Britain industrialized first, says Jared Rubin, and many other countries in Western Europe and North America followed soon after.
Britain industrialized first, says Jared Rubin, and many other countries in Western Europe and North America followed soon after.
Before the Industrial Revolution, people almost everywhere on Earth had low living standards, notes Jared Rubinan economic historian at Chapman University and “co-author of”how the world became rich“With Mark Koyama. In an interview with HinduMr. Rubin explores the effects of geography and colonialism on economic development, the effects of population on living standards at different times in history, and the importance of institutions and culture in determining the fate of economies.
Can you offer a comprehensive comparison of global living standards before and after? industrial Revolution ,
Before the Industrial Revolution, the global standard of living was very low almost everywhere on Earth. There were certainly ups and downs (for example, during the high points of the Roman, Song, and Mughal empires), but most people historically lived near subsistence. A small section of the elite lived a relatively comfortable lifestyle, but even they did not have access to medicine, indoor plumbing, electricity and information that most people in the world have access to today. This changed in the late 18th century and especially in the 19th century. Britain first industrialized, and soon followed by many other countries in Western Europe and North America. It took a few generations, but in the middle of the 19th century the standard of living began to rise rapidly. By the end of the nineteenth century, the rate of technological progress was so rapid that the standard of living of a large proportion of the affected population increased.
How did you do it industrial Revolution The reason for the economic divergence between East and West?
It was not so much the Industrial Revolution as a series of events that followed. Certainly industrialization led to a huge increase in productivity in the West. And this was reflected in the total income. But per capita income has lagged since the population explosion, and wages remained relatively low. Nevertheless, by the middle of the 19th century, the return to education began to increase (in large part due to industrialization), so more parents sent their children to school than to work on a farm or factory. At the same time, the need to have many children was less, especially since investment in their education was increasingly expensive (mainly due to preterm labor). Therefore, people started having fewer children in the industrialized world. These two factors allowed a significant increase in per capita income in the West, and this contributed to the increased rate of technological progress that allowed economic growth to continue unabated. In the rest of the world, the rate of technological progress was too low for sustained economic growth. Takeoff was possible only after countries had adopted marginal (such as in Meiji Japan) technologies and production processes.
Couldn’t the overpopulation due to eastern economies like India and China improve the standard of living of their people, as in some western economies?
Yes and no. By far the most important factor was that rate of technological progress in india And China had very little. It is impossible to imagine a world where China or India in the 19th century could have had the same standard of living as the West, without a huge increase in technological productivity. That said, China and India were more technologically advanced than the West for at least a millennium after the fall of the Roman Empire. But, as in every other part of the world, the extra income from those technological advances was ‘eaten’ by the additional population. Had the population of China or India collapsed due to some sort of natural disaster, war or epidemic, the living standards of the survivors would almost certainly have seen an increase. But these would probably have faded over time. And, in any case, modern economic growth isn’t just a matter of correcting demographics. Innovation is key.
Can colonialism explain past and present differences in living standards between East and West?
I believe that colonialism does a better job of explaining why some pre-colonial nations have remained poorer than explaining why the economic takeoff happened in the first place. While it is certainly true that some of the profits of colonialism were incorporated into industrial activity, the large and important regions that were at the center of industrialization of Britain (and of Europe) were the least tied to colonialism. That said, colonization was brutal and draining, and it left a formidable legacy in many places. This is most evident in sub-Saharan Africa, where the legacy of the slave trade remains very much with us today. Many former colonies have also been mired in authoritarian dictatorships, which have limited economic growth. These results can be directly linked to the way the colonization took place and the way the colonists ruled the colony.
Have countries with poor geography managed to get rich? if so, how?
some have. Japan has very few natural resources but is one of the richest countries in the world. “Good” geography can be a blessing or a curse. In America it was a blessing, as access to all kinds of natural resources and climatic conditions contributed to its economic growth. However, many places with mineral or oil wealth (Venezuela, many parts of sub-Saharan Africa) remain poor despite access to valuable resources. Here the common denominators are the entities. Places with poor political institutions can ruin their “good” geography, using it to promote corrupt governance. This is less likely to happen in places with more inclusive political institutions, where the power of any one group of interests is somewhat limited.
How important do you find institutions and culture to improve the standard of living of ordinary people as compared to other factors such as geography, colonization and overpopulation?
All are important. I believe that institutions and culture are fundamental, especially in the way they talk to each other, As mentioned above, institutions can overcome the curse of poor geography. They can also help provide the right incentives for investment, innovation and economic freedom. These are all incredibly important characteristics of growing economies, and they do not arise out of thin air. But the same institution will not function in the same way in different societies. Culture plays an important role in shaping how economic and political institutions operate. For example, institutions that promote education (perhaps through government investment) will be more successful when there are cultural qualities that value education. This is just one example. And while there are many reasons why people in different parts of the world have different living standards, institutions—and the cultural characteristics that make those institutions work the way they do—are central to explaining those differences.