrow.Westernculturewasnostaticideal,butadynamicandgrowingvisionforfuturegenerations.Inthissense,Westerncultureisstillanidealtobeachieved,stillinprocessofformation.”Kelley(1999,p.11)ReferencesBlaut,JamesM.(2000):EighteurocentrichistoriansKelley,MichaelW.(1999):TheimpulseofpowerinWesterncivilization


Obstaclestomoderneconomicgrowth“Why,withonlyafewexceptions—Japan,SouthKorea,Chile,Singapore,Taiwan—havecountriesoutsideofEurope,NorthAmerica,andAustralia/NewZealandfounditsohardtoachieveEuropeanstandardsofliving?Theprimaryreasonswhymodern economic growth has not spread to more nations are lack of scientific training, lack of entrepreneurialopportunity, or both. … First, a dependence on selling natural resources can trap countries into low levels ofdevelopment. … A secondobstacle tomoderneconomicgrowth is investment in thewrongkindsof education.ManycountriesthatobservedthesuccessoftheWestdidnotappreciatehowmuchthatsuccessdependedonbroadeducation,free thought, the technical training of craftspeople, and the production of scientifically skilled engineers. Instead, theythought that college education of any kind would do … A third obstacle to modern economic growth is a lack ofopportunitiesforpeoplewithtraining,ideas,andtalenttocreatenewindustries … Afourthpathtopovertyiscreatingclosedeconomies. … Finally, onemorepath topoverty,much rarer in theworld todaybut fairly common inmostofhistory,wasforreligiousorthodoxytostifleinnovationorforreligiouseducationtodominateanddisplacescientificandtechnicaleducation.”Goldstone 2009,pp.172‐175 Thedoctrineofexhaustedopportunity“According to thisdoctrineprofitableeconomicopportunitieswillnot longgounexploitedunlessagentsarepreventedfromrespondingtothembysocialorinstitutionalobstacles.Sincesuchobstaclestendinthelongruntobeerodedbytheself‐interested actions of those who would profit from the unexploited opportunity, it follows that economiescharacterisedbyastagnanttechnologyarelikelytohaveexhaustedtheiropportunitiesforfurthergrowth.”Grantham(1999,p.204)Smallvslargemarkets“EconomistssinceAdamSmithhaveunderstoodinageneralwaythateconomicdevelopmentinvolvesacircularchainofcausationbetween theextentof themarketand thedivisionof labour.Themarketsupplyofeachspecialisedproducerconstitutestheeffectivedemandforthemarketedsuppliesofotherspecialisedproducers.Itfollowsthatthegreaterthedegree of specialisation, the larger the effective demand for specialised production. In the theoretical literature thisphenomenon is called 'thick‐market externalities (…). The externalities stem from the capacity of large markets togeneratealevelofaggregatedemandthatishighenoughtocoverthesunkcostsofprovidingspecialisedservices.Grantham(1999,p.217)“…thestructureofthepre‐industrialeconomyfromtheperspectiveofitsfundamentalindivisibilities.Themainsunkcostinahandicrafteconomyistheirreversibleinvestmentinacquiringtheskillsthatmakespecialisedworkersmoreproductivethanunspecialisedones.Inanagriculturaleconomythecostistheadvancesoflabourandcapitalrequiredbymoreintensivecultivation.Neitherweretrivial,andtheywereaugmentedbythecostsofcollecting,transportingandfinancingnon‐localsaleswheneverthelevelofspecialisationreachedthepointwhereitcouldonlybesustainedbygeographicalextensionofthemarket.”Grantham(1999,p.217)

Grantham(1999,p.220)“The horizontal axis measures the extent ofspecialisation, which can bemeasured in terms ofthenumberofspecialistsorinunits ofspecialisedoutput, while the vertical axis measures thethreshold or cut‐off cost of opportunities tospecialise. The curve CC orders such opportunitiesby their minimum cost, and maps them onto theaggregatelevelofspecialisationthatwouldobtainifallopportunitiesuptotheonegovernedbyagivenlevel of specialisation were accepted. The curvestarts from a positive point on the cost axisbecause even the least expensive project incurspositivecost,anditisconcaveupwardbecauseonecanalwaysconceiveof ever more costly projects.ThecurveOBbycontrastdefinesthesteady‐statelevelofspecialisationthatsupportsagiventhresholdcost.Itmapssteady‐statedemandorcostoffindinga trading partner onto the threshold cost of themarginal productionopportunity. Clearlylowlevelsof specialisation imply low cut‐off thresholds,because they mean low numbers of market

participants and high marketing cost. Conversely, high levels of specialisation imply a high threshold. This relation


exhibitsincreasing,followedbydecreasing,returnstoincreasingspecialisation,reflectingtheinitiallysharpdeclineinsearchcostsasthenumberofmarketparticipantsincreasesfollowedbylowerratesofgaintoadditionalparticipantswhenthemarketislarge.”Grantham(1999,pp.220‐221)ReferenceGoldstone,JackA. 2009 :WhyEurope?TheRiseoftheWestinworldhistory,1500‐1850,McGraw‐Hill,NewYork.Grantham,George(1999):“Onthemacroeconomicsofpre‐industrialeconomies”,EuropeanReviewofEconomicHistory3(2),199‐232.


TheJ‐curve“Thereisacounterintuitiverelationshipbetweenanation'sstabilityanditsopenness,bothtotheinfluencesoftheoutsideworldandwithinitsborders.Certainstates—NorthKorea,Burma,Belarus,Zimbabwe—arestablepreciselybecausetheyareclosed … Otherstates—theUnitedStates,Japan,Sweden—arestablebecausetheyareinvigoratedbytheforcesofglobalization.These statesareable towithstandpolitical conflict, because their citizens—and international investors—knowthatpoliticalandsocialproblemswithinthemwillbepeacefullyresolvedbyinstitutionsthatareindependentofoneanother and that the electoratewill broadly accept the resolution as legitimate. The institutions, not the personalities,matterinsuchastate.Yet,foracountrythatis‘stablebecauseit'sclosed’tobecomeacountrythatis‘stablebecauseit'sopen,’itmustgothroughatransitionalperiodofdangerousinstability.Somestates,likeSouthAfrica,survivethatjourney.Others,likeYugoslavia,collapse.”Bremmer(2006,pp.4‐5)“ ‘Openness’ is a measure of the extent to which a nation is in harmony with the crosscurrents of globalization—theprocessesbywhichpeople, ideas, information,goods,andservicescross internationalbordersatunprecedentedspeed.Howmany books written in a foreign language are translated into the local language?What percentage of a nation'scitizenshaveaccesstomediaoutletswhosesignalsoriginatefrombeyondtheirborders?Howmanyareabletomakeaninternationalphonecall?Howmuchdirectcontactdolocalpeoplehavewithforeigners?Howfreeareanation'scitizenstotravelabroad?Howmuchforeigndirectinvestmentisthereinthecountry?Howmuchlocalmoneyisinvestedoutsidethe

country?Howmuchcross‐bordertradeexists?… But openness also refers to the flow ofinformation and ideas within a country'sborders.Arecitizensfreetocommunicatewithone another? Do they have access toinformation about events in other regions ofthe country? Are freedoms of speech andassembly legallyestablished?Howtransparentare the processes of local and nationalgovernment? Are there free flows of tradeacross regions within the state? Do citizenshave access to, and influence in, theprocessesof governance? ‘Stability’ has two crucialcomponents: the state's capacity to withstandshocksanditsabilitytoavoidproducingthem.Anationisonlyunstableifbothareabsent.”Bremmer(2006,pp.7‐8)Bremmer(2006,p.6)

“…theleftsideofthecurveismuchsteeperbecausealittleconsolidationandcontrolcanprovidealotofstability.Itisfasterandeasiertocloseacountrythantoopenit.”Bremmer(2006,p.14)“Nationswithlittlehistoryofopennessandpluralismhaveahabitofrespondingtoturmoilwithacentralizationofstatepower;thathabitisahardonetobreak.(…)Mostdevelopingcountrieshavenoexperienceofstablenormalcytoreturnto.Throwingmoneyatsocialandpoliticalproblems inorder to finance theconstructionofnew infrastructure ignores theproblemrevealedbytheJcurve:developingcountriesbecomelessstablebeforetheybecomemoreso. It'sonethingtobuild a new parliament building. It's quite another to populate the building with legislators dedicated to pluralistgovernance.Thelattertakestime,andbeforeitcanbeachieved,theprocessofbuildinganopenstaterequiresaperiodofsignificantinstability.”Bremmer(2006,p.15)“TheleftslopeoftheJcurveismuchsteeperthantherightsidebecauseacountrythatisstableonlybecauseit'sclosedtotheoutsideworldcanfall intoadeepcrisisveryquickly(…)thereverse isalsotrue:aclosedcountrycansubstantiallyreinforce its stability—and become even more authoritarian— through the implementation of measures that furtherisolatethenation'speople.”Bremmer(2006,p.17)“Inanyleft‐side‐of‐the‐curvestate,it'seasiertocloseacountrythantoopenit.Butoncematurepoliticalinstitutionsarefullyconstructedandembracedbyanation'speople,theyarealotmoredurableanddofarmoretoprotecttheviabilityofthestatethananypolicestatetacticcan.”Bremmer(2006,p.18)


“The far left side is themostcounterintuitivesectionof the J curve: states thatareoftenamong themostdestituteandretrogradearesurprisinglystable.”Bremmer(2006,p.27)“AllstatesareinconstantmotionontheJcurve.Inleft‐side‐of‐the‐curvestates,thereisaconstanttensionbetweenthenatural pull toward greater openness and an authoritarian state's efforts to continually reconsolidate power (…) Inaddition,theJcurveitselfisinmotionupanddown.When,forexample,anaturaldisasterstrikes,anation'sentireJcurvemaysliplower.Suchashiftindicatesthat,foreverypossibledegreeofopenness,thereislessstability.Thecurvecanalsoshifthigher. Ifastate'seconomydependsonoilrevenues,andtheglobalprice foroilmoveshigher, theaddedrevenueincreasesstabilityateverypossiblelevelofopenness.”Bremmer(2006,p.20)“Consolidated authoritarian regimes shouldn't be bolstered, but that doesn't imply that the correct policy is’regimechange’—certainlynotinthemilitary,statue‐topplingsense.Therightapproachtoclosedstatesisusuallyinducementandcontainment.Societiescanbepersuadedtoacceptpoliciesthatopenthecountryincrementallytotheoutsideworldandbuildadynamicandfinanciallyindependentmiddleclasscapableofchangingsocietyfromwithin.That'swhytheUnitedStatesisrighttohelppromoteChineseandRussianmembershipintheWorldTradeOrganization.”Bremmer(2006,p.23)“… the developed world should neither shelter normilitarily destabilize authoritarian regimes—unless those regimesrepresentanimminentthreattothenationalsecurityofotherstates.Developedstatesshouldinsteadworktocreatetheconditionsmostfavorableforaclosedregime'ssafepassagethroughtheleaststablesegmentoftheJcurve—howeverandwhenevertheslidetoinstabilitycomes.Anddevelopedstatesshouldminimizetheriskthesestatesposetherestoftheworldastheirtransitiontowardmodernitybegins.”Bremmer(2006,pp.23‐24)“It'sfinetosaythatanationmorepolitically,economically,andsociallyopentoforeignmarketsandideaswillbefreer,moreprosperous,and,inthelongrun,morestablethanaclosednation.Yes,openisbetterthanclosed.But,ifpressureforchangeisnotreleasedincrementallyandwithcare—forinstance,iffreeandfairnationalelectionswereheldtomorrowinPakistan,Egypt,orUzbekistan—muchoftherestoftheworldwouldnotliketheresult.”Bremmer(2006,p.80)“Unfortunately, the rulers of most closed states have little incentive to begin preparing their societies for maturegovernanceinthefirstplace.Arabregimes,inparticular,havemadeitdifficulttoestablishaviablepoliticalalternativetothe ruling elite. (…) Thosewho believe, for example, that only the threat (or the reality) ofmilitary action can createpressureforreformaredangerouslyshortsighted.But thosewhobelieve thatcommitteddiplomatscanalwaysfindtherightcombinationofincentivestomodifyanytyrant'sbehavioraremistakenaswell.”Bremmer(2006,pp.81‐82)“Allstatesare inconstantmovementontheJcurve(…)Leftalone,a left‐sidestatewillslide toward instabilitybecauseauthoritarianismmustbecontinuouslyreconsolidated(…)Astheenergiesofglobalizationopenuptheleastpoliticallyandeconomicallydevelopedareasoftheworld,asthecitizensofclosedstateslearnmoreaboutlifebeyondtheirbordersanddiscover theydon't have to live as theydo, tyrantsmust expendmore andmore effort to isolate their societies.Thesestatescannowfallmoreswiftlyandsuddenlyintoinstabilitythanatanytimeinhistory.”Bremmer(2006,p.265)“The countries on the right side of the J curve have a collective political, economic, and security interest in workingtogethertohelpmoveleft‐sidestatesthroughinstabilitytotherightsideofthecurve.Buttheymustrecognizethatthemostpowerfulagentsforconstructive,sustainablechangeinanysocietyarethepeoplewholivewithinit.Strategiesthatempower groups within closed states to challenge the authoritarian status quo can create strong momentum fordemocraticchange.”Bremmer(2006,p.266)“Yet,globalization,forallthereasonslistedabove,canalsobetremendouslydestabilizing.Notallstatesontheleftsideofthe Jcurveareequippedtosurvive thepotentialchaosof the transition fromleft toright.There ispressure forchangewithin every closed society, a pressure that exists naturally. But, in the short term, demands for far‐reaching politicalchange shouldbe fully supportedonly in those states thathave a fighting chanceof surviving thepassage through thedepthsofthecurve.Ifacountrythatisunpreparedforsuchinstabilityfalls,orispushed,intothedipinthecurve,therearetwopossibleoutcomes.Botharegeopoliticallydangerous.First,whenastatesuddenlybecomesunstable,itscitizensmaydemandarestorationofstabilityattheexpenseofallmeaningfulreform.”Bremmer(2006,p.267)


“Theotherpossibleconsequenceofaprematureslideintoinstabilityisevenmoredangerous—totalstatefailure.”Bremmer(2006,p.268)“How can right‐side countries help prepare a left‐side state for the destabilizing transition? By implementing policiesdesigned to raise the left‐side state's entire J curve. When a country becomes more stable at every possible level ofopenness,thatcountryisbetterfortifiedtowithstandthestressesofchange.That'swhy, forexample,theUnitedStatesgovernmentactedwisely inrisingabovepartisanshiptorenewmost‐favored‐nationtradingstatus forChinaduringthe1990s.”Bremmer(2006,p.270)“When, on the other hand, a closed regime attempts ambitious economic and political reforms simultaneously, theresultingshockstothesystemcanbetoogreat.MikhailGorbachev(andlaterBorisYeltsin)learnedthatlessonthehardway.Whenaleft‐sidestatetriestoreformitspoliticsunderconditionsofhighunemploymentandwithoutthesupportofan economically sturdy middle class, the resentments unleashed produce a dangerous backlash. There is a directrelationshipbetweeninstabilityanddemandwithinsocietyforauthoritarianism.Apeoplewhofeareconomicinsecuritywilldefercallsforfreedomandrepresentativegovernmentinfavorofsupportfor(oratleastsubmissionto)asingleclearvoicepromising food, jobs,andsocialguarantees.Thepurpose, therefore,of lifting theentire Jcurve througheconomicreformandthecreationofabroadmiddleclassistoreducedemandforauthoritarianismandtobuildthenecessarypublicconfidencethatincreasesdemandforanopeningupofsociety.”Bremmer(2006,p.271)ReferenceBremmer,Ian(2006):TheJcurve:Anewwaytounderstandwhynationsriseandfall,Simon&Schuster,NewYork.


Thebasiclawsofhumanstupidity“TheFirstBasicLawofHumanStupidityassertswithoutambiguitythat‘Alwaysandinevitablyeveryoneunderestimatesthenumberofstupidindividualsincirculation’.”Cipolla(2011,p.19)“Ifirmlybelievethatstupidityisanindiscriminateprivilegeofallhumangroupsandisuniformlydistributedaccordingtoaconstantproportion.ThisfactisscientificallyexpressedbytheSecondBasicLawwhichstatesthat‘Theprobabilitythatacertainpersonbestupidisindependentofanyothercharacteristicofthatperson’.”Cipolla(2011,p.24)“TheThirdBasicLaw assumes (…) that human beings fall into four basic categories: the helpless, the intelligent, thebanditandthestupid.IfTomtakesanactionandsuffersalosswhileproducingagaintoDick,(…)Tomactedhelplessly.IfTomtakesanactionbywhichhemakesagainwhileyieldingagainalsotoDick,(…)Tomactedintelligently.IfTomtakesanactionbywhichhemakesagaincausingDickaloss,(…)Tomactedasabandit.(…)AstheThirdBasicLawexplicitlyclarifies:‘Astupidpersonisapersonwhocauseslossestoanotherpersonortoagroupofpersonswhilehimselfderivingnogainandevenpossiblyincurringlosses’.”Cipolla(2011,pp.35‐36)“Essentially stupid people are dangerous and damaging because reasonable people find it difficult to imagine andunderstandunreasonablebehaviour.Astupidcreaturewillharassyoufornoreason,fornoadvantage,withoutanyplanorschemeandatthemostimprobabletimesandplaces.Youhavenorationalwayoftellingifandwhenandhowandwhythestupidcreatureattacks.Whenconfrontedwithastupidindividualyouarecompletelyathismercy.Becausethestupidperson’sactionsdonotconformtotherulesofrationality, it followsthat:a)one isgenerallycaughtbysurpriseby theattack;b)evenwhenonebecomesawareoftheattack,onecannotorganizearationaldefence,becausetheattackitselflacksanyrationalstructure.”Cipolla(2011,pp.51‐52)“Onemayhopetooutmanoeuvrethestupidanduptoapointonemayactuallydoso.Butbecauseoftheerraticbehaviourof the stupid, one cannot foresee all the stupid's actions and reactions and before long onewill be pulverized by theunpredictablemovesofthestupidpartner.ThisisclearlysummarizedintheFourthBasicLawwhichstatesthat:‘Non‐stupid people always underestimate the damaging power of stupid individuals. In particular non‐stupid peopleconstantly forget thatatall timesandplacesandunderanycircumstances todealand/orassociatewithstupidpeopleinfalliblyturnsouttobeacostlymistake’.Throughcenturiesandmillennia,inpublicasinprivatelife,countlessindividualshavefailedtotakeaccountoftheFourthBasicLawandthefailurehascausedmankindincalculablelosses.”Cipolla(2011,p.56)“TheFifthBasicLawstatesthat‘Astupidpersonisthemostdangeroustypeofperson’.ThecorollaryoftheLawisthat‘Astupidpersonismoredangerousthanabandit’.”Cipolla(2011,p.59)

“Stupidpeoplecauselossestootherpeoplewithnocounterpartofgainsontheirownaccount.Thusthesocietyasawholeisimpoverished.”Cipolla(2011,p.60)“thehelplesswithovertonesofintelligence(area ),thebanditswithovertonesofintelligence(area )andabovealltheintelligent(areaI)allcontribute,thoughindifferentdegrees,toaccruetothewelfareofasociety.Ontheotherhandthebanditswithovertonesofstupidity(area ) and the helpless with overtones of stupidity (area )manage to add losses to those caused by stupid people thusenhancingthenefariousdestructivepowerofthelattergroup.”Cipolla(2011,pp.61‐62)“It would be a profound mistake to believe the number of stupidpeople inadecliningsociety isgreater than inadevelopingsociety.Both such societies are plagued by the same percentage of stupidpeople.Thedifferencebetweenthetwosocietiesisthatinthesociety


whichperformspoorly:a)thestupidmembersofthesocietyareallowedbytheothermemberstobecomemoreactiveand take more actions; b) there is a change in the composition of the non‐stupid section with a relative decline ofpopulationsofareasI, and andaproportionateincreaseofpopulationsofarea and .”Cipolla(2011,p.62)ReferenceCipolla,CarloM.(2011):Thebasiclawsofhumanstupidity,ilMulino,Bologna,Italy.


