His theory relies on intelligence being very closely correlated with economic success, and economic success being very closely correlated with reproductive success. I’m not sure that this is true, especially in the latter case: the greater income one can generate themself, the less they can gain from a child’s production relative to their own income, and therefore the less valuable (economically) is a child to them and the less likely they are to have a greater number of children.
I think the missing element he is looking for is entrepreneurship and the resulting innovations which in turn allows further innovations. We’ve seen how quickly technology progresses in the 21st century, which is a quicker progression than that of the later 20th century, which was quicker than that of the early 20th century etc. In the ‘Malthusian Age’, the major innovations were a lot less frequent (and I grant to Hoppe that most of these were the result of the work of intelligent individuals). In the mid-18th century, however, a combination of the existing institutions and recipes (earlier innovations) created a greater opportunity for intelligent individuals to capitalise on this environment, making use of and expanding the stock of recipes. I haven’t put a great deal of thought into this, so let me know if I’m way off.
I wasn’t aware of the earlier thread (it was only short). I have to admit I’m used to Hoppe venturing into strange theories like this - the climate part reminds me of Aristotle’s theory on the superiority of the Greeks - but I think it’s overall beneficial that he’s prone to do this. Some of his ideas (in general, I mean) are extremely insightful, even though they sometimes seem simple.
Hoppe’s theory is a vulgarization of Clark’s in A Farewell to Alms; where he argues that the almost total elimination of the peasant underclass in the middle ages to modern era selected for the survival of the greediest. The propensity to accumulate and invest and not to give a damn about helping other people is a major fuel for capitalist economies; which is why Scrooge is better than people who feel so great about giving to charity where their money will be squandered on good-for-nothings.
Very high intelligence is negatively correlated with economic success; even the desire to be economically successful depends on being status oriented to a large extent and very smart people tend to be insular and not much care about people. As production is mostly created by the middle class, so the most productive are usually middle-brow people.
We’re getting smarter, but that is because of better nutrition and intellectual stimulation thanks to the industrial revolution, not the other way around. I agree that secure property rights are only a necessary condition for economic growth. I think the reason humanity escaped the Malthusian trap in the 1800s is that we figured out that we could get machines to work for us, which meant that productivity went up faster than we could breed new people. Also this productivity made us prosperous so that we became too lazy to have many kids. So economic progress sort of managed to reach a tipping point where it wasn’t canceled out by population increases any more.
The Greeks (and possibly others) kind of scratched the surface with regard to getting machine-power to do our dirty-work. But they either never realized it’s potential or it was never efficient enough to be attempted on a large scale. It was only with coal-powered steam engines in Britain in the late 18th century that this became efficient enough to stick.
I think the reason humanity escaped the Malthusian trap in the 1800s is that we figured out that we could get machines to work for us, which meant that productivity went up faster than we could breed new people
Yet, the same machines in India were considerably less efficient than those in the US or other Western nations.
Also this productivity made us prosperous so that we became too lazy to have many kids
What, too lazy to have many children? I’m not particularly sure what you mean. I’d say a better story concerns the relative price adjustments and prospects for those with human capital, parents switched from having many children to having just a few, but investing in more human capital for those few.
They probably didn’t have secure private property, as mentioned that is a necessary condition. Also Britain has some of the most accessible coal reserves in the world, which is one of the reasons the industrial revolution took off there.
Yes, too lazy to have many children. Why do you think birthrates go down when countries become prosperous? The most so among the affluent upper classes. Having a kid is a lot of work. Back in the day we slaved all the time anyways, so it didn’t bother us. But when life got easy people rather go to movies and have sushi than to change diapers. Plus having a kid ruins your figure. Also modern economic growth emancipates women. Once women have a say in reproductive choices it pushes down birthrates even more.
Do you think the 19th century poor did decide to have fewer children based on some rational calculation that they need less human capital because of technological progress? That’s not how it works. That might be the effect, but that’s not the incentive that causes it. In part, of course, having many children is a response to many of them dying. So when child mortality went down birthrates went down. But mostly falling birthrates is because wealthy people don’t feel like having a lot of kids.
Nah. The interests and skills required for material wealth and the motivation to actually get it sharply declines in most very intelligent people, especially intellectuals. Academics especially are incredibly lazy. They want to get paid to read books on subjects no one else cares about, which is a huge reason they’re such whores for state funds.
