Samuel Cohn: Global Social Trends

ABSTRACT

 

This paper offers an alternative to the view that high technology promotes development and low technology inhibits development. We differentiate between monopoly technology and accessible technology. Monopoly technology produces growth by producing monopoly rents. As a byproduct, it also produces substantial inequality, both within nations and globally. Accessible technology produces growth without monopoly simply by increasing the volume of production in a lucrative business. We illustrate this first with a consideration of successful agrarian-based development in the global North that was based on agricultural products that were not particularly monopolized. We then move to a detailed consideration of fishing in nineteenth-century Norway. Norway’s economic development depended on proceeds from fishing exports. Norwegian fishing had a distinctive technology that made it particularly low-tech and egalitarian. It produced substantial wealth for the nation while producing very little social inequality. 

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Macrosociological models of development have generally argued that inequality is both a cause and a consequence of successful economic development. This holds both for authors in the functionalist/modernization school and for authors in the neo-Marxist/ world-system traditions. A consensus position on the link between inequality and growth can be found in Kuznets (1955:18):

 

[We expect] ... widening inequality in these early phases of economic growth. ... [This] is particularly applicable to factors bearing upon the lower income groups: the dislocating effects of the agricultural and industrial revolutions. ...Furthermore, there may have been a preponderance in the earlier periods of factors favoring maintenance or increase in the shares of top-income groups, in so far as their position was bolstered by gains arising out of new industries, by an unusually rapid rate of creation of new fortunes.

 

Kuznets’s claim that development is intrinsically tied to widening inequality closely echoes Marxist/critical depictions of capitalist self-aggrandizement and the immiseration of the working class (Engels 1845; Piketty 2014; Wright 1994) and functionalist accounts of industrial society having middle-class non-aristocratic elites linked to technological progress in industry (Davis and Moore 1945; Kerr et. al. 1964; Parsons 1964).

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The traditional account underestimates the role of social equality in producing development. While the Kuznetsian model fits important cases such as Great Britain and Germany, there are equally important cases of more egalitarian development in the industrialized nations. Here the relative lack of stratification contributed not only to continued economic growth but to their becoming wealthy nations in the first place. Canada, Australia, New Zealand, and Scandinavia all represent cases of this second type.

 

The argument that inequality produces economic growth assumes that successful capitalist development comes from monopoly technology. Possession of a scarce technology or a unique ability to make valued goods allows the producer of those goods to charge monopoly rent. Traditional theories of growth, both functionalist and Marxist, attribute the economic rise of the core nations to the possession of monopolistic technology in such sectors as mechanized textile production, railroads, automobile production, and computers. Samir Amin’s (1973) theory of unequal terms of exchange argues that core nations become core nations by having proprietary manufactured goods for which they charge monopoly rent. The periphery becomes poor because it lacks such monopolies, and is forced to trade with the monopolists on unequal terms (see also Bradshaw and Wallace 1996; Frank 1969; Myrdal 1957; Prebitsch 1950; Singer 1950).

 

But what if monopoly technology is not necessary for nations to become wealthy? What if nations can become rich without exploiting other nations with unequal terms of trade? We argue that much of the growth in nineteenth-century Europe, North America, and Oceania came from accessible technology: technology that was readily available to all parties and that involved negligible barriers to entry and no monopoly rent. Growth from accessible technology involves the simple expansion of production in a lucrative business, and it is not materially affected by other firms or other nations being involved in that business or having skills nearly identical to one’s own. Although exceptions exist, agriculture and agricultural processing are common examples of industries that are based on accessible technology. We argue that much of the West grew on the basis of agriculture and agricultural technology, rather than the factory production and heavy industry that are emphasized in traditional accounts.

 

We illustrate our arguments by a consideration of the economic history of Norway. Norway became a wealthy nation despite lacking nearly all of the prerequisites of economic development. It was a colonized by both Denmark and Sweden, both of whom damaged its economy; it lacked coal and steel, the critical resources of the nineteenth century; it had a very small population. Norway grew almost exclusively on the basis of fishing—fishing that was executed in an unusually egalitarian fashion. We present nineteenth-century Norway as an ideal type of what successful capitalist growth can look like when based on accessible rather than monopolistic technology and consequently on equality rather than inequality.

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WHY EQUALITY PROMOTES GROWTH

 

The idea that social equality can promote economic development and growth is not new. There is a broad range of authors who can be loosely construed as invoking “social democratic” models of growth. We concur with many of these alternative positions, although we will not be emphasizing them here. These include the arguments that:

 

• Equality produces greater investment in education, which promotes development through superior human capital (Heller 1999; Karl 1997).

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• Equality promotes state limitations on worker exploitation, reducing the viability of sweating labor, and encouraging employers to develop high-tech strategies of growth (Streeck 1992; Webb and Webb 1919).

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• Social equality weakens the dominance of finance institutions, and thus prevents the instabilities associated with casino capitalism and financial speculation (Stiglitz 2013; Weeks 2014).

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• Social equality restricts the rise of male-dominated military or rentier states, which by enforcing patriarchy restrict female labor force participation and women’s entrepreneurship (Blumberg 2016; Moghadam 1993).

 

We instead concentrate on one simple but fundamental relationship: social equality increases market demand, because the poor consume a larger percentage of their income than the rich do. Among authors read by development sociologists, this position is most associated with Stiglitz (2013) and Elsenhans (1996). Elsenhans (1992:80–129) makes social inequality his prime focus, arguing that it is the fundamental cause of slow growth in the global South.

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Among authors read by development sociologists, this position is most associated with Stiglitz (2013) and Elsenhans (1996). Elsenhans (1992:80–129) makes social inequality his prime focus, arguing that it is the fundamental cause of slow growth in the global South.

