In the previous blog, I asked why some nations are wealthy, stable, and happy, and others are not. Many theories have tried to provide an answer to this question. How do we decide which of the competing theories is true? So far, economists have not done a compelling job addressing this issue.
Let’s take Why Nations Fail, one of the best recent books by economists (or, rather, by an economist Daron Acemoglu and a political scientist James Robinson) that tackles this question. In his review in Cliodynamics Tom Currie notes that there are “two problems with A&R’s analysis as it currently stands: 1) The descriptive, case study approach adopted here makes the systematic appraisal of alternative hypotheses difficult, 2) The focus on historical contingency of the development of certain types of institutions overlooks or down-plays more general patterns about where and when these institutions have tended to develop.”
I think this criticism is fair. However, it is equally true that we simply lack appropriate data to test rival theories about the deep roots of economic development. Consider another article in the current issue of Cliodynamics, “Was Wealth Really Determined in 8000 BCE, 1000 BCE, 0 CE, or Even 1500 CE?” by William Thompson and Kentaro Sakuwa.
As these authors point out, previous empirical analyses have been plagued by a variety of problems. One is the use of modern states as geographical units, even though they may have little relation to historically appropriate units of analysis. Think of the USSR, for example – a very inconvenient unit of analysis for any historical period before 1700, when the Russian Empire emerged as a Great Power.
Another problem is how to deal with time. Some authors look at what was the situation 10,000 years ago, at the dawn of agriculture. From there they jump to 1500 BC (the Bronze Age), then to 1 AD (a pretty arbitrary date), to 1500 AD (the ‘dawn of modernity’), and finally to the present. Other analyses use different time jumps.
It’s like we have a faulty time machine. Ideally we’d like to jump back in time to the beginning of things, and then trace how they developed. So, for example, we would jump to the Fertile Crescent 10,000 years ago, and then travel forward in one century leaps, recording how everything changes. It would be like Sid Meyer’s game of Civilization, except for real. “Oh, they invented Monotheism”. “Aha, now they have Bureaucracy.”
Instead of this, eminently sensible approach, we have to endure jumps of random duration that land us in periods that may not be of critical importance to the understanding of questions we want to answer. And we pass over a lot of history between the jumps (from 8,000 BC to 1500 BC? Weren’t there a lot of interesting developments in between that we’d like to see?).
OK, enough of this analogy. We don’t have a time machine, so much the worse.
Except that we do, an imperfect and, at times, an exasperating version, but it does allow us to peek back in the past. Thousands of historians and archaeologists collectively can tell us a lot about the past – not everything, but if we could somehow put all their knowledge together, it would provide a very rich historical tapestry, which, I am sure, would allow us to reject a lot of theories – and build better, new and improved ones.
This is what’s most galling – the data that we need to test theories are there. Some of it is scattered over a multitude of published and unpublished articles. But most simply resides in the brains of historians or archaeologists specializing on particular regions and epochs. The only way to make these data useful (for a systematic testing of theories, that is) is to translate/transcribe them from human brains onto electronic, computer-readable media.
As I wrote in previous blogs (e.g., here), one of my current (and probably the most important) projects is Seshat: Global History Databank. So today I cannot answer the questions with which I started this blog. But give us a few years. Once we can trace how agricultural innovations and new ways of organizing polity, society, and economy arose and spread, we will be able to have a much better idea why some nations are rich, and others are poor.