Insight and notta lotta Yada-yada

When everything you thought you knew turns out to be wrong, a potentially dull commentary becomes riveting, discovers Deirdre McCloskey.

If you have no deep knowledge of acids, it may come as a surprise that an acid with interesting properties has so simple a formula as H2SO4. My, my: just look what those darn chemicals can do! Similarly, if you have thus far read Jane Austen for her exciting plots, it may be a surprise that she invented the free indirect style in the English novel, thus achieving her comic effects. Remarkable! Notions such as these stick. Unsurprising matter does not. You could call it, in honour of Jerry Seinfeld, the Yada-yada-yada Theory of Learning. Yada-yada-yada, you will recall, is the all-purpose filler, the et cetera, the and-so-forth, the proceed-as-before.

No one learns from yada. Stick to the surprising stuff. Fortunately, most of what people think they already know is wrong so you can rather easily surprise them, avoid yada, and teach.

Consider, for example, what you think you know about the subject of these three imposing volumes, the economic history of Britain since William and Mary, written by 51 expert contributors and ably edited by Roderick Floud and Paul Johnson. The subject is parcelled out into Industrialisation, 1700-1860; Economic Maturity, 1860-1939 ; and Structural Change and Growth, 1939-2000 . All the numbers and arguments are here, everything you wanted to know or thought you already knew. To precis the three volumes respectively in leading questions, how did Britain (Scotland is treated as rather an appendage) come to be rich? Did Victorian or Edwardian or Georgian Britain fail? Did the experiment with massive state intervention after 1939 help or hurt?

If you are like most educated people, you have, without being sharply aware of it, rather a lot of opinions on these matters. In fact, you possess a full and even coherent account that goes something like this: the economic life of a nation is like a tree, with stages from acorn to oak, or, like human growth, childhood to old age. In England, population exploded - the child grew - because death rates fell after the gin age. Enclosures were crucial, driving people off the land and into the dark satanic mills.

Exploitation, not population growth and the Napoleonic Wars, kept wages low. The overseas slave trade was a crucial source for financing the industrial revolution. That revolution was a matter of big mills and big machines, especially the steam engine. After the railway age and the repeal of Corn Laws, though, Britain failed. The Germans and Americans were better, it turned out, at everything. Agriculture suffered a great depression. Britain was crippled by not having investment banks and technical colleges like Germany. For the rest, the family firm was stuffy and rigid, and sent the young man off to a minor public school, where he became a twit. Fortunately, he could go to India and govern. The empire was responsible for the prosperity of late Victorian Britain. Loss of the empire explains Britain's troubles in the 20th century. Trade unions were a big factor in improving conditions for the workers. Capitalism needed to be brought to heel. State enterprise, planning, regulation and subsidies were devised to accomplish this. The balance of payments is a suitable object of policy. Policy, by the way, is easy - a matter of ministerial intent.

The received wisdom, the newspaper account of British economic history, your personal yada-yada-yada about the first industrial nation is, in every detail, mistaken. Nothing of what you think you know is correct. Or so your friends the economic historians of Britain are here to tell you.

The received wisdom circa 1970 was, for example, that the Industrial Revolution was a matter of investment. This "capital fundamentalism", as William Easterly has called the comparable conviction among Western economists trying to help the third world at the time, has been revived in the so-called "new growth theory" over in the department of economics.

The historian of technology Joel Mokyr thinks differently: "The years 1760-1815 witnessed more than just some lucky breaks in a handful of industries: it was also the period in which people defied gravity through hot-air balloons, began the conquest of smallpox and learned to can goods, to use binary codes for manufacturing purposes, to infer geological strata from fossil evidence, and to burn gas for lighting... In pottery, one of the oldest techniques known to mankind, Josiah Wedgwood and others introduced new materials, new moulding techniques and improved oven-firing."

If you were over in the department of economics you might think that these were merely routine returns on investment, although you would have to explain why history waited until the 18th century to make the investment.

Mokyr points out, on the contrary: "Most of the payoff to technological creativity occurs in a more remote future and is spread over a longer period than was previously believed." So there was an enormous change in spirit, which was not aggregately profitable until too late to be explained by mere profit. It was, as Mokyr puts it, an "industrial enlightenment", that is, an intellectual - could one say "spiritual"? - change.

David Mitch, in one of the few sustained and successful attempts at humour in the volumes, asks what would have happened if the British population had been replaced overnight by Eskimos. This mental experiment gets at the quality of "human capital", and Mitch points out that the British human capital in turn would have worked poorly in the Arctic. But surely he is right that "Britain's intellectual vibrancy in the late 18th century... would be one of the major losses". Something about those British.

The received wisdom in 1970 was that modern economic growth was a matter of heroic innovations in steam and cotton. False, says Kristine Bruland of the University of Oslo. "Innovation was a broad process, pervasively embedded in many industries", and looks like "a general social propensity to innovate". "The claims for steam as a driving force for growth," to take one example, "are seriously overdone", as Nick von Tunzelmann has long argued. Again, it was something about those British, as David Edgerton has been arguing elsewhere for the period of alleged economic decline. Radar, TV and jet engines, among other items, do not come out of a failing economy.

