A link to the essay.
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This is a link to an excellent article
published by the Mises Institute (https://mises.org) on July 24, 2018 - It
originally appeared as "The Theory of Economic Development and the
European Miracle" in The Collapse of Development Planning, edited
by Peter J. Boettke.
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The author's theme is that the lack of study
of economic history has prevented economists today from understanding the full
meaning of The 'Economic Miracle' that took place in Europe resulting in the
Industrial Revolution and the creation of the modern world. He especially notes
the persistance of the previous popular misunderstanding of the reality of
Europe during the 'Middle Ages'. Contrary to Enlightenment dismissal, the
European Middle Ages was Not a 'dark age', but a flourishing period of
developments that directly prepared for the creation and expansion of
capialism. He discusses some of the likely causes of this and cites authors who
have written much to overcome the results. Even more so, however, is that huge
lack of interest by establishment economists today on the economic history of
ancient Mesopotamia and Egypt. This is begining to be improved, see some
samples below. But especially theories about 'money' begin with Coinage in
Lydia and Greece as if the developed urban societies in the Near East didn't
have money for 3000 years already.
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The essay is additionally valuable for the
extensive bibliography and end notes. However, the bibliography includes only
works published prior to 1992. There are many other books and articles that
confirm his thesis and I will list some of them below.
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The author also criticizes contemporary
academic study of history, economics, and economic history.
He quotes P. T. Bauer, "The historical background is essential for a
worthwhile discussion of economic development, which is an integral part of the
historical progress of society. But many of the most widely publicized writings
on development effectively disregard both the historical background and the
nature of development as a process."
He adds his idea, "Too many writers in the field have succumbed to
professional overspecialization combined with a positivist obsession with data
that happen to be amenable to mathematical techniques. The result has been
models of development with little connection to reality".
His critique applies equally to academic historians as to economists.
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Further, again quoting Bauer, "It is
misleading to refer to the situation in eighteenth and nineteenth century
Europe as representing initial conditions in development. By then the west was
pervaded by the attitudes and institutions appropriate to an exchange economy
and a technical age to a far greater extent than south Asia today. These
attitudes and institutions had emerged gradually over a period of eight
centuries".
And he follows this with his summary, "At the root of the approach
criticized by Bauer there appears to be a methodological holism that prefers to
manipulate aggregates while ignoring individual human actors and the
institutions their actions generate. Yet, 'differences in people's capacities
and attitudes and in their institutions are far reaching and deep seated and
largely explain differences in economic performance and in levels and rates of
material progress'".
So true, and also in the differences in their political actions. The same
approach is favored by many historians and especially by sociologists and
political theorists. Rather than take the trouble to study the details of
individual beliefs, decisions, and resulting actions, they aggregate these and
study, then theorize, only macro level concepts. For instance, rather than
attributing government policy and political actions to individual rulers they
write about 'states' and competition between 'rising powers' and 'status quo
existing powers'.
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References
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Sloan, John Bourgeois Role - This is
my summary and general review of the three books by Dr. McCloskey on the
central role of the Bourgeois in creation of the Industrial Revolution and
modern world
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McCloskey, Deirdre Nansen, Bourgeois
Equality This is volume 3 of the series
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McCloskey, Deirdre Nansen, Bourgeois
Virtues This is volume 1 of the series
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McCloskey, Deirdre Nansen, Bourgeois
Dignity This is volume 2 of the series
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Muller, Jerry - The Mind and the
Market The author describes and critiques intellecturals - authors and
commentators - who aproved of or disapproved of capitalism
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Muller, Jerry - Thinking of
Capitalism. This is an extended continuation of the above with many more
authors.
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Trentmann, Frank- Empire of Things A
massive compendium of the material wealth generated by the Industrial
Revolution and its continuation to the present.
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Bury, J. B. The Idea of Progress: An
Inquiry into its growth and oritgin The author describes ancient, classical
and medieval conceptions of reality - that is static or deteriorating from some
mythical past golden age. He then shows the revolution in thought that occured
when real, material, this world, progress was accepted and promulgted.
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Cheyney, Edward - The Dawn of a new Era
1250-1453 A history of the late middle ages - early modern era - that
describes the real development.
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Mantoux, Paul - The Industrial Revolution
in the Eighteenth Century The subject is the gradual development of the
factory system in England.