Exit,voiceandloyaltySociallifeisnoterror‐free“Under any economic, social, or political system, individuals, business fims, andorganizations in general are subject tolapsesfromefficient,rational,law‐abiding,virtuous,orotherwisefunctionalbehavior.Nomatterhowwellasociety'sbasicinstitutionsaredevised,failuresofsomeactorstoliveuptothebehaviorwhichisexpectedofthemareboundtooccur,ifonly forall kindsofaccidental reasons.Eachsociety learns to livewitha certainamountof suchdysfunctionalormis‐behavior.”Hirschman(1970,p.1)HowtodealwithlapsesandmistakesofeconomicactorsTheperformanceofafirmoranorganization isassumedtobesubject todeterioration(…)Managementthenfindsoutaboutitsfailingsviatwoalternativeroutes:(1)Somecustomersstopbuyingthefirm'sproductsorsomemembersleavetheorganization:thisistheexitoption.Asaresult, revenues drop, membership declines, and management is impelled to search for ways and means to correctwhateverfaultshaveledtoexit.(2)Thefim'scustomersortheorganization'smembersexpresstheirdissatisfactiondirectlytomanagementortosomeotherauthoritytowhichmanagementissubordinateorthroughgeneralprotestaddressedtoanyonewhocarestolisten:this is the voice option. As a result,management once again engages in a search for the causes and possible cures ofcustomers'andmembers'dissatisfaction.”Hirschman(1970,pp.3‐4)“Exitbelongstotheeconomicsrealm,voicetothepoliticsrealm.Thecustomerwho,dissatisfiedwiththeproductofone firm,shifts to thatofanother,uses themarkettodefendhiswelfareor to improvehisposition;andhealsosets inmotionmarket forceswhichmay inducerecoveryonthepartof the fimthathasdeclined incomparativeperformance.Thisisthesortofmechanismeconomicsthriveson.Itisneat:oneeitherexitsoronedoesnot;itisimpersonal:anyface‐to‐face confrontation between customer and firm with its imponderable and unpredictable elements is avoided andsuccessandfailureoftheorganizationarecommunicatedtoitbyasetofstatistics;anditisindirect anyrecoveryonthepartofthedecliningfimcomesbycourtesyoftheInvisibleHand,asanunintendedby‐productofthecustomer'sdecisiontoshift.Inalltheserespects,voiceisjusttheoppositeofexit.Itisafarmore‘messy’conceptbecauseitcanbegraduated,allthewayfromfaintgrumblingtoviolentprotest;itimpliesarticulationofone'scriticalopinionsratherthanaprivate,‘secret’voteintheanonymityofasupermarket;andfinally,itisdirectandstraightforwardratherthanroundabout.Voiceispoliticalactionparexcellence.”Hirschman(1970,pp.15‐16)“Everystate‐andindeedeveryorganization‐requiresforitsestablishmentandexistencesomelimitationsorceilingsontheextentofexitorofvoiceorofboth.Inotherwords,therearelevelsofexit(disintegration)andvoice(disruption)beyondwhichitisimpossibleforanorganizationtoexistasanorganization.Atthesametime,anorganizationneedsminimalorfloor levelsofexitandvoice inorder toreceive thenecessary feedbackabout itsperformance.Everyorganization thusnavigatesbetween the Scylla ofdisintegration‐disruptionand theCharybdisofdeteriorationdue to lackof feedback.Aterritorialorganizationsuchasanationalstatemustbyitsverynaturesuppressexitintheformofsecession(thoughnotnecessarilytheemigrationofindividualcitizens);hence,feedbackishereboundtotakeprimarilytheformofvoice(…)inthecenterofEuropetheattempttosuppressterritorialexitandtoasserttherighttocontrolthemovementofmenandcommodities across bordersrequired so great a concentration of effort and authority that the attempt to achievemanageablylowlevelsofexitledalsotothecrushingofvoice,whichwasreducedintheprocesstolevelsfarbelowthoserequiredforlong‐runstabilityandhealth.ThecountriesoftheEuropeanperiphery(andafewothers)founditeasiertocontroltheirbordersandtherefore‘managedtokeepabetterbalancebetweenexitcontrolsandvoicechannelingduringthecrucialphasesofstate‐building’.”Hirschman(1980,p.441)“… just as the process of state‐building required restricting both exit and voice, so liberalization and widening ofparticipationmaynotbepossible,ormaybeextraordinarilydifficulttohandle,unlessexitandvoicecontrolscanbeeasedjointly.Thereason issimple: the forcesofcriticismanddissent thathavebeendammedupbystringentvoiceandexitcontrolsmaybe sopowerful, especiallyduringaperiodof economic transformation, that, if they are released intoonechannel(usuallyvoice)only,theywillexceedtolerablelevelsor,atanyrate,suchlevelsasarethoughttobetolerablebytherulers.”Hirschman(1980,p.442)Theinteractionofthesethreevariablessuppressionofexit,suppressionofvoice,andrepressioncanalsobeobservedinothersettings.Onemightevenproposeatheorem:astatecancontrolonlytwooutofthesethreevariables. InCuba,FidelCastrochosetosuppressvoiceandtolimittheamountofrepression:sohehadtoputupwithanunexpectedlylargelossofskilledmanpowerashundredsofthousandsofCubanschosetoemigrate.InStalin'sRussia,completesuppressionofexitandvoiceyieldedrepressionofasizeandkindthatsurelyhadnotbeenfullyintendedattheoutset,whileinpost‐


StalinistRussia,thedecisiontosetlimitstorepression,combinedwiththecontinuedstrictcontrolsonexit,hasledtothevoicingofconsiderablymoredissentthantheauthoritieshadplannedfor.”Hirschman(1980,p.444)ReferencesHirschman,AlbertO.(1970):Exit,Voice,andLoyalty:ResponsestoDeclineinFirms,Organizations,andStates,HarvardUniversityPress,Harvard,Massachussetts.Hirschman,AlbertO.(1980):‘Exit,voice,andloyalty’:furtherreflectionsandasurveyofrecentcontributions,TheMilbankMemorialFundQuarterly.HealthandSociety58(3),430‐453.


Bigbusinessesandthewealthofnations“EversincetheSecondIndustrialRevolutionexplodedinthelastdecadesofthenineteenthcentury,thelargeindustrialenterprisehascontinuouslyplayedacentralroleinthedynamicgrowthoftheinternationaleconomyandtheeconomictransformation of allmajor nations. Among the new forms of large enterprises,manufacturing firms have been at theforefront not only of capital formation and productivity growth but also of technological progress and knowledgeaugmentation. This is not simply because modern economic growth on a global scale has taken the general form ofindustrialdevelopment.Itisalsobecausemanufacturingenterprises,especiallythoseincapital‐intensiveandknowledge‐intensive industries, have historically accounted formost of the research and developmentwhich became essential tocontinuingtechnologicalinnovationinthetwentiethcentury.”Chandleretal(1997,p.24)“Fromtheirbeginningsinthelatenineteenthcenturylargeenterprisesincapital‐intensiveindustrieshavesystematicallyembodied the latest scientific and technological advances and have commercialized these intomarketable products. Inindustries which led the Second Industrial Revolution, "first movers" often start‐up firms which invested inmanufacturing facilities large enough to exploit economies of scale established themselves as dominant oligopolisticplayers indomesticandthen internationalmarkets.(…)Large industrialenterprisesthusestablishedthemselvesasthefertile learning ground for technological, managerial, and organizational knowledge for an entire economy. The newtechnologiestheydevelopedinmanufacturingwereextensivelyadoptedinnonmanufacturingsectors.Thiscontributedtoproductivityimprovementinawiderangeofindustries,especiallytransportation,communication,andfinancialservices.Large industrial enterprises accelerated this diffusion process by internalizing the technology‐transfer mechanismthroughtheirintegrationanddiversificationintononmanufacturingfunctions.(…)Themodernindustrialenterprise,therefore,hasnotbeensimplyscale‐intensive,capital‐using,andnatural‐resource‐consuming. It has also been knowledge‐augmenting and learning‐enhancing. By committing to the extensive long‐terminvestment in human andorganizational resources aswell as physical assets, these large enterprises could exploit thecomplementarity between the large‐scale investment in physical capital and the sustained capital formation in suchintangible assets as human resources and technological knowledge. The capabilities which resulted became the corecompetenciesofmanyoftheinternationalfirms.Thesecompetenciesenabledsuchfirmstomaintainthemselvesasmajorglobal players and to exploit the dramatic technological innovations in electronics, aerospace, chemicals, andpharmaceuticals associatedwithwhatmight be considered a Third Industrial Revolution afterWorldWar II. The newtechnologiesoftheThirdIndustrialRevolutiontransformedtheprocessesofproductionanddistributionaseffectivelyasthenewcapital‐intensivetechnologiesoftheSecondIndustrialRevolutionalteredtheminthelatenineteenthcentury.Butnow theprimecommercializerswere large firmsalready inexistence,whereas in theSecond IndustrialRevolution theleadhadusuallybeentakenbynewfirms.”Chandleretal(1997,pp.24‐25)“Themajor contributions of theworld's large industrial enterprises to economic growth during the twentieth centuryappeartobefour.(…)First, large firms substantially lowered the cost of production by investing inmanufacturing facilities large enough toexploiteconomiesofscale.Thiswashistoricallyanecessaryconditionforthosefirmstobecomeoligopolisticplayers incapital‐intensiveindustries.(…)Second,byrecruitingthemanagers,workers,andtechnicians‐thehumancapital‐requiredtouseandcommercializethenewtechnologies,theseenterprisesbecamethelocusoflearningfortheinitialdevelopmentandcontinuedenhancementof theirproduct‐specific intangibleorganizationalassets.Andtheseassetswereessential tomaintain the industrialandcompetitivestrengthofthenationalindustriesinwhichtheyoperated.Third,themanagersofthenewindustrialenterprisesquicklyrealizedthat,iftheyweretomaintainthecostadvantagesoflarge‐scaleproduction,theyhadtohaveanassuredflowofmaterialsandinformationanddirectcontactswithdistributorsinnationalandglobalmarkets.Thus,thesefirmsbecamethecore,thenexus,ofanetworkofsuppliers,equipmentmakers,retailers,advertisers,designers,andprovidersoftechnicalandfinancialservices.Fourth,basedonthehumancapitaltheycultivated,largeindustrialenterprisesbecameaprimarydriveroftechnologicaladvances through their heavy investment in research and development activities. This investment has becomeincreasingly critical for the commercialization of new technology, particularly in capital‐intensive and increasinglyknowledgeintensive industries, in order to secure and raise market share in a domestic market, to expand intointernationalmarkets,andtocreatebarrierstoentryfornewcomers.”Chandleretal(1997,p.26)ReferenceChandler, Alfred D.; Franco Amatori; Takashi Hikino; eds. (1997): Big Business and theWealth of Nations, CambridgeUniversityPress,NewYork.


Thefivetenetsofinjustice“The five tenets of injustice are that: elitism is efficient, exclusion is necessary, prejudice is natural, greed is good anddespair is inevitable. (…)Thosewhobelieve in these tenets are themajority inpower acrossalmost all rich countries.Althoughmanyofthosewhoarepowerfulmaywanttomaketheconditionsoflifealittlelesspainfulforothers,theydonotbelievethatthereisacureformodernsocialills,oreventhatafewinequalitiescanbemuchalleviated.Rather,theybelievethatjustafewchildrenaresuffientlyabletobefullyeducatedandonlyafewofthosearethenabletogovern;therestmustbe led.Theybelievethatthepoorwillalwaysbewithusnomatterhowrichweare.Theyhavealsocometobelievethatmostothersarenaturallyperhapsgenetically,inferiortothem.(…)Thisbookbringstogetherevidencewhichshowsthatthesebeliefsareunfounded.Theevidencealsoshowshowpeoplewhoendupinpowercomesoeasilytoholdthesebeliefs,orbecomeconvertedtothem,andhowtheirbeliefsprovidefalsejustifiationforthosewhobenefitmostfrominjustice.”Dorling(2010,pp.1‐2)“Elitismandexclusionhavefurthercausesandcorollaries,andchiefamongtheseisprejudice.Aselitismandinequalityrise,andasmorepeoplebecomesociallyexcluded,orareabletoexcludethemselvesbyusingtheirwealth,thoseatthetopmoreoftenlookdownonotherswithevergreaterdisdainandfear,asevidencedbygrowingsocialsegregation(…)Theriseofelitism,exclusionandprejudicewereallprecursorsoftheageofgreed,usheredinduringthe1980s,seenasgood,andnotquestionedseriouslyuntil2008.”Dorling(2010,p.7)“Socialinequalitywithinrichcountriespersistsbecauseofacontinuedbeliefinthetenetsofinjustice.”Dorling(2010,p.13)“Thenew injustices inaffluent countrieshaveseveral things in common:all areaspectsof risingsocial inequalities;allhavearisenfromasurplusofriches;andallsuggestthatsofarwehavecomeupwiththewronganswertothequestionofwhatweshoulddonowthatwearesorich.”Dorling(2010,p.14)“Elitismsuggeststhateducationaldivisionsarenatural.Educationaldivisionsarereflectedbothinthosechildrenwhoareexcludedfromlifechoicesforbeingseenasnothavingenoughqualifiations,andinthoseabletoexcludethemselves,oftenbyoptingintoprivateeducation.Elitismistheincubationchamberwithinwhichprejudiceisfostered.Elitismprovidesadefenceforgreed.Itincreasesanxietyanddespairasendlessexaminationsaretaken,aspeopleareranked,orderedandsorted.Itperpetuatesanenforcedandinefficienthierarchyinoursocieties.”Dorling(2010,p.309)“Justaselitismisintegraltoalltheotherformsofinjustice,soisexclusion.Theexclusionthatriseswithelitismmakesthepoorappeardifferent,exacerbatesinequalitiesbetweenethnicgroupsand,literally,causesracialdifferences.Risinggreedcouldnotbesatisfidwithouttheexclusionofsomany,andsomanywouldnotbeexcludednowwereitnotforgreed.Buttheconsequencesspreadupthrougheventothosewhoappearmostsuccessfullygreedy.Ratesofdespairmightbehighestforthosewhoaremostexcludedbuteventhewealthyinrichcountriesarenowshowingmanymoresignsofdespair,asare their children. Growing despair has become symptomatic of our more unequal afflunt societies as a whole. Theprejudicethatriseswithexclusionallowsthegreedytotryto justifytheirgreedandmakesothersthinktheydeservealittlemorethanmost.(…)Andaselitismincubatesexclusion,exclusionexacerbatesprejudice,prejudicefostersgreedandgreed −because wealth is simultaneously no ultimate reward andmakesmanywithout wealth feel more worthless −causesdespair.Inturn,despairpreventsusfromeffectivelytacklinginjustice.”Dorling(2010,pp.309‐310)ReferenceDorling,Daniel(2010):Injustice:WhySocialInequalityPersists,ThePolicyPress,Bristol,UK.


WhyEuropegrewrichandAsiadidnot“SincethenineteenthcenturyanumberofexplanationshavebeenofferedforwhyEuropeindustrializedandAsiadidnot.Advantagesinmarkets,population,propertyrights,rationality,statesystemsandscientific lifehaveallbeeninvokedtoaccount for Europe’s exceptional path of development. (…)They explain divergence in the sameway. They all identifysomethingthatmadeEuropedifferent,towhichEurope’sdivergentpathisthenattributed.”Parthasarathi(2011,p.1)“… advances in economic thinking indicate that divergent paths of development need not imply –nor require– deepdifferencesineconomicinstitutions,forcontextmatters.Theapproachtodivergencetakeninthisworkmovesawayfromseeingeconomicdevelopmentintheeighteenthcenturyinbinaryterms,aseitherleadingtomodernindustryoritsfailure.Instead,itpointstotheexistenceofpluralpathsofchange,whichweretheproductsofthepressuresandneedsthatthedynamicanddiverseeconomiesofEuropeandAsiafaced.(…)BritaindivergedfromAsia,aswellasotherpartsofEurope,notbecauseitpossessedrationality,science,markets,capitalismoranythingelseingreaterabundance,butbecausethepressuresandneedsitfaced–incombinationwithitsstatepolicies–producedarevolutionaryresponse.”Parthasarathi(2011,p.2)“Twopressureswere critical in generatingBritishdivergence.The firstwas the competitive challengeof Indian cottontextiles,whichintheeighteenthcenturywerethemostimportantmanufacturedgoodinworldtradeandwereconsumedfromtheAmericas to Japan.Britishefforts to imitate Indianclothpropelledasearch fornewtechniquesofproduction,which culminated in the great breakthroughs in spinning of the late eighteenth century. These new technologiestransformed theworld economy and shifted the center of globalmanufacturing fromAsia to Europe. The secondwasshortages ofwood, a consequence of deforestation. The British responsewas the substitution of coal forwood,whichsparked the development of the steam engine, new techniques for the smelting of iron and eventually newmeans oftransport, including the railway and steamship. Neither of these pressures –shortages of wood and competition fromglobal trade– was found in eighteenth‐century India. From this perspective, British advances in cotton and coal weresolutionstoproblemsthatdidnotexistintheIndiansubcontinent.”Parthasarathi(2011,p.2)“InChina,asinIndia,Britishtechnologicalbreakthroughsincottonandcoal,whilerevolutionary,didnotaddressmajorneeds.Therefore, theBritishpathof changewaseitherunnecessaryor inadequate for thepressingsocial, political andeconomicneedsoftheadvancedpartsofAsiaintheeighteenthcentury.”Parthasarathi(2011,p.3)“The Western European path of change was without a doubt extraordinary, but this was not because economic ortechnologicaldynamismwasuniquetothatpartoftheworld.EuropefollowedanexceptionalpathbecauseitfacedasetofpressureswhichwereabsentinIndiaandonlypartlyfoundinChina.Therefore,IndiaandChinahadnoneedtoforgetheeconomicandtechnologicalresponsesthatemergedinEurope(…). Industrialization inWesternEuropedidnotemergefromaneffort to industrialize. Itwasanunanticipated,unforeseenandunintendedoutcomeoftheeconomicandsocialneedsthatwerefoundinthatpartoftheworld.”Parthasarathi(2011,p.10)“…someofthemostdynamicsectorsineighteenth‐centuryEuropewerethosethatwereseekingtoimitateandcompeteagainsttheproductsofAsia.Ofthese,theEuropeanencounterwiththecottontextilesofIndiawouldprovetobethemostmomentous for the divergence between Europe and Asia. Indian and Chinesemanufacturers did not face such globalcompetitivepressures,and,asaconsequence,thepowerfulincentivesforinnovationthattheglobaleconomytransmittedtoEuropewereabsent.ThesecondpressurethatdifferedacrossEuropeandAsia lay in(…)thesupplyofwood.(…)Inseveral parts of Europe and East Asia coal began to be used (…)No one in eighteenth‐century Britain anticipated theenergy revolution that would be wrought by coal. In India, the abundance of woodmeant that there was no need toexperimentwithcoalandtheexploitationofitssizabledepositswouldawaitthenineteenthcentury.”Parthasarathi(2011,p.10‐11)“…historiansmustmoveaway fromthesearch forwhatmadeEuropeeconomically, sociallyorculturallydifferentandinsteadfocusonthesocialneeds,economicpressuresandpoliticalresponsesthatproduceddifferentpathsofchangeintheeighteenthcentury.TheBritishpathwasacomingtogetherofglobalcompetitivepressures,ecologicalshortfallsandamercantilestate.Nootheradvancedregionfacedthesepressuresandcombinedthemwithastatethathadsuchcapacitiesto forge a revolutionary response.While the highly commercialized regions of the Indian subcontinent had their ownsourcesofpoliticalandeconomicdynamism,andtherewasundoubtedlysignificanttechnologicalchangetakingplace,thepressureswerenotsuchthatradicaltransformationswereneededorriskypathshadtobepursued.”Parthasarathi(2011,p.263)Reference


Parthasarathi, Prasannan (2011):Why Europe Grew Rich and Asia did not: Global Economic Divergence, 1600–1850,CambridgeUniversityPress,Cambridge,UK.


Capitalismandtheenvironment:friendorfoeCorollarytoHermanDaly’sImpossibilityTheoremofunlimitedeconomicgrowthinalimitedenvironment“The continuation for any length of time of capitalism, as a grow‐or‐die system dedicated to unlimited capitalaccumulation,isitselfaflatimpossibility.”MagdoffandFoster(2011,p.7)“Weareconstantlybeingtoldbythevestedinterests(…)thatcapitalismoffersthesolutiontotheenvironmentalproblem:asifthefurthergrowthofcapitalmarkets,greenconsumption,andnewtechnologyprovideuswithmiraculouswaysoutofourglobalecologicaldilemma.Suchviewsarerootedinanabsolutedenialofreality(…) Inthismakebelieve(…)thewondrousworkingsofmarkets,perhapstweakedhereortherebyregulationsandincentives,makemiraclespossible.Intheprocess,thelawsofphysics,chemistry,biology,andecology—aswellasthelimitsoftheearth—aresimplyconjuredaway.”MagdoffandFoster(2011,p.7)“Environmental degradation is not new to today’sworld but has occurred throughout recorded historywith profoundnegative consequences foranumberof ancient civilizations (…)Whatmakes themodernera standout in this respect,however,isthattherearemanymoreofusinhabitingmoreoftheearth;wehavetechnologiesthatcandomuchgreaterdamageanddoitmorequickly;andwehaveaneconomicsystemthatknowsnobounds.”MagdoffandFoster(2011,pp.11‐12)“Oneofthelatest,mostimportantdevelopmentsinEarthsystemscience,developedbyleadingscientists,istheconceptof‘planetary boundaries,’ inwhich nine critical boundaries/thresholds of the earth system have been designated (or arebeingconsidered)inrelationto:(1)climatechange;(2)oceanacidification;(3)stratosphericozonedepletion;(4)thebiogeochemicalflowboundary(thenitrogenandphosphoruscycles);(5)globalfreshwateruse;(6)changeinlanduse;(7)biodiversityloss;(8)atmosphericaerosolloading;and(9)chemicalpollution.Staying within each of these boundaries is considered essential to maintaining the relatively benign climate andenvironmentalconditionsthathaveexistedduringthelast12,000years(theHoloceneepoch).Thesustainableboundariesin three of these systems—climate change, biodiversity, and human interference with the nitrogen cycle (…)—havealreadybeencrossed.”MagdoffandFoster(2011,pp.12‐13)“Westronglyagreewith thoseenvironmentalistswhohaveconcluded that continuing ‘businessasusual’ is thepath toglobaldisaster.Tomanypeople,thismeansthatwemustlimittheecologicalfootprintofhumanbeingsontheearth,andtodothis,weneedaneconomy—particularlyintherichcountries—thatceasestogrow.”MagdoffandFoster(2011,p.27)“…iftheoveralleconomicpieisnotgrowing,orisgrowingveryslowly,itisstillpossibleforthosewithpowertogetmuchbiggerslices,butonlybydishingoutdiminishedportionstoeveryoneelse.(…)Oneofthewaysinwhichthesystemtriestorevitalizecapitalaccumulationandgrowthunder recessions isbyremovingprotectionsfortheenvironment,whichare considered an unaffordable luxury in hard economic times. Insofar as this helps the capitalist economy recover,however,itisoftendoublydestructiveoftheenvironment:sincenotonlyhaveenvironmentalprotectionsbeenrelaxedtospurgrowth,buttheexpandingeconomynowdrawsonmoreenergyandresources.”MagdoffandFoster(2011,p.60)


HetheringtonandReid 2010,p.5

ReferenceHetherington,Renee;RobertG.B.Reid 2010 :ClimatechangeandmodernhumanevolutionMagdoff, Fred; JohnBellamyFoster (2011):WhatEveryEnvironmentalistNeeds toKnowaboutCapitalism:ACitizen'sGuidetoCapitalismandtheEnvironment,MonthlyReviewPress,NewYork.


