Were later industrialisations systematically different from earlier?

The splitting industrialisations into “late” and “early” varieties owes a lot to Alexander Gerschenkron (1962). He argued that industrialisation would not occur spontaneously or quickly  in backwards countries, thus later industrialisations would be different to earlier ones. To overcome these deficiencies he argued that i) institutional substitutes would have to be created and that ii) later industrialisers would need qualitatively different substitutes to earlier industrialisers. In contrast, Jones (1988) argues that growth occurs naturally on the removal of restraints; hence, later industrialisers would appear similar, in that they would industrialise once their poor institutions are removed. Of course, industrialisation cannot be thought of too broadly otherwise our question becomes useless. That China now makes iPods and Germany then made railway tracks should not lead us to argue that their industrialisations are therefore irreconcilably different. Technology changes through time and sets an upper limit on a society’s potential wealth (North, 1996, part II), it is the convergence on a contemporary upper limit which we should examine. Institutions play a dominant role in prescribing the incentives affecting how individuals and organisations behave (North, 1996), the structure of these institutions in industrialising countries must be the focus of our study.

Arguably, the first state to begin to industrialise was Sung China (Jones, 1988, ch 4). This is somewhat problematic for Gerschenkron’s theories on late industrialisation, as it exposes the limits of his linear pattern for industrialisation. An alternative theory suggests that the removal of obstacles to growth, for example the removal of self reinforcing rent seeking (Murphy et al, 1993), may offer a better schematic for successful industrialisations. While some of Gerschenkron’s work on Europe has been questioned by the later historiography his general approach “still seems a fruitful way of approaching the problem of European industrialisation” (1991, 24).

Gerschenkron argued that there are a number of identifiable trends in the institutions of late industrialisers which set their experience apart from earlier industrialisers (1962, 353-354). Institutional substitutes appear to have operated in a number of developing countries. Active industrial policies in Germany (Chang, 2002, pp 32-35) and America (Chang, 2002, pp 24-32) have been credited some with their industrial success in catching up and overtaking England in the 19th Century. Amsden (1988, pp 143-144), citing data from East Asia, argues further that industrial policy has been different depending on the context of industrialisation.

However, the importance of avoiding rent seeking remained central in the experience of all industrialisers, whether late or early. For example, while the institutions of South Korea certainly seem more activist than those of early modern England, one thing which unites the two is the importance of evading rent seeking activities. While rent-seeking in Latin America helped the continent fall behind the rest of the world (North et al, 2000), the South Korean government remained “cold-blooded” in allowing poorly managed firms to fail where necessary. Furthermore, some of the evidence from industrialising Europe suggests that there is continuity between many different industrialisations. In Imperial Russia, before the 1850s, the state’s policy sought to “impede rather than promote economic development,” (Gregory, 1991, pg 77), a pattern closely matching Jones’ own description of a state of “greed and lethargy… sufficient to smother the prospects of re-growth” (1988, pg 146).

Once again, in this case the impetus to growth rests more on the elimination of rent-seeking growth impeding institutions than on the creation of Gerschenkronian institutional substitutes. One of the reasons that there is a continuity in the institutions of industrialising countries is the damage done by rent seeking, and the improvement in growth prospects that results in rent seeking’s elimination. Murphy et al. explain that rent seeking can put “a severe tax on innovative activities and thereby move resources into established production or the public rent-seeking sector. The result would be a sharp reduction in economic growth.” (1993, pg 413) There are are therefore large returns to the elimination of rent-seeking.

However, there are a number of differences identifiable in the institutions of later industrialisers than in the earlier industrialisers of the North Atlantic. Alice Amsden argues that there are unique institutions adopted in South Korea (and other East Asian “Tiger” economies) which aided its industrialisation. In her words, “Korea is evidence for the proposition that if and when late industrialization arrives, the driving force behind it is a strong interventionist state.“ (1988, pg 55) Furthermore, she argues that this modern, or post-war, interventionist state has behaved in a qualitatively different manner to states in the past.

“The First Industrial Revolution was built on laissez-faire, the Second on infant industry protection. In late industrialization, the foundation is the subsidy—which includes both protection and financial incentives. “ (1988, pp 143-144)

Amsden may have resorted to hyperbole in the above quotation in order to downplay the continuity in the success of industrialising states in adopting institutions which avoid rent-seeking, however the pattern of industrialisation does appear to roughly match her sentiment. Similarly, Wade approvingly cites Krugman and Stiglitz expressing similar sentiments to Gerschenkron that the financial system best suited to industrialising countries does not conform to an ideal type, but rather needs to be suited to the country’s individual circumstances (2003, pg 368). There do appear to be notably differences in the institutions adopted by later industrialisers even if there remain significant continuities also.

While the institutions which foster (or fail to stifle) growth may appear somewhat similar through time as examined above, there remains debate on the extent to which later industrialisers rely on past technological advancement compared with earlier industrialisers. Amsden has argued that South Korea’s industrialisation proceeded through a process of “Industrializing through Learning.” In this process imported technologies allow a country to industrialise by leapfrogging on the achievements of the already developed. She claims that the “First Industrial Revolution in Britain… [had] the distinction of generating new products and processes,” whereas the Korean did not, at least initially (Amsden, 1988, pg 3). In fact, as Mokyr argues, the British Industrial Revolution relied a great deal on imported technology (1993, pp 36-37). The experience of industrialisation often, if not always, involves the adoption of best practice techniques from abroad, the technological “trade deficit” may have been greater in South Korea than in England, but both relied on external invention and innovations to varying degrees.

While institutions and technology remain important, geography play a very real role in shaping economic performance (see Kruman 1991; Diamond 1997; Harman, 1999 esp. part 1) . As Sachs (2003) argues, even under conditions where either Jones’s “bad” institutions have been removed, or where Gerschenkron’s enlightened state has created the “good” institutions, there may still be large barriers to economic development. This geographic constraint is one reason to argue firmly that “late” industrialisers will always be different, from past industrialisations and from one another. Likewise, South Korea’s industrialisation took place despite its domestic paucity of natural resources (Amsden, 1989, pg 11), England may not have industrialised were it not for abundant supplies of coal (Allen, 2009).

