What Makes a Nation Wealthy?

Tyler Cowen reviews Gregory Clark's new book A Farewell to Alms:

Economists typically explain the wealth of a nation by pointing to good policies and the quality of a country’s institutions. But why do these differences exist in the first place?

In A Farewell to Alms: A Brief Economic History of the World Gregory Clark, an economics professor at the University of California, Davis, identifies the quality of labor as the fundamental factor behind economic growth. Poor labor quality discourages capital from flowing into a country, which means that poverty persists. Good institutions never have a chance to develop...

New York Times