What more can be learned about a topic like the origins of economic growth that has been covered so extensively? When pulling back and looking at all the connected threads, is there an order in which things must happen to spark the change?
Mark Koyama is a Professor of Economics at George Mason University, Research Associate at the Centre for Economic and Policy Research (CEPR), and Mercatus Center, Senior Scholar. He is also the co-author of two books, How the World Became Rich: The Historical Origins of Economic Growth and Persecution and Toleration: The Long Road to Religious Freedom.
Greg and Mark discuss the recurring interest in the origins of economic growth and the Industrial Revolution. Mark lays out the various theories and factors that have shaped economic development across different regions and historical periods, such as geography, demography, culture, institutions, and political conditions. Greg asks why some regions like Europe succeeded in industrialization while others did not, and the role of colonialism in shaping global economic dynamics. Mark also offers insights into the ongoing relevance of economic history in understanding contemporary growth and innovation.
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Episode Quotes:
The overlooked challenge of sustaining economic growth
04:45: Once you think about growth, it's hard to think about anything else. It's a question, I think, both for rich countries, which are stagnating. So, I mean, for the US in my view, but if you think about Germany or the UK, these are pretty stagnant economies right now. And so I think these are, you know, it's not just a "Oh, we've had this revolution. Now we can sit on this, wealth gradient.." No, this is an ongoing problem, and I think policymakers in most countries have totally neglected issues of growth. They've focused on all these other issues, which we think are important, and we might say we care about growth, but we really don't act like it. And, similarly, there's a need in developing countries, obviously, to sustain growth. Both the poorest countries in the world, but also middle-income countries, which can stagnate and fall into what's called a middle-income trap.
Geography’s impact on economic hubs
13:55: Geography still has this massive role, basically, even today, in the where, like the location, which locations are going to be economic hubs. But obviously, you can’t explain the why, so it’s going to be insufficient on its own, but it could be interacting with other factors.
On markets and creative destruction
42:06: You need markets, which are flexible and adaptable, so they can be disrupted by new technologies and entrepreneurs. Other people will have a more statist perspective. They’ll think that you need, maybe, the state to do more on basic science, right? Maybe more even on actual innovation to support this. But I tend to think that you need these market institutions, basically, and they need to be sufficiently vibrant.
