Explaining the Modern Revolution: Ideas? Institutions? The Survival of the Richest? Coal? All of the Above?

If we look over the evolutionary history of human society, we see two great revolutions--the Ancient Revolution that occurred 5,000 to 10,000 years ago and the Modern Revolution that began about 200-250 years ago,  The Ancient Revolution came with the transition from foraging to farming, which eventually brought urban settlements, bureaucratic states, and the invention of writing.  The Modern Revolution came with the Commercial and Industrial Revolution in Great Britain, which has brought an astounding increase in peace, prosperity, and population. 

It is remarkable that social scientists cannot agree on how to explain these two great social revolutions.  We might think the difficulty of explaining the Ancient Revolution comes from the limited evidence provided by the archaeology of the ancient world.  But the Modern Revolution is so recent in human history that we have plenty of evidence that should help us to explain it.

Whenever I read the work of scholars offering explanations of the Modern Revolution, I often feel exhilaration followed by frustration.  I feel exhilarated when someone makes a persuasive case for one factor as the primary cause for the Modern Revolution.  But then I feel frustrated when I see the good criticisms of this explanation coming from those who favor other factors as more important.  My intuition now is that the causality of the Modern Revolution is so complex--with the interaction of many causes--that the explanations focusing on only one cause can be only partially correct.

That was my thought while reading the issue of "Cato Unbound" from a few years ago on "Bourgeois Dignity: The Virtue of the Modern World."  This is a wonderfully rich debate between Deirdre McCloskey, Gregory Clark, Matt Ridley, and Jonathan Feinstein.  I do wish, however, that someone like Douglass North had been included to represent the "institutionalist" position in this debate.

Many economists like North explain economic history by assuming that people always respond to incentives, and therefore a historical revolution like the Industrial Revolution must have come from institutional changes that created new incentives for innovation--institutional changes such as secure property rights, free markets, low taxes, and the rule of law.  All of the participants in the "Cato Unbound" debate reject this explanation for the Industrial Revolution, because they argue that many of the institutional changes identified by North and others were to be found in medieval England, long before the revolution of the eighteenth and nineteenth centuries.  Actually, they suggest, fully incentivized societies can be found throughout the history of the past 10,000 years.  But they don't comment on North's argument about the importance of the general incorporation laws in England in the middle of the nineteenth century, which provided for the first time "open access" to incorporation, and which brought an explosive growth in corporate organizations.  Here North's institutional argument looks strong to me.

The lead essay by McCloskey summarizes her argument for explaining the Modern Revolution as a intellectual revolution in ideas or rhetoric, in which people in the seventeenth and eighteenth centuries in northwestern Europe were persuaded to accept the bourgeoisie--merchants, traders, artisans, and others of the commercial middle class--as morally dignified and politically free.  For the first time in history, the bourgeois class came to be regarded as virtuous--as displaying the "bourgeois virtues"--and this new moral respect for the bourgeois life stimulated the social and economic innovation that created the Modern Revolution.

Greg Clark agrees with McCloskey that there was a cultural change during the British Industrial Revolution, but he doubts that this was a purely intellectual change in cultural fashion.  Rather, what we need is a Darwinian theory of cultural evolution that would explain the Industrial Revolution as a cultural change coming through the "survival of the richest," in which economically successful families had more offspring who inherited the bourgeois values of those families.  Although there is some evidence for this, summarized in Clark's A Farewell to Alms, Clark is vague about how exactly this happened, and he's especially vague about whether this worked through genetic inheritance.  I have noted these problems in a previous post.

Matt Ridley agrees with McCloskey that the Industrial Revolution was driven by the growing influence of liberal ideas.  But Ridley insists that liberal ideas can be found throughout history, because human history has always been driven by the innovation stirred by exchange and specialization, which is the fundamental idea of liberalism.  But whereas in the past, the bursts of innovation from exchange and specialization leading to prosperity have burned out, something happened in the British Industrial Revolution to keep the fires burning.

The cause of this, Ridley insists, was coal.  The story of human civilization is the story of capturing the flow of energy from the sun to sustain human survival and reproduction.   The Ancient Revolution was based on a revolution in capturing the energy of the sun:  cultivating domesticated plants and herding domesticated animals was a more efficient way of channelling the energy of the sun to do work that would sustain the large populations of people in agrarian societies.  The subsequent history shows a movement through harnessing different sources of energy: human muscles (slaves), animal muscles, wood, water, and wind. 

The secret to why the British Industrial Revolution did not peter out, Ridley argues, was the shift to drawing from the solar energy stored in fossil fuels.  In The Rational Optimist, Ridley writes:

"Coal gave Britain fuel equivalent to the output of fifteen million acres of forest to burn, an area the size of Scotland.  By 1870, the burning of coal in Britain was generating as many calories as would have been expended by 850 million laborers.  It was as if each worker had twenty servants at his beck and call.  The capacity of the country's steam engines alone was equivalent to six million horses or forty million men, who would otherwise have eaten three times the entire wheat harvest.  That is how much energy had been harnessed to the application of the division of labor" (231).

Although they disagree about what they regard as the primary cause of the Industrial Revolution, all of the scholars here agree that the key is not accumulation but innovation.  Marxists argue that the British Industrial Revolution arose from the accumulation of capital by exploitation of domestic workers and foreign colonies.  But these scholars argue that mere accumulation is not enough if there is no openness to innovation or to what Joseph Schumpeter called "creative destruction."  The true source of wealth through innovation is the human mind, and more importantly, what Ridley calls the "collective brain" that arises from exchange and specialization.

These scholars also seem to agree in their optimism--in their hope that as long as human innovation is rewarded, human beings will find unexpected solutions to their problems.

But beneath this surface of optimism, there is a current of cosmic pessimism.  Consider the following from Ridley's Rational Optimist:

"Civilization, like life itself, has always been about capturing energy.  That is to say, just as a successful species is one that converts the sun's energy into offspring more rapidly than another species, so the same is true of a nation.  Progressively, as the aeons passed, life as a whole has grown gradually more and more efficient at doing this, at locally cheating the second law of thermodynamics.  The plants and animals that dominate the earth today channel more of the sun's energy through their bodies than their ancestors of the Cambrian period (when, for example, there were no plants on land).  Likewise, human history is a tale of progressively discovering and diverting sources of energy to support the human lifestyle.  Domesticated crops captured more solar energy for the first farmers; draught animals channelled more plant energy into raising human living standards; watermills tool the sun's evaporation engine and used it to enrich medieval monks.  'Civilization, like life, is a Sisyphean flight from chaos,' as Peter Huber and Mark Mills put it, 'The chaos will prevail in the end, but it is our mission to postpone that day for as long as we can and to push things in the opposite direction with all the ingenuity and determination we can must.  Energy isn't the problem.  Energy is the solution.'" (244)

"The chaos will prevail in the end"! 

Is this the dark side of an evolutionary view of human life as emerging within a cosmos that is indifferent or even hostile to human cares?  Is this what Leo Strauss identified as the "fear of the most terrible truth" in the evolutionary liberalism of Lucretius--even if the atomic world is eternal, the human world is not, and thus the thought "that nothing lovable is eternal or sempiternal or deathless, or that the eternal is not lovable"? 

Is this why so many of the Straussians scorn Darwinian science as nihilism--because it teaches "the most terrible truth" of Lucretian moral anthropology and denies Platonic moral cosmology?

Some of these points have been elaborated in previous posts here, here, here, here, here, and here.