Monday, April 14, 2014

Can the industrial revolution be explained by the "cool-water condition"?

In my last post I discussed how Christian Welzel’s book, Freedom Rising has reinforced me in the view that the story of human flourishing is all about emancipation. As people obtain more action resources (wealth, intellectual skills and opportunities to connect with others) they tend to adopt emancipative values and to engage in collective action to attain more civic entitlements. Life provides greater opportunities for most people as this process occurs.

Before proceeding further it may be worth noting that there is evidence that poor people in low-income countries place value on economic freedom and the right to express their opinions e.g. the survey evidence by Deepa Narayan, Lant Pritchett and Soumya Kapoor discussed by William Easterly in The Tyranny of Experts, p 150 (which was reviewed on this blog a few weeks ago). It is hardly surprising that poor people do not like governments stealing their property or impeding their endeavours to earn more income and then telling them to shut up when they complain. Humans don’t have to become wealthy before they perceive that they have natural rights that should be respected.

In this post I consider whether or not Freedom Rising provides a satisfactory explanation of the conditions that got the ball rolling toward improved civic entitlements by enabling people to achieve higher material living standards, first in western Europe and then in many other parts of the world. It is important to have an understanding of the factors that led to the industrial revolution in order to consider whether a reversal of those factors could cause the processes of emancipation and human flourishing to be interrupted.

Professor Welzel identifies an environmental condition, the cool-water (CW) condition, as the source of the expansion in action resources associated with the industrial revolution. The CW condition is a combination of moderately cold climates, rainfall in all seasons, and permanently navigable waterways. These conditions are important because cool temperatures diminish infectious diseases, decelerate soil depletion and diminish physical exhaustion from work; continuity of rainfall improves land productivity and keeps water sources healthier; and permanently navigable waterways are a lubricant for economic exchange. Under the CW condition, soil is arable without irrigation, small farming households can work relatively large sections of land on their own, there is no need for extended families with many children to provide labour, and families do not have much need for community support. The CW condition enables people to have water autonomy – it prevents a central power from monopolising access to water as a means of controlling people.

 The development of urban markets occurred late in the CW societies, but once urban markets emerged in the CW societies of western Europe, the CW conditions made those societies more vibrant by generating “derivative autonomies, such as autonomy in marketing one’s skills, ideas and produce – the engine of technological advancement”.

It seems plausible to me that the CW conditions improved the odds that the industrial revolution would occur in western Europe rather than in some other part of the world at a comparable stage of technological development, e.g. China. My problem is that narrowing the source to western Europe provides, at best, a partial explanation. Why did the industrial revolution begin in north-western Europe rather than, for example, in south-western Europe?

If we want to answer that question then it seems to me that it is useful to look at economic history and, in particular, the works of people like Joel Mokyr and Deidre McCloskey. I suppose it is predictable that I might take that view since that is the approach taken in Chapter 7 of my book, Free to Flourish, and in posts on this blog (for example here and here).

Joel Mokyr has suggested that the industrial revolution should be referred to as the industrial enlightenment. He argued in The Enlightened Economy that a sustained period of industrial innovation was made possible because the “legitimisation of systematic experiments carried over to the realm of technology”.

Deidre McCloskey presented her views about the importance of value change as follows:
In particular, three centuries ago in places like Holland and England the talk and thought about the middle class began to alter. Ordinary conversation about innovation and markets became more approving. The high theorists were emboldened to rethink their prejudice against the bourgeoisie, a prejudice by then millennia old. … In northwestern Europe around 1700 the general opinion shifted in favour of the bourgeoisie and especially in favour of its marketing and innovating. … People stopped sneering at market innovativeness and other bourgeois virtues …”.

In Free to Flourish I concluded my discussion of drivers of opportunity in the following terms:
“This account of the historical drivers of opportunity underlines the importance of economic freedom in determining the advance of technology and innovation. Yet, the ongoing expansion of opportunities depends on much more than just formal rules and economic incentives. It also depends importantly on beliefs, ideologies and social norms.
One implication is that inter-personal trust and supportive public attitudes toward commerce need to be recognised as important factors influencing the growth of opportunities. Another implication is that the economic freedom necessary for ongoing growth of opportunities cannot be sustained unless prevailing beliefs, ideologies and norms are supportive.

The relationship between prevailing values and economic freedom seems to me to be a topic worth exploring further. It would be interesting to see to what extent emancipative values are correlated with values that support economic freedom. Are emancipative values protective of economic freedom, or is there reason to be concerned that such values are leading to increased pressure for “entitlements” that threaten economic freedom and hence the further growth of action resources?

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