Economic History Association

Bionomics: The Inevitability of Capitalism. by Michael Rothschild Review by: Joel Mokyr The Journal of Economic History, Vol. 52, No. 2 (Jun., 1992), pp. 524-525 Published by: Cambridge University Press on behalf of the Economic History Association Stable URL: http://www.jstor.org/stable/2123166 . Accessed: 21/05/2012 08:58
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When outsiders venture into well-troddenintellectual fields. Veseth notes a bias in the Victorian income tax: depreciationwas not tax deductibleand thereforemighthave provided an incentiveto hold on to olderequipment. I remainunconvinced that Victorian tax and debt policies provide an importantexplanation of late Victorian growth problems. Third.financial.bold. MICHAEL EDELSTEIN. Pp. technical. Queens College and The Graduate School. Douglass C. CUNY Bionomics: The Inevitability of Capitalism. Veseth does not offer any quantitativeevidence. it can only come from carefulspecificationof the experiences to be studied. This is a book on economics by an outsider.He is best on his home ground: delineatingthe achievements and problems of recent reforms of the Social Security system. poverty.or. If the longer-term movementof economic historyis to have a usable present. $24. Given the low rates of the British income tax. two responses often occur: the insiders latch on to the lack of formal training to dismiss the work of laypersonsas the trivialproductof an interloperor a crackpot. In Veseth's analysis of the post-World War II U. New York: Henry Holt.but it is unclear in what manner. though parts of his analysis of public finance in the 1980sare insightful.which acceleratedthe federaldeficit to unprecedentedpeacetime levels. Comparedto the ambition and sweep of Rothschild. It is wide-ranging. he brings to bear a wider readingof the relevantliteratureand more evidence than he did in his treatment of RenaissanceFlorenceand VictorianBritain. Furthermore. economy.Yet-considering the detailand depthof his secondary sources-his descriptionsof the demographic. competition. but a casual inspection of governmentdata reveals that the income tax was rarelymore than20 percentof the centralgovernment's budget and usually closer to 10 or 15 percent.they acknowledgethat the newcomerhas broughta breeze of fresh air into old debates that have gone stale.but there is no such carefulmapping.who has ventured into economic theory and economic history to offer a new interpretation practicallyeverything:markets. xv. the issue is not the potentialbias but the actual effect.the income tax was overwhelminglyborne by the wealthy (at quite low rates) at a time when most other revenue sources were quite regressive. 423. North and Eric L. a thoroughimmersion in the literature the period. The key to understanding how an . For example. Yet the overall message of this iconoclastic book is worth listeningto. and then go about their business. and communicationsstructuralchanges are distressinglyvague. and original.and a precise detailingof the chains and webs of historical of developments.S. of technology. it is quite possible that the effect of the bias was trivial. Thus. 1990.95. By Michael Rothschild. It is rare indeed that scholarshipis transformed total outsiders-the sociology of science and indeed humannatureitself by are pitted against it. Jones look like obscurantistantiquarians. less frequently. MichaelRothschild(not to be confusedwith the well-knowntheoristby the same name) is a lawyer and businessman. the roles of bureaucraciesand corporations-everything is fair game. Veseth's readingof economic historyis too narrowlyfocused and empirically imprecise.This is an interestingpoint but here. accordingto his own methodologyit should have been possible to carefullydetail the links between the evolving structuralshifts of the 1960s and 1970s and the appearanceof federal deficits in the late 1970s. economic development. Still more interestingin his use of the ideology and politicaleconomy of California'sProposition13 referendum explainthe curiouseconomics and politics to of Reagan'sfederaltax reformsof the early 1980s.524 Reviews of Books income tax is characterizedas burdensome. In the end. because what it proposes is a truly historicalview of economics. as with the expenditure biases induced by Florence's catasto tax reform.

could yield rich insights in the understanding economic institutions and technologicalprogress. The Journal of Evolutionary Economics has appeared. Northwestern University Letters of Eugene V. By not living up to that requirement. Yet the conditio sine qua non of an evolutionary approach to economics is to know and use more history. This approach.dedicated to the pursuitof this analogy. and institutionsare expected to survive depending on their relative contributionto economic performanceor "fitness" (hence the subtitle). Others. Robert Constantine.Reviews of Books 525 economy operates. He has found that metaphorin biology.In point of fact.can come to grips with the problemsof chance versus destiny and path dependency versus choice under constraints in the development of technology and institutions.by showing how the present is shaped from the past by a combination of accidental innovations and selection mechanisms.led lives of "perfect stability" without travellingmore than a few miles from their homes and in abject poverty. lxxxvii. Pp. The economy. "Progress [before the IndustrialRevolution]was a spiritualmatter. Urbana: University of Illinois Press. Technologicalchange is envisaged using niche theory. Economists such as Jack Hirshleifer. Debs (3 volumes). He rejects the mechanicalanalogiesof neoclassicaleconomics as irrelevant. the plea to introducean explicit evolutionarydimensioninto economics to make it better in as coping with non-market phenomenais surely timely. as is the startling statementthat Marx and his followers accepted Malthus'spredictions(p. is an understandingthat it is an evolving system ruledby Darwinianselection processes.The author'sdescriptionof technologicalchange at Darwinchicken farms. Beyond that. The dynamics of this ecosystem is representedby punctuatedequilibria. Just as one cannot study evolutionary biology without knowing something about fossils.which was recently developed by evolutionarybiologists and system analysts. Rothschild maintains. Unkind critics might exploit some of the more egregious errors to discredit the entire approach as the work of a dilettante. An evolutionaryapproach. and it would be a pity if the book were to be dismissed for frivolous reasons. evolutionary economics is by definitionhistoricaland requiresa full and detailedknowledgeof history. and Richard Nelson have for a long time been advocating this approach. not a practicalone" (p. and a brand new journal. Readersof this Journal will scarcely have to be persuadedthat a thoroughknowledgeof economic historyis essential to anyone who wants to take economics out of the fetters of static analysis.Rothschildhas weakened his case. JOELMOKYR. in Rothschild's view is an "ecosystem" in which the rate of change is directly related to the degree of diversity present. Edited by J. 1990. scant scientific or technologicalprogresshad been madesince the decline of Greece 1700years earlier" (p.and insteadsearches for a metaphorthat will help him to understandlong-runhistoricaleconomic change. maintainsRothschild. For most Americansliving at the turnof the twentiethcentury. 20). The statementthat "except for Gutenberg'sinventionof movable type. especially in biology and business. Rothschildhas read an enormousamountand educatedhimself in a host of unrelated fields. the period . if of adoptedwidely. a weakness that blunts the attacks that this otherwise thoughtful and knowledgeable author launches against economics. 8) would be grounds for academic dismissal at my institution. It is thereforeunfortunate that Rothschild's knowledge of history and economic history is highly deficient. Yet such howlersare but superficial blemisheson a seriousidea. Socialism. It is full of provocative and interestinginsights.Douglass North. 184). Eugene Victor Debs was "Mr. will pick up the story where he left off. however. Most Englishmenaround 1700. Paul David. many scholarsagree on this-and Rothschildis less lonely than he supposes." During the three decades between 1895 and 1925. and his emphasis on inter-firmcooperation and cross-fertilizationmakes for compellingreadingfor anyone interestedin the historyof technology. even if it is not as revolutionary Rothschild supposes. Geoffrey Hodgson. 591. and help create the new economics about which he and many others dream.

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