How the West Grew Rich: The Economic Transformation of the Industrial World by Nathan Rosenberg, L. E. Birdzell, Jr, and: The Age of Manufactures 1700–1820: Industry, Innovation and Work in Britain by Maxine Berg

Abstract

962 Book Reviews TECHNOLOGY AND CULTURE How the West Grew Rich: The Economic Transformation of the Industrial World. By Nathan Rosenberg and L. E. Birdzell, Jr. New York: Basic Books, 1986. Pp. xiv + 353; notes, index. $19.95 (cloth); $10.95 (paper). The Age of Manufactures 1700—1820: Industry, Innovation and Work in Britain. By Maxine Berg. New York: Oxford University Press, 1986. Pp· 378; illustrations, tables, notes, bibliography, index. $10.95 (paper). A century after Arnold Toynbee coined the term, there is still no compelling scholarly explanation of the causes of the Industrial Rev­ olution. Nathan Rosenberg and L. E. Birdzell, Jr., posit a plausible answer. Like most such answers, theirs relies on metaphor. Technology provided the “lever,” while “some familiar Western institutions pro­ vided the fulcrum.” Those institutions included the law, the corpo­ ration, and the banking and credit system. Rosenberg and Birdzell are more interested in the fulcrum than the lever. They are convinced that the relative autonomy of those economic institutions from gov­ ernment intervention was the key to the West’s transformation, and they are convinced that their argument matters for the future. Con­ straints on the free exercise of economic authority by government, they warn, might well threaten the foundations of the West’s prosperity. How the West Grew Rich is a deeply conservative book. No other book in recent years marshalls the economic history of the West in defense of laissez-faire in such a sustained manner. To their credit, there are moments when the authors acknowledge evidence that does not fit. The geometric expansion of output in the West has continued in the 20th century, at the same time as government intervention in the economy has increased. This suggests, as the authors state, that other causes may be at work. Since there are no known limits to the advance of knowledge, “the growth of technology is especially appealing as an explanation of the persistence of Western economic growth” (p. 262). But it is an insight that is not elaborated. The book’s principal weakness is the lack of a sustained and cred­ itable analysis of the benefits of government economic intervention. In the American case, this was not simply a matter of regulating trade, enforcing property rights, and educating a work force. This the au­ thors mention. The government, at federal, state, and local levels, provided private industry with land and capital in the 19th century. State governments subsidized canals, granted public rights to private corporations, and funded banks. In this century, the government con­ tinues as a major source of research and development funds and of the costs of transportation improvement. In addition, government regulation of the marketplace has had clear benefits to some sectors of business. No convincing explanations of the West’s economic success can be constructed by posing such a sharp distinction between the TECHNOLOGY AND CULTURE Book Reviews 963 government and the economy, nor by neglecting the benefits that private enterprise derived from government. The authors’ ideological biases are most apparent in their treatment of labor. The response of that small number of middle-class reformers who sought to remedy the evident abuses of the factory system was, according to the authors, a form of “social pathology.” After viewing the poor for generations simply as objects of charity, such reformers saw the factory system as evil rather than as a “significant social ad­ vance.” This, Rosenberg and Birdzell claim, was pathological. Artisans who saw themselves as victims of new and unfair competition “ab­ surdly caricatured” reality. They were, the authors tell us, “monop­ olists at long last caught up with.” The increased length of the working day reflects, not exploitation, but the improved diet of workers and is thus an indication of “improved worker welfare.” Those seeking a balanced account of the costs and benefits of the Industrial Revolution will not find it here. What they will find is an extended interpretive essay attempting to synthesize a vast and growing literature. The authors range from the Middle Ages to the growth of science-based industry. Rosenberg is a prominent economist and historian of technology and on several im­ portant issues he has useful things to say. But...