Since institutions can have many faces, the very same institution could be argued to be either favourable or unfavourable – depending on whether one is looking at a rich or a poor country.
Last but by no means least, although ‘formal’ institutions have received considerable attention, ‘informal’ ones have received far less. They have long been lumped into the catch-all term ‘culture’ and left for sociologists to explore on the assumption that good or bad culture is merely the product of a good or bad economy. Indeed, whilst esteemed sociologists have long pointed to the way in which culture affects the economy, economists have often lambasted such arguments as being woolly, soft and superficial.23 Where culture has received more serious consideration, it has been by forcing it into the economic straitjacket: its repackaging in the form of what economists have come to call ‘social capital’.
Recently, however, economists have begun to take culture more seriously, particularly given that research now suggests that formal institutions are insufficient to explain economic outcomes (rather like markets).24 This includes evidence of the way in which the same ethnic groups have been found to perform relatively well in whatever country they are located in (and so whatever institutions they are subjected to),25 and that the same formal institutions can produce different effects in different places.26 Culture seems to matter.
Culture can be defined in a number of different ways (indeed, one study cites 164 different definitions27), but we can think about it as ‘information capable of affecting individuals’ behaviour that they acquire from other members of their species through teaching, imitation, and other forms of social transmission.’28 It can include attitudes to risk, to family, to strangers and to rule breaking, such as whether accepting bribes is deemed acceptable. Crucially, and as Deirdre McCloskey argues, culture can also include attitudes to markets, entrepreneurship and production: whether trade, work and rolling up your sleeves to produce are deemed acceptable ‒ something we too often take for granted today but wasn't always the case in years gone by.29 Culture is also, to say the least, key to bringing women into our story. Culture is, of course, extremely difficult to measure, which may help explain why economists, who tend to favour quantitative techniques, have neglected it. However, economic historians are currently working on novel ways to measure culture, including by finding ways of comparing and quantifying aspects of folklore – the beliefs, stories and customs passed down from one generation to the next.30 In the next chapter, we will span the world to document historic attitudes and practices relating to women.
Culture can affect prosperity independently of formal institutions, but it can also affect the evolution and success of those formal institutions.31 As we will argue in part III, family systems that are more supportive of women's freedom can go a long way to explaining the emergence of ‘good’ institutions. Where families involve extended kinship structures, who provide for themselves and who closely monitor their members’ actions, they can be inimical to the emergence of generalized trust and cooperation between non-family members. This both restricts the development of a deep and broad market and the emergence of a supportive state, whilst favouring nepotistic practices.32 Although it is rarely noted, these family systems are also exactly the ones that are most inimical to women's freedom – that constrain women's ability to live independent lives, that rely on them to provide caring activity, and that connect family honour with female modesty, sometimes with violent implications.33 They also, as we will see, start to crumble as women find opportunities outside in the marketplace.
Bringing women into the story also allows us to understand why transplanting democracy doesn't always deliver the expected benefits. As we will see, patriarchal cultures are much more supportive of autocracy than they are of democracy. By contrast, cultures in which women are viewed as equal – and where, in parallel, ‘fathers’ have less power over the young ‒ socialize all young people to speak up rather than shut up, to challenge people in authority and to hold them to account.
Women's freedom is at the roots of the type of cultural practices that deliver and sustain institutions that support prosperity. As the famous feminist saying goes, personal is political. Economists have, sadly, been too reluctant to integrate the private sphere of life with the public sphere.34
History Lesson 3: freedom is needed outside (as well as inside) the marketplace
Although when it comes to economic growth it is common to give much of the credit to the market, the fundamental driver of economic advance ‒ continued scientific and technological progress ‒ requires freedoms that go well beyond it.
According to Joel Mokyr, it is not the market alone that explains the increased scientific and technological activity in Europe, something that spurred the Industrial Revolution and sustained economic growth; it was the Enlightenment.35 The Enlightenment, which began in the late seventeenth century but gathered steam in the eighteenth century, involved a whole new way of looking at the world: one that was scientific. It involved a shift away from seeing the world as driven by fate, magic and heavenly forces to instead seeing events around us as the result of scientific law – law that was for us to explore, to understand and to harness in the process of taking charge of ‘nature’ in an effort to better human lives. Rather than feeling that individual human life was out of our hands – that our fate was something over which we had little individual control ‒ it introduced the modern-day notion that we have the power to bring about improvement by taking charge of nature. Not only did we have that power, but there was a sense that improvement was something that we should value. Progress, to paraphrase Mokyr, became both possible and desirable.
Rather than investing time and money in fasting, praying and purchasing religious relics, Europeans began investing those scarce resources in other ways: in innovation, investment and working longer and more intensively.36 Deference to authority was replaced with values that are crucial to fostering scientific improvement: openness and tolerance to new ideas; valuing merit over status; and free speech.