GoldenRulesofRegionalGrowth“Chinawaseasilytheextremecase,withdifferencesinaverageincomeashighastentoonebetweentherichest and the poorest regions. (…) One naturallywonderswhether such regional differences are thenatural outcome of national economic growth andthe workings of modern market economies. Areregional welfare inequalities unavoidable—anecessaryconditionofprosperity?”Polèse(2009,p.x)“Competition between places, communities, andregions is not exactly the same as competitionbetween nations. The fundamental difference isopenness. Places, communities, and regions do nothave real economic boundaries, although they canhavepoliticaloradministrativeboundaries.”Polèse(2009,p.8)

Polèse(2009,p.5)

“…thegeographyofwealthcanbereducedtowhatIshallcalltheFourGoldenRulesof Regional Growth. Within nations,where wealth is created and where jobsemerge will in large part depend on fourfactors: size, location, cost, and uniqueevents:Rule 1—Size matters because dynamicindustries(themostadvancedineachage)are naturally drawn to large cities andplaces within easy reach. Within nations,rule 1 will produce economic centers—densemulti‐cityconstellationsofeconomicactivity.Thecorollaryofsizemattersisthatproximity to size—to urban centers—alsomatters.Rule 2—Location matters becauseindustries (selling tradable products) aredrawn toplacesbestsuited forcommerceand interaction with markets. Withinnations, places located on trade corridorsor closest to the nation’s major tradingpartnerswillbefavoredRule 3—Costs matter because—failingadequate size or a propitious location—placeswill grow if theyhaveaclear laborcost advantage or, alternatively, anexceptional resource endowment.However, the latter of en precludes theformer, as illustrated by the IntrusiveRentierSyndrome.Rule 4—Exceptions abound becauseunique events and accidents—history,politics, and technological change—cancause growth (or decline) to occur inplaces one would not have initiallypredicted on the basis of the threepreviousrules.”Polèse(2009,pp.28‐29)


“Explaining why the U.S. or Britain is richerthan,say,Nigeria isnotatall thesamethingasexplainingwhycertainplacesintheU.S.orBritain are richer—or growing morerapidly—than other places in the U.S. orBritain.”Polèse(2009,p.2)“If place no longer mattered, differences ineconomic fortune within nations—betweendif erent places—should have disappeared(oratleastbeintheprocessofdisappearing),certainly within the world’s moreeconomicallyadvancednations.Theevidencetells the opposite story. In United States—arguably the world’s most mobile societywith a long history of free movement andexchange between places—incomedifferences between places are far frominsignificant.”Polèse(2009,p.3)“The positive relationship between city sizeand higher incomes is one of the bestdocumented in regional economics. (…). Butwhyshouldsizestillmatter intheageoftheInternet?”Polèse(2009,p.4)

“Wealth differences between placesexist in every nation. In the U.S.,average product person in the tworichest states is about twice that ofthe two poorest. In developingnations such as India and China, thegapbetweenrichandpoorregionsisgenerallymuchgreater.”Polèse(2009,pp.4‐5)“Theevidence(…)suggeststhatlong‐term economic growth does indeedleadtoareductioninregionalincomedif erences. (…) data exist for theUnitedStatesandforCanada(…).Theresults are unequivocal. Regionalincome disparities have fallendramaticallyinbothnationsoverthelastcentury.”Polèse(2009,p.97)“… it is diffiult to argue—based onNorth American and westernEuropean experiences—that econo‐mic integration, labor mobility, andeconomic growth do not over timepromote greater income equalitybetweenregions.”Polèse(2009,p.99)


“WhatHaveWeLearned?• Some Places Will Always Be Wealthier ThanOthers•CitiesWillContinuetoGrow•TheDiversificationof theSourcesofRegionalGrowth•TheNever‐endingSearchfortheRightStrategy•TheNewImportanceofPlace:People”Polèse(2009,p.195‐207)“Perhapsthemostimportantlessontobedrawnfrom this book is that the reasons for which aparticular place prospers (or does not) willseldombeexactlythatsameasthatforanother.The search for a single explanation isunderstandable, but also futile. By the sametoken, the search for amagic formula thatwilldeliver growth or arrest decline is no lessunderstandable, but equally futile. The searchfortherightpolicyleverisultimatelyasfruitlessas the search for a pill to cure all humanailments.”Polèse(2009,p.205)ReferencePolèse,Mario(2009):TheWealthandPovertyofRegions: Why Cities Matter, The University ofChicagoPress,Chicago,Illinois.


Rodrik’strilemma“Globalization—bywhich Imeanenhanced tradeand financial integration—posesbothopportunitiesandchallenges tothemixedeconomy.Ontheplusside,theglobalexpansionofmarketspromisesgreaterprosperitythroughthechannelsofdivisionof laborandspecializationaccordingtocomparativeadvantage.Thisopportunityisofparticularsignificancetodevelopingcountries,sinceitallowsthemaccesstostate‐of‐the‐arttechnologyandcheapcapitalgoodsonworldmarkets.Butglobalizationalsoundercutstheabilityofnation‐statestoerectregulatoryandredistributiveinstitutions,anddoessoatthesametimethatit increasesthepremiumonsolidnationalinstitutions.Socialsafetynetsbecomemoredifficulttofinance just as the need for social insurance becomes greater; financial intermediaries increase their ability to evadenational regulation just as prudential supervision becomes more important; macroeconomic management becomestrickierjustasthecostsofpolicymistakesareamplified.Onceagain,thestakesaregreaterforthedevelopingcountries,sincetheyhaveweakinstitutionstobeginwith.”Rodrik(2007,pp.195‐196)“Thedilemmathatweface(…)isthatmarketsarestrivingtobecomeglobalwhiletheinstitutionsneededtosupportthemremain by and large national (…) the implications of this discrepancy are twofold. On the one hand, the existence ofjurisdictionalboundaries,drawnlargelyalongnationallines,restrictseconomicintegration.Thisinhibitsefficiency.Ontheotherhand,thedesirebyproducersandinvestorstogoglobalweakenstheinstitutionalbaseofnationaleconomies.Thisinhibits equity and legitimacy. Taken together, the two processes drive us toward a no‐man’s world. Exporters,multinationals,andfinancierscomplainaboutimpedimentstotradeandcapitalflows.Laboradvocates,environmentalists,andconsumersafetyactivistsdecrythedownwardpressuresonnationalstandardsandlegislation.Broadsectionsofthepopulacetreatglobalizationasadirtywordwhilehappilydevouringitsfruits.Andgovernmentofficialsvacillate,tryingtopleaseeachgroupinturnwhilesatisfyingnone.Inthelongrun,thewayoutofthedilemmaistoenvisageaworldinwhichpoliticsisasglobalaseconomics.Thiswouldbeaworldofglobalfederalism,withthemixedeconomyreconstructedatthegloballevel.”Rodrik(2007,p.196)“How global is the global economy in reality? The natural benchmark for thinking about economic globalization is toconsideraworldinwhichmarketsforgoods,services,andfactorsofproductionareperfectlyintegrated.(…)Contrarytoconventionalwisdomandmuchpunditry,internationaleconomicintegrationremainsremarkablylimited.(…)Integrationinassetmarkets remainsalso limited. Investmentportfolios in theadvanced industrial countries typicallyexhibit largeamountsof“homebias”:thatis,peopleinvestahigherproportionofassetsintheirowncountriesthantheprinciplesofassetdiversificationwouldseemtosuggest.”Rodrik(2007,p.197)“… thepolitical trilemmaof theworld economy.The threenodesof the extended trilemmaare international economicintegration,thenation‐state,andmasspolitics.”Rodrik(2007,p.199)

“I use the term nation‐state to refer toterritorial‐jurisdictional entities withindependent powers of making andadministering the law. I use the term masspolitics to refer topolitical systemswhere (a)thefranchiseisunrestricted;(b)thereisahighdegree of political mobilization; and (c)political institutions are responsive tomobilized groups. (…) If we want trueinternationaleconomicintegration,wehavetogo eitherwith the nation‐state, inwhich casethedomainofnationalpoliticswillhavetobesignificantly restricted, or else with masspolitics, inwhichcasewewillhave togiveupthenation‐stateinfavorofglobalfederalism.Ifwewanthighlyparticipatorypoliticalregimes,we have to choose between the nation‐stateand international economic integration. If wewant to keep the nation‐state, we have tochoose between mass politics andinternationaleconomicintegration.”Rodrik(2007,pp.199‐200)


“… consider our hypothetical perfectly integrated world economy. This would be a world economy in which nationaljurisdictions do not interfere with arbitrage in markets for goods, services or capital. Transaction costs and taxdifferentials would be minor; product and regulatory standards would be harmonized; there would be a commonmonetarysystem;andconvergenceincommoditypricesandfactorreturnswouldbealmostcomplete.”Rodrik(2007,pp.200‐201)“Thepriceofmaintainingnationaljurisdictionalsovereigntywhilemarketsbecomeinternationalisthatpoliticshavetobeexercised over amuch narrower domain. “As your country puts on the Golden Straitjacket,” Friedman notes (…), twothingstendtohappen:youreconomygrowsandyourpoliticsshrinks.. . .[The]GoldenStraitjacketnarrowsthepoliticalandeconomicpolicychoicesofthoseinpowertorelativelytightparameters.Thatiswhyitisincreasinglydifficultthesedays to findany realdifferencesbetween rulingandoppositionparties in those countries thathaveputon theGoldenStraitjacket.”Rodrik(2007,p.202)“…oncetherulesofthegamearesetbytherequirementsoftheglobaleconomy,theabilityofmobilizedpopulargroupstoaccessandinfluencenationaleconomicpolicymakinghastoberestricted.”Rodrik(2007,p.202)ReferenceRodrik, Dani (2007): One Economics, Many Recipes: Globalization, Institutions, and Economic Growth, PrincetonUniversityPress,Princeton,NewJersey.


WastheriseoftheWestduetotheriseofthebrain’slefthemisphere?“Oneof themoredurablegeneralisationsabout thehemisphereshasbeenthe findingthat the lefthemisphere tendstodealmorewithpiecesofinformationinisolation,andtherighthemispherewiththeentityasawhole,theso‐calledGestalt–possiblyunderlyingandhelping toexplain theapparentverbal/visualdichotomy, sincewordsareprocessed serially,whilepicturesaretakeninallatonce.”“themost fundamental difference between the hemispheres lies in the type of attention they give to theworld (…) Acentralthemeofthisbookistheimportanceofourdispositiontowardstheworldandoneanother,asbeingfundamentalingroundingwhatitisthatwecometohavearelationshipwith,ratherthantheotherwayround.Thekindofattentionwepayactuallyalterstheworld:weare,literally,partnersincreation.(…)UltimatelyIbelievethatmanyofthedisputesaboutthe nature of the human world can be illuminated by an understanding that there are two fundamentally different‘versions’deliveredtousbythetwohemispheres,bothofwhichcanhavearingofauthenticityaboutthem,andbothofwhicharehugelyvaluable;butthattheystandinoppositiontooneanother,andneedtobekeptapartfromoneanother–hencethebihemisphericstructureofthebrain.”“…therelationshipbetweenthehemispheresdoesnotappeartobesymmetrical,inthatthelefthemisphereisultimatelydependenton,onemightalmostsayparasiticon,theright,thoughitseemstohavenoawarenessofthisfact.Indeeditisfilledwithanalarmingself‐confidence.”“…itisasifthelefthemisphere,whichcreatesasortofself‐reflexivevirtualworld,hasblockedofftheavailableexits,thewaysoutofthehallofmirrors,intoarealitywhichtherighthemispherecouldenableustounderstand.Inthepast,thistendencywas counterbalanced by forces from outside the enclosed system of the self‐consciousmind; apart from thehistoryincarnatedinourculture,andthenaturalworlditself,frombothofwhichweareincreasinglyalienated,thesewereprincipallytheembodiednatureofourexistence,theartsandreligion.Inourtimeeachofthesehasbeensubvertedandthe routes of escape from the virtual world have been closed off. An increasingly mechanistic, fragmented,decontextualisedworld,marked by unwarranted optimismmixedwith paranoia and a feeling of emptiness, has comeabout,reflecting,Ibelieve,theunopposedactionofadysfunctionallefthemisphere.”“The righthemisphere, theone thatbelieves,butdoesnotknow,has todependon theother, the lefthemisphere, thatknows, but doesn't believe. It is as though a power that has an infinite, and therefore intrinsically uncertain, potentialBeingneedsnonethelesstosubmittobedelimited–needsstasis,certainty, fixity– inordertoBe.Thegreaterpurposedemandsthesubmission.TheMasterneedstotrust,tobelievein,hisemissary,knowingallthewhilethatthattrustmaybeabused.Theemissaryknows,butknowswrongly,thatheisinvulnerable.Iftherelationshipholds,theyareinvincible;but if it is abused, it is not just theMaster that suffers, butbothof them, since the emissaryoweshis existence to theMaster.”“…sincethelefthemisphereisthehemisphereofWhat,quantitywouldbetheonlycriterionthatitwouldunderstand.Therighthemisphere'sappreciationofHow(quality)wouldbelost.Asaresultconsiderationsofquantitymightcomeactuallyto replace considerations of quality altogether, and without the majority of people being aware that anything hadhappened.Numbers,whichthelefthemispherefeelsfamiliarwithandisexcellentatmanipulating(though(…)it is lessgoodatunderstandingwhattheymean),wouldcometoreplacetheresponsetoindividuals,whetherpeople,places,thingsor circumstances, which the right hemisphere would have distinguished. ‘Either/or’ would tend to be substituted formattersofdegree,andacertaininflexibilitywouldresult.”“Thelefthemispherepreferstheimpersonaltothepersonal,andthattendencywouldinanycasebeinstantiatedinthefabricofa technologicallydrivenandbureaucraticallyadministeredsociety.The impersonalwouldcometoreplace thepersonal.Therewouldbeafocusonmaterialthingsattheexpenseoftheliving.Socialcohesion,andthebondsbetweenpersonandperson,andjustasimportantlybetweenpersonandplace,thecontextinwhicheachpersonbelongs,wouldbeneglected,perhapsactivelydisrupted,asbothinconvenientandincomprehensibletothelefthemisphereactingonitsown.Therewouldbeadepersonalisationoftherelationshipsbetweenmembersofsociety,andinsociety'srelationshipwithitsmembers. Exploitation rather than co‐operation would be, explicitly or not, the default relationship between humanindividuals,andbetweenhumanityandtherestoftheworld.Resentmentwouldleadtoanemphasisonuniformityandequality,notasjustonedesirabletobebalancedwithothers,butastheultimatedesirable,transcendingallothers.Asaresultindividualitieswouldbeironedoutandidentificationwouldbebycategories:socioeconomicgroups,races,sexes,andsoon,whichwouldalso feel themselves tobe implicitlyorexplicitly incompetitionwith,resentfulof,oneanother.Paranoiaandlackoftrustwouldcometobethepervadingstancewithinsocietybothbetweenindividuals,andbetweensuchgroups,andwouldbethestanceofgovernmenttowardsitspeople.”“itisanessentialfeatureofthelefthemisphere'stakeontheworldthatitcangraspitandcontrolit.”“Familyrelationships,orskilledroleswithinsociety,suchasthoseofpriests,teachersanddoctors,whichtranscendwhatcanbequantifiedorregulated,andinfactdependonadegreeofaltruism,wouldbecometheobjectofsuspicion.Theleft


hemispheremisunderstandsthenatureofsuchrelationships,as itmisunderstandsaltruismasaversionofself‐interest,andseesthemasathreattoitspower.”“Mostcountriesstudiedshoweitheradecreaseoratleastnochangeinwell‐beingdespiteanincreaseinprosperity;andnorelationshipcanbefoundbetweenhappinessandeconomicgrowth.Themaindeterminantsofhappiness,asonemighthaveexpected,arenoteconomicinnature.”“Idonotunderestimatetheimportanceofthelefthemisphere'scontributiontoallthathumankindhasachieved,andtoallthatweare,intheeverydaysenseoftheword;infactitisbecauseIvalueit,thatIsaythatithastofinditsproperplace,soastofulfilitscriticallyimportantrole.Itisawonderfulservant,butaverypoormaster.”“… a number of thinkers have observed, often with a sense of unease, that over history intuition has lost ground torationality;butingeneraltheiruneasehasbeentemperedbythefeelingthatthismustbeinagoodcause.IalsoreferredtoPanksepp,whopositsanevolutionaryprocessinvolvingthedisconnectionofcognitivefromemotionalprocesses.”“…wehavealreadyfallenforthelefthemisphere'spropaganda–thatwhatitdoesismorehighlyevolvedthanwhattherighthemispheredoes.Thisshiftisnotaboutevolution,norevenaboutemotionversuscognition:itisabouttwomodesofbeing, eachwith its cognitiveandemotionalaspects, andeachoperatingataveryhigh level. It isnot about somethingmoreevolvedcompetingwithsomethingmoreprimitive:infactthelosingpartyinthisstruggle,therighthemisphere,isnotonlymorecloselyintouchwithemotionandthebody(thereforewiththeneurologically‘inferior’andmoreancientregionsofthecentralnervoussystem)butalsohasthemostsophisticatedandextensive,andquitepossiblymostlatelyevolved,representationintheprefrontalcortex,themosthighlyevolvedpartofthebrain.”“…eveninitsownterms,thelefthemisphereisboundtofail.Thatwill,however,notstopitfrompersistinginitscurrentpath. And the task of opposing this trend is made more difficult by the fact that two of the main sources of non‐materialistic values, which might therefore have led to resistance, are both prime targets of the process that the lefthemispherehassetinmotion.Wehavenolongeraconsistentcoherenttraditionintheculture,whichmighthavepassedon,inembodiedandintuitiveform,thefruitsofexperienceofourforebears,whatusedtoformthecommunalwisdom–perhaps even common sense, to which modernism and post‐modernism are implacably opposed. The historic past iscontinuallyunderthreatofbecominglittlemorethanaheritagemuseum,wherebyitbecomesreconstructedaccordingtothestereotypesofthelefthemisphere.Andthenaturalworldusedtobeanothersourceofcontactwithsomethingthatstilllay outside the realmof the self‐constructed, but that is on the retreat, andmanypeople in any case lead lives almostcompletelydevoidofcontactwithit.”“…thereisinfactmuchevidencethatEastAsiansandWesternersperceivetheworldandthinkaboutitinverydifferentways. In general, EastAsians have amore holistic approach. For example, if asked to groupobjects, EastAsiansmakecomparativelylittleuseofcategories.Theyaremorelikelytoattendtothebroadperceptualandconceptualfield,noticingrelationshipsandchanges,andgroupingobjectsaccordingtofamilyresemblances,basedonanappreciationofthewhole,rather thanonmembershipof a category.Westerners are significantlymore likely to giveone‐dimensional, rule‐basedresponses,basedonindividualcomponentsofthestimuli.EastAsiansalsorelylessonformallogic,insteadfocussingonrelationsamongobjectsandthecontextinwhichtheyinteract.TheyusemoreintuitivemodescomparedwithAmericansofEuropeanorigin.Theyseeeventsasarisingfromanentirecontext,andtendtothinkinamuchlesslinear,andmoreglobalway,aboutcausation.BycontrastWesterners tend to focusexclusivelyon theobjectascause,andare thereforeoftenmistaken.Westernersaremoreanalytic,andpayattentionprimarilytoisolatedobjects,andthecategoriestowhichthey belong. They tend to use rules, including formal logic, to understand their behaviour. These effects remainwhenlanguageiscontrolledfor.”“EastAsiansuse amore ‘dialectical’modeof reasoning: they aremorewilling toaccept, to entertain, or even seekoutcontradictoryperspectiveson the same issue. They see theworld inwhich they live as complex, containing inherentlyconflicting elements. (…) Presented with evidence for two opposing positions, Easterners are more likely to reach acompromise,whereasthefactofoppositiontendstomakeWesternersadheretoonepositionmorestrongly.Westernersadoptamore‘either/or’approach.”“Ithinkthereisbynowenoughconsistentevidence,fromavarietyofsources,andofavarietyoftypes,forustoacceptsomethingwhichseemsintuitivelylikely:thattherearedifferencesbetweenthewayinwhichWesternersandEastAsiansseetheworld,andthatthesehavesomethingtodowiththebalanceofthehemispheres(…)agreaterrelianceintheWestonthelefthemisphere.”“What theevidence suggests (…) is that theEastAsian culturesuse strategiesofbothhemispheresmoreevenly,whileWestern strategies are steeply skewed towards the left hemisphere. In otherwords, the emissary appears towork inharmonywiththeMasterintheEast,butisintheprocessofusurpinghimintheWest.”