With a world as geographically varied as our own and with the swift technological progress of the last two centuries there will always be differences in economic experience across space and time. However, as Karl Polanyi (2001 [1944]) argues, all industrialisation constitute a “Great Transformation” for the societies and people involved; in this broad way all “late” and “early” industrialisations are, in fact, very similar. There is evidence that this similarity extends deeper, the institutions adopted in different countries during industrialisation bare striking similarities given the disparate locations, cultures and technologies involved. The removal of institutions which encourage rent-seeking or actively seek to discourage growth, such as those followed in Imperial Russia, seem vital for industrialisation. For example, even where institutions appear different to those in earlier industrialises, compare South Korea’s industrial policy with Germany’s, the importance of avoiding rent seeking remains paramount. However, the focus on removing bad institutions should not lead us to ignore the very real institutional differences which appeared in later institutions. The financial arrangements present in England, Germany and South Korea certainly differed in significant respects. However as Acemoglu and Johnson (2003) argue secure property rights have far stronger positive effects on growth than do the different forms of financial intermediation practised in each country. Therefore, although it is possible to identify significant differences in later industrialisers I do not think it is necessary to label these differences systematic.

Bibliography

Acemoglu, D. and Johnson, S. (2003) “Unbundling Institutions”, NBER Working Paper No. 9934

Allen, Robert C. (2009) “Why was the Industrial Revolution British?”  http://www.voxeu.org/index.php?q=node/3570 (last accessed 11am 1st November 2010)

Amsden, Alice H. (1992) Asia’s Next Giant – South Korea and Late Industrialization (New York: Oxford University Press)

Chang , H. J. (2002) Kicking Away the Ladder (Glasgow: Anthem Press)

Diamond, J (1997) Guns, germs, and steel : the fates of human societies (New York; W.W. Norton & Co)

Harman, C. (1999) A People’s History of the World (London : Bookmarks)

Gerschenkron, A. (1962) Economic Backwardness in Historical Perspective by (USA: Harvad Univerity Press)

Gregory, (1991) “The role of the state in promoting ecoomic development: the Russian case and its general implications” in Sylla, R. and Toniolo, G. (eds), Patterns of European Industrialization (Great Britain: Routlege)

Jones, E.L. (1988) Growth Recurring (USA: The University of Michigan Press).

Krugman, P (1991) “Increasing Returns and Economic Geography” in Journal of Political Economy, vol. 99, no. 3 pp. 483-499

Mokyr, J (1999) “‘Editor’s Introduction: the new economic history and the industrial revolution”, in Mokyr, J. ed, The British industrial revolution. An economic perspective (Boulder, CO : Westview Press)

Murphy, Shleifer and Vishny (1993) “Why Is Rent-Seeking So Costly to Growth?” in Papers and Proceedings of the Hundred and Fifth Annual Meeting of the American Economic Association  Vol. 83, No. 2 , pp. 409-414

North, D. (1996) “Epilogue: Economic Performances Through Time” in Alston, L. Eggerston T. and D. North (eds.) Empirical Studies in Institutional Change, (USA: University of Cambridge Press) pp 342-356

North, D. Summerhill, W. & Weingast B. (2000) “Order, Disorder and Economic Change: Latin America versus North America” in B. Bueno de Mesquita & H.L. Root (eds.) Governing for Prosperity (New Haven, Yale University Press) pp 17-58

Polanyi, K. (2001 [1944]) The Great Transformation (Boston, MA : Beacon Press)

Sachs, J.(2003) “Institutions Matter, but not for Everything”, in Finance and Development 38-41.

Sylla, R. & G. Toniolo (1991) “Introduction: patterns of European industrialistion during the nineteenth centruy” in Sylla, R. and Toniolo, G. (eds), Patterns of European Industrialization (Great Britain: Routlege) pp 1-28

Sylla R. (1991) “The Role if the Banks” pp 45-63 in Sylla, R. and Toniolo, G. (eds), Patterns of European Industrialization (Great Britain: Routlege)

Wade, R (1990) Governing the Market (USA: Princeton University Press)

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D. Feeny, ‘The decline of property rights in man in Thailand, 1800-1913’, Journal of Economic History, 49 (1989), 285-96.

Abstract [page 285] Like many land-abundant, labor-scarce economies, Thailand had a well-developed system of property rights in man. Over the nineteenth century corvée slavery were abolished and replaced by military conscription, head tax , and more precise property rights in land. Concomitant trends include extensive commercialization, the growth of international trade, imperialist threats to Thai sovereignty, and the growth of a centralized unitary state.

II

Looking at preindustrial Europe and the Americas provides a number of generalisation about the evolution of property rights in man. [286] Slavery and serfdom are associated with places where land is abundant and labour is scarce. Whether property rights in man takes the form of slavery of serfdom depends on the economy. Slavery is favored where property right are well defined and economic activity is cheaply supervised. Serfdom is favoured where property rights are weak and there is an information asymmetry which favour supervision by he lord.

The model used in this paper involves treating the behaviour of agents in changing institutional frameworks as endogenous. It exploits the metaphors of supply and demand. Demand for change arises when current intuitions leave some benefits uncaptured – i.e the relative real rise in a production factor will lead to a rise in the demand for property rights in that factor to be better defined. [287] The supply of institutional change relies on the flexibility of the political order. The expected net benefit to elite decision makes matters a great deal in defining supply.

III

Early 19th C Thailand was largely a subsistence rice economy but intra-Asian trade was significant. The volume of trade increased though the early 19th C but a major increase occurred in 1855 with the Bowring Treaty with Great Britain and similar treaties with other Western Powers and Japan which established free trade and the exemption of foreign powers from domestic law. The reduction in tariffs reduced central revenue [288] and gave the state an incentive to overhaul its system of public administration. An incentive to bring the Western Powers under domestic control created the impetus for a modern legal system.

