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Journal of Economic Literature 2008, 46:4, 946–973 http:www.aeaweb.org/articles.php?doi=10.1257/jel.46.4.946 A Review of Gregory Clark’s A Farewell to Alms: A Brief Economic History of the World Robert C. Allen* A Farewell to Alms advances striking claims about the economic history of the world. These include (1) the preindustrial world was in a Malthusian preventive check equi- librium, (2) living standards were unchanging and above subsistence for the last 100,000 years, (3) bad institutions were not the cause of economic backwardness, (4) successful economic growth was due to the spread of “middle class” values from the elite to the rest of society for “biological” reasons, (5) workers were the big gainers in the British Industrial Revolution, and (6) the absence of middle class values, for biological reasons, explains why most of the world is poor. The empirical support for these claims is examined, and all are questionable. 1. Introduction have the first Industrial Revolution?—Clark proceeds in a similar a priori fashion. There saiah Berlin divided thinkers into two is very little testing of Clark’s theories: there Isorts—foxes and hedgehogs—following is scarcely a regression in sight nor even Archilochus’s adage: “The fox knows many a “horse race” in which they are matched things, but the hedgehog one big thing.” Greg against alternatives to see which can best Clark is a hedgehog, and this will make him explain what happened. Instead, informa- popular with those economists who proceed tion and anecdotes are assembled to show by first formulating a model and then fitting that the world exemplifies Clark’s ideas. A it to the world. His big idea is the macroeco- Farewell to Alms: A Brief Economic History nomic distinction between Malthusian and of the World (Princeton University Press, Solovian phases of history. Clark narrates the 2007) has a clear story line that makes for an story of the world in these terms, and, as sub- engaging read. But is it true? sidiary issues arise—e.g., why did England As befits an enthusiast for the forager life style, Clark is very good at hunting down * Allen: Nuffield College, Oxford University. Without remarkable facts and gathering unusual anec- implicating them, I thank the following for comments dotes. We learn how rapidly it took news of and advice: Sam Bowles, Stan Engerman, Tim Guinnane, events in distant lands to reach England (pp. Knick Harley, Shiela Johannsson, Zorina Khan, John Komlos, Cormac O’ Grada, Peter Temin, and Jan Luiten 306–07), how many calories were produced van Zanden. by an hour’s work in different societies (p. 68), 946 Allen: A Review of Gregory Clark’s A Farewell to Alms 947 and even the intriguing fact that Malthus’s on whether his theories accord with the facts. family line died out because his children had Clark supports his argument with his own none of their own (p. 81, n. 19). Nuts and ber- brand of casual empiricism with little refer- ries from the forest are scattered throughout ence to the findings of other scholars who A Farewell to Alms. are often more careful, comprehensive, and In the preface, Clark (p. x) recognizes that methodologically sophisticated. The ques- he may not convince all of his colleagues in tion that animates this review is whether economic history, and in that he is correct. Clark’s theories stand up in the light of that Most economic historians are foxes, and many research. will find the book unappetizing. They see the This review is organized around the major world as a complicated place and proceed propositions of A Farewell to Alms. They inductively rather than deductively. Their are: models of inquiry are Baconian and posi- • The preindustrial world was Malthusian, tivistic: The accumulation of more evidence and demography kept income per head will eventually reveal the truth. Models can constant for 100,000 years. help to organize and guide the collection of • Bad institutions do not explain the information, but they are no substitute for absence of economic growth. On the research. Clark has done serious work along contrary, the institutions of medieval these lines—mainly the collection of prices England were almost perfect for growth. and incomes that we will discuss later—but • Rather, the lack of growth in the prein- he is also too dismissive of much historical dustrial world was due to bad culture, scholarship. He distinguishes his book from to a lack of the “middle class” virtues of “the usual dreary academic sins, which now hard work and thrift. seem to dominate so much writing in the • The Industrial Revolution happened in humanities.” Whereas most historians see England because the middle class vir- themselves collecting information to create tues spread down the social scale there an increasingly accurate description of the in the sixteenth