The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor.

Economic history merges the two dreariest of sciences, but you'd never know it from David Landes's new book. It is engaging, energetic, well written, and, despite its length (524 pages of text, 126 pages of notes, bibliography, and index) and weight (2.5 pounds), hard to put down. His brilliant treatment of a complex subject - why some nations are so rich and some so poor - provides multiple answers, some of them obvious, some debatable, some convincing, some provocative. Anyone seriously engaged in "reforming" economic, political, and social structures ought to absorb its sophisticated hard-nosed empirical view of why, in the author's view, even the poorest Americans are generally better off than almost all the inhabitants, rich or poor, of China and the nations of Africa.

Landes is hardly complacent about that imbalance, but neither does he offer reassurances that there are any easy ways to redress it. Being among the first industrializing nations does not assure continuing prosperity; those who come later can leapfrog. But finally, he argues that "the most successful cures for poverty come from within.... What counts is work, thrift, honesty, patience, tenacity. To people haunted by misery and hunger, that may add up to selfish indifference. But at bottom, no empowerment is so effective as self-empowerment." Sounds familiar perhaps (shades of Benjamin Franklin and Ronald Reagan), but - and this is crucial - the evidence, argument, and interpretation are not.

The Wealth and Poverty of Nations reaches as far back as the fall of the Roman Empire to show how that truism became true, first in England, then in North America and the rest of Europe, at least as far as economic progress can be measured by per capita GNP. But this is not a work of statistical comparisons or Western chauvinism; economic interpretation and historical events are intertwined and his thesis finely argued with an eye to telling detail and example.

Consider eyeglasses: those who are lifelong wearers regard them as mere ocular appendages. But when they were first invented (probably in Pisa at the end of the thirteenth century), they increased the working lives of scribes, toolmakers, weavers, metalworkers. As the human eye ages the lens begins to harden and it can no longer focus. The invention of convex glass lenses and a device to hold them corrected that. Thus, "around the age of forty, a medieval craftsman could reasonably expect to live and work another twenty years, the best years of his working life...if he could see well enough. Eyeglasses solved the problem."

Of course, eyeglasses in themselves didn't bring about the industrial revolution or raise any nation's GNP. They were but one of a number of singular technological innovations (the water wheel, the mechanical clock, printing, and gunpowder) that in Europe by 1500 had spawned their own little revolutions. The mechanical clock required skill at working metals and shaping fine parts; its proliferation changed the way people thought about time and organized it. The water wheels freed human and animal labor for other productive uses; in manufacturing them, millwrights experimented with toothed gears and cranks devising new ways to direct water-driven power, for example, in grinding grain and making paper. These machine-making skills would subsequently be put to other manufacturing uses. It was, then, no single invention or innovation but the accumulation of them that early on set Europe, and especially England, apart from the rest of the world and on the road to exponential economic growth.

Here, Landes stops to examine one of the first, but not necessarily determinative, gaps between Europe and China, which, after all, was the first home of gunpowder, printing, paper, wheelbarrows, etc. What happened? Why didn't the Chinese ultimately prosper? The assumption that "knowledge and know-how are cumulative" didn't hold in China: smelting, once invented, fell into disuse, spinning machines for hemp were never adapted to cotton, paper remained a handmade luxury. Rather than adapting and refining their own inventions, the Chinese suffered from what Landes calls "technological oblivion and regression." Political and cultural values were simply not attuned to innovation or enterprise: the absence of free markets and of institutionalized property rights played a part, and through most of its history, China's top-down government worked mightily to prevent change.

In contrast, Europe had a joie de trouver. Why? Landes cites several long-accepted explanations: the Judeo-Christian respect for manual labor, subordination of nature to man, and sense of linear time, but he himself stresses the role of the market. "Enterprise was free in Europe. Innovation worked and paid, and rulers and vested interests were limited in their ability to prevent or discourage innovation. Success bred imitation and emulation." And he helpfully reminds us that the original "restraint of trade" consisted in exorbitant, and sometimes extortionary, road and canal tolls that inhibited the development of "free trade." By the fifteenth century, the British had done away with such local tolls, so that early on they created a national market in which to buy and sell among themselves; not so in France, Germany, and points East, where barriers remained well into the nineteenth century. Within Europe, some nations did better than others. Italy led the medieval commercial revolution (and invented those eyeglasses), but it was a prisoner of the Mediterranean and guild structures that kept the great merchant city-states from joining in the Great Opening, as Landes terms overseas expansion to China, India, and the New World.