Rice exports grew 4.43% by volume and 5.64% by value from 1864 to 1910. The cost of imports did not increase as much and the terms of trade moved in favour of rice. In the same period real wages measured in rice declined by 1.35% per year from 1850 to 1914 (0.7% from 1864 to 1914). This created weaker incentives for well defined property rights in man and stronger incentives for well defined property rights in land.

IV

The paper outlines what property rights in man were like in early 180s Thailand. Thai Society was divided into five categories: the Monarch, members of the royal family, the nobility, commoners and slaves.

[289] Nobles had direct control of the commoners, known as phrai. Phrai were split into three groups who owed different amounts of corvée.

  1. phrai luang who owed 6 months of labour a year to the monarch or 18-24 baht
  2. phrai som who owed 2 months a year to their noble an 1 month per year to the monarch or 6 baht
  3. phrai suai who were obligated to work for 8 days for the monarch or pay 1.5 baht.

There were seven categories of slave, but under two broad headings, war slaves and debt slaves. As there were no well defined property rights in land, people often acted as collateral on loans.

In contrast to property rights in man, property rights in land well less well defined. In theory all land belonged to the king, but in practice land could be used privately so long as no damage was done to it (a usufruct property regime), or not left unattended for a long period of time.

[290] V

The evolution of property rights in Thailand occurred in the context of commercialisation, a struggle for control of manpower between king and nobles, and the centralisation of power in Bangkok. Migration to Bangkok increased the number of wage labourers, commercialisation made payment in money easier and the king could rely on wage labourers rather than serfs for labour. By accepting monetary payment for corvée obligations the king could undercut the nobles and increase his relative power. Competition between noble and monarch reduced the corvée obligations to stop peasants fleeing their onerous workloads. [292]To modernise the state under Chulalongkorn (1868-1910) a head tax replaced the corvée obligation’s nonmilatary role and a conscripted army allowed the king to maintain an army as required.

Parallel to the dismantling of corvée is the abolition of slavery. To undercut the nobility’s power further it was in the king’s interest to reduce the practice of slavery – nobles used slaves extensively as they were both collateral and the spoils of war. [294] In 1868 an edict was issued which meant that the wife’s consent was required to sell her or her children. A gradual reduction in the price of slaves was decreed in 1874, so that all slave children would be freed by 21 – in 1890 this was extended to all slaves and in 1905 slavery was abolished. The price of slaves was to be reduced by 4 baht per month until freedom occurred. [295] This gradual method stopped and large fiscal strain on the state from occurring and reduced opposition from slave owners.

Although humanitarian interests had a role, Thailand had to regain sovereignty and set up a legal system under which foreign powers wold agree to be ruled. The economics were also conducive, the increase in the value of land and rice was well known and this shifted people’s incentives away from slave ownership and towards land ownership for both production and collateral. Evidence suggests that the abolition of slavery allowed labour to move more freely.

[296] Conclusions

Domestic and international political motives, rather than pure economic incentives appears to have played a large role in dismantling human property right regimes. Neither corvée or slavery were abolished because they were unprofitable or because an elite had stopped enjoying their benefits – however economic trends made them relatively less attractive. Rice farming methods of Thailand in the period relied on farmer proprietors and was unsuited to slavery. Economics played a role, but ideological and normative factors played major roles.

Austin, Gareth. ‘Reciprocal Comparison and African History: Tackling Conceptual Eurocentrism in the Study of Africa’s Economic Past’, African Studies Review, 50 (2007), pp 1-28.

[1] Abstract: This article argues for constructive responses to the dominance, in the analysis of African economic history, of concepts derived from Western experience. It reviews the existing responses of this kind, highlighting the fact that some of the most influential ideas applied to African economies, past and present, have been coined in the context not of Europe or North America but rather of other relatively poor regions formerly under European colonial rule. These “Third World” contributions have been enriching for African studies, though they have been duly criticized in African contexts, in accordance with the usual scholarly pattern. It is argued here that the main requirement for overcoming conceptual Eurocentrism in African history, in the interests of a more genuinely “general” social science and “global” history, is reciprocal comparison of Africa and other continents—or, more precisely, of specific areas within Africa with counterparts elsewhere. Pioneering examples of such comparisons are reviewed and, to illustrate the possibilities, a set of propositions is put forward from African history that may be useful for specialists on other parts of the world. The article concludes with suggestions for ways in which Africanists can best pursue the project of reciprocal comparison, and with a plea for us to be more intellectually ambitious.

This article is about Africanists can best respond to the continued Eurocentrism of the study of Africa. [2] A lot of the tools used by Africanists come from Europe (but this flow has not been reversed). The “stylised facts” of western history, agriculture, statecraft, capitalism etc. has influenced the questions which Africanists have asked. [3] This article looks at Eurocentrism in the recent literature of African economic historiography, Africanists views of Africa have been shaped also by other regions of the “Third World”, part three argues that Eurocentric generalisations should not be abandoned but instead bettered and improved by Africanists, part four looks at the recipricol comparisons from various scholars.

Conceptual Eurocentrism in African Economic Historiography: The Last Quarter Century

Most economic history of Africa has been undertaken using frameworks imported from “the West.” Some were influenced by the categories associated with Karl Marx or Max Weber, Adam Smith or Karl Polanyi. Ultimately their “abstractions were usually underpinned, explicitly or implicitly, by narratives of European history.” [4] Most common now is a “rational-choice” framework which looks at transaction costs, contract theory and the actions of individuals and societies seeking a set of institutions which may-but may not- provide solutions.

We have to consider to what extent rational-choice political economy is Eurocentric in its intellectual inspirations. First, there is considerable difference between the paper or book on Africa and the overarching historical model. Second, the broad sense of property in rational-choice political economy-as entitlements to use resources in permitted ways-fits well in African history.

