Possible Causes of the Industrial Revolution

I've just finished reading Greg Clark's book, A Farewell to Alms, available in Kent Library. Clark addresses a few very interesting questions. First, why did the Industrial Revolution begin in England and not Japan or China or India or somewhere else? Second, why did the great expansion in economic well-being begin around 1780 and not before? Third, what were the drivers behind the escape from the Malthusian trap where, for thousands of years, advances in technology resulted in short-term per capita income gains which were wiped out by an expansion in the population?

Clark examines the main economic growth theories and finds them all insufficient as explanations for growth. Instead, Clark argues that there were four main drivers of the Industrial Revolution that occurred over centuries. First, interest rates declined because individuals became more patient and willing to defer gratification. In an interesting section, Clark gives evidence that forager/hunter societies have very high rates of time preference (they strongly prefer current consumption to future consumption). For example, the Yanomamo of Brazil, have such a high rate of time preference that they cut the branches off berry bushes to make picking easier, even though it reduces future harvests and even kills the bush. The decline in interest rates allowed greater accumulation of capital which helped fuel growth. Second, economic growth occurred because of greater willingness to work more. People in forager societies lived at the subsistence level but worked little; on average the male Yanomamo worked between three and six hours a day, while male laborers in England worked between eight and nine hours per day, but also existed at the subsistence level. However, the longer work hours became a cultural norm and helped enhance efficiency as the world went through the demographic transition to lower population growth. Third, "literacy and numeracy went from a rarity to the norm." Numeric skills were needed to facilitate the use of money as a medium of exchange, rather than barter, and ultimately allowed technological innovation to spread. Finally, there was a decline in interpersonal violence. While Clark glosses over this driver of growth, I would argue that the decline in interpersonal violence gave rise to greater trust between individuals. Without trust, voluntary trade between strangers is more difficult resulting in a loss of the gains from specialization according to comparative advantage.

Clark provides evidence on a wide range of economic and social indicators between various hunter/gatherer societies and more industrial societies to build his case. He looks at height, fertility rates, calorie consumption, work hours, transportation costs, population, profit rates, interest rates, land rents, and wages. Clark's overall theme seems to suggest that the industrial revolution occurred in England and Europe because of cultural changes, rather than institutional changes, such as greater reliance on private property rights and markets and limited government.