Capitalism and Progress – Part 2
The fruits of the Industrial Revolution.
In the previous essay in this series, we explored how the Black Death paved the way for freer markets and the Industrial Revolution. The results of that Industrial Revolution are the subject of this essay.
Since the end of the feudal era in the Middle Ages, the Industrial Revolution has made the world much more economically rich and equal.
According to Brookings Institution scholar Homi Khara, “There was almost no middle class before the Industrial Revolution began in the 1830s … It was just royalty and peasants. Now we are about to have a majority middle-class world,” meaning a majority of people who have enough money to cover basics needs, such as food, clothing and shelter, and still have enough left over for a few luxuries, such as fancy food, a television, a motorbike, home improvements or higher education.
In the United States, the middle class is shrinking, but only because more middle class people are becoming higher-income.
Since the Industrial Revolution, life expectancy has skyrocketed.
For thousands of years, the world population and GDP per capita remained essentially flat. And then it took off after the Industrial Revolution.
As Steven Pinker points out, gross domestic product “correlates with every indicator of human flourishing” including longevity, health, nutrition, peace, freedom, human rights, tolerance, and even self-reported happiness levels.”
As Dierdre McCloskey has written in Leave Me Alone and I'll Make You Rich: How the Bourgeois Deal Enriched the World:
Our ancestors … lived on about $3 a day, expressed in US dollars at 2008 prices. The poorest places were down at $1 a day, the richest as an average in 1800, up at a still pathetic $6. Now the two billion or so people in the very high-income nations earn more like $80 to $150 a day. They are on the sharply rising blade of a hockey stick of the Great Enrichment, after three hundred thousand years bumping along the $3 a day of the handle … The great magnitude of the increase is not at all in scientific doubt, ranging from 1,000 to 10,000 percent over the pathetic base, depending on where one measures it or with what technical adjustments for quality improvement. The Nobel laureate in economics William Nordhaus notes that the conventional magnitudes are greatly understated precisely because the quality of goods and services has improved: “If we are to obtain accurate estimates of the growth of real incomes over the last century, we must somehow construct price indexes that account for the vast changes in the quality and range of goods and services that we consume, that somehow compare the services of horse with automobile, of Pony Express with facsimile machine [facsimile machine—how quaint!], of carbon paper with photocopier, of dark and lonely nights with nights spent watching television, and of brain surgery with magnetic resonance imaging.” The world’s daily bread, along with clothing and shelter and entertainment and lighting and dentistry and air conditioning, has increased by a factor of easily ten globally, and much more, thirty to one hundred times, in the high-income nations.
As economic historian Joel Mokyr has written:
The most dramatic transformation of capitalism, which definitely qualifies as a transition from capitalism 1.0 to 2.0 occurred during the Industrial Revolution. Before 1750, roughly speaking, capitalist entrepreneurs made money primarily by exploiting commercial opportunities (buying low and selling high) and by taking advantage of underexploited resources. The Industrial Revolution opened a different window: technical innovation. In this new form of capitalism, entrepreneurs could make profits by venturing into something that had never been done before. They did so by taking advantage of the growth of useful knowledge, whether driven by the progress of science or by the sheer ingenuity of clever inventors. Technology, rather than finance or international trade, became the primum movens of capitalism. Economists as different as Karl Marx and Joseph Schumpeter realized that industrial capitalism was different from commercial capitalism (though the two forms complemented each other nicely). The industrial economy could expand indefinitely as long as technology could keep expanding.
While some argue that innovators should sacrifice profits for shareholders in exchange for some largely undefined but politicized “greater good,” Nobel Prize-winning economist William Nordhaus showed that innovators already capture only a minuscule fraction of the benefits of their innovations, the vast majority of which is passed on to consumers. As Andy Kessler notes:
In a 2005 paper, Yale economist William Nordhaus concludes, “Only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers.” This is what Friedman was saying implicitly when he called for corporations to maximize profits: It would maximize value to society at large. Mr. Nordhaus quantified that value in a 2006 paper for the National Bureau of Economic Research: “Innovators were able to capture about 4 percent of the total social surplus from innovation.” The social surplus Mr. Nordhaus identifies is the improvements capitalism brings to common living standards. That is societal wealth. Yes, entrepreneurs and innovators generate wealth for themselves, but not as much as they do for society. If that’s not socially responsible, I don’t know what is. Mr. Nordhaus should have won his Nobel for this, but it was his work on “integrating climate change into long-run macroeconomic analysis” that caught the committee’s eye in 2018. Sigh. The flip side is that for every dollar government removes from profitable uses through taxes or regulation, it theoretically takes 25 times that amount from compounding social wealth. Each lost dollar reduces investment and potential productivity, and instead goes to whoever public policies favor. Same for environmental, social and governance investing, where distortions diminish returns, just as federal car mileage standards and union overpay destroyed Detroit.
Indeed, leading Enlightenment observer Voltaire gave this classic description of the prime virtues of free markets in his observations on the London Stock Exchange:
Enter into the Royal Exchange of London, a place more respectable than many courts, in which deputies from all nations assemble for the advantage of mankind. There the Jew, the Mahometan, and the Christian bargain with one another as if they were of the same religion, and bestow the name of infidel on bankrupts only … Was there in London but one religion, despotism might be apprehended; if two only, they would seek to cut each other’s throats; but as there are at least thirty, they live together in peace and happiness.
This view became the bedrock Enlightenment view on the benefits of free markets, which led to the Industrial Revolution and historically unprecedented increases in human well-being. What Voltaire’s getting at here, of course, is that only when the focus is on profits can people agree to disagree on everything else, and go about the business of making things that materially improve everyone’s lives without the distraction of politics. Efforts to require corporations to focus on things other than profits is fundamentally anti-Enlightenment insofar as it takes one’s eyes off the ball of profits, and threatens to embroil business in the affairs of politics -- producing the exact opposite of the result Voltaire and other Enlightenment thinkers saw as so wonderful, namely the lifting of Europe out of the destructive identity politics of the day, which in turn lifted the well-being of Europeans generally.