Rational-choice political economy was developed in the mid-20th C in the USA and Britain and reflect its time and location. Coase and Williamson had to describe the world around them. [5] In a mcro-form rational-choice political economy sees a certain way of setting up institutions as right, but is not teleological,in that it can see that failures have occurred rather frequently throughout history. It has been inspired by western history but can be used in ways which are not Eurocentric.

Models from the Third World in African Economic History

Most African history has been written from a Western perspective, but there has also been much work using the Caribbean, Southeast Asia, and recently South Asia as reference points.

[6] W. A. Lewis’s famous model of “economic development with unlimited supplies of labour” (Lewis 1954) would have been inspired not only by Western history, but by travels around the poorer parts of the world.  This dual economic surplus-labour/capitalist-production framework has been applied fruitfully to South Rhodesia and South Africa (however, low wages in the surplus labour zones were often in fact caused by state repression).

Sen’s theory of entitlement and work on famines is relevant to Africa; famines rarely occur because food production shinks, but instead because people cannot get access to it. Other Indian Economists have also played a large role in shaping Africanists views of Africa. [7] Models drawn from Latin America and Asia have played a large role.  Ideas such as “rent-seeking” and “urban bias” have large roles to play in understanding Africa.

There is as much South-South academic criticism as there is North-South academic criticism. [8] Lewis is criticised (see above), Sen is taken to task for under politicising his account of famine, he also neglects the very real difficulties of agricultural production.

Toward Better Generalizations: The Method of “Reciprocal Comparison” and African History

Does it matter if the concepts of African history have an exotic Western provenance? [9] Early economic work on Africa illustrated that markets had existed long ago in Africa, and that homo economus had existed in Africa too; this helped Africa, but by living up to a Westerner’s model, Adam Smith.  That something developed outside Africa does not mean that it cannot be helpful to Africanists. Two example are given on page 9 on Niger Delta canoehouses and Kikuyu society.

In other cases Western models are not so useful. [10] Many European metanarratives are not useful, Africanists need to alter them to make them relevant – you cannot retreat away from comparative analysis on grounds of historiographical exceptionalism or postmodernist epistemology.

Pomeranz’s work on reciprocal comparison is useful, we can treat China, Europe and Africa all as deviations from the norm of the other and ask “why?” What is also useful is a disaggregation of the units of analysis. Why was the Niger Delta not the Yangzi Delta or the Netherlands etc?

This is made difficult by a couple of things. First of all:

[F[amiliarity with at least the basics of European history tends to be expected from specialists on non-Western countries, whereas the converse is not the case.

There are also multiple narratives on most topics and in most regions of Africa, let alone sub-Saharan Africa. These need to be unpacked and explored before reciprocal comparisons can begin to make sense. [11] There have been many books on Africa attempting to pick out rends and potential “building blocks” for Africa as a whole and its macro regions.

An important part of reciprocal comparison is to derive models from Africa and then to apply them to other parts of the world. For example, Goody argues that because the plough was used less south of the Sahara agricultural surpluses (and hence complementary activty) was lower in that region. Goody traces patterns in state formation and inheritence from this. However, even in this Austin argues that too much weight may be being placed on agricultural surplus over other sources of wealth.

[12-13] Lots of important scholarship has come out of Africa. Collier studied the franc zone and gave valuable insights into disperate countries using the same currency. Fenoaltea’s study of the slave trade from an African perspective allowed him to offer an alanysis of slavery in a European context, from the Roman’s onward. Thomas studied witchcraft in both Africa and England. Penninggroth uses emancipation in Fantes on the Gold coast to spread light on the experience of blanks in the US South.

Some Lessons from African Experience for the Comparative Study of Long-Term Economic Development

[14] Study of Africa can help us look at the world in different ways. For example, “in sub-Saharan Africa, before and in many cases during and after the colonial period, there was no strong or necessary correlation between agricultural intensification (increase in the quantity of labor and/ or capital applied per unit of land) and overall productivity (i.e., “total factor productivity,” the ratio of output to the totality of inputs). Thus intensive agriculture was not necessarily more advanced” This labour intensive agriculture is different to the capital intensive agriculture observed in late modern Europe.  Labour and capital were limited in Africa but abundant land was available, this has consequences for analyses which pit an “industrious” asian revolution against and “industrial” European revolutions.

[16] Studies in Africa can also lead us to alter our view that rent-seeking and economic growth are opposed. Slavery represents the extraction of an economic rent, but it would be anachronistic to say that this did not contribute to the development of Europe and America. Africa has also taught us that rent-seeking is self perpetuating (there are increasing returns to scale) and likely to be stable. However, under certain circumstances, rent seeking can be unstable, as in the 1980s.

[17] A study of Africa also leads us to question the primacy which states are given in analyses such as North’s. Much of Africa has often been stateless, yet not economically undynamic. However, looking at the privately and state enforced slave trade, certain advantagous of statehood come to the fore in terms of trade and economic efficiency.

[18] Reflections

There have been few reciprocal comparisons involving Africa, but those that have been done are of a high quality. African studies has much to offer the world, for example the “informal sector” is a widely used term and framework, and originated in Africa.

Conceptual Eurocentrism continues to operate at a range of levels of abstraction. Ultimately, reciprocal comparison needs to supersede it on all those levels.

Protected: EH481: Reading and Tasks List 2010 (Rather a lot of LSE information here so I’m password protecting this one)

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EH481: Economic Change in Glbal History: Introductory Lecture

Taught by Alejandra Ingoin nad Tirthanker Roy. Lectures on Thursday Afternoons 3 til 5 in S221. My Seminar is at 5 on a Tuesday. This is a reading intensive course – read, discuss and debate. Seminars will take the form of two 12-15 minute presentations given by students, followed by a discussion. 2 x 1500 word essays will be submitted, non-assessed by they will be returned with comments and an indicitive grade. A 2 hour Exam will take place at the end of May.