 

The argument that the poor have a higher propensity to consume while the wealthy have a higher propensity to save is a staple argument of Keynesian microeconomics (Keynes 1936:96; Samuelson and Nordhaus 2009). The theory derives from the principle of diminishing marginal utility (Clark 1886; Jevons 1871; Marshall 1891). As people consume more and more, the value associated with each additional expenditure becomes less and less. First expenditures tend to be on basic survival needs such as food, clothing, and shelter. As budgets increase, people can move toward satisfying secondary needs or obtaining luxury goods. If they become rich enough, they have nothing they really want immediately, and can afford to save for future consumption. Poor people consume a high percentage of their income, because they are obtaining fundamental necessities. Subsequent purchases produce less utility, so people with higher incomes consume less.

 

Keynes argued that the differential consumption capacity of the rich and the poor would lead to societies having different multiplier effects. More egalitarian societies would have a smaller percentage of the population with a high propensity to save, and a larger percentage with a high propensity to consume. This would increase the additional employment that would be produced by exogenous economic growth. Reassertions of these claims have become increasingly common in both neo-Keynesian and developmental economics (Dabla-Norris et. al. 2015; Ostry, Berg, and Tsangarides 2014; Stiglitz 2013; for a review of empirical literature in economics on this issue, see Annex 2 of Cingano 2014).

 

The emphasis on multiplier effects in this literature is well considered—and is in marked contrast with practice in development sociology, which emphasizes base industries that have transformative effects; consider Smelser’s (1959) emphasis on cotton manufacture or Evans’s (1979) focus on steel and petrochemicals. A high-technology modern industry with low multipliers will produce a disarticulated economy with reduced effects on employment and income (Cardoso 1971). It is important to study the determinants of high multipliers as well as the determinants of strong base industry. In this regard, social equality can produce high multipliers, which in turn increase social equality, producing a beneficial feedback circuit of humanistic development rather than disarticulated development.

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THE TECHNOLOGICAL BASIS OF EGALITARIAN DEVELOPMENT

 

High multipliers and egalitarian development are linked to the technological basis of growth in particular nations. There are technologies that promote inequality both domestically and internationally, and those which produce growth without such stratifying effects. Macrosociology has focused on inegalitarian technologies; but successful development has occurred in nations that use technologies that are both pro-growth and consistent with social equality.

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The key issue is the distinction between monopoly and accessible technology. Both dependency/world-systems theories and functionalism/modernization of development view monopoly as a precondition for successful economic development. In neoMarxist models of development, the purest statement of this position is the theory of unequal terms of trade (Amin 1973; Andersson 1976; Emmanuel 1972; Prebisch 1950; Singer 1950). The theory argues that trade between the core and the periphery produces a one-way flow of financial resources from the global South to the global North. This resource extraction is based on monopoly rent. The core produces manufactured goods, generally using proprietary technologies. The periphery cannot produce those goods by itself, and has to purchase them on the global market, with revenues from selling agricultural and mineral commodities at competitive market prices. The high prices associated with manufacturing monopolies and the low prices associated with competition in agricultural markets produces this one-way flow of resources. 

 

Underdevelopment theory also gives primacy to the role of monopoly technology. The underdevelopment theorists made multiple arguments about how the core deprives the periphery of technology by destroying infant industries, maintaining patent control of technology in the core nations, encouraging brain drain, or structuring global commodity chains so that design functions are maintained in the core (Bair 2008; Barnet and Muller 1975; Frank 1969). The complement to this argument is developmentalist state theory, which emphasizes the role of the state in supporting both education and the creation of locally based counter-technologies (Cohn 2016; Woo-Cumings 1999). Alice Amsden’s The Rise of the Rest (2003), for example, is a book-length treatment of the transfer of skills from the core to the semi-periphery and the role of the state in building technological capacity. This is a fuller statement of the classic Gerschenkronian (1962) theory of late development, which always emphasized the role of hard-to-get industrial technology as a critical precondition for growth. The primacy of monopoly technology in growth is also emphasized by the literature on innovation and technology transfer in development, in which a complex substructure of culture and institutions that foment collective learning and innovation is required (Abramovitz 1989; Lall 1987; Lundvall 1995; Nelson 1993). 

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We agree that technology matters. And we have few disputes with any of the work just referred to. However, the classic discussions of technology only refer to one kind of technology, which we call monopoly technology. The analyses these authors make of monopoly technology are essentially correct. However, economic development can also occur through a second type of technology: accessible technology. The simple difference between the two is that monopoly technology is proprietary, advanced, and difficult to obtain, while accessible technology is fairly simple, represents modest increments over prevailing practices, and is easy to obtain and share.

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The development literature too often assumes that the only technologies that are economically relevant are those that are so difficult to obtain that they provide the holders of such technologies with monopolies. Monopoly rent is a powerful force. It is easy to see how controlling a monopoly technology could provide substantial economic advantage. However, accessible technologies also provide prosperity and growth. Furthermore, because access to the technology is widespread, its benefits are dispersed broadly. This broader distribution of human capital produces a fairer and more egalitarian form of economic development. Monopoly technology produces power, inequality, cartels, and the domination of the weak by the strong. Accessible technology benefits everyone, in a positive-sum game.

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We argue that much of the growth of the West came from accessible technology that produced egalitarian rather than inegalitarian development. We illustrate this with a discussion of agriculture and fishing in nineteenth-century and early-twentieth-century European, North American, and Oceanian development. We pay particular attention to Norwegian development, and especially to the role of fishing in Norwegian development. The exclusive concentration of macrosociologists on Victorian Britain and Wilhelmine Germany as ideal types for the entire process of development foregrounds breakthrough industrial technology and its monopolistic consequences. But even eighteenth-century England and Germany had simple agricultural improvements, such as fen drainage, that used technology that was easy to understand and easy to obtain but which nevertheless produced development that was broadly based and not especially disarticulated. The case of Norway and its fisheries may seem relatively obscure, but it is closely related to processes that were occurring throughout the global North, and it illustrates processes that can be a key part of the transition from underdeveloped to developed.

