Historia

Historia Económica 1 (E041)
Tommy E. Murphy
Topic 13
Culture and performance in the
long term
May 8, 2023
Historia Económica 1 (E041) Tommy E. Murphy
25. Two systems

Kahneman [2011], Thinking, fast and slow
• System 1
ü Operates automatically and
quickly, with little or no effort
and no sense of voluntary
control
• System 2
ü Allocates attention to the
effortful mental activities that
demand it, including complex
computations
17 x 24
Culture and performance in the long term May 8, 2023
26. No need to be right…

• Why do incorrect beliefs persist?
ü Non-falsifiable beliefs and rituals are widespread
• Might they lead to the ‘correct’ behaviour?

ü Nunn & Sanchez de la Sierra [2017] look into
‘magical’ beliefs
- Magic spells that provide protection against death from
bullets
ü They suggest these beliefs induce actors to undertake
actions that are not optimal as individuals, but are for
the society as a whole… if there is group-level
selection, the practice might persist (and spread)
- E.g. the reduce the perceived cost of contributing to the
public good (i.e. defending the village from invaders)
Che Guevara in the Congo

Che’s frustration with dawa

“Esta dawa hizo bastante daño para la preparación militar. El principio es el siguiente:
un líquido donde están disueltos jugos de hierbas y otras materias mágicas se echa sobre
el combatiente al que se le hacen algunos signos cabalísticos y, casi siempre, una
mancha con carbón en la frente; está ahora protegido contra toda clase de armas del
enemigo (aunque esto también depende del poder del brujo), pero no puede tocar
ningún objeto que no le pertenezca, no puede tocar mujer y tampoco sentir miedo so
pena de perder la protección. La solución a cualquier falla es muy sencilla; hombre
muerto: hombre con miedo, hombre que robó o se acostó con alguna mujer; hombre
herido: hombre con miedo. Como el miedo acompaña a las acciones de la guerra, los
combatientes encontraban muy natural el achacarle la herida al temor, es decir, a la falta
de fe.Y los muertos no hablan; se les puede cargar con las tres faltas.
La creencia es tan fuerte que nadie va a combate sin hacerse la dawa. Siempre temí que
esa superstición se volviera contra nosotros y que nos echaran la culpa del fracaso de
algún combate en que hubiera muchos muertos. Busqué varias veces la conversación con
distintos responsables para tratar de ir haciendo una labor de convencimiento contra ella.
Fue imposible; es reconocida como un artículo de fe. Los más evolucionados
políticamente dicen que es una fuerza natural, material y que, como materialistas
dialécticos, reconocen el poder de la dawa, cuyos secretos dominan los brujos de la
selva.”
Ernesto ‘Che’ Guevara, circa 1965
Pasajes de la Guerra Revolucionaria: Congo
Historia Económica 1 (E041)
Tommy E. Murphy
Topic 14
Pre-industrial demographic
equilibrium
May 8, 2023
1. Pre-industrial growth
• Unlike a modern economy, pre-industrial
economy relied upon a thin base of knowledge
and capital…
ü Knowledge largely coming from experience, trial
and error
• …most economic growth before the Industrial

Revolution came from specialisation and trade
rather than from technological change
ü That is, from Smithian growth instead of
Schumpeterian growth
- (More on Schumpeterian growth when we look into the
Industrial Revolution)
Pre-industrial demographic equilibrium May 8, 2023
2. Smithian Growth
• Specialisation and division of labour
ü Based on the exchange of goods
- Exchange of goods produced at a low opportunity cost
for others produced at high opportunity cost
ü The extent of the market limits this specialisation
- Access to markets and urbanisation
• Increases in labour productivity

ü Economies of practice and learning-by-doing
ü Technology transfer based on production
continuity
ü Given the nature of knowledge, temporary shocks
could destroy productivity gains
3. Technological progress and setbacks

Output per
worker
y3
y4 Learning-by-
y1 doing
y0
Specialisation
dlA dlB Division of labour
Source: Adapted from Persson [2010]; An Economic History of Europe, p. 27

4. Between Smith and Malthus

Specialisation and
learning-by-doing Smithian
growth
(+)
Population Output
growth per capita
(–)
Diminishing Malthusian
returns dynamics
Source: Adapted from Persson [2010]; An Economic History of Europe, p. 61

5. Humanity’s history in one picture

Per capita income
Source: Clark [2007]; A Farewell to the Alms, p. 2

Greg Clark (1957-today)

• Anglo-American economist,
trained at Cambridge and
Harvard, professor at UC
Davis for decades, now at
Southern Denmark Univ.
• He has worked extensively

on long-term British
economic history, especially
on issues of growth,
population dynamics and –
most recently– social
mobility


6. Explaining the Malthusian Trap

• What accounts for the epoch of stagnation that
characterised most of human history?
• Why had episodes of technological progress in
the pre-industrialization era failed to generate
sustained economic growth?
• Why has population growth counterbalanced
the expansion of resources per capita that
could have been generated by technological
progress?