This course looks at globalisation, history and economic change. Giddens (1990) says the stretching of social connections between local and distant defines the modern condition.

Global history is a critical response to post-modernism (the past has no core), globalisation defines the present and has consequences for the nation state, for cultrues of trust and for the economy. If the global is a condition of material life that condition has a history. Indentifying the global with the modern is questionable.

The state has been massively changed by globalisation, weakening it in someways and strengthening global checks and balances others. Trust has changed massively; In the past trust was generated by local/personal ties; today that is impossible and trust is instead generated by institutions.

Held argues that globalisation has a history, but that modernity is qualitively unique (a position I share). This is new geography of power and privilige which transcends political borders and regions. Global History does not place the nation state at the centre of its analysis (the only time that is appropriate is when national policies are being compared). Is Global History a different kind of history?

___

In O’Rourke and Williamson’s history states are almost absent, instead markets act with little direction from the state. If anything states are subservient to the markets. They emphasise the integration of a North Atlantic economy in the 19th C rather than several national economies. The transport revolution of the 19th C, increased trade and increased migration alead to wage, price and rent convergence across the North Atlantic region. For them the state is irrelevant – however this is a questionable assumption. Key ingredients of this revolution spring from the state, railways, banks, property, law – all the foundations were laid by the state.

It also ignore the continental empires. Statehood that denies selfdetermination but which could work for market inegration. Niall Ferguson has argued that nothing in history has done more for the free movement andd free trade etc. than the British Empire.

Re-Orient is a book by Gunder Frank. In it he argues that there was a global economy as far back as the 1500s wutg a complex division of labour and multilateral trade. Silver, from the New World, lubricated the global economy and led to increase trade in Indonesian pepper, Indian textiles, Chinese tea and so on. A private merchantile drive was driven by silver from the Americas. This argument fails empirical tests. There was little price convergence around the world as late as the 18th C which you would expect to see in a truly functioning global economy.

___

Global has a history and one that is driven by market forces. Global History doesn’t ignore the state, but it does not focus on it either. It seeks to offer a cosmopolitan history where the West is not the sole comparitor; rather reciprocal comparisons allow for a decentred view of the human experience. In the 19th C states enforce market linkages. In the 18th Military sates help form local markets. In the 20th century states obstructed market linkages, for example during the Great Depression and the post war era.

Markets cross borders and this has important political, economic and cultural effects. Global and local are not two seperate experiences but interact in different ways. Global needs to context itself against the local.

____

There will be different approaches followed on the course. Rational choice, Marxist, Worlds System, Institutionist.

We will examine states and empire.

We will also look at channels through which the global is felt but which are nto factor markets. Ideas, Diseases, Popualtion and ecology.

K. Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (USA: Princeton University Press, 2000)

[page 3] The 19th and 20th C social sciences sought to find the difference between Europe and the rest of the world. It sought to answer the question “why did Europe develop?” Different theories have been proposed; some argue that Europe developed by exploiting its colonies and living off the surplus. Others emphasise the exploitation of Europeans and the productivity enhancements the Industrial Revolution brought.

[4] Contrary to many arguments, Europe and Asia were very similar up until 1800. Europe was less labour intensive than Asia and more capital intensive, but was reaching ecological limits which would cause it to switch to more labour intensive forms of production. (Capitalism is a system which seeks to reduce the amount of labour input for each product output, i.e. it strives to be less labour intensive than before) In the 18th C resource extraction from the New World helped keep European labourers off the fields and in factories.

The core regions of Europe and Asia were similar in their institutions and endowments. This mean that a comparative approach will not reveal why one region forged ahead and the other fell behind. Therefor we need to look at how the regions interacted. The pre-1800 world was polycentric. Lots of the earths conjunctions worked to the European’s favour rather than the Asians’. This was not because the designed them, but was a quirk of fate.

[5] Much scholarship has fallen into a World System Theory mould or put European success down only to internal factors. Neither approach is satisfactory. Sadly, recent scholarship has given undue attention to internal factors and downplayed external events. Three ways stand out:

  1. Recent scholarship has found “capitalism” in the west as far back as the Dark Ages, making Europe’s path look unique. However, similar “capitalisms” can be found in India, China and Japan’s past.
  2. The above led to dominance being given to internal european processes. But this ignores too much of the New World’s role in the Old. This is ideologically convenient for boosters of neoliberal capitalism.
  3. Industrialisation was initially a British phenomenon which then spread  to the rest of Europe. however, literature treats industrialisation as a European phenomenon. This makes extra-European connections seem less important; New World played a large role in the first industrial revolution in Britain. Empire has been treated as something created by superiority, rather than as something which helped create the superiority.

[6] We also have unuseful use of European level units of comparison. England is not comparable to China as a unit. China is continental in size, whereas England is 2/3 of a medium sized island off the coast of continental European. [7] Therefore, it makes sense to compare subregions in China with the individual countries and regions of Europe. For example the Yangzi Delta is imilar in many ways to European states like Holland and the UK.

[8] Reciprocal comparisons needed to avoid biases sources. Both sides are deviations from the expectations of the other.

[9] A series of reciprocal comparisons between Europe, India, China and Japan produce several similarities in agriculture and proto-industrial development as late as 1750. We should not confuse the point at which Europe became the wealthiest area of the world with the point at which it broke out of a Malthusian world into one of sustained per capita growth. Manu places reached the same limit of economic development as Europe had. Europe grew because of historically contingent events, like the location of coal and the opening of the New World. The idea the without the New World or coal that Europe would have developed nonetheless is not supported by pre=1800s stagnation in living standards vis a vis the rest of the Old World.

[10] Jones argues that preindustrial Europe was far ahead of the rest of the world in the accumulation of human and physical capital. It is argued that the demography of Europe and economic behaviour of european individuals left enough surplus for non-farm industrial workers to exist. However, comparisons between Europe and Asia show that European social patterns and demography were not unique.

