Contrary to my expectations, the book was fast paced, analytical and number driven. The book discusses economic growth trajectories of major economies. In the pre World War era, economic growth was driven by geographical factors, but post World War II institutions were the key players. The geographical temperate regions witnessed relatively low population growth and relatively higher wage rates. In an environment of well defined property rights, as was the case in Great Britain, Western Europe and later on in northern America, this feature propelled technological innovations. Firms could make profits by developing capital intensive creations like steam engine or printing press. This further allowed exchange of ideas across borders and pushed the western civilizations to the technological frontier. In contrast, countries in Africa or Latin America or even South Asia with large populations and weak institutions under colonialism were pushed behind. Labor in these countries was so cheap that their colonial masters found it unprofitable to bring in capital intensive technologies. In addition, to maintain their dominance over native persons they introduced practices which promoted racial discrimination, orthodoxy and fear for innovation. Educational, legal and political institutions only took off after the independence of these countries in the early twentieth century.
In recent times, countries in parts of Asia and South East Asia have broken away from their historical shackles. Allen attributes the success to big push industrialization. A series of reforms which together gave a push towards encouraging indigenous innovation, institution building and better quality of life. Russia, Japan, South Korea and now China. The story fits them all.
A wonderful read. But by the time I finished the book, I had this nagging feeling. I was reminded of Inception's dialogue, "Well, dreams, they feel real while we're in them right? Its only when we wake up then we realize that something was actually strange." What was so special about countries like Japan, China, Singapore or South Korea which could implement Big Push industrialization? Independent India has witnessed no massive international confrontation. We are still carrying the British legacy of distrusting institutions and scorning different communities. Our national identity has never been challenged so we do not aspire to acquire any. We are happy with tags like 'world's largest democracy' or 'largest emerging economy' which we have been carrying for the last 70 years. We are happy with the odd Tagore, Ramanujan, Tendulkar or Karmakar to really create more of them in our homes. Nothing has every pushed us! Something is missing in our growth strategy of more competition and more trade. If that was bad news, the worse news is that with fourth revolution round the corner, we have little time to figure it out.
God, can open worms everywhere. Big push indeed. The book shall whet your appetite for more economic history reading.