“…wemighthavetorevisethesuperiorassumptionthatweunderstandtheworldbetterthanourancestors,andadoptamorerealisticviewthatwejustseeitdifferently–andmayindeedbeseeinglessthantheydid”.“In1973,ChrisMcManus andNickHumphreyhadalreadypublished inNature the results of a studyof approximately1,400Westernportraitpaintingsfromthesixteenthtotwentiethcenturies,showingthatthereisatendencyduringthisperiod,also,forthesittertobeportrayedlookingtotheviewer'sleft.Thesefindingshavesincebeenconfirmedbyothers.The implication appears to be that the focus of interest comes to lie in the viewer's left visual field (preferentiallysubservedby therighthemisphere),at thesametimethatthemoreemotionallyexpressive lefthemifaceof thesubject(controlledbythesubject'srighthemisphere)isexposedtoview.”Shiftfromrighttoleftfacing“The ‘natural’ tendency,asexhibitedbythemajorityof faceprofilesdrawnbychildren, isstill toface left,eveninsomecasesiftheyarecopyingamodelthatisfacingtotheright.”“… insyllabic languagesconceptsareput together fromsyllableswhichhavemeaning in themselves.AlthoughmodernWestern languages are not syllabic, but phonemic, we can get an idea of what this is like if we remain aware of theetymologyofEnglish(orGerman,orotherWestern)words–ifwearesufficientlyawareofaword'sstructure,andoftheoriginalmeaningsofthecomponentparts.Insyllabiclanguages,therefore,meaningislessarbitrary,moreclearlyrootedin theworld out ofwhich it emanates, and retains itsmetaphoric base to a greater extent. (…) In both these respectssyllabic languages favour understanding by the right hemisphere, whereas phonemic languages favour that of the lefthemisphere.”“Therighthemisphereprefersverticallines,butthelefthemisphereprefershorizontallines.Iflinesarevertical,thelefthemispherepreferstoreadthemfromthebottomup,whereastherighthemispherepreferstoreadfromthetopdown.Inalmosteveryculturewritinghasbegunbybeingvertical.Some,suchastheorientallanguages,remainvertical:theyarealsogenerally read from the topdown, and from right to left. Inotherwords, they are read from themaximally right‐hemisphere‐determined point of view. Although both oriental andWestern languages are generally read from the topdown,sothatatthegloballeveltheystillconformtotheright‐hemispherepreference,atthelocal,sequential leveltheyhavedriftedintheWesttowardsthelefthemisphere'spointofview.Thisprocessstartedwiththemovetophonetics.”McGilchrist(2009)

Brener

Left‐wingprofile


“ThepreferencefortheleftprofiledirectionistracedbacktotheearlyGreekperiodinpaintings,drawings,coinportraits,gems,cameos,andvaseportraits.Fiftythousandobjectshavebeenanalyzed. A 60%prevalenceofface direction towards the right occurs in the cultural centers of theMediterraneanbefore600B.C.BeforetheearlyGreekperiod:theAssyrian,Egyptian, and Sumerian cultures faced more profiles to the right. Thistendency for right profiledirectioncanbe traced back to StoneAgecavedrawings.TheprofileshiftfromrighttoleftoccursintheearlyGreekperiodandisrelatedtoashiftinscriptandinletterprofileatthesametime.Thisprofile shift occurs simultaneouslywith an acceleration of intellectual andcultural developmentwhich also influenced our present culture. Althoughthe percentage of right handers might not have changed considerablysince the Stone Age, the profile shift from right to left suggests a

hypotheticalchangeindominanceofthecerebralhemispheresforhighervisualperceptionwhichmayhaveinducedaleftpreferenceintheperiodaround600B.C.”McGilchrist(2009)

Categoriesvsrelationships

A B C

WithwhatobjectwouldyoupairA?(orBoC?)WesternersputtogetherAandB;Chinese,puttogetherAandC.Nisbett(2003,p.141)

“Ifyou’reaWesterner,oddsareyouthinkthechickenandthecowbelongtogether.DevelopmentalpsychologistLiang‐hwangChiushowedtripletslikethatintheillustrationtoAmericanandChinesechildren.ChiufoundthattheAmericanchildren preferred to group objects because they belonged to the “taxonomic” category, that is, the same classificationtermcouldbeappliedtoboth(“adults,”“tools”).Chinesechildrenpreferredtogroupobjectsonthebasisofrelationships.Theywouldbemorelikelytosaythecowandthegrassintheillustrationgotogetherbecause‘thecoweatsthegrass.’”Nisbett(2003,p.140)“Categories are denoted by nouns. It seems obvious that nounswould be easier for a young child to learn than verbs.Relationships,ontheotherhand,involve,tacitlyorexplicitly,averb.Americanchildrenarelearningthattheworldismostlyaplacewithobjects,Japanesechildrenthattheworldismostlyaboutrelationships.ThereisanAsianexpressionthatreflectsaculturalprejudiceagainstindividuality:“Thepegthatstandsoutispoundeddown.” In general, EastAsians are supposed to be less concernedwithpersonal goals or self‐aggrandizement thanareWesterners.Groupgoalsandcoordinatedactionaremoreoftentheconcerns.Maintainingharmonioussocialrelationsis likely to take precedence over achieving personal success. Success is often sought as a group goal rather than as apersonalbadgeofmerit.Individualdistinctivenessisnotparticularlydesirable.ForAsians,feelinggoodaboutthemselvesis likely to be tied to the sense that they are in harmonywith thewishes of the groups towhich they belong and aremeetingthegroup’sexpectations.Equalityoftreatmentisnotassumednorisitnecessarilyregardedasdesirable.”Nisbett(2003,pp.48‐49)“Westernersemphasizedistinctiveness–theywanttobedistinctive,undercontrolandpursuingtheirowngoals.”“Chinesepeopleare inclined toattributebehavior tocontextandAmericans tend toattribute thesamebehavior to theactor.”Nisbett(2003,p.114)“AmericansregardpersonalitiesasrelativelyfixedandAsiansregardthemasmoremalleable.ThisisconsistentwiththelongWesterntraditionofregardingtheworldasbeinglargelystaticandthelongEasterntraditionofviewingtheworldasconstantlychanging.”Nisbett(2003,p.130)


“EastAsianlanguagesarehighly“contextual.”EnglishwordsarerelativelydistinctiveandEnglishspeakersinadditionareconcerned to make sure that words and utterances require as little context as possible (…) Americans start withdescribinganobjectwhereasJapanesestartbyestablishingthecontext.”“MostWesternlanguagesare‘agentic’inthesensethatthelanguageconveysthattheselfhasoperatedontheworld:‘Hedropped it.’ (An exception is Spanish.) Eastern languages are in general relatively nonagentic: ‘It fell fromhim,’ or just‘fell.’”“InChineseoneasks“Drinkmore?”InEnglish,oneasks“Moretea?”ToChinesespeakers,it’sperfectlyobviousthatit’steathatone is talkingaboutdrinkingmoreof, there isgoodevidence that forEastAsians theworld is seenmuchmore intermsofrelationshipsthanitisforWesterners,whoaremoreinclinedtoseetheworldintermsofstaticobjectsthatcanbegroupedintocategories.”Nisbett(2003,p.162)ReferencesBrener,MiltonE.:Faces:ThechanginglookofhumankindHufschmidt, Hans‐Joachim (1980): Das Rechts‐Links‐Profil im kulturhistorischen Längsschnitt, European Archives ofPsychiatryandClinicalNeuroscience229(1),17‐43McGilchrist, Iain (2009): The master and his emissary: the divided brain and the making of the Western wold, YaleUniversityPress,NewHaven.Nisbett,RichardE.(2003):AsiansandWesternersthinkdifferently


ThetheoryofthefivepersonalitiesExtraversion,Agreeableness,Conscientiousness,EmotionalStability,andOpenness toExperiencerecognizedasgeneticallybased,stable,andcrossculturegeneralizable“FactorI:Extraversion(AKASurgency)Thistraitreflectspreferencefor,andbehaviorin,socialsituations.Peoplehighinextraversionareenergeticandseekoutthecompanyofothers.Lowscorers(introverts)tendtobemorequietandreserved.Comparedtootherpeoplewhohavetakenthistest,yourscoreonthisdimension(18)isrelativelylow.FactorII:Agreeableness(AKAFriendliness)This trait reflects howwe tend to interactwith others. People high in agreeableness tend to be trusting, friendly andcooperative.Lowscorerstendtobemoreaggressiveandlesscooperative.Comparedtootherpeoplewhohavetakenthistest,yourscoreonthisdimension(28)isaboutaverage.FactorIII:Conscientiousness(AKAWillorDependability)Thistraitreflectshoworganizedandpersistentweareinpursuingourgoals.Highscorersaremethodical,wellorganizedanddutiful. Lowscorersare less careful, less focussedandmore likely tobedistracted from tasks. Compared tootherpeoplewhohavetakenthistest,yourscoreonthisdimension(41)isrelativelyhigh.FactorIV:NeuroticismThis trait reflects the tendency to experience negative thoughts and feelings.High scorers are prone to insecurity andemotionaldistress. Lowscorers tend tobemore relaxed, less emotional and lessprone todistress.Compared tootherpeoplewhohavetakenthistest,yourscoreonthisdimension(11)isrelativelylow.FactorV:Openness(AKACultureorIntellect)Thistraitreflects'open‐mindedness'andinterestinculture.Highscorerstendtobeimaginative,creative,andtoseekoutcultural andeducational experiences. Lowscorersaremoredown‐to‐earth, less interested in art andmorepractical innature.Comparedtootherpeoplewhohavetakenthistest,yourscoreonthisdimension(28)isaboutaverage.”“…theevidence forpredictivevalidityof traits isnowoverwhelming. Invirtuallyevery fieldofpsychology,we findthetraitscorrelatewithindividualdifferencesinbehaviour,subjectiveexperienceorphysiology,oftentoapracticallyusefulextent.”ReferenceMatthews,Geraldetal.(2009):PersonalityTraits


Whysmartpeoplecanbesostupid?“…whypeoplewhohavealltheabilityonecouldwishforoftendon’tuseitwhentheyneeditmostandcanevenloseit(relative to their initially less able peers). The reason for this, ironically, lies in the very fact thatmany smart peoplebecometooinvestedinbeingsmart.Theythinkofsmartnessassomethingthattheyhaveandothersdon’t—assomethingthatmakesthemspecialandworthy.Asaresult,theybecometoofocusedonbeingsmartandlookingsmartratherthanonchallengingthemselves,stretchingandexpandingtheirskills,becomingsmarter.Inotherwords,theyfocusonthetraitofintelligenceandonprovingthattheyhaveit,ratherthanontheprocessoflearningandgrowingovertime.”Sternberg(2002,p.24)“Differentpeoplehavedifferentviewsofintelligence(…)Somethinkofitasafixedtrait,witheachpersonhavingacertainfiniteamount.(…)Otherpeople,incontrast,viewintelligenceasapotentialthatcanbedevelopedovertime.(…)Forthem,then,it’snotaboutrankingamongsomeintellectualelite;it’saboutworkinghard,takingonchallenges,strivingtolearn—thingsthatwillallowthemtogrowintellectually(…)oncepeoplebelievethattheirintelligenceisapotentialthatcanbedeveloped, they start focusing,noton the short‐termoutcomes thatmightmake them lookgood,buton theeffort andstrategiesthatwillleadtolearningandlong‐termachievement.”Sternberg(2002,p.25)“Oneofthedumbestthingspeoplewiththefixedviewofintelligencedoistosacrificeimportantlearningopportunitieswhen those opportunities contain a risk of revealing ignorance ormaking errors. Of course, the very idea of learningimpliesthatthereissomethingyoudon’talreadyknow.Yetpeoplewhoholdthefixedviewofintelligencefeeltheycannotafford to reveal their ignorance andmake errors because (…) this can call their intelligence and even theirworth intoquestion.”Sternberg(2002,p.29)“Manypeoplewhoholdthe fixedviewof intelligenceholdyetanotherbelief thatmakes themdodumbthings. It is thebeliefthatifyou’retrulyintelligent,youdon’tneedeffort.(Orthatifyouneedeffort,you’renotintelligent.)”Sternberg(2002,p.31)“MakingPeopleDumbbyTellingThemThey’reSmartOneprevalentviewinAmericancultureisthatbypraisingpeople’sabilitiesorintelligence,onecanboosttheirconfidence,increasetheirmotivation,andraisetheirachievementlevel.Althoughthissoundssensible,wehavejustseenthatpeoplewhoaretoofocusedontheirintelligencecanbevulnerabletounderachievement.Perhapstheactofpraisingintelligencewhen people succeed, rather than boosting self‐confidence and achievement, might focus them on measuring theirintelligence,worryingaboutitsadequacy,avoidingrisk,andquestioningtheirintelligencewhentheyfail.”Sternberg(2002,p.36)“Intelligencepraisetaughtstudentsthatintelligenceisafixedqualityandthatitcanbemeasuredfromtheirperformance.Theyquicklybecameafraidofchallenge,theysacrificedlearning,andtheystoppedenjoyingeffort.Notsurprisingly,theirskills suffered. In contrast,praise that focusedoneffort seemed to convey that the task skillswere acquirable througheffort. These students relished the challenge,wanted to learnmore, and sought continued effort. Their task skills, notsurprisingly,flourished.In summary, contrary to popular belief, praising people’s intelligence does not fortify them. It might buoy them uptemporarily,but it instillsbeliefs thatmake themvulnerable.Focusingpeopleon ‘process,’ suchas their effortor theirstrategies,iswhatseemstofortifythem.Thatis,itmotivatestheminawaythatallowsthemtowithstandandeventhriveonsetbacks.Theseexperimentsthusencapsulatethethemeofthischapter:anunduefocusonintelligencecanmakesmartpeopledumb;afocusoneffortcanmakepeoplesmarter.”Sternberg(2002,pp.38‐39)ReferenceSternberg,RobertJ.;ed.(2002):WhySmartPeopleCanBesoStupid,YaleUniversityPress,NewHaven.


Invisiblefactorsofprosperity“…howoftenhaveyouheardafriendaskexasperatedly,‘Whyonearthdomosquitoesexist!?’(…)Yetwenowknowthatadultmosquitoesareimportantcomponentsofthefoodchainsthatfeedbirds,andtheirlarvaeareamajoringredientofthedietofmanyfish.Mostpeopleappreciatebirdsandfish,onewayoranother,andthereforeappreciate(…)theplaceofmosquitoesinnature.Butthereismore.Someorchidsrequiremosquitoesforpollination;andresearchononemosquitospeciesinparticularisrevealingapotentialbreakthroughinthefightagainstmalaria,oneoftheworld’smostdisastrousdiseases.”BeattieandEhrlich(2004,p.ix)“…ourignoranceabouttheinteractionsofspeciesinnaturalecosystemsdemonstratesthatwehumansarenotreallyincontrol.Forexample,manyorganismsregulatethefertilityofthesoilandthecontentoftheatmosphere,butwehaveverylittle knowledge of which species are involved, howmany there are, and what precisely they do. This book will alsopresentmanyexamplesofthebasicpropositionthatspeciesthatappeartobetotallyinsignificantrightnowarelikelyinthefuturetobecomeextremelyvaluabletomedicine,toagriculture,andtoavarietyofotherhumanneeds.Thespecieswithwhichwesharetheplanetare,ifnothingelse,avastinsurancepolicyagainsttheproblemswewillprobablyfaceintheyearstocome.”BeattieandEhrlich(2004,p.x)“Onespecificexampleofthelinkbetweenenergyandeconomicprosperityrarelyunderstoodbymosteconomistsisthatof the role of energy in the dollar value of the products generated by a worker working for 1 hour. Increased laborproductivity allowed the employer to pay his or her worker more even while making a larger profit. This increasedproductivityisnormallyassignedtotechnologicalprogress.Whatislessunderstoodisthatlaborproductivityincreasedindirectproportiontotheamountofenergyusedperworkerhour(…).AtthattimelaborproductivityintheUnitedStateswas two or three times that of a European worker, not because the worker worked harder or was more clever, ascommonlyassumed,butbecausehehadbigmachinesusingtwoorthreetimesmoreenergyhelpinghimdothejob!Againwhatisoftenattributedexclusivelytotechnologywasinfactequallybasedonincreasingtheavailabilityanduseofcheapenergy,whichwasmuchcheaperintheUnitedStatesthaninmostothernations.”HallandKlitgaard(2012,p.21)

Hall and Klitgaard(2012,p.37)Fallofcivilizations“The pattern thatTainter has developedseems so verypowerful: that as acivilization generatessome successfulmeansof generating wealth(i.e., surplus energy)and is able to feed itspeople and keep itsenemies at bay, thepower of the centralcityandofthechiefcanincrease dramatically.Wealth and resource flows to the center

increase dramatically with early successful invasions of neighbors. But the very success of the expansion/subjugationeventually leads to the collapse of many of these civilizations because of the increasing and eventually unsustainableenergycostsofthenecessaryincreaseincomplexity,thatis,theenergycostofmaintainingtherequiredfoodproductionanddistributionsystemsfortheincreasinglypopulouscentralcityfromincreasinglydistantgranaries,andtheenergycostofarmiesnecessarytoenforcedisciplineonlargerandlargersubjugatedpeople.Thiseventuallyexhauststhetreasuriesandtherealresourcesofthecentralauthority,andthelandsreverttotheoriginalinhabitants.”HallandKlitgaard(2012,p.66)“The(MKing)Hubbertpeaktheorysaysthatforanygivengeographicalarea,fromanindividualoil‐producingregiontotheplanetasawhole,therateofpetroleumproductiontendstofollowabell‐shapedcurve.Itisoneoftheprimarytheoriesonpeakoil.”


https://en.wikipedia.org/wiki/Hubbert_peak_theory

ReferencesBeattie, Andrew; Paul R. Ehrlich (2004):Wild Solutions: How Biodiversity Is Money in the Bank, second edition, YaleUniversityPress,NewHaven,Conneticutt.Hall,CharlesA.S.;KentA.Klitgaard(2012):EnergyandtheWealthofNations:UnderstandingtheBiophysicalEconomy,Springer,NewYork.


OriginsofagricultureTechnologicalprogressisreversible“ItiswidelybelievedthattheprimarydomesticatedcropsoftheNeolithic—namely,einkornwheat,emmerwheat,barley,lentil,pea,chickpea,andflax—appearedinitiallyinacoreareafromwhichtheyspreadthroughouttheMiddleEast(…).Recentarchaeobotanicaldata,however, indicate thatpredomesticationcultivationof someof thesespecieswascarriedoutautonomouslyinveryearlysitesoftheNearEasternPPNA(Pre‐PotteryNeolithicA;~11,500to10,300calendaryearsbeforepresent).Moreover,thedataalsosuggestthatsomeofthesecropsdidnotdevelopintofullydomesticatedspeciesbecausetheircultivationwasabandonedbythelocalpopulations.Humandomesticationofplantscanbedividedintothreestages:“gathering,”inwhichpeoplegatheredannualplantsfromwildstands;“cultivation,”inwhichwildplantgenotypesweresystematicallysowninfieldsofchoice;and“domestication,”inwhichmutantplantswithdesirablecharacteristicswereraised.Cultivationistheessentialstage,astherepetitivecycleofsowing,collecting,andsowingofwildplantsgivesrisetogenotypeaccumulationthatleadstodomestication.”Weissetal(2006,p.1608)Transitionsbetween technological levelsarenotautomatic/Agriculturewasanunintended consequenceofalong‐livedprocessorprocesses“… the initiation of agriculture in one place does not imply that the successfully grown plantswould be continuouslycultivated (…). Consequently, the locationof the germplasmofwild‐plant founder stocks genetically associatedwith aparticularfullydomesticatedplantare,inreality,justthestocksthatledultimatelytothedomesticatedplant.”Weissetal(2006,p.1608)“Increasingarchaeobotanicalevidenceindicatesthatthebeginningofagriculture,aswellasofcropdomestication,wasnotnecessarilyasingleeventbutaprocessoftrialanderror.Foroatsandrye,forexample,thebeginningsofcultivationandsubsequentdomesticationareseparatedbymillenniaandgreatdistances.FortheNearEast,currentdatasuggestthatatleastthreeor fourspeciescanbeconsideredasearlypioneercrops,whichpredatethesevenwellrecognizedspeciesoffoundercrops.”Weissetal(2006,p.1610)“In thePPNA,NearEasternhumangroups in tworegionsalreadypossessedandappliedagriculturalknowledge: In thenorth,theyplantedlentilandperhapsrye;andinthesouth,theyraisedbarleyandprobablyoat,togetherwithimportedlentil.Althoughthisearlybarleyandlentilwaseventuallydomesticatedintheregion,twoofthecropsraisedorgatheredthere—rye and oats—were abandoned. The transition to food production in easternNorthAmerica shows a notablesimilaritytotheNearEast.(…)bothintheNearEastandearlyeasternNorthAmerica,thefirststageofagriculturewascultivatingannualwildplants;thesecondstagewascultivatingbothwildtypesanddomesticants;andthelaststagewasthecultivationofdomesticantsalone.”Weissetal(2006,p.1610)“Causesthathavebeenproposedforthetransitionfromforagingtofarming:aliens;bigmen;broadspectrumadaptation;circumscription;climaticchange;competition;desertification;diffusion;domesticability;energetics;familiarity;fatintake;feasting; geniuses; hormones; intelligence; kitchen gardening; land ownership; multicausal; marginal environments;natural habitat; natural selection; nutritional stress; oases; plant migration; population growth; population pressure;random genetic kicks; resource concentration; resource pressure; rich environments; rituals; scheduling conflicts;sedentism;storage;technologicalinnovation;wateraccess;xenophobia;zoologicaldiversity.”Barker(2006,p.383)“Thetransitionfromforagingtofarmingwasthemostprofoundrevolutioninhumanhistory,albeitonewhoseoriginsinmanyrespectsgobacktothebeginningsofourspeciesandwhoseaftershockshavecontinuedinsomepartsoftheworldalmost to the modern era. Its legacy today is the mechanized and industrialized systems of farming that sustainextraordinarydensitiesofpopulationandaglobaleconomythat together threaten thesustainabilityofourplanetonascaleunmatchedatanytimeinthepast.”Barker(2006,p.414)


MajorcentersofdomesticationanddatesforearliestplantsandanimalsDouglasandBar‐Yosef(2011,p.S170)

“humanpopulationmayhaveaveragednomorethanameretwothousandpeoplearound70,000yearsago(…)Ourspecieshasbeenonanacceleratinggrowthcurvesincearound60,000yearsago.”

Wells

“Oneofthegreatmythssurroundingthedevelopmentofhumancultureoverthepast10,000yersisthatthingsgotprogressivelybetteraswemovedfromourhuntergathererexistencetothesublimelyelevatedstateinwhichwelivetoday(…)Theexplosioninthesizeofthehumanpopulationafter10,000yearsagoisassumedtobemerelythenumericalmanifestationofthepositiveimpactofgrowingourownfood,thebenefitsofthenewlifestylewritintheexpandingnumberofhappyfarmers.Infact,nothingcouldbefurtherfromthetruth.”