There were booms in Asia and productivity improving innovations which raised per capita income. We must look at a Fall of Asia as well as a Rise of Europe. Asia was not at its population density maxima in the 18th and 19th C, there was room to expand. Do not ignore the tremendous resources inflow from the New World to Europe. This was different to frontier expansion in Europe or Asia. The clearing of the German forests for arable land and wood has parallels in Bengal, but there is no Asia equivalent for the bounty the New World Provided.

[12] You cannot attribute a fall of Asia to its coming to its Malthusian limits. China was only as full as large parts of Europe was – i.e. Britain. If Europe was not at crisis at the end of the 18th C then neither were large parts of Asia

Sugihara has argued that Europe became more capital intensive than Asia around 1500 as Asia became more labour intensive (although our author dates this divergence to around the 18th C). A large source of Europe’s GDP growth in the early modern period came from exporting manufactures to the large markets which Asia’s “industrious revolution” had created.

[13] However, the differences in the way labour was used was not essential but was contingent on a number of events. Population distribution, due to market distortions, made population growth in developed areas more likely relative to undeveloped areas in Europe rather than Asia, leading to the capital intensity of production to increase.

[14] Braudel, Wallerstein, Chaudhuri and North pay less attention to the levels of wealth with which Europe entered the 18th and 19th C and more to the institutions which existed. European institutions, allegedly better protected private property etc, better rewarded those who efficiently used labour, land and capital than Asian institutions. [15] Brenner makes a similar but potentially complementary argument. The divergent regimes are the result of class struggle:

  • In Wester Europe the peasants won the first round against their land lords after the black death, freeing them from coerced labour; in eastern europe the serfs lost.
  • In France the smallholders won the second round and big landowners and small holders were left with little incentive to improve the quality of the land. In England big landowners won and improved productivity while freeing labour for the factories.

This left England most resembling a neoclassical economic model of free markets and led it to develop first and most strongly.

Braudel and his school instead focus on the retained wealth of a small number of landowners and capitalists. This wealth was often accumulated by force. This capital was then invested in productive endeavour, beginning development. For Wallerstein it is the interaction between Eastern and Western Europe that signals the beginnings of a world economy.

There are problems with all these Eurocentric stories, but institutions do matter a great deal for development. There is little evidence that European institutions were much better than Asia ones until the Industrial revolution was underway. There was no decisive lead in capital stock or institutions with respect to the most advanced regions of Japan or China.

Industrialisation outside England was limited until the 1860s so a broad european miracle seems less convincing. People in other parts of the world acted in the same ways as Europeans to reduce their fertility (to boost per capita, not just total consumption and investment). Technological innovation had given Europe an edge by 18000, but alone this was not enough to cause an industrial revolution. 

[18] Consumption patterns differentiate Europe, China and Japan from the rest of the world, but not from one another. Increased productivity in these regions routinely increased demand and consumption patters which favour europe seem to stem from external factors.

Europe’s financial markets were more efficient, but there was no developmental bottleneck which advanced financial products could relive at this early stage. Direct competition between european and asian merchants did occur, and when it did and the Europeans were not allowed to use force the Europeans possessed no obvious advantage. Land and energy were the most important constraints on early development, exactly the things relieved by New World products.

New legal forms in Europe (limited liability etc.) did matter for developemtn. But these were not enough to prompt development. Overseas interstate [20] rivalries did matter.

There were further econoligcal barriers to further growth in all the most densely populated, market driven and commercial areas of Eurasia. All areas attempted to relieve pressure through trade with the rest of the Old World. But lack of demand in the Old World meant that it was difficult to development large scale manufacturing. Europe’s land constraint was eased by a shift from wood to coal and by large imports (ghost acres) or food and non-food agriculturals from the New World. The New World also provided a large market for manufactured goods.

The New World slave periphery was different to China’s hinterland because it relied on manufactured imports in a way which China’s interior (with its proto-industry) did not. This dynamic continued well into the 19th C, from indipendence, emancipation and beyond.

Global History for Global Citizenship by Patrick Karl O’Brien: A Summary

Why is it important to study Global History?

Nietzsche said that ” knowledge of the past has always been desired in the services of the present.” That is still true, because Globalisation is the leitmotiv of our time Global History’s diffusion into systems of preparatory and higher education is unavoidable. Secondly, as science heads towards the ever smaller scale, Higgs boson and quarks, so other subjects have scaled in the opposite direction. Lastly, despite the large time scales, huge areas involved and heterogeneity of cultures involved, Global History is possible. So, we can do it, there is space for it and it is needed to understand the present.

It is important to historicise globalisation. Were it not for globalisation, of knowledge, of techniques and cultures, Global history would not be possible. However, without global history we can be left with multiple overlapping and contradictory descriptions of globalisation.

Historians have already shown that a global world existed for some before the 19th C transport and industrial revolution. Globalisation as an interrelated geopolitical, political, social, economic, religious and cultural process runs through history like a thread. But it can be divided into four heuristic stages.

Archaic globalisation: The ancient civilisations and their interactions up to the 14th C and the beginning of European exploration and expansion overseas.

Proto-globalisation: 14th C tp 1840s. Columbus, De Gama, Magellan and other’s journeys of discovery and overseas settlement. The expansion of overseas commerce and the relative decline in importance of overland commerce.

Modern globalisation: 1846 to 1948. As Marx said “Bourgeoisie exploiting the world” – a different sort of empire and globalisation which gave the world global systems of production and communication.

Contemporary globalisation: 1948 onwards. The independence of India in 1948 and the foundation of the People’s Republic of China were a profound qualitative change from what occurred under the previous round of globalisation.

These aren’t true categories in any epistemological sense, but they are useful to direct out analysis. We can examine the extend intensity, velocity and outcomes of connections over time through time and explore the forces changing the world.

