British Economic Growth, 1270–1870 is the culmination of an outstanding effort by Stephen Broadberry, Bruce M. S. Campbell, Alexander Klein, Mark Overton, and Bas van Leeuwen to reconstruct British historical national accounts over the very long run. The real per capita gross domestic product estimates that are the main outcome of the first half of the book illustrate the enormous improvement, over time, in real income and consequently standards of living. The most original insight is that the emergence of sustained growth was much more gradual than it was previously thought, and that it started around the mid-seventeenth century. The data also emphasize the historical nonlinearity of the long-term growth process. The second half of the book goes beyond this task and provides a magisterial overview of what we currently know about consumption practices, distribution, labor productivity, and comparative income levels relative to other countries in this period. (It is truly difficult to do justice to this landmark publication in a short review; for a more in-depth discussion, see the forthcoming working paper: Nuno Palma, Book review of “British Economic Growth, 1270–1870.”)
In addition to their own new data, the authors rely on a tremendous wealth of secondary source information produced by generations of economic historians, the equivalent of which is simply not available for other continental countries, with the notable exception of the Netherlands. What are the main new conclusions that result from this impressive exercise? The authors argue that the economy grew substantially during the early modern period, especially after 1650. This position stands in sharp contrast to that of Gregory Clark, A Farewell to Alms: A Brief Economic History of the World: A Brief Economic History of the World (2007), who argues that the English economy was trapped at an approximately constant (nonphysiological) “subsistence” level until it finally broke away during the nineteenth century.
Two aspects of their findings are especially striking. First, real income per capita approximately quadrupled between 1270 and 1870, but this growth was far from uniform over time: “not much” happened from approximately 1380 to 1650. This finding is perhaps a little surprising in light of the fact that the authors also argue for significant levels of structural change between 1520 and 1650. (Perhaps as long as surplus labor was still available in the countryside, incomes did not need to rise in the cities?) For the following period, the authors show that premodern growth was fastest in the period after the Civil War, but preceding the Glorious Revolution. Indeed, real per capita growth was faster then than during the “classical” period of the industrial revolution, 1760–1820. These new findings, if confirmed, present a considerably new picture of the early modern period.
In one of the last chapters, the authors provide a set of international comparisons in Geary-Khamis “international” dollars of 1990 (374–75). (For a critical discussion concerning the Geary-Khamis construction method, see pages 3–4 of Leandro Prados de la Escosura, “International Comparisons of Real Product, 1820–1990: An Alternative Data Set, Explorations in Economic History 37, no. 1 [January 2000]: 1–41; and Angus Deaton and Alan Heston, “Understanding PPPs and PPP-Based National Accounts, American Economic Journal: Macroeconomics 2, no. 4 [October 2010]: 1–35.)”
Unlike the use of market exchange rates, in principle, using international dollars of a constant year allows for comparison of income levels across space and time. In practice, however, the devil is in the details. No proper purchasing power parities (PPPs) exist before the twentieth century, which means that backward projection using volume indices could easily lead to greatly compounded errors. As we move back in time, modern categories become less representative, leading to severe index number problems that the use of hedonic indexes may be able to mitigate but cannot credibly solve.
It would be unfair to the authors to aim much criticism at their usage of the Geary-Khamis international 1990 dollars method, which is standard in the literature and needed to be included. However, I would have preferred a more frank and thorough discussion of its limits, and in particular, it would have been useful to also show the results under the presently available alternative, the shortcut or indirect method of Prados de la Escosura cited above, especially in light of the fact that this method leads to a considerably different picture of comparative income levels for early modern Europe. Specifically, if this method is used, the early modern “little divergence” in incomes defended by Broadberry (Accounting for the Great Divergence, 2015) and others, largely disappears (Figure 1).
Figure 1 Output per capita in Europe (GB 1850 = 100), using the 1850 benchmarks of Prados de la Escosura (page 24), and assuming Italy's relative level was constant 1850–1860. For details and the country-specific sources, see Table 1 in the above referenced forthcoming discussion from Palma.
No work is perfect, but this book—together with related research of Broadberry and others—represents the synthesis and culmination of the work of generations of economic historians of Britain and a significant research effort of the authors in their own right. It is the most important contribution made in the last quarter of a century toward establishing the facts that may one day permit answering that which is perhaps the most important question of all social science: Why are the societies we live in so much richer than it was the case in the past?
