David S. Landes, The Wealth and Poverty of Nations

-- Bradford DeLong (delong@econ.berkeley.edu), May 04, 2000

Answers

Ken Pomeranz came through Berkeley earlier today, giving a very, very impressive show on "Re-Thinking the Late Imperial Chinese Economy: Development, Disaggregation, and Decline in the 18th and 19th Centuries."

If you have a seminar budget, invite him. I haven't heard a more interesting economic history talk this year...

Among other things, he has convinced me that I won't be able to stay in this business ten more years unless I can discourse as learnedly on comparative patterns of economic growth *within* China (and India too) as well as I can discourse on patterns within Europe or across the Americas.

So I have started memorizing the list of Chinese regions: Manchuria, North China, Northwest China, Xinjiang, Tibet, Upper Yangtse, Middle Yangtse, Lower Yangtse, Southeast Coast... uh-oh... Greater Guangdong, and... uh-oh again... Greater Yunnan.

-- Bradford DeLong (delong@econ.berkeley.edu), May 05, 2000.

On Thu, 14 May 1998 Jack Goldstone wrote:

>There is emerging what I like to call the "California" >school or interpretation of global economic history. This has been >developed in good part by scholars in California, and holds that there >were NO significant long-term advantages enjoyed by Europe over the main >centers of civilization in Asia; that the level of technology, science, >agriculture, and living standards were similar in these regions from 1000 >to 1800 AD, with Europe lagging if anything until nearly the end of this >period; and that even the dynamics of political and social structures and >conflicts in Asia and Europe were essentially similar from 1500 to 1850.

Living standards and agriculture I can buy. And "Technology" is complex: are we talking rice seedlings, porcelain, or printing presses? Yet the slope of European technological progress in the second millennium is very impressive. By 1700 where outside of Europe are the equivalents of the eyeglasses? The astrolabes? The microscopes? The logarithmic tables? The lathes? The slide rules? The high-volume printing presses? The telescopes? The escapement clocks? The grenades? The--advanced--cannon?

It is certainly true that eyeglasses, logarithms, screw-cutting lathes, and printing presses churning out volumes by Erasmus don't mean beans (directly) for sugar or cotton consumption in the Rhine or Thames delta (and that grenades and cannon tend to make life a lot more nasty, brutal, and short). But they mean a lot in terms of laying the groundwork for further developments.

And science? 1800 is more than a century and a quarter past Newton.

And politics? Where is the William the Silent of Asia? Where is Magna Carta? Where are the self-governing cities of Asia? Listen to only a few speeches from Mahathir Muhammed or Lee Kuan Yu and you can't help but be struck by the difference between their belief that rulers command and people obey and the ideas that governments are instituted not to give rulers the style of life to which they want to be accustomed but to secure the people's natural rights,and that they derive their just powers from the consent of the governed.

And as Alan Taylor eloquently pointed out, to reduce the European Miracle from a ten-century to a two-century affair makes understanding and accounting for it much, much harder...

-- Bradford DeLong (delong@econ.berkeley.edu), May 05, 2000.

I find myself worried that we might be about to fall into what I think of as the Rostow strap. A generation ago W.W. Rostow knew that the industrial revolution was important, and concluded that it must have shown itself in a rapid jump in economy-wide productivity levels and rates of economic growth.

It didn't.

Even large structural changes in a small sector have--initially-- little effect on economy-wide averages.

Today I think that we are in danger of making that mistake in reverse: just because we can see no large productivity differentials at the level of the economy as a whole between, say, southern France and Lingnan (:-) I'm learning) in the eighteenth century doesn't mean that the differences in technology, economic structure, ideology, politics, and culture weren't important...

>Under title 3 below, I then append MY OWN ALTERNATIVE EXPLANATION as a >somewhat longer but still excessively short summary extract from my book >ReORIENT. Of course, that is intended as a challenge to others to join in >to the still outstanding task of constructing a holistic real world or >really holistic global/world embracing explanation, in which Ken Pomeranz >is also engaged, but alas David Landes is not [yet?].

I think that David Landes's treatment of non-European Eurasia and North Africa is probably wrong in two different dimensions, but let me concentrate only on the first. The first is Landes's belief that climate near the equator somehow militates against first commercial development and second industrialization. The second is his overly- static picture of the agrarian civilizations of temperate-zone Asia.

Landes wants to argue that because tropical climates are hot and disease-ridden, that human productivity there is low, hence no civilization can ever amass the surplus above biological subsistence necessary to set out on the road that eventually leads to industrialization.

The problem is that Landes is also a follower of the tradition of M.M. Postan (as am I) --that before the industrial revolution it is probably informative and insightful to try to analyze human civilizations from the perspective of ecologico-cultural equilibrium. When living standards are relatively high, birth rates are high and death rates are low; when living standards are relatively low birth rates are low and death rates are high (or, rather, variable). This means that if technological progress is sufficiently slow (and before the industrial revolution it was "sufficiently slow" always and everywhere), then a civilization's population density will within several generations adjust itself to resources and technologies in such a way that keeps living standards oscillating around the civilization's set-point of rough population balance.

Thus in the long-run of a century or so, a civilization's living standards are determined not by its summer temperature or by the prevalence of pinworms, but by its ecological and cultural practices that determine its set-point. A civilization like northwest Europe can have a relatively high set-point if culture delays marriage until the male member of the couple has a farm or a secure place. A civilization like that of the Yangtse delta as described by Ken Pomeranz can have a relatively high set-point if heads of lineage restrict their younger siblings fertility . A civilization like that of Poland can have a relatively low set-point if the second serfdom turns large proportions of the population into landless laborers with no incentive to delay nuptuality or diminish fertility. A civilization like that of the Yellow River valley can have a relatively low set-point if senior members' control over lineage juniors breaks down.

As a result, I think that Landes's argument that regions near the equator were always extremely unlikely places for commercial and industrial revolutions is deeply flawed. Hot summers and the consequent difficulty of hard summer work might keep Ceylon from having the pre-industrial population density of the Rhine delta (or the Yangtse delta), but I don't think that they have any implications for pre-industrial average living standards. If you wanted to rescue Landes's argument about climate, I think you would have to identify a line of causation running from location near the equator to some particular set of ecologico-cultural practices that leads to a relatively low living-standard set-point...

>- Western Europe and particularly Britain were hard put to compete >especially with India and China. Europe was still dependent on India for >cotton textiles and on China for ceramics and silks that Europe re-exported >and from which it profited in its [economic and/or political] colonies in >Africa and the Americas. Moreover, Europe remained dependent on its >colonies for most of the money it needed to pay for these imports, both for >re-export and for its own consumption and other use, eg, as inputs for its >own production and export. In the late eighteenth and early nineteenth >centuries, there was a decline in the marginal if not also the absolute >inflow of precious metals and other profits through the slave trade and >plantations from the European colonies in Africa and the Americas. To >recoup and even to maintain - never mind to increase - its [world and even >domestic] market share Europeans collectively and its entrepreneurs >individually had to attempt to increase their penetration of at least some >markets, and to do so either by eliminating competition >politically/militarily or by undercutting it by lowering its own costs of >production, or both.

I have often wondered whether late seventeenth, eighteenth, and early nineteenth century European perceptions that labor was cheap in the Orient might not have been consequences of American silver and the price revolution: wages were low in the Orient, but subsistence was cheap as well. Large nominal wage differentials (large enough to make China and India super-competitive with Europe as producers of cotton textiles, ceramics, and silks) are perfectly consistent with relatively equal real wages and living standards, with a higher nominal price level in Europe, and with a consequent flood of specie out of Europe to Asia. (And, later, a flood of EOC opium out of India to China.)

>In short, changing world demographic/ economic/ ecological circumstances >suddenly - and for most people including Adam Smith unexpectedly - made a >number of related investments economically rational and profitable: in >machinery and processes that saved labor input per unit of output, thus >increasing the productivity and use of labor and its total output; >increasing productive power generation; and increasingly productive >employment and productivity of capital. This transformation of the >productive process was initially concentrated in selected industrial, >agricultural, and service sectors in those parts of the world economy whose >comparative competitive POSITION made -- and then continually re- made -- >such Newly Industrializing Economies [NIE] import substituting and export >promoting measures economically rational and politically possible.

A point for Gunder Frank is the failure of the industrial revolution to take root first in the Netherlands. It seems as though the Dutch had better--more productive and more value-adding--things to do than to monkey with steam engines and put workers who could be adding lots of value on the Amsterdam docks to work watching early spinning machines.

Or so I read Jan de Vries and Adrian van der Woude...

-- jbdelong@home.com (delong@econ.berkeley.edu), May 05, 2000.

When Joel Mokyr criticizes Jared Diamond's _Guns, Germs, and Steel_;

... in the chapters on agriculture [Jared Diamond's] imagination abandons him. How much of the performance of non-Europeans was really constrained by their environment and how much their own making? In Diamond's view, the answer is "all and nothing." Yet one can imagine crops that were manipulated and selected to produce crops that are as unimaginable to us as poodles and sweet corn would have seemed 10,000 years ago. Take one example: among the disadvantages that the indigenous plants of what is now the Eastern U.S. suffered from is a lack of founder crops. Yet he does concede that some of them on the surface could have done nicely, such as a flower named sumpweed, "a nutritionist's ultimate dream" with 32 percent protein. Sumpweed, Diamond explains, did not make it to the rank of corn , potatoes, and rye because it causes hayfever, does not smell good, and handling it can cause skin irritation (p. 151). Are we really sure that these vices could not have been bred out of them? After all, all domesticated plants had originally undesirable characteristics, but through deliberate and lucky selection mechanisms they eventually got over them. Wheat, rye, and maize, which feed much of the world's population, all had humble beginnings...

I think Mokyr misreads Diamond's argument--which is, first of all, not an argument about the disadvantages faced by non-Europeans but about the disadvantages faced by non-Eurasians.

As I understood Diamond's agricultural argument, Eurasia's agricultural advantage had multiple causes. One of these multiple causes was indeed that Eurasia had "better flora (for our long-run purposes: grains with larger seeds). But others were at least as important. Eurasia was bigger. Because Eurasia runs East-West rather than North-South, knowledge about effective agricultural techniques diffuses much more rapidly and successfully. Add all these reasons together and you can see why Eurasia is (still) the most densely populated region of the world, and why the world's diet is based on wheat, rye, rice, and their cousins.

I had thought that one of Diamond's points was that American Indians had done rather well--with corn and potatoes--even though the original flora was not that appetizing (have you ever seen a wild corn plant?). But two heads are better than one. Add Eurasia's large size coupled with easy diffusion along the East-West axis and "better" wild grains and it would have been extraordinary if New World agriculture had been more developed than Old World. Had the American Indians been given enough time, then even with low population densities they might have eventually selectively bred and domesticated sumpweed. But their independent history was cut short in 1500.

-- Bradford DeLong (delong@econ.berkeley.edu), May 05, 2000.

Dear All,

My, aren't we sensitive! A little critique from Landes of counting and noses are out of joint. I think the real message of McNeill's review is highly critical of Landes -- that he completely screwed up on his account of non-European economic history, and missed some key elements of the European story to boot. All this is massaged by praise for Landes' elegant prose (which has always been marvelous) and some vague plaudits for the volume of items discussed.

In a way I don't know whether to be glad to have such a masterful account that is so badly flawed by Eurocentrism that it makes a wonderful foil for future work, or to be dismayed that such a brilliant and well-read intellectual as David Landes could still think that the Chinese "maximized population" and suffered from a lack of dairy and draft animals. Either way, both Landes' book and McNeill's review tell me the same story: comparative economic history still has a lot of work to do.

-- Jack A. Goldstone (jagoldstone@ucdavis.edu), May 05, 2000.

>William McNeill clearly needs to be cast into a den staffed not with lions >but with ten historians of discursive practice. He badly needs to learn >that there are things worse than people who actually try to count noses...

Ah, but if they were only counting noses it might not be so bad. I think it is the measuring of noses to construct an index of GNP that provokes anxiety. You have to admit, "lending ficticious precision to error" is a wonderful line. Could be a great book title. KL

-- Kenneth Lipartito (klipartito@UH.EDU), May 05, 2000.

William McNeill reviews David S. Landes's book in the most recent issue of the New York Review of Books (April 23, 1998, pp. 37-39). McNeill describes the book as a "magnificent, yet limited, masterwork." It might also be of interest to us that McNeill cites Landes' description of cliometricians as historians "'whose heroic exercise of imagination and ingenuity' creates statistical models that lend entirely fictitious precision to error and often lead to a conclusion that 'beggars credulity.'"

-- John Komlos (John.Komlos@econhist.vwl.uni-muenchen.de), May 05, 2000.

I am confused. It seems to me that Gunder Frank is between a rock and a hard place. The key hypothesis (an empirical claim) is that the East was about level with Europe ca. 1750. That seems like a testable hypothesis, and the work of many scholars, like Ken Pomeranz (whose work was the subject of a FORUM on This List), is putting it to the test. But what of its implications? Does it matter? And how does it matter?

Suppose the hypothesis is false. The East was behind, as the Eurocentrics believe. Then we are back to having the old stroy about the "superiority" of European institutions for what--500, 750, 1,000 years? And Frank's case would be lost.

Suppose the hypothesis is true. Then, following a ruthlessly nihilistic line, we may dismiss everything before the Industrial Revolution, at least in comparative terms, as of little interest. Everybody was on the same page, no great divergence, etc. But then, EVERYTHING, hinges on the last 250 or so years, and the "great bifurcation" (as Joel Mokr termed it in the online internet video seminar last week). And the issue there is why did Asia (read: non- European or non-European New World) fall so far behind? We know from Bairoch/Maddison et al. that this divergence was huge. Is this scenario any better for Frank? If the New Economic History, New Institutional History, and the New Growth Theory and Empirics, say anything, it is that, going beyond simple neoclassical models, policies and institutions did make a difference in growth outcomes. So hey, we have whittled down 1,000 years of "superior" European institutions to just 250 years... great! But that just happens to be the 250 years in which the gap between rich and poor nations has gone through thr roof. And so it really matters, and it still begs the question as to what made the difference for Europe, and why Asia (and others) didn't have the right conditions. So Frank now has to move to post-1750, not pre-1750, and tell us why that happened, and where we are going. And here there are two problems--one theoretical, one empirical. First, if it is not the Institutions/NEH/Growth story, then what is it--surely not a rehash of the discredited structuralist/dependency theories of the 1960s? Second, who said Asia is getting ready to once again catch and surpass Europe; a handful (literally) of countries have reached middle income per capita levels, namely the NICs, meaning they have reached the same level as the richest Latin American countries, and are close to the poorest "Western" nations. But the rest of Asia is far behind. China and India dominate the population weighted picture. Their institutional and policy environment is/was not very conducive for growth, or else why would their per capita incomes be so low? Even on the most optimistic forecasts, parity of the East (as a whole) and West might be decades or centuries away.

I think (and I think David Landes, Joel Mokyr, and many others think) that the Industrial Revolution is so important because it is the beginning of that great bifurcation. (And that bifurcation is great even if we allow Europe to still have a lead in 1750; the lead just gets and order of magnitude bigger after that). Explaining that post- 1750 bifurcation is probably THE greatest challenge of global economic history. Landes deserves credit: he has tried to meet that challenge, and he gave us a story. What's yours?