The Hot and Cold War which occurred from 1939-1989 had a profound effect on the world. There is a greater demand for human rights, peaceful conditions of commerce, environmental protection and diffusion of development beyond the borders of states through some form of global governance.

Today’s globalisation is different to that of the past both quantitatively and qualitatively. To study of Global History is not to be an apologist for any neoliberal or neoconservative ideology, Global History can teach us the malign as well as benign outcomes of Globalisation.

For example, those who have studied the difficulty with which areas develop are not so enthrall to Ricardian principles. They can see, have studied, how forming states and domestic economies is a protracted and complex process. A process easily thrown off course by uncontrolled engagement with powerful geopolitical, economic and cultural forces from beyond porous borders.

Public History

Modern popular history often promotes patriotic (and xenophobic) narratives on economic development. These have drawn wide criticism for their ignorance of Japan, China, India, Africa and other “knowable” others. An over reliance on Marx’s of Adam Smith’s critique of Asiatic modes of production is not useful.

Global History has to engage with these dominant and parochial narratives because if it does not, their proponents will a) write school textbooks and b) promote their ideas through the television and through popular writing.  This publication is often done to promote an ideology – usually unfeted free enterprise or Stalinism.

Modern History, partly due to its genesis, is far too focussed on the local and the national. Global history allows us to approach global politics, society, culture, geopolitics, demography and social change. Global History can do this because it attempts to decentre itself and to be multidisciplinary.

Global History can help a global civil society grow to match a global political and economic realm. No objective understanding of the past is possible but an understanding of social and political processes is needed. This is not a new mission because all historians have always written with a mission, even if an ironic detachment was need to be taken seriously. What is different now is that Globalisation and Global History allow historians to show that we are all Global Citizens.

How do you study Global History? Comparisons, connections, entanglements and Eurocentrism

How do we learn the past? We learn the past by being taught it by someone else, whether orally or by reading.

History is also invented by peoples, tribes, religions who need a common past as a means to define and establish themselves. They need a common (sometimes mythical) common origin to give the group a common destiny. This is done through a process of othering. We can only know something we don’t know through comparison with something we do know.

The other is alien, it is foreign. Everyone is ethnocentric so some extent, it is unavoidable in the way we have been brough up to define others in terms of their differences to you. Identity is a narrative of yourself established in relation to the other. French versus English. Argentinian versus Brazil. Protestant versus Catholic. Hindu versus Muslim. West versus Rest. This is both a historical and Epistemology process.

History of Eurocentrism

Is Eurocentrism Americancentrism and Australiancentrism too?

Notion of Europe emerged out of the Schism in the Christian Church and the emergence of a powerful Muslim civilisation to its south east (the holy land) and south west (Iberia).

Europe was created by the crusades and an ex-post mythology of the crusades. The creation of Europe was also the Christianisation of Europe. The European experience split the world encountered into heretics (cathars) and infidels (Muslims). Through a series of historical contingent events Europeans circumvented the “siege” they were under from Muslims to the south through exploring by sail.

They set out to reach the East via the West. D’oh! They found the New World instead. There they found a new “other” one which was neither infidel nor heretic. In fact, many were unsure if what they found was even human.

European adventurers didn’t treat these people like heretics (they didn’t burn them) or infidels (they didn’t slaughter them) or Africans (they didn’t enslave them). They attempted to civilise them. The Catholic Church said that these people should not be enslaved. They were not infidels or heretics because they hadn’t chosen to be ignorant of Jesus, they were just far away.

Therefore the Europeans treated this new other unlike other others. They saw them as minors, children, to be educated, civilised and converted. Europeans then had to export “europeaness” to the New World. The correct and civilised way to eat, dress, speak, pray were all taught to those of the New World. It reshaped the idea of Europe and the idea of history.

The Enlightenment

The Enlightenment purposefully created a European genealogy which is secular and historical rather than religious or mythological. It turns history into a civilisational project, involving a linear path of development. A European recipe which can be exported (via empire) to the rest of the world. Thus, 18th/19th C empire was different to 16th/17th C empire.

The enlightenment creates a historically centred narrative against which everything else is measured, compared and contrasted (location, chronology and hierarchy).

Progress

European civilisation is seen as a linear process. In this process are grand theories of social development like Spencer and Darwin. This sense of progress defines an ethos of 19th C imperialism. It offers a political economy of space use environment and people, one of modernity. With this the world is divided into core and periphery.

US

The US is the uebermost case of a nation defined on a centred historical and ideological construct. Anyone can become American if they sign up to this founding mythology.

Is Centred History good History?

A centred history has flaws because it must create distinct events in order for its narrative arc to work. However, events are not centred and so each centred history much obscure one thing when it tries to focus on another.

For example, the Renaissance was only possible because the Arabs preserved knowledge of the Ancient Greeks which Europe had lost (I almost wrote “which we lost”, naughty). Focussing on a narrative of the Renaissance risks ignoring the rest of the world.

Are all histories equal? Some would say yes. A Global History Scholar from Malaysia attended a conference on Global History and requested that non-Islamic scholars admit the Koran as a historical source. Is the History of the Koran admissible?

What is good history? Is it a matter of the quantity of sources? The quality of the sources provided? There are a multitude of sources on most subjects saying contrary things, very often from very good authorities too. This way lies rampant relavatism, from which it is difficult to learn anything.

The problem with centred history is that because it is highly specialised and necessarily fragmented it risks only being able to explain itself; it becomes arcane knowledge. History as a discourse  becomes history as rhetoric. History of “exceptionalism” from American to Chinese fails to help us explain the world.

Global History attempts to overcome this by being a completely cosmopolitan exercise. Not only that but by focussing on a very long time scale it avoids the risk of being beholden to a dominant narrative of any one historian or school of historians.

