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?

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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.

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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.

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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.

HY423: Empire, Colonialism and Globalisation: Introductory Lecture

Why study Empire?

Well, it matters. It determines who rules or ruled the world.

Studying empire is always interesting because they always encompass such a vast amount of time, space and culture. Because they are so vast, the study of empire is often polemical because it is hard to be indifferent to the values under which much of the world is run, especially if they seem alien and immoral to you.

Many people were in the lecture to ask “is the US an Empire?” Don’t bother. There is no definition of empire, so if you want the US to be an empire you define empire in a way that makes the US an empire. Don’t worry about if the US is an empire or not.

Studying empire is an exercise in imagination. It covers all history of all eras. Therefore, do not try to learn everything on this course because all you are doing is this, trying too hard and paying the consequences.

epic fail photos - Throwing FAIL

What you need to learn is the principles and techniques so you can apply them as needed.

A classical description of empire is

Domination of peripheral societies by a metropolitan centre

This is a good definition of the European transoceanic empires, but it is less useful in other ways.

It doesn’t work for land empires because the periphery is very often internal i.e. the most exploited section of the Ottoman empire was Anatolia. There are also many types of empire.

Aristocratic empires are based on class not race, nationality or locality. So in Tsarist Russia nobles from far away were seen as closer than serfs from an hour outside your estate.

Religious empires The Ottoman empire was not defined by class or race or nationality, it was defined by religion. While still a tolerant place for the time if you wanted to be a ruling Ottoman you had to be a Muslim. Parallels with the USSR in that it is an empire built on ideology rather than race etc.

Nomadic empire Around the world commercial centres have been conquered by local nomads/barbarians. Inb Khaldun noted that conquerors are often less developed than the conquered, especially where nomads takeover commercial, usually coastal or riverine towns. Often rather than seeing a dominant culture forced on the conquered the conquerors are subsumed into their new home’s culture. This is what happened to the Manchu Qing, they eventually became Chinese/Han despite being from what is now Manchuria in Northern China.

So, why is our model of empire not more inclusive, why is it so eurocentric?

There is an obvious answer. Anglo-American intellectual hegemony. however, there is a more interesting reason.

Lenin saw imperialism as the highest form of capitalism. Lenin knew there had been empires in the past and had studied them, but he still singled out imperialism as a key component of modern capitalist society. He recognised that there is something different about modern imperialism when compared to the old land, religious and nomadic empires of yesteryear.

We have a eurocentric definition of empire because a eurocentric definition of empire is more useful and relevant to us today.

US Empire vs European Empire

The US is the heir to Anglo/Dutch financial systems and capitalist methods of production. It is also heir to a legal system with its roots in England.

Something which is obvious, but potentially overlooked, is that the US has geopolitical power because it is a continent sized countries sitting between the two great world oceans inbetween the economies of East Asia and Europe.

The UK, Dutch, Portuguese etc empires were exclusionary. We were all Subjects of her majesty but the de facto rights of those born in Britain were far greater than those born abroad. There was no desire to assimilate the new colonies, they were merely useful for prestige and mostly for resources. A prominent school of thought was that what had destroyed Rome was that the culture of the Asiatic holdings had infected the Republic and made it weak.

The Ottoman empire was not like this, there was no exclusion on who could rule, so long as you were Muslim. The height of the Ottoman empire was a time when it was ruled by converted ex-Christian ex-slaves.

The US is more like the Ottoman empire, it is built on an idea (however true) of “America.”

Towards an adequate definition of empire

  1. Polity of great geographic scope
  2. Multi-cultural-multi-national
  3. Not based on the consent of the governed
  4. Power – if you’re not powerful you’re not an empire.

What is Power? Michael Mann, in his Sources of Social Power, identifies four sources of power

  1. Military
  2. Political
  3. Economic
  4. Cultural or Ideological

To these four we can add two more to help describe the power of an empire

  1. Geopolitical
  2. Demographic

Empires use different combinations of these powers to varying degrees throughout their history. At different points at the same time and at different times at the same point different combinations of these sources of power will be deployed. 19th C Australia versus 20th C Algeria. Boston versus Delhi.

