Books in Review: 'The Wealth and Poverty of Nations'

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor. By David S. Landes. Norton. 650 pp. $30.

***

The irony of this major study of economic development is that its author writes as a complacent secularist and yet his fundamental thesis is theological. One can see this by comparing it to a rival study, in some ways its superior in clarity and theoretical cogency, How the West Grew Rich: The Economic Transformation of the Industrial World (1986). In that book, Nathan Rosenberg and L. E. Birdzell, Jr. stress institutional relationships, such as those between political and economic structures, and between science and markets. But David Landes, professor emeritus of history and economics at Harvard, unabashedly stresses culture, especially religion, and in particular, the Judaism that lies behind Christianity. In his final summary pages we read, for example:

"If we learn anything from the history of economic development, it is that culture makes all the difference. (Max Weber was right on.) Witness the enterprise of expatriate minorities—the Chinese in East and Southeast Asia, Indians in East Africa, Lebanese in West Africa, Jews and Calvinists throughout much of Europe, and on and on. Yet culture, in the sense of the inner values and attitudes that guide a population, frightens scholars."

And what precisely do the "inner values and attitudes" shaped by religion do? Landes quotes approvingly the view of the nineteenth-century Argentine champion of freedom, Alberdi, who called the religion of the English, the Germans, the Swiss, and the North Americans "the agent that makes them what they are." The center of culture, so to speak, is cult; men aspire to what they worship.

Europe’s buoyant political and economic dynamism required three specific theological breakthroughs, Landes thinks: the Judeo-Christian respect for manual labor, the Judeo-Christian subordination of nature to man, and the Judeo-Christian sense of linear time. He emphasizes elsewhere how the authority of God, conscience, and church limits the authority of secular state claims and thus creates space for liberty.

Landes believes that European success required more than Judeo-Christian theology, though: "In the last analysis, however, I would stress the market. Enterprise was free in Europe. Innovation worked and paid, and rulers and vested interests were limited in their ability to prevent or discourage innovation." Culture is crucial, but alone it does not suffice.

Landes organizes his text into twenty-nine chapters, covering the whole of human history and every part of the world. These chapters are crowded with vignettes, anecdotes, delicious quotes from ancient chronicles and journals, shrewd distinctions, and reasons for and against various arguments put forward by economic historians of past and present. His style is unusually lively for an academic, and its tone is rather more like that of journalism of a high order than of systematic scholarship. His method is eclectic and commonsensical rather than heavily theoretical or ideological.

It is not as though Landes does not have an ideology of his own; about that, more later. But no other historian recounts quite so large a store of anecdotes, concrete empirical materials, and fragments of theory—just enough theory to be the skeleton for his vast range of concrete stories. From Landes, one gains a new sense of how steel was first made; the technological grandeur and the limitations of the great Chinese empires of hundreds of years ago; the tragedy of the intellectual and practical decline of Islam; the pride and self-enclosed world of Spain at the height of its power; and countless fascinating stories of craftsmen, organizers of great enterprises, and trades and barters of all types. It is as if all of economic history had come to a great world’s fair, and one could visit it, pavilion after pavilion, being inspired with wonder and a sense of intellectual delight. And the theme of all the exhibits is unified: What has worked, and why; and what has not.

Landes provides a great deal of evidence that Jewish-Christian Europe cultivated discovery and novelty as did no other culture. He judges that the inventiveness of the years 1000-1500 in Europe were the most dynamic of the preceding 4000 years. He lists some of the crucial inventions of that era: water mills and other mechanical devices; the mechanical clock—the first digital, not analog, device; the eyeglass, greatly heightening the sense of precision and the possibilities of miniaturization; printing; gunpowder—used, not as the Chinese used it, for incendiary display but for the projection of force.

This is a book to be taken seriously, especially by non-economists. Anyone who wants to get a down-to-earth economic education enriched with endless examples will find in this text an unparalleled opportunity. Nonetheless, I see four flaws in it.

