Comment by cdavid | Hacker News Reader

Comment by cdavid | Hacker News Reader

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I think that's exactly his point, actually, although I thought that was quite well understood. E.g. "How Asia works" explained the difference between taiwan/japan/s korea on one hand, and philipines/indonesia/malaysia on the other hand exactly around this axis.

Tyler Cowen tends to be one of the few famous economist who do admit that even though not well understood, there is such a thing as "culture" that influences economics and that is important, so I guess that's his angle. Another mystery under that angle is why France managed to modernize so well in XIXth, even though it had bad institutions. See e.g. Rodrik/Cowen talking about this in https://medium.com/conversations-with-tyler/a-conversation-w... (search for "Barrington Moore" section). In How Asia Works, the author argued quite convincingly about the importance of land reform, and how splitting huge landlors domains into small pots of lands was critical. As each farmer would get incentivized to improve their production, skills and market mechanisms develop much more quickly.

Chinese emperors have done this type of land reform innumerable times and it has always ended up in famine and disaster/regime change. Land consolidation became a thing (as it inevitably does) and baron landlords became commonplace as the consolidation of fields occurred. The positive aspect of land redistribution via the equal field system is that it alters the power structure for the corrupt landlords who should not have power and prevent progressive changes that benefit society. The negative aspect is it's borderline impossible to vet who is "worthy" of being a landlord. The Chinese unfortunately would let "laissez-faire" take over property control.

Eventually someone who knew how to get a leg up on others would take advantage of others financial incompetence, likely mortgage the property, then acquire it, eventually leading up to owning basically a whole province thus becoming basically creating their own landed title and domain. Then suddenly you've got a feudalistic system that has always existed, but the head government now may even have a worse problem they created themselves. It's happened when the south basically broke off after the final rebellion during the Tang dynasty. These landholders eventually had enough power and cultural difference that they could break from the north and retain full autonomy.

Necessary but not sufficient and all that... In how Asia works, Studwell argued quite convincingly how land reforms in Japan, South Korea, etc. was a prelude to successful industrialization because it allowed creating financial surplus thanks to increase agricultural output across a significant part of the population.

And in China, it is well acknowledged that the reform from 1978 were a significant step toward China economic growth: https://en.wikipedia.org/wiki/China%27s_Rural_Reform

But like I said about how these wide sweeping reforms, they create instability and also famine. The reason it ended up being good (as your link also shows) was due to land consolidation. Millions of independent farmers does not create a food surplus as much as a few consolidated landmasses that can maximize production. As I stated, the consolidation inevitably occurs and always have in the many times China has performed land redistribution.

The primary reason the growth occurred was because of the land consolidation. Instead of having millions of independent farmers, they consolidated the land and only required hundreds of thousands of laborers to work on the land to maximize production. Thus allowing for a massive labor force that could be utilized for industrial production.

I don't know where you get the idea from that France had bad institutions, but I can not disagree more. They have a long track record of stellar institutions, most of the continental law tradition was modelled after the French 'code civil' implemented at the beginning of the 19th century. The grand Ecoles produced excellent scholars and administrators as is also evident from the scientific output in the 19th century, only rivalled (surpasses) by England and Germany.

It was well understood also that any European bureaucracy would be dominated by Frenchmen, because they simply were the best.

The topic is complex, but France was (and still is) a very centralized country, compared to the UK, Netherlands, Denmark, or what would become Germany. And you had fewer, bigger land owners. It is often argued that it is only through competition with all those neighbors that it managed to modernize. That's what Rodrik alluded to in the talk I mentioned earlier.

And still today, agriculture is more important to our French psyché than it tends to be in other countries in the north and the west.

But... there's a clear policy angle here? There's no need to navel gaze about culture on this. If you follow the same policies that other major powers followed when they were growing (protectionism + heavy coordination between government and large coorporations) you will find growth.

To be honest I feel so little empathy from this author and their post.

I mean there's so much comprehensive studying about the american health care market. The US gov't has spent 50 years staring at it in trying to make it less of a nightmare!

He poses the question of quantifying worker productivity in knowledge economies as if this hasn't been a topic of discussion and like 10 iterations for the past 50 years.

He talks about a lack of criticism of institutions, when there are _centuries_ of criticism on various arms of the government and how they function. Political science is a whole branch of study!

I just get the vibe that this person almost never actually reads books, and just reads pop science takes on economics all day. I mean he's probably a major player in economics but I guess that's kinda the point.

I see how you could interpret his post that way, but saying that Cowen does not actually read books is... not knowing the guy very well :)

His perspective I believe is that a lot of those points have been studied, but need a fresh look, and are the most likely to be intellectually disrupted if you want.

> why France managed to modernize so well in XIXth, even though it had bad institutions.

I've mostly read about France's rural history in the 19th century, but imho its institutions were not that bad, whatever the term might mean for the 19th century. Afaik both Louis Philippe I and Napoleon III were pretty laissez-faire when it came to business, an attitude that proved successful for the first waves of industrialisation. Napoleon III's reign also added some proto-Keynes-ian touches to France's economy. A very quick search gave me this quick write-up on the issue [1]:

> Napoléon III also directed the building of the French railway network, which greatly contributed to the development of the coal mining and steel industry in France, radically changing the nature of the French economy, which entered the modern age of large-scale capitalism. The French economy, the second largest in the world at the time (behind the United Kingdom), experienced a very strong growth during the reign of Napoléon III. Names such as steel tycoon Eugène Schneider or banking mogul James de Rothschild are symbols of the period

[1] https://www.newworldencyclopedia.org/entry/Napoleon_III#Deve...

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