Gregory Clark of University of Southern Denmark reviews “The Wealth of a Nation: Institutional Foundations of English Capitalism” by Geoffrey M. Hodgson. The Econlit abstract of this book begins: “Discusses the English economy from 1300 to about 1820, focusing on the foundational conditions that enabled a dramatic transition from stagnation to growth that occurred in the seventeenth and eighteenth centuries.”

The British Industrial Revolution is the key break in world history. Yet the timing, location, and cause of this Revolution are unsolved puzzles. Joel Mokyr's book is one of a number of recent attempted solutions. He explains the Industrial Revolution through the arrival of a particular ideology in Britain, associated with the earlier European intellectual movement of the Enlightenment. This review considers how Mokyr's “idealist” approach fares as an account of the Industrial Revolution, compared to the spate of recent proposed “materialist” explanations. (JEL N13, N63)

Avner Greif's Institutions and the Path to the Modern Economy: Lessons from Medieval Trade (Cambridge University Press, 2006) is a major work in the ongoing project of many economists and economic historians to show that institutions are the fundamental driver of all economic history and of all contemporary differences in economic performance. This review outlines the contribution of this book to the project and the general status of this long standing ambition.

This comment assesses the claim of The Rise and Fall of American Growth that for coming decades, growth in US TFP will continue the disappointing pace of the last decade. While predicting future technological advance is difficult, there are indications that Gordon may actually be too optimistic on future TFP growth. The share of output from manufacturing, which still generates the majority of R&D expenditures, and has historically more rapid TFP growth, will continue to fall. There are substantial obstacles to rapid TFP advance in much of the rest of the economy: construction, transport, health care and other services.

I use building workers' wages for 12092004 and the skill premium to consider the causes and consequences of the Industrial Revolution. Real wages were trendless before 1800, as would be predicted for the Malthusian era. Comparing wages with population, however, suggests that the break from the technological stagnation of the Malthusian era came around 1640, long before the classic Industrial Revolution, and even before the arrival of modern democracy in 1689. Building wages also conflict with human capital interpretations of the Industrial Revolution, as modeled by Gary Becker, Kevin Murphy, and Robert Tamura; Oded Galor and David Weil; and Robert Lucas. Human capital accumulation began when the rewards for skills were unchanged and when fertility was increasing.

The modern world is the product of two momen tous changes: the Industrial Revolution of 1800, which brought sustained efficiency advances in economies, and the Demographic Transition of 1900, which channeled those efficiency advances mainly into increased income per capita, instead of increases in population. How these revolutions were connected has been a persistent unsolved puzzle in the history of growth. The Demographic Transition was achieved without any improve ment in contraceptive technologies from those of 1800 and earlier. It was a possibility for all preindustrial societies. Why did it occur only after the Industrial Revolution? The key component of the Malthusian econ