The title of Gregory Clark’s ambitious work of economic history, A Farewell to Alms: A Brief Economic History of the World, may be a little misleading for its potential readers. Those seeking a short chronological account of the world economy will not find it here. Instead, Clark’s goal is to account for the transformation of economies that began about the year 1800 and to explain how this transformation resulted in contemporary inequalities in development among the nations of the world.
Before 1800, according to Clark, incomes and standards of living varied across historical periods, geographic locations, and social classes, but there was no general upward movement. Greater social differentiation may have made lives better for the rich and worse for the poor. Sometimes, a relatively more equal distribution of income may have led to better situations for the least advantaged. The average standard of living, though, remained the same from prehistory to the beginning of the modern era. Clark argues that the reason for this long economic stagnation was the Malthusian trap.
In 1798, Thomas Robert Malthus published a book on population in which he argued that human populations have a tendency to expand to the point at which their environments will no longer support them. When more food becomes available, the population will simply increase to consume the surplus. Under such a situation, there is no improvement of the overall economic situation because any expansion of the amount of food or other goods produced creates more people. When the population reaches the maximum that an environment will support, the population begins to decline again and cut back production. This account is basically a classical economist’s view of population, in which population obeys the laws of supply and demand. The account of Malthus was also an influence, some decades later, on the biological thinking of one of his relatives, Charles Darwin, who saw the supply of food in environments as shaping the characteristics, as well as the sizes, of living populations. The Darwin connection is also important to Clark’s book, because Clark suggests that population change, through a type of Darwinian selection, may have been the way out of the Malthusian trap.
In part 1 of the book, Clark provides an examination of life during the period of the Malthusian trap before 1800. Using an impressive amount and variety of historical statistical information, he sketches out an image of living standards, fertility, and life expectancy around the world during the long preindustrial stage of human life. One of his targets for accounting for the long economic standstill is the institutional argument. According to the institutional view, the modern market economies that create industrialization developed only after institutions such as stable governments and financial arrangements came into existence to make working, saving, and investing worthwhile. Clark offers evidence that European societies, most notably England, had all of the institutions considered necessary for a market economy by the year 1200. So why did it take so long for markets to spur investments and innovations?
Clark maintains that in the millennia following the creation of settled agrarian society with the Neolithic Revolution, humanity gradually changed its culture and its genetic composition in response to a new environment that required steady work at daily routines. This created habits of industriousness that Clark suggests may have been rooted in biology. The Industrial Revolution began in Europe, and more specifically in England, as a result of a social environment that promoted the spread of a particular kind of industriousness. Clark gives data that show that higher-income men in England on the eve of modernity had more children than lower-income men. Since wealth predicted reproductive success, the environment selected those with the disposition to accumulate wealth. Even as the relatively numerous children of successful men moved downward on the social scale, they carried this disposition with them into the lower social classes. As a result, more of the population at all levels became thrifty, hardworking, and prudent. Essentially, Clark maintains, modern human beings emerged when the traits often identified as bourgeois or middle class became common traits among large portions of the population.
With the emergence of these modern human beings, interest rates began to go down. It was not the availability of banks or political stability that lowered the preference for immediate enjoyment...
(The entire section is 1875 words.)