A Farewell To Alms Part II: Why Have Some Countries Profited From The Industrial Revolution?
By Steve Sailer
[See also last week's A Farewell To Alms: Why Did The Industrial Revolution Happen Where It Did?]
In A Farewell to Alms, economic historian Gregory Clark asks: Why has the Industrial Revolution of the last two centuries caused a Great Divergence, making some nations so rich, while others have stayed so poor.
This is a social scientist's question, not a historian's, because there are enough separate countries in the world that general patterns can be perceived that can be reasonably well explained by a limited number of factors.
There are a lot of data to work with, folks.
A quick survey of the globe shows, for example, that countries tend to be poorer when they are ruled by crazed ideologies (e.g., North Korea vs. South Korea) or are far inland (e.g., Paraguay vs. Uruguay).
But another factor is so obvious that we aren't supposed to mention it.
If you rank the 156 countries with populations of one million or more in order of per capita GDP, the top 23 are made up of one Arab oil country (the United Arab Emirates), four Northeast Asian countries—and 18 countries with populations primarily of European origin.
Number 24 is
, where Europeans make up a little less than half the population, but dominate the economy. Not until 33rd place do we find a non-oil country without a predominant European or Northeast Asian population: Trinidad and Tobago, which is 40 percent South Asian and 38 percent black. Israel
The poorest European country is Serbia, which is still ahead of 66 others.
As of 2006, the 43 countries with majority European populations average $22,000 each, the eight Northeast Asian countries $21,000, and the 105 other countries $5,225.
Economists, however, have intellectually disarmed themselves from tackling this second question.
"Although the disparities in performance across countries remained unchanged, the ‘labor quality’ explanation disappeared from the economics literature after WWII. … Unskilled labor is assumed to be of the same quality everywhere."