First, there is the problem of the author’s ideology, lightly disguised in his last paragraph: "We must cultivate a skeptical faith, avoid dogma, listen and watch well, try to clarify and define ends, the better to choose means." It would be naive to believe from this that Landes is without an ideology of his own. Even he admits to holding strong opinions. He is, for example, disturbingly anti-Catholic. He also takes pokes as often as he can at "classical economists," free-marketeers, and partisans of laissez-faire. His arguments reveal the principles of the sort of mixed-regime liberalism one has come to expect from Cambridge, Massachusetts, closer in his case perhaps to Paul Samuelson than to John Kenneth Galbraith.

Second, these principles prevent him from paying attention to a rival vision of economic history: that of the "classical liberals" or "Austrian school." Among the writers on economic history whom he entirely ignores are Schumpeter, Mises, Hayek, Viner, Rothbard, and Kirz ner. Further, on the medieval period to which Landes pays such surprising and welcome attention, and precisely on Max Weber, Landes neglects to treat Randall Collins’ key volume, Weberian Sociological Theory (1986). By not paying attention to the work of various students and critics of Weber, Landes falls into the trap of never being very clear about what Weber actually said, and which precise parts of his hypothesis have been overturned or revised in the nearly one hundred years since he wrote.

Weber, for instance, is not very good in helping to explain differences in the performance of Protestant groups; why so few Calvinists have been found who actually taught what Weber imputes to them; why the economic performance of some Calvinist groups was long retarded; and, as Randall Collins points out, why Weber did not see that all the conditions for the rise of the spirit of capitalism that Weber attributes to the eighteenth century had already been met in the twelfth, as the huge tide of economic innovations and great social transformations at that time suggests.

Collins stresses the following points of Weberian theory: the specialized economic pursuits of various orders of monks; the availability of appeal to international authority in Rome regarding disputes among competing jurisdictions (emperors, kings, barons, prelates, abbots, orders, merchants, guilds, confraternities, etc.); the total economic dedication of tens of thousands of skilled celibate laborers; systems of accounts; sustained investment and continuous accumulation of capital; emphasis upon innovation and efficiency; the clearing of land and the use of mechanical power; the growth of new industries, from mining and metallurgy to machine-made textiles; and the building of libraries and the cultivation of research both practical and theoretical. All this long precedes the birth of Calvinism.

The third flaw is Landes’ "cultivated skeptical faith," which seems to be insufficiently skeptical about secularism, for while he invokes religion, he never takes it seriously enough to study it, even a little. For Landes "the invention of invention" is the crucial economic dynamic. He senses that its origin is religious, and he himself notices (without adjusting his theoretical framework) that its power is manifest well before the Reformation. But he never allows his skepticism to question secularism. Had he done so, he might have discovered, as Daniel Boorstin did in The Creators (1993), that the Jewish/Christian conviction that all people are made in the image of their Creator, and called to be like Him, has been a creative force unique in the entire modern world.

Landes might then have seen that Max Weber’s preoccupation with "hard work," a "secular asceticism," and the "logic" of bureaucratic development missed the bullseye. The truly dynamic factor in economics is creativity, serendipity, innovation, and the act of enterprise. When Weber wrote, the number of democratic republics in the world could be numbered on one hand, and so he also failed to see how such republics (i.e., under limited government, as well as government by the people) interact with and alter the economic order. In general, Landes is disappointingly weak on many theoretical links that one would like to understand as clearly as possible: between markets and republics; faith and inquiry; hope and enterprise; habits and practices; institutions and laws.

Finally, in a footnote in his final chapter, Landes suggests that people turn to religious faith out of weakness, seeking comfort, whereas "science and reason are tough companions." He is quite wrong about religious faith; it is often a far tougher companion than science and reason. These, by contrast, often seem to offer a sure circle of comfort.

One wishes that in his wide reading Landes had come to detect that stubborn faith in a divine and purposeful universe whose springs run somewhat deeper than science and reason alone, and prevent them from floating on air. Such a faith, rather than the comfort-seeking religious faith he thinks he finds, would seem to be consistent with the thesis Landes already holds: that Jews and Christians have felt a deep and persistent obligation to be faithful to reason and science, come what may—and thus the obligation to build the civilization whose centuries of nooks and crannies Landes has observed teeming with joyful vitality. Landes should be more surprised by this joy. It is an important datum.

Published in First Things May 26, 2004