The received wisdom circa 1970 was also that population growth during the 18th and 19th century had to do mainly with a falling death rate, the same "demographic transition" that other countries exhibited in the late 19th and 20th centuries. Research led by, and here described by, Anthony Wrigley has reversed the history: it was instead rising fertility, giving new meaning to the phrase "the sentimental revolution". Dudley Baines and Robert Wood, in a particularly lucid chapter in the second volume, make it clear that "a new-found desire to cheat biology" was behind the fall at the other end in the number of children a woman had in the period 1851-1931.

All this and more since 1970, and the application of quantitative methods to economic history.

The belief then was that families in olden times were "extended" and were wrecked by a "rise of individualism". The findings of Wrigley's Cambridge group, Jane Humphries notes, was "cataclysmic for the presumption that pre-industrial households were large and complex. The majority contained fewer than five persons... The discovery... exploded belief in the rise of individualism." As Alan Macfarlane of the group has been arguing for decades, individualism "rose" in England in Saxon times.

In 1970 the standard view was that countries grew by stages, like the seven ages of man, or like trees, with rigid sequence in the leaf, the blossom or the boll. The stage model, Pat Hudson argues, is quite wrong, as shown in the varied industrial history of England in the 18th century. The point was made in the 1960s by Alexander Gerschenkron for the general case. Some places and industries and people did not carry on the march to modernity.

As Hudson notes: "The fate of many former proto-industrial regions, such as East Anglia and the Weald of Kent, was deindustrialisation."

And so forth. But not yada-yada-yada. Women were not frivolously in charge of 18th-century consumption. Foreign trade was not an engine of British growth in the 19th century. Transport innovations in the 18th and 19th centuries made more contribution than cotton textiles. Britain's lack of good managers for state enterprises was the chief obstacle to the success of nationalisation after 1947.

Not that 1,561 pages on farm size, vocational training and national insurance benefits do not have passages of yada-yada-yada. Consecutive reading of a history such as this can be a bit trying, and the books lack the interpretive sparkle of a Norman Davies or Eric Hobsbawm product.

Perhaps a third editor would have been a good idea, someone to cross out the turns to yada-yada and ask insistently the question that, for the most part, the writers do a pretty good job of answering, but sometimes miss:

"And your point is exactly..?" Just a thought. The third volume is particularly scrappy and could have used a steadying editorial hand.

But that is not entirely fair to the brave and learned contributors to the third volume. Any recent history is bound to have an especially serious yada-yada problem. History starts with headlines, but if it ends with them it is liable to feel like hundreds of pages of The Economist rewritten by university lecturers. Older subjects have the advantage that the superficialities have been squeezed out by many generations of scholars.

The history of enclosures, for example, went from headlines (so to speak) about the Goths and Vandals of the open field farmers to the Fabian socialist views of the Hammonds a century ago, through a conservative reaction 50 years ago, through numbers and economics beginning 30 years ago, to something like a consensus now: on the whole, enclosures did not play a crucial role. The belief that the Victorian economy "failed" started with the panic over the German commercial invasion of the 1890s, developed into the blaming of fathers in the 1920s, modulated to the less fevered assessments after the Second World War, and then to analysis and counter-analysis in the 1960s and 1970s down to, again, something like a consensus: on the whole, the Victorian economy did not fail. Oddly, therefore, the first volume, the most remote in time, is more suitable for the general reader than the second, and the second more than the third.

Many of the chapters, I am gratified to report, confirm notions I put forward in the 1970s and 1980s, as a young and then young middle-aged economic historian, about trade, open fields and enclosures, Victorian failure and productivity change, dual and primal. But in one respect my younger self was disastrously and persistently mistaken. Like half the contributors to these volumes, I was quite sure that "spirit" had nothing to do with economic success, that entrepreneurship was a silliness of sociologists, that we can tell the story of modern economic growth by sticking to the virtue of prudence.

Modern economic growth is the increase of income per head by a factor of 15 or 20 since the 18th century in places such as Britain - and a factor of 8.5 worldwide, even including the places that have not had the luck or skill to let it happen fully. It is the most important event in the history of humanity since the domestication of animals and plants, perhaps the most important since the invention of language. It bids fair to free us all, eventually.

And it cannot be explained by the usual economist's tools of scarcity and calculation. That was my youthful error. The tools are still very good to have but, like Wittgenstein's point that philosophy has a use mainly for curing philosophy, they are for this big question useful mainly in disposing of mechanical explanations. The central puzzle is, why Britain? Or why northwestern Europe? And why the 18th and 19th centuries? Why did Britain then escape permanently from the poverty that has been the human lot since Adam, or since the mitochondrial Eve? Was it freedom of an unusual sort? Was it the ideology of capitalism? Was it science, itself a cumulative miracle, dependent on freedom and in technology dependent on capitalist ideology? No one knows. Until we do, we will not understand the modern world.

Barry Supple, my first teacher of economic history, was among the commentators at the conference producing these volumes. At the beginning of it all, at a conference in 1970 of "new" economic historians of Britain, he was also a commentator and was moved to verse: "Bliss was it in that dawn to be alive/ But to be young was very heaven."

If you are seriously interested in British history, put the three volumes on your bedside table and try one chapter a night for the next two months.

The truth will set you free. Or perhaps it will only lead you out into deeper waters. But that is improving, too.

Deirdre McCloskey teaches economics, history, English, communication and philosophy at the University of Illinois, Chicago, US. She was originally to have been one of the editors of The Cambridge Economic History of Modern Britain .