Writers are the same way. To quote George Orwell, “All writers are vain, selfish and lazy, moved by the same instinct that makes a baby squall for attention…”
Sorry, but it’s not original with me that most writers and academics are good-for-nothing weirdoes and/or losers.
As intelligent as many of them are, for example some of the Mises Institute fellows, 80% of them would be doing something other than teaching in a market system. What good is an economist?! What a useless science.
Economics is the only truly important science. Where would we be at without Adam Smith?
It may have some use as political propaganda; but even then I think it is rather limited due to the natural revulsion most people have towards capitalism. It is not, however, a productive science. Other than lecture on economics or do economic history, there is nothing you can do after learning economics that you couldn’t do before. You don’t need to understand capitalism, it takes care of itself if the legal norms are in place.
They probably didn’t have secure private property, as mentioned that is a necessary condition. Also Britain has some of the most accessible coal reserves in the world, which is one of the reasons the industrial revolution took off there.
They didn’t have secure private property, but that shouldn’t matter on a factory level. I read the book a while ago, so I can’t remember the exact figure he cites, but essentially the number of breakages of machine in factories (or something along those lines) was considerably higher in India than it was in either the US or the UK. Gregory Clark correctly cites this as evidence that there just wasn’t the same work ethic amongst Indians as there is amongst Westerners, which can be attributed to various cultural practises.
Do you think the 19th century poor did decide to have fewer children based on some rational calculation that they need less human capital because of technological progress? That’s not how it works. That might be the effect, but that’s not the incentive that causes it. In part, of course, having many children is a response to many of them dying. So when child mortality went down birthrates went down. But mostly falling birthrates is because wealthy people don’t feel like having a lot of kids.
Back in the times of the industrial revolution and even after the demographic transition the cities were death traps, so I’m not sure that child mortality rates can explain the drop in birth rates. As for your main question, do I believe that people make rational calculations about economic decisions based on relative prices and other social incentives? Absolutely, and I would have hoped that a self described Austrian economist would agree with me. By the way, the point was that they needed more human capital because of technological progress, not that they need less.
Ricky, the guys who get paid big time by economics consulting firms for their econometric skills and the mechanism design people who make decent amount working on stuff like auctions would probably disagree with you.
Bullshit, in economics grad students often work 7 day weeks at 10 hours a day, that doesn’t change too much for an associate professor trying to get tenure. After tenure, of course, is a different matter but that’s an issue of incentives not armchair psychologising.
Ricky, the guys who get paid big time by economics consulting firms for their econometric skills and the mechanism design people who make decent amount working on stuff like auctions would probably disagree with you.
Then what they’re doing isn’t economics. Economics is the science of human action, not number jockeying or foresight.
Bullshit, in economics grad students often work 7 day weeks at 10 hours a day, that doesn’t change too much for an associate professor trying to get tenure.
Working 10 hours a day 7 days a week reading books about a subject almost no one cares about and which 90% only exists because of State-grants. Most higher education is utterly useless, as are most higher educators; and most people drawn to art, bureaucracy and academics are basically people who lack the talent or drive for real jobs like brick-laying or stock-jobbing.
I’m the same way, I spend a ridiculous amount of time arguing about things of zero consequence (like this argument right here); but unlike most intellectuals I’m not in denial about it. We’re genetic flukes, and it’s not an accident that our reproduction rates are pretty low. This is why all these groups (as groups) love the government; it creates makework for them and makes them feel important.
Before the modern era almost all intellectuals had to have real jobs (Cantillon) or they were priests (the modern equivalent of a bureaucrat). No one was ‘an economist’; and if you were an ‘artist’ and couldn’t find a patron or moneyed buyers you ended up scrubbing cobblestones.
How could we have capitalism without having figured out that capitalism works? It wasn’t until half a century ago that humanity figured out that price controls don’t work. And Mises figured out that socialism can’t work in 1919. If economics, as a science, hadn’t figured these things out, we wouldn’t even know what policies to implement. And economic policy matters more than anything else, it’s the difference between Nigeria and Manhattan.
I agree that macroeconomics as a subject is pretty useless. You can work for the state or a think tank, but that’s about it.
What time period are you talking about here? I was talking about why the industrial revolution sparked in Britain in the 18th century, it came to India much later.
What’s human capital? More people or better nourished and educated people? But then we are explaining why people would have more kids, and that’s not what happened.