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Note that showing the importance of accessible technology is not the same as showing that monopoly technology didn’t matter. It would be absurd to claim that the Industrial Revolution did not benefit Britain, or that Britain did not benefit from unequal exchange with its trading partners in cotton. While we make a strong argument for the role of accessible technology here, it does not displace traditional arguments involving world-system dynamics or relationships of underdevelopment between the core and the periphery. Development is by its very nature a complex multicausal process. The argument presented here is that there are causes of development linked both to equality and to accessible technology. These may coexist with more traditional relationships of modernization or underdevelopment and warrant consideration in their own right.

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THE DYNAMICS OF MONOPOLY AND ACCESSIBLE TECHNOLOGY

 

Monopoly technology is technology that is understood by a very small set of actors. Typically, it is highly complex. It requires substantial background in one or more fields, all of which take time to master, whether through formal education or from on-the-job experience. Most of the technologies that underlie the first half of a Kondratieff cycle are monopoly technologies, such as the development of mechanized spinning, the construction of railways, Bessemer steel, or the creation of the internet. Many capital-intensive industries are based on monopoly technology, including oil, chemicals, and defense.

 

Accessible technology is technology that requires some effort to learn but is not particularly difficult to acquire. Cooking is an accessible technology. To be sure, there are master chefs with unique recipes of their own devising. But nearly every household in the world has someone who cooks, and over time they learn to cook pretty well. Auto repair is an accessible technology. Farming is often an accessible technology.

 

Many industries are based on accessible technology. Most of the eighteenth-century European textile business was based on accessible technology, although guilds existed for some monopoly technologies, such as silk and ribbon making. Sailing was an accessible technology, although some features of shipbuilding could have monopolistic features. Historically, low-level textile making and sailing became the basis of real industries that made money in pre-industrial Europe.

 

There is nothing intrinsic to an industry that makes it naturally monopolistic or accessible. Industries can easily move from being accessible to inaccessible or back again. Historically, mining and petroleum extraction moved from accessible to monopolistic. When mineral and oil deposits were on the surface, the technology to mine or drill for petroleum was accessible. Anyone with digging tools could dig for coal or gold. Most mine operators in eighteenth-century Britain were moonlighting farmers (Ashton and Sykes 1929). In the early days of petroleum, anyone who could drill a water well could also drill an oil well. Before the consolidating efforts of John D. Rockefeller, U.S. petroleum operations were widely dispersed; the competition to produce kerosene was characterized as ruinous (Yergin 2009). As extraction moved from shallow to deep deposits, production became more capital-intensive, and the technology more monopolistic (1). 

 

What are the consequences of having a monopoly technology rather than an accessible technology? Because these skills are difficult to acquire, the innovators who develop this technology tend to obtain a monopoly. The firms that develop the technology tend to have an oligopoly within the country of invention. The nation that develops the technology tends to have a monopoly relative to everyone else in the world economy. The monopoly rents that accrue to the innovative firm and nation lead to substantial cumulative advantage and the creation of social stratification both within the innovating nation and between that nation and the rest of the world. And within that nation, trusts and cartels form, such as Microsoft and the Big Three automakers.

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Within such corporations, economic rewards are concentrated among the missioncritical individuals who are responsible for having created and developed the monopoly technology. (The relationship between scarce skills and economic reward is a standard finding in both human capital theory and the organizational power literature: Becker 1964; Pfeffer 1981.) This leads to substantial rewards for engineers and entrepreneurs and significantly smaller rewards for workers. Workers in the monopoly sector do receive higher wages than those in the competitive sector, for all the reasons specified in dual labor market theory (Kalleberg, Wallace, and Althauser 1981). But the greater stratification both within and between firms leads to substantial social inequality within the nation as a whole.

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Organizationally, the strategic nature of the monopoly firm gives it substantial political power as an individual actor. The firm can act on its own behalf in making its case to government officials, so its lobbying is substantially more effective than that of a relatively diluted trade association.

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Developmentally, monopoly technology implies long gestation periods before a nation can successfully develop economically. As Gerschenkron (1962) noted, it can take a long time for a nation to become the first to obtain an all-powerful technology. But once it has its fundamental advantage, all the other nations are at a disadvantage, trying to catch up. Even with state support to accelerate the process, nations without this key innovation will need decades to gain technological parity with the dominant power.

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Accessible technology works very differently. Because the technology is easy to learn and there are few cognitive barriers to entry, there are no all-powerful firms or cartels, and no one-nation domination of world trade. Many different countries can participate in the industry if they so choose.

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Profits do not come from monopoly rent. They come from the simple expansion of a lucrative business. When volume goes up, prices may go down. But as long as the market does not become saturated, cost reductions increase consumer demand, and both sales and profits increase. Accessible technology leads to expansion that is widely shared across nations, with many countries making money.

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The income distribution that results from this growth is broadly egalitarian. Profits are shared among a large number of firms. Because of the simplicity of the technology, there are fewer strategic rewards for managers and engineers. The salaries of managers and workers become more similar. Salaries for both upper and lower classes are reduced by the absence of monopoly rents devolving to the economy as a whole—but within this lower salary pool, rewards are distributed more equally.

