Wednesday, 2 April 2008

BB2: The Survival of the Richest?:Gregory Clark

[This is talk 3, session 2 of 2, on the first day of the The Science Network's Beyond Belief Enlightenment 2.0 conference. An introduction and list of all reviews can be found at BB2: Enlightenment 2.0 Introduction]

Gregory Clark heads the Department of Economics at the University of California, Davis. He wrote "A Farewell to Alms: A Brief Economic History of the World" upon which he bases this talk on how the economic systems of the pre-industrial era helped shape modern cultures.

He starts, as an economist by presenting some data - at last! He claims that from 100,000 BC up to 1800 CE there has been no improvement in the human condition! And all economic history has in some sense happened in the last 200 odd years! This is because of the Malthusian Trap where the level of the human condition can be described in just two variables - fertility and mortality. These did not change over this time period, except possibly getting worse! Given the fixed factor of land there is an equilibrium subsistence income where the population comes into balance with resources and this has remained so till 1800. Regardless of inequalities within a societies such as Enlightenment England, where still, on average, it was worse off than hunter gatherer societies. He presents much data to support his claim such as based on heights - correlated with nutrition, life expectancy and other factors to make a convincing argument.

The challenge to economists is to answer what happened to break us out from the Malthusian Trap after 1800 where living standards have appreciably risen beyond equilibrium subsistence levels. He criticizes the standard institution argument - people are the same everywhere they just lack to right institutions - saying that suitable ones that would fulfill IMF requirements even better than today existed even in medieval England, so this cannot be the answer.

His answer is the cultural evolution within the time of the Malthusian Trap modifying preference choices. This is due to the fact that those who control resources out reproduce those who do not and there is replacement and a cascading downward mobility as the rich replace the poor. Again he provides evidence of this effect in pre-industrial England by analyzing over 3000 wills going from 1250 to 1800. He claims this is a Darwinian process, the survival of the richest. He, more controversially, argues that the wills record shows that it is not only wealth and preferences that are inherited but due to the emphasis on sons of fathers and so on it could be genetic too. The will record appears to maximize the genetic success of the wealthy. As a result preferences have changed over time. Culture has adapted to economy to then escape the Malthusian Trap. He also argues the growth of literacy is not due to the printing press and so on but that the literate are taking over society. The result of this that our preferences are to work far harder than in the past and to accumulate far more than we need or can use.

Why England, in particular, as the origin of the Industrial Revolution? Unlike many other societies there success was not based on violence but commerce and this is what had been selected for, more so than elsewhere...

Are the rich genetically different from the poor, is part of the reason for their success due to their genes? If so is this evidence sufficient to indicate a genetic change in the population of a society? And can this vary across different populations? Does such variations lead to some of the problems we are experiencing today with the clash of cultures? Is there a genetic difference that leads to differential economic growth? His answer is that there have been no studies that there are such systematic differences, still there there do seem to be differences between the economically successful and failures. He emphasizes that there can be other factors.

Bearing in mind it took over 4o00 years for a malfunctioning gene to spread to enable lactose tolerance, allowing Europeans to drink cows milk as adults at first glance his genetic claim seems dubious. However given his claim that this process was happening in parallel in many societies with non-random mating and with wealth and opportunity inheritance following genetic inheritance over many thousands of years this is not an absurd claim.

A posited counter-example, from a member of the audience, is that Muslims in Europe are 20 times less economically successful than Muslims in the USA, yet when they move from Europe to the USA the quickly reach the level of Muslims in the USA. However I would argue that "Muslim" is not a well defined evolutionary population, especially its history given forced conversions, the short period over which this could operate of less than 1500 odd years and that cultural elements may dominate this. And Clark counters that he knows of no examples of hunter-gatherer societies making the leap to a modern economy without wide spread social and economic problems.

Still it is a somewhat speculative hypothesis and more work needs to be done here. How does this bear in the Enlightenment 2.0? Is it important whether this inheritance of preferences is genetic or cultural? Well if it were only the latter then certainly cultural changes can be encouraged with some beneficial effect, whereas if it is the former cultural changes can still be influential but less so. How much less so depends on how "fixed" such traits may be. There is much speculation here and to assume it is correct would be premature. Either way one can effect cultural changes and this has been the issue all along. It might materially effect which cultural changes to emphasize.

The point possibly under-emphasized in this discussion is the evidence that the right institutions are not a panacea to the world problems. However Clark certainly did not argue that the lack of them was beneficial. So they might indeed be necessary but his evidence indicates that they are not sufficient. The question what else is sufficient is worth exploring and his is only one answer.

More importantly the underlying theme of Enlightenment 2.0 is that such a model, being developed and explored here, would be better for all. Certainly some, due to various factors, would be better off than others, but this has always been the case. The real issue is how those others, who are not better off would fare. Under an Enlightenment 2.0 approach, they should be better off than in other scenarios, even as the relative position of those in other such societies might be different. This is the real challenge of Enlightenment 2.0 and the more data to help to see how societies can successfully operate according to such principles the better.