Why do some nations gain economic success? Geographical determinists see factors from our physical environment such as climate, the shape of continents, flora and fauna, topography, etc. The essence of the argument is that without significant advances in agriculture, which first and most depends on nature, industrialization is impossible.
Jared Diamond's bestseller Guns, Germs, and Steel (Norton, 2005) explains the rise of the West by drawing from the treasury of biological and anthropological research. The opportunity to transplant nutritious plants from other parts of Eurasia and the presence of animals suitable for domestication created a dependable food supply leading to higher population density and technological progress. This also provided more resistance to disease, giving unfair advantages to colonists in the New World.
Geographical explanations help to explain pre-industrial divergence. They do not explain, however, why New Zealand joined the club of the rich while Argentina, once with living standards comparable to those in the United Sates, has fallen behind. Or why, with the past half-century's opportunities for information flow, technology dissemination, and foreign investment, sub-Saharan Africa is still so desperately poor.
This is where modern "institutionalists" come to the rescue by shedding light on social constraints. Gregory Clark's A Farewell to Alms (Princeton, 2007) will resurrect interest in Max Weber's classic analysis in The Protestant Ethic and the Spirit of Capitalism. Both theories imply that the problem of poverty persists after geography stops playing a major role, and that a free flow of knowledge and capital is not enough to close the wealth gap. A Farewell to Alms scandalizes the politically correct reader by claiming that the West's global economic hegemony arises from a superior work ethic generated by a culture that extols hard work and thrift.
Clark focuses on demography. He argues that the Industrial Revolution started in England at a time when the upper class was reproducing faster than the peasants. Since there was not enough room at the top, the descendants of aristocrats formed an ambitious, entrepreneurial middle class. Through those disinherited but well-educated men, pro-capitalist attitudes trickled down and led to a slow accumulation of human, physical, and social capital conducive to sustained growth.
A question remains: Why was the energy of those who sought economic success in England channeled into commercial rather than government-oriented activities, as was the norm in medieval Europe? That's where more research is needed.
-Alex Tokarev is a professor at The King's College, New York City