Mysteries of Economic Growth

Economic Growth in France and Britain 1851-1950

by Charles P. Kindleberger
Harvard, 378 pp., $8.95

The social sciences are always in danger of forgetting the unwelcome fact that they are very much less mature than they think, partly because their subject-matter is extremely difficult, partly because they cannot escape the ideologies, and partly because they are overrun with amateurs claiming to be professionals: politicians, businessmen, journalists, administrators, and the rest. Few presidents would claim to make technical suggestions about the construction of nuclear power-stations; but any fool who can read the financial pages has opinions about the economy and sometimes publishes them in print. The social sciences are therefore littered with theoretical rubbish which ought long ago to have been carted away. This state of affairs justifies books like Professor Kindleberger’s.

Its purpose is to eliminate wrong hypotheses about economic growth rather than to establish right ones. The author is equipped for this task not merely with logic, a good deal of historical reading, and a dry throwaway style, but also with a welcome lack of respect for his colleagues. He is politely puzzled by social psychology, social anthropology, and sociology: “to the extent that he can comprehend the jargon, their theories seem to him either wildly overgeneralized or self-evident.” He has no great hopes of history: “What has been revealed is the virtual impossibility of providing anything positive about theories of growth through the use of history, and the propensity of economic historians, with rare exceptions, to overgeneralize.” His view of economics is short of hero-worship: “As on so many occasions the task of economic analysis was a priestly one, to justify what was taking place for deepseated reasons rather than to determine the direction of movement.” In brief, he makes a good critic. Whether his constructive capacity is equally great is uncertain.

Professor Kindleberger has set out his exercise in skepticism as a comparative study of Britain and France between 1851 and 1950, a choice of countries and dates which is probably justifiable only on the grounds that any two countries, over any reasonably long period, will do to argue that there is at present no general theory of economic development which can also explain their divergences and fluctuations. This may well be so, though the theories which he investigates are of the more simple-minded type—mainly those which derive economic growth from the chief or exclusive operation of some single, often external, factor, such as the availability of natural resources or capital, the rate of population growth, entrepreneurship, “national character,” technological change, the presence or absence of competition, the independent activities of governments, and the like. He has no difficulty in showing that such “single-valued” explanations will not work. He also considers—perhaps more perfunctorily than is warranted—several relationships within the economy: those between the transformation of agriculture and industry, between exports and home industry and between different parts of a country. Actual general theories of development are rather neglected, except for a brief passage about Marxism, with which the author claims no close acquaintance, and a chapter on the “stage-theories” of Hoffman and…

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