Worldcentresofplantandanimaldomestication,Roberts(2014,p.179)

Recordedfirstappearancesofindividualdomesticatesindifferentregionsduringtheholocene,Roberts(2014,p.190)


Globalculturaldevelopmentsduringthelaterholocene,Roberts(2014,p.218)

ReferencesBarker,Graeme(2006):TheAgriculturalRevolutioninPrehistory:WhydidForagersbecomeFarmers?,OxfordUniversityPress,NewYork.Weiss, Ehud;Mordechai E. Kislev; AnatHartmann (2006): Autonomous Cultivation Before Domestication, Science 312,1608‐1610.Price,T.Douglas;OferBar‐Yosef(2011):TheOriginsofAgriculture:NewData,NewIdeas.AnIntroductiontoSupplement4,CurrentAnthropology52,Supplement4,S163‐S174.Roberts,Neil(2014):TheHolocene:AnEnvironmentalHistory,3rdedition,Wiley‐Blackwell,Oxford,UK.Wells,Spencer:Pandora'sSeed:TheUnforeseenCostofCivilization


Bernal’sladder:false/irrelevant/notoriginal/well‐know“ThephysicistDesmondBernaldescribedthesequenceofresponsesfromfellowscientists,asanideagraduallyascendsfromrejectiontoacceptance:1.Itcan’tberight. 2.Itmightberightbutit’snotimportant. 3.Itmightbeimportantbutit’snotoriginal. 4.It’swhatIalwaysthoughtmyself.”Calder(2005,p.35)ReferenceCalder,Nigel(2005):Magicuniverse:Agrandtourofmodernscience


TheNeedhamproblem(puzzle)DefinitionWhymodernscienceoriginatedonlyinEurope

“Thegreatestenigma in thehistoryof technology is the failureofChina tosustain its technological supremacy. In thecenturiesbefore1400, theChinesedevelopedanamazingtechnologicalmomentum,andmoved,as farasthesematterscanbemeasured,atarateasfastasorfasterthanEurope.”209

Exceptionalityofthescientificrevolution?“Theenlightenmentthefactthatusefulknowledgebecamemorediffuseandaccessibleintheyearsbetween1720and1780andthescientificrevolutionwerenotBritishphenomena,theywereEuropeanones.Asia,despiteitsenormousscientificachievements,neverattainedanythinglikeit.”Mokyr(2000,p.508)


“ThereasonthatChinafailedtohaveascientificrevolutionIhaveattributedheretothecontentsofcivilserviceexaminationsandthecriteriaofpromotion,whichdistractedtheattentionofintellectualsawayfrominvestingthehumancapital necessary for modern scientific research. Therefore, the probability of making atransition fromprimitivesciencetomodernsciencewasreduced.”286“…if this large population is ill equipped with the acquired humancapital necessary for undertaking modemscientific research and experiment, the likelihood that the economy will contribute to modem technologicalinvention and scientificdiscovery is small. For a developing country in modern times, many technologies cancertainly be imported from developed countries at a much lower cost than the cost of inventing themindependently. However,many empirical studies have found that thesuccessor failure of technology transferscruciallydependsonthedomesticabilitytofollowupwithadaptiveinnovationsontheimportedtechnology,whichin turn dependson domestic scientificresearch capacity. Therefore, in modern times a large population is nolongeranendowmentforeconomicdevelopment.Moreimportantthanthesizeofthepopulationiseducationwithanemphasisonmodemcurriculum.”286“Chinahadtwochances:first,togenerateacontinuing,self‐sustainingprocessofscientificandtechnologicaladvanceonthebasisofitsindigenoustraditionsandachievements;andsecond,tolearnfromEuropeanscienceandtechnologyoncetheforeign"barbarians"enteredtheChinesedomaininthesixteenthcentury.Chinafailedbothtimes.”Landes(2006,p.5)“Ingeneral,onecanestablishalonglistofinstancesofChinesepriority:thewheelbarrow,thestirrup,therigidhorsecollar (to prevent choking), the compass, paper, printing, gunpowder, porcelain. (But not the horse‐shoe, whichimpliesthattheChinesedidnotmakeuseofthehorsefortransport.)ThemysteryliesinthefailureofChinatorealizethepotentialofsomeofthemostimportantoftheseinventions.(…)Chineseindustrialhistoryoffersanumberofexamplesoftechnologicalregressionandoblivion.”Landes(2006,pp.5‐6)“First,Chinalackedafreemarketandinstitutionalizedpropertyrights.TheChinesestatewasalwayssteppingintointerferewithprivateenterprise(…)AsecondreasonwhyChinadidnotrealizetheeconomicpotentialofitsscientificexpertiseinvolvedthelargervaluesofthesociety.ThegreatHungarian‐German‐Frenchsinologist,EtienneBalazs(…),sawChina'sabortivetechnologyaspartofalargerpatternoftotalitariancontrol.Landes(2006,pp.6‐7)“thereasontheChinesedidnotdevelopbasedontheirscientificknowledgeisthatnoonewastrying.Whytry?(…)In all this, the contrast withEuropewasmarked.Where fragmentationandnational rivalries compelled Europeanrulerstopayheedtotheirsubjects,torecognizetheirrightsandcultivatethesourcesofwealth,therulersofChinahadafreehand.”Landes(2006,p.8)ReferencesLandes,DavidS.(2006):“WhyEuropeandtheWest?WhynotChina?”,JournalofEconomicPerspectives20(2),3‐22.Mokyr,Joel(2000):“TheindustrialrevolutionandtheNetherlands:Whydiditnothappen?”,DeEconomist148(4),503‐520.WhytheIndustrialRevolutionDidNotOriginateinChina(1985)TheNeedhamPuzzle:WhytheIndustrialRevolutionDidNotOriginateinChina


Fundamentalpuzzlesineconomichistoryandeconomicdevelopment“…fundamentalpuzzlesineconomichistory/development—puzzlesthatgototheheartofthenatureofeconomicchange.Theycanbebroadlyclassifiedundertwgeneralheadings:(1)howtoaccountfortheunevenanderraticpatternofbothhistoricalchangeandcontemporarydevelopment,and(2)howtomodelthisprocessofchangeanddevelopment.”North(1997,p.223)“Ingeneral,growthhasbeenmuchmoreexceptionalthanstagnationordecline.Moderneconomicgrowthappearstohavebegunperhapsfourhundredyearsagobutbeenconfinedtoasmallpartoftheearthformostofthattime.WidespreadgrowthisarecentphenomenonmostlydatingsinceWorldWarII.”North(1997,p.224)“Therationalchoiceparadigmassumesthatpeopleknowwhatis intheirself interestandactaccordingly,orattheveryleastthatcompetitionwillweedoutthosewhomakeincorrectchoicesandrewardthosewhomakecorrectchoices.Butitis impossible to reconcile this argumentwith thehistorical and contemporary record.Growth theory as it has evolvedfromneoclassicaltheoryisequallyunhelpfulinexplainingthishistoricalandcontemporaryrecord.”North(1997,p.224)thegrowththeorystemmingfromneoclassicaleconomics,oldornew,suggestsnotonlyignoranceoftheempiricalevidence,historicalorcontemporary,butafailuretorecognizethatincentivesmatter;surelyaremarkablepositionfoeconomistswhosetheoryisbuiltonincentives.Itistheincentivestructureimbeddedintheinstitutional/organizationalstructureofeconomiesthathastobeakeytounravelingthepuzzle.Butthatentailsastilldeeperpuzzle.Whydon'teconomiesthathaveinstitutionalframeworksthatareinhospitabletoeconomicgrowthsimplyadopttheframeworksofthesuccessfuleconomies?Theydo,oratleasttheytryto:therushtocreatemarketeconomiesisaubiquitouscharacteristicofthirdworldandtransitioneconomies.Butlookattheresults.Theyvaryenormously,fromChinaandtheCzechrepublic,whichsofararesuccessful;totherepublicsoftheformerSovietUnion,whichsofarshowfewsignsofsuccess;tosub‐SaharanAfrica,whichremainsabasketcase.North(1997,p.224)Tomakesenseoutofthehistoricalandcontemporaryevidence,wemustrethinkthewholeprocessofeconomicgrowth.Currenttheorystemsfromthedevelopmentofnationalincomeandgrowthaccountingliteratureandexploresthesuperficialaspectsofeconomicgrowth—technologyorhumanorphysicalcapital—ratherthanthestructureofincentivesanddisincentivesthatmakeuptheinstitutionalframeworkofaneconomyandpolity.North(1997,p.224)Institutionsprovidethestructurethathumansimposeonhumaninteractioninordertoreduceuncertainty.(…)Institutionsaretherulesofthegame—bothformalrulesandinformalconstraints(conventions,normsofbehavior,andself‐imposedcodesofconduct)—andtheirenforcementcharacteristics.Togethertheydefinethewaythegameisplayed.Organizationsaretheplayers.Theyaremadeupofgroupsofindividualsheldtogetherbysomecommonobjectives.North(1997,p.225)“…fivepropositionsthat,Ibelieve,underlieinstitutionalchange(…)PROPOSITION1:The continuous interactionbetween institutionsandorganizations in the economic settingof scarcityand,hence,competitionisthekeytoinstitutionalchange.PROPOSITION2:Competitionforcesorganizationscontinuallytoinvestinnewskillsandknowledgetosurvive.Thekindofskillsandknowledge idividualsand theirorganizationsacquirewill shapeevolvingperceptionsaboutopportunitiesand,hence,choicesthatwillincrementallyalterinstitutions.PROPOSITION 3: The institutional framework provides the incentive structure that dictates the kinds of skills andknowledgeperceivedtohavethemaximumpayoff.PROPOSITION4:Perceptionsarederivedfromthementalconstructsoftheplayers.PROPOSITION5:Theeconomiesofscope, complementarities,andnetworkexternalitiesofan institutionalmatrixmakeinstitutionalchangeoverwhelminglyincrementalandpathdependent.”North(1997,p.225‐226)Alternativeview:onlyorganizationsexist;institutionsarejustimpositionsofsomeorganizationsonotherorganizations.Theessenceof‘criminal’or‘antisocial’behaviouristherefusaltoacceptthoseimpositions.


ReferenceNorth,DouglassC.(1997):SomeFundamentalPuzzles inEconomicHistory/Development, inW.BrianArthur;StevenN.Durlauf;DavidA.Lane;eds.:TheEconomyasanEvolvingComplexSystemII,SFIStudies in theSciencesofComplexity,Vol.XXVII,Addison‐Wesley,pp.223‐237.


Cardwell’sLawDefinitionNamedbyMokyr(2000,p.510),statesthatnationsthataretechnologicallycreativearesoonlyforashorttime.The“real”IndustrialRevolutionwasthesecondone,startinginthe1860s.“…thereallysignificantevent isnottheearly inventionsof the1760sand1770sbut theircontinueddevelopmentafter1820,insharpcontrastwithearlierepisodesoftechnologicalbreakthroughs.”Mokyr(2000,p.506)“TheIndustrialRevolutionchangedtheeconomicsystemfromonedominatedbynegativefeedbackmechanismstooneofpredominantlypositivefeedback,wheregrowthbegatmoregrowth.”Mokyr(2000,p.504)ReferenceMokyr,Joel(2000):“TheindustrialrevolutionandtheNetherlands:Whydiditnothappen?”,DeEconomist148(4),503‐520.


Capitalism“…CapitalismwascreatedinductivelybyasmallnumberofpoliticalcompetitorsfromamongapopulationofmorethanthreehundredpoliticalentitiesinWesternEuropecirca1400.”Scott(2011,p.597)“Capitalismisanindirectsystemofgovernanceforeconomicrelationships.”Scott(2011,p.27)“Friedman conceives of capitalism as a one‐level system for achieving economic coordination (i.e., economicmarkets),North conceives of it as a two‐level system (i.e., economicmarkets embedded in institutions), and I conceive of it as athree‐level system (i.e., economic markets embedded in institutions governed by a political authority accountable topoliticalmarkets).”Scott(2011,p.37)“…capitalismisneitheraone‐levelsystemcomprisedofeconomicmarketsnoratwo‐levelsystemofthosemarketsandtheirsupportinginstitutions,butinsteadathree‐levelsystemofgovernancecomprisedofthosetwosubsystemsundertheauspices of one political authority (…) capitalism is not a natural system; rather, it is a socially constructed system ofgovernanceforeconomicrelationshipsamongpeopleandproperty.”Scott(2011,p.587)“Capitalismisbaseduponindirectgovernanceandnot“freemarkets”(…).Whereasthemarketsofcapitalismaretypicallydescribed as “free markets,” the freedoms of economic actors in those markets are always conditional upon theirobediencetoasetoflawsandregulations.Trulyfreeandunregulatedmarketsarenotarecipefororganizedcapitalism;insteadtheyarearecipeforinstabilityandevenchaos,astherecentglobalfinancialcrisishasdemonstrated.”Scott(2011,p.593‐594)“…themajorcharacteristicsofcapitalism:(1)Capitalismisanindirectsystemofgovernance;(2)capitalismisanalogoustoorganizedsports;(3)capitalismiscomprisedofthreelevels—markets,institutions,andpoliticalauthority;(4)thethirdlevel of political authority underscores the role of visible human agency, not just that of invisible market forces, incapitalism;(5)thepoliticalauthorityhastheadministrativeopportunityandinmanycasestheresponsibilitytoshapethecapitalistsystemtofavorcertaininterestgroupsoverothers,aswellastheentrepreneurialresponsibilitytomodernizethecapitalistsystemovertime;(6)capitalismisasystemofgovernancenotonlyforprivategoodsbutalsoforpublicor“common”goods,wheresomeofthemostimportantofthosecommongoodsarethemarketframeworksthemselves,andpolitical authority, not market forces, is essential for governing the latter; (7) political authority inevitably shapescapitalism according to a strategy, no matter how implicit or imperfect that strategy might be; and (8) political andeconomic markets determine the nature of political authority, such that the political system of governance and theeconomicsystem(i.e.,capitalismitself)arenotonlyinterdependentbutalsoatheaterofcompetitioninwhicheconomicandpoliticalactorscompetewitheachotherforpower.”Scott(2011,p.28)“Insports,asindeedincapitalism,thelevelofthepoliticalauthorityencompassestwodistinctroles:oneadministrative,inmaintaining the existing system with its approved teams, rules, and existing organization for the monitoring andenforcementoftherules,andthesecondentrepreneurial,inmobilizingpowertowintheneededvotesinthelegislatureinordertoadmitnewteams,changethelocationsortimingofcompetition,changetherulesandregulations,and/orchangethedistributionofrevenues.”Scott(2011,p.50)“While the institutions of organized sports are designed to ensure a level playing field, those of capitalismare not. Toexplain:Sinceeconomiesofscalewillenhanceproductivity,itfollowsthatcapitalismgenerallypermitstheaccumulationofadvantages,subjecttocertainexceptionsandcertainlimitsonacceptablebehavior.”Scott(2011,p.59)“Capitalism is three‐level system of indirect governance for economic relationships; it is a system that is political andadministrative as well as economic. Organized markets cannot exist without a set of institutional foundations thatestablishvariousrightsandresponsibilitiesthatareattributedtonotionsofproperty,andthesefoundationsarecreated,legitimated, regulated, and periodically modernized under the auspices of a political authority such as a state. It isgovernment and its agents, and not the private economic actors, who create and ultimately enforce the laws andregulationsthatguideproductionandtrade.”Scott(2011,p.63)


“Thepoliticalpowerofthewealthymerchantclass,anurban‐basedbourgeoisie,wasasinequanonforthecreationofacapitalistsystem.”Mielants(2007,p.78)Capitalismanddevelopment“…thefactthatthisapplicationofstatepowerwasdirectednotbytherisingclassofindustrialistsbutbytherulinglandedoligarchytestifiestothefactthattheIndustrialRevolutioninBritaingrewupoutofandcontinuedtobeshapedbythesocialpropertyrelationsofagrariancapitalism.”Žmolek(2013,p.839)“The great strength of capitalism lies in its capacity to facilitate the development and adaptation of new technologies,includingthepossibilityofhigherlevelsofresourcemobilizationtoachievemorerapidacquisitionandadaptationofnewtechnologiesindevelopingcountries.”Scott(2011,p.65)Capitalismandinequality“Sincecapitalismisdesignedtopromoteproductivity, itcanbeexpectedtopromote inequalitiesof incomeandwealth,andfirstmoversinatechnologymaykeeptheiradvantagesfordecades.”Scott(2011,p.59)Capitalismanddemocracy“Capitalismanddemocracyco‐existastheprevailingsystemsofgovernancetheworldoverandtheyinevitably interactwitheachotherandtransformeachother.However,with fewexceptionstheydidnotemergesimultaneouslyandtheirhistorical relationship is complex and far from obvious. Capitalism generally came first, often by centuries, and itsdecentralizedsystemofdecision‐makingappearstohavebeenanecessarypreconditionforthesuccessfulestablishmentof democracy. The rise of capitalism thus becomes of pivotal importance not only as a new and promising form ofeconomicgovernance,butalsoasapreconditionfortheriseoflarge‐scaleorrepresentativedemocracy(…)despitetheirdifferences in origins and function, both capitalism and democracy were propelled into existence by politicaltransformationsandnotjusteconomicgrowth.”Scott(2011,p.11)“Capitalismrequirestheruleoflaw;itdoesnotrequiredemocracy.”Scott(2011,p.603)

“Capitalismanddemocracyareinterdependentsystemsofgovernance.”Scott(2011,p.11)


ReferencesMielants,EricH.(2007):TheOriginsofCapitalismandthe“RiseoftheWest”,TempleUniversityPress,Philadelphia.Scott,BruceR.(2011):Capitalism.ItsOriginsandEvolutionasaSystemofGovernance,Springer,NewYork.Žmolek, Michael Andrew (2013): Rethinking the Industrial Revolution. Five Centuries of Transition from Agrarian toIndustrialCapitalisminEngland,BRILL,Leiden,TheNetherlands.


ThefalloftheSovietUnion“Adaptiveefficiencyentailsaninstitutionalstructurethatinthefaceoftheubiquitousuncertaintiesofanon‐ergodicworldwill flexibly try various alternatives to deal with novel problems that continue to emerge over time. In turn thisinstitutionalstructureentailsabeliefstructurethatwillencourageandpermitexperimentationandequallywillwipeoutfailures.TheSovietUnionrepresentedtheveryantithesisofsuchanapproach.”North(2005,p.154)“TheUnitedStateswononeofthelongestandmostpotentiallydestructivewarsinhumanhistory‐theColdWaragainsttheSovietUnion‐withoutfiringashot.Thebattlefieldwastheeconomy.RussianproductivitywassolowthattheSovietUnioncouldnot matchthemilitarycapabilitiesof theUnitedStates,andtheattempt toreformitseconomy ledto thecollapseoftheassociatedpoliticalsystem.”Kay(2004,p.9)ReferencesKay, John(2004):CultureandProsperity.TheTruthaboutMarkets:WhysomeNationsareRichbutmostRemainPoor,HarperBusiness,NewYork.North,DouglassCecil(2005):UnderstandingtheProcessofEconomicChange,PrincetonUniversityPress,Princeton,NewJersey.


ThegreatexperimentDefinitionThegreatexperimentisthesystematiccooperativedivisionoflaboramonggeneticallyunrelatedindividuals“Oureverydaylifeismuchstrangerthanweimagine,andrestsonfragilefoundations.Thisisthestartlingmessageoftheevolutionaryhistoryofhumankind.Ourteeming, industrialized,networkedexistenceisnotsomegradualandinevitableoutcomeofhumandevelopmentovermillionsofyears.Insteadweoweittoanextraordinaryexperimentlaunchedameretenthousandyearsago.Noonecouldhavepredictedthisexperimentfromobservingthecourseofourpreviousevolution,butitwouldforeverchangethecharacteroflifeonourplanet.Foraroundthattime,aftertheendofthelasticeage,oneofthemostaggressiveandelusivebanditspeciesintheentireanimalkingdombegantosettledown.”Seabright(2010,p.3)“Homosapienssapiensistheonlyanimalthatengagesinelaboratetasksharing—thedivisionoflaborasitissometimesknown—between genetically unrelatedmembers of the same species. It is a phenomenon as remarkable and uniquelyhumanaslanguageitself.Mosthumanbeingsnowobtainalargeshareoftheprovisionfortheirdailylivesfromotherstowhomtheyarenotrelatedbybloodormarriage.Eveninpoorruralsocietiespeopledependsignificantlyononrelativesfor food, clothing, medicine, protection, and shelter. In cities, most of these nonrelatives crucial to our survival areompletestrangers.Natureknowsnootherexamplesofsuchcomplexmutualdependenceamongstrangers.”Seabright(2010,p.4)“…whythedivisionoflaborissuchachallengeforustoexplain.Itlooksatthewayinwhichevensomeofthesimplestactivitiesofmodernsocietydependuponintricatewebsofinternationalcooperationthatfunctionwithoutanyone’sbeingin overall charge. On the contrary, they work through eliciting a single‐mindedness from their participants—a tunnelvision—thatishardlycompatiblewithaclearandnonpartisanvisionoftheprioritiesofsocietyasawhole.”Seabright(2010,p.7)degreeofspontaneouscoordinationdisplayedinhumansocieties‐>Thiscoordinationcomesaboutsimplybecauseofawillingnessofindividualstocooperatewithstrangersinamultitudeofsmallbutcollectivelyverysignificantways.whatmakessuchcooperationpossible,giventhepsychologywehaveinheritedfromourhunter‐gathererancestors.Theanswerconsistsofinstitutions—setsofrulesforsocialbehavior,someformal,manyinformal—thatbuildontheinstinctsof the shy,murderous ape inways thatmake life among strangers not only survivable but attractive, potentially evenluxurious.Theserulesofbehaviorhavemadeitpossibleforustodealwithstrangersbypersuadingus,ineffect,totreatthemashonoraryfriends.Someoftheinstitutionsthatmakethispossiblehavebeenconsciouslyandcoherentlydesigned,butmanyhavegrownbyexperimentorastheby‐productofattemptstoachievesomethingquitedifferent.Nobodycanclaimtheyarethe“best”institutionsthathumanbeingscouldeverdevise.Theyaresimplytheonesthathappentohavebeentried…ReferenceSeabright,Paul(2010):TheCompanyofStrangers:ANaturalHistoryofEconomicLife

Arethebigphenomenathathavetakenplaceaccidentsornecessaryevents?