The Founding Fathers supported free market dynamism.
From 1860 to 1900, worker real wages rose 50 percent and workers could spend those wages on a much larger variety of cheaper goods and services, as well as cheaper, more plentiful, and a healthier variety of foods. Life expectancy also rose from 38.3 years for white men in 1850 to 50 years of age by 1910.
The following charts show how life has improved in various ways over the last 200 years.
As GDP (gross domestic product) increases, mortality rates decline. The following chart shows GDP per capita compared to longer-term age-adjusted mortality rates from 1900 to 2000 in the United States.
The following chart shows the many ways the world has improved for the better following the Industrial Revolution.
The acceleration of knowledge during the Industrial Revolution was made possible by humans’ ability to share “cumulative culture” and associated knowledge across generations. As Steve Stewart-Williams describes it:
Cumulative culture makes us smarter in another way as well: It frees us from the limitations imposed by the anatomy of our brains, furnishing us with knowledge far beyond the reach of any isolated individual. If you were to make a list of every person who’s ever contributed in any way to the vast storehouse of our knowledge, and then add up every hour they devoted to making their contribution, you’d have a rough-and-ready estimate of the number of hours it would take for one individual to single-handedly assemble all the knowledge we now possess. What kind of time period are we looking at? Probably hundreds of thousands of years, and maybe even millions. This means that, by learning about science and getting a good education, we become as knowledgeable as a person who spent thousands or millions of years thinking and exploring the world. Bertrand Russell once quipped that “The average man’s opinions are much less foolish than they would be if he thought for himself.” He had a point, but it doesn’t just apply to the average person. It applies as well to the geniuses among us, all of whom build on the earlier cognitive achievements of the species. Newton is about as good an example of a genius as we might ever expect to find: a genius among geniuses, I’d argue. But even Newton was unable to comprehend the idea that matter warps space and slows time – not because of any constitutional incapacity, but just because he lived before Einstein. Einstein, for his part, couldn’t have done what he did if he hadn’t been able to build on the work of Newton and Newton’s intellectual descendants. Matt Ridley captured the general point nicely in a discussion of the causes of economic growth: “I cannot hope to match [Adam] Smith’s genius as an individual, but I have one great advantage over him – I can read his book.” The Industrial Revolution technologically super-charged that accumulation of knowledge.
Cesar Hidalgo, in his book “Why Information Grows: The Evolution of Order, from Atoms to Economies,” describes how humans are unique in that they can preserve their knowledge and build on it into the future, such that geographic areas with a longer history of preserving knowledge end up with greater concentrations of the sort of economic diversity of products and complexity of institutions that contribute to the largest gains in well-being per capita.
These advances have led to such growth in human population that half of all human experience has occurred after 1309, and 15 percent of all human experience is happening now.
The eradication of smallpox is an example of how the scientific method and the Industrial Revolution in the West led to mass progress everywhere.
The study of history should make us all feel good about the time we live in. As William B. Irvine writes in A Guide to the Good Life: The Ancient Art of Stoic Joy: “[W]e can do some historical research to see how our ancestors lived. We will quickly discover that we are living in what to them would have been a dream world—that we tend to take for granted things that our ancestors had to live without, including antibiotics, air conditioning, toilet paper, cell phones, television, windows, eyeglasses, and fresh fruit in January.”
Historian Niall Ferguson has summarized the reasons for the dominance of Western Civilization as follows:
Why did the West dominate the Rest and not vice versa? I have argued that it was because the West developed six killer applications that the Rest lacked. These were:
1. Competition, in that Europe itself was politically fragmented and that within each monarchy or republic there were multiple competing corporate entities
2. The Scientific Revolution, in that all the major seventeenth-century breakthroughs in mathematics, astronomy, physics, chemistry and biology happened in Western Europe
3. The rule of law and representative government, in that an optimal system of social and political order emerged in the English-speaking world, based on private property rights and the representation of property-owners in elected legislatures
4. Modern medicine, in that nearly all the major nineteenth- and twentieth-century breakthroughs in healthcare, including the control of tropical diseases, were made by Western Europeans and North Americans
5. The consumer society, in that the Industrial Revolution took place where there was both a supply of productivity-enhancing technologies and a demand for more, better and cheaper goods, beginning with cotton garments
6. The work ethic, in that Westerners were the first people in the world to combine more extensive and intensive labour with higher savings rates, permitting sustained capital accumulation.
Those six killer apps were the key to Western ascendancy.
Regarding Ferguson’s killer app number 1 (competition), David Landes, in his book The Wealth and Poverty of Nations: Why Are Some So Rich and Some So Poor, writes the following regarding the fragmentation of power in Europe that led to the benefits of competition:
Despotisms abounded in Europe, too, but they were mitigated by law, by territorial partition, and within states, by the division of power between the center (the crown) and local seigneurial authority. Fragmentation gave rise to competition, and competition favored good care of good subjects. Treat them badly, and they might go elsewhere. Ironically, then, Europe’s great good fortune lay in the fall of Rome and the weakness and division that ensued … The Roman dream of unity, authority, and order (the pax Romana) remained, indeed has persisted to the present. After all, one has usually seen fragmentation as a great misfortune, as a recipe for conflict; it is no accident that European union is seen today as the cure for the wars of yesterday. And yet, in those middle years between ancient and modern, fragmentation was the strongest brake on wilful, oppressive behavior. Political rivalry and the right of exit made all the difference. One other fissure helped: the split between secular and religious. Unlike Islamic societies, where religion was in principle supreme and the ideal government that of the holy men, Christianity, craving imperial tolerance, early made the distinction between God and Caesar. To each his own. This did not preclude misunderstandings and conflicts: nothing is so unstable as a dual supremacy; something’s got to give. In the end, it was the Church, and this meant yielding to Caesar what was Caesar’s and then a good part of what was God’s. Among the things that gave, homogeneous orthodoxy: where authority is divided, dissent flourishes. This may be bad for certainty and conformity, but it is surely good for the spirit and popular initiatives. Here, too, fragmentation made all the difference. The Church succeeded in asserting itself politically in some countries, notably those of southern Europe, not in others; so that there developed within Europe areas of potentially free thought. This freedom found expression later on in the Protestant Reformation, but even before, Europe was spared the thought control that proved a curse in Islam. One final advantage of fragmentation: by decentralizing authority, it made Europe safe from single- stroke conquest. The history of empire is dotted with such coups — one or two defeats and the whole ecumenical autocracy comes tumbling down. Thus Persia after Issus (333 B.C.E.) and Gaugamela (331 B.C.E.); Rome after the sack by Alaric (410); and the Sassanian empire after Qadisiya (637) and Nehawand (642). Also Aztec Mexico and Inca Peru. Europe, in contrast, did not have all its eggs in one basket.* In the thirteenth century the Mongol invaders from the Asian steppe made short work of the Slavic and Khazar kingdoms of what is now Russia and Ukraine, but they still had to cut their way through an array of central European states, including the new kingdoms of their predecessors in invasion — the Poles, Lithuanians, Germans, Hungarians, and Bulgars— before they could even begin to confront the successor states of the Roman empire.
Regarding Ferguson’s killer app number 3 (property rights), David Landes, in his book The Wealth and Poverty of Nations: Why Are Some So Rich and Some So Poor, writes:
Linked to the opposition between [ancient] Greek democracy and oriental despotism was that between private property and ruler-owns-all. Indeed, that was the salient characteristic of despotism, that the ruler, who was viewed as a god or as partaking of the divine, thus different from and far above his subjects, could do as he pleased with their lives and things, which they held at his pleasure. And what was true for the ruler was true for his henchmen. The martial aristocracy typically had a monopoly of weapons, and ordinary folk were careful not to offend them, arouse their cupidity, or even attract their attention; to look them in the eye was an act of impudence that invited severest punishment. Today, of course, we recognize that such contingency of ownership stifles enterprise and stunts development; for why should anyone invest capital or labor in the creation or acquisition of wealth that he may not be allowed to keep? In the words of Edmund Burke, “a law against property is a law against industry.”
Regarding Ferguson’s killer app number 5 (the Industrial Revolution and its advances), Landes, in his book The Wealth and Poverty of Nations, writes:
When Adam Smith came to write about these things in the eighteenth century, he pointed out that division of labor and widening of the market encourage technological innovation. This in fact is exactly what happened in the Europe of the Middle Ages— one of the most inventive societies that history had known. Some may be surprised: for a long time one saw these centuries as a dark interlude between the grandeur of Rome and the brilliance of the Renaissance. That cliche no longer holds in matters technological. A few examples:
1. The water wheel. It had been known to the Romans, who began to do interesting things with it during the last century of the empire, when the conquests were over and the supply of slaves had shrunk almost to nothing. By then it was too late; order and trade were breaking down. The device may well have survived on Church estates, where it freed clerics for prayer. In any event, it was revived in the tenth and eleventh centuries, multiplying easily in a region of wide rainfall and ubiquitous watercourses. In England, that peripheral, backward island, the Domesday census of 1086 showed some 5,600 of these mills; the Continent had many more. Even more impressive is the way waterpower technique advanced. Millwrights increased pressure and efficiency by building dams and ponds and by lining the wheels up to utilize the diminishing energy for a variety of tasks, beginning with those that needed the most power, and descending. At the same time, the invention or improvement of accessory devices— cranks, toothed gears— made it possible to use the power at a distance, change its direction, convert it from rotary to reciprocating motion, and apply it to an increasing variety of tasks: hence not only grinding grain, but fulling (pounding) cloth, thereby transforming the woolen manufacture; hammering metal; rolling and drawing sheet metal and wire; mashing hops for beer; pulping rags for paper. Paper, which was manufactured by hand and foot for a thousand years or so following its invention by the Chinese and adoption by the Arabs, was manufactured mechanically as soon as it reached medieval Europe in the thirteenth century … Paper had traveled nearly halfway around the world, but no culture or civilization on its route had tried to mechanize its manufacture.
2. Eyeglasses. A seemingly banal affair, the kind of thing that appears so commonplace as to be trivial. And yet the invention of spectacles more than doubled the working life of skilled craftsmen, especially those who did fine jobs: scribes (crucial before the invention of printing) and readers, instrument and toolmakers, close weavers, metalworkers. Eyeglasses made it possible to do fine work and use fine instruments. But also the converse: eyeglasses encouraged the invention of fine instruments, indeed pushed Europe in a direction found nowhere else. The Muslims knew the astrolabe, but that was it. The Europeans went on to invent gauges, micrometers, fine wheel cutters— a battery of tools linked to precision measurement and control. They thereby laid the basis for articulated machines with fitted parts. Close work: when other civilizations did it, they did it by long habituation. The skill was in the hand, not the eye- and- tool. They achieved remarkable results, but no piece was like any other; whereas Europe was already moving toward replication— batch and then mass production. This knowledge of lenses, moreover, was a school for further optical advances, and not only in Italy. Both telescope and microscope were invented in the Low Countries around 1600 and spread quickly from there. Europe enjoyed a monopoly of corrective lenses for three to four hundred years. In effect they doubled the skilled craft workforce, and more than doubled it if one takes into account the value of experience.
3. The mechanical clock. Another banality, so commonplace that we take it for granted. Yet Lewis Mumford quite correctly called it “the key-machine.” … [T]he clock brought order and control, both collective and personal. Its public display and private possession laid the basis for temporal autonomy: people could now coordinate comings and goings without dictation from above. (Contrast the military, where only officers need know the time.) The clock provided the punctuation marks for group activity, while enabling individuals to order their own work (and that of others) so as to enhance productivity. Indeed, the very notion of productivity is a by- product of the clock: once one can relate performance to uniform time units, work is never the same. One moves from the task- oriented time consciousness of the peasant (one job after another, as time and light permit) and the time- filling busyness of the domestic servant (always something to do) to an effort to maximize product per unit of time (time is money). The invention of the mechanical clock anticipates in its effects the economic analysis of Adam Smith: increase in the wealth of nations derives directly from improvement of the productive powers of labor. The mechanical clock remained a European (Western) monopoly for some three hundred years; in its higher forms, right into the twentieth century. Other civilizations admired and coveted clocks, or more accurately, their rulers and elites did; but none could make them to European standard. Chinese horology regressed and stagnated. It never got beyond water clocks, and by the time China came to know the Western mechanical clock, it was badly placed to understand and copy it. Not for want of interest: the Chinese imperial court and wealthy elites were wild about these machines; but because they were reluctant to acknowledge European technological superiority, they sought to trivialize them as toys. Big mistake. Islam might also have sought to possess and copy the clock, if only to fix prayers. And as in China, Muslim horologers made water clocks well in advance of anything known in Europe. Such was the legendary clock that Haroun- al- Raschid sent as a gift to Charlemagne around the year 800: no one at the Frankish court could do much with it, and it disappeared to ignorance and neglect. Like the Chinese, the Muslims were much taken with Western clocks and watches, doing their best to acquire them by purchase or tribute. But they never used them to create a public sense of time other than as a call to prayer. We have the testimony here of Ghiselin de Busbecq, ambassador from the Holy Roman Empire to the Sublime Porte in Constantinople, in a letter of 1560: “… if they established public clocks, they think that the authority of their muezzins and their ancient rites would suffer diminution.” Sacrilege.
4. Printing. Printing was invented in China (which also invented paper) in the ninth century and found general use by the tenth. This achievement is the more impressive in that the Chinese language, which is written in ideographs (no alphabet), does not lend itself easily to movable type. That explains why Chinese printing consisted primarily of full- page block impressions; also why so much of the old Chinese texts consists of drawings. If one is going to cut a block, it is easier to draw than to carve a multitude of characters. Also, ideographic writing works against literacy: one may learn the characters as a child, but if one does not keep using them, one forgets how to read. Pictures helped. Block printing limits the range and diffusion of publication. It is well suited to the spread of classic and sacred texts, Buddhist mantras, and the like, but it increases the cost and risk of publishing newer work and tends to small printings. Some Chinese printers did use movable type, but given the character of the written language and the investment required, the technique never caught on as in the West. Indeed, like other Chinese inventions, it may well have been abandoned for a time, to be reintroduced later. In spite of printing’s manifest advantages, it was not accepted everywhere. The Muslim countries long remained opposed, largely on religious grounds: the idea of a printed Koran was unacceptable. Jews and Christians had presses in Istanbul but not Muslims. The same in India: not until the early nineteenth century was the first press installed. In Europe, on the other hand, no one could put a lid on the new technology. Political authority was too fragmented. The Church had tried to curb vernacular translations of sacred writ and to forbid dissemination of both canonical and noncanonical texts. Now it was overwhelmed. The demons of heresy were out long before Luther, and printing made it impossible to get them back in the box.
5. Gunpowder. Europeans probably got this from the Chinese in the early fourteenth, possibly the late thirteenth century. The Chinese used gunpowder in powder form, as the name indicates, and got a weak reaction precisely because the fine- grain mass slowed ignition. The Europeans, on the other hand, learned in the sixteenth century to “corn” their powder, making it in the form of small kernels or pebbles. They got more rapid ignition, and by mixing the ingredients more thoroughly, a more complete and powerful explosion. With that, one could concentrate on range and weight of projectile; no messing around with noise and smell and visual effects. This focus on delivery, when combined with experience in bell founding (bell metal was convertible into gun metal, and the techniques of casting were interchangeable), gave Europe the world’s best cannon and military supremacy.
And regarding Ferguson’s killer app number 6 (the work ethic), Landes in his book The Wealth and Poverty of Nations, writes:
The Judeo-Christian respect for manual labor [is] summed up in a number of biblical injunctions. One example: When God warns Noah of the coming flood and tells him he will be saved, it is not God who saves him. “Build thee an ark of gopher wood,” he says, and Noah builds an ark to divine specifications. 2. The Judeo- Christian subordination of nature to man. This is a sharp departure from widespread animistic beliefs and practices that saw something of the divine in every tree and stream (hence naiads and dryads). Ecologists today might think these animistic beliefs preferable to what replaced them, but no one was listening to pagan nature worshippers in Christian Europe. The Judeo-Christian sense of linear time [is also important]. Other societies thought of time as cyclical, returning to earlier stages and starting over again. Linear time is progressive or regressive, moving on to better things or declining from some earlier, happier state. For Europeans in our period, the progressive view prevailed. In the last analysis, however, I would stress the market. Enterprise was free in Europe. Innovation worked and paid, and rulers and vested interests were limited in their ability to prevent or discourage innovation … Protestant merchants and manufacturers played a leading role in trade, banking, and industry. In manufacturing centers (fabriques) in France and western Germany, Protestants were typically the employers, Catholics the employed. In Switzerland, the Protestant cantons were the centers of export manufacturing industry (watches, machinery, textiles); the Catholic ones were primarily agricultural. In England, which by the end of the sixteenth century was overwhelmingly Protestant, the Dissenters (read Calvinists) were disproportionately active and influential in the factories and forges of the nascent Industrial Revolution. Nor on the theoretical. The heart of the matter lay indeed in the making of a new kind of man— rational, ordered, diligent, productive. These virtues, while not new, were hardly commonplace. Protestantism generalized them among its adherents, who judged one another by conformity to these standards. This is a story in itself, one that Weber did surprisingly little with: the role of group pressure and mutual scrutiny in assuring performance— everybody looking at everyone else and minding one another’s business. Two special characteristics of the Protestants reflect and confirm this link. The first was stress on instruction and literacy, for girls as well as boys. This was a by- product of Bible reading. Good Protestants were expected to read the holy scriptures for themselves. (By way of contrast, Catholics were catechized but did not have to read, and they were explicitly discouraged from reading the Bible.) The result: greater literacy and a larger pool of candidates for advanced schooling; also greater assurance of continuity of literacy from generation to generation. Literate mothers matter. The second was the importance accorded to time. Here we have what the sociologist would call unobtrusive evidence: the making and buying of clocks and watches. Even in Catholic areas such as France and Bavaria, most clockmakers were Protestant; and the use of these instruments of time measurement and their diffusion to rural areas was far more advanced in Britain and Holland than in Catholic countries. Nothing testifies so much as time sensibility to the “urbanization” of rural society, with all that that implies for rapid diffusion of values and tastes.
Landes also describes some of the geographical advantages and cultural advantages related to the work ethic that benefit those in North America during the course of the Industrial Revolution:
These frontier lands abounded in natural wealth, but this wealth proved differentially useful in the context of the new industrial technologies. Here the United States came out best: large expanses of fertile, virgin land; a fine climate for growing a crucial industrial-entry raw material, namely, cotton; rich deposits of the key ingredients for ferrous metallurgy; plenty of wood and coal for fuel, plus generous waterpower all along the east coast; an abundance of petroleum, valuable from the mid- nineteenth century for light, as lubricant, and above all as fuel for internal combustion motors; copper ores in quantity, ready by the end of the nineteenth century for the burgeoning demands of electrical power, motors, and transmission. And along with this went relatively convenient lines of access and communication: a well- indented coastline punctuated by superb harbors, large rivers (above all, the Mississippi and its affluents), and wide plains. The only serious mountain barrier between the Atlantic and the Rockies was the Appalachians, and here a number of gaps opened to trade and travel, in particular, the breach made by the Hudson River and the flat stretch to the Great Lakes. Here man was able to improve on nature, as the Erie Canal and railroads opened the Middle West to Middle Atlantic ports … [T]he northern United States … had the paradoxical advantage of a climate that limited cultivation to grains and yielded little at first in the way of an exportable surplus. Economies of scale were negligible, at least before the invention of mechanical technologies, so that holdings were small, often no larger than subsistence, and more or less evenly distributed. Such equality did not always please those of aristocratic inclinations. In 1765, a British visitor to New England, Lord Adam Gordon, frowned his disapproval: “… the levelling principle here, everywhere, operates strongly and takes the lead. Everybody has property, and everybody knows it.” Equality bred self-esteem, ambition, a readiness to enter and compete in the marketplace, a spirit of individualism and contentiousness. At the same time, smallholdings encouraged technical self- sufficiency and the handyman, fix-it mentality. Every farm had its workshop and anvil, its gadgets and cunning improvements. Ingenuity brought not only comfort and income but also status and prestige. Good workers were the envy of their neighbors, the heroes of the community. Listen to a report of 1681 on the quickness of Quaker settlers to engage in industry: “… they have also coopers, smiths, bricklayers, wheelwrights, plowrights and millwrights, ship carpenters and other trades, which work upon what the country produces for manufactories…. There are iron- houses, and a Furnace and Forging Mill already set up in East- Jersey, where they make iron.” Another report of 1698 speaks of cloth manufacture: in the Quaker communities of Burlington and Salem, “cloth workers were making very good serges, druggets, crapes, camblets, plushes and other woolen cloths. Entire families engaged in such manufactures, using wool and linen of their own raising.” New England and the middle colonies of Pennsylvania and New Jersey became the “industrial heartlands” of the new nation. Ironmaking got its start in the 1640s (bog iron on the Saugus [at Lynn] in Massachusetts), only two decades after the Pilgrims’ landing at Plymouth. By the time of the revolution (1770s), some two hundred iron forges were in operation in Britain’s American colonies, and the annual make was some 30,000 tons. Only Britain, France, Sweden, and Russia made more. Along with smelting went refining, hammering, cutting, slitting, rolling, and the sundry other operations that turn iron into tools and objects. Inevitably, the demand for British metallurgical products fell sharply, leading British manufacturers to petition Parliament for laws prohibiting colonial manufacture. As much command the tides. Such laws only sensitized the colonists to the injustice of their subordinate status and of government without representation; also to the importance of economic autonomy. As Benjamin Rush, doctor and civic leader in Pennsylvania, put it in 1775: “A people who are dependent on foreigners for food or clothes must always be subject to them.” One focus of colonial industry was to cost the British dear. The colonials made guns— muskets to begin with, and increasingly rifles, which along with hunting from childhood, gave them a substantial edge in marksmanship, an edge that would persist into the twentieth century. Guns had their particular virtues in a frontier society, to the point where some of the colonies imposed an obligation to bear arms, even to church. (Again, one has here a strong and persistent cultural characteristic, as witness the present- day opposition to gun control.) Demand, however, did not assure supply. Culture matters. The people of the South and of backwoods Appalachia went more heavily armed, but the guns were made in the northern colonies. The reason was simple: that was where the skills and tools were. By the time the South went to war against the Union in 1861, firearms production in the North outweighed that in the Confederacy by 32 to l. Here the North American colonies were helped by their anglophone culture: Britain boasted the most inventive society in Europe, and British immigrants felt at home in a society speaking the same language … The American republic was scarcely born when in 1790 Samuel Slater installed the first working spinning machines in Providence, Rhode Island. He was followed by others, and New England, with its strong streams, became a major center of cotton and woolen manufacture. Here, as on the European continent, British expatriates were the primary agents of technological diffusion. Yet the character of the receiving society mattered even more. The few carriers who brought the knowledge found quick students to copy, imitate, and, most important, improve. When Francis Lowell of Boston introduced the power loom in 1814, he found a ready workforce, descendants of “many generations of farmer-mechanics in the workshops of New England.” The figures tell the story. In 1788, Philadelphia’s Fourth of July parade featured a hand- powered cotton carding machine and an eighty- spindle jenny— symbols of a preindustrial (pre- power) economic independence. Twenty years later, the young United States was powering almost 100,000 cotton spindles; between 1810 and 1820 the number tripled, and in the next decade more than tripled again. So, by 1831, the industry counted 1.2 million spindles and 33,500 looms, most of them power-driven by piedmont streams from New Hampshire in the North to Maryland in the south. A recent comparison of productivity in manufacturing shows America well ahead of Britain by the 1820s. This was an extraordinary achievement, bringing together enlightened and often explicitly patriotic enterprise, knowledge and know- how, and an intelligent workforce. Some workers were Luddites who had fought machinery back in the old country but were ready to accept it in the New World; some, handloom weavers who had once refused to enter mills. Why the change? Like old England, New England resented the factory’s strict hours and personal supervision. But whereas old England could count initially on involuntary labor— poorhouse apprentices, daughters and wives, people who could not say no—- New England had to find ways to make these new jobs acceptable if not attractive. The American mills paid higher wages and gave their women and girls the kind of housing and chaste environment that reassured parents.
And Landes then describes the development of the “American system” of manufacturing, a topic explored in a previous essay series on “Pride in Precision”:
The decisive and most distinctive American innovation, though, was not any particular device, however important, but a mode of production— what came to be called the American system of manufactures. Already in colonial times, for example, much American house construction had turned from carpentry to millwork. Doors and windows were cut and assembled to standard size; glass, precut accordingly. (A French ship arriving in the young republic around 1815 with a cargo of window glass of various sizes was surprised to find it had to give most of it away.) Houses and buildings were only the beginning. The idea was to make all assembled objects in such wise that the parts be similar, if not interchangeable. The degree of similarity was a function of materials and tolerances: fit could be approximate for some purposes but not for others; and wood was a lot more forgiving than metal. So a carpenter could adjust pre- made doors and windows and a glazier could make window panes tight with a judicious use of putty; but the firing assembly of a musket called for greater precision than the stock, and a watch required closer tolerances than a clock. Meanwhile assembly depended on the skillful use of a file for last- minute adjustments and fitting; unless, that is, one wanted the parts to fit and work well from the start, without fitting, and that called for even more exactitude. In all these areas of manufacture, the United States was, if not the pioneer, then the great practitioner. From the start, the adoption of machines, in textile manufacture for example, was followed by the creation of machine shops to maintain and build the equipment; and these shops, little worlds of assembled and interchangeable skills, often took to making other kinds of machinery: steam engines, furnaces and boilers, locomotives, above all, machine tools. These last in turn, dedicated originally to one or another special purpose, found application in diverse industrial branches. It was not only the craftsmen who had children and grandchildren to carry the torch; their machines proliferated as well. Unlike Europe, America made little resistance to this advance of deskilling and routinizing technique. In a country of continuing revolution, old ways had little leverage. Listen to an official visitor to the Springfield Armory in 1841: …the skill of the armorer is but little needed: his “occupation’s gone.” A boy does just as well as a man. Indeed, from possessing greater activity of body, he does better. The difficulty of finding good armorers no longer exists; they abound in every machine shop and manufactory throughout the country. The skill of the eye and the hand, acquired by practice alone, is no longer indispensable; and if every operative were at once discharged from the Springfield armory, their places could be supplied with competent hands within a week. Small wonder that when the British, with all their industrial achievements, belatedly (mid- nineteenth century) wanted to make good and cheap muskets for military use, they sent their people to the United States to study American arsenal methods. The “American system” set standards of productivity for the rest of the industrial world. Each technology became a stepping stone to others. Clocks and guns prepared the way for watches and sewing machines. Mowers and harvesters led to sowers (planters and drills), reapers, binders, threshers, and eventually combines; bicycles, to automobiles; cash registers, to typewriters and calculators. And machines invented for one purpose slid easily to others: a sewing machine could be used on leather and canvas as well as fabric, could make boots and shoes and sails and tents as well as cloth garments. This was a mechanic’s wonderland, in agriculture as in industry. A letterwriter to the Scientific American of July 1900 exulted: “Indeed there is scarcely a thing done on the farm today in which patented machinery does not perform the greater part of the labor.” So agriculture became an industry too, with economies of scale, division of labor, attention to labor productivity. And to land productivity as well … American industry went on from one success to another. Other countries could copy; some indeed made forays along similar lines. But these older societies did not have the tabula rasa and the optimistic, open culture that eased the task of the American farmer and manufacturer. They had to work with cramped systems of land tenure, peasants (no peasants in the United States) who scrimped on equipment to add to their holdings, great landlords who saw land more as the foundation of status and style than as capital;* and with craftsmen who saw mechanization as a personal diminution, an offense to status, a threat to jobs. The older countries had their machine- breakers; America did not. European countries also had a consumption problem. Class structures and segmented tastes made it harder there to adopt standardized products. The world had long learned to live with the lavishness and indulgences of the rich and genteel; but now, for the first time in history, even ordinary folk could aspire to ownership of those hard goods— watches, clocks, bicycles, telephones, radios, domestic machines, above all, the automobile— that were seen in traditional societies as the appropriate privilege of the few.
The large majority of advances in the hard sciences, mathematics, medicine, and technology occurred in either Europe or North America.
The United States and Europe are also home to the largest number of Nobel Prize winners.
An updated version of the above charts through 2020 can be found here, and through 2021 here.
In the East, indeed, after the printing press was invented, it was banned in the Muslim-ruled Ottoman Empire:
Those who decry ‘Eurocentrism’ as if it were some distasteful prejudice have a problem: the Scientific Revolution was, by any scientific measure, wholly Eurocentric. An astonishingly high proportion of the key figures – around 80 per cent – originated in a hexagon bounded by Glasgow, Copenhagen, Kraków, Naples, Marseille and Plymouth, and nearly all the rest were born within a hundred miles of that area. In marked contrast, Ottoman scientific progress was non-existent in this same period. The best explanation for this divergence was the unlimited sovereignty of religion in the Muslim world. Towards the end of the eleventh century, influential Islamic clerics began to argue that the study of Greek philosophy was incompatible with the teachings of the Koran. Indeed, it was blasphemous to suggest that man might be able to discern the divine mode of operation, which God might in any case vary at will. In the words of Abu Hamid al-Ghazali, author of The Incoherence of the Philosophers, ‘It is rare that someone becomes absorbed in this [foreign] science without renouncing religion and letting go the reins of piety within him.’ Under clerical influence, the study of ancient philosophy was curtailed, books burned and so-called freethinkers persecuted; increasingly, the madrasas became focused exclusively on theology at a time when European universities were broadening the scope of their scholarship. Printing, too, was resisted in the Muslim world. For the Ottomans, script was sacred: there was a religious reverence for the pen, a preference for the art of calligraphy over the business of printing. ‘Scholar’s ink’, it was said, ‘is holier than martyr’s blood.’ In 1515 a decree of Sultan Selim I had threatened with death anyone found using the printing press. This failure to reconcile Islam with scientific progress was to prove disastrous. Having once provided European scholars with ideas and inspiration, Muslim scientists were now cut off from the latest research. If the Scientific Revolution was generated by a network, then the Ottoman Empire was effectively offline.
(During this time, Islamic rulers also cut off European trade to Asia, leading to the need for Christopher Columbus and others to seek trade routes to Asia by traveling East, around the world. As described by historian Timothy Winegard, “From its epicenter in Turkey, the Islamic Ottoman Empire expanded across the Middle East, the Balkans, and eastern Europe during the fourteenth and fifteenth centuries, and closed the Silk Road to Christian traders and European access to the Asian market … [T]he great powers of Europe sought to reopen this crucial commercial lifeline by circumventing the increasingly vast and combative Ottoman Empire. After six years of pestering the monarchies of Europe for funding, King Ferdinand and Queen Isabella of Spain finally relented and agreed to back the first voyage of … Cristobal Colon (as Columbus was known in 1492) to reestablish trade with the Far East.”).
Some of the reasons Islamic countries fell behind the rest of Europe are described by David Landes, in his book The Wealth and Poverty of Nations: Why Are Some So Rich and Some So Poor:
Islam … initially absorbed and developed the knowledge and ways of conquered peoples. By our period (roughly 1000 to 1500), Muslim rule went from the western end of the Mediterranean to the Indies. Before this, from about 750 to 1100, Islamic science and technology far surpassed those of Europe, which needed to recover its heritage and did so to some extent through contacts with Muslims in such frontier areas as Spain. Islam was Europe’s teacher. Then something went wrong. Islamic science, denounced as heresy by religious zealots, bent under theological pressures for spiritual conformity. (For thinkers and searchers, this could be a matter of life and death.) For militant Islam, the truth had already been revealed. What led back to the truth was useful and permissible; all the rest was error and deceit. 14 The historian Ibn Khald’n, conservative in religious matters, was nonetheless dismayed by Muslim hostility to learning: When the Muslims conquered Persia (637- 642) and came upon an indescribably large number of books and scientific papers, Sa’d bin Abi Waqqas wrote to Umar bin al- Khattab asking him for permission to take them and distribute them as booty among the Muslims. On that occasion, Umar wrote him: “Throw them in the water. If what they contain is right guidance, God has given us better guidance. If it is error, God has protected us against it.” Remember here that Islam does not, as Christianity does, separate the religious from the secular. The two constitute an integrated whole. The ideal state would be a theocracy; and in the absence of such fulfillment, a good ruler leaves matters of the spirit and mind (in the widest sense) to the doctors of the faith. This can be hard on scientists.
Landes also describes some of the reasons China as well fell behind the rest of Europe:
It would seem that none of the conventional explanations tells us in convincing fashion why technical progress was absent in the Chinese economy during a period that was, on the whole, one of prosperity and expansion. Almost every element usually regarded by historians as a major contributory cause to the industrial revolution in north-western Europe was also present in China. There had even been a revolution in the relations between social classes, at least in the countryside; but this had had no important effect on the techniques of production. Only Galilean-Newtonian science was missing; but in the short run this was not important. Had the Chinese possessed, or developed, the seventeenth- century European mania for tinkering and improving, they could easily have made an efficient spinning machine out of the primitive model described by Wang Chen…. A steam engine would have been more difficult; but it should not have posed insuperable difficulties to a people who had been building double- acting piston flame- throwers in the Sung dynasty. The crucial point is that nobody tried. In most fields, agriculture being the chief exception, Chinese technology stopped progressing well before the point at which a lack of scientific knowledge had become a serious obstacle. Why indeed? Sinologists have put forward several partial explanations. The most persuasive are of a piece:
The absence of a free market and institutionalized property rights. The Chinese state was always interfering with private enterprise— taking over lucrative activities, prohibiting others, manipulating prices, exacting bribes, curtailing private enrichment. A favorite target was maritime trade, which the Heavenly Kingdom saw as a diversion from imperial concerns, as a divisive force and source of income inequality, worse yet, as an invitation to exit. Matters reached a climax under the Ming dynasty (1368- 1644), when the state attempted to prohibit all trade overseas. Such interdictions led to evasion and smuggling, and smuggling brought corruption (protection money), confiscations, violence, and punishment. Bad government strangled initiative, increased the cost of transactions, diverted talent from commerce and industry.
The larger values of the society. A leading sociological historian (historical sociologist) sees gender relations as a major obstacle: the quasi- confinement of women to the home made it impossible, for example, to exploit textile machinery profitably in a factory setting. Here China differed sharply from Europe or Japan, where women had free access to public space and were often expected to work outside the home to accumulate a dowry or contribute resources to the family.
At about the same time the Ottoman Empire was banning the printing press, in Western history, the Protestant emphasis on the need for people to learn to read so they could understand the Bible directly also led to a growth in literacy, which in turn led to an increased ability to absorb cultural learning. As explained by Joseph Heinrich in The Secret of Our Success:
On the technology side … highly literate people, who were rare until relatively recently in human history, have some neuronal rewiring, longer verbal memories, greater brain activation for spoken language, and some losses in the domain of face recognition. The details of writing systems clearly evolved to fit the genetically specified architecture of our brains, but it’s worth asking what the implications were when reading—and its related neurological changes—first became widespread, due to the religious convictions that rapidly spread with Protestantism and the printing press, in the run up to the industrial revolution. This changed the brains of many people while opening the cultural transmission pathways among the numerous writers and readers in Europe for the first time. The result was a sudden expansion of collective brains.
Researchers have also found that:
conversionary Protestants (CPs) heavily influenced the rise and spread of stable democracy around the world … CPs were a crucial catalyst initiating the development and spread of religious liberty, mass education, mass printing, newspapers, voluntary organizations, and colonial reforms, thereby creating the conditions that made stable democracy more likely. Statistically, the historic prevalence of Protestant missionaries explains about half the variation in democracy in Africa, Asia, Latin America and Oceania and removes the impact of most variables that dominate current statistical research about democracy. The association between Protestant missions and democracy is consistent in different continents and subsamples, and it is robust to more than 50 controls and to instrumental variable analyses … Calvinists and Nonconformists contributed to democratic theory and institutions out of a concern to limit state power, to guard against the corruptibility of all humans and human institutions, and to justify rebellion against rulers who restricted their activities. Later democratic activists used some of these ideas and institutions to establish representative democracy … In Protestant Europe, conflict between CPs and defenders of state churches divided economic and political elites and created incentives for these elites to extend voting rights to previously excluded groups. Because of this close historical connection between CPs and democracy, most CPs did not consider democracy a threat to their religion and many actively promoted it. Moreover, CPs helped foster conditions that facilitated democracy—by spurring religious liberty; by dispersing mass education, printing, and organizational civil society; and by restricting the extralegal use of violence, forced labor, and land confiscation in colonial territories. These reforms undermined elites’ attempts to monopolize resources and increased their incentives to allow democracy. Figure 1 outlines these arguments visually and underlies the statistical models, which attempt to demonstrate a causal association between Protestant missions and democracy, but do not test which mechanism is most important.
Ahmet Kuru traces the history of Islamic violence, authoritarianism, and underdevelopment in his book Islam, Authoritarianism, and Underdevelopment. His book includes the following chart.
As of 2010, Muslim-majority countries’ averages of gross national income per capita, literacy rate, years of schooling, and life expectancy were all below world averages.
Islamic terrorism is still widespread in Africa. As was reported in April, 2021:
The Salafi-jihadi movement, which includes al Qaeda and the Islamic State, has notched success after success in sub-Saharan Africa in recent years. Salafi-jihadi groups are now active in 22 African countries and counting. Long-running insurgencies have expanded; for example, Mali-based extremists spread into previously stable Burkina Faso in 2016 and have escalated since, displacing more than a million people and turning the country into a launchpad for attacks on neighboring states. Persistent jihadi violence set the stage for a recent rash of kidnappings targeting schoolchildren in Nigeria, Africa’s largest country by population and economy. According to estimates by the United Nations, the Islamic State in Mozambique will displace a million people by June. It just derailed a multibillion-dollar natural gas project that was meant to be Mozambique’s ticket to prosperity … Africa’s rise to prosperity could be the defining story of the coming decades. But that won’t happen if hundreds of thousands of Africans live under Salafi-jihadi dominance and millions are displaced by violence, with huge swaths of terrain becoming permanent terrorist havens. Even if the international community consigns war-torn countries like Libya, Mali, and Somalia to their fates, the United States won’t be able to ignore the effects of the Salafi-jihadi scourge on the continent’s major players—Algeria, Egypt, Ethiopia, Kenya, Morocco, and more recently Tanzania and South Africa, which all face persistent or emerging Salafi-jihadi threats alongside domestic challenges to their current and future stability. And 200 million-strong Nigeria will surely stumble if it is unable to oust the proto-caliphate growing within its borders.
Predominantly Muslim countries also tend to be less free and tolerant. As described by Daniel Philpott:
Middle Eastern countries are characterized by having by far the most policies favoring one religion over another, and restricting religious freedom.
In the next essay in this series, we’ll explore how a too-limited understanding of history leads to an inaccurate perception of binary “good” or “bad” forces in history