Monday, 25 April 2011

How the West Grew Rich: The Economic Transformation of the Industrial World (Paperback)

by Nathan Rosenberg and L.E. Birdzell Jr.
In this elegant synthesis of economic history, two scholars argue that it is the political pluralism and the flexibility of the West's institutions--not corporate organization and mass production technology--that explain its unparalleled wealth.
About the Book
The central question that How the West Grew Rich addresses is precisely what its title implies. For thousands of years, human beings lived in unrelieved misery: hunger, famine, illiteracy, superstition, ignorance, pestilence and worse have been their lot. How did things change? How did a relatively few people--those in what we call "the West" -- escape from grinding poverty into sustained economic growth and material well-being when most other societies remained trapped in an endless cycle of birth, hardship, and death?

This fascinating book tells that story. The explanations that many historians have offered--claiming that it was all due to science, or luck, or natural resources, or exploitations or imperialism--are refuted at the outset, in the book's opening chapter. Rosenberg and Birdzell are then free to provide an explanation that makes much more sense.

Their story begins in the last half of the fourteenth century, which had seen "an apocalypse of wars, plagues, and famine" that dealt a fatal blow to feudalism. Feudalism had "established a society that lived, worked, and traded by custom and rule, not by strategy or calculating." When it was faced with massive changes, it could not adapt. Change was usually seen as heresy, immorality, or treason in any case. The power of political and religious authorities was eroded, and what emerged as a result was the beginnings of capitalism. Indeed, one of the problems faced was that this system emerged "virtually without thought or discussion," almost as if humanity was led to the system itself by some sort of "invisible hand."

How the West Grew Rich looks at every aspect of this process of the emergence of capitalism including:

* the role that "lawlessness, to the point of revolt" played in the process
* the emergence of "economic autonomy," for the first time in centuries
* the role of "economic experiments"
* the origins of major institutions, vital to preserving the precarious "free market"
* competition and the growth of technology
* the "moral creativity" of the new entrepreneurs faced with the challenges brought by a changing world
* how economic growth benefitted mainly the lower classes
* why "the great automobile fortune was Henry Ford's, not Henry Royce's"

-Reviewed by Roy A. Childs, Jr.

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