Table Of ContentThe Evolution of Economies
It is clear even to casual observation that economies evolve from year to year and over
centuries. Yet mainstream economic theory assumes that economies always move towards
equilibrium. One consequence of this is that mainstream theory is unable to deal with
economic history. The Evolution of Economies provides a clear account of how economies
evolve under a process of support-bargaining and money-bargaining. Both support-bargaining
and money-bargaining are situation-related – people determine their interests and actions by
reference to their present circumstances. This gives the bargaining system a natural evolu-
tionary dynamic. Societies evolve from situation to situation. Historical change follows this
evolutionary course.
A central chapter of the book applies the new theory in a re-evaluation of the industrial
revolution in Britain, showing how specialist money-bargaining agencies, in the form of
companies, evolved profitable formats and displaced landowners as the leading sources
of employment and economic necessities. Companies took advantage of the evolution of
technology to establish effective formats. The book also seeks to establish how it came
about that a ‘mainstream’ theory was developed that is so wildly at odds with the observ-
able features of economic history and economic exchange. Theory-making is described as
a process of ‘intellectual support-bargaining’ in which theory is shaped to the interests of
its makers. The work of major classical and neoclassical economists is contested as incom-
patible with the idea of an evolving money-bargaining system. The book reviews attempts
to derive an evolutionary economic theory from Darwin’s theory of evolution by natural
selection.
Neoclassical economic theory has had enormous influence on the governance of socie-
ties, principally through its theoretical endorsement of the benefits of ‘free markets’. An
evolutionary account of economic processes should change the basis of debate. The theory
presented here will be of interest immediately to all economists, whether evolutionary,
heterodox or neoclassical. It will facilitate the work of economic historians, who complain
that current theory gives no guidance for their historical investigations. Beyond the
confines of professional theory-making, many will find it a revelatory response to ques-
tions that have hitherto gone unanswered.
Patrick Spread spent his early years in the Bedfordshire and Hertfordshire villages where
his father was vicar. In his teens he was at Wellington College, going on to Oxford
University. After a few years in London he went to work overseas, first in the Solomon
Islands and then in other countries, including Fiji, Indonesia, Georgia and Ethiopia. In time
out from these assignments he worked on theory consistent with the experience. He
received a doctorate at the London Business School in 1982. In recent years he has been
able to give full attention to theoretical issues.
Routledge Frontiers of Political Economy
For a complete list of titles in this series, please visit: http://www.routledge.com/
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161 Economic Models for Policy 167 Ownership Economics
Making On the foundations of interest,
Principles and designs revisited money, markets, business cycles
S. I. Cohen and economic development
Gunnar Heinsohn and Otto
162 Reconstructing Keynesian Steiger; translated and edited
Macroeconomics, Volume 2 with comments and additions by
Integrated approaches Frank Decker
Carl Chiarella, Peter Flaschel
and Willi Semmler 168 Urban and Regional
Development Trajectories in
163 Architectures of Economic Contemporary Capitalism
Subjectivity Edited by Flavia Martinelli,
The philosophical foundations Frank Moulaert and
of the subject in the history of Andreas Novy
economic thought
Sonya Marie Scott 169 Social Fairness and
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164 Support-Bargaining, Economics Economic essays in the spirit of
and Society Duncan Foley
A social species Edited by Lance Taylor,
Patrick Spread Armon Rezai and Thomas Michl
165 Inherited Wealth, Justice and 170 Financial Crisis, Labour
Equality Markets and Institutions
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166 The Charismatic Principle in 171 Marx and Living Labour
Social Life Laurent Baronian
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172 A Political Economy of 180 Gender Perspectives and
Contemporary Capitalism and Gender Impacts of the Global
its Crisis Economic Crisis
Demystifying finance Edited by Rania Antonopoulos
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173 Against Utility-Based Performing the social
Economics Carsten Herrmann-Pillath
On a life-based approach and Ivan A. Boldyrev
Anastasios Korkotsides
182 Producer Cooperatives as a
174 Economic Indeterminacy
New Mode of Production
The dance of the meta-axioms
Bruno Jossa
Yanis Varoufakis
183 Economic Policy and the
175 Freedom, Responsibility
Financial Crisis
and Economics of the
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Person
Pasquale Tridico
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184 Information Technology and
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Socialist Construction
The end of capital and the
176 Reality and Accounting
transition to socialism
Ontological explorations in
Daniel E. Saros
the economic and social
sciences
185 Beyond Mainstream Explanations
Richard Mattessich
of the Financial Crisis
Parasitic finance capital
177 Profitability and the Great
Ismael Hossein-zadeh
Recession
The role of accumulation trends
186 Greek Capitalism in Crisis
in the financial crisis
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Ascension Mejorado and
Stavros Mavroudeas
Manuel Roman
178 Institutions and Development 187 Of Synthetic Finance
Three essays of speculative
After the Financial Crisis
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Pasquale Tridico Benjamin Lozano
179 The Political Economy of 188 The Political Economy and
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world The case of Ireland
