An Interesting Explanation for the Industrial Revolution: Capitalism is Genetically Inherited

Nicholas Wade reports in the NYTimes about a UCD professor, Gregory Clark, and his theory of the Industrial Revolution. His answer is that high fertility rates in the upper classes caused them to steadily supplant lower classes. They brought productive values with them such that when the population reached a critical mass of individuals with middle class breeding so to speak, the Industrial Revolution occurred:

A way to test the idea, he realized, was through analysis of ancient wills, which might reveal a connection between wealth and the number of progeny. The wills did that, but in quite the opposite direction to what he had expected.

Generation after generation, the rich had more surviving children than the poor, his research showed. That meant there must have been constant downward social mobility as the poor failed to reproduce themselves and the progeny of the rich took over their occupations. "The modern population of the English is largely descended from the economic upper classes of the Middle Ages," he concluded.

As the progeny of the rich pervaded all levels of society, Dr. Clark considered, the behaviors that made for wealth could have spread with them. He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer societies to 1800. Work hours increased, literacy and numeracy rose, and the level of interpersonal violence dropped.

Another significant change in behavior, Dr. Clark argues, was an increase in people's preference for saving over instant consumption, which he sees reflected in the steady decline in interest rates from 1200 to 1800.

"Thrift, prudence, negotiation and hard work were becoming values for communities that previously had been spendthrift, impulsive, violent and leisure loving," Dr. Clark writes.

Around 1790, a steady upward trend in production efficiency first emerges in the English economy. It was this significant acceleration in the rate of productivity growth that at last made possible England's escape from the Malthusian trap and the emergence of the Industrial Revolution.

In the rest of Europe and East Asia, populations had also long been shaped by the Malthusian trap of their stable agrarian economies. Their workforces easily absorbed the new production technologies that appeared first in England.

It is puzzling that the Industrial Revolution did not occur first in the much larger populations of China or Japan. Dr. Clark has found data showing that their richer classes, the Samurai in Japan and the Qing dynasty in China, were surprisingly unfertile and so would have failed to generate the downward social mobility that spread production-oriented values in England.

After the Industrial Revolution, the gap in living standards between the richest and the poorest countries started to accelerate, from a wealth disparity of about 4 to 1 in 1800 to more than 50 to 1 today. Just as there is no agreed explanation for the Industrial Revolution, economists cannot account well for the divergence between rich and poor nations or they would have better remedies to offer.

Many commentators point to a failure of political and social institutions as the reason that poor countries remain poor. But the proposed medicine of institutional reform "has failed repeatedly to cure the patient," Dr. Clark writes. He likens the "cult centers" of the World Bank and International Monetary Fund to prescientific physicians who prescribed bloodletting for ailments they did not understand.

If the Industrial Revolution was caused by changes in people's behavior, then populations that have not had time to adapt to the Malthusian constraints of agrarian economies will not be able to achieve the same production efficiencies, his thesis implies.

Dr. Clark says the middle-class values needed for productivity could have been transmitted either culturally or genetically. But in some passages, he seems to lean toward evolution as the explanation. "Through the long agrarian passage leading up to the Industrial Revolution, man was becoming biologically more adapted to the modern economic world," he writes. And, "The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality."

What was being inherited, in his view, was not greater intelligence -- being a hunter in a foraging society requires considerably greater skill than the repetitive actions of an agricultural laborer. Rather, it was "a repertoire of skills and dispositions that were very different from those of the pre-agrarian world."

Read the whole thing because it is much more involved than this quote suggests.

I guess I don't dispute his data with respect to the higher fertility rates in the rich or that this would likely cause a slow demographic shift in a Malthusian population.

What I am skeptical about is this association with capitalist values and genetics. I am willing to believe that the habits of the middle class were downwardly transmitted from parents to children. But behavior is just not heritable enough to justify the claim that something as complicated as a tendency towards capitalism is the result of one's genes. If so, which genes? What is the mechanism for that?

At the minimum, I might be willing to accept that an individual's time horizon with respect to risk and reward -- long time horizons leading to more saving -- might be related to how anxious that person is or how driven. Personality traits are partially though not primarily heritable. (For more information of the inheritance of behavior, read this.)

What just makes me skeptical is that he seems to be ignoring the environmental factors.

Hat-tip: Slashdot