Until relatively recently, we used to look back at history and assume that the West has always been best. But as economic history has gone global and penetrated further back in time, we have become more humble. We have been forced to admit that Western dominance has in fact been the exception and not the rule.

Only in the last two hundred years, since the time of the Industrial Revolution in Britain, has the West firmly managed to achieve global economic leadership. Before this time, it was the Middle East, along with China and parts of Pakistan and India, where all of the interesting action was taking place. And not just for a short while – for millennia.

Whether it’s the first time we humans began to settle down and practice farming (between 10,000 and 6,500 BCE), the first manufacturing technologies, which enabled the production of textiles, porcelains and metal-ware, the first urban settlements with their associated infrastructure or the first time we put pen to paper (or, rather, to clay tablet), the Middle East features highly. Europe was a backwater.

The data bear this out. As Bosker at al (2013) show, in the year 800, of the 22 largest cities in Europe and the Middle East, 14 were under Islamic rule. The largest was Baghdad, which had a combined population greater than the largest 13 Christian cities in Europe.

Why the Middle East fell behind Europe is a question that is attracting increasing interest among historians. Hypotheses include religion (Rubin, 2017), the effects of Western colonialism and the curse of oil. Fundamentally though, it is pretty clear that if the Middle East wants to catch up, it needs to switch its economic model to one which, like the West, depends on technologically driven economic growth.

The Global Creativity Index, which ranks economies in terms of technology, talent and tolerance, places Iran in 57^th place, Syria in 75^th place, Saudi Arabia in 83^rd place, Kuwait in 86^th place, and Iraq in 139^th place. While the Middle East might have been a technological leader centuries ago, that is clearly not the case today.

Freedom and technological progress

The question is this: does the region have what it takes to become a technological leader in the modern day?

One answer might be that it will depend on the market. And here, Saudi Arabia has a plan: market reforms that create more space for private sector activity. Respect for private property rights and for individual freedom will, however, be central to making this work.

But it wasn’t only freedom for merchants and entrepreneurs that made Europe stand out on the eve of the Industrial Revolution (Bateman, 2016a). It was freedom of a broader kind, including in the intellectual sphere and the private sphere of the family, as well as the marketplace.

With the former, the Enlightenment was central; with the latter, the family system and empowerment of women were crucial. Unlike market reforms, the Middle East could find these two additional aspects of freedom more difficult to copy. And both are, of course, absolutely contrary to what Islamic State stands for (Bateman, 2016b).

The Enlightenment began in Europe in the late seventeenth century. It involved a new way of looking at the world: one that was scientific, rational and more self-interested. It involved a shift away from seeing the world as driven by fate, magic and heavenly forces to instead seeing events around us as the result of scientific law – law that was for us to explore and understand, and for us to harness in the process of taking charge of ‘nature’.

Rather than feeling that individual human life was out of our hands – that our fate was something over which we had little individual control – the Enlightenment brought about the modern day notion that we have the power to achieve improvement. And not only did we have that power, but that improvement was something that we should value. Progress, to paraphrase Mokyr (2009), became both possible and desirable.

Rather than investing time and money in fasting, praying and religious relics, we began investing those scarce resources in other ways: in innovation, investment and working longer and more intensively. Crucially, and after a hundred years or more of carnage through Christian-versus-Christian religious wars, clerics were told to keep their hands off both the state and intellectual endeavour. Deference to authority was replaced with values that are crucial to harnessing individual endeavour: openness and tolerance to new ideas, valuing merit over status, and free speech.

Female agency, high wages and industrialisation

But it wasn’t only freedom for the intellectual elite, along with merchants and entrepreneurs, that mattered. Freedom for women was just as important, although is regularly overlooked. Indeed, the position of women in society was one of the things that most distinguished Europe from many other parts of the world – and still does today.

Historically speaking, the position of women can be measured through hard data, such as the average age at first marriage, which, for women in Britain in the seventeenth and eighteenth century was a surprisingly modern 26.

Thinking even more broadly, historical differences in the ‘female friendliness’ of family systems – the extent to which family norms support female agency – have recently been documented by De Pleijt et al (2016). We now have indices for historical gender inequality and for its deeper determinants: the family.

Van Zanden et al (2017) argue that agency – the ability both to define and then to act on one’s own goals – is central to the story of how the West grew rich, and that female agency had a particularly powerful effect. Female agency was crucial in a number of ways: it affected population dynamics, human capital, institutions and the propensity to democracy and liberalism.

Female agency also mattered in terms of another feature of north-western Europe, one that Allen (2009) argues was particularly significant in driving industrialisation by providing strong incentives for mechanisation: high wages. While we understand the consequences of high wages, explaining where they came from has been more difficult. That’s where female agency comes in (Bateman, 2014).

High wages resulted from a radically changing society, one in which women were free to work and so gained economic independence and the opportunity to escape early marriage. Traditional extended families were replaced with more consensual nuclear ones. This new family structure acted to keep fertility in line with the economy’s resources, producing a higher wage equilibrium that stimulated capital-intensive production and made saving and investing in your children’s education more affordable.

According to Emmanuel Todd (1987, 1988), the more consensual and equal family structures also helped to support democratic norms and institutions. Female agency is, therefore, central to understanding how the West managed to trump the rest of the world in the technological leadership race.

It is clear that if the Middle East wants to advance economically, it needs to advance in terms of its treatment of women. The United Nations Gender Inequality Index shows how far it has to come. While the OECD scores 0.194 and East Asia and the Pacific score 0.315, the Middle East scores 0.535. Only sub-Saharan Africa does worse, with a score of 0.572. Until individual freedom is addressed – and that includes for women – the Middle East will continue to play second fiddle to Europe.

Further reading

Allen, RC (2009) The British Industrial Revolution in International Perspective, Cambridge University Press.

Bateman, VN (2014) ‘The Changing Axis of Power in Early Modern Europe’, in H. Williams (ed.) A History of Capitalism, Legatum Institute.

Bateman, VN (2016a) Markets and Growth in Early Modern Europe, Routledge.

Bateman, VN (2016b) ‘Women Can Help the Middle East Move Beyond Oil’, Bloomberg View.

Bosker, M, E Buringh and JL Van Zanden (2013) ‘From Baghdad to London: Unraveling Urban Development in Europe, the Middle East, and North Africa, 800-1800’, Review of Economics and Statistics.

De Pleijt, AM, JL Van Zanden and S Carmichael (2016) ‘Gender Relations and Economic Development’, Working Paper 79, Centre for Global Economic History, Utrecht.

De Moor, T, and JL Van Zanden (2010) ‘Girl Power: The European Marriage Pattern and Labour Markets in the North Sea Region in the Late Medieval and Early Modern Period’, Economic History Review.

Hajnal, J (1982) ‘Two Kinds of Preindustrial Household Formation System’, Population and Development Review.

Mokyr, J (2009) The Enlightened Economy: An Economic History of Britain, 1700-1850, Yale University Press.

Rubin, J. (2017) Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not, Cambridge University Press.

Todd, E (1987) The Causes of Progress: Culture, Authority and Change, Blackwell.

Todd, E (1988) The Explanation of Ideology, Blackwell.

Van Zanden, JL, A Rijpma and J Kok (2017) Agency, Gender and Economic Development in the World Economy, Routledge.