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Global Development: Views from the Center

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October 05, 2007

Gregory Clark's Farewell to Alms: It's Not What You Think

Posted by Lawrence MacDonald at 01:10 PM

CGD yesterday hosted a lively book chat with Gregory Clark, author of a provocative new book, A Farewell To Alms: A Brief Economic History of the World. Clark, a British academic who is the chair of the economics department at the University of California at Davis, was witty and charming as he proposed a theory of economic growth that implied that most of the development work going on in the world is wrong-headed and doomed to fail.

To put his views in perspective when introducing him, I offered a four-bullet intellectual history of development economics in the later half of the 20th century:

  • It's physical capital, stupid.
  • It's human capital, stupid.
  • It's markets and policies, stupid.
  • And finally, with a brief nod towards social capital we arrive at the current conventional wisdom: It's institutions, stupid!

Clarks' book offers a new paradigm that could be summed up as follows: It's evolution—of values and culture and just perhaps of the human species. (And it's almost certainly not institutions, stupid!)

Having worked as a reporter in East and Southeast Asia during the formative years of the what is sometimes called the East Asian Miracle, I've long felt that development economists spend too little time thinking about the role of values and cultural norms (in East Asia's Confucian tigers these include hard work, thrift, dedication to study and learning, and entrepreneurship). So I am not unsympathetic to parts of Clark's thesis, at least in terms of the role of culture and values.

Economist bloggers have been having a good time discussing these issues, and Clark has joined in the fray, for example, On EconLog.

One element missing from these discussions is the implication of Clark's controversial theories for rich-world efforts to help foster development—particularly for aid. Pressed on this question by my colleague Michael Clemens, an economic historian who specializes in offering historical perspectives on current policy debates, Clark disavowed any intention to provide guidance for the aid community. Basically he said that anybody who interfered in others' lives based on his work would be making a big mistake.

Yet in his presentation he specifically challenged health-focused interventions in Africa, such as those funded by the Gates Foundation, saying that they would merely raise the overall level of misery by keeping alive an ever larger number of people mired in poverty. And in the book itself Clark is pessimistic about any and all attempts by the rich to help the poor. He writes, "Even direct gifts of aid have proved ineffective in stimulating growth. In this context the only policy the West could pursue that will ensure gains for at least some of the poor of the Third World is to liberalize immigration from those countries." (p. 373)

Confusion on this score is exacerbated by the clever and provocative title of his book, which is not explained in the book itself. Clark set the record straight on that point yesterday. A Farewell to Alms, he said, was not intended to imply that there is no need for or value to development assistance. Rather it was intended to celebrate the end of poverty in the rich societies which was made possible by the industrial revolution. And, he added later, a clever title is crucial if you want to sell a lot of books.

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Comments

Clark's work is provocative, and given its quality, appreciated. It evokes parallels with Heilbroner's 21st Century Capitalism or Iron's more recent works. His sweeping remarks and uni-event threshold (the Industrial Revolution) brings smiles; Egyptian agriculture, Phoenician outreach, Hellenic Greece, Roman Empire, Gupta's dynasties, Chinese eras, Arab glory and Inca progress fade into his long wave background. Toymbee's and Ortega's tug of war over the influence of geography and culture become irrelevant--given the parameters chosen (well being of the common folks).

But what causes some concerns is that some may choose to read into Clark's work the wrong (or right?) message: genetic determinism. Discredited by the re-emergence of East Asia and other groups considered genetically inferior a few decades ago, it still lurks in the background. Fortunately, reviewers like McDonald mitigate that risk.

The "it is not the institutions, stupid" leads to a separate debate. The term itself has been used to explain many different relationships of profoundly different natures, including a conflation with the broader notion of culture. Its use, no doubt, has become confusing and imprecise. During my work with a donor agency, I ceased using the term (reinforcing pro-poor institutions) because it was understood as seeking to strengthen government agencies, and not, for example, contract enforcement and the social mind set (culture?) that makes it possible.

Today, when we look at the verites floating 2000 years ago, our hubris grows. Should we have any doubt that in 4007 our current views will elicit a similar response? And yet, we must continue to do the best we can with what we have today, while continuously questioning and refining our knowledge.

I appreciate MacDonald's four eras and their labels. All too often the development paradigm does not count; funding sources or income concentration defines the rules of the game and priorities to be pursued. The development practitioner and the politicians advised must embark on the adventure of what can be done, not what should be done. I like to think that today we are better equipped to navigate the shoals separating both option sets--even sub-Saharan Africa is beginning to awake. But one thing we know that many politicians do not want to factor in their decision: it will take time. Hopefully, the work of the Center will enrich the understanding of the time dimension in development. Their work with MCC proves they are effective. And to coin a phrase there is no magic bullets. McDonald's or Rostow's, Engels or Marx, national development is a melange...some work, and others fail. Recepees, not blueprints tend to have several degrees of freedom.

We have all learned a lot, but all too often we must agree with the irascible philosopher that the more we know the less we know. Will this morph hubris into intellectual humbleness? Not in Clark's work.

And as long as we are in the theme of hubris deflation: the world is not flat and neither is history.

Posted by: Felipe P. Manteiga at October 9, 2007 05:00 PM

So much writing. So many ideas. So much theorizing. The problem we face that gives rise to wars, poverty, and general violence is the essentially dominator model of living that has undergirded every economic system we've created roughly since the Agricultural Revolution--communism, socialism, and capitalism included. There is not room here to explore why and how we humans shifted from the generally egalitarian (and cooperative, nonviolent) nomadic hunter-gatherer way of life to the problems generated by settled living around rich and stable resources. I recommend the book by anthropologist Douglas Fry ("Beyond War") as reading for anyone interested in our deep past. I explore these changes in a book ("Women, Power, and the Biology of Peace") and a website (www.afww.org). If we are to ever have a major paradigm shift that has any possibility of leading us from poverty and violence, we'll have to change our values. We'll have to return to a more egalitarian lifestyle...one might call it an Egalitarian Revolution. Riane Eisler's new book, "The Real Wealth of Nations: Creating an Economics of Caring," is a must read for serious students of paradigm shift and economics. Rather than try to sound-bite her views, I recommend the book itself or as a second choice, a good review at www.malwarwick.com/learning-resources/articles/the-real-wealth-of-nations.html. I am an evolutionary biologist. My interest in economics and poverty is related to the phenomenon of war and how, or if, we can abolish it. Anyone interested in a biologist's out-of-the-box views on war can check the essays on my website and my book (see the references above).

Posted by: Judith Hand at October 10, 2007 08:38 PM

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