Tyler Cowen: uncertainty

Transcript context

…Except as I say, when the British arrived in India, the British were open. The important thing that people maybe have difficulty understanding about British upper class was it is an incredibly open upper class. They were absorbing people coming from all different parts of the world. The Sassoon family, for example, ended up writing poetry against World War I, and also as the chief aid to the general fighting World War I. They had absorbed into British society, lots of foreigners many times before. In India, they were actually absorbing a lot of upper-class Indians into British society. What I’m saying is, to make the kind of revolution that we would expect in India, you don’t need 10 million people. You only need a couple of thousand, it would seem, to lead India to modern economic growth. That’s what’s so puzzling. You might explain all of this stuff, but all you need is some deviance. Take an example of this. Indian mills underperformed British textile mills. In 1940, there were 450 Indian textile mills. There was not a single one that achieved the average level of productivity of the English mills. How is that possible when you have this varied set of entrepreneurs, varied set of people, that you just cannot match the performance that’s going on in this other society? I remain puzzled by that. Say we look at some other extreme example: South Korea. In 1960, it’s maybe poorer than some parts of sub-Saharan Africa. Today, it’s a fully developed country. I don’t know what happened there, but I know it’s not a big genetic change. Something in the culture. They got their act together, and then they did great. What’s wrong with just assigning these puzzles to culture? Doesn’t mean we can explain them in the predictive sense. India somehow developed a better culture. South Korea certainly did. That we pretty much know. Why resist that kind of explanation? See, I’m not resisting here. What I’m saying is, having now spent many years studying economic history, I’ve finally come to, I think, modesty, and to say, look, there are some problems that just defy any serious explanation, that we make no progress with, but then, it turns out, there are some other things where we can explain surprisingly well what’s happening. Basically what I’m saying is, why I turned to studying social mobility is that here was something which actually showed this law-like characteristic, and where you could actually understand the processes and the logic of this, and why I turned away from studying things like, why isn’t the whole world developed, is that it just seemed impossible to actually make progress on that because once you just say, “Okay, it’s some kind of cultural event,” then what are you going to say after that?…

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