-- Alan Taylor (amt@nwu.edu), May 05, 2000.

In the debate between Frank and Landes, and in the assessment of the meaning of Ken Pomeranz's work on China versus Europe it seems to me that we should keep in mind two things:

1. All economies of the world before 1800 were "Malthusian" in the sense that living standards did NOT depend directly on the production technology. Instead living standards depended on the factors determining the birth rate (fertility control, marriage etc) and on the factors determining the death rates (the disease environment, war, the operation of grain markets etc). Thus Pomeranz's interesting findings that living standards in the Yangzi delta circa 1800 were as high as those in Europe says nothing directly about the relative development of European and Chinese technology. For all we know living standards in sub-Saharan Africa may have been higher than in either of these places (because of the disease environment).

Indeed one interpretation of Pomeranz's results are that they reinforce the work of Chinese demographers who have been emphasizing that Europe was not the only part of the world where there was limitation of fertility in the years before 1800. Though marriage was early and nearly universal for Chinese women, fertility was limited within marriage by means known and unknown.

The high Chinese living standards thus may indicate only facts about Chinese family and social structure (and disease environment), and nothing about technology. Unless you have a theory of the IR which emphasizes high living standards this finding about China will not in itself change any views about what caused the IR.

2. By 1900 there was a huge gap in living standards between even the advanced areas of China like Shanghai and Britain and the USA. In nominal terms at least wages in China were one fifth those in Britain in cotton textiles. Recent work on Britain in the IR and later has emphasized slower and slower growth rates of output and of real wages (see Feinstein's recent work). Was this gap then the result of a collapse in Chinese living standards 1800-1900? Did China just stagnate from 1800 to 1900, or did it actually regress in living standards? And if it did regress, why did that happen within the Malthusian economic framework that still operated in China.

Yours hurriedly!

-- Gregory Clark (gclark@ucdavis.edu), May 05, 2000.

Dear Colleagues,

In reply to Alan Taylor's comment on Frank.

(1) Yes, explaining the great bifurcation is the key issue (2) Frank, Pommeranz, and others now make it difficult if not impossible to see the roots of the great bifurcation in long-term structural changes c. 1000-1700. The "action" is in the last few centuries. (3) I agree with Taylor that Frank's explanation of the bifurcation may be weak. Where Frank sees a slowdown in Asia due to population/resource imbalances, I would suggest instead a sudden "leap forward" in England, due to (a) new institutions developed post-1689; (b) new technology developed post-1689; and (c) a new religiously tolerant, scientifically empirical, culture of inquiry, experiment, and innovation that developed in England post-1689. (4) If this seems to pivot everything on the Glorious Revolution, that's right. North and Weingast pointed to this period as crucial for emergence of the Bank of England, but I think that is but one minor element in the story. If James II had triumphed, he likely would have suppressed the Royal Society or limited its inquiries (see the work of Margaret Jacob); and if England became Catholicized, and Protestantism was suppressed, the Huegenots would also have been (at about the same time, with the Revocation of the Edict of Nantes in 1685) completely lost. The mechanics' libraries and Dissenting academies might have been subordinate to the Churchmen, as on the continent. The Dissenters who provided the bulk of the entrepreneurial energy of the IR in England might simply not have made their contribution, and perhaps modern science and industry as we know it might never have developed in the west. Recall that even when modern technology was available, the Ottomans, and counter-reformation Spain and Italy ignored or discouraged it, as they had ignored then discouraged Galileo. One cannot assume that because modernity had advantages, anyone would seek or seize them. (5) In short, I think what needs to be explained is not a "long-term, inevitable" process that leads to industrialization, but a rare, one-off, developmental anomaly or "sport" that leads England on what is, by world standards, a "peculiar path." Once explored, others can follow this path (as the French began to obsess about "english pumps" and smuggle in English workmen in the late 18th century), but I see no reason why it should have "naturally" developed. (6) Alan, Brad, and others, I am glad you are impressed with the work of Ken Pommeranz, and intrigued by the work of Andre Gunder Frank. I also recommend the work of R. Bin Wong, and my own article "The Problem of the 'Early Modern' World" forthcoming in the JOURNAL OF THE SOCIAL AND ECONOMIC HISTORY OF THE ORIENT (and available by email if anyone wishes it).

In closing, let me not try to settle any argument, but to better frame the terms of debate. On the one hand, there is what I would call the North/Landes/Jones view (as given in Doug North and Robert Thomas' key article, David Landes recent book, and Eric Jones' THE EUROPEAN MIRACLE) that Europe had decisive advantages stretching back to the Middle Ages that provided a cumulating advantage in capital, living standards, consumerism, technology, exploration, etc. that produced a gradual but persistent increase in economic growth and culminated in a marked advantage over other parts of the world by the late 18th century. There is some difference among these authors over whether they key advantages were in institutions, livestock/ecology, or mechanical skills, or culture, but all agree the differences were long-standing and produced a long-term change. Moreover, it was European expansion and dynamism that was the long-term driver of global economic history, and changed the world.

Against this view, there is emerging what I like to call the "California" school or interpretation of global economic history. This has been developed in good part by scholars in California, and holds that there were NO significant long-term advantages enjoyed by Europe over the main centers of civilization in Asia; that the level of technology, science, agriculture, and living standards were similar in these regions from 1000 to 1800 AD, with Europe lagging if anything until nearly the end of this period; and that even the dynamics of political and social structures and conflicts in Asia and Europe were essentially similar from 1500 to 1850. Moreover, it was China's demand for silver, and production of advanced/luxury consumer goods (silks, ceramics, exotic woods and spices), that drove world trading patterns, and provided a global trading system on which Europe "piggybacked" its development; and it was only after 1750 that Europe suddenly began to gain an advantage in growth, technology, and power over its Eurasian rivals. Thus some sharp change must have occurred in Europe in the late 17th/early 18th centuries to create this "bifurcation." Some of the major scholars in this "California" school are R.Bin Wong and Ken Pommeranz at UC-Irvine, key work on the comparative development of China and Europe Philip Huang (UCLA) and Robert Marks (Whittier) on long-term economic history of key regions in China James Lee at Caltech on China's long-term demographic history, demonstrating that it was NOT in a Malthusian high-pressure trap. Dennis Flynn and Arturo Giraldez at U. of Pacific, and Gunder Frank (at Toronto, but whose new work is published by U. of California Press) who have documented the extensive silver flows into China across the Pacific as well as the Atlantic, and have shown how central China was to global trade and economic activity from 1500 to 1750 My own work on the parallels between Asian and European rebellions and revolutions 1500-1850, and on the role of culture in possibly leading to some differences between materially similar economies in China and western Europe. Certainly there are other scholars who have made major contributions to this emerging view, but the above group certainly have been in touch and read and influenced each other enough to form a "school" of sorts. Of course, within the "california school" there are major differences on precisely how and why the bifurcation occurred, and on the importance of global vs. domestic developments in that change. But on the main point -- that the bifurcation was late, began in basically similar societies c. 1750, and began in a world in which China played a dominant economic role, there is strong agreement.

Let the debates begin!

All the best, jack

-- jack a. goldstone (jagoldstone@ucdavis.edu), May 05, 2000.

On 12 May, Gunder Frank wrote:

>many congratulations and best wishes to Brad for beginning to see the >light, which alas is not very compatible with Brad's 'defense' of David >Landes' book and his own theses in the ensuing debate -- which i have just >continued with my posting on the Landes book, in which I apologize for not >adding that Ken is the best guy and thing on that [non-Landes] wavelength. >But Dear Brad, Ken does not limit himself to 'comparisons'. He also makes >connections. I hope yuu will too.

Most of what I might have written has already been written--very well--by Alan Taylor.

I do, however, find it interesting to look back and reflect upon my own thoughts on western Europe compared to Chinese patterns of development...

I suppose that my first image--acquired while taking Social Studies 10, which because of its concentration on *theory* leaves one with a somewhat shaky empirical foundation corresponding to the state of historical knowledge about 1870--was that of Max Weber: that the key to understanding why and when the industrial revolution took place was to grasp the peculiar means-ends instrumental rationality of Protestant northern Europe, that this peculiar cultural complex was closely tied up with religions and values, and that as a result Confucian, Hindu, and Buddhist Asia had no chance at all of successfully industrializing for centuries. This--Weberian--point of view has been decisively proven wrong by East Asian industrialization since 1950.

I think that my second image--acquired after reading a little too much of Hannah Arendt and Karl Wittfogel--was that of South and East Asia as dominated by water-monopoly empires that are fundamentally hostile to change (which may disrupt the power of landlord and priestly elites) and that in their control over agrarian infrastructure have the power to make their hostility to change effective. You can see this position too as essentially Weberian-- although the key here is the independence of the European city rather than the Protestant Ethic. And I still find myself believing (say, two days a week) that there was something very special about the Medieval Commune and what it developed into, and that this did play a major role in bringing us to where we are today.

My third image was that constructed by Ernst Gellner and John A. Hall--I think of _Plough, Sword, and Book_, of _Powers and Liberties_, and of _Liberalism_. Their image of pre-industrial societies--of Agraria--is of societies in which warrior-princes, priests, and landlords all conspire to keep the peasants ignorant, barefoot, pregnant, and over taxed; to keep the urban merchants in constant fear of losing their fortunes, their businesses, and their lives; and in which technological advance is quickly abandoned either because the inventors have become rich and no longer wish to be corrupted by contact with production and toil, or because cheap and unfree labor forces leave those with power with no incentive to maintain and operate technology. In their view, the natural state of post-Neolithic Revolution humanity is somewhere between Merovingian Gaul and the Moghul Gangetic Plain, and that only a true miracle allowed our escape from Agraria's trap. I find myself believing their story, but also believing that they have vastly overstated the power of warrior, priest, and landlord elites to control historical developments.

My fourth image was one I drew from Joel Mokyr's _Lever of Riches_: it is of Chinese and Indian civilizations that are progressive, dynamic, technologically and demographically expansionary up until about 1400 or so. But then circumstances--foreign conquest, Ming ideology, whatever--create a profound hostility to further change, transform the ruling class into a purely parasitic ruling class, and set both India and China on the track toward the semi-Malthusian subsistence-level near-catastrophe that they reached in the nineteenth century.

Now Ken Pomeranz's work (and not his alone) is transforming my image of South and East Asian civilizations once again--but I do not yet have a clear picture of just what it was that blocked what is now Greater Shanghai (or Greater Canton, or Greater Tokyo, or Greater Mumbai, or Greater Calcutta) from becoming the locus of an advanced commercial economy on the brink of an industrial revolution in the sense of Greater London, Greater Paris, and Greater Amsterdam.

Jim Blaut has an answer (which is, I think, the same as Eric Jones's answer in the _European Miracle: although Blaut talks in terms of pillage, murder, and extortion and Jones in terms of "ghost acreage" they are referring to the same phenomena). But I look at the size of the Dutch herring fleet compared to the VOC, and at the profits of the English wool industry compared to the fortunes of Robert Clive and Warren Hastings, and I find myself still thinking that long- distance trade is too small to bear the burden and that more is to be learned from trying to think hard about

-- Bradford DeLong (jbdelong@home.com), May 05, 2000.

The May 25 issue of the New Republic contains a review by Jagdish Bhagwati of Landes and of Kindleberger's _World Economic Primacy: 1500-1990_. Bhagwati's conclusions about Landes:

"Landes wishes to link the European miracle causally, in the spirit of Max Weber, to underlying values as defined by the Judeo-Christian, and especially Protestant, universe. Islam is held to be inimical to a repetition of the European experience owing to its allegedly holistic nature, with religion 'in principle supreme and the ideal government that of the holy men.' Such assertions recur throughout the book. And here Landes is stepping into quicksand. For it is impossible to relate culture or values to these pro-growth institutions and policy frameworks, and hence to economic growth, in a causally tight way. .... I do not mean to deny culture any role. But the precise role of culture in economic behavior remains elusive. The encouraging truth appears to be that growth-inducing institutions, like hardy perennials that will grow in different and indifferent soils, are resilient and compatible with a range of cultures. And for a historian who is confronted with economic success in extremely diverse cultures, it is ahistorical to assert otherwise."

It would be interesting to learn where Bhagwati thinks the IR came from.

Tony O'Brien Lehigh University

. . . .

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-- Anthony Patrick O'Brien (ao01@Lehigh.EDU), May 05, 2000.

Having followed this discussion with interest, and now with Jack Goldstone including me in the "California school" with regard to many of the issues raised, I thought it was time to introduce myself to the Eh.Res list by way of comments on some of postings. First, and as a preliminary, the interest of historians whose primary focus has been Europe and/or North America in the work of Asianists is a welcome change, Brad de Long's comments about his education notwithstanding (maybe his experiences were exceptional). Most of us working on China have for a very long time immersed ourselves in work on Europe, becoming familiar with issues and perspectives coming from that body of work, and clearly that experience is beginning to bear fruit, as the work of Ken Pomeranz, Bin Wong, and James Lee (among others in the "California school") attests. Now that we are beginning to have a global dialog, maybe we will make some progress on understanding global processes. Now to some comments on others' postings: Greg Clark asserted (5/13/98) that prior to 1800, all economies in the world were Malthusian "in the sense that living standards did NOT depend directly on the production technology," but did depend on population dynamics. The work that I have done on the part of South China called Lingnan (and here I'll try to help Brad de Long begin to remember some of these regions of China by offering a translation: "South of the Mountains"), indicates that that region (Guangzhou/Canton and its hinterland, a very wealthy and "developed" part of late imperial China) may well have begun to break with a Malthusian regime in the second half of the eighteenth century, without having experienced an "industrial revolution" (but perhaps an industrious one). But that does not mean, as Greg suggests, that that important demographic change arose only from family and social structure reasons, and not technological developments. The evidence that I've developed (in my book, Tigers, Rice, Silk, and Silt: Environment and Economy in Late Imperial South China) suggests that in Lingnan, by the end of the 18th century grain prices and food supply had become delinked from harvest quality, assuring food supplies to urban and sub-urban residents and workders at reasonable prices, regardless of what the harvest was. The question is, Why? And here I would point to both technological developments in agriculture, in particular irrigation and the use of various techniques by which peasant farmers could get 5 or 6 harvests in two years from the same plot of land, and to organizational changes, in particular the development of a large, integrated, and efficient market for food grains, in particular rice. In fact, the eighteenth-century grain market in Lingnan was larger, more integrated, and more efficient (by various measures) than those in the most developed parts of Europe, allowing for the development of a very large and productive textile industry (both cotton and silk) in the Pearl River delta, utilizing spinning wheels and looms worked (and powered) by several individuals. In short, in at least one region of China ca. 1800, it is likely that living standards were not "determined" by birth and death rates (and their causes), although population dynamics undoubtedly remained important. None of this gets to the question of explaining the industrial revolution, as Greg Clark wants, but it should cast doubt on some verities, perhaps including the one that does away with the industrial revolution altogether in favor of an industrious revolution. For once again, even if we go down that route, historians working on China can demonstrate that China got that far too, and by 1800. So, yes, the work of yet another historian of China tends to support the case that the differences between China and Europe appeared very late, around 1800 in Lingnan, or later than the 1750 date suggested by Alan Taylor. So maybe we have to think about "the great bifurcation" as coming later than 1750. Which brings me to my last observation: in 1984 Braudel (in the Structures of Everyday Life) had already identified "the gap," its late appearance around 1800, and the need for explaining it, as the most important item on historians' agendas. But contrary to the thrust of Alan Taylor's last paragraph, it is not necessarily the Europeanists (e.g. the North/Landes/Jones Eurocentric view summarized by Jack Goldstone) who are helping the most with crafting an explanation (or perhaps more precisely, one that will hold up globally given the historical evidence we now have for China). In fact, I would submit that this whole debate is possible only because of the work that Asianists in general, but those working on China in particular, have done over the past 15 years. Gunder Frank is right: it's time for economic h

-- Robert Marks (rmarks@whittier.edu), May 05, 2000.

