There really is quite a bit good about this book. For one thing, it is very readable. Economic history is not usually regarded as a subject for a real page-turner, but Bernstein manages to come close. For another thing, his economics is solid. He is, as one would expect of a working investment advisor, a free market economist, but he isn't an ideologue. He recognizes that there is more to life than the free market. So he can point out, p. 270, that under Meiji Japan the landlord-tenant system was economically efficient yet a social disaster. And he writes, p. 339, that "History teaches that significant wealth inequality is not as benign as a moderately uncomfortable tax burden is." One of those three stars is for that sentence alone.
So why only three stars? Because economic history needs both good economics and good history: Bernstein's history is very bad indeed.
The first thing that jumps out is how Bernstein relies on popular histories. When he discusses the Middle Ages, for example, he repeatedly cites Barbara Tuchman's _A Distant Mirror_. That is a very good popular history of 14th century northern France. She used scholarly sources, which in turn used original period sources. But this is another way of saying that what we get from Bernstein is three steps removed from concrete facts to ever vaguer generalization, rather like repeatedly photocopying a document. Statements about one place and time get turned into statements about Europe in the Middle Ages. When you deal in vague generalizations you can make the history fit any desired mold. Anyone claiming to have a brilliant historical insight should at least read actual historians.
On a more concrete level, there are countless howlers: We have the Catholic Inquisition in Edinburgh over a century after the Scottish Reformation. We have a credulous retelling of the story of Galileo dropping weights off the leaning tower of Pisa. We are told that the "conventional military wisdom" is that an American defeat at the Battle of Midway might have forced the U.S. to sue for peace. Who holds this conventional wisdom? Not any military historian who doesn't want to get laughed out of the room. One is left with the feeling that he learned this from watching bad documentaries on the History Channel. And so on, and so on, and so on. The book is full of these.
Playing a game of 'gotcha!' is beside the point if the book holds together despite the occasional error. Unfortunately, it does not. The thesis breathlessly reported in the promotional material is that the economic revolution of England circa 1820 was the result of four factors coming together: property rights, scientific rationalism, capital markets, and modern transportation and communication. This actually is only the subject of less than half the book. Much of the rest is devoted to the proposition that these same four factors are necessary and sufficient for other nations to reproduce the revolutionary growth. It really isn't obvious or clear that the basic factors needed to invent a phenomenon are the same as those needed to duplicate it. The assumption, apparently unexamined, results in an unhappy combination, with yet more tucking and folding and stretching needed.
Consider the fourth factor, modern transportation and communications. In 1820 this meant railroads and telegraphs. Bernstein correctly shows how their invention resulted from modern science and their exploitation was made possible through property rights and capitalization. In other words, railroads and telegraphs resulted from the other three factors. But this means that transportation and communications aren't a fundamental factor at all, but derive from other, more basic factors: combine the three fundamental factors, stir, let the pot simmer for a couple of centuries, and you have your fourth factor. It doesn't make sense to treat it as fundamental when considering 1820 England. On the other hand, other nations have no need to re-invent the railroad. So if you look at how other nations can reproduce the effect, it makes sense to treat transportation and communications as a basic necessity.
That's a pretty abstract complaint. Even it does involve a bit of folding and tucking, who cares so long as the model works? But it doesn't. Bernstein completely fails to explain how Germany underwent similar growth in the 1890s. On page 157 he notes the tiny German capital market in 1873, and on page 370 he mentions that 1870 to 1913 Germany had the second-fastest growth in the world. How can this be? This is not merely nitpicking. If Germany lacked any of the purportedly necessary factors, yet achieved rapid growth without them, the thesis is disproved. I honestly don't know if Bernstein didn't notice the problem, ducked the issue, or has an explanation but left it out to keep his page count down.
The whole thing smacks of a pet idea which attempts to neatly tie everything together, but fails. Were this the first draft of a doctoral thesis it would, one trusts, be followed by extensive revision. But in the hands of an established writer it gets published, and he being a capable writer, he writes convincingly.
So why do I give it as many as three stars? For the reasons I gave in my first paragraph, I think this is a suitable book for some readers. Someone who wants a painless introduction to both history and economics will come out knowing more than when he went in, and reading this book might lead to reading better books. But for my money I think that even after fifteen years Paul Kennedy's _The Rise and the Decline of the Great Powers_ holds up well and covers a lot of the same ground better.