Now, of course, the key feature of the last two hundred years has been the coincidence of both rising populations and rising incomes, indicating an escape from the Malthusian trap. The way economists have typically explained this escape is to point to sustained technological change (endogenously driven by an increasingly skilled workforce),61 followed by falling fertility, itself argued to be a result of technological change, incentivizing parents to shift away from having lots of poorly educated children to having just a few that they could better afford to invest in.62 Quality replaced quantity. The divergence between ‘the West and the rest’ is subsequently explained by their resultant interactions in the trading domain. As the West industrialized, ‘the rest’ began to specialize in exporting primary products, which meant less of a demand for skilled workers and so a lack of transition from ‘quantity to quality’ in regard to childbearing decisions. Whilst the West therefore experienced the benefits of growth in terms of rising incomes per capita, the rest of the world experienced it in terms of an expanding population, which held down their standard of living.63
In these modern-day Malthusian-style models (known to economists as unified growth theory), fertility is modelled as a straightforward economic calculation. The problem is that it cannot – and should not ‒ be thought of independently of women's freedom to take charge of their bodies. Economists explain changes in fertility across long spans of time as if they were purely a result of choice: of women initially choosing to have lots of children and then, as we reach the late nineteenth and twentieth centuries, and at least in the West, choosing to have fewer children – in response to growth.64 Birth control is taken for granted – as if it has existed in a reliable enough form for centuries.65 Women are assumed to have been making a free choice, when for most of history pregnancy was not always a choice. It was often an inevitability. The shift to a world in which women do have control over their bodies deserves recognition for its contribution to lifting prosperity – and the lack of that bodily autonomy is equally vital to explaining why many poorer countries are still desperately poor. Given economists’ failure to acknowledge the importance of women's bodily autonomy, it is hardly surprising that, despite increased attention given to how to help the global poor, international funding for birth control for the world's poorest women has been on a declining trend.66 Indeed, more than 200 million women across the globe who would like to avoid pregnancy still lack access to birth control.67
2 Environment
Population growth wasn't the only obstacle to continued economic expansion in the past. So too was the environment. Some environmental episodes appear to be entirely external to the process of growth – a matter of bad luck ‒ but others are a direct consequence. Jared Diamond's magisterial economic history of the world points to the relationship between changing geography and the economy, including the shifting fortunes of the Middle East. Bruce Campbell has recently made connections between the performance of the medieval economy and environmental conditions.68 Moving forward in time, the Little Ice Age has been blamed for the long seventeenth-century crisis in Europe, a period in which there were serious upheavals politically, socially and economically. As current environmental conditions deteriorate, we need to take seriously the possibility of a negative feedback process through which environmental damage makes growth ever more difficult to sustain. As the Stern Review concluded: ‘The evidence shows that ignoring climate change will eventually damage economic growth … Tackling climate change is the pro-growth strategy for the longer term … The earlier effective action is taken, the less costly it will be.’69
Needless to say, there are clear links between Malthus's population concerns and today's environmental ones. Whilst many economists feel confident that Malthus is dead and buried, the environmental toll of the human race suggests that such thinking is at best hopeful and at worst arrogant.70 For those who are concerned, clean technology has been the focal point. However, evidence suggests that women's freedom over their bodies can be just as, or even more, cost effective. Project Drawdown – a coalition of scientists, scholars and others interested in the planet ‒ ranks 80 separate solutions to global warming.71 Family planning and the education of girls are ranked in the top ten, ahead of solar farms and wind turbines. Women's bodily autonomy is vital to making growth sustainable.
Gender also feeds into another, albeit indirect and more subtle, cause of environmental decay: how we choose to measure the economy and how that in turn affects what governments choose to prioritize. Where activities that result in the degradation of the natural environment actually benefit measured gross domestic product (GDP), the damage involved can easily be overlooked and even encouraged. When only the physical production of goods and services is included in how we measure the economy, activities that contribute to our well-being, and that have a much lower cost for the planet, can easily be ignored, along with the potential trade-offs between the two, trade-offs which, when not properly considered, can result not only in the depletion of the natural environment but also in the depletion of daily human energy and the va-va-voom needed to both look after (‘provide’) and create (‘reproduce’) human life.72 According to Bina Agarwal, ‘[t]here are important connections between the domination and oppression of women and the domination and exploitation of nature.’73 Both the environment along with reproductive and caring labour share common features: they are taken for granted, are historically ignored by national accounting and are undervalued. And, as a result, both are inevitably at risk of depletion, reducing our ability to sustain life on earth.74 Where the environment and non-market work are captured in how we measure the economy, politicians and policy makers are much more likely to stand up and pay attention to any warning signs. Feminist economists therefore recommend that our traditional focus on economic growth be replaced with a broader measure of the economy that incorporates both well-being and sustainability, and they have developed concepts accordingly such as ‘social provisioning’ and ‘social reproduction’.75
A number of alternatives to GDP are now available which take into account both the environment and non-market activities that generate well-being, such as household labour. They include the Index of Sustainable Economic Welfare, which builds on the early work of economists William Nordhaus and James Tobin, along with the Genuine Progress Indicator (GPI).76 In fact, alternatives to GDP seem to be ever expanding, with different countries, economic organizations and think tanks developing their own measures, often in competition with one another. There are also a number of different ways of valuing caring activities and a significant debate about the best means to do so.77 The problem is, therefore, that despite growing recognition of the importance of well-being and sustainability, as set out in the Sustainable Development Goals (SDGs), there is, as yet, no common agreement on an alternative measure to GDP, which means that it remains the most popular headline measure for any economy.
