Why Us and Not Them?


(Read Part 1Part 2,  Part 3, Part 4)

The study of economics poses many great questions.

But there’s one question in particular – which most of us may well have wondered about at some time or another – even if we never actually studied the subject.

The question is this:

How come we in the West have had it so good – and for so long – compared to the rest of the world?

The lynchpin of course was industrialization.

But what was it about Western Europe which enabled it to industrialize in the first place?

Why did it not happen in some other great civilization instead – and a long time before – such as in China or India or Egypt or Greece or Rome or Turkey or wherever?

Why was it they never made it to the next level?

Niall Ferguson, in this lecture, put it as follows:

“How are we to explain this, the ultimate global imbalance, which placed a minority of mankind – at most a fifth – in such a position of material and political superiority over the rest? It seems implausible that it was due to some innate superiority of Europeans, as the racial theorists of the 19th and 20th Century often argued. The gene pool was surely not so different in the year 500, when the Western end of Eurasia was entering a period of nearly a thousand years of relative stagnation. Likewise, the climate, topography and natural resources of Europe were much the same in 1500 as they had been in 500.”

And then adds – as if addressing any Marxists present:

“It cannot have been imperialism either. The other civilizations did plenty of that.”

So … we’re back to the question.

Why us and not them?

Where do we start? Would it be with the Renaissance, or the Reformation, or the Age of Enlightenment? Or maybe we could zero in on particular events – like the establishment of the first Parliament in England in the thirteenth century, or with Gutenberg in the fifteenth, or the Union of Utrecht in the sixteenth or the Glorious Revolution in the seventeenth?

In his essay “The European Miracle”, Ralph Raico pulls things together by drawing on the work of a number of researchers, in particular that of developmental economist, P T Bauer.

These scholars see the above periods and events, not as possible starting points, but instead as part of a process which was to lead to industrialization – a process which started many centuries earlier.

The history of great empires and dynasties is that they were ruled by tiny elites who had the power to behave with impunity – which they all did. The lot of the masses was one of subjugation and abject misery – of the kind which is still with us today in many third world countries.

As one great empire or dynasty faded so another would rise up to carry on where the other had left off – and so it always was.

Until something unique happened.

As the Roman Empire decayed and collapsed another did not spring up to take its place.

Instead, Raico writes, Western Europe fragmented into, “a mosaic of kingdoms, principalities, city-states, ecclesiastical domains, and other political entities.”

In other words – there was a massive decentralization of power.

He continues:

“Within this system, it was highly imprudent for any prince to attempt to infringe property rights in the manner customary elsewhere in the world. In constant rivalry with one another, princes found that outright expropriations, confiscatory taxation, and the blocking of trade did not go unpunished. The punishment was to be compelled to witness the relative economic progress of one’s rivals, often through the movement of capital, and capitalists, to neighboring realms.”

Put another way, if things got bad enough, people in this civilization had the possibility of ‘exit’.

Add to this the spread of Christianity and the consequences of adopting its core values:

“[This was something which would take in everything] from the mitigation of slavery [right through] to the concepts of natural law, including the legitimacy of resistance to unjust rulers.”

Although very slow and gradual, the result would be transformational – the makings of something quite different from anything which had gone before.

As Raico explains:

“Through the struggle for power within the realms, representative bodies came into being, and princes often found their hands tied by … charters of rights … which they were forced to grant their subjects. In the end, even within the relatively small states of Europe, power was dispersed among estates, orders, chartered towns, religious communities, corps, universities, etc., each with its own guaranteed liberties.”

And the upshot:

“The rule of law came to be established throughout much of the Continent.”

It was this which laid the cornerstones for institutions which would later foster, promote and establish property rights for the masses.

The long road to industrialization was peppered with co-incidence, happenstance, hit and miss – call it what you will – but it was the evolution of these rights, in combination with the periods and events listed above, which was critical.

Without them we’d still be back where we were in the Dark Ages.

(Read Part 1Part 2,  Part 3, Part 4)

Chris ClancyChris Clancy is a Contributing Editor with Self-Educated American. His essays and articles on economics and other things are widely published on the internet. Formerly he was employed for a number of years as associate professor of financial accounting at Zhongnan University of Economics and Law in Wuhan City, Hubei Province. He then left China for two years during which he wrote a book about his time there – Cut Loose at 50 – a must-read for anyone thinking about living and working in China. He has now returned to China where he teaches economics with the prestigious Dipont organization

Email him at [email protected]