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How Rich Countries Got Rich...and Why Poor Countries Stay Poor

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How Rich Countries Got Rich...and Why Poor Countries Stay Poor

Hachette Book Group UK,

15 min read
7 take-aways
Audio & text

What's inside?

This book explains the economic fate of countries in a way that mainstream economics cannot.

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Editorial Rating

9

Qualities

  • Analytical
  • Innovative
  • Eloquent

Recommendation

Experts have long pondered why some national economies grow while others languish. Economist Erik S. Reinert looks at history to dispute the assumptions of neoclassical theories in regard to economic development. His ideas are based on what he calls “evidence amassed in the laboratory of the international economy.” Mainstream economics, for instance, can’t explain China’s dramatic growth or other countries’ economic failures. Students of economics and public policy will find this an important reference book.

Summary

Pre-modern writings on economic development highlight issues that today’s mainstream economics neglects.

Harvard Business School teaches students to approach a problem by gathering broad evidence and then focusing on the mismatches and dissonances between reality and existing theories. Economic development is one area in which a mismatch between past reality and current theory is obvious. But you can find reasons for these inconsistencies in long-forgotten books and obscure publications, such as the 19th-century political pamphlets that documented the policy debates going on within the United States as it grew into an economic superpower.

Many early writers recognized that cities with a diverse mix of manufacturing activities had created a “common weal” of rising prosperity. For example, Naples, despite its bountiful surrounding farmland, remained poor, while Venice, built on a swamp, became rich from its trade and arts. Early thinkers also grasped the dynamic that manufacturing could deliver increasing returns to scale, as investment in mechanization meant that subsequent units produced would need less labor per unit...

About the Author

Erik S. Reinert, a Norwegian citizen, is a professor at Tallinn University of Technology, Estonia, and at University College London. He is also the executive chairman of The Other Canon Foundation, a center for heterodox economists. How Rich Countries Got Rich...and Why Poor Countries Stay Poor has been translated into more than 20 languages.

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