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Accessible technology leads to corporate representation by associational employer federations rather than direct lobbying. No one firm has the power to dictate terms to the state. Furthermore, each industry is made up of many companies, and they all have a stake in the well-being of the industry as a whole.

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Development with accessible technology is more rapid than that based on monopoly technology, but the odds of attaining a hegemonic position within the world system are smaller. The rapid learning curve associated with accessible technology means there is no gestation period associated with basic mastery of the technology. Companies can enter the sector quickly and make money in the short or middle term. However, accessible technology does not offer the possibility of future monopoly rents. Accessible developers are “condemned” to a secondary position in the global economic core. That said, having an economy as strong as a Denmark, New Zealand, or Canada is not terrible from a humanistic perspective. Becoming a military or geopolitical hegemon requires access to monopoly technology. Accessible technology merely allows you to become rich.

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STAPLES THEORY AS A SPECIAL CASE OF ACCESSIBLE TECHNOLOGY

 

Agricultural theories of economic growth in the nations that are developed now implicitly invoke the arguments we present here on accessible technology. The strongest version of such claims is staples theory. Staples theorists argue that the economic development of the core nations was based on the successful export of agricultural products, rather than the control of monopolistic industrial technology. The original staples theorists made this argument for Canada (Innis 1930; Watkins 1963). It has since been extended to the United States (North 1959; Prasad 2012) and to Australia (McLean 2013). Dieter Senghaas (1985) has argued that the Canadian experience generalizes to nearly every nation in the global North other than Britain, Germany, and Japan. He further argues that egalitarian land distribution was essential to creating successful agricultural export sectors. He argues that Scandinavia became wealthy almost entirely on the basis of agricultural exports and land reform; Iberia and Eastern Europe failed to industrialize because latifundism inhibited their development of a competitive agrarian export sector.

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There are weaker versions of this argument that simply claim that successful agriculture is a precondition for industrial growth. This has been applied to the English Industrial Revolution (Deane 1965; Overton 1996), to pre-industrial European growth as a whole (Bairoch 1993; Cipolla 1994), and to economic development as a whole (Boserup 1981; Rostow 1960; Szirmai 2005).

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Generally, in the early stages of development, agriculture manifests itself as accessible technology. Australia’s primary export crop was wool. There was nothing more complicated in wool production than letting sheep graze, shearing the sheep, and putting the wool in bags. The improved plows of the early nineteenth century were extremely cheap and widely dispersed. The dairy industry of the mid-nineteenth century was based on small-scale cream separators cheap enough and simple enough to be purchased by even the smallest farms (Cochrane 1979). To be sure, there were challenging technical problems to be worked out involving crop rotation, manure use, and the like. But once these problems were solved, the solutions were widely shared and involved supplies that were readily available. Countries that grew on the basis of nineteenth-century export agriculture were not using monopoly technology or collecting monopoly rent.

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We draw on a number of historical export data sources to highlight this prevalence of agricultural exports among wealthy nations in the late nineteenth and early twentieth century. The data are derived from the earliest known official statistical abstracts of

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Austro-Hungary, Belgium, the German Empire, Holland, Italy, Japan, Sweden, Switzerland, and Britain; historical statistics of Canada, the United States, Denmark, New Zealand, and Norway; the statistical yearbook of the Australian Commonwealth; and economic histories of Finland and France. We focus on the volume and composition of exports of these nations in the world economy, rather than simply presenting GDP rankings, to show the primacy of agricultural exports as a major contributor to the early development of the industrialized nations.

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In Table 1, we show the earliest known data on the composition of exports from the nations of the global North. Unfortunately, data are not available for the period in which these wealthy nations first attained industrial status. With the exception of Scandinavia and Japan, nearly every nation in this table was already wealthy and industrialized long before their governments collected data on the composition of exports. Australia, for example, had the highest per capita GDP in the world in 1850. But data on the composition of its exports first became available in 1901. The United States was already the seventh-richest nation in the world in 1870, the first date for which export composition data are available. Thus, it is impossible with the data available to test whether agriculture or manufacture was responsible for the basic rise to wealth of the Western economies in the early nineteenth century.

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However, these statistics from after prosperity was a fait accompli still make an important point about the process of economic growth. Even 40 or 50 years after these nations became wealthy, the overwhelming majority of the West’s exports were agricultural rather than based on manufacturing or mining. With the notable exceptions of the United Kingdom, France, Germany, and Switzerland, the exports of nearly every wealthy nation were predominantly agricultural. This makes it unlikely that they attained wealth through the advantages of manufacturing exports.

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In this table, we differentiate between “processed” and “unprocessed” agriculture to distinguish those agriculture products which are raw or unrefined (such as raw cotton, live animals, or grains) from those which have been through a relatively simple production process (such as butter, leather, or flour). The data manifest three types of nations: those that represent egalitarian development through accessible technology, those that fit what has been conceived of as the traditional manufacturing-led export economy, and those with somewhat of a balance between agricultural and manufacturing exports.

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We have listed the nations by prevalence of total agriculture-related exports (highest to lowest). Looking toward the bottom of the table, it becomes clear that not all the nations in our sample were agricultural exporters. In the United Kingdom, France, Switzerland, and the German Empire, manufacturing contributed 50–75% of total exports, and notably, the United Kingdom data do not reflect any agricultural exports at all. Still, the largest exports in these four nations were generally textiles, specifically manufactures of wool, cotton, and silk. Thus, these nations reflect economic growth through attainment of higher manufacturing technology. We emphasize that as nations which primarily specialize in textile manufactures, Switzerland, Germany, France, and the United Kingdom appear to be the exception to economic growth in this period rather than the rule.

