It is somewhat fitting that, in a week where Joel Mokyr won the Nobel Prize in economics, I was just finishing up reading a book on economic history. It wasn't one of Mokyr's books though (although they are on my to-be-read list now). It was The Rise of the Western World, by Mokyr's fellow Nobel laureate Douglass North, co-authored with Robert Thomas.
A lot of economic history focuses on the Industrial Revolution. North and Thomas focus their attention earlier, on the period between the High Middle Ages and the Enlightenment, between 900 CE and 1700 CE. This period is of interest because it was when western Europe emerged from a feudal society into more modern political states, and during which property rights over land increasingly developed. These changes formed the antecedents to the Industrial Revolution that was to come. North and Thomas summarise this in the introduction to the book:
Economic growth occurs if output grows faster than population. Given the described assumptions about the way people behave, economic growth will occur if property rights make it worthwhile to undertake socially productive activity. The creating, specifying and enacting of such property rights are costly, in a degree affected by the state of technology and organization. As the potential grows for private gains to exceed transaction costs, efforts will be made to establish such property rights. Governments take over the protection and enforcement of property rights because they can do so at a lower cost than private volunteer groups. However, the fiscal needs of government may induce the protection of certain property rights which hinder rather than promote growth; therefore we have no guarantee that productive institutional arrangements will emerge.
My ECONS102 students will probably recognise important elements in there from their lectures, including property rights, institutions, and transaction costs. Indeed, I learned a lot from reading this book that will help to better articulate and link those points, as well as bringing in not only this work, but the work on common governance by Elinor Ostrom.
The majority of the book works through the period chronologically, developing the ideas and presenting supporting data where needed. It finishes by considering differences in institutions and economic growth performance in the 'early modern period' between England, France, Spain, and the Netherlands. The writing can be a little dry, but it is neither heavily data-driven nor overly theoretical. However, economic theory definitely underpins the key ideas in the text. Consider this bit on growth in the Middle Ages:
...we suggest that a growing population was the exogenous variable that basically accounts for the growth and development of Western Europe during the high Middle Ages. An expanding population in a local area would eventually encounter diminishing returns to further increases in the size of the labor force. Part of the increased labor force would as a consequence migrate to take up virgin land in the wilderness, thus extending the frontiers of settlement. However, the density of habitation would still be greater in the older areas than on the frontier, and this differential, resulting in a variation of land-to-labor ratios between areas, when coupled with regional differences in natural resource endowments, would lead to different types of production. Such variances would allow profitable exchanges of products between regions. We submit, therefore, that the development and expansion of a market economy during the Middle Ages was a direct response to the opportunity to gain from the specialization and trade made feasible by population growth.
North and Thomas don't pause to explain the economic terms in their exposition. So, while this book is readable to a non-economist, it seems to me that only those with a bit of economic training will truly appreciate the ideas presented in the book. Indeed, that is almost certainly the audience that North and Thomas had in mind. For those with a little bit of economic knowledge, and an interest in economic history, there is a lot to be gained from reading this book. I recommend it, especially to anyone looking to see the story up to the point where the economic historians specialising in the Industrial Revolution take over.
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