Jim Blaut makes some excellent general points about the importance of the New World. I would like to make a few comments:

1) I know Ken Pomeranz will agree that access to New World resources made a big difference for Europe. And this was a point that, although it came up, did not get as thorough discussion as some other points either in the discussion on Ken's work last year on this discussion list, or when I have seen Ken present his work.

2) I think it is important to think about the role of New World wealth. I don't think gold and silver was the most important stuff. After all, the Industrial Revolution starts in England, not in Spain. You may argue that the gold and silver flowed from Spain into England, in return for manufactured goods. But a fair amount of the gold and silver also flowed into CHINA, to pay for silk and tea and china.

3) If we return to Ken's own analysis, as I understand it, it is that the New World provided raw materials such as cotton and sugar that complemented the raw materials available in Europe. The market economy was also spreading geographically in Asia, but (perhaps) the complementarities between the new and old regions was different. (Although if I understand Bob Marks' work, even this isn't clear.

4) I do not know how access to New World wealth altered the distribution of wealth and power among different elements in the European ruling classes. It seems to have relatively different outcomes in different nations. Perhaps one interpretation is that the New World was destabilizing. It was not a foregone conclusion that the new equilibrium would put the "capitalists" on top, it didn't in France or Spain. But it did in Holland and England. Why? are we back to pre-modern institutions? Or was their a certain random character to the outcome of political struggles. Maybe Europe does better (or worse, depends on how you feel about capitalism. I like it) because you only needed one or two states to end up with the "right" people in control. In this story, China is handicapped because it is a unified state, only gets to run the "experiment" on one government. Or maybe the geo-political nature of China meant if the ruling structure imploded the result was invasion and the imposition of a foreign ruling class, rather than a Glorious Revolution.

5) To tie two threads together, the New World and the credit markets, how much did the need to modernize the financial systems, both to fund wars and to organize the large scale enterprises needed to take advantage of new economic opportunities (plantations and trade both ran on European based credit) driven by the New World discoveries. In this story the "wealth" created is the new institutions called into being to help exploit the new natural resources.

I am sure this only scratches the surface of the questions raised by bringing the New World into the picture.

Rebecca Menes Department of Political Science University of California--Los A

-- Rebecca Menes (menes@ucla.edu), May 05, 2000.

Herewith a brief response to two of Brad DeLong's thoughtful, quizzical comments.

(1) "[As] Alan Taylor eloquently pointed out, to reduce the European Miracle from a ten-century to a two-century affair makes understanding and accounting for it much, much harder..."

I don't think that anyone, and certainly not Gunder Frank, is arguing that you don't have to look for pre-18th-century csauses for 18th- century effects. The problem is: how far back do you have to go? Frank and I argue that you don't have to go back before the 16tth century, because the rise of Europe relative to other civilizations was kicked off initially by the inflow of silver (etc.) from the Americas after 1492.

Landes, Jones, & Co. of course argue otherwise. They find saome unique European genius (mentality, culture) in Europe 1000 years ago (Landes, Lynn White, MacFarlane, Weber, et al.) or 5000 years ago (Jones, Mann, Hall, Wittfogel, et al.), something, or some things, that propelled Europe and only Europe forward toward later modernization. This, of course, is the conventional position. I think it has in it a large dose of Eurocentric folklore. For every trait in ancient or medieval Europe that seems to be part of the explanation for Europe's later rise (relative to other civilizations), I think you find either that (1) the trait was also present in non-Europe, or (2) the trait was not really all that progressive, or all that pregnant with implications for later progress, or (3) the trait could be balanced off against some trait of non-Europe which was equally pregnant with implications for later development. The problem here is what I call "tunnel history." You know that Europe in later times had some undeniable superiority or priority. You search for the causes of that superior or prior fact *only* in prior European facts, neglecting the rest of the world.

(2) "Where are the self-governing cities of Asia?"

There were self-governing cities, city-states or small kingdoms dominated by a single city, along all the coasts of the Indian Ocean from Sofala and Kilwa around to Malacca and beyond. There were man y port cities lying within large empires but enjoying essenmtially complete autonomy in matters relating to the economy. I think the Weberian idea that European cities were somehow uniquely "free" is folklore: everything European was endowed with freedom, everything Asian was unfree, oppressed by Oriental despotism.

A similar argument applies to the now-conventional idea that the political fragmentation of medieval Europe allowed for economic development in ways not possible ("blocked") elsewhere by "empire." Note first that the older conventional view held quite the opposite to be the case: the fragmentation of feudal societies was altogether bad, and had to be replaced by central governments before modernization was possible. The newer pro-fragmentation theory seems to me to be more of the Oriental despotism mythology. Empires like China did not fundamentally suppress economic activity in local regions and cities (see Bob Marks' post on his work on South China). Indian Ocean port cities under the Mughals were allowed, even in some ways encouraged, to operate as autonomous economic entities. Centralized polities indeed had specific advantages: a large area serving as labor shed and market (this argument anticipates the modern theory of the "national economy"), a potential for the diffusion of technology uninhibited by political and migration barriers. Etcetera. There is the view that smaller polities somehow mean more individualism. I think this is romantic nonsense. Was a baron more democratic than a king in Magna Carta times? What about all thosemedieval tolls between markets? My guess is that markets were freer under empires, ceteris paribus, than under fragmented feudal semi-polities.

-- James M. Blaut (70671.2032@compuserve.com), May 05, 2000.

Just two quick points.

First, I believe James Blaut's sweeping claims about the exploitations of the Americas by the Europeans as the explanation for their rapid economic development after 1492 is suspect primarily because of the poor performance of the domestic economies of Spain and Portugal throughout this period. Indeed, it seems to me that one of peculiar outcomes of the new global perspective is that we can now refocus on why some European nations succeeded in the period 1800 to 1950 while others in Europe continued to stagnate. Maybe some of the same limitations that throttled growth in much of southern and eastern Europe were also present in China, Africa, Latin America, etc.

My second point is just to underline the comments of Dick Sylla about the importance of maturing financial markets in facilitating economic growth. Larry Neal and I have conclusively shown, I think, that those parts of Europe and North America that demonstrated economic development had institutionally mature financial markets by 1810 or before. I have raised this issue with Ken Pomeranz at several of his seminar presentations in the southern California area. Ken has acknowledged that shortcomings in the financial sector might have played a role in China's arrested development, he has not been willing, to date, to move financial problems up near the top of his ist of explanatory factors. Nonetheless, I believe that a strong financial base, including functioning markets for short-term, intermediate-term, and long-term monies, is one of the essential prerequisites for advancement. Since I study this subject full time, I realize that I am extremely biased in discussing its importance -- but Dick and I and Larry, and others in our camp, could still be on the mark in identifying one of major stumbling blocks for sustained economic development.

-- Ed Perkins (Perkinsej@aol.com), May 05, 2000.

Thank You One and All for your interest, attention, consideration and patience with me. A family medical emergency is the real reason and David Landes' absence the official excuse for the tardiness of this my first general response and the delay till still later of my detailed reply.

I fully agree with Taylor and others that circa 1800 represents a disjuncture, and that it remains to be explained by me and others. I say 'remains to be' because I disasgree with Taylor et al when they contend that received theory has offered some satisfactory explanations. I contend that they are not even minimally satisfactory or accetable, and under title 2 below I again summarize - in three short paragraphs - my general reservations, written long before reading Landes's new book and your reactions to my critique thereof.

Under title 3 below, I then append MY OWN ALTERNATIVE EXPLANATION as a somewhat longer but still excessively short summary extract from my book ReORIENT. Of course, that is intended as a challenge to others to join in to the still outstanding task of constructing a holistic real world or really holistic global/world embracing explanation, in which Ken Pomeranz is also engaged, but alas David Landes is not [yet?].

I beg indulgence to postpone my detailed reply to critiques until I catch up with the backlog accumulated during the above mentioned medical problem and I sort out and put in order your responses that I have received via 5 e-mail diuscussion lists in differently assembled and packaged but also often duplicated/ triplicated form [which I offered to David Landes also to do for him in his absence aboad]. Then, I promise to try to address your specific comments, critiques and related or alternative explanations [thank you again] in a future detailed and organized 'comprehensive' reply. So for now, here goes only what I already wrote BEFORE I read what you just wrote, but after long-winded other discussions with some colleagies named below.

2. SUMMARY CRITIQUE OF RECEIVED THEORY AGAIN

Received theory attributes the industrial revolution and the "rise" of the West to its alleged "exceptionality" and "superiority." The source of the same is sought in turn in the also alleged long standing or even primeval Western preparation for take-off. This contention mistakes the place and misplaces the "concreteness" of the transformation by looking for it in Europe itself. Yet the "causes" of the transformation can never be understood as long as they are examined only under the European streetlight and must instead be sought under the world- wide global illumination in the system as a whole. That turns all received theory on its head.

The argument - and the evidence! - is that world development between 1400 and 1800 reflects not Asia's weakness but its strength, and not Europe's nonexistent strength but rather its relative weakness in the global economy. For it was all these regions' joint participation and place in the single but unequally structured and unevenly changing global economy that resulted also in changes in their relative positions in the world. The common global economic expansion since 1400 long benefited the Asian centers earlier and more than marginal Europe, Africa, and the Americas. However, this very economic benefit turned into a growing absolute and relative disadvantage for one Asian region after another in the late eighteenth century. Production and trade began to atrophy as growing population and income, but also their economic and social polarization, exerted pressure on resources, constrained effective demand at the bottom, and increased the availability of cheap labor in Asia more than elsewhere in the world. That world economic change also opened the door to the "Rise of the West,' which smust be re-examined in terms the more important global historical continuity instead of any and all its dis- continuities. The perception of a major new departure in 1500, which allegedly spells a dis-continuous break in world history, is substantially [mis] informed by a Eurocentric vantage point. Once we abandon this Eurocentrism and adopt a more globally holistic world or even pan EurAsian perspective, dis-continuity is replaced by far more continuity. Or the other way around? Once we look upon the whole world more holistically, historical continuity looms much larger, especially in Asia. Indeed, the very "Rise of the West" itself then appears derived from this global historical continuity. East Asia's renewed rise to world economic prominence makes it all the more urgent to focus on the long historical continuity of which this process is a part.

3. GUNDER FRANK'S ALTERNATIVE SUMMARY EXPLANATION:

A WORLD DEMOGRAPHIC/ ECONOMIC/ ECOLOGICAL EXPLANATION OF THE DECLINE OF THE EAST AND THE RISE OF THE WEST

My explanation has three related parts. A combination of demographic and micro-/macro-economic analysis identifies an inflection of population and economic productivity growth rates that led to an "exchange" of places between Asia and Europe in the world economy/system between 1750 and 1850. Microeconomic analysis of world- wide supply-and-demand relations and relative economic and ecological factor prices can show how they generated incentives for labor and capital saving and energy producing invention, investment and innovation, which took place in Europe. On the other hand, macroeconomic analysis of cyclical distribution of income and derivative effective demand and supply in Asia illuminate the opportunity to do so profitably in world economic terms.

This sumamry eplanation of the related "Decline of the East" and "Rise of ther West" may be briefly elaborated as follows: The simple hypothesis is that technological innovations were a function of demand and supply and of relative factor prices of inputs like labor, capital, and land. Therefore it was primarily the higher wages and relatively abundant capital in Europe that eventually generated labor saving and energy producing technology. This argument may be challenged by the observation [eg. by Pomeranz 1997] that the "industrial revolution" was less labor "saving" than labor "extending" and that it increased the productivity of both labor and capital. Direct wage rates or costs may also have been as high [or even higher] in some parts of China, eg. in the Yangtze Valley and the South, though probably not anywhere in India, than in some parts of Europe, especially England.

An unequal distribution of income generates luxury and import demand at the top and a large supply of cheap labor at the bottom. I contended that this was the case moreoso, and Pomeranz (1997) that it was not so, in China than in Europe, although we agree that it probably was more unequal than either in India. N9 But the problem of absolute, relative and world wide comparative wage costs - in entrepreneurial calculation as in our analysis of the same - is related also to local and regional problems of labor allocation. And there were some economic differences in labor allocation especially between agriculture and industry, which were related to some institutional differences. However, it is less clear to what extent these differences were underlying causes or of the observed allocation of labor or whether they were only different institutional mechanisms through which the labor allocation were organized. Particularly important differences were: A. Bonded labor in India (Pomeranz 1997). B. Women were tied to the village and their labor was restricted to agriculture and dopmestic industry, eg. spinning, in China (Goldstone 1996). C. Some industrial workers could still draw directly on some subsistence goods produced by women-village- agriculture in China but less so in England without having to aquire these through the market (Pomeranz 1997). D. Enclosures [to produce more cheaper wool for textiles on more land - "sheep ate men"] expulsed male and female labor from the land into urban un/employment in England [and elsewhere in Europe?].

The industrial "revolution" was initiated with cotton textiles, but these required both a growing "external" supply of cotton [for Europe - from its colonies] and a "world" market for all in which everybody had to compete [except China, which still had a growing and protected domestic and regional market]. The industrial "revolution" also required and took place in the supply and production of more and cheaper energy, especially through coal and its use in making and using machinery to generate steam power, first stationary and then also mobile. The critical role of coal and its replacement of wood as a source of fuel in Britain is demonstrated by Wrigley (1994). These sources of power technically and economically first required [and permitted] concentration of labor and capital in mining, transport, and production. Then they also permitted faster and cheaper long distance transport via steam powered railway and shipping.

Investment in such "revolutionary" industrial power, equipment, organization and the labor necessary to make them work was undertaken wherever, but also only where, it was economically rational and possible to do so, in terms of (A) Labor allocation and cost alternatives; (B) Location and comparative costs of other productive inputs [eg. timber/coal/animal/human sources of power and transport,as well as raw materials like cotton and iron], which were related to the geographical location of these resources and to ecological changes in their availability; (C) capital availability and alternative profitable uses; and (D) Market penetration and potential.

At the turn of the eighteenth-nineteenth centuries the above mentioned factors in world economic competitive and comparative circumstances, changes, and transformation generated the following results:

- India continued but was threatened in its competitive dominance on the world textile market on the basis of cheap and also bonded skilled labor. Domestic supplies of cotton, food and other wage goods continued to be ample and cheap; and productive, trade and financial organization and transport remained relatively efficient despite suffering from increasing economic and political difficulties. However, supplies of alternative power and materials, eg. from coal and iron/steel, were relatively scarce and expensive. Therefore, Indians had little economically rational incentive to invest in innovations at this time. They were further impeded from doing so first by economic decline beginning already in the second quarter of the eighteenth century or earlier; then by the [resulting?] decline in population growth and British colonialism from the third quarter onwards; and finally from a combination of both decline and colonialism as well as "Drain" of capital from India to Britain. India switched from being a net exporter to being a net importer of cotton textiles in 1816. However India did continue to struggle on the textile market and began again to increase textile production - by then also in factories - and exports in the last third of the nineteenth century.

