Fundamental Causes of Growth

Throughout history, there are many factors that have had an effect on the growth of the economy. Most of these causes have had a very small effect overall and tend to be limited to a small area, so what we want to know is what the fundamental causes of these causes are. There are three basic theories that economic historians use to account for long run growth – geography, culture, and institutions. While all three are important and have had an influence on the economies of the world, I believe that it was institutions that played the most important role in the development and success of the economy of the United States.
Geography is one of the simplest and most logical explanations of what causes disparity in the rate of growth between peoples. The geography theory began as far back as the early eighteenth century, with the argument that with differing geography comes differing climates, and climates can have a profound impact on the productivity of humans. It is argued that people in cold climates are more productive because it is less comfortable, whereas people in warmer climates are less productive because the heat drains them of energy, making them lazy. A more likely reason for the difference in productivity between warm and cold climates is that agriculture in tropical climates is made more difficult by the limited number of staple crops that will grow there, and the likelihood of bad weather or disease to wipe out a particular crop or livestock.
Jared Diamond, author of Guns, Germs, and Steel, believes that geography is one of the primary factors that determine whether an economy sees long term growth or not. Diamond says that geography determined when a people began the transition from hunter gatherers to food producers, and that this production of food allowed their society to advance much more quickly. His main idea is that hunting and gathering food was too time consuming, and did not provide enough for any serious growth, due to the fact that the...