------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (March 2008)

Gregory Clark, _A Farewell to Alms: A Brief Economic History of the 
World_. Princeton, NJ: Princeton University Press, 2007. xii + 420 
pp. $30 (cloth), ISBN: 978-0-691-12135-2.

Reviewed for EH.NET by Robert A. Margo, Department of Economics, 
Boston University.


"Big Think" refers to the genre of economic history that asks The Big 
Question. Why England and not China? Do institutions "matter" or is 
it something else, or many things? Why is the United States rich and 
Bolivia poor?

Reviewers should be upfront about their ex ante biases. Here is one 
of mine: I do not care for Big Think. The Big Question per se is not 
the problem -- in economics, there is nothing more important. For me, 
the problem with Big Think is that it is inherently Too Big. One 
cannot hope to answer The Big Question by tackling it head on. One 
must break The Big Question into a great many very tiny precisely 
posed questions, and get the answers to them right. In economic 
history we are still _very_ far from completing this task even for a 
country whose economic history is as well-worn as the United States. 
Big Think is a Big Distraction from our true purpose in life.

Personal tastes notwithstanding, I do teach (or at least try to 
teach) Big Think to my graduate students. I do so because I teach to 
the market, not what I like or dislike. Each part of the economics 
world needs a reason to live and the market seems to be saying that 
it wants economic historians, at least some of the time, to Think 
Big. To some extent the market is a reflection of supply. As economic 
historians age, they need something to work on other than university 
promotion and tenure committees. Big Think is attractive as it seems, 
well, Big and, most importantly, can be practiced successfully 
without paying much attention to the latest advances in formal theory 
or econometrics, or for that matter, _any_ theory or econometrics. 
This is not a life-cycle career path open to, say, labor economists 
doing structural estimation or freshwater macroeconomists. Economic 
history may also self-select individuals who derive utility from 
talking about the fate of man and assorted related conundrums. 
However, demand also plays its part. Some of this demand comes from 
pundits who are angry because they feel that today's economics is too 
mathematical or not focused enough on the "real world." Other 
interest in Big Think is genuine in the sense that it derives from a 
public that routinely sees physicists contemplate the Big Bang or 
biologists the Mystery of Life (Evolution) and would like economists 
to behave similarly. Surely economic history has something to tell us 
about The Big Question -- which brings me to the task at hand.

One day last summer I got up very early, played the lute for a while, 
made breakfast, and then read the _New York Times_ online. There, in 
the "Science" section, was a big article on Greg Clark's new book.

At the time I was, and still am, genuinely pleased for Greg. Economic 
historians are underserved by the popular media, and we should cheer 
when one of our own is so celebrated. Greg is disciplined, hard 
working and highly productive, not afraid of big data sets or getting 
his hands dirty. Many of his articles appear on graduate reading 
lists, one barometer of their net worth. He is an excellent citizen 
of the profession and of his university. (Clark is Professor of 
Economics (and Chair) at the University of California, Davis.) Not 
long ago I attended a seminar of Clark's at the Harvard Economic 
History Workshop. The paper was about total factor productivity 
growth in England during the Industrial Revolution His talk bogged 
down early as several in the assembled multitude asked Greg many Big 
Questions. I sat in the back of the room, dozing off periodically (a 
hazard on Friday afternoons) but woke up sufficiently in time to 
raise my hand at an appropriate juncture. I pointed out that the 
total factor productivity (TFP) series in Clark's paper, if taken 
seriously, would appear to render irrelevant much previous work on 
the Industrial Revolution, including work by some of the people in 
the room. The conversation, therefore, should be about whether my 
reading was correct and, if so, we should believe his new series, the 
key issue being that it is based on the dual (prices) rather than 
quantities. For the next few minutes the conversation did grapple a 
bit with this issue but soon returned to Big and I went back to 
day-dreaming. I think, however, it was the right conversation to have 
at the time, and still do (see below).

So, what's in the book and how do I feel having read it? First things 
first, I dislike the title. It's the sort of title that draws groans 
from the humanists for good reason. I wish Princeton's editor has 
exercised more discretion, not the only time I felt this way (see 
below).