- China still retained its world market dominance in ceramics, partially in silk and increasingly in tea, and remained substantially self-sufficient in textiles. China's balance of trade and payments surplus continued into the early nineteenth century. Therefore China had availability and concentration of capital from both domestic and foreign sources. However, China's natural deposits of coal were distant from its possible utilization for the generation and industrial use of power, so that progressive deforestation still did not make it economical to switch from wood to coal for fuel. Moreover, transport via inland canals and coastal shipping, as well as by road, remained efficient and cheap [but not from outlying coal deposits].

This economic efficiency and competitiveness of the Chinese on both domestic and world markets also rested on absolutely and comparatively cheap labor costs. Even if per-capita income was higher than elsewhere, as Bairoch notes, and its distribution was no more unequal than elsewhere [as Pomeranz and Goldstone claim], the wage good cost of production was low, both absolutely and relatively. Labor was abundant for agriculture and industry, and agricultural products were cheaply available also for industrial workers and therefore to their employers, who could pay their workers low subsistence wages. Goldstone (1996) emphasizes one reason: Women were tied to the villages and therefore remained available for [cheap] agricultural production. Pomeranz (1997) emphasizes a related reason: Urban industrial workers were still able to draw for part of their subsistence on "their" villages, which was produced cheaply in part by the women to whom Goldstone refers. In other words from an entrepreneurial industrial employer and market perspective, wage goods were absolutely and relative cheap; because agriculture produced them efficiently and cheaply also with female labor. The "institutional" distribution of cheap food to urban and other workers in industry, transport, trade and other services was functionally equivalent to what it would also have been if the functional distribution of income had been MORE unequal than it was. The availability of labor was high, its supply price low, its demand for consumer goods attenuated; and there was little incentive to invest in labor saving or alternative energy using production or transport. Elvin (1973) sought to summarize such circumstances in his "equilibrium trap." Even so, China still remained competitive on the world market and maintained its export surplus. Emperor Ch'ien Lung said in his 1793 message to King George III of England "I set no value on objects strange and ingenious and have no use for your country's manufactures" (Schurman and Schell 1967, I:108-109).

- Western Europe and particularly Britain were hard put to compete especially with India and China. Europe was still dependent on India for cotton textiles and on China for ceramics and silks that Europe re-exported and from which it profited in its [economic and/or political] colonies in Africa and the Americas. Moreover, Europe remained dependent on its colonies for most of the money it needed to pay for these imports, both for re-export and for its own consumption and other use, eg, as inputs for its own production and export. In the late eighteenth and early nineteenth centuries, there was a decline in the marginal if not also the absolute inflow of precious metals and other profits through the slave trade and plantations from the European colonies in Africa and the Americas. To recoup and even to maintain - never mind to increase - its [world and even domestic] market share Europeans collectively and its entrepreneurs individually had to attempt to increase their penetration of at least some markets, and to do so either by eliminating competition politically/militarily or by undercutting it by lowering its own costs of production, or both.

Opportunity to do so knocked when the "Decline" began in India and West Asia, if not yet in China. Wage and other costs of production and transport were still uncompetitively high in Britain and elsewhere in Europe. However especially after 1750, rising incomes and declining mortality rates sharply increased the rate and amount of population growth. Moreover, the displacement of surplus labor from agriculture increased its potential supply to industry. At the same time, the imposition of British colonialism on India reversed the perennial capital outflow to India and turned it into "The Drain" from India and into Britain. Moreover, a combination of commercial and colonial measures would permit the import of much more raw cotton to Britain and Western Europe. Deforestation and ever scarcer supplies of wood and charcoal and rendered these more expensive.

At the same time since the second third of the eighteenth century, first relative and then absolute declines in the cost of coal made the replacement of charcoal [and peat] by hard coal increasingly economical and then common in Britain. The Kondratieff B phase in the last third of the eighteenth century generated technological inventions and improvements in textile manufacturing and steam engines [first to pump water out of coal pits and then also to supply motive power to the textile industry]. At the turn of the eighteenth- nineteenth centuries, the "first" A phase [identified by Kondratieff] and the Napoleonic wars generated increased investment in and the expansion of these new productive facilities and then also of transport equipment. Ever more of the available but still relatively high cost labor force was incorporated into the "factory system." Production increased rapidly; real wages and income declined; and "the workshop of the world" conquered ever more foreign markets through "free trade." Yet even then, British colonialism had to prohibit free trade to India and recurred to the export of its opium to force an "Open Door" into China.

- Most other parts of the world still fall through the cracks of our world economic analysis. Yet in brief, we can observe that most of Africa may have had labor/land ratios at least as favorable to labor saving investment as Europe. However Africa did not have an analogous resource base [except the still undeveloped one in Southern Africa], and far from having a capital inflow, Africa suffered from capital outflow. The same was true of the Caribbean. Latin America had resources and labor, but also suffered from colonial and neo-colonial capital outflow as well as specialization in raw materials exports, while its domestic markets were captured by European exports. West, Central Asia, and Southeast Asia became increasingly captive markets for if not also colonies of Europe and its industry, to which they supplied the raw materials that they had previously themselves processed for domestic consumption and export. In the nineteenth century, only the European "settler colonies" in North America, Australasia, Argentina, and Southern Africa were able to find other places in the international division of labor, and China and Japan were able to continue offering significant resistance.

In short, changing world demographic/ economic/ ecological circumstances suddenly - and for most people including Adam Smith unexpectedly - made a number of related investments economically rational and profitable: in machinery and processes that saved labor input per unit of output, thus increasing the productivity and use of labor and its total output; increasing productive power generation; and increasingly productive employment and productivity of capital. This transformation of the productive process was initially concentrated in selected industrial, agricultural, and service sectors in those parts of the world economy whose comparative competitive POSITION made -- and then continually re-made -- such Newly Industrializing Economies [NIE] import substituting and export promoting measures economically rational and politically possible. Thus, this transformation was and continues to be only a temporally localized and still shifting manifestation of a WORLD economic process, e

-- Gunder Frank (agfrank@chass.utoronto.ca), May 05, 2000.

I've been trying to keep up with the Landes/Frank discussion while (like most of us) doing 15 other things, and so have kept postponing joining in; but now I can't help myself. I write from a serious disadvantage, not yet having read Landes, but much of the discussion seems to stand on its own.

First, I think Frank's work, my own work and that of various others whom Jack Goldstone calls the "California school" does make it seem very likely that the "great divergence" is a post-1750 phenomenon, perhaps even a post 1800 one; at least I think the burden of proof would now lie with those who think it came earlier. It may well be, as Alan Taylor suggests, that this shorter time frame makes the "European miracle" harder to explain than if we saw it slowly emerging since 1000, but so be it; I think it is the task we have nonetheless.

Greg Clark asks how we can explain the huge size of the gap circa 1900 if it had only been growing for 150 years or so. Various possibilities come to mind, including 1)that the higher estimates of British growth during the "Industrial Revolution" may turn out to be not far off after all; and 2)that not only was Britain/Europe growing rapidly during the 19th century, but China -- or at least many parts of it -- were actually going through a pretty significant decline. Most of my estimates of per capita consumption ca. 1750 in China are in fact, considerably higher than ca. 1900, and in at least one important area -- cotton cloth -- I think a good case can be made for almost no change in absolute levels of output, or even a slight decline, over a period in which population doubled.Nor do we lack for explanations of such a decline in 19th century China. There was a serious breakdown in government, at least in mid-century, with massive civil wars, and serious decay of some important public infrastructure (especially, though not exclusively for water control). Opium, still a fairly trivial problem in 1750, became an astonishingly widespread problem during the 19th century. Estimates of the amount of opium produced and imported ca. 1900 might have been enough to supply as many as 40,000,000 addicts. Third, and seemingly independently, there seems to have been a breakdown in some regions (though not all) of the micro-level social structures that in other Chinese times and places were central to the operation of preventive checks on population, leading to very rapid, ecologically disastrous population growth in these regions (especially North China) -- and to a contraction of the crucial streams of cheap primary products (rice, timber, raw cotton) that these regions had previously exported to china's richest areas. Moreover, as the population of these poorer regions grew much faster than that in wealthier regions, they further depressed Chinese averages.

None of this, however, changes the fact that Europe (or at least Northwestern Europe) underwent an astonishing growth spurt in this period, which we still need to explain. If we define "institutions" broadly enough, then an explanation of this spurt in terms of "superior institutions" becomes almost tautological: the only alternative to it would be to say it was all a matter of luck or (which amounts to the same thing) Europeans riding the wave of developments that were really centered elsewhere. And while I do think global processes deserve more attention than they usually get, they aren't the whole story.

But if "superior institutions" is to be a meaningful answer, it needs to be broken down considerably. What were European institutions better for? Reducing transactions costs? Encouraging technological innovation? Plundering others? Developing human capital? We need some ways of assessing these possibilities, assessing the impact of "superiority" in each area in which it might have existed, and assessing the impact of those things that do fall outside the bounds of even a broad definition of institutions (e.g. resource endowments).

When it comes to lowering transaction costs, I'm dubious about overall European superiority before the breakdown of public order in mid-19th century China. Chinese land markets were remarkably active and in many ways less restricted than those in Europe; a similar case could also be made for labor markets, and for at least some product markets (both the degree of price integration and the scale of product flows in china's long-distance grain trade, for instance, would compare quite well with anything int he Atlantic world before It is however, probably important that a lot of European inferiorities in these areas get erased at the end of the 18th and beginning of the 19th century, as guilds, common land, etc., were vastly reduced by French Revolutionary and Napoleonic-era reforms on much of the continent. And as these deficits disappeared, one area in which European institutions probably were much better at keeping transaction costs down -- namely financial markets-- became much more important. As technological and other changes created various economic sectors in which firms needed large sums of relatively patient capital, which exceeded the capital-raising abilities of families and other sorts of personal networks(first, perhaps in railroads, then in a whole set of industries affected by Chandler's managerial revolution) institutions like the corporation became quite important. Previously this institutional form, however clever, had been of limited importance for anything besides extra-continental trade and colonization. And the sophistication of European public finance -- which had exceeded that of China (though I'm not so sure about India) for quite a while, became much more significant as states a)began to do more things that could be beneficial to the economy, rather than spending almost all the money they raise don war- making and b)extended their war-making (with the aid of new weapons) to continental Asia, making China's relative weakness in public finance far more important than it had been when the Empire's only serious external rivals ( various steppe and NE Asian tribal groups) had been people who had still less of a system for drawing on future state revenues. Add together European catch-up in areas where it had been behind, the expanded importance of one area where it had long been ahead, and the spectacular if temporary collapse of public order in mid-19th century China and one can see a significant role for "institutional superiority" in lowering transaction costs during "the great divergence" without having to posit that this superiority came from a gap that had long been growing.

The question of promoting technological change (in part by encouraging science) seems like the best case for a slowly maturing Western European advantage -- Margaret Jacob's work on the culture of science in Britain, for instance, makes a lot of sense to me. But even here, we are talking about a post-1500 development, not a post- 1000 one. Moreover, it's relationship to the Industrial Revolution (at least in its early stages) remains, I think, pretty controversial -- certainly there were people using Newtonian mechanics to calculate how much power they'd get out of a new water wheel, but there were also a lot of crucial advances that seem to have been fairly distant from science. Moreover, we should remember that Europe was not ahead in all important areas, even as late as 1800 -- and that which technological advantages turned out to be crucial and which relatively unimportant depended on a lot of things. Thus, Europe remained relatively backward in agricultural yields per acre even in 1800 (though the potato was helping it close some of that gap) -- and that particular bit of backwardness might have mattered a lot more had it not been for the existence of a)parts of Europe, which, thanks to rather rigid institutions, had not participated nearly as much in the post 1450 expansion (either in output or in population growth) as the most advanced parts of Europe, or many parts of China, and thus still had relatively large amounts of land per capita (something Frank emphasizes as a European "advantage of backwardness) and b)had Europe also not had, due to a combination of skills, luck (especially in the form of epidemics) and ruthlessness, the Americas as a place to which to send 50,000,000 people over the next century, and from which to export staggering quantities of primary products (something which I have contrasted with the very different relationships between China's most advanced regions and its peripheries, most of which were rapidly filling up by the late 18th/early 19th century). And for all that European technology advanced a long a broad front in this period, I wonder how much many of these clever innovations would have mattered had it not been for the fundamental coal/steam engine breakthrough in Britain -- one which took plenty of knowledge to be sure (though it should be noted that both the Chinese and the Indians, and probably others, had all the basic science you needed for a steam engine), but also depended, as I have argued elsewhere, on the fortunate location of large coal deposits near the crucial market and artisanal center of London (which both enabled and encouraged the very inefficient and awkward first steam engines, useful only for pumping out mines,into something vastly more important). By contrast, virtually all of China's coal was hundreds of land-locked miles from the markets and artisanal talents of the Lower Yangzi, Lingnan, and Southeast Coast. Moreover, the problem in these mines was not water that needed to be pumped out, but, on the contrary, such severe aridity that explosions were happening all the time. So while there were limited incentives to try shake Chinese coal mining (by this time a rather backward sector) out of its torpor, the Chinese instead dealt with fuel shortages through the diffusion of extremely efficient stoves, a very far-flung timber trade, the use of crop residues (and finding ways of preventing that diversion of residues from impoverishing the soil) and so on -- all quite clever, too, but not part of a path that would lead either to the fundamental break with dependence on annual flows of solar energy that England's fossil fuel breakthrough represented, or the tremendous iron/steel boom, or the clever idea of putting the steam engine on a set of tracks to solve transport problems, etc. The point is not that Europe was "just lucky," by any means, but that a lot of things are involved in determining which technological advantages/disadvantages opened a world of self-sustaining growth (or foreclosed it) and which led to incremental improvements (or the lack of them) but no great transformation. In this regard, I'm somewhat dubious of Landes' apparent stress (I'm still getting his argument second hand, so I may be being unfair) on clocks and spectacles. It's true, Europeans were the world's leaders in both these areas (as far as I know) by the 18th century, but Chinese made remarkably good copies of both (see Needham, for instance, on the very high quality of cuckoo clocks based on European models but made in places like Suzhou and Hangzhou --if the point is that the skills developed in making these gadgets developed a reservoir of skills in making complex gear systems, etc., which had broader application, the extremely elaborate jackwork of these gadgets should establish that this was no European monopoly.) Assertions of blanket technological superiority still seem shaky to me, even near the end of the 18th century: and when we try to figure out which kinds of technological superiority mattered, we get a series of path-dependent stories in which scientific knowledge and artisanal cleverness per se often don't seem to me the most important factors.

As far as having institutions for developing human capital, is concerned, it seems to me one would have to grant a Western European and North American advantage by sometime in the mid-19th century, with the spread of public education and so on. But at least so far, I don't see strong evidence of a clear advantage that kicks in early enough to explain the beginnings of the great divergence.

