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19th century correlation vs. causation

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Most of us believe that the industrial revolution was the result of the high degree of economic freedom that existed during the second half of the 19th century. We do so, I assume, because the progress made during that period aligns with what we think should happen based on our pro-capitalist belief system. But can we say that we really know this for sure? I often slap leftists down for their use of the false cause logical fallacy when they do things like purport to show using statistics that the minimum wage doesn't increase unemployment rate. If I argue that the industrial revolution proves the superiority of capitalism, am I not doing the same, purporting to measure the direct impact of policy on economic growth?

Edited by happiness

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It must be pointed out that the industrial revolution was underway at least a century before you claim and its effects were commented on by observers such as Adam Smith in 1776. What is more, we have the example of the agrarian south vs the industrial north and who won that conflict. There are monuments to industry all over the place, including sky scrapers, sports arenas, rail road stations that resemble cathedrals, etc. These are not just syllogisms or worse, simple inferrences from analogies.

It is true that there are monuments to the industrial capacity of communists, but there are two great motives: Fear of risk and promise of reward. Stalin could motivate workers through fear. The alternative is preferable, in my view and we have the history of bare soviet shelves as evidence as to which system works better. Western nations muddy the philosophical waters by having "mixed" systems.

But I am getting too far afield of your original point. I contest the premise of your original post. Even so, there is considerable historical evidence that free enterprise works and is preferable to historical alternatives.

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... because the progress made during that period aligns with what we think should happen based on our pro-capitalist belief system. 

I wouldn't put it that way. "Surface correlation" is not proof, and it's also intellectually unsatisfying. If one takes periods from history and give them some type of ranking by the amount of economic freedom allowed, and if one were to take periods and give them values based on how much growth happened, then one might (knowing what we already know) expect a positive correlation, but such a process is so fraught with methodological problems that it really wouldn't be proof. 

 

Solid proof of causation flows from understanding the mechanism that goes from cause to effect. It comes from examining similar causes in other contexts to see if there truly is a pattern. It comes from analyzing the cause for the various sub-causes and sub-effects and seeing how these flow through. It comes from paying attention to cases where the cause seemed to exist, but the effect did not follow: and figuring out if some other causes were at play (perhaps this effect follows this cause only in specific contexts). 

 

The case linking economic freedom to the greater production of goods in an economy does not rest on the industrial revolution alone. After all, consider this alternative argument: the wealth in an economy depends primarily on per-capita production. One man, on his own, and with very basic tools, can produce very little. By harnessing coal, and specialization (division of labor) per-capita production can increase by orders of magnitude. The industrial revolution rests on tapping into coal, and in organizing work into factory-like settings with extremely high division of labor. Where, a communist might ask, is freedom in all of this? Well, perhaps James Watt needs to be free to think of new ideas, but surely many inventors invent for the intellectual adventure of it all, and would continue to do so even in a socialist paradise... where they would be free to come with as many productive ideas as they can.

Edited by softwareNerd

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I wanted to add a few points:

 

1. Chewing on freedom today, one must consider modern cases like Britain before and after Thatcher, the "Asian tigers", the post-1980 changes in China, the late 1990s change in India, the experiences of Eastern Europe.

 

2. A good book, that looks at human beings from pre-history onward, and the role played by free-trade, is "The rational Optimist" - by Matt Ridley

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