How the West Won

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

by David S. Landes
Norton, 650 pp., $30.00

If we learn anything from the history of economic development, it is that culture makes all the difference.” So David Landes sums up the message of his book. The title he chose and the histories of particular nations that he explores with wit and impressive learning are thus part of a sustained criticism of neoclassical economists’ faith in the power of free markets to affect all peoples similarly and thus maximize wealth and well-being. Landes, on the contrary, argues that the historical record shows: 1) “The gains from trade are unequal.” 2) “The export and import of jobs is not the same as trade in commodities.” 3) The “comparative advantage” a nation may have in international trade “is not fixed, and it can move for and against.” 4) “Just because markets give signals does not mean that people will respond timely or well. Some people do this better than others, and culture can make all the difference.”

Yet Landes does not “advocate any particular national policy…. I just want to say that the current pattern of technological diffusion and catch-up development will press hard on the haves, especially the individual victims of economic regrouping, while bringing ‘goodies’ and hope to some of the have-nots, and despair, disappointment and anger to many of the others.” Not a very cheerful prognosis for the United States, therefore, or for the world. Yet the book concludes on a rather different note:

History tells us that the most successful cures for poverty come from within…. What counts is work, thrift, honesty, patience, tenacity…. The people who live to work are a small and fortunate elite. But it is an elite open to newcomers, self-selected, the kind of people who accentuate the positive…. Edu-cated, eyes-open optimism pays; pessimism can only offer the empty consolation of being right. The one lesson that emerges is the need to keep trying.

Landes himself is among the “small but fortunate elite” he admires, a man who “lives to work,” and keeps on trying to understand the economic history of the world. His book is the fruit of an academic tradition of economic history that began in the 1880s when Arnold Toynbee (uncle of the famous historian Arnold J. Toynbee), while lecturing at Oxford on the reign of King George III, invented the term and concept of “Industrial Revolution.” Since then, innumerable scholars have both challenged the concept and reaffirmed it; they have explored its antecedents in Britain and Western Europe, studied the diffusion of the “revolution,” and argued about why it occurred when and where it did. Landes’s earlier book, The Unbound Prometheus (1969), remains a splendid summation of this long debate, with special emphasis on, and sensitivity to, changing technologies of production in Western Europe.

His new book expands the scope of his previous work.

My aim in writing this book is to do world history…. I thought to trace and understand the main stream of economic advance and modernization: how have we come to where and what …

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