Finally, we get to exploiting other parts of the world, at which Europeans clearly did excel. Clearly, this story cannot be reduced to "Europeans were nastier, or better at being nasty," and I don't think people who point to this factor generally mean to do so: effectively exploiting the new World in particular involved navigational skills, joint-stock companies, etc., along with plenty of violence, good luck with geography and germs, and a peculiar political economy (a bunch of relatively equal states almost constantly at war with each other) which quite likely did more harm than good within Europe's own boundaries, but created big benefits for Europe insofar as it encouraged overseas expansion. (Not to mention the irony that the buoyancy of Chinese silver demand had much to do with keeping the price high enough to make the first couple of centuries of European presence in the New World sustainable in the first place: take away that demand, as Dennis Flynn and others have shown, and the slide in silver's value would have been so rapid in the 16th century that Spanish administration in the New world would have become a money loser within a few decades.) Again, the point is not to "bash Europe" and say that the post-1750 miracle can be reduced to luck and ruthlessness, or that it can be explained entirely based on post-1750 developments: I would certainly agree with Brad DeLong that we don't want to make the "Rostow error" of thinking that just because we can't see big divergences until the last couple hundred years there weren't some pretty important differences that go back further. The point is, I think, that those differences cut both ways, so that only at the very end does it become clear that one place is headed for something much better than the other; indeed what might have seemed like advantages at one point (e.g the more or less free land and labor markets in china's hinterlands, as opposed to the many growth- slowing institutions in much of continental Europe) could be disadvantages later. Moreover, this eventual result depends on complex interactions involving many factors that neither Europeans nor Chinese could have predicted or controlled. So by all means, let's look for stories that place the 19th century in the context of much longer regional trajectories,as Landes does...

-- Ken Pomeranz (kpomeran@benfranklin.hnet.uci.edu), May 05, 2000.

> The problem is that Landes is also a follower of the tradition of M.M. > Postan (as am I) --that before the industrial revolution it is probably > informative and insightful to try to analyze human civilizations from the > perspective of ecologico-cultural equilibrium. When living standards are > relatively high, birth rates are high and death rates are low; when living > standards are relatively low birth rates are low and death rates are high > (or, rather, variable).

The evidence for this is partial and there are counterfactuals. The booming West European population 1750-1800 was generally and often accompanied by depressed living standards, hunger and civil unrest. Equally, there is no single 50-year period in the previous 500 years where population swings in Europe and Asia cannot be more easily acsribed to the obvious effects of war, plague, adverse or positive climate fluctuations. In general, there has been no eco-equilibrium in human settled populations during the present Interglacial, ie, the agrarian period. The entire period has been characterised by secular growth trends in population and productivity. So what is the evidence for the existence of 'set-points' which in any case are moving targets? So the qualitative change which the IR represents was only an inflection in a long-term underlying trend; and it's too early in any case to argue that we've escaped the Malthusian trap :).

The argument for the effects of American silver and the European price revolution, in altering the balance of input and especially labour costs between Europe and Asia is more compelling. The real catalyst of change however was the mobilisation of fossil fuels, which also of course explains why Britain and Belgian has an IR and the Dutch didn't. Belgium and Britain had coal. Holland did not. .

-- Mark Jones (jones_m@netcomuk.co.uk), May 05, 2000.

I hope I'll be permitted to dwell at some length on Barry Pavier's and Thomas Bartlett's posting since these deal precisely with some themes of my own research:

>Looking very briefly at a couple of examples, work in >recent years on C18 South Asia (notably, but not only, by Chris >Bayly) demonstrates how the East India Company's empire rested for >sixty years on collaboration with sophisticated and extensive >merchant classes.

True but: 1.) Our knowledge of the 18th century (Bengal to some extent excepted) is still extremely scanty. That this is best known for the EIC is mainly because these sources are easier to use. It would not be that hard to show however, I think, that the Maratha svaraj was also built on support of powerful and sophisticated Indian merchants too or, for that matter, that this also applied to the Dutch and the Portuguese. And if there's one thing we should be wary of, it is to overestimate the importance of the EIC in the early eighteenth century. The VOC (Dutch) was a far bigger organization than the EIC until about 1720. Why were the English succesful then ? I think rather because they were able to rally rural elites who felt threatened by the disintegration of the command-structures of the Mughal empire after 1730.

2.) The problem with the term `the merchant class' is that it covers everybody from the local seller of arrack to the Jagat Seth. I do not think the Indian merchants were a single group, let alone a class. The social formation (often clumsily called the `middle class') where large merchants belonged to, would include very diverse groups of warriors, priests and poets too. And, moreover, the middle classes were very unclear divided from the landlord-elites, particularly in the case of giant banking-house like the Jagat Set, who were very much part of the `old' Mughal elite.

So yes - class-analysis is more critical for research than the cross- country analysis of the Landes-discussion, since the critical issue is not how much wealth there is but how it is divided. So, I fully agree with Brian on this, but we need a far more refined model of the class-structure in the eighteenth century, starting from South Asian categories rather than European.

What comes out of a reading of this era is that, >with the exception of Tipu Sultan, no-one in South Asia realised >the nature of the people with whom they were dealing, and thus did >not undestand the dynamics of capitalism.

I do know what Barry means by capitalism - if he means commercial capitalism then Indian merchants had a pretty good grasp of it (and so, for that matter, had Indian soldiers) if he means industrial capitalism, then that only seriously began to infer with the Indian trade after 1820. But, anyhow, it could be argued that British expansion Wellesley-style was not so much grounded in capitalism but was very much grounded in the military absolutism (like Russia and Prussia) of the eighteenth century and that it was rather anti- capitalist than capitalists. The Wellesley-brothers would have been horrified had they heard that they are now called `agents of capitalism' - or shortly probably portfolio-capitalist. Sure, the officers of the British Indian army were there for profit, but then so were the officers of the Marathas or the Rajputs. And if it would have been for the `capitalists' on the Board of the Company the British might not have built up an army to conquer an empire at all.

In fact, I think it was precisely because of the predominance of the military/landed groups within the administration of the Company after Cornwallis that the British were able to build up a coalition with Indian elites, since their military/fiscal idiom was very familiar to the latter. So, it was not the British elites did not understand the Indian elites the two understood each other very well - talking a common idiom of nobility and landed wealth which they largely shared.

Again, I would also argue that Indian elites perfectly understood the `geopolitics' of the EIC's army - at least I recently saw a couple of letters of Nana Phadnis, which prove that the peshwa, for one, was very well aware of what the British were doing - and well realized the British were aiming for dominion over the whole of India. The problem was that there was not much the Marathas could do about it - because the British were using an instability within the Indian state- system which resulted from the same mechanism of dissent (Andre Wink's fitna) as what the Marathas were using. Basically, Indian elites sited with the British because it was in their interest to do so - mainly since the British protected elite's both against rural revolts and against rival groups.

So, The British were thus able >to wage a successful class struggle against these merchant classes in the >first three decades of the C19 - even though they had been formally ruling >them for the previous sixty years.

Again, which groups are you talking about ? If there was one revolutionary measure of the British it would be the permanent settlement. It could be argued that permanent settlement favoured two groups: the zamindars and rural money-lenders, while inflicting massive damage to the peasant-economy and the peasantry. I would certainly argue that permanent settlement was class-war and was meant as class-war against the small independent peasants. But it was certainly not intended - and didn't work out either - as class-war against the merchants or against the landlords. What it did was to handle the control over the peasants precisely to those groups who had helped the British.

>Thus there is nothing inherent about who's more advanced than someone >else - it depends on the material conditions of a society and the >most important element in this is class conflict, inside particular >societies or between ruling classes in different societies.

This may be an unpopular position but I agree - basically, I would argue, the rapid development of trade, agriculure and of state control over taxation under the Mughals caused the old patronage- system of power to break down in the first half of the eighteenth century. A breakdown which had some elements of a class-struggle but was mainly a struggle within the elite: a restructing of relationships of power away from the `central state' to the local landlords. It was this struggle which gave the British their initial chance.

And in reply to Thomas C. Bartlett:

May I remind you that Louis Dermigny studied the silver-flow to China already in the ninety - fifties and sixties for the eighteenth century as did Vitorinho Magelhaes Godinho for the sixteenth and may I, please, point out that historians at IGEER (Leiden) have been working on the bullion-trade of the VOC for twenty years now ?

Maybe the theme on which IGEER is now working (that is the flow of bills between Asia and Europe) will be discovered by a new `Californian school' in twenty years which will reason (as has been argued for the bullion-flow to the Baltic) that it was not so important after all, since more `invisible' money was flowing back to Europe than was sent in cash to China (and to India). This, of course, presupposes that there was a global market for fiduciary money in the seventeenth and eighteenth century but for the eighteenth century this argument does not seem so far fetched. Particulary for India, for it may be emphasized that the largest European trading-organization in Asia, the VOC, sent very, very little cash to China and more than half of the cash received was - in the late seventeenth century - sent to Bengal alone.

Since India was receiving as much cash as China I find explanations of bullion-flows starting from `local' Chinese conditions alone improbable. Rather, I would argue, the bullion-flow `to the East' (including Ottoman Turkey another major recipient which is always forgotten !) resulted from the increasing substitution of taxation in services and goods by taxation in cash which necessitated more media of exchange. And, therefore, this was a function of the strengthening of the state in Europe and Asia. As such the bullion-flows were a result of the class-relations within the countryside which is to argue Barry Pavier's overall point more vigorously.

-- R.J.Barendse (barendse@coombs.anu.edu.au), May 05, 2000.

Herewith a brief response to the critical-though-friendly comments by Mike Robison, Deirdre McCloskey, Rebecca Menes, and Ed Perkins, all of which floated out of cyberspace and into my comnputer today.

1) Mike, Deirdre, and Ed suggest that a flaw in my basic argument -- that accumulation from the New World after 1500 initiated the rise of Europe relative to other civilizations -- is the fact that economic development post-1500, and later the Industrial Revolution, took place in northwestern Europe, not in Iberia, although the New World wealth went to Iberia.

A partial answer to this critical point is in my 1993 book *The Colonizer's Model of the World: Geographical Diffusionism and Eurocentric History*, p. 211: "There is debate as to why the center shifted from Iberia to the lower Rhine - southern England region. Perhaps the same forces which had made this northern region a mercantile-maritime center in the Middle Ages permitted it to gain control of the overseas enterprise: namely, large population, abundant nearby fertile land and forest resources, access to many markets (the Rhine, the Baltic,etc.). Vis -a-vis Italy, it held most of these same advantages plus that of location on the Atlantic and possession of the requirements for rapid growth of oceanic shipping and fishing fleets."

I should add this perhaps crucial factor, largely derived from the fact of prior economic dominance: merchant communities of northern Europe and Italy bankrolled much of the American adventure, managed to become the suppliers of manufactured goods which were exchanged for the American preious metals obtained by the Spaniards, and participated actively in the adventure (the Welsers for instance purchased the right to colonize part of Venezuela and had factories in Hispaniola and Seville in the 16th C.; Antwerp captured the market for Asian spices; Dutch bottoms carried Brazilian sugar, while Dutch interests partially controlled the Brazilian plantation enterprise and participated in the slave trade, etc.).

2) Mike asks: "Was the gold and silver obtained from the americas that significant in relation to the scale of the Asian economies?" Deirdre asks whether American specie is relevant. Again I will shamelessly quote from my book (pp. 189-193):

"We notice first the export of gold and silver from the Americas and its insertion within the circuits of an eastern hemispheric market economy in which gold and silver already provide the common measure of value, directly or indirectly,in almost all markets. ...By 1640 at least 180 tons of gold and 17,000 tons of silver are known to have reached Europe.(The real figures must be at least double these amounts,since records were poor... and since contraband was immensely important)...In the period 1561-1580 about 85% of the entire world's production of silver came from the Americas. The simple quantity of gold and silver in circulation in the Eastern Hemisphere economy as a whole was profoundly affected: hemispheric silver stock may have been tripled and gold stock increased by 20% during the course of the l6th century as a result of bullion brought from America. ... (In Europe, the circulation of metal coins increased eight or ten fold in the course of the century.) This process must be seen in perspective: it is money flowing constantly and in massive amounts into Europe, through Europe, and from Europe to Asia and Africa, constantly replenished at the entry points with more American supplies, and constantly permitting those who hold it to offer better prices for all goods, as well as labor and land, in all markets, than anyone else had

ever been able to offer in prior times. The importance of these flows of gold and silver is routinely underestimated by scholars, mainly for three reasons... First, the process is seen somehow as purely primitive accumulation. But the metals were mined by workers and transported by workers; the enterprise overall involved risk capital and all of the other familiar traits of the sorts of protocapitalist productive enterprises which were characteristic of that time (that it was partly state controlled does not alter this argument, nor does the fact that some of the labor was unfree); and very major economic and social systems were built around the mines themselves in Mexico, Peru, and other parts of America.Second, the argument that precious metal flows significantly affected the European economy is dismissed by some scholars as "monetarism"...The error in this charge is a failure to see the 16th century economy in its own, appropriate,geographical and social context...Two facts here are basic.First of all, the possession of precious metal was highly localized in space. European merchants, as a community, obtained it and set it in motion outward, toward rural Europe and toward markets outside of Europe. Second of all, the supply of precious metal was essentially continuous, and therefore the advantage held by European protocapitalists in terms of prices they could offer for commodities, labor, and land was persistently higher than the prices which competitors anywhere could offer...A third sort of doubt... about the importance of American gold and silver is associated with the critique of Earl Hamilton's classic theory... He was (partly) wrong about the mechanisms which brought about this change. The metals did not transform the economy in any direct sense. Rather, they enriched the protocapitalist class and... gave them the power to...[transform] a political and social system..." [Citations are in the book.]

I would add: Gold and silver were commodities, very high-value products obtained at extrmely low cost by the European merchant community and then sold in exchange for other commodities, land, labor, etc., both inside and outside of Europe. That's how they got rich.

3) Mike comments on my (very tentative) argument that steadily increasing and unlimited markets led manufacturers to adopt new technology in the (mainly early 19th century and later) Industrial Revolution: "Steadily expanding markets are a very useful thing, however [Asian] businesses had larger markets...it seems if the the scale of markets was the 'unique advantage,' the advantage would have gone to the Asians."

The issue is not scale but rate of change. Formal and informal colonialism provided pre-IR Europe with huge new markets, and the economic development (and warfare) of 17th and 18th C Europe was producing additional new markets. I have not seen any argument that Asia and Africa in this period were enjoying anything like the same rate of growth of demand for non-subsistence products, nor do I know of any prior period anywhere where manufacturers could contemplate rapid and continuous expansion of the market for their commodities and hence could logically -- perhaps regardless of real labor costs -- invest in new technology. This constantly expanding, constantly modernizing system was put together mainly in the first third of the 19th century. The rest is history (and geography).

3) Rebecca: "China is handicapped because it is a unified state." In another post I gave my reasons for disputing the view that Europe's political fragmentation was more favorable to growth...

-- James Blaut (70671.2032@compuserve.com), May 05, 2000.

>The argument for the effects of American silver and the European price >revolution, in altering the balance of input and especially labour costs >between Europe and Asia is more compelling. The real catalyst of change >however was the mobilisation of fossil fuels, which also of course >explains why Britain and Belgian has an IR and the Dutch didn't. Belgium >and Britain had coal. Holland did not.