_A Farewell to Alms_ is divided into eighteen chapters organized in 
three Parts, a technical appendix that reviews the basics of growth 
accounting, and a bibliography. The Introduction provocatively begins 
with Figure 1.1, "World economic history in one picture: Incomes rose 
sharply in many countries after 1800 but declined in others", 
self-explanatory. This will be a book about the (very) long run 
persistence of the Malthusian economy before its abrupt demise, in 
some countries, with the Industrial Revolution (IR), followed by 
ever-widening gaps in living standards between rich and poor. It will 
also be a book (p. 8), however, about how the long "pre-industrial 
era was shaping people, at least culturally and perhaps also 
genetically," by which Clark means the development in the West of key 
behaviors, especially patience. The Great Divergence happened because 
the post-revolutionary industrial technologies of the West are 
designed to be complementary with hard work; appearances perhaps to 
the contrary, Clark believes that people in poor countries don't 
really work very hard. In the final analysis, though, none of this 
matters because, as Richard Easterlin has told us many times, money 
doesn't buy (absolute) happiness.

Part I of the book consists of seven chapters that comprise a long 
meditation on Malthus. The basics of the Malthusian model are set 
forth in Figures 2.1 through 2.5. Land is fixed in supply and subject 
to diminishing returns. The problem is not that there were no 
improvements in technology prior to the IR. The problem is that such 
improvements were just too sporadic and limited. Consequently, as the 
saying goes, life was nasty, brutish, and short. And if we were to 
imagine a sudden pre-IR improvement in institutions, this wouldn't 
matter either -- in fact, welfare would decline, if good institutions 
somehow promoted higher population growth. To get sustained economic 
growth we need sustained TFP growth. The remaining chapters elaborate 
on these themes, focusing on living standards (chapter three), 
fertility behavior (chapter four), mortality (chapter five), 
technology (chapter seven), and institutions (chapter eight). The 
most interesting material is in chapters six and nine. Chapter six 
presents evidence drawn from wills that shows a positive correlation 
between reproductive success (how many children men fathered) and 
wealth at death. To the extent that the wealth itself was created 
though patience and hard work -- "middle class' values -- the 
behaviors could be (and Clark believes were) passed on from one 
generation to the next, just waiting to take advantage of sustained 
improvements in technology if such ever arrived. Chapter nine 
presents disparate evidence on the "rise" of "modern man": long-term 
reductions in real interest rates, greater awareness of "time" 
because of increases in literacy and understanding of numbers, and an 
increased willingness to work more intensely and for longer hours.

Part II, made up of five chapters, is about the Industrial Revolution 
proper. Chapter ten argues the IR represented a fundamental break 
with the past in terms of TFP growth not capital accumulation. 
Chapter eleven briefly considers, and rejects, various theories as to 
why the discontinuity in TFP growth occurred: institutions, multiple 
equilibrium (the pre-IR was caught up in a bad one), scale economies 
or endogenous growth. Chapter twelve suggests that the discontinuity 
may be more apparent than real, the confluence of a much longer 
process of innovation (with long lags in the effects of innovations 
on the real economy) coupled with (according to Clark) unrelated 
population growth. Chapter thirteen asks why England and not China 
(or India or Japan). Clark answers by saying that China et al had 
even faster population growth (more Malthus) and less reproductive 
success among the wealthy, hence less diffusion of the behaviors that 
Clarks sees as the key to modern economic growth.

Part III, the shortest, is made up of three chapters. Chapter 
fourteen restates the well-known (to economic historians and 
development economists at least) fact that per capita incomes have 
diverged since at least the dawning of the industrial revolution. Of 
course whether they will continue to do so in the next two centuries 
remains to be seen; my guess is "not." Chapter fifteen asks why the 
IR didn't spread everywhere. Clark's answer is that in poor countries 
lots of workers get assigned to foreign machines with little or no 
gain in efficiency. Chapter sixteen burrows into the reason for the 
inefficiency: the capital (and technology) that was (and is) imported 
into poor places is complementary to the sort of behaviors -- 
"industriousness" -- that took a long time to develop in the West and 
which are in short supply elsewhere. Chapter eighteen concludes with 
a few zingers levied at the alleged irrelevance of modern economics 
along with musings about the failure of the IR to spread happiness 
around the globe and on the West's "biological" inheritance from the 
IR -- perpetual discontent.

