Trevor Butterworth summarizes Joel Mokyr’s latest book, The Enlightened Economy:
Why did Britain have an industrial revolution first? Why not France or the Netherlands, given their economic power in the 17th century and, at the time, the increasingly free market in ideas between Paris, Amsterdam, Edinburgh and London?
Mr. Mokyr’s answer — articulated in densely packed but gratifyingly lucid prose — is that in Britain ideas interacted vigorously with business interests in “a positive feedback loop that created the greatest sea change in economic history since the advent of culture.”
Reduced to a thumbnail sketch, liberty and natural philosophy — a catch-all term for the study of “useful” knowledge — begat prosperity, which begat more liberty and useful knowledge, which in turn spread through Europe and the Americas.
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The reason for Britain’s exceptionalism, Mr. Mokyr says, lies in the increasing hostility to rent-seeking — the use of political power to redistribute rather than create wealth — among the country’s most important intellectuals in the second half of the 18th century. Indeed, a host of liberal ideas, in the classic sense, took hold: the rejection of mercantilism’s closed markets, the weakening of guilds and the expansion of internal free trade, and robust physical and intellectual property rights all put Britain far ahead of France, where violent revolution was needed to disrupt the privileges of the old regime.Such political upheaval in Europe, notes Mr. Mokyr, disrupted trade, fostered uncertainty, and may well have created all kinds of knock-on social disincentives for technological and scientific innovation and collaboration with business. Much as we might deplore too many of our brightest students going into law rather than chemistry or engineering, it is not unreasonable to think that many of France’s brightest thinkers were diverted by brute events into political rather than scientific activism (or chastened by poor Lavoisier’s beheading during the Revolution).
I still think the term rent-seeking is a terrible bit of jargon.
As Aretae points out, the solution to rent-seeking seems to be either a strong central government (a là Augustus) or a weak central government (a là the American frontier).