He puts less stock than many in the economic advantages brought by exploration and discovery. His contempt is palpable for the human and economic waste of the slave trade, the extermination of the Amerindians, the expulsion of the Jews, and the exploitation of African labor that the Spanish, Portuguese, English, Dutch, and later colonial powers practiced. But his criticism does not change his conclusion: colonialism was not a determining factor in the race to the industrial revolution. Rather the confluence in some countries of manufacturing, shipbuilding, navigational instrumentation, commercial acumen, political and social values, and simple curiosity that led men to sail unknown seas also laid the groundwork at home for the economic revolutions that followed. But not everywhere. Overseas empire waylaid some: the Spanish ultimately lost the riches they seized from "New Spain." Buying everything from the rest of Europe, they fell far behind in manufacturing and industrial development and left a parallel economic legacy in Spanish America, with consequences we continue to see today. "Wealth is not so good as work, nor riches so great as earnings."

In contrast, the English colonies in North America were less remunerative and less appealing - at least in the short run. "They caught fish, tapped and refined whale oil, grew and bought and resold cereals, wove cloth, cast and forged iron, cut timber and mined coal." They "built on work," rather than easy money, again with consequences we continue to see today.

Shades of Max Weber's The Protestant Ethic and the Spirit of Capitalism! Many historians now find that thesis "implausible and unacceptable." Not Landes, who, in a brilliant and brief digression, isolates those qualities of this-worldly rationality that Weber described, and offers data to show how often those rational, ordered, diligent, and productive people were, in fact, of the Protestant persuasion. Not always, of course. But Weber's thesis, as Landes sees it, "is that in that place and time..., religion encouraged the appearance in numbers of a personality type that had been exceptional and adventitious before; and that this type created a new economy...that we know as (industrial) capitalism."

The Japanese displayed similar qualities. Though late to the industrial revolution, they ultimately surpassed the trailblazers with a work ethic that Landes argues most Europeans would have rejected. The Japanese, for example, have no Sabbath, hence they can work seven days a week. Their "industrious revolution" paved the way for the industrial revolution. And that is Landes's bottom line: the Japanese, like their industrializing predecessors were committed to "work rather than wealth." What a model to have to follow. But that is the point, isn't it? There is no easy way to move from poverty to wealth - at least as Landes defines it.

Not everyone will share his assumptions that material wealth is the sine qua non of human happiness and well-being. Other things count: family loyalty, community solidarity, spiritual and religious practices. I doubt that Landes would dismiss these, or insist that GNP is the first measure of human flourishing. And who would deny that without a decent level of material goods, financial predictability, the rule of law, and a functioning economy, there could not be human flourishing at all? Why else are our consciences so deeply troubled when we see the desolation wreaked by economic and social poverty, except that we have so much and others so little?

Landes's book is a challenge to the mindset of many on the left, especially religious activists. Although they have long recognized the fatal weaknesses of centralized command economies and have come to a grudging respect for markets, they continue to view poverty-racked societies as victims largely of outside forces rather than their own values. Government action, not private investment and the working of markets, continues to be the focus of these activists' recommendations. In fact, Landes makes some points congenial to this perspective: racial and sexual equality, universal education, and democratic institutions are necessary for economic development; concentrated wealth, whether in private hands or national treasuries, hinders economic development. As a historian, he also leaves most current policy questions unaddressed. But it would be unfortunate if anyone set aside this history in order to protect an ideology.

"The task of the rich countries is to help the poor become healthier and wealthier," Landes writes. "If we do not, they will seek to take what they cannot make; and if they cannot earn by exporting commodities, they will export people. In short, wealth is an irresistible magnet; and poverty is a potentially raging contaminant: it cannot be segregated, and our peace and prosperity depend in the long run on the well being of others." Too utilitarian? Perhaps. But I cannot help concluding that the story of how we have come to be so prosperous, too prosperous, has lessons that we should heed as we extend a helping hand to others. What we say and do can hinder as much as help. The Wealth and Poverty of Nations shows how very subtle the balance can be.

Margaret O'Brien Steinfels is the editor of Commonweal.