On the Causes of Economic Growth: The Lessons of History

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Algora Pub., 2008 - Business & Economics - 340 pages
What's the secret? Can policies "grow" the economy? How do leaders make their countries prosper? Since the earliest of times, humans have endeavored to uncover the causes of prosperity. Step by step, Sabillon tests the principal theories on the causes of economic growth against the facts of history. Here, for the first time, the economic statistics of the world are presented in a rationalized format that allows for an easy comparison across countries and through time, with a challenge to those who study them. What do the statistics show, and what are the trends beyond cherished theories that suit various political purposes? Tested against the historical data, textbook ideas and theories consistently come up short. Such analyses are highly troubling, because they reveal an absence of correlation between theory and reality. The data — statistics illustrating the development of the world economy during the last several centuries — was extracted from economic, history and economic history books, from publications of the World Bank, the Organization for Economic Cooperation and Development, the International Monetary Fund, the World Trade Organization, the United Nations' specialized agencies, research institutes and country statistical publications and other books and journals. Analyzing the data over geography and time, Sabillon concludes that contrary to contemporary wisdom, left to market forces alone, the economy will not and does not flourish. Only decisive intervention in support of manufacturing and technological advancement can provide growth. This systematic review of history and test of accepted dogma challenges economic theorists to consider one part of the equation of economic policy that has been wiped off the blackboard in today's politically-correct debates.

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About the author (2008)

Economist, Honduran Ministry of Finance; consultant to Honduran Central Bank.

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