PerspectiveEconomics

Intellectuals and the rise of the modern economy

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Science  10 Jul 2015:
Vol. 349, Issue 6244, pp. 141-142
DOI: 10.1126/science.aac6520

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Summary

For many decades, economists dismissed culture as irrelevant to most questions in economic growth. However, in the past decade they have rediscovered its importance in the emergence of the Great Enrichment (the rapid and unprecedented process of economic growth since 1850) (13). In retrospect, this development seems inevitable. Once it was accepted that institutions are a powerful factor in explaining differences in national per-capita income today (4), culture—in the sense of the beliefs and values on which institutions were founded—could not be far behind. In a recent paper, Squicciarini and Voigtländer (5) provide further support for this idea by showing how culture affected the rise of the modern economy.