New Book by Phillip Hoffman Explores the Origins of Economic Growth

In 1700, life was miserable everywhere. Nearly everyone was poor, most had to toil long days in fields just to feed their families, and half of all children died before adulthood. But throughout the following century, technological and political shifts in northwestern Europe unleashed something completely new in human history that transformed the world—sustained economic growth. Why and how this revolution started where it did is the focus of a new book by Philip T. Hoffman, Caltech's Rea A. and Lela G. Axline Professor of Business Economics and History, Emeritus.

Why Europe?: The Great Divergence and the West's Rise to Global Predominance - New Approaches to Economic and Social History was published on July 16, 2026, by Cambridge University Press.

"Today in the US, we take economic growth for granted, but it has greatly improved people's lives," says Hoffman, who uses economic theory and historical evidence to explain long-term changes in politics, society, and the economy. "I wanted to come up with an explanation of why sustained economic growth began in the 1700s in northwestern Europe and why it didn't happen elsewhere—for instance, Song Dynasty China."

Hoffman's 2015 book, Why Did Europe Conquer the World?, looked at how Europeans advanced gunpowder technology to conquer or colonize more than 80 percent of the world. While this military power allowed a relatively small number of people to quickly take over much of the rest of the globe, it didn't necessarily lead to the economic growth that began in Europe, particularly in Britain.

"There are people who would argue that military power was either an impetus for or a necessary condition for economic growth, but I found that's just not the case," Hoffman says. "Once you get technical change and economic growth, not just in the military sector but in general, that does make conquest a lot easier. So, it has some side effect, but the conquest is more a consequence of than a cause of economic growth."

Instead, he argues that several key economic, political, and intellectual factors converged in northwestern Europe, and particularly in Britain, in the 1600s and 1700s, including a growing interest in science and engineering that ultimately powered technological advances.

"Think of it like starting a fire, and the fuel is ideas from northwestern Europe's intellectual heritage, from the Enlightenment and the Scientific Revolution," Hoffman says. "Once the growth gets started, you can then share those ideas much more easily. You don't have to replicate all the conditions that were sufficient to get it started back then. Instead, you can simply pass the torch."

Political changes that secured property rights—including for intellectual property—also fostered economic growth, or so Hoffman's historical research shows. So did Western Europe's dominant religion, Western Christianity, which helped keep any one ruler from becoming too powerful and choking off growth, as happened in Eastern Europe and Asia.

"In Western Christianity, you had the head of the primary Western church—the Pope—who could keep political rulers from getting too powerful," Hoffman explains. "And that had a profound effect because it helped prevent a long-lasting emperor from arising in Western Europe. Sure, there was Charlemagne and Napoleon, but neither of them lasted very long."

Western Europe's political fragmentation also meant people could move relatively easily and might find resources to thrive elsewhere if they faced religious or political persecution. For example, Hoffman points to John Holker, a British textile maker—and one of the world's first industrial spies—who took his skills to France in the mid-1700s after opposing the British government. He helped establish some of the first factories in France for making cotton clothing.

"Cotton garments in the 1700s were the rage, and Holker was able to take advantage of new technology used to make them," Hoffman says, noting that the factories and the new machines in them cut the cost of cotton garments, making them affordable even for poor consumers. "This is what technical change is; it reduces the costs of things, and it makes them available, so they're no longer just a luxury. Sustained economic growth means those costs continue to fall."

The type of economic growth seen in Europe later took root in places like the US and Japan, but it did not spread uniformly across the world. Research by Hoffman and other economic historians shows that slow growth often resulted from authoritarian regimes and weak property rights. For example, while the US had low fees for patents in the 19th century and many financial institutions for lending, Mexico had high fees and very few banks.

"In Mexico, to start a business was very difficult, totally unlike the United States, and you had to be politically connected to do it," Hoffman says. "We can show that really slowed technical change in Mexico."

Still, Hoffman says the biggest drivers of economic growth were new ideas and the institutions, such as scientific societies, universities, and governments willing to invest in finding these new ideas. "We continue to rely on those institutions today," he says. Hoffman hopes that, like the leaders who first helped propel widespread economic prosperity, readers of his book will leave with the belief that economic growth is good but also realize that inequality hampers it.

"We could complain about all the bad things you may associate with economic growth, like pollution, but there are ways to solve these problems," Hoffman says. "I think we should come to appreciate the virtues of economic growth and, at the same time, work to make sure that it's more widely shared, both in our country and around the world."