Cheap to float the coal downstream from Belgium into the Rhine delta-- but Dutch labor costs were too high for it to be profitable to use it in factories (which is another way of saying that Dutch workers had higher-productivity things to do).

But I should stop talking about Holland or else I will say something wrong and be very embarrassed when Jan de Vries returns from England...

(Responding to Ken Pomeranz):

> The question of promoting technological change (in part by encouraging >science) seems like the best case for a slowly maturing Western European >advantage -- Margaret Jacob's work on the culture of science in Britain, >for instance, makes a lot of sense to me. But even here, we are talking >about a post-1500 development, not a post- 1000 one.

I think you are probably right...

>Moreover, we should remember that >Europe was not ahead in all important areas, even as late as 1800 -- and >that which technological advantages turned out to be crucial and which >relatively unimportant depended on a lot of things. Thus, Europe remained >relatively backward in agricultural yields per acre even in 1800 (though >the potato was helping it close some of that gap) -- and that particular >bit of backwardness might have mattered a lot more had it not been for >[what Eric Jones called "ghost acreage."

I find myself wanting a *relatively* *detailed* technological balance sheet for Northwestern Europe vs. Yangtse Delta China in 1400, 1600, and 1800. My problem is that I'm not competent to construct the "China" side of it...

>By contrast, virtually all >of China's coal was hundreds of land- locked miles from the markets and >artisanal talents of the Lower Yangzi, Lingnan, and Southeast Coast. >Moreover, the problem in these mines was not water that needed to be >pumped out, but, on the contrary, such severe aridity that explosions were >happening all the time.

So you can't build a steam economy until you already have your railroads built...

>Finally, we get to exploiting other parts of the world, at which >Europeans clearly did excel. Clearly, this story cannot be reduced to >"Europeans were nastier, or better at being nasty,"

But they were pretty nasty. Is it an accident that the two greatest mass-murderers in human history--Hitler and Stalin--were born in Europe?

(Although Mao may ultimately win the prize, depending on how large the Great Leap Forward famine was and whether one regards it as genocide

-- Bradford DeLong (jbdelong@home.com), May 05, 2000.

Ken Pomeranz writes: >By contrast, virtually all >of China's coal was hundreds of land-locked miles from the markets and >artisanal talents of the Lower Yangzi, Lingnan, and Southeast Coast. >Moreover, the problem in these mines was not water that needed to be >pumped out, but, on the contrary, such severe aridity that explosions were >happening all the time.

Actually coal mine explosians were also common in England and this illustrates the steady stream of innovations that characterized the industrial revolution. Coal mine explosions are caused by methane gas, sparks, and coal dust. Mines in England had all three. In the late 1700's and early 1800's they recognized that some combination of these was causing the explosions. The miners words for these were "firedamp" for methane concentrations high enough to be ignited by a spark and "blackdamp" for methane concentrations so high the drove out oxygen and miners suffocated. An early (19th century development?) was the miners lamp. It had a small screen that prevented the flame from igniting the methane and the flame could be "read" so that they could measure the amount of concentration of methane. The miners lamp continues to be used today. And of course there were the canaries...

I find Ken's work to be extremely interesting and want to know more. Yet I also think the point is that there was a whole stream of innovations that were introduced in addition to the pump which lead to an increase in coal mine productivity. I find Landes argument about time pieces and their widespread use convincing. A series of small technical innovations widely applied, increased use of measurement, and the reinforcement of one innovation by another that led to small gains in profits and productivity make for larger societal differences. I do not necessarily think the point is that China and England had the same standard of living, or that invention and ideas did not develop independently (or were stolen) in China and England but that innovation allowed England to develop an alternative fuel which meant trees could be used for ships rather than fuel and those ships could be used for carrying bullion, products, slaves, and piracy and so on.

The most recent Scientific American has another interesting example that relates to this discussion. During Japan's long period of isolation matehmatics continued to evolve, simple and extremely complex problems involving mathematical proofs and diagrams were hung in Japanese temples. They contained the problem and the solution and challenged visitors to duplicate the proof. Some of these proofs involved a type integral and differential calculus that seems to have been discovered independently in Japan at about the same time as Newton and Liebniz. What I found interesting is that in Japan they were hung in temples and do not appear to have found wider use while in Europe these inventions began to find wide use in science and engineering almost immediately.

-- lawrence boyd (boyd@Serv1.arthum.Hawaii.Edu), May 05, 2000.

Dear Jim Blaut,

The intriguing extracts from your book don't quite respond to the point I was making about precious metals.

It's an economist's point. If my august Authority doesn't strike you dumb, ask any economist whose judgment you trust if she doesn't agree with the following:

Gold and silver are good things, yes, as are wheat and iron and wool and haircuts. But non-economists are inclined to assign them greater importance than they deserve. We economists think the other people are merely confused, and we have been stepping forward smartly since 1776 to set them straight. (For this they have not shown proper gratitude.)

Our point is that money is just one useful thing among others, and like eyeglasses and clocks is not to be elevated beyond its reasomable impact. Its reasonable impact is its contribution to efficiency (I set aside your much more persuasive point of political economy: that WHO got the money shook up the political balance: tho not I should think in a desirable way for growth--it gave Catholic Iberia the coin to push ignorance and intolerance, as David Landes would say) The part of national income attributable to an elastic money supply is small, some few percent, and the magnitude could be nothing like what's necessary to explain European dominance. (European dominance probably had more to do with other metallic matters---cannon boring and nail-making, for example--than with Spanish treasure.)

My opinion here is not "monetarist" (although I and Dennis Flynn are for this period world monetarists--see his recent book, and an old review of mine on the anti-monetarism of an earlier generation, in the Journal of Political Economy, Nov/Dec 1972)). It's the common coin since Smith among economists.

Please don't badmouth Earl Hamilton in my hearing! I loved the man: what a prince.

Believe me. Or. . . believe me?

Sincerely,

-- D. McCloskey (mcclosky@blue.weeg.uiowa.edu), May 05, 2000.

Marathas (my area of research), have been mentioned several times (Bartlett, etc.) in this discussion, hence these remarks. To begin, I come down very much on the side of the "short" bifurcation rather than the long one. Until the middle of the eighteenth century, Indian rulers did not look to any of the European trading powers for anything of any significance. Indigenous, as opposed to European, records show that kingly income from trade was minor compared to income from taxation on agriculture and indigeous manufacture. The Maratha tax system was the among the most sophisticated in the world, complete with field by field yearly surveys, written contracts and accounts, auditing and written apppeals processes. Similarly, the court system had full written records of evidence. precedence, and judgements. Kings knew how to promote prosperity through tax breaks for development of agricuture, and tax breaks for development of market towns. The credit networks and the check-clearing system were very sophisticated and quite capable of moving very large sums across the lenghth and breadth of India. India was not looking to Europe for institutional forms, either in business or government.

When, then, did kings begin to be aware that European traders were something different than, for example, the Armenians and Arabs who had been along the western coast for centuries? For the Mararthas, it was some time in the late seventeenth century. A mirror-of-princes style advice by a senior courtier to a young ruler suggested that he never grant land to the "hat wearing" traders because, unlike all the others, these groups "represented kings". The Marathas knew all about the Portuguese seizure of Goa (many of their Brahmin administrators were from Goa) and had some contact with the British at Bombay

It was not until the middle decades of the eighteeth century that Maratha rulers thought that the Europeans had anything significant that they wanted; that was military, specifically the infantry/artillery combination which had been successful in the French-British wars fought in both South India and Bengal. Within a few years, many Indian kings knew that their artillery casting, musket manufacture, and infantry training were inferior to what they saw the Europeans producing; they moved vigorously to hire units and expertise. The East India Company moved just as vigorously to deny this knowledge to Indian rulers (through severe restrictions on access to their armouries, for example),

We should remember that it was in the same period that the Europeans realized that collecting taxes through the indigenous system was far more profitable than trade and - even more importantly - that indigeous taxes were the only thing against which indigenous bankers would offer large scale credit. This credit was esential to paying troops and running a war. It was only after the British seized Bengal and land up the Madras coast that they were credible players to the Indian banking community.

We should be very cautious in our analysis of "alliances" between European powers and Indian "elites". Often, the Europeans were only pusuing a standard Indian diplomatic/military practice, that is, supporting a weak candidtate for a throne who could only stay in power with their support, then extracting tax revenue ro their "help".

Overall, the change I see happening in England and not happening in India especially in the eighteeth century was a gradual movement of useful knowledge from personal/family/guild to a somewhat more public sphere. I am thinking of the establishment of the Woolich arsenal with its constant experiments and documentation leading to regularization of ball size and weight and codification of firing procedure and drill throughout the British forces. I am thinking of the patent process and journals of agricultural improvement. Also, the shipping newpapers and publication of agricutural prices. Government sponsopship of naval testing.

I am not arguing the older "guns and sails" formulation. There was nothing inevitable about the Europeans winning in India. They had their share of serious setbacks, both military losses and financial disasters. Still, their "edge" seems to be the results of this sort of accumulation of knowledge, especially government patronized military knowledge which kept acccumulating in the home country and was then used in colonial ventures.

-- Stuart Gordon (Gordonstu@aol.com), May 05, 2000.

A brief but pithy respons to David Gress, who first of all says > >"Before people divide too radically into two camps on the origins of >economic growth, modernity, and Western prosperity -- the North/Landes camp >versus Jack Goldstone's California camp -- perhaps they ought to consider >that both may have a part of the truth." But David parks himself firmly in >the Landes camp. Landes gives a lot of attention to the post-1500 factors >in "the rise of Europe," but his real argument is that the uniquely >progressive European mentality/culture and the European environment (not >nastily tropical nor Wittfogelianly arid) are the basic explanation for the >later rise of Europe. > >If I read Jack Goldstone correctly, his "California school" does not draw >into the explanation any pre-1500 propensities. Speaking for myself, I have >come to reject flatly the idea that Europe pre-1492 had any potentiality or >actuality for later development that was not also present in non-Europe. So >the line is drawn in the sand: either Europe had something marvelous going >for it back in medieval and/or ancient times (Landes, Jones, et al.), or it >did not (the Californio-centrics). > >Respectfull submitted > >Jim Blaut >Geographer

Is it possible we are confusing necessary and sufficient conditions? It is possible "to reject flatly the idea that Europe pre-1492 had any potentiality or actuality for later development that was not also present in non-Europe" and still believe that the bifurcation is not totally independent of the pre-15th century world. The Industrial Revolution isn't just a horse race (why Europe, not Asia?), it's something that happened. In this light, I would like to make one point and ask one question:

1. We can certainly come up with regions/nations/cultures that did not have the "potentiality" before 1492. European history doesn't have to be unique, just slightly unusual, in order to play an role in understanding why Europe develops differently post-1800. There can be interactions between European conditions before 1500, not unique but unusual in human experience, and European conditions after 1500, which may also have been not unique, but unusual. The interaction, however, may have been unique. (And if not unique, was at least undeniably first.)

2. I am not clear which of the following counterfactuals is being proposed in the anti-Landes camp: 1. Landes is wrong because if Europe had been magically erased than some other region (frontrunners currently SE China or parts of India) would have invented the IR, only a generation or so later. Many (or at least 3 other) regions could have had an IR, but Europe got one a few key years earlier. 2. The IR is the invention of a world system. Disturb any part and it doesn't happen. So we have to understand not Asia versus Europe, but Asia and Europe. Of course we then have to determine how one tiny part of this system seems to get all the goodies, at least for a little while.

It seems important to differentiate these two alternatives when discussing evidence and when discussing what are important future research agenda.

Rebecca Menes

Charles Grove Haines Visiting Assistant Professor Department of Political Science University of California--Los Angeles

The lyf so short, the crafte so long to learn...

-- Rebecca Menes (menes@ucla.edu), May 05, 2000.

deal precisely with some themes of my own research:

>Looking very briefly at a couple of examples, work in >recent years on C18 South Asia (notably, but not only, by Chris >Bayly) demonstrates how the East India Company's empire rested for >sixty years on collaboration with sophisticated and extensive >merchant classes.

True but: 1.) Our knowledge of the 18th century (Bengal to some extent excepted) is still extremely scanty. That this is best known for the EIC is mainly because these sources are easier to use. It would not be that hard to show however, I think, that the Maratha svaraj was also built on support of powerful and sophisticated Indian merchants too or, for that matter, that this also applied to the Dutch and the Portuguese. And if there's one thing we should be wary of, it is to overestimate the importance of the EIC in the early eighteenth century. The VOC (Dutch) was a far bigger organization than the EIC until about 1720. Why were the English succesful then ? I think rather because they were able to rally rural elites who felt threatened by the disintegration of the command-structures of the Mughal empire after 1730.

2.) The problem with the term `the merchant class' is that it covers everybody from the local seller of arrack to the Jagat Seth. I do not think the Indian merchants were a single group, let alone a class. The social formation (often clumsily called the `middle class') where large merchants belonged to, would include very diverse groups of warriors, priests and poets too. And, moreover, the middle classes were very unclear divided from the landlord-elites, particularly in the case of giant banking-house like the Jagat Set, who were very much part of the `old' Mughal elite.

So yes - class-analysis is more critical for research than the cross- country analysis of the Landes-discussion, since the critical issue is not how much wealth there is but how it is divided. So, I fully agree with Brian on this, but we need a far more refined model of the class-structure in the eighteenth century, starting from South Asian categories rather than European.

What comes out of a reading of this era is that, >with the exception of Tipu Sultan, no-one in South Asia realised >the nature of the people with whom they were dealing, and thus did >not undestand the dynamics of capitalism.

I do know what Barry means by capitalism - if he means commercial capitalism then Indian merchants had a pretty good grasp of it (and so, for that matter, had Indian soldiers) if he means industrial capitalism, then that only seriously began to infer with the Indian trade after 1820. But, anyhow, it could be argued that British expansion Wellesley-style was not so much grounded in capitalism but was very much grounded in the military absolutism (like Russia and Prussia) of the eighteenth century and that it was rather anti- capitalist than capitalists. The Wellesley-brothers would have been horrified had they heard that they are now called `agents of capitalism' - or shortly probably portfolio-capitalist. Sure, the officers of the British Indian army were there for profit, but then so were the officers of the Marathas or the Rajputs. And if it would have been for the `capitalists' on the Board of the Company the British might not have built up an army to conquer an empire at all.

In fact, I think it was precisely because of the predominance of the military/landed groups within the administration of the Company after Cornwallis that the British were able to build up a coalition with Indian elites, since their military/fiscal idiom was very familiar to the latter. So, it was not the British elites did not understand the Indian elites the two understood each other very well - talking a common idiom of nobility and landed wealth which they largely shared.

Again, I would also argue that Indian elites perfectly understood the `geopolitics' of the EIC's army - at least I recently saw a couple of letters of Nana Phadnis, which prove that the peshwa, for one, was very well aware of what the British were doing - and well realized the British were aiming for dominion over the whole of India. The problem was that there was not much the Marathas could do about it - because the British were using an instability within the Indian state- system which resulted from the same mechanism of dissent (Andre Wink's fitna) as what the Marathas were using. Basically, Indian elites sited with the British because it was in their interest to do so - mainly since the British protected elite's both against rural revolts and against rival groups.

So, The British were thus able >to wage a successful class struggle against these merchant classes in the >first three decades of the C19 - even though they had been formally ruling >them for the previous sixty years.

