How the West Grew Rich: The Economic Transformation of the Industrial World

For millennia, economic growth in human societies was languid. Then, as nations in the West adopted a new set of political and economic institutions, growth became explosive by historical norms. Nathan Rosenberg and L.E. Birdzell, Jr., tell the story of how this happened. The weakening of feudalism and guild controls allowed more space for entrepreneurs and new ideas. Enforceable contracts, bills of exchange, formal property rights, limited liability corporations, and limited government enabled the rise of merchants and industrialists who could take risks and pool resources for larger enterprises. This enabled capital accumulation and virtuous cycles leading to technological innovation and growing productivity. Massive new wealth enabled the West to project power globally. As non-Western societies adopted parts or all of this formula, they too prospered. As a strategist assesses trends in the global distribution of power, a key question is which states and societies have the ability generate such wealth.