This process is analysed across the three major, pre-industrial examples of successful market economies in western Eurasia: Iraq in the early Middle Ages, Italy in the high Middle Ages, and the Low Countries in the late Middle Ages and the early modern period, and then parallels drawn to England and the United States in the modern period. These areas successively saw a rapid rise of factor markets and the associated dynamism, followed by stagnation, which enables an in-depth investigation of the causes and results of this process.
What are the key drivers of economic prosperity? Why do societies that were at one point world economic leaders often end up falling behind? What role do factor markets play in this process? These are the questions addressed in Bas van Bavel’s fascinating entry into the “big think” literature, The Invisible Hand? How Market Economies Have Emerged and Declined since AD 500. In this book, van Bavel proposes a theory of cyclical economic growth and decline, and he supports this theory with three case studies: early medieval Iraq (c. 500-1100), high medieval northern Italy (c. 1000-1500), and the late medieval and early modern Low Countries (c. 1100-1800).
Jared Rubin is an associate professor of economics at Chapman University. His recent book Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not (2017, Cambridge University Press) analyzes the role that religious authorities and institutions played in the economic development — or lack thereof — of Western Europe and the Middle East.