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On another note, some nations in our sample blur the line between clear-cut agriculture- or manufacturing-dominated exporters. For example, while about 41% of Italy’s total exports are agriculture-related, the nation still has a sizable manufacturing sector, with about 34% of total exports. Inversely, while Japan’s largest export sector is manufacturing (at about 46% of total exports), the nation nevertheless has a fairly substantial agricultural sector, at about 35% of total exports. Belgium presents an interesting case because while manufacturing is its largest sector, at roughly a third of total exports, agriculture contributes about a quarter of the total, and about 28% of its exports are lumped into the ambiguous “all other exports” category. We also note that, while we classify France as a manufacturing exporter (with manufactures making up just over half of exports), 43% of its total exports are agriculture-related.

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Despite the few heavy manufacturing and mixed agriculture/manufacturing nations, the cases presented in Table 1, taken together, reveal that growth through agricultural exports was the norm among wealthy nations in the late nineteenth and early twentieth century. The first 10 cases listed in the table are majority agriculture exporters and represent the model of growth through accessible technology. In these nations, products such as animal foodstuffs, animal substances, wood/timber, grains/cereals, and raw cotton comprised a large portion of overall exports. Australia’s composition of exports provide a clear example of a nation which fits the accessible technology frame of development as represented by agricultural-export-led growth. Animal products and foodstuffs (such as wool and meat) constituted about 44% of Australia’s total exports. Denmark also represents the model of development centered on accessible technology. Agriculture and processed agriculture made up 90% of Denmark’s total exports, with cereals and butter alone comprising 54% of the total.

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Nor were Australia and Denmark alone in their attainment of economic preeminence via accessible technology and agriculture-based exports. In most of the cases in the table, agriculture dominates all other sectors in share of exports. Total agriculture-related exports are at least twice manufacturing exports in 10 of the 17 cases. In the first 10 cases listed, total agriculture-related products constituted at least half of all exports. Agriculture-related exports is the largest export sector in 11 of the 17 cases. The Unites States, Denmark, and Norway are the most remarkable agricultural exporters of the 17 cases. Total agriculture-related exports made up approximately 90% or more of exports from these three nations. In sum, while four of the cases indicate heavy manufacturing, and three indicate a mix between agriculture and manufacturing, heavy agriculture represents the majority, with 10 cases

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WORLD MARKET SHARES IN AGRICULTURE AND TRADED VERSUS NONTRADED GOODS

 

In addition to highlighting that growth in most wealthy nations was achieved through accessible technology, as represented by a focus on agriculture, fishing, and forestry production and trade, our findings represent a departure from the narrative of underdevelopment theory, in which monopoly technology in the core creates unequal terms of exchange between the core and the periphery (Amin 1973). Rather than employing monopoly technology to generate monopoly rent from the periphery (thereby creating unequal terms of trade), we find that the focus on agriculture in much of the core promoted autocentric economic growth. Obviously, in cases like Australia, where wool was exported to British mills for textile manufacture, agricultural trade was part of an integrated world-system process, and development was not autocentric. The same would apply to the export of American or Egyptian cotton to Britain. However, where agriculture commodities were consumed locally, which was more generally the case, nations retained more control over their developmental processes. The data indicate that production of agricultural commodities was broadly dispersed and largely untraded. We take this broad dispersion of agricultural production and mostly untraded agriculture as evidence of accessibility. Given that this production was dispersed among a number of nations, we can assume the absence of international dominance by any one nation, and therefore the absence of unequal terms of trade.

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Table 2 provides an overview of world market share of agricultural products by nation in 1910, which demonstrates the extent to which these products were traded and highlights which nations were leading agricultural exporters. The data are from B. R. Mitchell’s International Historical Statistics (2007a, 2007b, 2007c). The numbers in each row are national exports as a percentage of world production. The numbers in the bottom row reflect world production which is not accounted for by international trade, that is, production which is internally traded and consumed locally. Note here that the sampling is by product rather than nation. We identified particularly important nineteenthcentury and early-twentieth-century agricultural products and report which nations produced these goods regardless of whether these nations were in the global North or South. The table is meant to show the non-traded nature of agricultural goods. We do not wish to argue that the poorer nations in the table, such as Peru or the Sudan, were able to achieve successful economic development.

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As mentioned, the largely untraded nature of commodities and broadly dispersed production indicates the absence of international dominance. In 1910, the vast majority of agricultural products were not traded overseas. Meat and wheat are the most noticeable examples of non-traded agriculture, with exports of both commodities making up a very small proportion of world production.

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Some nations’ exports dominated world trade, not in terms of monopolistic production but in world market share. Among the largest agricultural exporters in this period were the United States, with cotton exports which comprised roughly 40% of world cotton production, and Australia, with wool exports that constituted 24% of world wool production. Other notable exports include Denmark’s butter exports (7% of world production), Indian cotton (10%), Argentinian wool (12%), and Norwegian fish (5%).

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Cotton provides an interesting case of broadly dispersed production and an emphasis on exports in a handful of nations. In 1870, cotton was primarily produced in four countries: Egypt, China, India, and the United States. Notably, approximately 40% of world cotton production was untraded. This shows that cotton production was clearly dispersed internationally and that no one nation held a technological monopoly on cotton production. Thus, economic growth in nations that traded cotton was not achieved through generating monopoly rent. Instead, as with other agricultural products, growth through exporting cotton was spurred in a number of nations by increasing production of the lucrative commodity.

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CAVEAT: WHEN AGRICULTURE IS NEITHER ACCESSIBLE NOR GROWTH-PROMOTING

 

The foregoing argument should not be taken as saying either that all agriculture is egalitarian or that it promotes growth. It is widely accepted that latifundism stifles the growth potential of an agrarian economy, by killing the domestic market and constraining investment and entrepreneurship among smallholders (Furtado 1976; Senghaas 1985; Szirmai 2005).