and seventeenth centu- past, Clark sees their work as “willful obfus- ries for biological reasons. The poor did cation and jargon-laden vacuity” (p. x). In its not have enough surviving children to place, Clark offers us the big picture. But is reproduce themselves, while the rich had he “leading us to the light” as he hopes, or is a surplus with the result that children he offering what Berlin calls the hedgehog’s of the rich were forced down the social typically “fanatical, inner vision”? scale. The middle class virtues went with We should not judge a book by its cover them since they were—quite possibly— and probably not by its title either, for, in this carried in their genes. This mechanism case, it is inaccurate. The aim of the book is did not operate in other countries since to explain why some countries are rich and the rich and the poor had similar num- others are poor. The West (including Japan) bers of surviving children. has achieved mass prosperity, but the rest • Income grew slowly during the Industrial have yet to bid a “farewell to alms.” Indeed, Revolution and workers rather than in Clark’s view, their prospects are bleak. capitalists or landowners were the main Why have some countries succeeded? Is pes- beneficiaries. simism about the rest warranted? These are • The Industrial Revolution ought to have big questions and Clark offers answers that spread quickly around the world since are often original. Whether they are impor- modern machinery could be imported, tant insights or novel eccentricities depends and low wages should have given 948 Journal of Economic Literature, Vol. XLVI (December 2008) businesses in poor countries a competi- portion of the fertility function represents the tive edge. However, for biological rea- behavior of people who defer marriage when sons, workers in Asia, Africa, and Latin incomes are low. If the curves in the two ver- America lacked middle class values. As sions were otherwise the same, the preven- a result, the competitive advantage was tive check allows an equilibrium wage that frittered away in high manning levels, is higher than “bare bones” subsistence and and poor countries stayed poor. reflects cultural patterns related to marriage. Malthus took this possibility very seriously. He believed that wages in China and India, 2. Was the Preindustrial World for instance, were lower than in England, and Malthusian? he attributed the difference to differences in Clark divides world history into two phases: marriage behavior. In England, he believed The first was a Malthusian phase. “The same all social strata delayed or postponed mar- [Malthusian] economic model applies to all riage when economic conditions were diffi- societies before 1800” (p. 30). The second cult—hence the upward slope in the fertility was the subsequent period of sustained eco- function—while he believed marriage was nomic growth. This division is supported universal in Asia, so fertility was at its maxi- by the striking graph of the real wage in mum. In Malthus’s view, England equili- England from 1200 to the present. The curve brated at a “cultural subsistence” wage that looks like a right angle: It is horizontal from exceeded “barebones” subsistence. 1200 to the early nineteenth century when The history of real wages is broadly in it turns almost vertical rising by a factor of accord with Malthus’s views. To explore this ten in the last 150 years. According to Clark, question, I have deflated the real annual Malthusian dynamics explain the stasis from earnings of laborers with the cost of a “bare 1200 to 1800. But do they really? bones subsistence” basket for a family, rep- While it is widely believed that the pre- resenting the minimum cost of survival in industrial world was Malthusian, the view different parts of the world.1 Diets are speci- is controversial among economic historians. fied to provide a man with 1940 calories per Part of the trouble is that Malthus proposed day (and other family members accordingly) two versions of his model, which makes it using the cheapest available carbohydrate. difficult to reject “Malthusianism.” In both For northwestern Europe, that was oatmeal; versions, the wage in the long run was deter- for Florence, it was polenta; for Delhi, it was mined by equating fertility and mortality, millet chapatis; for Beijing, it was sorghum. which were both regarded as functions of Peas or beans are included as well as mini- the real wage. In the first and simplest “posi- mal allowances for meat or fish, butter or oil, tive” check version, the mortality rate was a cloth, fuel, and rent. When full-time, full- declining function of the wage, while fertil- year earnings for the man equal the annual ity was at its maximum and independent of cost of this basket, the family exists at sub- the wage.

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