Most World's Important Unanswered Historical Question: 'What Changed
by Gary North: Why
Economists Love the Federal Reserve
historian Gregory Clark summarizes a remarkable fact.
. . . there
is no sign of any improvement in material conditions for settled
agrarian societies as we approach 1800. There was no gain between
1800 BC and AD 1800 a period of 3,600 years. Indeed the
wages for east and south Asia and southern Europe for 1800 stand
out by their low level compared to those for ancient Babylonia,
ancient Greece, or Roman Egypt.
1800, this all changed. Economic growth began: about 2% per annum,
compounded. That brought our world into existence.
We are the
great beneficiaries of a process that few people understand. No
one has explained cogently how it came into existence. A rate of
growth so slow that no one could perceive it at the time has created
a world that would have been inconceivable in 1800.
has taken a mere three generations. This is simply inconceivable.
gave me a great Christmas present in 2010. She scheduled an appointment
for me to interview a man in her church. His name is Lyon Tyler.
My daughter grew up in a city named after his grandfather: Tyler,
Texas. His grandfather was John Tyler, the tenth President of the
United States. He signed the law that admitted Texas into the Union
was born in 1790, the first full year of Washington's Presidency.
younger brother, also alive, uses the ultimate one-upsmanship one-liner
I have ever heard. After chatting for a while with a stranger, he
springs it on him.
my grandfather once said to Thomas Jefferson. . . ."
You can try
to top that one. You won't succeed.
In 1889, the
first volume of Henry Adams' history of the administrations of Jefferson
and Madison appeared. Adams was the grandson of President John Quincy
Adams. He began his book with this paragraph.
to the census of 1800, the United States of America contained
5,308,483 persons. In the same year the British Islands contained
upwards of fifteen millions; the French Republic, more than twenty-seven
millions. Nearly one fifth of the American people were negro slaves;
the true political population consisted of four and a half million
free white or less than one million able-bodied males, on whose
shoulders fell the burden of a continent. Even after two centuries
of struggle the land was still untamed; forest covered every portion,
except here and there a strip of cultivated soil; the minerals
lay undisturbed in their rocky beds, and more than two thirds
of the people clung to the seaboard within fifty miles of tide-water,
where alone the wants of civilized life could be supplied. The
centre of population rested within eighteen miles of Baltimore,
north and east of Washington. Except in political arrangement,
the interior was little more civilized than in 1750, and was not
much easier to penetrate than when La Salle and Hennepin found
their way to the Mississippi more than a century before.
The world of
1800 would have been recognizable to Socrates, except for the printed
book. In contrast, the world of 1889 would not have been recognizable
to the young John Tyler.
By 1889, these
post-1800 inventions had arrived: gas lighting, electric lighting
(arc light), the steam powered ship, the tin can, the macadamized
road, photography, the railroad, portland cement, the reaper, anesthesia,
the typewriter, the sewing machine, the Colt revolver, the telegraph,
the wrench, the safety pin, mass-produced newspapers, pasteurization,
vulcanized rubber, barbed wire, petroleum-based industry, dynamite,
the telephone, Carnegie's steel mills, the skyscraper, the internal
combustion engine, the automobile, and commercial electricity.
So, as I move
toward the day when I am a footnote rather than a participant, I
propose a thesis. One unanswered question above all others constitutes
the most important historical question in recorded history. Here
happened around the year 1800 in Great Britain that led to approximately
2% per annum economic growth for the next two centuries?
historians think this began around 1780. Others, most notably Angus
Maddison, believe it began in 1820. The year 1800 is a good middle-ground
world is not even remotely like the world of 1800. In contrast,
1800 was recognizably similar A.D. 1. Clark points out that in the
Roman Empire in A.D. 1, information traveled at about one mile per
hour. In 1800, this had increased to about 1.4 miles per hour. Compare
that with the speed of light: 186,000 miles per second. That was
what the telegraph did.
The world of
1876 was not remotely like 1800. Yet compare 1876 with today. A
child in 1876 who read a newspaper account of Custer's Last Stand
lived long enough to see Neil Armstrong walk on the moon in 1969.
In 1967, I
took a graduate seminar in economic history from Hugh Aitken. I
had studied this subject as an undergraduate with him in 1962. Aitken
was a great teacher. He is not famous, but several years after I
took that seminar, he became the editor of The Journal of Economic
History, one of the two major academic English-language journals
in the field. In one session, he said this. "There is no agreement
on what happened around 1800 to launch the Industrial Revolution."
There is still no agreement.
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2011 Gary North
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