Of course, one of the major risks of arguing that the Enlightenment caused the rise of the West is that it implies that other parts of the world were ‘unenlightened’. Rather than taking such a route, Mokyr's more recent work points not to a lack of intellectual capacity outside of Europe but to the way in which powerful political actors in China and the Middle East responded by suppressing it.37 The implication is that, for the good of scientific advance, no one state should be large enough to turn off the lights of growth; that Europe's historic division into multiple states, between which intellectuals could move to escape repression, was crucial to sustaining scientific advance.38
Interestingly, in some ways the Enlightenment involved the exact opposite of ‘capitalist’ or ‘market’ values. It created a more cooperative and collaborative research spirit, one in which ideas were openly and freely distributed. And, unlike those involved in the marketplace, what drives scientists is, in general, something other than money: curiosity, intellectual discovery, peer recognition and the desire to reduce human suffering.
Now when economists think about freedom, their focus has traditionally been on the market: freedom for merchants and entrepreneurs. Following Mokyr, they now also emphasize the importance of freedom for intellectuals (basically, for people like themselves). However, we still need to think about freedom much more broadly, as Deirdre McCloskey39 has suggested in her Bourgeois Trilogy of books: the freedom to make the most of our lives no matter where we are born, to whom we are born or into what gender we are born.
To be free to make the most of our lives, we need to be free to stand up and stand out. In general, any society that enforces conformity limits the individual experimentation required for progress. In Africa, the slave trade became a tool to enforce conformity, with those seen as ‘troublemakers’ being the first to be sold into the hands of slave traders.40Accusations of witchcraft could easily hang over any individual who stood out – including those who s
ucceeded. If you did well, such as by trying a new seed that resulted in a bumper harvest, you risked being accused of being a witch.41 That's quite a disincentive to individual effort and experimentation. According to Jean-Philippe Platteau, witchcraft accusations are still a problem in many rural parts of Africa today – if anything, increasingly so as economic opportunities create disparities between households. Of course, witchcraft accusations were also common in sixteenth- and seventeenth-century Europe, when more than 100,000 people were tried, 40‒60,000 of whom were executed, and 80 per cent of whom were women.42 Interestingly, however, relatively fewer trials took place in England, which was to become the home of the Industrial Revolution.43 Cultures that are tolerant of individual difference are also those supportive of growth.
Not only is the Enlightenment story one which tends to focus on freedoms for intellectual elites as opposed to freedoms more generally, it is also a largely male story. Of course, as time went on, Mary Wollstonecraft and others argued that women were equally as capable of ‘reason’ but, with the very notion of freedom having developed at a time when women were second-class citizens and when birth-control technology was, compared to today, largely non-existent, the central importance of women's bodily freedom was left off the freedom agenda. Women's freedoms came to be seen as a duplicate of men's, ignoring the fact that there is one vital difference between the two: that a woman can never be free unless she has control over her fertility.
Indeed, at the very same time that the Enlightenment was beginning to take hold in Europe, restrictions on women's fertility and sexuality, including penalties for abortion, non-marital births and sex work, were deepening in many parts of Europe.44 As Merry E. Wiesner-Hanks points out, European authorities at this time executed more women for infanticide than any other crime (apart, that is, for witchcraft); restricted the hiring of unmarried mothers; built asylums to house and imprison not only sex workers but also women who had had sex before marriage (‘fornicators’), and even those simply deemed pretty enough that they risked falling into prostitution or fornication. It was not unknown for authorities to instruct midwives to examine the breasts of all local young single women in their neighborhood in the event that a baby was found abandoned, and one eighteenth-century German doctor went as far as to suggest that all unmarried women should bathe publicly once a month to ‘prove’ that they were virgins – that through such bathing any traces of non-marital births could be detected and punished. Indeed, as Merry E. Wiesner-Hanks goes on to note, ‘[i]mprisoning women for sexual crimes marks the first time that prison was used as punishment in Europe rather than simply as a place to hold people until their trial or before deportation.’45 Women's freedom to take charge of their own bodies (not only of their brains) seemed to escape the ‘freedom’ agenda, which continues to leave women's bodily autonomy at risk today, including through lack of access to birth control (the ‘global gag rule’), abortion and sex worker rights (under attack from the Nordic model).
As we will see in the final part of this book, the Enlightenment seriously affected the way in which economics itself developed: it pushed it in a direction that sidelined women. As Anne McClintock points out, metaphors of sexual dominance of men over women were central to the Enlightenment movement: nature was represented as female, as something that sat waiting to be dominated and tamed by male reason; so too with the exploration of foreign lands, European contact being commonly represented as a strong, white, armoured European chancing upon an ‘easy’ naked women basking sensually in the tropical sunshine, waiting not only for his seed but also to be ‘civilized’ by his application of reason.46
The Enlightenment explanation for the rise of the West might be increasingly popular, but it is also one which, through the groups it excluded, helps us identify what was limiting growth as much as what was driving it. The rise of the West might have been even stronger and faster had women's freedom been included rather than excluded. It's not surprising, therefore, that industrialization began first in the part of Europe where, relatively speaking, women had greater freedoms (and those freedoms had suffered less of a retreat).