Remember, that Military and Economic power are not always connected. Islamic extremists are weak economically, however, if they secure a nuclear weapon the western world could become an even more repressive place. Much as Augustus’s rome became Diocletian’s in the face of barbarian incursions.

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In the mid 19th C the future of the world already looked like it would belong to continental sized great powers. The US and Russia, although poor, were seen as potential superpowers even then.

This prompted the UK and France, both rich countries, to try to grab land  in order to bolster their support base. Germany started two world wars, in part, to try to join this imperial club, as it seemed necessary to survive.

However, the peak of empire coincided with the beginnings of ethnic nationalism and there seemed few ways to reconcile this with empire. States tried to consolidate empires into nations with mixed results.

The USSR attempted to do this with a new ideology rather than an ethnic group, Socialism would hold together then empire. To an extent it did, but only while it could bolster this ideology with military and political power.

We can imagine Scotland as an independent country. But can we imagine an independent Bavaria? Well 150 years ago Bavaria was independent and the idea of an independent Scotland laughable. The Ukraine was part of Russia for a long time, yet in the early 90s it popped into existence as its own nation state.

Why study collapsed empires?

Because you can learn a lot from old empires.

The Eastern Austro-Hungarian Empire was one of the homes of the great civilised idea of tolerance. “Consociational democracy” was born here. Group rights and individual rights were enshrined in law here – in many ways coercive empires can be more free and tolerant than democratic states. The same was true in 15th/16th C Italy – if you wanted a good life you better hope to be the subject of a prince, rather than a democracy.

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Studying Empire teaches us that so much is contingent in life. Two generations after the Qing finally secure the borders of China and bring peace to what had become a violent part of the world the Europeans arrive and change China is ways which were utterly unpredictable, and at the time, unknown to everyone involved.

EH483: The Development and Integration of the World Economy in the 19th and 20th Centuries: Introductory Lecture

Lecturers = Dudly Baines – Albrecht Ritschl – Tirthankar Ray – Kerry Hickson = Monday 1300-1400 in the New Academic Building. Seminars are on Tuesdays.

The coursework for this unit will include two formative essays of 1500 words (pah, my undergrad essays were 4000 words) and one assessed essay of 2500 words. These will be due towards the end of the course. There will also be a three hour exam in May 2011.

All the details and deadlines are in the Notes for Students on Moodle.

Enough admin, to the meat!

There is an element of comparative development of the world economy. The unit is economics focussed and 19th century focussed. The course will be very long run to begin with and we wil then drill down into more detail later.

Objectives of the course

Explain the origins and evolution of  international inequality in the “modern world.”

Comparative elements – Demography, geography, trade, urbanisation, culture, institutions, technology and policy.

Case Study elements – Industrialisation, catch-up, fall behind, factor price integration.

GDP per capita (1990 international $)

  1870 1913 1950 1973 1998
UK 3191 4921 6907 12022 18714
W.Europe 1974 3473 4594 11534 17921
US 2445 5301 9561 16689 27331
Latin America 698 1511 2554 4531 5795
Japan 737 1387 1926 11439 20413
Other Asia 543 640 635 1231 2936
Africa 444 585 852 1365 1368

Shares of World GDP (%)

  1870 1913 1950 1973 1998
UK 9.1 8.3 6.5 4.2 3.3
W.Europe 33.6 33.5 26.3 25.7 20.6
US 8.9 19.1 27.3 22.0 21.9
Latin America 2.5 4.5 7.9 8.7 8.7
Japan 2.3 2.6 3.0 7.7 7.7
Other Asia 36.0 21.9 15.5 16.4 29.5
Africa 3.6 2.7 3.6 3.3 3.1

Every region is richer now then it was in 1870 (the time when a truly modern economy began to appear), but some are regions are richer than others. Two things stand out.