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Stark, Rodney- How the West Won: The
Neglected Story of the Triumph of Modernity
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Bernstein, William J. - The Birth of
Plenty How the Prosperity of the Modern World Was Created
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Trentmann, Frank - Empire of Things: How
We Became a World of Consumers, from the15th Century to the21st
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Mokyr, Joel- Culture of Growth: The
Origins of the Modern Economy
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Morris , Ian - Why the West Rules - for
Now| An interesting effort to quantify the standard of living of a society
from Neolithic era to the present. He shows the same amazing and immense
increase in living standards in western Europe around 1800 that Dr. McCloskey
describes but without her explanation of causes. This is very strongly not only
the materialistic view but also the result of econometrics - reliances on
statistics and mathematics.
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Ferguson, Niall - Civilization: The West
and the Rest The author proposes four broad social conditions which he
claims set the West apart and caused it to 'dominate' the world. Dr. McCloskey
cites Ferguson and disagrees with his basically materialistic theories.
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Landes, David - Wealth and Poverty of
Nations: Why Some are so Rich and Some so Poor Another effort to explain
Western 'domination' of the modern world. Again, Dr. McCloskey cites Landes and
disagrees with his theory on causation. This is another basically materialistic
concept.
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Landes, David & Joel Mokyr & William
Baumol -The Invention of Enterprise A very valuable multi-authored set
of essays describing the role of entrepreneurs in economies from ancient
Mesopotamia to modern times. Market economies, entrepreneurs, and credit are
not new phenomena. This book refutes Polyani's ideas about ancient economies.
Several essays are about the development of commerce, markets, and innovation
in Western Europe (and China) that disagree with Dr. McCloskey on the timing of
these events.
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Spufford, Peter - Power and Profit: The
Merchant in Medieval Europe A huge study of the actual conditions of
commerce in late medieval times based on both the author's personal visits
throughout Europe and his mining of original sources. I believe he presents a
view of a much more advanced economy in late middle ages Europe. This book
refutes Polyani's ideas about medieval economies. It also indicates that the
'betterment' had a more gradual development in Western Europe than Dr.
McCloskey claims.
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Gordon, Robert J. - The Rise and Fall of
American Growth - An immense compendium of data on the origins and
developments of all sorts of technology in the U.S. but flawed by the author's
insistence that economic expansion is ending because every significant
technology has already been invented and employed. But his conclusion is a
typical leftist set of government interventions that he believes may improve
the future. Dr. McCloskey disagrees with his conclusions. She believes that
unless government stifles innovation that there are many more revolutionary
ideas to come. George Gilder and many other authors also stress that the
expanding role of 'surprise' in the information economy will expand living
standards even more.
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Gordon, John Steele - An Empire of
Wealth Another historical look at the expansion of American living
standards, but this one starts earlier than Robert Gordon's examples. This
author includes the role of financial causes such as credit - in fact he
stresses the role of credit. The first several chapters on colonial and early
constituted US are particularly full of evidence of the role of credit. And the
description of the role of Alexander Hamilton is excellent.
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Ingham, Geoffrey - Capitalism
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Ingham, Geoffrey - The Nature of Money
A sociologist looks at the narrow discussions of economists on this subject
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Rothbard, Murray N. - Economic Thought
Before Adam Smith vol 1 of An Austrian Perspective on the History of
Economic Thought
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Rothbard, Murray N. - Classical
Economics - vol 2 of An Austrian Perspective on the History of Economic
Thought
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Rothbard, Murray N. - A History of Money
and Banking in the United States a throughly 'revisionist' account that
provides a much different understanding of American history than one finds in
standard school text books.
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Podany, Amanda - Brotherhood of Kings
A delightful book about the diplomacy of the Mesopotamian 'great kings' and
Egyptian Pharoah based on translations of their prolific correspondence on clay
tablets preserved in their archives being rescued from archeological sites.
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Podany, Amanda - Ancient Mesopotamia
Transcript to accompany a fascinating Great Courses lecture series. The
analysis is based on the continuing translation of thousands of clay tables
recovered from archeologic sites.
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Hudson, Michael- ...and forgive them
their debts The author focuses on the manner in which Mesopotamian rulers
periodically abolished the accumulated debts of their subjects.
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Manning, A. G. ed- The Ancient Economy:
Evidence and Models Discussions about the past failure of economists to
reconginze the significance of developed economic activity in Mesopotamian and
Egyptian societies during centuries prior to the appearance of Classical Greece
and Rome
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David Hackett Fischer- The Great Wave
Detailed analysis based on price data from the 12th century to the present
describing the recuring waves of large increases in price levels and subsequent
declines (inflations and deflations) in Western Europe
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