©Deirdre Nansen McCloskey | COPYRIGHTED MATERIAL

Review of The Cambridge Economic History of Modern Britain.
Edited by Roderick Floud and Paul Johnson. Cambridge University Press.

by Deirdre McCloskey
Times Higher Education Supplement, 15 January 2004
Filed under articles [criticism in history and economic history] [reviews]

Paul A. Johnson

If you have no deep knowledge of acids it comes as a surprise that an acid with very interesting properties has so simple a formula as H2SO4. My, my: just look what those darn chemicals do. If you have thus far read Jane Austen for her exciting plots it will come as a surprise to be told that she invented the free indirect style in the English novel and achieved in that way her comic effects. Remarkable. Notions such as these stick. The unsurprising matter does not. You could call it, in honor of Jerry Seinfeld, the Yada-yada-yada Theory of Learning. "Yada-yada-yada," you will recall, is the all-purpose filler, the etc., the and-so-forth, the proceed-as-before. No one learns from yada. Stick to the surprising stuff. Fortunately most of what people think they already know is wrong. And so you can rather easily surprise them, avoid yada, and teach.

Consider, for example, what you think you know about the subject of these three imposing volumes, the economic history of Britain since William and Mary, written by 51 expert contributors and ably edited by Roderick Floud and Paul Johnson. The subject is parceled out into Vol. 1 on Industrialization 1700-1860, Vol. 2 on Economic Maturity 1860-1939, and Vol. 3 on Structural Change and Growth, 1939-2000. All the numbers and arguments are here, everything you wanted to know---or think you already know. To put the three volumes in leading questions, (1.) How did Britain (Scotland is treated as rather an appendage) come to be rich? (2.) Did Victorian or Edwardian or Georgian Britain Fail? (3.) Did the experiment with massive state intervention after 1939 help or hurt?

If you are like most educated people you have without being sharply aware of it rather a lot of opinions on these matters. In fact you possess a full and even coherent account that goes something like this: The economic life of a nation is like a tree, with stages from acorn to oak, or like human growth, childhood to old age. In England population exploded-the child grew---because death rates fell after the Gin Age. Enclosures were crucial, driving people off the land and into the dark satanic mills. Exploitation, not population growth and the Napoleonic Wars, kept wages low. The overseas slave trade was a crucial source for financing the industrial revolution. That revolution was a matter of big mills and big machines, especially the steam engine. After the Railway Age and the Repeal of Corn Laws, though, Britain failed. The Germans and Americans were better, it turned out, at everything. Agriculture suffered a Great Depression. Britain was crippled by not having investment banks and technical colleges like Germany. For the rest the family firm was stuffy and rigid, and sent the young man off to a minor public school, where he became a twit. Fortunately he could go to India and govern. The Empire was responsible for the prosperity of late Victorian Britain. Loss of the Empire explains Britain's troubles in the 20th century. Trade unions were a big factor in improving conditions for the workers. Capitalism needed to be brought to heel, and fortunately state enterprise, planning, regulation, and subsidies were devised to accomplish this. The balance of payments is a suitable object of policy. Policy, by the way, is easy, a matter of ministerial intent.

The received wisdom, the newspaper account of British economic history, your personal yada-yada-yada about the first industrial nation is in every detail mistaken. Nothing of what you think you know is correct. Or so your friends the economic historians of Britain are here to tell you.

The received wisdom c. 1970 was for example that the industrial revolution was a matter of investment. This "capital fundamentalism," as William Easterly has called the comparable conviction among Western economists trying to help the Third World at the time, has been revived in the so-called "new growth theory" over in the Department of Economics. The historian of technology Joel Mokyr thinks differently: "The years 1760-1815 witnessed more than just some lucky breaks in a handful of industries: it was also the period in which people defied gravity through hot-air balloons, began the conquest of smallpox, and learned to can food, to use binary codes for manufacturing purposes, to infer geological strata from fossil evidence, and to burn gas for lighting. . . . In pottery, one of the oldest techniques known to mankind, Josiah Wedgwood and others introduced new materials, new moulding techniques, and improved over-firing." You might think if you were over the Department of Economics that these were merely routine returns on investment, though you would then have the problem of explaining why history waited until Britain in the 18th century to make the investments. "Most of the payoff to technologically creativity," Mokyr points out, on the contrary, "occurs in a more remote future and is spread over a longer period than was previously believed." So there was an enormous change in spirit, which was not aggregately profitable until too late to be explained by mere profit. It was, as Mokyr puts it, an "Industrial Enlightenment," that is, an intellectual---could one say "spiritual"?---change. David Mitch, in one of the few sustained and successful attempts at humor in the volumes, asks what would have happened if the British population had been replaced overnight by Eskimos. The mental experiments gets at the quality of "human capital," and Mitch does point out that the British human capital in turn would work poorly in the Arctic. But surely he is right that "Britain's intellectual vibrancy is the late 18th century . . . would be one of the major losses." Something about those British.

The received wisdom was that modern economic growth was a matter of heroic innovations in steam and cotton. False, says Kristine Bruland of the University of Oslo. "Innovation was a broad process," she argues, "pervasively embedded in many industries," and looks like "a general social propensity to innovate." "The claims for steam as a driving force for growth," to take one example, "are seriously overdone," as Nick von Tunzelmann has long argued. Again, it was something about those British, as David Edgerton (not in the volumes) has been arguing for the period of alleged economic decline. Radar and television and jet engines, among other items, do not come out of a failing economy.