Örjan Appelqvist Julien Mercille
189 Financial Cultures and Crisis 198 The Systemic Nature of the
Dynamics Economic Crisis
Edited by Bon Jessop, Brigitte The perspectives of heterodox
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190 Capitalism and the Political
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and grievable death
191 The Responsible Economy Edited by Patricia J. Lopez and
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192 Globalization and the Critique 200 Civil Society, the Third Sector
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Dennis Young and Philippe
193 Exit from Globalization Eynaud
Richard Westra
201 Economics, Culture and
194 Reconstructing Keynesian Development
Macroeconomics Volume III Eiman O. Zein-Elabdin
Financial markets and banking
Carl Chiarella, Peter Flaschel 202 Paradigms in Political Economy
and Willi Semmler Kavous Ardalan
195 The European Union and 203 The Economics of Voting
Supranational Political Studies of self-interest,
Economy bargaining, duty and rights
Edited by Riccardo Fiorentini Dan Usher
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204 The Political Economy of Food
196 The Future of Capitalism After and Finance
the Financial Crisis Ted P. Schmidt
The varieties of Capitalism debate
in the age of austerity 205 The Evolution of Economies
Edited by Richard Westra, Money-bargaining, economic
Dennis Badeen and change and industrial revolution
Robert Albritton Patrick Spread
197 Liberal Learning and the
Art of Self-Governance
Edited by Emily Chamlee-Wright
The Evolution of Economies
Money-bargaining, economic change and
industrial revolution
Patrick Spread
First published 2016
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2016 Patrick Spread
The right of Patrick Spread to be identified as author of this work has been
asserted in accordance with the Copyright, Designs and Patent Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Spread, Patrick, 1944-
The evolution of economies : Money-bargaining, economic change and
industrial revolution / Patrick Spread.
New York : Routledge, 2016. | Includes bibliographical references.
LCCN 2015030224| ISBN 9781138122918 (hardback) | ISBN
9781315649207 (ebook)
LCSH: Evolutionary economics. | Mutualism. | International trade.
LCC HB97.3 .S67 2016 | DDC 330.1–dc23
LC record available at http://lccn.loc.gov/2015030224
ISBN: 978-1-138-12291-8 (hbk)
ISBN: 978-1-315-64920-7 (ebk)
Typeset in Times New Roman
by Cenveo Publisher Services
Contents
List of tables viii
Introduction ix
1 Support-bargaining and the evolution of human societies 1
2 Money and money-bargaining 13
3 Macroeconomics and money-bargaining 35
4 Evolutionary economics 67
5 The evolution of money-bargaining 108
6 The state and money-bargaining 175
7 Support-bargaining, credit and confidence 201
8 The evolution of foreign trade 248
9 Information and the evolution of communications 283
Conclusion 313
Bibliography 320
Index 328
List of tables
5.1 Occupations and incomes in England and Wales, 1688,
based on the compilations of Gregory King 115
5.2 Value of output of major industries 134
5.3 Gross value of cotton output and cotton exports as
proportion of gross output 136
5.4 Relative prices of industry output 137
6.1 Central government revenue from taxation and services, 1700–1950 191
6.2 Central government current expenditure, 1700–1950 192
8.1 Value of shipping tonnage built in Britain and net shipping services 252
8.2 Summary balance of payments, 1816–1913 256
8.3 Comparative advantage and unit cost advantage 267
Introduction
Two hundred years ago most people in Britain lived in abject poverty, working
the land for meagre returns or cleaning and cooking in the homes of the affluent.
Many children died before their fifth birthday, and the survivors were lucky to
reach 50. Malnutrition was common. Most people remained in the locality of
their birth, confined by access to land and the uncertain welcome elsewhere. Few
people were properly literate and information about anything was scarce. Simple
faith in a deity and redeemer helped people to endure their condition.
Now, most people live in or near large cities, working in offices, factories or
shops for companies, some of which employ thousands of people around the
world. They travel to work by car, bus or train. They are well nourished – many
are over-nourished – and well sheltered in comfortably furnished homes. Many
take holidays in southern sunshine. They are unlucky if they do not reach 70 years
of age. They are all educated, many of them to very high standards. At the flick
of a switch or the click of a button they have access to immense amounts of
information and entertainment. Most find they can largely dispense with the reas-
surance of a guardian deity. Clearly, society has evolved over those 200 years.
So, if theory is to explain society, it has to have some component that
covers the evolutionary character of society. More than that, evolution has to
be a central part of any realistic theory of society. Yet the ‘neoclassical’ theory
of economic activity, the dominant theory taught across the Western world,
presents a system that always moves towards equilibrium. A model based on
rational choice is held to explain the behaviour of all humans at all times.
The aim of this book is to provide a theory that explains the evolution of human
societies, particularly those parts of societies usually understood as ‘economic’.
These are mostly activities undertaken in return for money or involving the acqui-
sition of goods and services in exchange for money. The book is about the evolution
of ‘money-bargaining’.
It aims to explain also how neoclassical theory came to be accepted as the
mainstream theory of the workings of an economy. Roger Backhouse has
pondered the problem before in a slightly different form. The main theme of his
analysis of the development of economic theory in Economists and the Economy:
The Evolution of Economic Ideas is the question of: ‘how a body of thought that
was so closely concerned with practical, real-world problems developed into
something akin to a branch of mathematics’.1
