1. history: the rise of the west

Marx: the theory of capitalism

Marx argued that societies developed through stages:

1. Primitive communism

2. Slave society

3. Feudalism

4. Capitalism

5. Socialism

Origins of capitalism/growth: Growth set in motion by capital accumulation during transition from feudalism to capitalism

Primitive primary capital accumulation:

1. dispossession of peasant class: free propertyless working class

2. “Mercantile property”: surplus extracted from the colonial trading system

Marxist theories contend that property and Labour relations determine path of economic development:

-Medieval Economy based on serfdom limited labour mobility & markets → no free markets for land or labor

-Modern economy: based on industry &commerce could only develop with capitalist institutions: free markets + landless working class

Critique:

– Vibrant trade in medieval cities already demonstrated capitalist features
– Serfdom was not a “blanket of tradition”
➢ Markets existed: peasants responded to commercial opportunities
➢ Serfdom was flexible: landlords demanded tribute in kind, money, or
labour service (robot) depending on market incentives

Liberal political economy theory

North and Weingast connect British growth to the Glorious Revolution of 1688.

It:

• Strengthened Parliament.

• Limited the monarch’s powers.

• Protected private property.

• Made public borrowing more credible.

• Increased the state’s capacity to tax and invest.

Britain also developed into a fiscal-military state capable of taxation, borrowing, administration and maintaining a standing army.

Critique:

– Property rights as secure in absolutist France or China – no growth there
– England/Britain wasted high taxes & public debt on global warfare

European states centralize

• Western political & economic institutions were exceptional
– Medieval kings relied on landed aristocracy’s armies for military support
– Early modern states in western Europe created first consolidated nation
states with centralized governments (although undemocratic).
– Absolutism: crown and parliament established monopoly of power
o Royal absolutism: Portugal, Spain, France
o Parliamentary absolutism: England (later Great Britain)
– Standing armies required ability to tax, issue debt, administer spending
• “Doorstep conditions” for democratic transition
1. Equality before the law
2. Permanent institutions to regulate social conflict
3. State monopoly of violence
➢ New western state model to achieve centralization: fiscal-military state
Europe in 1648:
• State consolidation along Atlantic and North-Sea coastline
• E.g. Portugal, Spain, England, France, Denmark, Dutch Republic
• Only Germany and Italy remain fragmented until 1860s
• Overall, large degree of state centralization in 17th c. Europe

Science and the Industrial Enlightenment

Protestant Reformation
– Weber: rise of the West explained by western rationality, which arose
from Protestant theology
– Weaknesses of this interpretation: empirical evidence is unconvincing
Scientific revolution
– Modern technology derived from modern science
– Mokyr: “industrial Enlightenment”
1. Western exceptionalism: scientific approach widely accepted in Europe by the 18th century, but not elsewhere
2. Useful knowledge: scientific methods applied to study of technology
Bourgeois dignity
– McCloskey: 18th century English society held practical knowledge and entrepreneurial virtues in high esteem.

The Scientific Revolution created knowledge that contributed to technology.

Important discoveries included:

• The atmosphere has weight.

• Condensing steam produces a vacuum.

• Atmospheric pressure can perform mechanical work.

These discoveries contributed to:

• Savery’s steam pump in 1698.

• Newcomen’s steam engine in 1712.

Mokyr’s Industrial Enlightenment describes:

• Applying scientific and experimental methods to technology.

• Belief in natural laws that could be discovered.

• Expectation that useful knowledge could improve human life.

• Communication between scientists and practical manufacturers.

• Diffusion of knowledge through societies, academies, lectures and coffee houses.
  
  

Human capital

Human capital increased through:

• Literacy, Numeracy, Printing, Apprenticeships, Practical craft skills.

The printing press (1455) sharply reduced the price of books. In England, the percentage of people able to sign their names increased from approximately 6% in 1500 to 53% in 1800.

Numeracy expanded because commerce required:

• Accounting.

• Measurement.

• Navigation.

• Geometry and arithmetic.

English apprenticeships:

• Connected rural workers with urban masters. (integration)

• Spread mechanical skills, diffusion of proto industries

• Encouraged competition between masters.

• We’re relatively open across social classes. (social mobility)

Human capital increased Britain’s ability to respond to economic incentives, but knowledge alone did not determine which inventions were profitable.

The Malthusian economy

Core assumptions

• Land and natural resources are fixed.

• Technological progress is slow and discontinuous.

• Additional labour experiences diminishing marginal productivity.

• Birth and death rates respond to income.

The mechanism

1. Income per person rises.

2. Families can support more children.

3. Mortality declines.

4. Population grows.

5. More workers use the same fixed amount of land.

6. Output per worker declines.

7. Income returns toward subsistence.

Technology shock

A one-off improvement in technology initially raises income. However:

Higher income → population growth → diminishing returns → income returns toward subsistence.

Long-run result:

• Larger population.

• Higher total output.

• No permanent increase in income per person.

Permanent fall in the birth rate

• Reduces population pressure.

• Increases land and resources per worker.

• Raises the marginal product of labour.

• Produces permanently higher equilibrium income per person.

Western societies that restricted fertility archived higher living standards

European marriage pattern (Hajnal)

Northwest Europe
1. Late average age at first marriage for women (24–26)
2. High fertility within marriage
3. Many women, typically 10–25%, never married
4. Low illegitimacy rates, 3–4% of births out of wedlock
South and East Europe
1. Early marriage for most women (16-19)
2. Very high fertility within marriage
3. Very few women never married
Implication: Northwest Europe had lower population growth,
hence enjoyed higher living standards

Several “Western family practices” underpinned EMP:
1. Late average age at first marriage
– Nuclear family: people could not marry before earning enough to sustain a separate household → western Europeans responded to falling wages by delaying marriage
– Urban economy: male apprentices and female household servants could not marry → economic incentive to delay marriage
2. ”Girl power”: high share of women never married
➢ Urban jobs helped women support themselves until a suitable marriage
➢ Domestic service in upper-class households attracted poor rural women, making the opportunity cost of marriage very high.
3. Little fertility control once in marriage: population growth was held in check by economic incentives, not by social norms.

What does “Rise of the West” mean?

The Rise of the West describes how western Europe, followed by North America, became economically and technologically dominant.
1. Research findings:
i. The Industrial Revolution inaugurated modern economic growth
and established western supremacy in the global economy.
ii. Western exceptionalism had deeper origins explained by social,
political, cultural and demographic factors.
iii. Western institutions, cultural and social norms made society more
innovative, but economic incentives unlocked this potential.
2. Key concepts: consumerism, European Marriage Pattern