Emergenceofmatter

Emergenceofcomplexmollecules

Emergenceoflife

Emergenceofcomplexlife

Emergenceofsensientlife

Emergenceofintelligentlife

Emergenceofcivilization

Emergenceofaplanetwhenalltheabovecanariseandpersist


Anothergreatexperiment“Webelievethatlifeintheformofmicrobesortheirequivalentsisverycommonintheuniverse,perhapsmorecommonthanevenDrakeandSaganenvisioned.However,complexlife—animalsandhigherplants—is likely tobe farmorerarethaniscommonlyassumed.WecombinethesetwopredictionsofthecommonnessofsimplelifeandtherarityofcomplexlifeintowhatwewillcalltheRareEarthHypothesis.”WardandBrownlee(2000,p.xviii)

RareEarthfactors

WardandBrownlee(2000,pp.xxxi‐xxxii)ReferenceWard,PeterD.;DonaldBrownlee(2000):Whycomplexlifeisuncommonintheuniverse‐


Peopleandtechnology

"Thetotalquantityofhumanity(andthenexusofhumannumberswithtechnology)hasbeenthemaindriving

force"

Measuresofprogress–Simonp.3


Whypeoplebelieveweirdthings“…twotypesofthinkingerrors:Type1Error:believingafalsehoodandType2Error:rejectingatruth.Sincetheseerrorswill notnecessarily getuskilled, theypersist. TheBeliefEnginehas evolvedasamechanism forhelpingus to survivebecause in addition to committing Type 1 and Type 2 Errors, we also commit what we might call a Type 1 Hit: notbelievingafalsehoodandaType2Hit:believingatruth.”“…a spandrel is "the tapering triangular spaces formedby the intersectionof two roundedarchesat rightangle."Thisleftoverspaceinmedievalchurchesisfilledwithelaborate,beautifuldesignssopurposefullooking"thatwearetemptedtoviewitasthestartingpointofanyanalysis,asthecauseinsomesenseofthesurroundingarchitecture.Butthiswouldinverttheproperpathofanalysis."Toask"whatisthepurposeofthespandrel"istoaskthewrongquestion.Itwouldbelike asking "why domales have nipples?" The correct question is "why do females have nipples?" The answer is thatfemalesneedthemtonurturetheirbabies,andmalesandfemalesarebuiltonthesamearchitecturalframe.Itwassimplyeasierfornaturetoconstructmaleswithworthlessnipplesratherthanreconfiguretheunderlyinggeneticarchitecture.”“WemakeType1and2ErrorsbecauseweneedtomakeType1and2Hits.Wehavemagicalthinkingandsuperstitionsbecauseweneedcriticalthinkingandpattern‐finding.Thetwocannotbeseparated.Magicalthinkingisanecessaryby‐productoftheevolvedmechanismofcausalthinking.”ReferenceShermer,Michael(2002):Whypeoplebelieveweirdthings


DevelopmentandindustrializationDoesdevelopmentrequireindustrialization?“Thehistoricalrecordofalldevelopedcountries–goingbackatleast500years–confirmsthispolicyindustrializationasamandatorypassagepointtodevelopment.”Reinert(2011,p.157)“Asoneeighteenth‐centuryeconomistput it,diversifying theeconomyaway fromdependenceonagriculturecuredthemain ills ofmankind: unemployment, superstition, poverty, and shortage of foreign exchange. Today’s failing states inAfricaallhaveonethingincommon:aminuteindustrialsector.”Reinert(2011,p.158)“From the Enlightenment through to twentieth‐century fascism, Nazism, Stalinism, and Western democracies, alldevelopment strategies were based on industrialization.When the Allies wanted to punish Germany after the SecondWorldWarthecruellestplantheycouldcomeupwithwasforceddeindustrialization:theMorgenthauPlan.Thisplanwas,however,soeffectiveinproducingmasspovertythatitonlylastedtwoyearsandwasreplacedbytheMarshallPlan,aplanforre‐industrialization.”Reinert(2011,p.158)Institutionscannotbeconsideredregardlessofthecontext(economicstructure)inwhichtheyareimplantedorthatcreatesthem“Institutions are a product of specific social and economic structures. Such structures are a key factor to explaindemocracy(goodgovernance)andprosperity.”Reinert(2011,p.158)Reference

Reinert(2011)


‘Morristheorem’andtheparadoxofdevelopment‘Morristheorem’“Changeiscausedbylazy,greedy,frightenedpeoplelookingforeasier,moreprofitable,andsaferwaystodothings.Andtheyrarelyknowwhatthey’redoing.”“…change is causedby lazy,greedy, frightened people(whorarelyknowwhatthey'redoing) lookingforeasier,moreprofitable, and saferways to do things (…) none of the great transformations in social development—the origins ofagriculture,theriseofcitiesandstates,thecreationofdifferentkindsofempires,theindustrialrevolution—wasamatterofmeretinkering;eachwastheresultofdesperatetimescallingfordesperatemeasures.”Morris(2010,p.559)Theparadoxofdevelopment“Risingsocialdevelopmentgeneratestheveryforcesthatunderminefurthersocialdevelopment.Icallthistheparadoxofdevelopment.Successcreatesnewproblems;solvingthemcreatesstillnewerproblems.Life,astheysay,isavaleoftears.Theparadoxofdevelopment isconstantlyatwork,confrontingpeoplewithhardchoices.Oftenpeople fail toriseto itschallenges,andsocialdevelopmentstagnatesorevendeclines.Atothertimes, though,sloth, fear,andgreedcombinetopushsomepeopletotakerisks,innovatingtochangetherulesofthegame.Ifatleastafewofthemsucceedandifmostpeople then adopt the successful innovations, a society might push through the resource bottleneck and socialdevelopmentwillkeeprising.”Morris(2010,p.560)“historyis(…)asinglegrandandrelentlessprocessofadaptationstotheworldthatalwaysgeneratenewproblemsthatcallforfurtheradaptations(…)Ihavecalledthisprocesstheparadoxofdevelopment:risingsocialdevelopmentcreatestheveryforcesthatundermineit.Peopleconfrontandsolvesuchparadoxeseveryday,butonceinawhiletheparadoxcreatestoughceilingsthatwillyieldonlytotrulytransformativechange(…)asasocietyapproachesoneoftheseceilingsakindofracebeginsbetweendevelopmentandcollapse.Societiesrarely‐perhapsnever‐simplygetstuckataceilingandstagnate, theirsocialdevelopmentunchangingforcenturies.Rather, if theydonot figureouthow tosmashtheceiling,theirproblemsspiraloutofcontrol(…and…)willdrivedevelopmentdown…”Morris(2010,p.560)ReferenceMorris,Ian(2010):WhytheWestrules—forNow.ThePatternsofHistoryandWhatTheyRevealabouttheFuture,ProfileBooks,London.


State,elites,anddevelopmentState“ContrarytothosewhowouldviewthestateasapassiveagentinBritain’sIndustrialRevolution,thehistoricalfactthattheartisan‐ledresistancetotheconversiontocapitalisminBritishmanufacturingwasonlyovercomethrough thedirectapplicationof statepowerdemonstrates that the stateplayedavery activeandcentral role in theIndustrialRevolution.”Žmolek(2013,p.42)“Europepresenteditselfasauniquelyfortunatenaturalexperiment,withits300–500competingpoliticalentitiesin1500;theywerereducedtoonly40in1820,parallelingthe“shakeout”thatroutinelytakesplaceinnewindustriesinmoderntimes(…).Rivalryamongstatesputapremiumonmilitarypower,which,intheperiodfrom1400to1800,dependedonhiringmercenaries.”Scott(2011,pp.xvii‐xviii)“… without the essential and ongoing work of the visible hand of government to revise as well as enforce marketframeworks, we would have much less developed capitalist systems. (…) Capitalism requires more thanmarkets andtradersandcommissionagents; itrequiresthekindsofsecurityofproductspecificationandcompliancethatultimatelyonlygovernmentcanensure.”Scott(2011,p.65)“…capitalismwascreated“topdown”inthesetypicallysmallentities.Thecriticaldecisionswerebypoliticalleaderswhoauthorized potential entrepreneurs to exercise power as a way to help raise incomes for themselves and theircommunities,wherethesehigherincomescouldsubsequentlybetaxedtoprovidefordefenseandotherpublicgoods.”Scott(2011,p.598)“… itwas partially because European states used their power to supportmercantilist policies overseas that Europeanmerchants were capable of eventually dominating the non‐European world, incorporating it into the capitalist world‐system. The existing ruling strata in South Asia, by contrast, were more preoccupied with imposing extraeconomiccoercionontheiragriculturalproducersthanwithformulatingmercantilistpolicies.”Mielants(2007,p.160)“Thestatesupportedindustrializationthoroughlywithinstitutionslikenationalbanks,legalprotectionssuchaspatents,bymanagingtradethroughthetariffandcommercialtreaties,and,whennecessary,withforce.Withoutdefensebythestate,Westernentrepreneurscouldnothaveinitiatedormaintainedtheindustrialrevolution.”Horn(1997,p.vii‐viii)Elites“…evenby themid‐nineteenth century, some three‐quartersof a century into the Industrial Revolution, the UnitedKingdomwas still very much ruled by a landed oligarchy whose interests wereconverging with those of theindustrialmercantileandbanking‘bourgeoisie’.”Žmolek(2013,p.794‐795)“Britain’s aristocracy was really no longer an aristocracy, it was a landed oligarchy which had overseen thedevelopmentofagrariancapitalismandhadactuallyensuredthatthesameprinciplesofpoliticaleconomythathad been used to abolish feudalismand the peasantry in favour of a systemof capitalist tenantfarmingwereequallyappliedtomanufacturing,byforcewhennecessary.”Žmolek(2013,p.795)“Havingmanagedtogaingeneralcontroloverstatepowerintheseventeenthcentury,asexpressedthroughParliament,theruling landedoligarchymanaged toretainthiscontrol intothe latterhalfofthenineteenthcentury.Basedontheirexperiencewiththesuccessof‘improved’agriculture,thelandedoligarchssharedanideologicalbiasinfavouroftheeffortsofcapitalistemployersto‘improve’productioninmanufacturing.”Žmolek(2013,p.838)“Likelaternation‐states(…),medievalcitieswereessentialtothedevelopmentofcapitalism(…).Inmyview,itwasthecity‐states’ political system(s) that had a crucial impact on long‐termEuropean socioeconomic processes; itwas thesepolitical systems that enabled capitalism to grow, thrive, and ultimately expand into aworld‐economy. Therefore, it isnecessary to recognize the importance of earlymodern cities as the “power containers” of the bourgeoisie. The samepolicies and techniques of domination and exploitation experimentedwith and implemented by elites in themedievalEuropeancity‐statesystemwerelaterusedbytheelitesofnation‐statesduringthe16thand17thcenturiestofostertheirceaselessaccumulationofcapital.”Mielants(2007,pp.42‐43)


“…Europeanpoliticalstructuresweredifferentfromnon‐Europeanones.Intheformer,merchantcommunitiesandguildsstruggledforpowerintheirpoliticallyindependentcity‐states(somethingofaprecursortotheinterstatesystemofthe16thcentury)(Arrighi1994).Gainingthispowerwascrucialtotheirsuccessasthemerchanteliteswerethenabletousethestateinfrastructuretotheiradvantage.”Mielants(2007,p.155)“Itwas the dynamic consequences of the competition among fragmented political bodies that resulted in an especiallycreativeenvironment.”North(2005,p.138)“ThedivergentevolutionoftheNetherlandsandEngland,ontheonehand,andSpain—andFrance—ontheothercanbeimmediatelyattributedtothedifferentbargainingstrengthofconstituentsandrulersandthethreeunderlyingsourcesofthatbargainingstrength:thegainstoconstituentgroupsofthestatetakingoverprotectionofproperty;theclosenessofsubstitutesfortheexistingruler;theeconomicstructurewhichdeterminedtheyieldstovarioustaxes.”North(2005,p.144)Militarysector“…themilitarysectorinwesternEuropeexperiencedrapidandsustainedproductivitygrowthwellbeforetheindustrialrevolution.TheproductivitygrowthhasimplicationsforthehistoryofthemilitaryrevolutioninearlymodernEurope.”Hoffman(2011)“…whenWesternEuropefirstforgedaheadofotherpartsoftheworld—inparticular,advancedpartsofAsia—intheracetoward economic development.Was it only after 1800, with the industrial revolution well underway, that westernEuropean per‐capita incomes, labour productivity, or technology diverged, or was it earlier, before the industrialrevolution?Whatwas the causeof thedivergence?Was it beneficial institutions,which stimulated investment and theaccumulationofhumanandphysicalcapital;theevolutionofculturalpracticesthatencouragedhardworkandeducation;thescientificrevolutionandtheEnlightenment,whichspreadusefulknowledgeandpoliticalreform;orwasitsimplyanaccidentthattheindustrialrevolutionstartedinwesternEurope?…onearea inwhichwesternEuropepossessedanundeniable comparativeadvantagewellbefore1800seems tohavebeen overlooked—namely, violence. The states of western Europe were simply better at making and using artillery,firearms, fortifications, andarmedships thanotheradvancedpartsof theworldand theyhaddeveloped the fiscal andorganizationalsystemsthatarmiesandnaviesequippedwiththistechnologyrequired.TheEuropeanshadthisadvantagelongbefore1800.Bythen,theyhadconqueredsome35percentoftheglobe,andtheycontrolledlucrativetraderoutesasfarawayasAsia.”Hoffman(2011)“TheargumentisthatearlymodernEuropewasindeeddifferentfromAsia,butnotinthewaywethink.Thedifferencecannotbefoundinscientificspirit,propertyrights,orfactorprices.WhereEuropedifferedwasthepresenceofstatesthatcametotheaidofindustry,whereasthepriorityoftheAsianstateshadbeenpreventionoffamines.”Parthasrathi(2011)“Thekeydifferencebetweenthefunctioningandsociopoliticalpositionofmerchantsinthefeudal‐absolutist–andlatercapitalist – states in Europe, and those within the tributary societies such as the Ottoman Empire, Mughal India andImperialChina,wasthereforethestructuraldependenceofthe formerstatesonmerchantsforwar‐financingandsocialreproduction, which gave the merchants a relatively strong position of social and juridical autonomy. In Europe,governmentsoftenprovidedmerchantswithconsiderableresourcesandstatebacking.”AnievasandNişancıoğlu(2015,p.257)ReferencesAnievas,Alex;KeremNişancıoğlu(2015):HowtheWestCametoRule:TheGeopoliticalOriginsofCapitalism,PlutoPress,London.Hoffman, Philip T. (2011): “Prices, the military revolution, and western Europe’s comparative advantage in violence,EconomicHistoryReview64,S1,39–59Horn,Jeff(2007):TheIndustrialRevolution,GreenwoodPress,Westport,Connecticut.Mielants,EricH.(2007):TheOriginsofCapitalismandthe“RiseoftheWest”,TempleUniversityPress,Philadelphia.Morris,Ian(2010):WhytheWestrules—forNow.ThePatternsofHistoryandWhatTheyRevealabouttheFuture,ProfileBooks,London.North,DouglassCecil(2005):UnderstandingtheProcessofEconomicChange,PrincetonUniversityPress,Princeton,NewJersey.


Parthasrathi, Prasannan (2011): Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600‐1850,CambridgeUniversityPress,Cambridge,UK.Scott,BruceR.(2011):Capitalism.ItsOriginsandEvolutionasaSystemofGovernance,Springer,NewYork.Žmolek, Michael Andrew (2013): Rethinking the Industrial Revolution. Five Centuries of Transition from Agrarian toIndustrialCapitalisminEngland,BRILL,Leiden,TheNetherlands.


Economicpolicyforprosperity“AprevailingviewamongacademicsintheWestinthe1980sand1990swasthattherightapproachforthetransitionwastoeliminatealldistortionssimultaneously in abigbang,asencapsulated intheWashingtonConsensus.TheworstpossibleapproachtofollowwasgradualpiecemealpolicychangesaspracticedinChina.”Lin(2014,p.x)“The few successful economies, including China, Vietnam, and Laos,which started their transitions in the 1980s, andMauritius, which started its transition in the early 1970s, all adopted the gradual dual‐track approach —the worstpossiblechoicefromtheviewpointofmainstreameconomics.”Lin(2014,p.xi)“Themainstream ideas in the 1950s and 1960s advised the developing countries to build up the large‐scalemodern,capital‐intensiveindustriesprevailingindevelopedcountriesatthattime(…)Countriesfollowingthisstrategyenjoyedafew years of investment‐led growth, but stagnation and crises soon followed. The few economies that achievedmiraculous transformation,most inEast Asia, followed instead thewrongapproach: todevelop traditionalsmall‐scale,labor‐intensiveindustriesforexport.”Lin(2014,p.xi‐xii)“…theprevailingtheoriesinmoderntimeshavebeenadvancedmostlybytheoristslivingintheadvancedcountries.(…)So,ifagovernmentinadevelopingcountryfollowstheprevailingtheoriesfromtheadvancedcountriestoformulateitspolicies,theresultscanbetheoppositeofwhatthepolicieswereintendedtoachieve.”Lin(2014,p.xii)“TheadvicefromtheWashingtonConsensuswastoimproveeverythingforthewholenationsimultaneouslyinonebigbangwithoutfavoringspecificsectorsandregions.Instead,theChinesegovernmentmobilizeditslimitedresourcesandimplementationcapabilitytobuildspecialeconomiczonesandindustrialparks.”Lin(2014,p.xiii)“Thenatureofmoderneconomic growth (…) isaprocessof continuingenhancements in laborproductivity. (…) Iamconvincedthatanydevelopingcountrycanstartimmediatelyonapathtoadynamicstructuraltransformationandgrowtheven though endowed with poor infrastructure and business environment. Its government has to adopt a pragmaticapproach to use its limited resources and implementation capacity to facilitate the technological innovation anddevelopment of industries in which it has comparative advantages so as to keep its factor costs of productioncomparativelylow.”Lin(2014,p.xiii)“Developingcountries,includingthoseinSub‐SaharanAfrica,donothavetowaituntilallconditionsfordevelopmentaremade ready. As this book promotes, they can immediately start on a path of dynamic structural transformation andpoverty reduction if their governments use their limited resources and implementation capacity to facilitate thedevelopmentofsectorsinwhichtheyhavecomparativeadvantages.”Lin(2014,p.xv)“Thenewstructuraleconomicsdescribedinthisbookisorganizedaroundthreeideas:•First, aneconomy’s structure of factor endowments (…) determines its total budget, relative factor prices, andcomparative advantagesand evolves fromone level ofdevelopment toanother. So the industrial structureof a giveneconomy will differ at different levels of development. Each industrial structure requires the correspondinginfrastructure(…)tofacilitateitsoperationsandtransactions.•Second,eachlevelofeconomicdevelopmentisapointalongthecontinuumfromalow‐incomeagrarianeconomytoahighincome industrialized economy (…). Industrial upgrading and infrastructure improvement targets in developingcountriesshouldnotnecessarilydrawfromthoseinhigh‐incomecountries.•Third,at eachgiven levelofdevelopment, themarket is thebasicmechanism foreffective resourceallocation (…) inaddition to an effective market mechanism, the government should coordinate or provide the improvements ininfrastructureandcompensatefortheexternalitiestofacilitateindustrialupgradinganddiversification.”Lin(2014,p.10)“manypolitical leaderspursuedgoalswithgenuineandnoble intentionsbut causeddisastrousconsequences for theirnations, theirpeople, andsometimesthemselvesaswell.They tooksignsofanation’sdevelopmentas thecauseof itsdevelopment.”Lin(2014,p.52)“Economic development is a process of continual industrial upgrading and diversification, with correspondingimprovements and adaptations in infrastructure— a process with intrinsic coordination and externality issues. All


countries that have transformed from agrarian economies to modern advanced economies — including those oldindustrialpowersinWesternEuropeandNorthAmericaaswellasthenewlyindustrializedeconomiesinEastAsia—hadgovernments that helped individual firms overcome coordination and externality problems in their structuraltransformation.Indeed,thegovernmentsofhigh‐incomecountriestodaycontinuetoplaythatrole.”Lin(2014,p.241)“The secret recipe to economic success is thus the one that helps policymakers in developing countries identify theindustriesinwhichtheireconomiesmayhavelatentcomparativeadvantages.”Lin(2014,p.242)“Thekeyreasonsforconvergenceofsuccessfuleconomies seemto lie intheirabilitytochangetheirhumanaswellasphysicalcapitalendowments,increasethepaceofadoptionofnewideas,speedtheprocessofindustrialupgrading,andimprovesoftinfrastructure(suchasinstitutions)andhardinfrastructure(suchastransportationandtelecommunicationsnetworks).”Lin(2014,p.33)ReferenceLin, JustinYifu(2014):TheQuestforProsperity:HowDevelopingEconomiesCanTakeOff,SecondPrintingwithaNewPreface,PrincetonUniversityPress,Princeton,NewJersey.


Sourcesofgrowth“WhileIfullyagreewiththeimportanceofhumancapitalaccumulationinsustaininggrowth,Ialsobelievethatwhattrulydistinguishesmodern economicgrowthfrompremoderngrowthisthewaythat innovationis integratedintobusinesspracticesanddevelopmentandthespeedatwhichthisishappening.”Lin(2014,p.28)“Productivityisnotsimplytheresultoftheavailabilityofcapitalandtechnology,ordifferencesintheskillsofindividualworkers. In the modern world, skills can be developed everywhere, and capital and technology flow freely amongcountries Economic differences persist because output and living standards are the complex product of the economicenvironmentintersectingwithsocial,political,andculturalinstitutions.Theeconomiclivesofindividualsaretheproductofthesystemswithinwhichtheyoperate.”Kay(2004,p.28‐29)“Thedestructionofphysicalcapitaldoesnotleadtoenduringdifferencesineconomicperformance;theimplementationofdifferentmechanismsofeconomicmanagementdoes.Thestarkdifferences ineconomic livesthatweseearoundtheworld are not the result of differences in the availability of resources or education or capital or skills. They are theproductofdifferencesinthestructureofeconomicinstitutions.Theselatterdifferencesinturndeterminetheavailabilityofresources,education,capital,andskills.”Kay(2004,p.30)“Thedifferencebetweenrichandpoorstatesistheresultofdifferencesinthequalityoftheireconomicinstitutions.”Kay(2004,p.354‐55)“Richstatesare theproductof ‐literally‐centuriesofcoevolutionofcivilsociety, politics,andeconomic institutions.Acoevolutionthatweonlypartiallyunderstandandcannottransplant.Intheonlysuccessfulexamplesoftransplantation‐theWesternoffshoots‐entirepopulations,andtheirinstitutions,weresettledinalmostemptycountries.TheappealoftheAmericanbusinessmodeltoday,asofMarxismyesterday,isthesuggestionthatthehistoryofeconomicinstitutions,the structure of current society, and the path of future development have a simple economic explanation and aninevitableoutcome.ThisisasmisleadingaviewofpoliticaleconomyastheMarxistone.Thereisnograndnarrative,onlylittlestories.”Kay(2004,p.355)“The difference between rich nations and poor nations is (…) that rich nations producemore goods and services. Onereason they can do so is because their technology is better; that is, their ability to control andmanipulate nature andpeopleforproductiveendsissuperior.(…)Westerntechnologicalsuperiorityhasdeephistoricalroots,andcanonlybeunderstood‐ifatall‐byananalysisthatiswillingtolookbackcenturies,evenmillennia.Tobesure,technologycannottakeall the credit: the development of law, trade, administration, and institutions were all part of the story. Yet (…)technologicalcreativitywasattheverybaseoftheriseoftheWest.Itwastheleverofitsriches.”Mokyr(1990,p.vii)“Forasocietytobetechnologicallycreative,threeconditionshavetobesatisfied.First,therehastobeacadreofingeniousand resourceful innovators who are both willing and able to challenge their physical environment for their ownimprovement.Innovationofanykindisunlikelyinasocietythatismalnourished,superstitious,orextremelytraditional.Second, economic and social institutions have to encourage potential innovators by presenting them with the rightincentivestructure.Inpart,suchincentivesareeconomic;technologicalcreativityismorelikelyifaninnovatorcanexpecttobecomerich.Noneconomicincentivescanmattertoo,however.Asocietycanrewardsuccessfulinnovatorsbyawardingthemmedals,Nobelprizes,orintangiblesymbolsofprestige.Third,innovationrequiresdiversityandtolerance.Ineverysociety,therearestabilizingforcesthatprotectthestatusquo.Someoftheseforcesprotectentrenchedvestedintereststhat might incur losses if innovations were introduced, others are simply don't‐rock‐the‐boat kinds of forces.Technologicalcreativityneedstoovercometheseforces.”Mokyr(1990,p.11‐12)“…theprimerequirementofgrowthisintersectorialharmony:onesectorshouldnotbeallowedtoblockprogressbeingmadeinanother.”Braudel(1984,p.541)“…spreadofmodemeconomicgrowthhasdependedchieflyonthediffusionofabodyofknowledgeconcerningnewproductiontechniques.”Easterlin(1981,p.1)


Foremostquestionofmoderneconomichistory“Whythespreadofeconomicgrowthhasbeensolimited:whyisn'tthewholeworlddeveloped?Beyondthis,thereisthequestionofthefuture:willthewholeworldbecomedeveloped?Ifso,howsoon?”Easterlin(1981,p.2)“The historical experience of the advanced economies and that of Asian countries such as South Korea indicates thatdevelopmententails a shift fromdependenceonagricultural activities (especially on farming) into relianceonmodernindustrialandservicesectors.Thisshiftisreferredtoasstructuraltransformationandiswhatleadstofastandsustainedgrowth. Inotherwords,becomingadevelopedcountryrequiresachievingsustainedgrowth foraperiodofdecades. Ingeneral,theonlywaytodothisisthroughsignificantstructuraltransformation.”Felipeetal(2013,p.792)Structuraltransformation“…structuraltransformationistheprocessbywhichcountrieschangewhattheyproduceandhowtheydoit,aswellashow theymove from low‐productivity and low‐wageactivities to high‐productivity andhigh‐wageactivities. Structuraltransformationhasthreecomponents:(i)shiftsintheoutputstructure,fromactivitiesofrelativelylowproductivityintohigh‐productivity activities; (ii) shifts in the employment structure, typically a decline in the share of employment inagriculture;and(iii)upgradinganddiversificationoftheproductionandexportbaskets.Itisnotobvioushowthisprocesshappens,exceptthatinallsuccessfulcasestherehasbeensomeformofgovernmentintervention.”Felipeetal(2013,pp.792‐793)ReferencesBraudel,Fernand(1984):Civilizationandcapitalism,15th‐18thcentury,VolumeIII:Theperspectiveoftheworld,Collins,London.Easterlin,RichardA.(1981):“WhyIsn'ttheWholeWorldDeveloped?”,TheJournalofEconomicHistory41(1),1‐19.Felipe,Jesus;UtsavKumar;NorioUsui;ArnelynAbdon(2013):“WhyhasChinasucceeded?Andwhyitwillcontinuetodoso”,CambridgeJournalofEconomics37,791‐818.Kay, John(2004):CultureandProsperity.TheTruthaboutMarkets:WhysomeNationsareRichbutmostRemainPoor,HarperBusiness,NewYork.Mokyr,Joel(1990):TheleverofrichesLin, JustinYifu(2014):TheQuestforProsperity:HowDevelopingEconomiesCanTakeOff,SecondPrintingwithaNewPreface,PrincetonUniversityPress,Princeton,NewJersey.