Comparisons, connections, interactions and entanglements

Connections are important because we need to understand the webs and flows of goods, knowledge and people between distant (in space and time) others. This information is revealed in different channels; trade; diffusion of ideas; exchange; encounters; dislocation; aculturation. There are also vectors that determine how these connections are made, technological, scientific and epidemiological.

All history is Comparative history. With reciprocal comparisons we can try to avoid some of the flaws of euro- and western- centric histories. Rather than ask “why didn’t China end up like England,” we can ask “why didn’t England end up like China?” This allows us to surmount the tyranny of local detail. It also prevents us from taking ownership of a topic and allowing this to cloud our judgement. We can aggregate and average features over large areas and examine their similarities and differences.

Interactions and entanglements also give us a way to examine things without a centre. For example, Iberia, Southeast Asia and the US/Mexico border all give us opportunities to look at competing narratives and identities. This is not to accept relavatism, but rather to enable us to accept and analyse the existence of completing and complimentary identities. Global History allows us to examine the diversity of human experience and enables us to challenge the cultural and political enterprises of hegemony.

Virtues of Global History

It revisits common denominators of chronology, concepts and causality across as much of time and space as possible. It helps us to deal with the facts on the grounds while accepting diversity to avoid describing contingent events as universal experiences.

This decentred history helps us to understand the process of change rather than merely explain how we got to where we are, however narrowly or broadly “we” are defined.

EH481: Economic Change in Global History: Approaches and Analysis – Indicative reading

Here.

  • K Pomeranz, The Great Divergence (2000)
  • J Diamond, Guns, Germs and Steel (1998)
  • E Jones, Growth Recurring: Economic Change in World History (1988, 2000)
  • D Landes, The Wealth and Poverty of Nations (1998)
  • A Frank, Re-Orient: Global economy in the Asian Age (1998)
  • D North, Institutions, Institutional Change and Economic Performance (1990)
  • C Bayly, The Birth of the Modern World 1780-1914: Global Connections and Comparisons (2004)
  • A G Hopkins (ed), Globalization in World History (2002)
  • D Smith, D Solinger & S Topik (eds), States and Sovereignty in the Global Economy (1999)
  • J Osterhammel and N Petersson (eds), Globalization: A Short History (2005)
  • B Gills and W. Thompson (eds), Globalization and Global History (2006)

Pritchett, L “Divergence, Big Time” in The Journal of Economic Perspectives, Vol. 11, No. 3. (Summer, 1997), pp. 3-17.

From here.

The topic of this paper is the massive divergence which has been observed between currently rich countries (European Countries and their offshoots plus Japan) and the other countries. No grouping is really all that accurate, but the theme of divergence in growth rates, productivity and wealth split the world into two fairly distinct groups.

The period discussed is that since 1870s. This if often chosen as a start date for “modern” economic history. First of all, for rich countries decent economic information is available more or less uninterrupted since this date. Also 1870 follows on from a series of major events, US Civil War, Franco-Prussian War, and Japan’s Meiji Restoration.

The above table is used to illustrate a number of things. First of all, there was some sort of Golden Age for capitalism between the end of the war and the end of the 1970s. There is a strong convergence within this subset of countries; the poorest six countries in 1870 had five of the six fastest national growth rates for the time Period. 1870 to 1960. The five richest in 1870 had the five slowest growth rates.

Secondly, Even with the catch up of the poorest countries growth rates are relatively uniform: the standard deviation of the growth rates is only .33. Evans (1994) formally tested the hypothesis that the growth rates of European countries and their offshoots (not Japan) were equal in the period and could not reject it.

Thirdly, although there has been substantial variation over time there has been no substantial acceleration of growth rates over time. Growth rates have been remarkably stable.

Unfortunately all these observations are drawn from a self selecting group of countries which are now rich; the observation they have grown strongly and consistently over the last 100+ years and that they are now rich is almost tautological. Countries like Japan which did converge are included, but countries which didn’t like Argentina are not.

A Lower Bound for GDP

There is a paucity of data for historically poor for a variety of obvious reasons. However, there is a physical limit on how poor a country can be, “even deprivation has its limits.” Pritchett argues that $250 expressed in 1985 purchasing power equivalents is the lowest GDP per capita could have been in 1870.

No one has ever observed lower living standards in the modern poor world; this level is set well below modern levels of “absolute poverty” and is at the limit of viable nutritional intake; a lower standard of living and the population could not expand.

PPP is very important in measuring living standards in poor countries (see disclaimer here), tradeable goods cost more or less the same everywhere, but haircuts etc are much cheaper in poor countries. $70 in 1985 US market exchange rate dollars = our P$250 minimum GDP per capita level.

Divergence, Big Time

If you accept: a) the current estimates of relative incomes across nations; b) the estimates of the historical growth rates of the now-rich nations; and c) that even in the poorest economies incomes were not below P$250 at any point-then you cannot escape the conclusion that the last 150 years have seen divergence, big time.

If we assume that all countries have grown at roughly the same rate and backcast from now then we come to the conclusion that soem countries had incomes lower than P$100 in 1870, since this is impossible then we must have seen massive divergence.

The magnitude of the divergence is staggering. From 1870 to 1990 the average absolute gap in incomes of all countries from the leader had grown from $1,286 to $12,662, an order of magnitude.(pp 9-12 are well illustrated and should be read in full). Bairoch (1993) argues that developed countries and developing countries were largely economically equal as late as 1800, this implies and even more startling era of divergence since.

Divergence is not a thing of the past

There are a number of countries catching up and growing at historically unprecedented rates (Korea, Taiwan, etc), but manuy continue to stagnate and some have even regressed (i.e. negative growth rates since 1960). Many countries have seen slowdowns and some have seen “meltdowns.”Annual growth rates amongst developing countries from 1960-1990 range from -2.7 percent to 6.9 percent.

There has been no obvious acceleration of growth in most developing countries, either relatively or absolutely, and no reversal in divergence. Almost nothing that is true about the growth rates of developed countries is true of that for developing countries.