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It is also noteworthy that since the beginning of the twentieth century, agriculture in the global North has become increasingly capital-intensive and inegalitarian. Farms have increased in size; farm ownership has concentrated; agribusiness has absorbed a large share of family farms; and mechanization and off-farm intermediate processing have increased (Cochrane 1979; Fitzgerald 2003; McMichael 2013).

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Note, however, that the increasing inaccessibility of agricultural technology comes just when agriculture is exhausting itself as an engine of development anyway. Concentration and mechanization were responses to overproduction crises in agriculture (Fitzgerald 2003; Koning 1994; Prasad 2012). The agricultural booms of the nineteenth century occurred in a period of expanding demand as both population growth and increasing disposable income led to a substantial increase in the demand for food. However, by the nineteenth century, world agricultural output was growing much more rapidly than was the population, and the market was increasingly flooded (Cochrane 1979, Lake 1989). Capitalization and concentration were attempts to save investments in otherwise failing family farms.

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What matters here is that agriculture becomes less accessible precisely because it has lost its ability to produce economic development. Increasing the productivity of an economic sector does not promote economic development if that sector is already suffering from an overproduction crisis. The glory days of accessible agriculture were before the twentieth century when the world was undersupplied rather than oversupplied with foodstuffs. In this setting, institutional arrangements that could increase output could increase growth, and accessible technology was one such institutional arrangement.

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SUCCESSFUL EGALITARIAN DEVELOPMENT IN HISTORICAL CONTEXT: THE CASE OF LATE-NINETEENTH-CENTURY NORWEGIAN FISHING

 

To illustrate the power of accessible technology to move a nation from poor to rich, we consider the case of nineteenth-century Norway (2). It is remarkable that Norway ever became a developed nation at all. It is a small nation. Its 1870 population, 1.7 million, was smaller than that of the city of Paris (1.8 million). The domestic market offered few prospects for industrialization. It has few natural resources. It spent much of its history under the control of either Denmark or Sweden, and suffered from internal colonialism by both. Both nations prevented Norway from imposing protective tariffs, even when Britain had imposed outright bans on the importation of Norwegian timber. Denmark consistently allied with France against Britain, provoking sanctions against Norway, even though Britain was Norway’s primary trading partner. Norway had no coal, which prevented its moving into heavy industry. Norway would have to import any steel it wished to use. Most of the land area is mountainous and poorly suited to agriculture. Even today, only 3.3% of the land is arable (Moen 1999). Forestry was a viable option, and after the British Free Trade reforms reopened the world timber market, Norway was active in that sector, along with Canada and Finland. Other than that, Norway had little to offer except poverty and a coastline.

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Norway was, however, highly egalitarian. Most Scandinavian nations underwent significant land reform in the eighteenth century, restricting the size of the estates of nobles and redistributing substantial quantities of land to the free peasantry (Alestalo and Kuhne 1987) (3).

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The motivations for land reform in Norway were threefold, all of them military or political. In the 1700s, Norway was under the control of Denmark. Denmark was being geopolitically threatened by both Britain and Sweden. Danish statemakers felt the need to increase taxable revenue, and they saw midsized estates as more productive than minifundia. The urban court also wanted to limit the power of rural aristocrats, who were threats to seize the throne. Reducing estate size limited the size of the armies available to potential frondistes, regional aristocrats with ambitions of seizing the throne. Lastly, Denmark had to defend the Norwegian frontier against Swedish expansionism. Giving land to frontier settlers created a de facto national guard that limited Sweden’s ability to enter Eastern Norway (Friedman 1979; Larsen 1948). The greater land equality in the eighteenth century set the stage for the egalitarian growth that Norway, and the rest of Scandinavia, would experience after the Industrial Revolution.

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Despite all this, by the nineteenth century, adverse class pressures were leading to rural poverty rather than prosperity in Norway. A belated agricultural revolution was finally increasing yields in the Norwegian countryside. Some of this was benign and came in the form of increasing the stock of arable land. Much of it, however, came from rural proletarianization: small peasant plots were being consolidated, and in the process former residents were being removed from the land. The poverty rolls were increasing, similar to the increases that E. P. Thompson (1963) documents for the early nineteenth century in Britain. Rural–urban migration was intensifying, although the cities had relatively few prospects for employment.

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Hodne (1975) argues that what saved Norway was the employment and export revenues that came from its fishing industry. In the 1870s, the period of the greatest boom, fishing provided nearly half of Norway’s export revenues, and was probably its greatest “anti-poverty” program as well.

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Norwegian fishing was highly seasonal. There were two primary runs, one for herring and one for cod. They both occurred in January and February. Almost no one was a fulltime fisher in Norway. People were part-time fishers in the winter months—which was nearly ideal for agricultural laborers, who otherwise would have had nothing to do in that season.

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Although fishing occurs everywhere along the Norwegian coast, the really dramatic yields come from the far north of the country, notably in the provinces of Nordland, Troms, and Finnmark, near the Russian border. Large schools of fish in the Atlantic Ocean migrate northward to the Arctic Ocean, and in doing so they pass by the very top of Norway.

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What turns Norwegian Arctic Ocean fishing into accessible technology is that when running, the fish swim very close to the shore. In most other settings, large schools of fish only swim in deep water. Fishers need boats capable of navigating in the open sea, which are large and expensive. Obtaining such a boat requires capital, and funding it requires a year-round commitment to fishing.

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In Troms and Finnmark, almost any kind of a rowboat can get a fisher out to the fish. Because the fish are running in such volume, large boats are preferable to small boats, but all this means is obtaining a large row boat with a sizable hold. Nineteenth-century Norwegian fishing vessels had no decks, and no engine. In most cases, they did not even have sails. A bunch of men got into the boat with anywhere from one to four pairs of oars; they rowed; they threw out some nets; and they caught lots and lots of fish.