Some areas expereinced rapid growth and some did not. We need to look to the genesis of this rapid growth. It was not an increase in the use of land or other inputs which started this growth, but an increase in productivity.

The world became more unequal and we see a great deal of divergence between economies that industrialised and those that did not.

Growth

Classical economics looked at incereasing inputs to creat more wealth. Growth rested on using inputs more efficiently.

Growth was assumed to run out at some opoint, however, this has evidently not happened.

Marx helped introduce the idea that industry could grow even when land and other inputs became scarce.

Innovation has been treated as exogenous in many growth models driving progress forward. This is of course not good enough. Endogenous growth theories are essential.

Inequality

Economics helps us describe interpersonal inequality, this can be scaled up with some modification to help us look at international inequality.

Key concepts

  • Factor Endowments
  • Factor Rewards

Classical economics looked at three factors, each controlled by a different class: Landlords controlling land, Workers controlling labour, and capitalists controlling finance and physical capital. The distribution of income is dictated by different factor endowments and factor rewards. Labour’s share is dictated by what is required to fulfil its own subsistence and reproduction; the Landlord’s share is dictated by the fertility and scarcity of land; and the capitalist’s share by the demand for loanable funds (However, Marx argued that a capialist’s income was a form of economic rent on the labour of the workers).

Neoclassical economics looks at the world differently. My lecturers argues that the shape of the world changed somewhere around 1850 and the borders between the different classes break down.  Individuals and households are now better described as possessing a portfolio of skills and capital. The market then sets their rewards on the basis of the demand for the productive factors they can supply.

Two issues complicate this

Factor Ownership – Risk and uncertainty – transaction costs – institutions. These shape both the supply and rewards of certain productive facotrs. For example;

  • Gender plays a role in reducing the rewards which women receive in return for their skills.
  • Slaves versus free labour
  • Spain – their two tier labour market

Technology – change alters the composition of skills and factors in demand. This leads to wage inequality. Some factors are complimentary; for example you couldn’t print the Gutenberg Bible without the creation of the wine press. Network externalities – in high density areas the same skills can receive larger rewards because there is a greater interaction with complimentary factors.

You can map this discussion of interpersonal inequality onto international inequality.

Nations have different endowments. Different rewards persist in the presence of trade cost, transaction cost, formal institutions, culture, political system, geography, demography  etc.

Market integration should lead to a convergence of costs, prices and incomes. This however is far from inevitable.

What made the The 19th Century special? The period encompassing the industrial revolution also saw a transport revolution which helped increase trade, Smithian specialisation and productivity advancements:

  • The cost of freight fall

  • Industrialisation
  • The introduction of more uniform legal codes
  • Communications costs plummeted
  • This was the 1st Globalisation
  • trade and mobility of factors
  • population growth
  • urbanization
  • technological and institutional change

Convergence seen in the North Atlantic (and Dominions), but the rest of the world sees Divergence, Big Time.

The course will address the question of why did some areas experience this revolution and why did some not?

  • Marx – markets did not determine rewards – political economy – colonialism
  • Rostow argued that there was one process – modernization – and that this proceeded at different speeds. Parts of the world were merely not yet ready.
  • Some argue that Geography played the most important role. Tropical countries didn’t develop, so it must be harder to develop in the tropics, natural
  • resources like coal helped the UK develop so countries without these natural endowments were not able to develop.
  • Some areas did not develop because of Markets and risks – risks of commodity market fluctuations – risks of financial integration.

Other reasons to be examined include:

  • Some countries had better institutions (property rights, commercial culture, civic mindedness), which allowed them to utilise their endowments.
  • Some areas developed effective contract law and contract design so that the risks of economic activity were reduced.
  • Culture may have played a role. For example there may have been a bias against innovation in some places.

A further part of the course will examine “catch-up” development. What policies, factors and contingent events aided countries in catching up with the developed world.