_A Farewell to Alms_ is a mixed bag. Like peacocks Big Thinkers are 
expected to strut their stuff and without question Clark has stuff to 
strut. His knowledge of the economic history and related social 
science literature is encyclopedic -- in particular, I learned a 
considerable amount about what anthropologists have been doing of 
potential relevance to economic history. The writing style is 
engaging, moves along at a brisk pace, and when occasion demands, 
suitably humorous. The book truly does summarize into a coherent 
whole a gargantuan, disparate and influential opus. As such, it is an 
effective window on Clark's world, especially for those who lack the 
time (or knowledge) to dissect his many working papers and journal 
articles. As previously noted, these working papers and articles are 
based on seriously hard work over a long period of time with primary 
sources and are worthy of the highest professional respect.

Taken as a whole, however, _A Farewell to Alms_ doesn't do it for me. 
One key reason is the tone: it is too argumentative. Clark goes out 
of his way, and then some, to differentiate his product and attack 
his rivals (see, for example, the first full paragraph on p. 147 and 
the corresponding footnote on Avner Grief). He is particularly 
scornful of those who would attribute long-run economic success to 
secure rights to private property, arguing that all the relevant 
institutions were in place in England long before the IR. The second 
paragraph on p. 372 declares that, in today's world, the "deluge of 
economics journal articles ... serves more to obscure than to 
illuminate" and "booming demand ... has driven up the salaries of 
even academic economists to unprecedented levels" -- except, 
according to footnote 2 on the same page, at "the University of 
California, Davis" which "seems to be the sole exception to this 
salary inflation." For my entire working life (and I am sure, longer 
than that) there has been an undercurrent of hostility in the 
economic history world towards formal economics. The hostility is 
based on its alleged irrelevance to history, but its real source is 
probably envy. I am sorry to see Clark give in to this tendency (to 
be charitable, perhaps this is part of his marketing plan).

I recently had occasion to re-read Robert Fogel's presidential 
address to the Economic History Association, which was a response to 
his many and varied critics on the social savings of the railroad. 
Even when his critics were at their nastiest Fogel was always 
gracious in battle, praising the criticisms as empirically or 
theoretically valuable even while he was hard at work demolishing 
them. Personally, I think it very unlikely that any single story can 
explain the wealth of nations. It is much more likely, it seems to 
me, that Acemoglu, Engerman, Epstein, Galor, Goldstone, Grief, Jones, 
Kremer, Lucas, McCloskey, Mokyr, North, Pomeranz, Sokoloff, Thomas 
and many others, along with Clark, are _all_ correct, to some extent. 
 From the other angle, I find it strange to think that any economic 
historian would dispute seriously the notion that the sort of 
behaviors Clark emphasizes -- or more generally, "culture" -- were 
present as causal factors in the IR. The real question, as always, is 
how much.

As for the real question, I think Clark enjoys going where no man has 
gone before and, therefore, beyond -- sometimes well beyond -- what 
the evidence may actually support. Chapter six, as noted, gives us 
some data from wills linking wealth positively to reproductive 
success. Even taken on face value, should I trust these data? Why or 
why not? Even if I believe the data to be trustworthy, how do I know 
I am observing a causal link between "good" behaviors (for example, 
patience) that, in the best of circumstances (and these are far from 
the best) are barely, if at all, observable to the econometrician? 
What, precisely, are the mechanisms that allow good behaviors to be 
transmitted across generations? Don't institutions of one type or 
other play a role? Well, you could say to me, read the paper. Except 
I did happen to go to a seminar not too long ago on this work -- and 
I didn't think the questions were answered satisfactorily there, 
either. I'm not cherry-picking; almost every chapter has something 
like this.

So, in the end, should you read _A Farewell to Alms_? If you are into 
Big Think as a consumer or producer, the answer is a definite "yes" 
-- especially if you are a producer (trust me, you will need to 
prepare a response to Clark, if you haven't already). Even if, in the 
end, you are like me -- you don't care for Big Think but you have 
graduate students to worry about -- the answer is still "yes". Just 
make sure that your students realize that the scholarly behaviors 
they should be emulating are the virtues -- patience, hard work and 
discipline -- that produced the articles underlying this book in the 
first place.


Robert A. Margo is Professor of Economics and of African-American 
Studies at Boston University and Research Associate, National Bureau 
of Economic Research. He is also the editor of _Explorations in 
Economic History_ (until July 2008).

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