Gender matters not only for understanding the causes of environmental damage, but also for the consequences. As Agarwal notes, ‘it is women of poor, rural households who are most adversely affected and who have participated actively in ecology movements.’78 As Senay Habtezion notes, women ‘are highly dependent on local natural resources for their livelihood. Women charged with securing water, food and fuel for cooking and heating face the greatest challenges’, and yet they are often locked out of policy making, and ‘socio-cultural norms can limit women from acquiring the information and skills necessary to escape or avoid hazards (e.g. swimming and climbing trees to escape rising water levels). Similarly, dress codes imposed on women can restrict their mobility in times of disaster, as can their responsibility for small children who cannot swim or run.’79
Making growth sustainable is not possible in a world where women lack basic freedoms.
3 Politics
In addition to population and the environment, a further explanation for ‘growth stops’ is political. In particular, it is argued that the reversal of fortunes be
tween the northern and southern Americas, and the stagnation of Africa after 1650,80 was a result of the adverse effects on institutions of European political interferences.81 In regard to the Americas, economists have argued that Europeans set up extractive institutions – ones that resulted in a high degree of persistent inequality – in parts of the continent which were initially relatively prosperous: where there were obvious resources to extract (including silver), and where there were ‘scale economies’ in setting up slave-based production. Elsewhere, where there was less obvious low-hanging fruit on offer, and conditions were somewhat more favourable for human inhabitation, poor Europeans migrated and brought their democratic institutions with them,82 albeit these were not so democratic for the Plains Indians, who, being some of the tallest people in the world, seem to have had a reasonably high standard of living – until Europeans entered the scene.83 In regard to Africa, it is of course common to argue that ‘underdevelopment’ is a result of the slave trade and colonization. Recent research suggests that Africa has not always been poor (relatively speaking), only becoming so after the Europeans entered the story. Connections have been made between the slave trade, a lack of state development, ethnic conflict and general distrust amongst the population, all of which resulted in political institutions that were unfavourable to growth. Colonization has similarly been argued to have adversely affected political institutions, both through its authoritarian nature and through the way it encouraged ‘self-serving manoeuvering’ amongst African elites, with wealth and prestige in the colonial era being earned through political manoeuvering with occupiers, rather than through promoting wider prosperity.84 In other words, colonialism ‘divorced political ambition from public service’.85 Indeed, before colonial rule, almost one in two African societies had rulers who were kept in check by councils, and almost 90 per cent of centralized states had a judiciary. These figures fell to a quarter and 40 per cent respectively in the twentieth century.86
However, in addition to external political forces, often attracted like a bee to a honeypot, internal forces can also stand in the way of continued prosperity.87 After all, economic stagnation and growth reversals also beset parts of the world in which Europeans were not interfering from the outside. Understanding how a region can seemingly bite off its nose to spite its face hangs on the idea that economic prosperity creates ‘losers’ as well as ‘winners’. Economic advance involves a process of creative destruction: the replacement of older machines with newer versions and archaic products with more innovative ones. Along the way, some sectors of the economy shrink whilst others expand, and some businesses boom whilst others go bust. It is a process that is almost inescapable – unless, that is, we want to stand in the way of progress. However, there are necessarily those who have an incentive to block change: those with a vested interest in older techniques and those who possess obsolete skills. In addition, there are those who fear losing political power when others succeed.88
Mancur Olson, author of The Rise and Decline of Nations, famously argued that the resultant ‘vested interests’ build up over time and, by gaining political influence, bring about policy changes that make the economy increasingly sluggish. According to Olson, the problem is that these vested interest groups are much better at representing themselves to government than are those who gain from the economy's dynamism: the millions of consumers, current and future, who benefit from cheaper and more innovative products; and the younger generations equipping themselves with newer and more relevant skills.89
According to Joel Mokyr, an economy is best insulated from such pressures where government takes a hands-off approach, making it less liable to ‘capture’.90 The shift towards laissez-faire, as trumpeted by Adam Smith, was, Mokyr argues, one of the reasons why Britain was able to successfully sustain economic growth from the late eighteenth century onwards. That compares with medieval Italy, at the time the home of cloth production, which, in response to rising competition from north-western Europe, chose to enact various regulations which limited the use of new techniques and new dyes. The justification was that it would preserve the quality of Italian cloth; the upshot was that Italy could not compete.