Again, which groups are you talking about ? If there was one revolutionary measure of the British it would be the permanent settlement. It could be argued that permanent settlement favoured two groups: the zamindars and rural money-lenders, while inflicting massive damage to the peasant-economy and the peasantry. I would certainly argue that permanent settlement was class-war and was meant as class-war against the small independent peasants. But it was certainly not intended - and didn't work out either - as class-war against the merchants or against the landlords. What it did was to handle the control over the peasants precisely to those groups who had helped the British.

>Thus there is nothing inherent about who's more advanced than someone >else - it depends on the material conditions of a society and the >most important element in this is class conflict, inside particular >societies or between ruling classes in different societies.

This may be an unpopular position but I agree - basically, I would argue, the rapid development of trade, agriculure and of state control over taxation under the Mughals caused the old patronage- system of power to break down in the first half of the eighteenth century. A breakdown which had some elements of a class-struggle but was mainly a struggle within the elite: a restructing of relationships of power away from the `central state' to the local landlords. It was this struggle which gave the British their initial chance.

And in reply to Thomas C. Bartlett:

May I remind you that Louis Dermigny studied the silver-flow to China already in the ninety - fifties and sixties for the eighteenth century as did Vitorinho Magelhaes Godinho for the sixteenth and may I, please, point out that historians at IGEER (Leiden) have been working on the bullion-trade of the VOC for twenty years now ?

Maybe the theme on which IGEER is now working (that is the flow of bills between Asia and Europe) will be discovered by a new `Californian school' in twenty years which will reason (as has been argued for the bullion-flow to the Baltic) that it was not so important after all, since more `invisible' money was flowing back to Europe than was sent in cash to China (and to India). This, of course, presupposes that there was a global market for fiduciary money in the seventeenth and eighteenth century but for the eighteenth century this argument does not seem so far fetched. Particulary for India, for it may be emphasized that the largest European trading-organization in Asia, the VOC, sent very, very little cash to China and more than half of the cash received was - in the late seventeenth century - sent to Bengal alone.

Since India was receiving as much cash as China I find explanations of bullion-flows starting from `local' Chinese conditions alone improbable. Rather, I would argue, the bullion-flow `to the East' (including Ottoman Turkey another major recipient which is always forgotten !) resulted from the increasing substitution of taxation in services and goods by taxation in cash which necessitated more media of exchange. And, therefore, this was a function of the strengthening of the state in Europe and Asia. As such the bullion-flows were a result of the class-relations within the countryside which is to argue Barry Pavier's overall point more vigorously.

-- R.J.Barendse (barendse@coombs.anu.edu.au), May 05, 2000.

Herewith a brief response to the critical-though-friendly comments by Mike Robison, Deirdre McCloskey, Rebecca Menes, and Ed Perkins, all of which floated out of cyberspace and into my comnputer today.

1) Mike, Deirdre, and Ed suggest that a flaw in my basic argument -- that accumulation from the New World after 1500 initiated the rise of Europe relative to other civilizations -- is the fact that economic development post-1500, and later the Industrial Revolution, took place in northwestern Europe, not in Iberia, although the New World wealth went to Iberia.

A partial answer to this critical point is in my 1993 book *The Colonizer's Model of the World: Geographical Diffusionism and Eurocentric History*, p. 211: "There is debate as to why the center shifted from Iberia to the lower Rhine - southern England region. Perhaps the same forces which had made this northern region a mercantile-maritime center in the Middle Ages permitted it to gain control of the overseas enterprise: namely, large population, abundant nearby fertile land and forest resources, access to many markets (the Rhine, the Baltic,etc.). Vis -a-vis Italy, it held most of these same advantages plus that of location on the Atlantic and possession of the requirements for rapid growth of oceanic shipping and fishing fleets."

I should add this perhaps crucial factor, largely derived from the fact of prior economic dominance: merchant communities of northern Europe and Italy bankrolled much of the American adventure, managed to become the suppliers of manufactured goods which were exchanged for the American preious metals obtained by the Spaniards, and participated actively in the adventure (the Welsers for instance purchased the right to colonize part of Venezuela and had factories in Hispaniola and Seville in the 16th C.; Antwerp captured the market for Asian spices; Dutch bottoms carried Brazilian sugar, while Dutch interests partially controlled the Brazilian plantation enterprise and participated in the slave trade, etc.).

2) Mike asks: "Was the gold and silver obtained from the americas that significant in relation to the scale of the Asian economies?" Deirdre asks whether American specie is relevant. Again I will shamelessly quote from my book (pp. 189-193):

"We notice first the export of gold and silver from the Americas and its insertion within the circuits of an eastern hemispheric market economy in which gold and silver already provide the common measure of value, directly or indirectly,in almost all markets. ...By 1640 at least 180 tons of gold and 17,000 tons of silver are known to have reached Europe.(The real figures must be at least double these amounts,since records were poor... and since contraband was immensely important)...In the period 1561-1580 about 85% of the entire world's production of silver came from the Americas. The simple quantity of gold and silver in circulation in the Eastern Hemisphere economy as a whole was profoundly affected: hemispheric silver stock may have been tripled and gold stock increased by 20% during the course of the l6th century as a result of bullion brought from America. ... (In Europe, the circulation of metal coins increased eight or ten fold in the course of the century.) This process must be seen in perspective: it is money flowing constantly and in massive amounts into Europe, through Europe, and from Europe to Asia and Africa, constantly replenished at the entry points with more American supplies, and constantly permitting those who hold it to offer better prices for all goods, as well as labor and land, in all markets, than anyone else had

ever been able to offer in prior times. The importance of these flows of gold and silver is routinely underestimated by scholars, mainly for three reasons... First, the process is seen somehow as purely primitive accumulation. But the metals were mined by workers and transported by workers; the enterprise overall involved risk capital and all of the other familiar traits of the sorts of protocapitalist productive enterprises which were characteristic of that time (that it was partly state controlled does not alter this argument, nor does the fact that some of the labor was unfree); and very major economic and social systems were built around the mines themselves in Mexico, Peru, and other parts of America.Second, the argument that precious metal flows significantly affected the European economy is dismissed by some scholars as "monetarism"...The error in this charge is a failure to see the 16th century economy in its own, appropriate,geographical and social context...Two facts here are basic.First of all, the possession of precious metal was highly localized in space. European merchants, as a community, obtained it and set it in motion outward, toward rural Europe and toward markets outside of Europe. Second of all, the supply of precious metal was essentially continuous, and therefore the advantage held by European protocapitalists in terms of prices they could offer for commodities, labor, and land was persistently higher than the prices which competitors anywhere could offer...A third sort of doubt... about the importance of American gold and silver is associated with the critique of Earl Hamilton's classic theory... He was (partly) wrong about the mechanisms which brought about this change. The metals did not transform the economy in any direct sense. Rather, they enriched the protocapitalist class and... gave them the power to...[transform] a political and social system..." [Citations are in the book.]

I would add: Gold and silver were commodities, very high-value products obtained at extrmely low cost by the European merchant community and then sold in exchange for other commodities, land, labor, etc., both inside and outside of Europe. That's how they got rich.

3) Mike comments on my (very tentative) argument that steadily increasing and unlimited markets led manufacturers to adopt new technology in the (mainly early 19th century and later) Industrial Revolution: "Steadily expanding markets are a very useful thing, however [Asian] businesses had larger markets...it seems if the the scale of markets was the 'unique advantage,' the advantage would have gone to the Asians."

The issue is not scale but rate of change. Formal and informal colonialism provided pre-IR Europe with huge new markets, and the economic development (and warfare) of 17th and 18th C Europe was producing additional new markets. I have not seen any argument that Asia and Africa in this period were enjoying anything like the same rate of growth of demand for non-subsistence products, nor do I know of any prior period anywhere where manufacturers could contemplate rapid and continuous expansion of the market for their commodities and hence could logically -- perhaps regardless of real labor costs -- invest in new technology. This constantly expanding, constantly modernizing system was put together mainly in the first third of the 19th century. The rest is history (and geography).

3) Rebecca: "China is handicapped because it is a unified state." In another post I gave my reasons for disputing the view that Europe's political fragmentation was more favorable to

-- James Blaut (70671.2032@compuserve.com), May 05, 2000.

In response to a query by Alan Taylor to Gunder Frank, asking Gunder to be more clear on his theory of the great bifurcation, and how it differed from that of Pomeranz, Wong, myself, and others, Gunder asked me for help. My answer, which Alan suggested might usefully be posted to EH.NET, is as follows:

Dear Alan et al.

Gunder asks for help. Well, we are a "school," but not a team, or tag team, so we have our internal differences, and cannot all be presumed to be moving in the same direction. But there are a few things I can say in response to Alan's thoughtful and kind skeptical inquiries (you're right, Alan, you are a most gentle critic compared to what's lurking out there).

FIRST: We all share a goal of CRITIQUING a "standard view" found in scholars from Weber and Marx to Jones and Landes, to wit: cultural and or ecological circumstances that emerged in Europe c. 1000 AD (e.g. rain-fed heavy plow agriculture, feudal lord/peasant relations, Christian faustian attitudes toward nature, obsessions with time or counting, skill at mechanical crafts) created a unique social matrix with inherent advantages in eventually achieving a modern industial economy, in contrast to non-European societies which either lacked one or more of these essential qualities, or were inherently barred from later industrial advance by governments or cultures that were always too chaotic, predatory, tradition-bound or isolated to embark on sustained per-capita growth. IN CONTRAST, we argue that it is difficult to find EMPIRICAL evidence that sustains a view of an inherently advantaged Europe centuries before industrialization, and that much empirical evidence suggests equality or superiority for Asian societies relative to Europe, as late ast 1750, in most factors held germane to later economic growth.

Second, we all share the goal of CRITIQUING another standard view, from the days of Parry and the "age of exploration," that the expansion of Europe's trading and colonization into the Indian ocean and southeast Asia c. 1500-1700 represents a triumph of superior European civilization, exhibiting its inevitable and irresistable drive to expansion. IN CONTRAST, we argue that a complex global trading system involving bullion, luxury goods, and bulk goods (raw textile materials, rice) already existed in Asia and the Indian ocean long before major European involvement, and that the Europeans entered this world as technical/manufacturing laggards, with little to trade except the silver they obtained from the new world. In fact, if not for China's (and India's and Turkey's) appetite for silver, which sustained a profitably unequal value of silver in the West and in China for centuries, Europe's involvement in Asian trade would have remained insignificant.

FINALLY, there is the question of what positive theory do we have to account for Europe's eventual emergence (however brief) as "top dog" in this global system, and by extension, for the emergence of a novel factory and steam-powered industrialized economy first in Europe, rather than elsewhere. It is on this positive theory that Alan requests that the scholars I call the "California school" and their predecessors and colleagues have significant differences. I won't go into them here -- if you read Gunder's book, Ken's book, Bin's book and my essay, you will see both overlaps and differences. Gunder believes population/resource balances and social inequality variation was critical, I don't. Ken and I both believe easy access to coal by people who needed fuel was crucial, others don't. Ken believes New World resources were crucial; I remain skeptical. I believe institutional and cultural shifts c. 1650-1750 were a crucial part of the story, Gunder dislikes this.

So Gunder is right that we are just barely beginning the positive task, and that we are still struggling to complete the CRITIQUING tasks one and two. In fact this critical mode takes up the bulk of Gunders, Ken's, and my publications so far. I can say that once you buy into the critiques, the whole landscape looks so different that you have to take a deep breath and venture bravely out into the region of positive explanation. We sure could use all the fellow- explorers we can find, so get your map right (don't buy it from Landes) and then follow or explore on your own. We welcome help!

All the best,

-- Jack Goldstone (jagoldstone@ucdavis.edu), May 05, 2000.

From: Donald B Wagner

In this fascinating debate I have a small empirical point to inject that has some relevance. The Eh.res editors suggest:

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< <<<<<<<< 3. Europe's take-off was the result of its interactions with Asia as part of a world trading system. The counterfactual here is that in the absence of Asia, Europe would not have undergone the Industrial Revolution. If this is the argument the question becomes one of identifying the specific mechanisms through which trade benefited Europe differentially, and how Asian trade in particular contributed to Europe's take off. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> >>>>>>>>

I have been studying the iron industry in Qing China, looking very closely at its technology. See my book, _The traditional Chinese iron industry and its modern fate_, 1997, which is also on the WWW at .

It is striking to find that the iron-production technology changes very significantly from the 18th century on, gradually going from large-scale capital-intensive to small-scale labour-intensive. (The same development is likely to have taken place in other industries, I can't be sure without much more research.) While there obviously were numerous factors at work here (including e.g. the Qing government's attempts to discourage large-scale production), I have argued that this development was primarily a rational response to changing economic conditions:

The trade with Europe provided investment opportunities with much higher returns than large-scale industry. That was the *first* blow to the large-scale sector of the traditional iron industry. Large- scale works closed down, production decreased, and what was produced came from smaller works. These were in an engineering sense less 'efficient' than the large-scale works - but they were more efficient in an overall economic sense, because they used less of the scarcest resource, capital.

The *second* blow (a knockout) to the large-scale sector came in the early 19th century, when the cost of English iron had fallen to the point that it could compete in China with Chinese-produced iron. The large-scale sector was dependent on large markets, and therefore on good transportation, and regions with good transportation were of course the first to be penetrated by the foreign competition. The small-scale ironworks of isolated regions were protected from the foreign competition by high transportation costs - they not only thrived, they even grew for a while, and they were still there in the 1950's, when an attempt was made to use their technology in the Great Leap Forward.

So here is one way in which the trade between Europe and China helped Europe's industrialisation: it brought about a shift of China's capital resources away from production of essentials, eliminating European industry's most important competitor in Asia and opening an additional market.

It would be interesting to investigate whether Chinese capital actually ended up in European industry, by various indirect channels.

Both of the above-described blows were felt by Chinese society as a whole as major industries collapsed, leaving armies of unemployed workers with no alternative but banditry/rebellion/revolution (call it what you like). (Remember that the Taiping Rebellion started among unemployed miners.) I suppose it was an advantage for European industry that China as a whole was destabilised, but here I am being more speculative. The destabilisation certainly made it harder for China to respond to the European challenge, and widened the 'bifurcation' that various debaters have talked about.

When I talk about these things I tend to be put in one or another of two pigeonholes: (1) sprouts of capitalism or (2) the evils of imperialism. Please be assured that my concern is to discuss what happened and why, neither what didn't happen nor the moral value of what did happen. And I am certainly not proposing any kind of single- cause theory, only pointing out one factor which I believe was important.

I wonder whether anything like the developments I have described here also occurred in India?

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< <<<<<<<<<< 4. Europe's access to New World gold, silver, or other natural resources was the source of its advantage. If this is the argument, what was the mechanism by which these resources stimulated European growth? >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> >>>>>>>>>>

New World silver made the tea trade possible, and the tea trade provided the investment opportunities that started the ruin...

-- Donald B Wagner (DWag@compuserve.com), May 05, 2000.

I hope I'll be permitted shameless self-advertising in this posting.

I would like to point out here that this week the Dutch version of my magnus opus "Arabian seas 1640-1700" has appeared (475 pages, 200.000 words, 1.675 footnotes). I do not have further information available as yet (price, ISBN etc.) and will post these when I have returned from a long trip to the Australian outback (from 9 th of july) at the end of august.