TheIndustriousRevolution“…intheseventeenthandeighteenthcenturies,andincreasingnumberofpeoplelinkedtogetherinfamilyunitsworkedharderandlongernotonlytokeepbodyandsoultogether,butincreasinglytogetthingstheywantedfortheirownuseorconsumption.This intensificationofhumanendeavorhas beentermedthe "industriousrevolution"byJanDeVries.Heargues that households "made decisions that increased both the supply of marketed commodities and labor and thedemandforgoodsofferedinthemarketplace."Twofactorsmadethispossible:areductionofleisuretime—onthepartofmen,women,andchildren—infavorofwagelabor;andashiftfromproducingawidevarietyofgoodsandservicesfordirectconsumptiontopurchasingmarketedgoods.Thislatterswitchimpliedgreaterspecializationandhelpedtoincreaseproductivity.”Horn(1997,pp.13‐14)“Whatcausedthiswillingnesstoworkharderandlonger?Bothcontemporariesandhistorianspointtotheemergenceofaseemingly insatiable consumer demand for luxury goods and colonial commodities that affectedmost of northwesternEurope. Although the passion for fashion was noticeable mostly among the elite and the growingmiddle classes ‐thedemandfornewconsumergoodsalsoextendedtothelaboringclasses.”Horn(1997,p.14)ReferenceHorn,Jeff(2007):TheIndustrialRevolution,GreenwoodPress,Westport,Connecticut.


Developmenttraps“Development trapshavebecomea fashionableareaofacademicdispute,witha fairlypredictableright‐leftdivide.Theright tends to deny the existence of development traps, asserting that any country adopting good policieswill escapepoverty.Thelefttendstoseeglobalcapitalismasinherentlygeneratingapovertytrap.”Collier(2007,p.5)“Thisbookisaboutfourtrapsthathavereceivedlessattention:theconflicttrap,thenaturalresourcestrap,thetrapofbeinglandlockedwithbadneighbors,andthetrapofbadgovernanceinasmallcountry.”Collier(2007,p.5)“…theglobalmarketisnowfarmorehostiletonewentrantsthanitwasinthe1980s.WhenMauritiusescapedthetrapsinthe1980sitrocketedtomiddle‐incomelevels;whenneighboringMadagascarfinallyescapedthetrapstwodecadeslater,therewasnorocket.”Collier(2007)Thepoorestcountriesaredivergingfromtherest“Duringthe1970sthebottombilliondivergedingrowthfromtherestofthedevelopingworldby2percentayear.Soeventhen the main feature of the societies in the bottom billion was divergence, not development. But the situation soonbecame alarminglyworse.During the 1980s the divergence accelerated to 4.4 percent a year, and during the 1990s itacceleratedfurthertoanastonishing5percentayear.Takingthethreedecadesasawhole,theexperienceofthesocietiesinthebottombillionwasthusoneofmassiveandacceleratingdivergence.”Collier(2007)China’strap“Chinaaround1800wasmoreorlesscaughtintwocomplementarytraps(…)thelow‐levelproductivityequilibriumandthepre‐modernhigh‐leveltechnologicalequilibrium.”Elvin(1988,pp.104‐105)

Low‐levelproductivityequilibriumtrapinChina,Elvin(1988,p.104)Lownessoftheproductivityoflabourspreadsthroughtherestofthesysteminaself‐reinforcingfashion

ReferencesCollier,Paul(2007):TheBottomBillion:WhythePoorestCountriesareFailingandWhatCanBeDoneAboutItElvin,Mark(1988):Chinaasacounterfactual,inJeanBaechler,JohnA.Hall,andMichaelMann;eds.:Europeandtheriseofcapitalism,Blackwell,Oxford,UK,pp.101‐112.


ThemythoftheEuropeanmiracle“Themyth of the Europeanmiracle is the doctrine that the rise of Europe resulted, essentially, from historical forcesgeneratedwithinEuropeitself;thatEurope’sriseaboveothercivilizations,intermsoflevelofdevelopmentorrateofdevelopment or both, began before the dawn of themodern era, before 1492; that the post‐1492modernization ofEuropecameaboutessentiallybecauseoftheworkingoutoftheseolderinternalforces,notbecauseoftheinflowingofwealthandinnovationsfromnon‐Europe;andthatthepost‐1492historyofthenon‐European(colonial)worldwasessentiallyanoutflowingofmodernizationfromEurope.”Blaut(1993,p.59)Reference[Colonizersmodeloftheworld]‐JamesMBlaut1993


TheWestandtheRest“…whatdistinguishedtheWestfromtheRest–themainspringsofglobalpower–weresixidentifiablynovelcomplexesofinstitutionsandassociatedideasandbehaviours.Forthesakeofsimplicity,Isummarizethemundersixheadings:1.Competition2.Science3.Propertyrights4.Medicine5.Theconsumersociety6.Theworkethic1.Competition–adecentralizationofbothpoliticalandeconomiclife,whichcreatedthelaunch‐padforbothnation‐statesandcapitalism.2. Science–awayof studying,understandingandultimately changing thenaturalworld,whichgave theWest (amongotherthings)amajormilitaryadvantageovertheRest.3.Propertyrights– theruleof lawasameansofprotectingprivateownersandpeacefullyresolvingdisputesbetweenthem,whichformedthebasisforthemoststableformofrepresentativegovernment.4.Medicine–abranchofsciencethatallowedamajorimprovementinhealthandlifeexpectancy,beginninginWesternsocieties,butalsointheircolonies.5.Theconsumersociety–amodeofmateriallivinginwhichtheproductionandpurchaseofclothingandotherconsumergoodsplayacentraleconomicrole,andwithoutwhichtheIndustrialRevolutionwouldhavebeenunsustainable.6.Theworkethic–amoralframeworkandmodeofactivityderivablefrom(amongothersources)ProtestantChristianity,whichprovidestheglueforthedynamicandpotentiallyunstablesocietycreatedbyapps1to5.”ReferenceFerguson,Niall(2011):Civilization:TheWestandtheRest,AllenLane


TheIndustrialRevolution“Explaining the technologicalbreakthroughsof theeighteenthcentury is, therefore, thekey toexplaining the IndustrialRevolution.”Allen(2009,p.1)“TheIndustrialRevolution, inshort,wasinventedinBritainintheeighteenthcenturybecauseitpaidto invent it there,while it would not have been profitable in other times and places. The prices that governed these profitabilityconsiderationsweretheresultofBritain’ssuccessintheglobaleconomyafter1500,sotheIndustrialRevolutioncanbeseenasthesequeltothatfirstphaseofglobalization.”Allen(2009,p.2)“Britain’ssuccessintheearlyIndustrialRevolutionwasbasedoninventingtechnologythatwastailoredtoitscircumstancesanduselesselsewhere.”Allen(2009,p.3)“ThustheIndustrialRevolutionowesitspedigreetoaseriesofprocessesthatbroughtaboutatransformationofsocialpropertyrelationsresultinginwidespreadmarketdependenceandmarketregulationoftheeconomy.Whilethisentireprocessinvolvedclassstruggleintheformofresistanceonthepartofdirectproducersseekingtoavoidlossofaccesstomeansofsubsistenceorlossofcontrolofthelabourprocess,andthusrequiredactivesuppressionofsuchresistanceonthepartofsurplusappropriators,thisemphasison‘active’or‘conscious’suppressionofresistanceshouldnotbetakentomeanthatlandlords,tenant‐farmersorstatepolicy‐makerswereawarethroughouttheprocess that the long‐term consequences of their actions would result in a capitalist society and an industrialrevolution.”Žmolek(2013,p.5)“…theworld’sfirstindustrialrevolutiondidnotcomeaboutastheresultoftheoperationofnaturalandimmutableeconomiclawsbutratherthroughaseriesofprocessesthatinvolvedconsciousdecisionsandactionsbysocialagentsengagedinalongtrainofstrugglesoverthepreservationofcustomarymodesofeconomicregulationversustheexpansionofmarketregulationoftheeconomyandthesubsumptionofsocialrelationstocapital.ThisseriesofprocessesbywhichpristinecapitalismandpristineindustrialisationfirstdevelopedinBritainwasprotractedandcomplex.”Žmolek(2013,p.793)“…theadoptionofcapitalistinstitutionsisapoliticaldecision,andnotonebasedupontheeconomicsofcosteffectiveness(…)Governmentshavetobewillingtodelegatepowertoeconomicactorswhileholdingthemaccountable,ataminimum,topaytaxes.”Scott(2011,p.603)“…animportantpartofthestoryoftheindustrialrevolutionishowthestatesoftheWest—throughtrade,conquest,andcolonization—wereabletoappropriatethe land, labor,andnaturalresourcesofotherpartsof theworldfortheirownbenefit.”Horn(1997,p.vii)“TheWestern countriesmay have come to dominate other parts of theworld, but domination for economic purposesbeganathome.GreatBritaincouldinitiateanindustrialrevolutionbecauseitsentrepreneurswereabletoenforceworkrhythms,laboringconditions,andwagescalesthatwouldhaveprovokedsocialrevolutioninallofitsclosestcompetitors.By transforming the relationship of the laboring classes to the industrial work process, British entrepreneurs, theirimitators,andtheircompetitorswereabletoearnphenomenalprofitsandgeneratewealthatanunprecedentedrate.”Horn(1997,p.vii)“thereasontheFirstIndustrialRevolutiontookplaceinBritainisbecausecapitalismfirstoriginatedinonlyonecountry:England.”Žmolek(2013,p.6)“Britain became the ‘workshop of the world’ because the superior economic might of its agrarian‐capitalisteconomyprovidedthenecessaryfinancialandmilitarystrengthnecessarytodefeatfirstHollandandthenFranceinaseriesofwarsfromthelateseventeenthandeighteenthcenturiesinordertoemergeasthepreeminentcommercialpowerintheworld.Attheverysametime,themanufacturingsectorofBritain’seconomywastransformedalongcapitalistlines,allowingforunprecedentedincreasesinproductivityandoutputofgoodsthatcouldbemarketedatthemostcompetitive prices in the colonies and world‐wide. Secondly, this ‘breakthrough’happened in the latterhalfof theeighteenthcenturybecausethesametermsoftradethatinthefirsthalfofthecenturyhadenabledagrariancapitalismtorespondtofallingpricesbyintensifyingproductionshiftedtofavourmanufacturinginwaysthatmadeinnovationand


theapplicationofmachinerytoproductionuniquelyprofitable.Thirdly,theIndustrialRevolutionwas‘ignited’anddidnot fizzle out, because just as self‐sustaininggrowthhadalreadybeenachievedin agriculture, the process ofcapitalist development inmanufacturingalso involvedself‐reinforcingmechanismsbaseduponthe conversiontoopenmarket competition. The application of state forcewas required, however, in order to suppress a long strugglecharacterisedbyepisodicviolencewagedbytraditionalcraftartisansseekingtopreservethecustomarymodeofproductionthatwasthebasisoftheirlivelihood,theirindependenceandtheirhonour.”Žmolek(2013,p.795‐796)“…theindustrialrevolutionwasatleasttwofold.Itwasarevolutionintheordinarysenseoftheword,bringingitsvisiblechangesinasequenceofshort‐termevents,yetitwasatthesametimealong‐termprocess,advancingwithdiscreetandsilentsteps,sometimesbarelydiscernibleatall.”Braudel(1984,p.538)“… the industrial revolution and its eventual use by the Europeans to achieve a position of dominance in the worldeconomycannotbeadequatelyexplainedonthebasisonlyoffactors“internal”toEurope,notevensupplementedbyitsaccumulation of capital extracted from its colonies.We need aworld economic accounting for and explanation of thisglobalprocess.”Frank(1998,p.37)“ThereisnowaywecanunderstandandaccountforwhathappenedinEuropeortheAmericaswithouttakingaccountofwhathappenedinAsiaandAfrica—andviceversa—norwhathappenedanywherewithoutidentifyingtheinfluencesthatemanatedfromeverywhere,thatisfromthestructureanddynamicofthewholeworld(system)itself.Inaword,weneedaholisticanalysistoexplainanypartofthesystem.”Frank(1998,p.37)“Theargumenthereisthattheupward“A”phasesinceabout1400ofsuchalongcyclereacheditsupperturningpointandgavewaytoasucceedinglong“B”phase,especiallyforthemorecentraleconomiesinAsiabetween1750and1800.(…)Thatlong“A”phaseofexpansionthatcametoanendinAsiainthelateeighteenthcenturyanditssubsequent(cyclical?)declineofferedthestillmarginalWest its first realopportunity to improve its relativeandabsolutepositionwithin theworldeconomyandsystem.OnlythencouldtheWestgoontoachievea(temporary?)periodofdominance.”Frank(1998,p.263)Importanceofknowledgeandvalues(theimmaterial)“Industrial development occurred first in Britain for reasons that had to do with science and culture, not simply orexclusivelywithrawmaterials,capitaldevelopment,cheaplabor,ortechnologicalinnovation.(…)Insomeplacesandnotinothersmentalshiftsledtoentrepreneurialactivityandtothemorerapidapplicationofpowertechnology.”Jacob(1997,p.2)ReferencesAllen,RobertC.(2009):TheBritishIndustrialRevolutioninGlobalPerspective,CambridgeUniversityPress,Cambridge,UK.Braudel,Fernand(1984):Civilizationandcapitalism,15th‐18thcentury,VolumeIII:Theperspectiveoftheworld,Collins,London.Frank,AndreGunter(1998):Re‐ORIENT:GlobaleconomyintheAsianage,UniversityofCaliforniaPress,Berkeley,CA.Horn,Jeff(2007):TheIndustrialRevolution,GreenwoodPress,Westport,Connecticut.Jacob,MargaretC.(1997):ScientificcultureandthemakingoftheindustrialWest,OxfordUniversityPress,NewYork.Žmolek, Michael Andrew (2013): Rethinking the Industrial Revolution. Five Centuries of Transition from Agrarian toIndustrialCapitalisminEngland,BRILL,Leiden,TheNetherlands.


TheWashingtonConsensus

TodaroandSmith,p.532


Thepursuitofexcellence“Excellenceexists,and it is time toacknowledgeandcelebrate themagnificent inequality thathasenabledsomeofourfellowhumanstohavesoenrichedthelivesoftherestofus.”Murray(2004,pp.449‐450)“Equality is a fine ideal, and should have an honored place. To have understood that each person is unique, that eachpersonmustbetreatedasanendandnotameans,thateachpersonshouldbefreetolivehislifeasheseesfit,solongasheaccordsothersthesamefreedom,thateachpersonshouldbeequalbeforethelawandisequalinGod’ssight,andtoincorporatetheseprinciplesintothegovernanceofnations—theseareamongthegreatestofallhumanaccomplishments.But equality has nothing to do with the abilities, persistence, zeal, and vision that produce excellence. Equality andexcellenceinhabitdifferentdomains,andallegiancetooneneednotcompetewithallegiancetotheother.Excellenceisnotsimplyamatterofopinion,thoughjudgmententersintoitsidentification.Excellencehasattributesthatcanbeidentified,evaluated,andcomparedacrossworks.”Murray(2004,p.450)“Thenatureofaccomplishment inagiven timeandplacecanbepredictedwith reasonableaccuracygiven informationabout that culture’s status with regard to the four dimensions of purpose, autonomy, organizing structure, andtranscendentalgoods.”Murray(2004,p.451)“A culture canproduce a streamof accomplishmentwhilebeing strongononly someof the fourdimensions.TheEastAsian,SouthAsian,andArabiccivilizationsareexamples.Allwereatadisadvantage(intermsofaccomplishmentintheartsandsciences)throughouttheirhistories,inthesensethatallwereculturesinwhichdutytrumpedvocation,familismtrumpedindividualism,andconsensustrumpeddebate.”Murray(2004,p.452)“Thelimitsfacingcivilizationswhereduty,family,andconsensusareprimaryvaluesdifferfortheartsandsciences.Inthearts,respectfortraditionmeansthatartisticstructuresarenotperiodicallyrebuiltfromscratch,butelaboratedslowlyandincrementally.Respectfortraditiondoesnotdiminishthetechnicalexcellenceoftheworkatitsbest,butitdoesmilitateagainstvarietyandinnovation.Inthesciences,theconstraintsaremoresevere.Thefuelofthescientificmethod—nonstopdebateandfiercecompetitiontoputthenextbrickoftheedificeinplace—seemstodemandindividualismontheWesternmodel. Improvements in the state of knowledge can be made without it, but individualism is valuable for achievingbreakthroughs.”Murray(2004,p.452)“The Aristotelian principle means that human beings with the potential for excellence will usually try to realize thatpotential,giventhechance.Buthowhardtheytry,andhowtheygoaboutit,aredecisivelyaffectedbyhowtheyseetheirplacesintheuniverseatoneextreme,andtheirplacesintheirownfamiliesandcommunitiesattheother.Cultureinturnaffects thesewaysof seeing, and indoing soaffects the likelihood that thepeoplewith the capacity for excellencewillachieveit.Ilabeltwoimportantwaysofseeingone’splaceintheworldpurposeandautonomy.”Murray(2004,p.391)“1PurposeOneof themostoverlookedaspectsofexcellence ishowmuchwork it takes. Famecancomeeasilyandovernight,butexcellenceisalmostalwaysaccompaniedbyacrushingworkload,pursuedwithsingle‐mindedintensity.Strenuouseffortoverlongperiodsoftimeisarepetitivethemeinthebiographiesofthegiants,sometimestakingonmythicproportions.”Murray(2004,p.392)“2‐AutonomyPurposereferstoaperson’sbeliefthatlifehasameaning.Autonomyreferstoaperson’sbeliefthatitisinhispowertofulfill that meaning through his own acts. Own acts is a crucial element, for the creative act is both audacious andindividualbynature.Thisisnotequivalenttosayingthatgreataccomplishmentalwaysoccursamongpeopleactingalone.Scientific knowledge is advanced by sharing ideas with colleagues, and there is the occasional example of a greatcollaborationinthearts.Butcreativityultimatelycomesdowntosmall,solitaryactsinwhichanindividualconceivesofsomethingnewandgives it a try,withoutknowing for surehow itwill turnout. Streamsof accomplishmentaremorecommonandmoreextensiveincultureswheredoingnewthingsandactingautonomouslyareencouragedthaninculturesthatdisapprove.”Murray(2004,pp.394‐395)“Thepropositionisthathighlyfamilisticculturesandonesthatreverethepastwilllimitbothautonomyandcreativityandhencewillbeonesinwhichstreamsofaccomplishmentareconstrained.”


Murray(2004,p.406)“Whatarethevariablesthathelpexplainwhatkindofworkisproducedinagiveneraandplace?ThetwovariablesIusearelabeledorganizingstructureandtranscendentalgoods.3‐OrganizingstructureByorganizingstructure,Imeantheframeworkfortheconductofscienceortheartsandthecriteriaaccordingtowhichasocietyevaluatesachievement.4‐TranscendentalgoodsAmajor stream of accomplishment in any domain requires awell articulated vision of, and use of, the transcendentalgoodsrelevanttothatdomain.”ReferenceMurray,Charles(2004):HumanAccomplishment:ThePursuitofExcellenceintheArtsandSciences800BCto1950


ThetwoEuropes“There is littleagreementaboutwhentheprocessofEuropeanmarket integrationbegan,abouttheextentof tradeandmarket integration at various points in earlymodernEurope, or about the comparative levels of economic integrationEuropehadreachedrelativetotherestoftheworld.”“Does market integration help to explain why it was Europe that led the economic development inthe world andindustrialisedfirst?Doesitgiveusaclueaboutwhy,withinEurope, itwasitsNorth‐westernpartthatspearheadedthe‘riseofEurope’?Factis:wedonotreallyknow.”“ItappearsthatphysicalgeographyisnotonlyanimportantdimensiontoaddtothehistoryofeconomicintegrationinEurope,butthatitisactuallythemostcharacteristicfeatureofgrainmarketsinearlymodernEurope.Mostvariationinprices across Europeis explained by the fact that price movements are similar within lowland Europe and withinlandlockedEurope.”