History Lesson 4: high wages (not low wages) are good for growth
Since Karl Marx's time, it has been popular to argue that growth is built on the back of low-wage labourers, exploited by capitalists who extract ‘surplus value’ to fund investment and expansion. Marx had argued that the Industrial Revolution was a result of British peasants being dispossessed of their land rights in the ‘enclosure movement’, during which commonly owned land was privatized, which created a ‘working class’ ripe to be exploited by factory owners. Recently, there has also been a revival of interest in the way in which cheap slave labour contributed to the British Industrial Revolution and the rise of Europe.47
However, an economy might only grow so far by relying on cheap labour. That's the lesson of Robert C. Allen's research, which suggests that industrialization and sustained economic growth began not in a part of the world where workers were super-cheap, but in a part of the globe where they were relatively expensive.48 Allen argues that the Britain that gave birth to the Industrial Revolution was, in fact, a high-wage economy, and that these relatively high wages meant that businesses had to search for and develop machines that could mechanize production, saving on labour costs. According to Allen, high wages incentivized the movement of scientific ideas out of the ‘ivory towers’ (the intellectual domain considered by Mokyr) into the ‘real’ world: onto the factory floor, where productivity consequently rose and economic growth could, as a result, be generated. By the late nineteenth and early twentieth centuries, the centre of industrialization shifted towards the United States, where wages were even higher than in Britain. The result was an even more machine-intensive growth path, one of mass production, and a virtuous circle between rising wages and rising productivity.
However, whilst Allen considers the consequences of high wages for growth, what we also need is a complete explanation for the origin of high wages. Although Allen has himself explained high wages as being the consequence of increasing demand for labour, it is essential to also think about the supply of labour. And that requires us to bring reproduction, and with it women's freedom, into the story.
Although the argument that high wages are good for growth challenges models of development based on cheap labour, Allen's work has recently been the subject of intense debate. Three main objections have been raised. The first suggests that Allen overestimated British wages.49 The second revises upwards estimated wages in some other parts of Europe.50 The third, originating in the work of Jane Humphries, argues that high wages were not available to women and children51 nor, we might add, poorly paid immigrant labour, including that from Ireland. The high-wage story of the Industrial Revolution is, much like the Enlightenment story, a largely male story (and a white male one at that).
However, proving that cheap labour existed in Britain is one thing. Proving that it helped rather than hindered the Industrial Revolution is very different. Correlation does not mean causation. The Industrial Revolution might have been even faster had wages been higher. Cheap labour could have slowed things down, reducing the need to innovate, as we will see later on in this book.52 If that's the case, then cheap labour is doubly tragic: it certainly doesn't help the workers themselves, and neither does it help the economy. It is a lose‒lose. We can debate the extent to which wages were high in Britain, and the extent to which they were likely hangs on what is going on in women's lives, but it is trickier to deny the notion that low wages can be bad for long-term growth. As we will see, women's freedoms were better in Britain than in most other parts of the world; had they been closer to where they are today, growth could have been even more spectacular.
History Lesson 5: understanding why growth stops
It is not enough to understand why growth gets going in the first place; we also have to understand why it comes to a stop.53As we saw at the start of this chapter, there were a number of noticea
ble expansionary episodes in the many millennia before the Industrial Revolution. Dynamism was clearly capable of taking hold – and in quite a few different periods of history.54 History also reveals a series of unexpected ‘reversals of fortune’: between the Mediterranean and north-western Europe (after 1350)55; between West Africa and the Americas (after 1500) 56; within the Americas between the south and the north57; between Asia and Europe (some time before 1800)58; and between Latin America and Asia in the mid-twentieth century.59 Despite numerous sparks, no other civilization succeeded in maintaining economic growth for long enough or at a sufficiently high level to transform the standard of living to the extent that happened in the West.
History provides us with at least three reasons for why economic expansion can fizzle out: population growth; environmental ruin; and politics. All have implications for whether we can expect the western growth spurt to continue. And if we open our eyes to gender, all serve to highlight the vital role of women's freedom.
1 Population
On the eve of the Industrial Revolution, ironically just as Britain was beginning its miraculous rise, the economist Thomas Malthus was feeling pessimistic. Malthus took a famously dismal view of the economy's ability to sustain growth. He argued that population had a propensity to expand in a rapid ‘geometric’ fashion, outstripping the earth's ability to provide food and raw materials, which increased at a slower ‒ ‘arithmetic’ – rate. Wherever the economy started to expand, such as due to a new technology, Malthus believed it was ultimately doomed. As incomes began to improve, the death rate would, he argued, naturally decline. That together with high fertility (he was, after all writing at a time before modern-day contraceptives) meant population growth would increase. Under the pressure of population, food and raw material prices would rise, reducing the ‘real’ value of people's income, and making production more costly. As a result, the economy would soon end up back at the old standard of living, just with a bigger population than before.60 Technological superiority did not show up in people's income but in population density. Malthus was so convinced by his model that he had very little patience with attempts by government – or revolutionaries – to help the poor. He believed that the redistribution of income, as was the aim of the French Revolutionaries of the time, would simply lead to larger numbers of people, rather than serving to improve the lot of each one.
The Sex Factor Page 4