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Opportunities in fishing generated massive south-to-north migration, both permanent and seasonal. Small hamlets on the water, like Svolvar or Stamsund, could see their populations swell by over 30,000 during January and February. Nordland and Troms tripled their permanent populations during the nineteenth century, and Finnmark quintupled its population. The villages in these states came to resemble frontier towns. There was a heavy imbalance of men over women; the population was of prime working age; income was spent freely; and by Norwegian standards, vice was rampant.

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The fish was sold in multiple forms. Large amounts of cod and herring were simply sold as fresh fish. A significant amount of cod was dried for the Spanish and Portuguese markets. Dried salt cod or bacalhau is a dominant foodstuff in both Spain and Portugal. There is a smaller market for this in France, where it is called morue. Fish was salted and either put in barrels and sent to the Baltic, or dried and sent to Italy. Drying and salting are extremely simple technologies, of about the same level of difficulty as household cooking.

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In 1853, an Oslo pharmacist invented cod liver oil. This turned an otherwise useless byproduct of fish preserving into a marketable commodity that could command a premium price. And in 1879, a Bergen industrialist developed a method for canning sardines. Soon Norwegian sardines, a product that was otherwise difficult to sell, were being packed in olive oil or tomato sauce and marketed globally (Larsen 1948; Liebermann 1970).

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The properties of northern Norwegian fishing were particularly suited for stimulating broadly dispersed egalitarian development.

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• The fishing itself was labor-intensive. But many individuals were able to participate, often without giving up their regular occupation.

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• The fishing was not technically difficult. If one could row and handle a net, one had most of the needed skills.

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• The spin-off processing was not technically difficult. It was not hard to learn how to dry or salt fish. Cod liver oil and canned sardines required some skill in metal manufacture, but this type of food processing was much simpler than what would be required to, say, create a locomotive capable of pulling a great weight.

• The simplicity of the boats meant there was no engineering class that could earn superior returns.

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• Fishing boats were owned collectively. They were too large to be piloted or managed by a single person, but they were cheap enough that a small group of fishers could easily pool their resources to build and manage one. Typically, fishers owned a share of a boat, not unlike a modern timeshare in a summer home. Shares in boats were fully fungible and sellable. The low cost of the boats meant there was no “capital owning” class that could extract surplus from the labor of the fishers.

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• The low cost of the boats increased the GNP multiplier effect from fishing. Because fishing used little capital, there was little reason for fishers to save. (The low propensity to save had legitimate parallels in fishers’ other job as farmers. The staple crop was potatoes, a crop that required little capital or saving. Neither plows, nor agricultural implements, nor elaborate storage were required.) Therefore, Norwegian fishers tended to spend the entire proceeds of the yearly run on consumer goods. This had several beneficial effects. For one, it improved the nutrition and housing of the fishing population. This would have reduced both adult and infant mortality, and thus fostered lower fertility (4).

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• It also produced a domestic market for Norwegian consumer goods. The small size of the Norwegian population would have handicapped any manufacturer. A market that regularly bought atypically large amounts of consumer goods compensated for the small population. Typically, the northern fish was brought to market, often as not in Bergen, in two boatloads in the summer: a smaller first boatload with roe and byproducts from the previous year, and a second major boatload with the dried fish from the present year. Fishers used these trips to Bergen as major shopping expeditions, and they loaded up for the return home.

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• Underwear was a particularly big item. Norwegians had not worn a lot of underwear in earlier periods. Rising incomes and the movement of population from the temperate south to the colder north created a significant market for long johns, thick woolen socks, and other personal apparel. Canned food was popular as an alternative to the potatoes, bread, and fished/hunted proteins that were staples of the winter diet (Liebermann 1970).

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• The collective nature of the fishing itself, with multiple people in one big boat, and the collective nature of shared boat ownership produced significant social capital among the fishers. Everything was done as a team. This vastly increased the ability of the fishers to work together in both the political and the social sphere. The fishers became very good at pressuring the state to provide economic support for fishers, and at creating institutions that would improve the technical capacities of fishing.

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The political power of fishers was augmented as an accidental byproduct of the electoral system the Norwegian bourgeoisie used to contain the political strength of urban labor. Like other Scandinavian nations, Norway had a voting system that vested disproportionate electoral power in rural districts, in an explicit attempt to partially disenfranchise urban workers and forestall trade unionism. The northern fishers took the greatest possible advantage of this bias, and they were able to obtain almost anything they wanted from the Storting.

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The early concessions were infrastructural, and resembled what was done on the coasts of many advanced capitalist nations. In the 1840s the government financed navigational maps. In the 1850s the government paid for lighthouses. In most of the rest of the country, local municipalities paid for part of the cost of lighthouses. In the fishing north, the federal government paid all of it.

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The fishers were very concerned both about conservation and about preventing the fisheries from being monopolized by larger or better financed outsiders. The herring fisheries were regulated in 1850, and the cod fisheries in 1857. Government inspectors were brought in to adjudicate disputes, which generally concerned any one individual taking too much. Later on, fishing technology would improve to the point that larger, more expensive tackle could bring in larger hauls than the traditional rowboats could. The northern fishers got the government to ban it.

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Still, Norway was part of the global economy, and the high seas were open to anyone who wished to sail on them. Southern Norwegian capitalists began to invest in larger boats with the intention of sailing out into the North Sea. The migrating fish swam through the North Sea before they arrived at Nordland and Finnmark; enterprising larger boats could intercept the fish before they arrived at the Arctic coast and thus deprive the traditional fishers of their customary catch. And having the Storting ban this practice would only have meant that English or Portuguese fishers would do the intercepting, rather than Norwegians.

