HOW IT ALL BEGAN: Origins of the Modern Economy by Walt W. Rostow

HOW IT ALL BEGAN: Origins of the Modern Economy

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Apparently in despair about the need to make technological innovations that can bring the human species through the present ecological barrier, Rostow muses over the question of how our forefathers transcended feudalism and created industrial society. He deals with Dutch trading ships, Genoese banks, steam engines and war; his theory, that the mercantilists' ""commercial revolution"" allowed capitalists an increased return on the basis of new inventions is not really a theory but a restatement of rarely disputed fact. The question Rostow bypasses is why the first mercantile era ended in the great Spanish bankruptcy of the mid-1600's and massive population decline, while subsequent capitalism produced industry and growth in living standards. The book begs the question of how surplus social wealth -- what the Physiocrats called ""absolute surplus"" -- became utilized for technological improvement: ""For two hundred years now -- from Adam Smith through Marshall and Robertson, to Samuelson and Kaldor -- economists have not been able to integrate satisfactorily the generation of major technologies with the corpus of economic theory."" Rostow continues the tradition. Thus his study is essentially anecdotal, and one can find better stories of early capitalism in Miriam Beard's classic A History of Business, which cheerfully traces the frequent difficulty in distinguishing the great bankers and traders from pirates and warmongers. And for a deeper historical appreciation (Rostow rarely mentions historians, only economists) of these problems, Crisis in Europe, 1560-1660, edited by Trevor Aston, is more enlightening and far more conceptually developed.

Pub Date: April 1st, 1975
Publisher: McGraw-Hill