  • Gerschenkron examined late industrialisers like the US, Germany and Russia and saw how the later the industrialisation, the more the state had to intervene to shape markets.
  • Alice Amsden has argued that Southeast Asia Industrialised by ‘getting prices wrong’. They forced surpluses out of productive agriculture into unproductive activities to prompt industrialisation.
  • “Death of distance.” As space becomes smaller it is easier and easier to trade knowledge, goods and services. This process has accelerated over time, particularly since the 1970s.

The course will also examine on whether growth counts as development. Is a measure like the Human Development Index better? Does equality or equity have an important role to play?

All will be revealed over the next year.

HY423: Empire, Colonialism and Globalisation – Indicitive Reading

Here.

  • M Doyle, Empires, Cornell University Press, Ithaca, 1986
  • P Kennedy, The rise and fall of the great powers, 1988
  • J Tracy (Ed), The Political Economy of Merchant Empires, Cambridge, 1993
  • G V Scammell, The First Imperial Age, London, 1989
  • J H Parry, Trade and Dominion, London, 1971
  • D Lieven, Empire. The Russian Empire and its Rivals, Pimlico, 2003
  • C A Bayly, Imperial Meridian, London, 1989
  • S Howe, Empire. A Very Short Introduction, Oxford University Press, 2002
  • G Lundestad, The Fall of Great Powers, Oxford University Press, 1994

EH483: The Development and Integration of the World Economy in the 19th and 20th Centuries – Indicative reading

Here.

  • B Arthur (Ed), Increasing Returns and Path Dependence in the Economy (1994)
  • M Bordo, A Taylor, J Williamson (2003), Globalization in Historical Perspective
  • J Diamond, Guns, Germs and Steel (1997)
  • S Engerman & K Sokoloff, Factor Endowments, Institutions and Differential Paths of Growth among New World Economies (1994)
  • R Findlay, K O’Rourke (2009), Power and Plenty
  • B Foster, The Vulnerable Planet: A Short Economic History of the Environment (1993)
  • J Goody, The East in the West (1996)
  • Wang Gungwu (Ed), Global History and Migrations (1997)
  • I Inkster, Science and Technology in History (1981)
  • E L Jones, Growth Recurring (1988)
  • M Livi-Bacci, A Concise History of World Population (1997)
  • P Mathias & J Davis (Eds), Agriculture and Industrialization from the 18th Century to the Present Day (1996)
  • M Obstfeld, A Taylor (2004), Global Capital Markets
  • D Puga, ‘Urbanization Patterns: European vs. Less Developed Countries’, Journal of Regional Science (1998) Here
  • A van der Woude, A Hayami & J de Vries (Eds), Urbanisation in History (1990)
  • World Bank, Global Integration and Decentralization in an Urbanizing World (1999)

EH482: Pre-Modern Paths of Growth: East and West Compared, 1000-1800 – Indicative reading

Here.

  • M Olson, ‘Big bills left on the sidewalk: why some nations are rich, and others poor’, Journal of Economic Perspectives, 10:2 (1996) Here
  • E L Jones, Growth Recurring: economic change in world history (1988; 2nd edn, 2002)
  • M Mann, The Sources of Social Power, Vol I (1987)
  • D North & R Thomas, The Rise of the Western World (1973)
  • K G Persson, Pre-industrial Economic Growth (1988); I Wallerstein, Historical Capitalism (1983)
  • P Anderson, Lineages of the Absolutist State (1974)
  • T Aston & C Philpin (Eds), The Brenner Debate: agrarian class structure and economic development in pre-industrial Europe (1985)
  • S R Epstein, Freedom and growth. The rise of states and markets in Europe 1300-1750 (2000)
  • J De Vries, The Economy of Europe in an age of crisis, 1600-1750 (1976)
  • G Deng, The Premodern Chinese Economy (1999)
  • T C Smith, The Agrarian Origins of Modern Japan (1959)
  • K Pomeranz, The Great Divergence: China, Europe, and the making of the modern world economy (2000)
  • A G Frank, ReORIENT: Global economy in the Asian age 1998)

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)