7. Heights in the very long term

In centimetres, Western Europe & Eastern Mediterranean, Paleolithic-1900s
Source: Boix & Rosenbluth [2014]; “Bones of Contention,” p. 6

8. Stationary populations
• In the long term, in all animal populations, births
must be equal to deaths…
• …this was also true for humans before 1800
ü Episodes of population growth were temporary
ü Population eventually stabilised and the number of
surviving children per woman returned to the
replacement rate
- Human population was about 100,000 people in 130,000
BC, reaching some 770 million in 1800
- This implies an average rate of 2,005 surviving children
per woman

9.
History
of world
popula-
tion
Source: Fogel [2004];

The Escape from Hunger,
p. 22

10. Populations of Western Europe
Source: Clark [2007]; A Farewell to the Alms, p. 21

11. Fertility today

Fertility rate, total children per woman, 2010-2015

12. Fertility some time ago

Fertility rate, total children per woman, 1950-1955

T. Robert Malthus (1766-1834)

• Born into a wealthy family in
southern England, he studied
at Jesus College (Cambridge
University), was ordained as
an Anglican priest, and then
became a professor at
Cambridge
• His Essay on Population

became a contemporary
sales success
ü First serious economic study
on the welfare of the lower
classes

13. Malthus’ motivation

• Robert Malthus argued endlessly with his father
(a disciple of Rousseau and Hume), who was a
fan of the French Revolution & the perfectibility
of society…
• …and he developed his demographic theory to
show that this perfectibility was impossible
ü 1798 - 1st edition Essay
ü 1803 - 2nd edition (with much more data)
• Malthus became very famous

ü He became a friend of Ricardo
ü Got involved in public policy debates
14. Population dynamics

• In absence of migration, population grows when
births exceed deaths:
• The rate of change of population is then

defined as the difference of two rates
ü The crude birth rate (CBR)
ü The crude death rate (CDR)
15. What are these things?

• Crude birth rate
ü Births per 1,000 population per year
- They vary greatly in all societies
- Maximum biologically possible, approximately 60
- Some African countries today reach 55, in pre-industrial
England remained below 30
• Crude death rates

ü Deaths per 1,000 population per year
• …and we also have the material living standards

ü Goods and services consumed in a society
- Mainly food, clothing and shelter
16. Three basic elements

• These factors characterise low population
growth economies
ü Birth rates are constant or increasing with real
income
- Lower living standards => fall in fertility
- For the English case, which Malthus knew well, this was via
increasing age of marriage
ü Mortality rates fall when materials standards
improve
- Several factors: better nutrition, fewer diseases, etc.
ü Material conditions (goods and services consumed
in a society) diminish as the population increases
- Pressure on land and diminishing returns

17. Malthus’ vision

• He believed that population would expand
indefinitely until something stopped its growth
ü Either a positive check…
- Events that typically raise mortality, such as hunger,
disease, war, etc.
ü …or a preventive check
- Moral restraints or behaviour that reduces birth (such as
delaying marriage or not marry at all)
• Population grows until it reaches an equilibrium

ü Population then depends on the economy’s size
- Which, in turn, is determined by technology and capital
accumulation

18. Relevance of the checks

• Income level is determined by which check
restricts population growth
• When the positive check operates, there is a
low level of average income
ü Population is restricted mainly by mortality
• When the preventive check operates, there is a

higher level of average income
ü Birth rates fall with income, and lower fertility
relieves pressure on the population, reducing the fall
in income

19. A Malthusian model (1)

Vital
rates
Largely determined by:

- External shocks (weather, natural
disasters, etc.)
- Available technology (to generate
food, cure diseases, etc.)
deaths
Income

Vital
rates
births
Families behaviour depends on:
- Biology
- Culture / social norms
deaths
Income

Vital
rates births
Vpos
The intersection determines an

equilibrium because equal births
Vprev to deaths
=>
Population is constant, so the
system does not evolve
deaths
Wpos Wprev Income

22. If there is a technological change?

• Malthus did not deny the existence of
technological progress in the period…
• …he highlighted the stagnation of living
standards, but was aware of innovations
ü New crops
- E.g., the potato introduced into Europe from Peru in the
1570s (remember Nunn and Qian, 2011)
ü New methods
- E.g., Jethro Tull’s seed drill, which allowed few men to
plough and plant vast fields, while distributing seeds
regularly, favouring uniform growth and crop’s maturation
• So… what happens with technological change?

