The dominant incentive-based apparatus of modern economics and political economy has not been able to offer a satisfying explanation of the greatest single fact of economic history – the sudden and unprecedented economic growth of the living standards that started two centuries ago. Baumard's article is a welcome contribution to recent literature that goes beyond the standard, incentive-based economic and institutional explanations of the causes of the Great Enrichment.
Baumard's application of Life History Theory (LHT) to the Great Enrichment, if right, not only connects the dots in accounts provided by McCloskey (Reference McCloskey2016a), Mokyr (Reference Mokyr2016), and Clarke (Reference Clark2007), but also opens the door to other potential applications of the theory that the author does not entertain. For example, LHT may be able to explain the settling of America, as the settlers exhibited precisely the initiative, optimism, and long-term horizon that Baumard argues were crucial for the enrichment of England.
Nevertheless, Baumard's attempt to explain Great Enrichment using a theory ultimately grounded in evolution raises several questions.
Most glaringly, Baumard's work fails to properly engage the issue of causality. According to him, the necessary condition for a portion of a population to switch to a long-term strategy is a previous improvement in the living standards, such as that present in and before the eighteenth century in England. The long-term strategy is thus a consequence as much as a cause of economic growth. Perhaps aware of the shortcoming, Baumard resorts to endogenous growth theories, a family of economic models that capture the interplay and mutual reinforcement of various elements of economic growth, “in which growth and technological progress are endogenous and do not require any external input” (sect 6.2, para. 2). This maneuver, however, does not shed any new light in the question of causality but simply moves the explanation a few centuries back: England in the eighteenth century grew rich because England in the fifteenth century started growing rich.
Indeed, if LHT switch is causally important, we would expect visible implications for other times and places. How can one explain large differences in economic growth in different regions? Since the 1970s, poorer China has grown much faster than the relatively affluent Latin America. Once prosperous countries, such as Argentina in the early 20th century and Venezuela more recently, experienced considerable declines. For growing economies, the LHT hypothesis, as espoused by Baumard, implies that there is a critical level of per capita income after which growth accelerates. Baumard does not tell us what this level could be, and historic economic growth trajectories of different societies up to the present do not seem to support the existence of such thresholds.
Although the premise of Baumard's approach is that the Great Enrichment is a unique period of history and an enduring scientific puzzle (i.e., exponential economic growth starts in eighteenth-century England), the approach is simultaneously sympathetic to the view that “there is actually nothing special about the Industrial Revolution. The rate of innovation has been increasing exponentially since the Neolithic, and the Industrial Revolution is just the moment at which the exponential nature of the acceleration became undeniable” (i.e., exponential growth with a starting point in Neolithic; sect 6.2, para. 3). That Baumard's theory approach can accommodate so easily these wildly different curves suggests that the approach lacks specificity.
And there is a good reason for it. The theory lacks specificity because Baumard never uses a crucial part of LHT – Darwinian fitness. LHT does not merely say that humans could be more or less forward looking (as Baumard extensively documents), but also ties these strategies to environmental and ultimately evolutionary pressures they are facing. LHT was developed as a way to reconcile flexibility in animal behavior with evolutionary theory by showing that, for various organisms, in various circumstances, it pays off, from a Darwinian perspective, to tinker with parental and reproductive investment over lifetime.
Yet, at no point does Baumard connect short-term versus long-term strategies in humans with their consequences for Darwinian fitness. Although persuasively demonstrating such connections is probably beyond the scope of a single article, his argument would be stronger if a plausible mechanism was presented: What exactly would increasing proportion of long-term strategists in the eighteenth-century England gain in terms of Darwinian fitness?
How abundant resources would lead to more long-term versus short-term strategies is likewise unclear. Would not individuals employing short-term strategies while free-riding on wealth generated by long-term innovators be at an evolutionary advantage? Should not the abundance of resources that make survival more likely and parental investment less necessary therefore favor reproducing as early and as often as possible? In fact, evolutionary theorists have argued that large environmental carrying capacity (of the sort created by exponential economic growth) would favor r versus K selection – concepts analogous, respectively, to short- and long-term life strategies (Taylor et al. Reference Taylor, Aarssen and Loehle1990).
Looking at the past two centuries at the most basic level one gets a sense that human choices are ever more removed from fitness maximization. Rather than experiencing explosive population growth in line with available resources, population in the richest societies in human history is, or soon will be, in decline. Natural selection, fitness maximization, and other concepts from evolutionary theory do not appear naturally suited for explaining these changes – they make them appear puzzling. We are therefore skeptical that theoretical accounts grounded in evolutionary theory, such as LHT, are ultimately going to be helpful in our understanding of recent history.