The benefits of the laissez-faire approach are evident to any historian. However, such an approach also had its downsides. As the British economy rapidly industrialized in the nineteenth century, cities became overcrowded insanitary hives of disease, taking a toll on people's health – and, with it, on the economy's ability to keep growing. The market alone was not enough to solve this problem. Markets can and do fail and in a way that can put sand in the wheels of continued economic growth. Economic prosperity therefore demands a state that is neither non-interventionist nor interventionist but that can judge which interventions are reasonable and which are not; a state that can think and question for itself, rather than being captured by outside groups. The state also needs to be able to adapt to the changing needs of the economy. After all, the kinds of policies that work well at one point in time might not work well in another. The education system, welfare system and national health policy need to keep up with the economy to prevent success turning into failure.91 Democracy is, of course, crucial in terms of providing the right incentives to bring this about, and, as we will see later, democracy and women's freedom are intimately linked.
Conclusion
In this chapter, I have drawn five lessons from current thinking about how the West grew rich. Along the way, I have touched on some of the key factors that economists and historians typically identify when attempting to explain what ignites economic growth: markets, institutions, science and wages. However, we have seen that many of these factors can also be found in parts of the world that did not experience the type of transformation that began in Britain more than two hundred years ago. Something is missing from this story of prosperity creation, something much more distinctive of the West than markets, institutions, science or wages. It is a missing link that explains not only what turned on the ignition but what has enabled the West to sustain growth – and has allowed a handful of other countries to follow suit. It is the elephant in the room. It is women's freedom.
Whilst women's freedom was by no means perfect in Europe, relative to the rest of the world it gave the West an advantage that was difficult to beat. If the West wants to stay ahead, that's worth remembering today.
Notes
1 Fara (2010).
2 Ehret (2014).
3 Akyeampong et al. (2014), pp. 5‒7.
4 Akyeampong et al. (2014), p. 7; Inikori (2014).
5 Bateman (2016b).
6 The Dependency School argues that the rise of the West and decline of the rest are part of the same process (Rodney 1972; Amin and Pearce 1976; Wallerstein 1976).
7 Bateman (2016b).
8 Stiglitz (2016).
9 Bateman (2016b); Van Bavel (2016); Spek, Leeuwen and Zanden (2013).
10 Contrary to Polanyi (1944) and Finley (1999).
11 Polanyi (1966); Van Bavel (2016); Inikori (2007); Akyeampong et al. (2014), pp. 8‒10, and the chapters contained therein.
12 Bateman (2016b).
13 McCloskey (2010).
14 De Moor and Van Zanden (2010); Ogilvie (2011), pp. 91, 183, 187, 414; Howell (2010), pp. 100‒1; Fontaine (2014), pp. 134, 146.
15 North and Thomas (1973); North (1981, 1990); Jones (1988); De Long and Schleifer (1993); Landes (1999); Hall and Jones (1999); Parente and Prescott (2002); Acemoglu, Johnson and Robinson (2001, 2002, 2005); Acemoglu and Robinson (2012); Engerman and Sokoloff (2002); Greif (2006). Along the way, there has been a significant debate amongst economists regarding the relative role of geography and institutions in prosperity creation. On geography, see Jones (1987), Diamond (1999), Gallup, Sachs and Mellinger (1999) and Olsson and Hibbs (2005). On how geography and institutions can interact, see Acemoglu, Johnson and Robinson (2001); Engerman and Sokoloff (2002); Easterly and Levine (2003); Rodrik, Subramanian and Trebbi (2004).
16
North and Weingast (1989); De Long and Schleifer (1993).
17 Van Zanden, Buringh and Bosker (2011).
18 Ghanem and Baten (2016), p. 221; Austin (2016); Broadberry (2016), p. 38.
19 Austin (2016).
20 Akyeampong et al. (2014), p. 10; Bates (2014); Reid (2014).
21 Glaeser et al. (2004).
22 Ogilvie and Carus (2014).
23 Examples of using culture to explain economic outcomes range from Weber (2016) to Wiener (1981) and Landes (1999), who writes ‘If we learn anything from the history of economic development, it is that culture makes all the difference.’
24 Nunn (2012), Spolaore and Wacziarg (2009, 2013); Michalopoulos and Papaioannou (2011). Also Guiso, Sapienza and Zingales (2006); Bisin and Verdier (2000, 2001); McCloskey (2010, 2011, 2017); Alesina and Giuliano (2015); Tabellini (2008, 2010); Mokyr (2017); Rubin (2018).
25 Michalopoulos and Papaioannou (2010).
26 Tabellini (2008, 2010).
27 Kroeber and Kluckhohn (1952).
28 Richerson and Boyd, 2006, p. 5.
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