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Once again, at the request of the northern fishers, the Norwegian government acted to preserve the competitiveness of local fishing. The government began to subsidize research into oceanography and marine biology, to develop fishing activities that could be continued in shallow coastal waters. These federal programs were actually quite successful. The most dramatic accomplishment was the creation of a commercial shrimping industry in the 1890s.

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The government also began to subsidize the industry. The Fund for Open Fishing was created, to be transformed after World War I into the Government Bank for Fishing. This was meant to provide subsidized capital to help Norwegian fishers get boats large enough to compete on the open high seas.

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Fishing did become more stratified. By the late nineteenth century, bona fide fishing companies in the southern cities owned their own fleets and hired fishers as employees. Still, the level of social inequality in a Norwegian fishing company was far less than what might have been observed in such contemporary institutions as Standard Oil and Krupp Steel. Obviously, the fishers in the north were even more egalitarian.

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Did the success of the fishing industry lead to more generalized development? Fishing was an obvious contributor to economic growth, although there were exogenous factors that would have mattered as well. Among the benefits of fishing were the multiplier effect of the higher demand for consumer goods, along with the demand for fishing gear, and the downstream development of food processing in the form of cod liver oil bottling and fish canning.

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The larger spinoffs went to the merchant marine and shipbuilding. Norway is coastal and probably would have developed a shipping industry even without the fish runs. In any case, Norway came to be a dominant world force in shipping; in the late nineteenth and early twentieth century, it had the third-largest merchant marine fleet, after Britain and the United States. Some of the Norwegian advantage was cheap labor. Prevailing Norwegian wages were far lower than those in Britain or the United States, which translated directly into lower shipping costs for Norwegian-flagged vessels.

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However, part of Norway’s success in marine transport probably came from the large labor supply associated with the seasonal population of fishing villages. The fishing boom produced substantial migration from the inland to the coast, but then left those workers essentially unemployed for 10 months of the year. Some would engage in marginal farming, or commute back to family farms in the interior. But others would use the seamanship they learned in coastal fishing to apply to work on larger and more ambitious boats in the south. The marine transport companies found themselves with an ample supply of semi-qualified sailors who had few other job prospects for most of the year.

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Note that marine transport is an accessible technology in and of itself, and the Norwegians concentrated on the most accessible half of it. They had little interest in advanced shipbuilding, and left runs using the latest or fastest ships to the Americans and British. They concentrated on large simple hauls that were not time-sensitive and that could be done with older, slower, second-hand boats. Coal was an ideal cargo for a Norwegian shipper. Later on, oil became a cargo of preference, since hulls that could hold liquid were easy to build, and petroleum rarely had to be moved at any great speed.

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ACCESSIBLE TECHNOLOGY AND OTHER EXPLANATIONS OF EITHER NORWEGIAN OR GENERAL CAPITALIST DEVELOPMENT

 

The Norwegian and cross-national evidence presented here suggest that accessible technology may have contributed to the early economic development both of Norway in particular and of many of the industrialized nations in general. However, mono-causal explanations are rarely analytically sufficient in macrosociology, and this is certainly the case in development sociology. A number of other variables clearly contributed to growth in these settings. A full review of every known alternative theory of economic development would be beyond the scope of a single journal article. (Exhaustive reviews of this subject can be found in Szirmai 2005 and Hooks 2016, and an encyclopedic listing of potential variables in Appendix 2 of Durlauf, Johnson, and Temple 2005.) However, we discuss four important considerations that might seem exogenous to the theory presented here but that provide some tempering of the accessible technology argument. Some of these outside factors represent complementary rather than competing causal mechanisms.

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High Norwegian educational attainment (5). Norway in 1870 had the second-highest level of educational attainment in the world. The average Norwegian adult had 5.67 years of education. Only Switzerland was higher, with 6.17 years. Norwegian adults were more educated than those in Great Britain, the United States, Germany, or any other nation in Scandinavia. Education is highly related to economic development, although the causal mechanisms behind this correlation are open to dispute (Bills 2016). Education was even more important in the nineteenth century; most European nations did not experience significant increases in their rates of economic growth until at least 40% of their male population was literate (Anderson and Bowman 1966).

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Education is both related to and orthogonal to egalitarian models of economic growth. In the narrowest sense, education will raise the productivity of the labor force by increasing human capital (Becker 1964), and will do so regardless of the distribution of income in the population.

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However, education is both a cause and effect of social equality. It causes social equality by allowing large numbers of individuals in the lower parts of the income distribution to raise their income relative to the smaller number of individuals at the top. And it is caused by social equality because more equal nations are more likely to spend more on education and other government services (Heller 1999; Stiglitz 2013). Education undoubtedly increases the accessibility of technology by making a larger percentage of the population capable of learning and using new production techniques.

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Emigration. Norway also benefited from having the second-highest rate of outmigration in Europe. Norway had the highest rate of emigration in Europe in 1861–70. It was topped only by Great Britain (1851–1860, 1871–1880) or Ireland (1881–1890; Hatton and Williamson 2005:53). Outmigration helps development in three ways. First, migrants send remittances back to their home country. These in turn promote capital formation (Massey et al. 1990) and school attendance (Cox Edwards and Ureta 2003; Lopez Cordova 2004). Second, emigration reduces the labor surplus in the sending country, allowing real wages to rise (Hatton and Williamson 2005). Third, reducing the population size reduces the denominator in GDP per capita. A smaller population allows the same amount of industrial product to be distributed among fewer consumers, raising standards of living for the population that remains (Sinding 2009).

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