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The dominant incentive-based apparatus of modern economics and political economy has not been able to offer a satisfying explanation of the greatest single fact of economic history – the sudden and unprecedented economic growth of the living standards that started two centuries ago. Baumard's article is a welcome contribution to recent literature that goes beyond the standard, incentive-based economic and institutional explanations of the causes of the Great Enrichment.
Baumard's application of Life History Theory (LHT) to the Great Enrichment, if right, not only connects the dots in accounts provided by McCloskey (Reference McCloskey2016a), Mokyr (Reference Mokyr2016), and Clarke (Reference Clark2007), but also opens the door to other potential applications of the theory that the author does not entertain. For example, LHT may be able to explain the settling of America, as the settlers exhibited precisely the initiative, optimism, and long-term horizon that Baumard argues were crucial for the enrichment of England.
Nevertheless, Baumard's attempt to explain Great Enrichment using a theory ultimately grounded in evolution raises several questions.
Most glaringly, Baumard's work fails to properly engage the issue of causality. According to him, the necessary condition for a portion of a population to switch to a long-term strategy is a previous improvement in the living standards, such as that present in and before the eighteenth century in England. The long-term strategy is thus a consequence as much as a cause of economic growth. Perhaps aware of the shortcoming, Baumard resorts to endogenous growth theories, a family of economic models that capture the interplay and mutual reinforcement of various elements of economic growth, “in which growth and technological progress are endogenous and do not require any external input” (sect 6.2, para. 2). This maneuver, however, does not shed any new light in the question of causality but simply moves the explanation a few centuries back: England in the eighteenth century grew rich because England in the fifteenth century started growing rich.
Indeed, if LHT switch is causally important, we would expect visible implications for other times and places. How can one explain large differences in economic growth in different regions? Since the 1970s, poorer China has grown much faster than the relatively affluent Latin America. Once prosperous countries, such as Argentina in the early 20th century and Venezuela more recently, experienced considerable declines. For growing economies, the LHT hypothesis, as espoused by Baumard, implies that there is a critical level of per capita income after which growth accelerates. Baumard does not tell us what this level could be, and historic economic growth trajectories of different societies up to the present do not seem to support the existence of such thresholds.
Although the premise of Baumard's approach is that the Great Enrichment is a unique period of history and an enduring scientific puzzle (i.e., exponential economic growth starts in eighteenth-century England), the approach is simultaneously sympathetic to the view that “there is actually nothing special about the Industrial Revolution. The rate of innovation has been increasing exponentially since the Neolithic, and the Industrial Revolution is just the moment at which the exponential nature of the acceleration became undeniable” (i.e., exponential growth with a starting point in Neolithic; sect 6.2, para. 3). That Baumard's theory approach can accommodate so easily these wildly different curves suggests that the approach lacks specificity.
And there is a good reason for it. The theory lacks specificity because Baumard never uses a crucial part of LHT – Darwinian fitness. LHT does not merely say that humans could be more or less forward looking (as Baumard extensively documents), but also ties these strategies to environmental and ultimately evolutionary pressures they are facing. LHT was developed as a way to reconcile flexibility in animal behavior with evolutionary theory by showing that, for various organisms, in various circumstances, it pays off, from a Darwinian perspective, to tinker with parental and reproductive investment over lifetime.
Yet, at no point does Baumard connect short-term versus long-term strategies in humans with their consequences for Darwinian fitness. Although persuasively demonstrating such connections is probably beyond the scope of a single article, his argument would be stronger if a plausible mechanism was presented: What exactly would increasing proportion of long-term strategists in the eighteenth-century England gain in terms of Darwinian fitness?
How abundant resources would lead to more long-term versus short-term strategies is likewise unclear. Would not individuals employing short-term strategies while free-riding on wealth generated by long-term innovators be at an evolutionary advantage? Should not the abundance of resources that make survival more likely and parental investment less necessary therefore favor reproducing as early and as often as possible? In fact, evolutionary theorists have argued that large environmental carrying capacity (of the sort created by exponential economic growth) would favor r versus K selection – concepts analogous, respectively, to short- and long-term life strategies (Taylor et al. Reference Taylor, Aarssen and Loehle1990).
Looking at the past two centuries at the most basic level one gets a sense that human choices are ever more removed from fitness maximization. Rather than experiencing explosive population growth in line with available resources, population in the richest societies in human history is, or soon will be, in decline. Natural selection, fitness maximization, and other concepts from evolutionary theory do not appear naturally suited for explaining these changes – they make them appear puzzling. We are therefore skeptical that theoretical accounts grounded in evolutionary theory, such as LHT, are ultimately going to be helpful in our understanding of recent history.