Page 261 - Encyclopedia Of World History

economic growth, extensive and intensive 611

Commerce is the great civilizer. • Robert G. Ingersoll (1833–1899)

but if all families cook for themselves, it becomes much time—increasing their output without using any more
harder to know how to do that addition.) materials or labor time—that is intensive growth.
Extensive growth comes with obvious costs and is pre-
Definitions sumably finite; on the other hand, it is extremely com-
Despite these difficulties, it is widely agreed in principle mon in world history, since it is an option open to any
that one can arrive at a total value for a society’s eco- society with unused land, free hours, etc. By contrast,
nomic production, and that an increase in this number— intensive growth can be nearly free (though not entirely
economic growth—indicates an increase in material abun- so, since considerable resources might be invested in fig-
dance in that society.Therefore, economic growth has a uring out how to do things better); in principle, it is also
great influence on human welfare, though it does not infinite, since it requires no additional material resources.
automatically indicate material betterment; growth that is On the other hand, it is not obvious that every society at
mostly directed toward building weapons, for instance, or every time can experience very much intensive growth.
growth that is so unevenly distributed that the number of Consequently, economic historians have devoted con-
very poor people is increasing, would not do much to siderable attention to trying to identify which times and
improve overall material welfare. Still, there is enough places have seen important bursts or sustained periods of
correspondence between economic growth and the intensive growth, and social and economic theorists have
capacity to meet material goals, whatever they may be, devoted just as much attention to trying to extract from
that in the twentieth century, measures of economic these cases a general set of conditions conducive to
growth probably became the most widely used indicator intensive growth.
for trends in aggregate human material welfare, both in In practice, however, intensive and extensive growth
the present and the past. Even those who are very skep- often occur together. If a new kind of plow makes it pos-
tical of equating output with welfare usually agree that sible to grow grain on land that would not previously
something important about a society is being measured support it, the innovation represents intensive growth;
when we measure the level and rate of change of its eco- but the extra labor, seed, etc. needed to maximize the
nomic output. benefit of the innovation represents an extensive com-
Economic growth is usually further divided into exten- ponent. Many technical or social changes also result in a
sive and intensive economic growth. This distinction is switch from using one kind of input to another (from
clear in theory but messy in practice. Extensive growth horses and hay to cars and oil, or from 50 hours of labor
refers to an increase in economic production that results and a very cheap spinning wheel to a few minutes of
from mobilizing more of the three basic factors of pro- labor and a huge machine) and may cause large changes
duction: land, labor, and capital. If a farmer who used to in the relative value of these inputs. (An hour of a hand-
work 50 days a year sowing 20 pounds of seed on 10 loom weaver’s labor bought three or four days worth of
acres of land begins to work 100 days a year and sow 40 food in parts of eighteenth-century China; today that
pounds of seed on 20 acres, thereby doubling his crop, labor is worth very little.) Therefore, it can be very hard
this is pure extensive growth. Intensive growth, on the to decide how much of a given episode of growth to
other hand, refers to growth that does not require more assign to the intensive or extensive category. Still, any
factor inputs, but results from using these inputs more understanding of the changing material life of humans
efficiently; this could result from new technology, a more requires trying to sort this out.
efficient social organization of production, or increases in
knowledge that make workers more efficient. If two peo- Three Eras of Growth
ple who used to each need a week to build a shelter start Though it is hard to prove, most growth prior to the nine-
working together so they can build three shelters in that teenth century is regarded as having been extensive,