The received wisdom was that population growth during the 18th and 19th century had to do mainly with a falling death rate, the same "demographic transition" which other countries exhibited in the late 19th and 20th centuries. Research since 1970 led by, and here described by, Anthony Wrigley has reversed the history: it was rising fertility, giving new meaning to the phrase "the Sentimental Revolution." Dudley Baines and Robert Wood, in a particularly lucid chapter in the second volume, make it clear that "a new found desire to cheat biology" was behind the fall at the other end in the number of children a woman had 1851-1931. All this and more since 1970 and the application of quantitative methods to economic history.

The received wisdom was that families in olden times were "extended" and were wrecked by a "rise of individualism" The findings of the Cambridge Group led by Wrigley, Jane Humphries notes, was "cataclysmic for the presumption that pre-industrial households were large and complex. The majority contained fewer than five persons. . . . The discovery . . . exploded belief in the rise of individualism." As Alan Macfarlane of the Cambridge Group has been arguing for decades, individualism "rose" in England in Saxon times.

The received wisdom was that countries grew by stages, like the seven ages of man, or like trees, with rigid sequence in the leaf, the blossom, or the boll. The stage model, Pat Hudson argues, is quite wrong, as shows in the varied industrial history of England in the 18th century. The point was made in the 1960s by Alexander Gerschenkron for the general case. Some places and industries and people did not carry on the march to modernity. As Hudson notes, "The fate of many former proto-industrial regions such as East Anglia and the Weald of Kent was deindustrialization."

And so forth. But not yada-yada-yada. Women were not frivolously in charge of 18th-century consumption. Foreign trade was not an engine of British growth in the 19th century. Transportation innovations in the 18th and 19th centuries made more contribution than cotton textiles. Britain's lack of good managers for state enterprises was the chief obstacle to the success of nationalization after 1947.

Not that 1372 pages on farm size, vocational training, and national insurance benefits doesn't have its passages of yada-yada-yada. Consecutive reading of a textbook like this can be a bit trying, and the books lack the interpretive sparkle of a Norman Davies or Eric Hobsbawm product. Perhaps a third editor would have been a good idea, someone to cross out the turns to yada-yada and to ask insistently what for the most part the writers do a pretty good job of answering but sometimes miss: And your point is . . . exactly what? Just a thought. The third volume is particularly scrappy, and could have used a steadying editorial hand.

But that is not entirely fair to the brave and learned contributors to the third volume. Any recent history is bound to have an especially serious yada-yada problem. History starts with headlines, but if it ends with them it is liable to feel like hundreds of pages of The Economist rewritten by university lecturers. Older subjects have the advantage that the superficialities have been squeezed out by many generations of scholars. The history of enclosures, for example, went from headlines (so to speak) about the Goths and Vandals of the open field farmers to the Fabian socialist views of the Hammonds a century ago, through a conservative reaction fifty years ago, through numbers and economics beginning thirty years ago, to something like a consensus now: concerning the crucial role of enclosures: on the whole, Not. The belief that the Victorian economy "failed" started with the panic over the German commercial invasion of the 1890s, developed into the blaming of fathers in the 1920s, modulated to the less fevered assessments after the Second War, and then to analysis and counter-analysis in the 1960s and 1970s down to, again, something like a consensus: on the whole, again, Not. Oddly, therefore, the first volume, the most remote in time, is most suitable for the general reader than the second, and the second more than the third.

Many of the chapters, I am gratified to report, confirm notions I put forward in the 1970s and 1980s, as a young and then young middle-aged economic historian. Trade, not. Open fields and enclosures. Victorian failure. Productivity change, dual and primal. Good on me. But in one respect my younger self was disastrously and persistently and ignorantly mistaken. Like half of the contributors to these volumes I was quite sure that "spirit" had nothing to do with it, that entrepreneurship was a silliness of sociologists, that we can tell the story of modern economic growth by sticking to the virtue of Prudence.

Modern economic growth is the increase of income per head by a factor of 15 or 20 since the 18th century in places like Britain---and a factor of 8.5; worldwide even including the places that have not had the luck or skill to let it happen fully. It is certainly the most important event in the history of humanity since the domestication of animals and plants, perhaps the most important since the invention of language. It bids fair to free us all, eventually.

And it cannot be explained by the usual economist's tools of scarcity and calculation. The tools are still very good to have, but like Wittgenstein's point about philosophy curing philosophy, they are for this big question useful mainly in disposing of mechanical explanations. The central puzzle is why Britain, or why Northwestern Europe, and why the 18th and 19th centuries. Why did Britain then escape permanently from the poverty that has been the human lot since Adam, or the mitochondrial Eve? Was it freedom of an unusual sort? Was it the ideology of capitalism? Was it science, itself a cumulative miracle? No one knows, and until we do we will not understand the modern world.

Barry Supple, my very first teacher of economic history, was among the commentators at the conference producing these volumes. At the beginning of it all, at a conference in 1970 of "new" economic historian of Britain, he was also a commentator, and was moved to verse:

Bliss was it in that dawn to be alive
But to be young [and numerate] was very heaven.

Do put the three volumes on your bedside table and have a go at one chapter a night for the next two months. The truth will set you free. Or perhaps lead you into deeper waters.