“Economic growth occurs when there is a sustained increase in economic prosperity, which we can measure by the total number of goods and services produced in the economy. The world we know today is a direct result of the economic growth that began in Britain in the 19th century, quickly spread to parts of Europe and North America, and has continued unabated since. It has since raised living standards in East Asia, Eastern Europe, and parts of Latin America. There is real hope to believe this will continue into South Asia, the Middle East, and sub-Saharan Africa in our lifetime.

We are trying to explain how this came about in the first place. Why didn’t growth happen before the 19th century? What were the preconditions that Britain had that allowed it to take off first? Why did some countries follow Britain’s lead and others did not? What can this history tell us about how wealth can spread to the rest of the world in the 21st century?”
This is one of the key questions in all of economics. Its answer is central to why some countries grew rich while others have not. The simplest answer is that economic growth occurred only after the rate of technological innovation became highly sustained. Without sustained technological innovation, any one-off economic improvement will not lead to sustained growth. Incomes will rise in the short run, but over time people will have more babies and those babies will eat up all the economic surplus. This is known as the “Malthusian trap,” after Thomas Malthus, a British clergyman of the late 18th century. This Malthusian logic explains the pre-industrial world pretty well.

Although there were ebbs and flows in pre-industrial economic growth, no society ever broke through and achieved sustained economic growth. This happened only after the overall rate of technological progress became high enough to more than offset the downward pressure imposed by population growth.

The question is why it took so long for the rate of technological innovation to grow as it did. This is one of the central questions we attempt to answer in this book. And there is not one “silver bullet” answer. For one, sustained innovation requires institutions that limit confiscation by the government (and protect other property rights more generally). But most societies in world history were weak on this dimension.

Sustained innovation also requires cultural values that support innovation and encourage understanding of how the world works. Societies in which work is looked down upon are unlikely to experience sustained innovation.

Ultimately (and this matters for the acceleration in growth we observe from the late 19th to the 20th centuries), it also helps if families limit the number of children they have. This does not necessarily contribute to innovation, but it does mean that innovation will more quickly translate into growth.

Most societies in world history had none of these features, let alone all of them. It took a while for all of these preconditions to coalesce in one nation. But once it did, economic growth took off.
There is little doubt that the colonizers benefited from colonial exploitation and the colonized suffered. In fact, a large literature has emerged showing just how persistent some of these effects have been on the colonized. The question here, however, is whether colonization was decisive for the onset of modern economic growth. On this, we are less sanguine.

On the one hand, the sugar economy boomed in the 17th and 18th centuries, and cotton was the major input into the textile factories at the center of Britain’s industrialization. These crops were produced with slave and coerced labor.

On the other hand, the evidence is fairly weak of a connection between the products of exploited labor and the innovations that were central to the onset of modern economic growth. This is not to deny a connection between the two, and reasonable people disagree over the relevant counterfactuals. Had there been no slave labor in the New World, would the Lancashire factories have been able to get enough cheap cotton to make innovation worthwhile? Would innovation have been possible with more expensive cotton of different quality from other parts of the world?

Our book leads to the conclusion that there is no silver bullet explanation for why the world became rich. Colonization likely played some role, and it likely played a much greater role in keeping large parts of the formerly colonized world poor. But there are many key features of the onset of growth that cannot really be accounted for by colonization. Most importantly, explaining how the world became rich requires an explanation for why the rate of technological change rose so rapidly. Colonization may have played an indirect role in this process, but there are many other causes we highlight that were much more direct and relevant.

I too would like to note, like Mark, that there is still much work to be done and future work may change my opinion on this topic.