Jethro Tull’s
1701 seed
drill
Jethro Tull
Vital Real S
rates wage
Real
Births S
wage
W
D
W
Deaths D
W Income Labour
Labour

Vital Real S
Re e
wa
rates wage
al
g
Births
W
V
W
D
S
Deaths
W Income Labour
D
Lab

our
Vital
rates
Births
W Real wage = Income
Deaths S
W Income
D
Labour = Population


Vital
rates
Births
Deaths
Income
W
Population D
26. Technological change? (1)

Vital
rates
Births
V
Disequilibrium of vital rates
Deaths
Income
W W'
Technological
change
S
=>
Increase in
productivity
Population D D'
27. Technological change? (2)

Vital
rates
Births Technological
improvements
Return to equilibrium do not affect
V
standards of
living in the
long run
Deaths
Population
endogenous Income
W W'
Technological
change
S
=>
Increase in
productivity
S'
Population D D'
28. Some evidence…

Population and real wages
...but real wage

remains the same
Real S S'
wage
W'
W D
D
' The population
grows...
Source: Clark [2007]; A
Population Farewell to the Alms, p. 103
29. Improvements in health?

Vital
rates
Births
V'
Deaths
Deaths'
Income
W' W
S Health
improvements
S'
=>
Deterioration in
Population
living standards
D
30. Social reform

• Malthus’ theory became the standard argument
against social reform
• Is impossible raise the income of the poor
ü Anything that increases the income of poor reduces
the mortality rate and increases birth...
ü ...the number of poor people would increase until
income falls back in the equilibrium level
ü Corollary: do not try
• Unsurprisingly, this argument became very

popular among the elites

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Historia Económica 1 (E041)

25. Two systems

26. No need to be right…

• Might they lead to the ‘correct’ behaviour?

Che Guevara in the Congo

Culture and performance in the long term May 8, 2023

Che’s frustration with dawa

• …most economic growth before the Industrial

• Increases in labour productivity

3. Technological progress and setbacks

dlA dlB Division of labour

Source: Adapted from Persson [2010]; An Economic History of Europe, p. 27

Pre-industrial demographic equilibrium May 8, 2023

4. Between Smith and Malthus

Source: Adapted from Persson [2010]; An Economic History of Europe, p. 61

Pre-industrial demographic equilibrium May 8, 2023

5. Humanity’s history in one picture

Source: Clark [2007]; A Farewell to the Alms, p. 2

Pre-industrial demographic equilibrium May 8, 2023

Greg Clark (1957-today)

• He has worked extensively

Pre-industrial demographic equilibrium May 8, 2023

Pre-industrial demographic equilibrium May 8, 2023

6. Explaining the Malthusian Trap

Pre-industrial demographic equilibrium May 8, 2023

7. Heights in the very long term

Source: Boix & Rosenbluth [2014]; “Bones of Contention,” p. 6

Pre-industrial demographic equilibrium May 8, 2023

Source: Fogel [2004];

Pre-industrial demographic equilibrium May 8, 2023

10. Populations of Western Europe

Source: Clark [2007]; A Farewell to the Alms, p. 21

Pre-industrial demographic equilibrium May 8, 2023

11. Fertility today

Pre-industrial demographic equilibrium May 8, 2023

12. Fertility some time ago

Pre-industrial demographic equilibrium May 8, 2023

T. Robert Malthus (1766-1834)

• His Essay on Population

Pre-industrial demographic equilibrium May 8, 2023

13. Malthus’ motivation

• Malthus became very famous

14. Population dynamics

• The rate of change of population is then

15. What are these things?

• Crude death rates

• …and we also have the material living standards

16. Three basic elements

Pre-industrial demographic equilibrium May 8, 2023

17. Malthus’ vision

• Population grows until it reaches an equilibrium

Pre-industrial demographic equilibrium May 8, 2023

18. Relevance of the checks

• When the preventive check operates, there is a

Pre-industrial demographic equilibrium May 8, 2023

19. A Malthusian model (1)

Largely determined by:

20. A Malthusian model (2)

21. A Malthusian model (3)

The intersection determines an

Wpos Wprev Income

22. If there is a technological change?