How the West Got Rich

http://www.wsj.com/articles/why-the-west-and-the-rest-got-rich-1463754427?utm_source=pocket&utm_medium=email&utm_campaign=pockethits

by SonicSoul • 10 years ago

14 7 10 years ago

wsj.com

m0llusk• 10 years ago

A highly detailed and relevant discussion of this subject can be found in the robustly researched work Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity by William Baumol, Robert Litan, and Carl Schramm:

http://sites.kauffman.org/capitalism/

woopwoop• 10 years ago

There is a compelling argument that liberty, or at least efficient markets, inhibits technological innovation. The reason is that there is no incentive to innovate when there is robust competition, since the advantage gained by an innovation will be competed away before the investment into the innovation can be recovered. In other words, why bother to invent if you are just going to be copied anyway?

rumiarabi• 10 years ago

So no mention of Imperialism and the vast transfer of wealth from indigenous peoples to their colonial oppressors? Not even a nod? We're rich because we're so free and liberated and gosh if these third world knuckleheads would just get it together they'd be just as rich! A+ WSJ.

jack9• 10 years ago

No, it was some fantastical idea that capitalism is inherently productive. Nevermind that those idea sex pots (what a shitty analogy) would have fallen on their face when you tried to run a steam engine through an existing infrastructure. The wide open plains and untapped resource mining and abundant water and farmlands is the economic plunder wave the US has been riding.

This is a 0 value fluff piece about rainbows with pots of gold at the end.

SonicSoul• 10 years ago

I admit I was conned by this article to seem legitimate. Can you recommend some posts/articles/books that are not fluff pieces on this subject? really trying to understand this subject

Animats• 10 years ago

That's the WSJ.

Of course, what really did it was steam, iron, and steel. Until the 1800s, economic growth in Europe was about half a percent a century. Didn't matter whether you had a king or a Parliament. A few coastal cities had figured out how to do shipping efficiently and were doing OK, but that had been happening on and off since Roman times. Those were sometimes city-states run by merchants, and were the closest thing to capitalist empires before the Industrial Revolution. That didn't scale; there wasn't much to ship yet.

Then came steam engines. It took a century to get that right. The first Newcomen steam engine, in 1712, was a dud, mostly because there was nothing to make a good boiler and cylinder with yet, so an extremely inefficient low pressure system had to be used. It took a century to get to Watt's engine. That was good enough for locomotives, and finally things started to spin.

The big moment was the opening of the Liverpool and Manchester Railway, in 1830. This was the moment when railroads got out of beta. People could, for the first time, buy a ticket and go someplace. Within a few decades, railroads were everywhere in Europe and growing in the US and India.

The Next Big Thing was steel. Steel has a long history, but until 1880, it was an expensive niche product, like titanium today. Then came the Bessemer process. Suddenly there was something strong and cheap from which you could make stuff.

None of this came out of the merchant city-states. The Hanseantic League didn't develop railroads. The Mediterranean maritime states didn't develop heavy industry. The most capitalist organizations on Earth at the time did a lot for art and architecture, but didn't start the Industrial Revolution early.

For a different view, learn how the East got rich. Read "How Asia Works".[1] This is a good study of how some of the east Asian countries went from the 18th century to the 21st in a few decades. The early stages required some degree of central planning, and specific incentives.

[1] https://www.amazon.com/How-Asia-Works-Success-Failure-ebook/...

evgen• 10 years ago

Don't forget canals. They were the transport infrastructure beta test for England. With canals it finally made economic sense to extract more and produce more than the immediate local economy could use. Canal building also prepared the public to invest/speculate on the new infrastructure and provide capital the government was unable or unwilling to risk. Railroads poured fuel on the fire, but the first spark came from canals.

How the West Got Rich

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