Economic developement of Europe - If we are to understand how development can be promoted in the poorer countries today, we must understand the historical process which transformed developed countries in the past, and why this process failed to take place elsewhere

The European Miracle

by Ralph Raico

Introduction The “European Miracle” The Uniqueness of Europe The Importance of the Middle Ages Case Studies of Development

Contrast of Europe with Russia The Downfall of Marxist Historiography Conclusion References Notes

Among writers on economic development, P.T. Bauer is noted both for the depth of his historical knowledge, and for his insistence on the indispensability of historical studies in understanding the phenomenon of growth (Walters 1989, 60; see also Dorn 1987). In canvassing the work of other theorists, Bauer has complained of their manifest "amputation of the time dimension":

The historical background is essential for a worthwhile discussion of economic development, which is an integral part of the historical progress of society. But many of the most widely publicized writings on development effectively disregard both the historical background and the nature of development as a process. (Bauer 1972, 324–25)

Too many writers in the field have succumbed to professional overspecialization combined with a positivist obsession with data that happen to be amenable to mathematical techniques. The result has been models of development with little connection to reality:


Abilities and attitudes, mores and institutions, cannot generally be quantified in an illuminating fashion.… Yet they are plainly much more important and relevant to development than such influences as the terms of trade, foreign exchange reserves, capital output ratios, or external economies, topics which fill the pages of the consensus literature. (Ibid., 326)

Even when a writer appears to approach the subject historically, concentration on quantifiable data to the neglect of underlying institutional and social-psychological factors tends to foreshorten the chronological perspective and thus vitiate the result:

It is misleading to refer to the situation in eighteenth -and nineteenth-century Europe as representing initial conditions in development. By then the west was pervaded by the attitudes and institutions appropriate to an exchange economy and a technical age to a far greater extent than south Asia today. These attitudes and institutions had emerged gradually over a period of eight centuries. (Ibid., 219–20)[1]

At the root of the approach criticized by Bauer there appears to be a methodological holism that prefers to manipulate aggregates while ignoring individual human actors and the institutions their actions generate. Yet, "differences in people's capacities and attitudes and in their institutions are far-reaching and deepseated and largely explain differences in economic performance and in levels and rates of material progress" (Ibid., 313–14; emphasis added).

Bauer's critique thus draws attention to the need to study both the centuries of European history antedating the Industrial Revolution and "the interrelationships between social, political, and legal institutions" in that period (Ibid., 277).[2] Here his assessment links up with an impressive body of scholarship that has emerged in recent years emphasizing precisely these points.

The "European Miracle"
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