“Intheearlymodernperiod,lowlandEurope’smarketsclearlyextendedtomuchbiggergeographicalareas:co‐movementwasstrongerandshowscloseintegrationoverlongerdistancesthaninlandlockedEurope.Accordingly,pricedispersionismuchgreaterintheinterior,asarevolatilitylevels.Theeighteenthcenturythenbroughtaboutthebeginningoftheendoflowland Europe’s advantage, as market areas expanded substantially in the landlocked part, butonly modestly in thelowland parts. On a regional and interregional scale, both increasing correlation coefficients and converging pricessupportedthispictureofconvergence.Thegeneral levelof integrationwasstillhigherinlowlandEuropebytheturnofthenineteenth century, but thedifferencehadbeenmuch reduced. The secondquarterof thenineteenth century saw,however,areneweddivergencebetweenthetworegions,asinlowlandpartsintegrationinthisperiodclearlybrokeoutofthe pre‐modern ties, so that even very distant market were now connected, whileprices between them converged.Landlocked Europe had to await the construction of a dense railway network in the second half of the century toexperience the sameaccelerationof integration,which eventually resulted in the formationof apan‐Europeanmarket.Overall, the eighteenth and nineteenth centuries saw a convergence in terms of market integration between the twoEuropes.”


Cipolla(1993,p.184)

ReferenceCipolla,C.M.1993:BeforetheIndustrialRevolution:EuropeanSocietyandEconomy,1000–1700,3rdedition,Routledge,London.Studer,Roman(2009):DoesTradeExplainEurope’sRise?Geography,MarketSizeAndEconomicDevelopment,WorkingPapersNo.129/09,LondonSchoolofEconomics.


TypesofnationaleconomiesScavengers“Scavengers areparasitic economiesof thepredators.As such, their situation tends tobeprecariuos. Scavengersdifferaccordingtotheirsourceofsustenance. 1/ Conjunctures and crises. Scavengers of this type take advantage of the conflict between economies. Theirwealthcomesfromviolatinglawsandfromactingasblackandillegalmarkets(contraband,armstrade,smuggling) 2/ Criminal organizations. The economy is infiltration by criminal organizations. They accumulatemoney as aresultofconductingcriminalactivitiesandthemoneyisnextlaundered. 3/Services.Theyareexternalappendagesofaneconomywheredomestic lawcanbeby‐passed: freezones,offshorehavens,offshorebankingandtranshipmentports,taxshelters… 4/Aid.Economiesthatrelyonaid(handouts,soft loans,technicalassistance)comingfromexternaleconomies:donor economies,multilateral aid agencies andNGOs.Aiddependence is likely to turn into addiction andproductionactivitiestendtobereplacedbylobbyingandpoliticalmanoeuvring. 5/Marginalization. Economies that become stronglydependent on other economies because: those economiesabsorbmostoftradeofthemarginalizedeconomy;orthemarginalizedeconomyspecializesinafewproductsorservies;orisaminorpartner(orapotentialone)inregionalalliance;orisunderthedirectprotectionofapowefuleconomy. 6/ Copycat. The economy is based on piracy: copying and emulating commodities, processes, technologies,patents,designs,copyrightedmaterial,innovations…originallymadeordevelopedbyothers.Sucheconomiesprosperaslongastheycanprofitfromemulation:furtherinnovationsbytherestofeconomieslimitthelong‐runsustainabilityofacopycateconomy.Theyarealsoexposedtotheinternationalbusinesscycle,tradeuncertaintiesandretaliationbythoseeconomiesharmedbypiracy.”Predators“Predatorsareeconomiestakingaleadingrole.Thereareseveralsourcesofeconomicleadirship. 1/ Intellectual property. Some predators generate intellectual property by encouraging and developinginnovation. They obtain income from licensing and royalties. They stimulate globalization, but generally lack themanufacturing and marketing basis todevelopby themselves the industrialapplicationsof thegenerated intellectualproperty.

2/Industry.Thesepredatorsconstituteindustrialbasesthatmakeuseoftheintellectualpropertycreatedbythefirst type of predators. These economies add enough value to the intellectual property through adaptation tomarkets,imageandbrandcreation,designingandimplementingproductinoprocesses,demandcreation…

3/Consumption.Theseareconsumerorientedeconomiesbasedonintangibles(services,information,knowledge,advertising,entertainment,financialassets)orcommoditiesthatenhacedtheconsumer’swelfare(likepharmaceuticals).Theyfocusonfosteringandmaintainingmarkets.

4/Trade.Tradereconomiesprovidethechannelsofcirculationofcommoditiesandservices,specifically,physicaltransportation,telecommunications,andeducatedmanpower.Scavengereconomiesdependcruciallyonthegrowthoftradereconomies,whichcouldbeconsideredenginesofglobalizationandworldgrowth.”ReferenceVaknin,Sam(2003):AftertheRain:HowtheWestLosttheEast,2ndedition,NarcissusPublications,Skopje.


Theendofmalesupremacy“Recentbrainimagingstudiesshowthatapartofthebrainthathelpsproduceviolence,calledtheamygdala,islargerinmenthaninwomen.Also,thefrontalcortex frontallobes ,whichhelptoregulateimpulsescomingfromtheamygdala,isare more active inwomen.Mounting evidence supports the claim thatmale and female brains aredifferent inmanyspecies, including us, partly because of androgenizing masculinizing influences of testosterone on the anterior hypothalamus,amygdala,andotherpartsofthebraininvolvedinsexandviolence.”“Once,allofourancestorscouldreproducefromtheirownbodies;wewereallbasicallyfemale. … Whydidthoseself‐sufficientfemalesinventmales?Ithadtobeaverybigreason,sincetheywerebringinginawholenewcastofcharacterswhotookupspaceandatetheirfill,butcouldnotthemselvesrealizethegoalofevolution:creatingnewlife.”“Thebestanswerseemstobe:toescapebeingwipedoutbygerms.Whenyoumakenewlifeonyourown,youbasicallycloneyourself,andultimatelylotsofyouroffspringandrelativeshavethesamegenes.Thegermthatgetsoneofyougetsyou all. Createmales, and in due course there ismuchmore variation.Meanwhile, you export the fiercest part of thecompetition.Youdo the reproducing, hedoesn’t except forhis teensydonation , sohe canduke it outwith theothermalesandtheycanevolvefaster.ButitturnsoutyouhavecreatedasortofFrankensteinmonster,afteracertainpointhardtocontrol.”“…womenarenotequaltomen;theyaresuperiorinmanyways,andinmostwaysthatwillcountinthefuture.Itisnotjustamatterofcultureorupbringing,althoughbothplaytheirroles.It isamatterofbiologyandofthedomainsofourthoughts and feelings influenced by biology. It is because of chromosomes, genes, hormones, and nerve circuits … womencancarryonthebusinessofacomplexworldinwaysthataremorefocused,efficient,deliberate,andconstructivethan men’s, because women are not frequently distracted by impulses and moods that, sometimes indirectly, lead toinappropriate sexandunnecessaryviolence.Womenaremorereluctantparticipants inboth.And if theydohave tobedrawnintowars,thesewillbewarsofnecessity,notwarsofchoice,foundedonrationalconsiderations,notonaclashofegosescalatingoutofcontrol.”“Inadditiontowomen’ssuperiorityinjudgment,theirtrustworthiness,reliability,fairness,workingandplayingwellwithothers,relativefreedomfromdistractingsexualimpulses,andlowerlevelsofprejudice,bigotry,andviolencemakethembiologicallysuperior.Theylivelonger,havelowermortalityatallages,aremoreresistanttomostcategoriesofdisease,andaremuch less likely tosufferbraindisordersthat leadtodisruptiveandevendestructivebehavior.And,ofcourse,mostfundamentallytheyarecapableofproducingnewlifefromtheirownbodies.”Robustclaim:mendothegreatmajorityofkillingsineveryculture.“whenmen get together in groups that excludewomen, their higher average levels of these emotions produce a toxicdynamicthathaspoisonedthestreamofhistory.”“Thereisabirthdefectthatissurprisinglycommon,duetoachangeinakeypairofchromosomes.Inthenormalconditionthetwolookthesame,butinthisdisorderoneisshrunkenbeyondrecognition.Theresultisshortenedlifespan,highermortality at all ages, an inability to reproduce, premature hair loss, and brain defects variously resulting in attentiondeficit, hyperactivity, conduct disorder, hypersexuality, and an enormous excess of both outward and self‐directedaggression. The main physiological mechanism is androgen poisoning, although there may be others. I call it the X‐chromosomedeficiencysyndrome,andastunning49percentofthehumanspeciesisaffected.Itisalsocalledmaleness.”“… we can think of maleness as a syndrome, a chromosomal defect shared by 49 percent of humans. It does seriousdamage.Itquashesthebody’sabilitytocreatenewlife,causesexcessdeathatallages,shortenslife,increasestheriskofdiseasesrangingfromheartattacktoautism,andcausesphysicalviolence,amongothersymptoms.Mostofthisisduetoandrogentoxicity,mainlytestosteronepoisoning,althoughestrogendeprivationandotherhormonalglitchesplayarole.ButmostofitcanbetracedbacktotheY.”“Themammalianbodyplanisbasicallyfemale.IfyouhavejustoneX Turnersyndrome ,youwillnotbefertile,butyouwillotherwisebefemale,aslongasyouhavenoY.IfyouhavetwoormoreX’sbutalsoaY Klinefeltersyndrome ,youwillnotbecompletelytypical,butyouwillbebasicallymale.TherearerarecasesofinfertilityinwomenwhoarefoundtobeXYbutareinsensitivetoandrogensduetoanothergene.AndafewmenseemtobeXXunderthemicroscopebutarefoundto have the key Y genes accidentally attached to one of their X’s—something that can happen in a slightly awry celldivision.Otherwiseit’sfairtosay:thebodyplanisfemaleunlesstheYflipsitintomaleness”ReferenceKonner,Melvin 2015 :WomenAfterAll:Sex,Evolution,andtheEndofMaleSupremacy


Thedarksideofinstitutions“Distributionalconflictsprovideabetterexplanationthanefficiency for thecoreeconomic institutionsofpre‐industrialEurope:serfdom,thecommunity,thecraftguild,andthemerchantguild.Presumptionthataninstitutionisanefficientsolutiontoaneconomicproblem“…viewinginstitutionsasinvariablygoodsolutionstoeconomicproblemsistoooptimistic”“Theviewthat institutionsareefficientarisesfromtheideathatpeoplewillnotvoluntarilychoosemorecostlywaysoftransacting.”Ogilvie,Sheilagh(2007,p.656)Theefficiencyapproachtoinstitutions“Whatonemightcallthe‘strong’versionoftheefficiencyapproach—mostclearlyarticulatedbytheeconomistAlchian—holds that even ifpeople cannotactually identifywhich institutionsareefficient, anevolutionaryprocessofDarwinianselectionensuresthatonlythoseinstitutionssurvivethatareefficient.Thisimplacablyweedsoutlessefficientinstitutionsandensuresthatbetterwaysoforganizingeconomic lifegraduallyevolve.The ‘weak’versionof theefficiencyview,bycontrast, holds that institutions initially arise because they are efficient, but are then sometimes kept in beingbypathdependency long after changes in exogenous parameters render them inefficient. One problemwith both ‘strong’ and‘weak’versionsoftheefficiencyapproachisthattheyneveractuallydefinethehappystateof‘efficiency’createdbytheirfavouredinstitutions.”Ogilvie,Sheilagh(2007,p.656)“Afirstdesideratumforanytheoryof institutions istotakeintoaccountthe fact thatany institutiondoesmanythings.Efficiencyapproachesgenerally focusonasingleaspectofan institution in isolation.Eachmodelemphasizesaspecificactivity, and claims that the institution’s efficiency in that activity benefited the entire economy. But this ignores auniversalfeatureofinstitutions—peopleusethemformanypurposes.Mostofthewaysaninstitutionisusedwillaffectefficiency,whetherpositivelyornegatively.Moreover,its‘efficient’and‘inefficient’activitiesaregenerallynotseparable;aninstitutioncomesasapackage.”Ogilvie,Sheilagh(2007,p.668)“Anyusefuleconomictheoryofinstitutionsmustalsotakeintoaccountthefactthatinstitutionsoftenexcludepeoplefromtheirbenefits—orevenfromentirespheresofeconomicactivity.”Ogilvie,Sheilagh(2007,p.671)“A third desideratum for any theory of institutions is to recognize the importance of self‐sustaining institutionalframeworks. Efficiency approaches typically focus on one institution at a time: serfdom, the commune, the guild, theproperty rights system. But institutions do not exist in isolation. Can we really explain any given institution withoutlookingatthewiderframeworkofotherinstitutionssurroundingit?”Ogilvie,Sheilagh(2007,p.674)“Afinaldesideratumforanyeconomictheoryofinstitutionsistodojusticetotheinterplaybetweeninwardbeliefsandvaluesontheonehandandinstitutionalrulesontheother.”Ogilvie,Sheilagh(2007,p.675)“Typically,theinstitutionsofasocietyhavecoexistedforcenturies,continuallyevolvingadivisionofactivities,supportingoneanotherinallsortsofways.Thesewaysmaynotnecessarilybeefficient,buttheyareoftenself‐sustaining.Takingasolitary institution out of its original institutional framework (which may have helped to sustain it), and seeking totransplantitintoaquitedifferentframework(whichmayevenresistitsencroachment),isnotunlikelytofail.”ReferenceOgilvie, Sheilagh (2007): “‘Whatever is, is right’? Economic institutions in pre‐industrial Europe”, Economic HistoryReview60(4),649‐684.


China’sriseStylizedfactsofChina’srise(highoutputgrowthrates)highgrowthratesofcapitalaccumulation,drivenbyhighinvestment–outputratiosmarkedoutwardorientationthroughexport‐ledgrowthpoliciesthepursuitofindustrialisation(inparticulartheproductionandexportofmanufactures).China’smiracleisthatithasbeenabletosustainthisprocessforthreedecades.Felipeetal(2013,pp.791‐792)“ThekeyfactorunderlyingChina’sfastdevelopmentduringthelast50yearsisitsabilitytomasterandaccumulatenewandmore complex capabilities, reflected in the increase in diversification and sophistication of its export basket. Thisaccumulationwaspolicyinducedandnottheresultofthemarket,andbeganbefore1979.”Felipeetal(2013,p.791)“The evidence of history simply negates the long‐standingmyth, propagated since the eighteenth centuryprimarily byWesternersfrustratedbytheir inabilityto imposetheirwillonChina,ofChineseisolationandisolationism.Wellbeforethe advent of Europeans to East Asia, China was integrated into a wide‐ranging network of commercial, intellectual,religious,andculturalcontactsthatlinkeditwiththewholeofAsia,theeasternMediterranean,atleastthenorthernpartofAfrica,andperiodicallyevenlandsfartherafield.(…)Thisage‐oldexperienceofinternationalexchangebroughtChinatoakeenawarenessoftheperilsofunrestrainedinteractionwithotherswhomightnotshareitsvaluesandtraditions.”Waley‐Cohen(1999,p.283)ReferenceFelipe,Jesus;UtsavKumar;NorioUsui;ArnelynAbdon(2013):“WhyhasChinasucceeded?Andwhyitwillcontinuetodoso”,CambridgeJournalofEconomics37,791‐818.Waley‐Cohen,Joanna(1999):TheSextantsofBeijing:GlobalCurrentsinChineseHistory,W.W.Norton,NewYork.


Socioeconomiclaws?LarryNiven'slawsforwriters4.Itisasintowastethereader'stime.5.Ifyou'venothingtosay,sayitanywayyoulike.Stylisticinnovations,contortedstorylinesornone,exoticorgenderlesspronouns,internalinconsistencies,therecipeforpreparingyourloverasacannibalbanquet:feelfree.Ifwhatyouhavetosayisimportantand/ordifficulttofollow,usethesimplestlanguagepossible.Ifthereaderdoesn'tgetitthen,letitnotbeyourfault.FreedomandsecurityTheproductoffreedomandsecurityisaconstantEthicsandtechnologyEthicschangewithtechnologySufferingandboredomTheproductofsufferingandboredomisaconstantArthurC.Clarke’s3rdlawAnysufficientlyadvancedtechnologyisindistinguishablefrommagic.VariationsonClarke’sthirdAnytechnologydistinguishablefrommagicisinsufficientlyadvanced.(GregoryBenford’svariation)Anysufficientlyadvancedmagicisindistinguishablefromtechnology.(Clarke’sthirdlaw,addendum.)Anysufficientlyadvancedtechnologyisindistinguishablefromacompletelyad‐hocplotdevice.(‘Langfordslaw’)Anytechnology,regardlessofhowadvanced,willseemlikemagictothosewhodonotunderstandit.(MarkStanley,Freefall)http://www.gregorybenford.com/uncategorized/variations‐on‐clarkes‐third‐law/IsaacAsimov’slawsofrobotics(applicabletopeople)1.Arobotmaynotinjureahumanbeingor,throughinaction,allowahumanbeingtocometoharm.2.ArobotmustobeytheordersgivenitbyhumanbeingsexceptwheresuchorderswouldconflictwiththeFirstLaw.3.ArobotmustprotectitsownexistenceaslongassuchprotectiondoesnotconflictwiththeFirstorSecondLaws.(RoyCharles)Amara'sLawWetendtooverestimatetheeffectofatechnologyintheshortrunandunderestimatetheeffectinthelongrun.Gibrat'slawThesizeofafirmanditsgrowthrateareindependent(Charles)Goodhart'slawWhenameasurebecomesatarget,itceasestobeagoodmeasure.Hofstadter'slawItalwaystakeslongerthanyouexpect,evenwhenyoutakeintoaccountHofstadter'sLaw.(Patrick)Hutber'slawImprovementmeansdeterioration(foundedonthecynicalobservationthatastatedimprovementactuallyhidesadeterioration:anypublicexpressionofimprovementissuspectonthegroundsthatimprovementisonlytoutedwhenitcanservetoconcealsomeformofdeterioration)MelvinKranzberg'ssixlawsoftechnologystate1.Technologyisneithergoodnorbad;norisitneutral.2.Inventionisthemotherofnecessity.3.Technologycomesinpackages,bigandsmall.4.Althoughtechnologymightbeaprimeelementinmanypublicissues,nontechnicalfactorstakeprecedenceintechnology‐policydecisions.5.Allhistoryisrelevant,butthehistoryoftechnologyisthemostrelevant.6.Technologyisaveryhumanactivity‐andsoisthehistoryoftechnologyhttps://en.wikipedia.org/wiki/Melvin_Kranzberg#Kranzberg.27s_laws_of_technology(GeorgeArmitage)Miller'slaw(incommunication)Tounderstandwhatanotherpersonissaying,youmustassumethatitistrueandtrytoimaginewhatitcouldbetrueof


(George)Miller’slaw(inpsychology)ThenumberofobjectsanaveragepersoncanholdinworkingmemoryisaboutsevenEditorialequivalentofMurphy'slaw,accordingtoJohnBangsundIfyouwriteanythingcriticizingeditingorproofreading,therewillbeafaultofsomekindinwhatyouhavewrittenOccam'srazorWxplanationsshouldnevermultiplycauseswithoutnecessity(Entianonsuntmultiplicandapraeternecessitatem)LeslieOrgel'srules(inevolutionarybiology)1.Wheneveraspontaneousprocessistooslowortooinefficientaproteinwillevolvetospeeditupormakeitmoreefficient.2.Evolutionisclevererthanyouare.Papert'sprincipleSomeofthemostcrucialstepsinmentalgrowtharebasednotsimplyonacquiringnewskills,butonacquiringnewadministrativewaystousewhatonealreadyknows(Vilfredo)ParetoprincipleFormanyphenomena80%ofconsequencesstemfrom20%ofthecauses(Northcote)Parkinson'slawWorkexpandstofillthetimeavailableforitscompletion(Corollary:Expenditurerisestomeetincome.)PeterprincipleInahierarchy,everyemployeetendstorisetohislevelofincompetenceRothbard'slawEveryonespecializesinhisownareaofweakness(Clay)ShirkyprincipleInstitutionswilltrytopreservetheproblemtowhichtheyarethesolutionStigler'slawNoscientificdiscoveryisnamedafteritsoriginaldiscoverer.(NamedbystatisticianStephenStiglerwhoattributesittosociologistRobertK.Merton,makingthelawself‐referential.)StreisandeffectThephenomenonwherebyanattempttohide,remove,orcensorapieceofinformationhastheunintendedconsequenceofpublicizingtheinformationmorewidely,usuallyfacilitatedbytheInternet.Sturgeon'slawNinetypercentofeverythingiscrudThomastheoremIfmendefinesituationsasreal,theyarerealintheirconsequences(PetrusJohannes)Verdoorn'slawFastergrowthinoutputincreasesproductivityduetoincreasingreturns(OsmoAntero)Wiio'slaws(humoristicallyformulatedseriousobservationsabouthumancommunication)Communicationusuallyfails,exceptbyaccident.Ifcommunicationcanfail,itwill.Ifcommunicationcannotfail,itstillmostusuallyfails.Ifcommunicationseemstosucceedintheintendedway,there'samisunderstanding.Ifyouarecontentwithyourmessage,communicationcertainlyfails.Ifamessagecanbeinterpretedinseveralways,itwillbeinterpretedinamannerthatmaximizesthedamage.Thereisalwayssomeonewhoknowsbetterthanyouwhatyoumeantwithyourmessage.Themorewecommunicate,theworsecommunicationsucceeds.Themorewecommunicate,thefastermisunderstandingspropagate.Inmasscommunication,theimportantthingisnothowthingsarebuthowtheyseemtobe.Theimportanceofanewsitemisinverselyproportionaltothesquareofthedistance.


Themoreimportantthesituationis,themoreprobablyyouforgetanessentialthingthatyourememberedamomentago.InvisiblelawofthemarketThemarketismorestupidthaneverybodythinks


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The 100 most influential persons in history according to ...gandalf.fee.urv.cat/professors/AntonioQuesada/Curs1819/XXX.pdf · The most influential man in history? Norman Borlaug: