Joel Mokyr - A Culture of Growth: The Origins of the Modern Economy

A Culture of Growth

The Origins of the Modern Economy

The Graz Schumpeter Lectures

Joel Mokyr

Princeton University Press

Princeton and Oxford

Copyright 2017 by Princeton University Press

Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TW

press.princeton.edu

Jacket art: Change Alley, London, 1853. Street scene depicting events surrounding the South Sea Bubble (17111720). The scene is taking place in front of Garraways Coffee House, with a pawn shop at left. Photo credit: HIP / Art Resource, NY

Library of Congress Cataloging-in-Publication Data

Names: Mokyr, Joel, author.

Title: A culture of growth : the origins of the modern economy / Joel Mokyr.

Description: Princeton, NJ : Princeton University Press, 2016. | Includes bibliographical references and index.

Identifiers: LCCN 2015045838 | ISBN 9780691168883 (hardback)

Subjects: LCSH: Economic development. | Economic history. | BISAC: BUSINESS & ECONOMICS / Economic History. | BUSINESS & ECONOMICS / Development / Economic Development. | BUSINESS & ECONOMICS / Economic Conditions. | BUSINESS & ECONOMICS / Economics / General. | HISTORY / Europe / General.

Classification: LCC HD75 .M65 2016 | DDC 330-dc23 LC record available at http: //lccn.loc.gov /2015045838

British Library Cataloging-in-Publication Data is available

Dedicated to
my three siblings
Rob, Miriam, and Ada
who have stood by me
for all those years

It is more easy to account for the rise and progress of commerce in any kingdom, than for that of learning.... Avarice, or the desire of gain, is an universal passion, which operates at all times, in all places, and upon all persons: But curiosity, or the love of knowledge, has a very limited influence, and requires youth, leisure, education, genius, and example, to make it govern any person... there is no subject, in which we must proceed with more caution, than in tracing the history of the arts and sciences; lest we assign causes which never existed, and reduce what is merely contingent to stable and universal principles. Those who cultivate the sciences in any state, are always few in number: The passion, which governs them, limited: Their taste and judgment delicate and easily perverted: And their application disturbed with the smallest accident. Chance, therefore, or secret and unknown causes, must have a great influence on the rise and progress of all the refined arts.

David Hume, 1742

Contents

This book had its origins in the Joseph Schumpeter lectures I delivered in Graz in November 2010 and I am deeply grateful to my hosts at the Schumpeter Society for their hospitality and penetrating comments at an early stage. Books based on endowed lectures tend to be relatively short. This book, however, took on a life of its own, and chapters kept being added. Having argued in previous works that the emergence of a cultural phenomenon we think of as the Enlightenment was central to the economic and technological miracles that mark European history since the Industrial Revolution, it became clear that we should ask hard questions about the origins of the emergence of intellectual innovation and a creative elite of scholars and engineers who pushed the envelope. Modern economics has accepted the challenge to understand matters that half a century lay firmly outside its realm: culture and institutions. In this book, I take a closer look at the culture and institutions of Europe between Columbus and the publication of Principia and ask how and why it created the conditions for modern economic growth.

Books such as this are never written alone. Many colleagues and friends patiently listened to my often incoherent ravings about various issues in intellectual and cultural history that were remote from their own research. Their questions and doubts made my determination to delve deeper stronger, but I surely did not answer all of them. Among my fellow travelers, who have been thinking along similar lines, I should mention three scholars whose work and friendship have been a source of inspiration even if they have different backgrounds: the sociologist Jack Goldstone, the historian Margaret Jacob, and that incomparable economist, historian, and general-purpose intellectual Deirdre McCloskey.

At Northwestern University, I have had for many years the benefit of two groups of colleagues in two large, vibrant, and utterly different departments, Economics and History. Economists, notwithstanding the stereotype, are often extraordinarily insightful and wide-ranging intellectuals. Many of them are also loyal lifelong friends. Among them, of course, the economic historians are foremost: my friends and fellow economic historians Louis Cain, Joseph Ferrie, Mara Squicciarini, and Regina Grafe (now at the European University). Among the other economists, I should mention especially Larry Christiano, Eddie Dekel, Matthias Doepke, Martin Eichenbaum, Robert J. Gordon, Joel Horowitz, Lynne Kiesling, and Charles Manski. In History, the list of colleagues who have enriched and stimulated this book include Kenneth Alder, Lydia Barnett, Peter Carroll, Sarah Maza,Melissa McCauley, Edward Muir, and Yohanan Petrovsky-Shtern. Much like Rabbi Akiva, however, through my entire career I learned the most from my current and former students: Ran Abramitzky, Gergo Baics, Maristella Botticini, Jos Espin, Avner Greif, Ralf Meisenzahl, John Nye, Tuan-Hwee Sng, Yannay Spitzer, Rick Szostak, Chris Vickers, Marlous van Waijenburg, Marianne Hinds Wanamaker, Anthony Wray, Ludovico Zaraga, Nicolas Ziebarth, and Ariell Zimran.

Outside Northwestern, perhaps the best scholarly environment any scholar can imagine is the fabulous Institutions, Organizations, and Growth group run by the Canadian Institute for Advanced Research (CIFAR). This group contains the best minds that social science has to offer in this world, and its interest in economic history is unrivaled. The group has allowed me to interact with and learn from scholars of the calibre of Daron Acemoglu, Roland Benabou, Tim Besley, Rob Boyd, Mauricio Drelichman, Avner Greif, Elhanan Helpman, Joseph Henrich, Roger Myerson, Torsten Persson, James Robinson, Ken Shepsle, and Guido Tabellini, and there exists no research project in social science that will not benefit vastly from the comments and suggestions of this remarkable group of intellects. For four decades now, I have benefited from the inexhaustible wisdom, the learning, and the kindness of my Irish friend and coauthor Cormac Grda. He and our erudite collaborator Morgan Kelly, also at University College Dublin, have many valuable contributions and suggestions to this manuscript. I am also grateful for the encouragement and sage counsel of Professor Alberto Quadrio Curzio, president of the Accademia dei Lincei. In Israel, I have benefited from being a guest in two departments, the Berglas School of Economics at Tel Aviv University and more recently the Interdisciplinary Center in Herzliya under the inspired leadership of Zvi Eckstein. Other Israelis to whom I owe special thanks are my co-authors and dear friends Amira Ofer and Karine van der Beek, my lifelong fellow-traveler, president Jacob Metzer of the Open University, and the ever-thoughtful and wise Manuel Trajtenberg, formerly of Tel Aviv University. Outside those institutions, I owe an enormous intellectual debt to four giants of economic history: Eric L. Jones, the late David S. Landes, the late Douglass C. North, and the late Nathan Rosenberg. More distant in time, but never forgotten, are the memories I have of my late Northwestern colleague Jonathan R. T. Hughes and his wife, Mary Gray.

Beyond those individuals, there are a large number of scholars who have attended seminars and lectures in which I tried out various ideas that eventually became this book. Among those many were seminars in economic history and economics at the following institutions: Bar Ilan University, University of California Berkeley, Ben Gurion University, Cambridge University, Carleton College, Harvard University, the Hebrew University, Interdisciplinary Center Herzliya, MIT Sloan School, the Princeton Center for Advanced Studies, UCLA, University of Peking, the University of Tel Aviv, and Yale University.