Now, relevant to the Landes-Frank discussion and especially Pommeranz posting to H-world, apart from many other matters (such as legal and social history) Arabian seas deals with many things which are directly relevant. Gunder would now probably say that I'm only looking under the Arabian seas' streetlight but, then, the Arabian seas are the Arabian seas, they are of no minor importance. And we know much less about the western Indian Ocean than we do about China (or Western Africa):

A.)It shows that in spite of the huge total size of the production Indian manufacturing (I logically focus on textiles but this also relates to metal) was not likely to have led to an industrial revolution. The market was too much segmented as to region, class, yes, caste and taste and too unpredictable and manufacturing was organized according to the `quasi'-unlimited supply of labour in India. The problem was not how to produce goods it was how to sell them.

While the eighteenth century in Britain witnessed both a standardisation of demand and a rapidly growing demand from the West Indies and North America, demand in India and the Middle East was still segmented. Indian manufacturing was more efficient in it's segment of the market than imports though as labour-costs could almost indefinitely be pushed down by an ever more intricate division of labour. Therefore, mechanisation would not have made sense. (By comparison remember that even now it is more efficient to use manual labour than cranes in construction-work in India.)

B.)Most critically, the discussion on the `American factor' has too much focussed on South America and on silver. For, indeed, bullion was merchandise in Europe-Asian trade but it was NOT (as Flynn argues) traded because it was profitable - this is, alas, all too complicated to dwell on it in a single posting.

Sure, silver was the most conspicious product traded by the Europeans. And it was traded to some extent since they enjoyed a comparative cost-advantage in this product (but this was not the main reason). I will not go into the issue of inflation at length here either but I argue Jim Blaut is partly right but for the wrong reasons: imports of silver indeed contributed to income-inequalities in the Arabian seas but not (except in Iran) because of inflation.

In `Arabian seas' I spent a good 200 pages proving that the silver- imports were merely the beginning of a world-wide process of product- substitution. This was basically away from `Asian' land-intensive agriculture to American land-extensive agriculture which I call in the terms of the `old' Gunder the development of underdevelopment. Not only was a wide range of products imported from Asia in Europe being substituted by American products in the 17 th century but American products were substituting for Asian products in inter-Asian trade as well. I treat a long series of examples which together make up much of the trade in the Arabian seas: coffee, sugar, tobacco, indigo, cotton, wood and pearls. And, yes, much of this was increasingly coming from Maryland and Virginia.

The rise of the Atlantic economy leads, I further argue, on the one hand to an expansion of demand for labour-intensive Indian products: Guinee textiles from the Coromandel coast have that name for a reason, whilst the buccaneers in the Arabian seas were mainly smugglers of Indian textiles to colonial New York and the West Indies. On the other hand it leads to an accumulation of money in the city of London which can then be invested in the East India Company and, more importantly, in the British inter-Asian trade.

For - as I show this for the British and the Portuguese - much (for the British), most (for the Portuguese) of the funds invested in Asian trade derived from American revenues.

The American edition which is in preparation will deal in more detail with the effects of the growth of the Atlantic economy (slavery in particular) on East Africa which bears a strong, and not at all coincidental, resemblance with developments in West Africa described in an earlier posting by Pat Manning.

C.)I argue furthermore that, because of these investments from the City, the British in particular (to some extent the French and the Portuguese but not the Dutch VOC) were able to construct a powerful system of private banks (or better `agency houses') in India which financed both British private trade and the British military. The British therefore were financially superior to most Indian princes. But this was not because Indian banking was primitive, far from it - As I show in a 45-page section trade in Surat (Gujarat) was as sophisticated as in Amsterdam because both were focal points of global trade but it was structured very differently -.

D.)The history of European expansion is a single process but its study has become separated between specialist on the Atlantic (America and Africa) and on Asia and this has seriously distorted our vision. (I would add now that treating East Africa as `African' and neglecting its Indian links seriously distorts our vision of the African past too.)

I argue two cases at length: the American slave-trade with Madagascar which was a mainstay of the economy of colonial New York and the Portuguese empire in India which at the end of the seventeenth century became increasingly a sub-colony of Brazil.

Now, since both empires were constructed on the `American conncetion' why the British and not Portugal? That is partly related to the different structures of the Brazilian and New England economy (basically New England's agriculture generated more purchasing-power than Brazil) but it is mainly caused by different initial positions: to wit Portugal's `semi-peripheral' position in European trade and basic weaknesses in the metropolitan economy.

`Arabian seas 1640-1700' was originally written five years before Gunder's `Asia' book was, but, I guess, in the Landes-Frank discussion which developed since this leaves me (with many other discussants) in the position that both are to some extent right.

Pro Landes I would argue that not all institutions were the same in Western Europe and South Asia and some may indeed have been important for the industrial revolution. Thus, English common law, thus, financial institutions, thus `the scientific revolution'. The `energy- base' argument is a weak one, I think, though.

And, to come back to Arabian seas, I would not deny that Europe WAS having an important impact on Asia in the 16-18 th century - and probably less so vice versa. "Indian ships might well have sailed to England but there were no Mughal factories in Britain" I write in `Arabian seas'. And the empirical problem is that if Asian trade in the 17 th and 18 th century grew, European trade in Asia grew much faster. Moreover, the Portuguese and the chartered companies did indeed drive out Asian merchants out of the trade and not only through violence but also as they were better organized. So, some roots of the Europe-Asia bifurication DO lie at least in the 16 th century.

But pro Gunder - and I do sympathize with the main tenants of Gunder and a fortiori of the so-called `California school' - this does NOT mean that Europe was in the 18 th century in all respects superior to Asia, let alone earlier. There is also no denying that Asia was still very important for `world-trade'. And moreover we should remind W.H. Moreland old remark that the entire long distance-trade of the Arabian seas might just have filled one freighter (I would say a supertanker) for maybe 90% of trade in the Arabian seas was regional and local. Therefore, the European impact on the economy as a whole was very, very limited until at least the mid-nineteenth century. And it is also certainly true that some parts of Asia were even in the eighteenth century at least as wealthy as Britain (and that parts of the British isles such as Ireland and the Scottish Highlands were as poor as the poorest parts of Asia.) The `third world' only arose from the mid-nineteenth century onward.

Gunder would probably say this is a half-baked `both and' position but there are no sharp `either-or' positions in answering large historical questions (however hard that may be for economists and sociologists to accept). And I would emphasize contra Jack Goldstone that in `Arabian seas' which is based on fifteen years work in original sources in seventeen languages I do attempt to transcend the mere criticism of the `Eurocentric school'.

Let me emphasize finally though, that even if I'm no `Californian', I sympathize with their position. For if history is as W.H. Mc Niell argues to a large extent myth-making (and the sociology and economics of our Californian colleagues are even more so) I think that even ethically this is a much more hopeful sign to give to poor countries than the Landes-line. Landes et alii basically signal to the third world that it has to discard all of its institutions and its culture (from the family to religion, from law to language etc. etc.) if they ever want to catch up with `modernity'. If I can be essentialist here: the Landes-line is a kind of `structural readjustment' of the third world's past.

And they signal moreover, that the history of all other people has been a failure since dim antiquity compared to the relentless onward march of the Anglo-Saxon race. (For the roots of the industrial revolution go back to King Arthur if not Boedica in their view). Is this an essentialist caricature as Pat Manning would now say too ? Maybe - but, then, to me - a citizen of a small non English speaking country - it often seems as if the British and Americans often do see the nationalist splinter in the eyes of Dutch, Hindhi, Chinese or Russian historiography. (And are immediately prepared poke fun at it. No, the Dutch did not originally `sail into our country near Lobith in 66 B.C.' - as we got taught at school - and, of course, the Rus' were not Russians) But they do not perceive the nationalist beam in their own eye in which they were the originators of anything useful - with the Romans and the Greeks US- and British citizens honoris causae -.

-- Dr. Rene Barendse (barendse@coombs.anu.edu.au), May 05, 2000.

As I've said before, I think the case for the importance of the New World is probably best made on the basis of resources, not profits. Still, I don't think the case against the importance of extra- European profits (at least some of which seem attributable to extra- economic coercion) is as ironclad as Alan Taylor suggests. The excerpt below (from my manuscript-in-progress) suggests one possible reason why, building on the work of somebody who did not reject the applicability of contemporary Western economics to other times and places -- Simon Kuznets. Granted, the pre-modern depreciation rate in the model is Kuznets' guess, not an empirical observation -- but it seems to me within the realm of plausibility. At any rate, I'd be interested to see what people think. By any measure, extra-European profits were dwarfed by those earned in less spectacular activities within Europe; but that need not make them insignificant. Patrick O'Brien, for instance, calculated in an often-cited article that the fruits of overseas coercion could not be responsible for over 7% of gross investment by late 18th century Britons (though a later article leaves open the possibility of a higher figure); and for Europe as a whole the figure would of course be far less. But in a pre-industrial world, such a figure could have been quite significant. Typical rates of growth in output were certainly much slower than in most industrial economies today, and it has been suggested (though not proved) that pre-industrial capital goods were far less physically durable than they are now (being made of different materials, and more completely exposed to the elements). This would suggest that a much smaller proportion of the year's production that was not consumed became net capital accumulation than is the case today: most went to offset the high rate of depreciation in the capital stock. Simon Kuznets estimated 30 years ago that simply by using a lower annual growth rate for the economy as a whole (.4% vs. the 2.5% he took to be normal for industrial economies), shortening the average life-span of the capital stock from 40 to 30 years, and raising curren maintenance needs (from 1% to 2% of output) to account for these differences, he arrived at a model "pre-industrial" economy with a gross savings rate of 21.3% of annual output, but a net gain to the capital stock equal to only 1.2% of the year's output: a sharp contrast to his model "modern" economy, in which gross savings of 24.9% yield net capital formation equal to 19% of the year's output. Making further adjustments he arrived at a hypothetical pre-modern economy which, even if it saved more in gross terms (26%) than his modern one, achieved a net increment to its capital stock equal to only 1.32% of its annual output. In other words, Kuznets' estimates suggest that offsetting depreciation, only 5-10% of what a pre-modern economy withheld from consumption became net capital formation. In such a context, even a relatively small "free lunch" -- an increment to gross capital formation that was not purchased at the expense of consumption -- could lead to a very significant increase in net capital accumulation. For instance, if we imagine an economy that conformed exactly to Kuznets' second model of a pre-industrial economy (gross investment of 26% of production, net of 1.32), raising gross investment by the 7% which O'Brien concedes that "super- profits" could have added to British gross investment would more than double the year's net increase to the capital stock. Or, to imagine the opposite scenario, one would not have to lower the amount of gross capital formation by very much to wipe out most or even all net capital accumulation; either way this hypothetical 7% addition could have been very important.

Granted, one must say "could have been" rather than "was." For purposes of this argument, O'Brien has been willing to stipulate that commerce with the periphery was twice as profitable as "normal" commercial profits in this period, while he rightly points out that nobody has yet shown any such thing. And while much of the cost of coercion was paid by the chartered companies -- and thus is already accounted for in O'Brien's exercise -- some further costs were not, and would need to be deducted in any thorough attempt to complete this thought experiment. (Such an exercise would also face once again the question of how to assess the opportunity costs of labor in Early modern Europe -- would say, the Scandinavian migrants and Dutch rural unemployed who signed up to sail and fight for the Dutch East India Company otherwise have found something productive to do at home? Given the institutions of the time, many might not have.) But if coercion yielded some additional profits for Europeans, as seems likely, and small increases in gross investment may have meant large changes in net investment...

-- Ken Pomeranz (kpomeran@benfranklin.hnet.uci.edu), May 05, 2000.

Two quick items: (1) In the arguments about Europe's very early greater propensity to measure and count -- when did the Chinese invent the abacus? This "counting device" remained more rapid and accurate than western mechanical and electric calculators until the 1960s (when merchants in my local Chinatown gave up the abacuses they had used when I was a boy and went to conventional cash registers and calculators). Fascination with measurement certainly goes back to the ancient greeks, whose studies of geometry, conic sections, and Pythagoras' theorum -- not to mention Plato's foundation of the universe and society on a mystic numerology -- are as striking as any interest in surveying. One should also read Christopher Eyre's essay in vol. 40 (1997) of the Journal of the Social and Economic History of the Orient on calculations of profit from land leasing in Greco- Roman Egypt; landholders needed pretty sophisticated methods of surveying and counting then too. Roman magistrates were obsessed with counting to ensure adequate grain supplies and bread baking for the provisioning of Rome. And one presumes the architects of the pyramids (c. 2500 BC) were obsessed with counting and measurement, as otherwise it's impossible to explain the precision in the layout and proportions of the pyramids themselves.

It is certainly true that in the post-Roman west European chaos and depopulation, such matters as grand architecture, provisioning large cities, speculating on grain harvests, etc., faded in importance. So perhaps their re-emergence, along with importation of Arab texts on algebra and such, made the 13th century appear to be newly "obsessed" with counting. (One could also say they were obsessed with scholastic nominalist debates, which we do not, in hindsight, associate with later progress). Much of what looks "new" from the perspective of late medieval times in contrast to early medieval times comes from neglecting the relative decline post 500 AD.

In any event, medieval Europeans had no early monopoly on sophisticated calculations or on widespread concern with counting.

(2) Interesting side-note. The latest issue of THE ECONOMIST notes that today, demand for silver is rapidly increasing, and the countries that are the world's two largest suppliers of silver bullion are -- Mexico and Peru! Plus ca change ...

Regards to all,

-- Jack Goldstone (jagoldstone@ucdavis.edu), May 05, 2000.

Dear Ken,

I see some leaks in your line of argument, and some plugged holes you might not have noticed.

The leak is that Patrick's calculation (I made it earlier than he did, just incidentally) gives 7% as a crazy upper bound, but the point is that it leaves 93% for domestic variables. In other words, if something as small as what Patrick calculates is to be refurbished and set up as some sort of Big Factor, then all kinds of previously ignored domestic somethings are Even Bigger. Do you see the point? It's like the objection to small-big causation: if Small Factor number 87 is to be counted as Big, then all other Small Factors are big, too, and one is left without explanation--or, rather, with too many little ones.

The argument is important because not asking how big is so crucial to attributing great force to foreign trade. Most changes were domestic, yes?

A hole-already-plugged is the logic of seed-yield ratios (which as I understand it are always very low in rice, so wheat-barley-oats has this disadvantage?): a medieval society that was (1.) largely agricultural and (2.) facing yield/seed ratios of 4 or 5 had to set aside a VERY large part of GNP just to get fed next year. It's real saving, tho an extreme case of Uncle Simon's low lived capital--the abstension from consumption is only eight months or so. When yields increase and agriculture becomes less important, on both counts a big portion of GNP is freed for net investment. Say,

(2/3 of a year) times

(1/5 seed set aside per gross yield of grain) times

(50% of GNP which is grain) equals

6.6666% of GNP per year devoted to seed,

which could change to, say, 30% of GNP [in all these I'm trying to bias the case against] and yields of 1/10:

(2/3) x (1/10) x (30%) = 2%, or 4.7% released for net investment.

-- Deirdre McCloskey (deirdre-mccloskey@uiowa.edu), May 05, 2000.