The Wealth and Poverty of Nations
The Wealth and Poverty of Nations (ISBN 0-393-04017-8), published in 1998 (with an epilogue added to the 1999 paperback edition), is a book by David Landes, currently Emeritus Professor of Economics and former Coolidge Professor of History at Harvard University. In it, Landes explains the 'European Miracle', or why European societies experienced a period of explosive growth when the rest of the world did not.
In doing so, he revives, at least in part, several theories he believes have been unfairly discarded by academics over the last 40 years. Among them:
- The 'cultural thesis' or 'Protestant work ethic' of Max Weber
- The 'hydraulic thesis' or 'Oriental Despotism thesis' of Karl A. Wittfogel
- The 'climate thesis' that posits that tropical climes are, ceteris paribus, poor candidates for development.
- Many of the theories of Adam Smith, whose Wealth of Nations is borrowed from for the title. But this does not necessarily mean a doctrinaire neoclassicism, as Landes notes that 'comparative advantage' can change over time, and also that developed countries, contrary to neoclassical theory, typically developed in an environment of protectionism against foreign trade.
He also spends a good deal of time in the effort to debunk claims that this miracle did not happen, was not significant, or was financed by European colonialism.
In short, he argues that the vast economic growth of Industrial Revolution was no accident--that several qualities of Europe (its climate, political competition, attitude towards science and religion, etc) and especially certain countries in Europe (firstly England, but also to an extent the Netherlands, with other countries left to copy their advances with varying degrees of success)
[edit] Criticism and response
Critics have charged Landes with Eurocentrism in his analysis, a charge which Landes himself does not deny--in fact, he embraces it explicitly, arguing that an explanation for an economic miracle that happened originally only in Europe (though he deals with the later 'Asian miracle' in Wealth and Poverty) must of necessity be a Eurocentric analysis, thus siding at least at some level with thinkers such as Bernard Lewis. Following Daniel Bell, knowledge is the necessary link between 'The European miracle' and the American post-industrial society.
Recent Work by Tabellini (2007, 2008), Guiso (2006), Inglehart (1996), Marini (2005) and Platteu (2000), in addition to Work by Banfield (1958), provides strong econometric evidence in support of the Landes conclusion. Finding among other things that Africans and South Americans value thrift and entrepreneurship, on average, much less than North American and Northern Europeans and that the levels of trust in these countries are substantially lower than in the West. Trust is important in a society because it lowers transaction costs.
Landes' disdain for mono-causal explanations has also caused his theory to be labeled as confused or contradictory.[citation needed] Landes does give several 'causes' and does not go into much detail explaining what he sees to be their relative weights. This is done, however, by the authors mentioned in the previous paragraph.
