Globalisation: The big Picture Tirthankar Roy an unresolved debate. Was Islam the cause of European isolation? On the contrary, it has been argued, the materially more advanced Arab world stimulated alternative trading worlds and trade-routes in the This is a magnificent book, written by two eminent economic historians, presenting an outline of world trade and economic change in the last one thousand years. Although trade is the centre of the narrative, the book is by no means a conventional account of goods and destinations. The interest of the book is in the forces working for and those working against economic integration of large regions, the means of such integration, and its consequences for the peoples engaged in exchange. As one would expect, over one thousand years, these forces, means, and consequences did not remain invariant. Shock factors played a large role too. And yet, the ebbs and flows in the long history of globalisation were not randomly generated. There were turning points, and there were recurring patterns. The book combines an impressive and always sensitive reading of a very large historical scholarship with an economist
BOOK REVIEWEconomic & Political Weekly EPW july 11, 2009 vol xliv no 2833Globalisation: The Big PictureTirthankar RoyThis is a magnificent book, written by two eminent economic historians, presenting an outline of world trade and economic change in the last one thou-sand years. Although trade is the centre of the narrative, the book is by no means a conventional account of goods and desti-nations. The interest of the book is in the forces working for and those working against economic integration of large re-gions, the means of such integration, and its consequences for the peoplesengagedin exchange. As one would expect,overone thousand years, these forces, means, and consequences did not remain invariant. Shock factors played a large role too. And yet, the ebbs and flows in the long history of globalisation were not randomly gener-ated. There were turning points, and there were recurring patterns. The book com-bines an impressive and always sensitive reading of a very large historical scholar-ship with an economist’s eye for patterns and significant moments of transition.The book has nine chapters, which cover the one thousand years chronologically. The opening chapter divides the world into seven regions using the rule that “economic integration was more advanced within each region than between these regions” (p 3). Each narrative chapter deals with a time-span, in turn, defined by one or more transi-tional episodes with worldwide implica-tions. Each chapter also describes the expe-riences of the seven regions separately and in mutual relation. In this way, we travel from European feudalism, Sung economic miracle, Mongol invasion, Black Death, voy-ages of discovery, settlement of the New World, mercantilism, colonisation, the Industrial Revolution, the age of specialisa-tion, deglobalisation in the interwar period, and reglobalisation in the late 20th century.Politics and TradeOne pattern among many dominates the narrative. Prosperity through private enter-prise is almost always dependent on politi-cal power. The relationship between Power and Plenty has too many dimensions to be reduced to alternative models of either pre-dation upon or patronage of merchants by states. But the relationship is close, endur-ing, and especially evident during great turning points. A second underlying theme is the close interdependence between power and culture in preindustrial times. “Trade expansion was combined with active cul-tural contact and political interaction” (p 69). Much knowledge was embodied in people, in contrast with the present times when knowledge can be found from books and media. Merchants and artisans were the most mobile groups, and sometimes re-settled themselves permanently or were invited to do so in other lands. Trade trans-mitted useful knowledge, knowledge of the arts and crafts and religion. Religion, in turn, was allied to statecraft, so that these cultural contacts could potentially influ-ence state-making, as the contact between south India and south-east Asia at the be-ginning of the second millennium illustrat-ed. Politics as a handmaiden of trade, and the “invisible cargo” of knowledge that merchants carried with them have received attention in recent economic history schol-arship, especially of maritime trade. The rich narrative shows the many ways that these correlations revealed themselves.Turning PointsOne of the great turning points in history came with the increasing control of the Mediterranean by the Arab Caliphate in the seventh century, which, according to the famous thesis advanced by the Belgian historian Henri Pirenne, led to the retreat of Europe from overseas trade, turned it into a rural backwater after the once-thriving cities of the Roman empire suf-fered decline, and gave rise to the agrarian self-sufficient economic structure that became the foundation of a feudal system. The Pirenne thesis has been the subject of an unresolved debate. Was Islam the cause of European isolation? On the contrary, it has been argued, the materially more ad-vanced Arab world stimulated alternative trading worlds and trade-routes in the eastern part of the continent, and indirectly turned Europe into a productive periphery, which had incentives to expand supply of resource-based goods, including grain and slaves, in exchange for manufactures. Early medieval Europe saw agrarian ex-pansion, technological change in agricul-ture, predatory slaving raids, and increas-ing monetisation despite loss of control of the Mediterranean. The Islamic empires themselves were weakened by both the Mongol invasion, and their own military structures that imposed rather high govern-ance costs. One consequence of a divided world was the rise of Venice as the middle-man between the two halves, indeed, as a point of contact between Europe, the Islamic world and distant China.While western Europe was spared a Mongol invasion, it was devastated by the Black Death, possibly a plague epidemic, of the mid-14th century. Catastrophic in its impact upon lives, the impact of plague on the economic prospect of survivors was a positive one, as one would expect given that production was intensive in land and labour and economic well-being followed a Malthusian dynamic. Land-labour ratio im-proved dramatically, wages increased, rents fell. But there was more. For generations to come, the plague improved the bargaining power of the peasant elite vis-à-vis the feudal landlords. The consequences of this huge shift in political balance were apparently very different between western and eastern Europe. In the east the rulers supported the landlords’ demand for more power to tie in labour to land by means of serfdom, where-as in the west, the state did not take sides in the same way, and peasant rights grew stronger as a result. A key factor in the new equation was the urban economy. “Trade and population recovery favoured urban interests in the west and rural interests in the east” (p 123). In this way the Black Death ended European isolation, increased the chances of non-Venetian middlemen to seek coveted foreign goods such as gold and spices, and in the words of the late Stephan Epstein, set the stage for the long 16th century boom (cited p 119).Power and Plenty: Trade, War, and the World Economy in the Second Millenniumby Ronald Findlay and Kevin H O’Rourke (Princeton and Oxford: Princeton University Press), 2007; pp xxviii + 619 , $39.50.
BOOK REVIEWEconomic & Political Weekly EPW july 11, 2009 vol xliv no 2835long-drawn-out affair, confined to a few sec-tors to begin with, and having rather little ripple effect upon manufacturing as a whole. In the early 19th century its signifi-cance lay not in an upsurge in total factor productivity. The revolution was a revolu-tion because it made the Malthusian trap obsolete. Rapid population growth in a small island with limited land, for the first time in history, did not lead to a loss of liv-ing standards, for the working population was able to increase labour productivity rather than having to exploit limited re-sources. What factors made this momen-tous change possible? Specifically, did trade contribute to industrialisation?Until the recent past, economic historians addressing this question seemed to belong in two opposite camps. The neoclassical school explained industrialisation as an out-come of the exceptional qualities of European societies – free enterprise, open society, printed books, strong states kept in check by strong citizenship, and others – and implied that these qualities had been missing in the non-western world. The neo-Marxist school considered that the plunder of resources from the non-western world, by means of a brutal trade system and profits from the slave trade made it possible for England to maintain a relatively high rate of private investment. The book presents a bal-anced discussion of the debate, and con-cludes persuasively that a model that places either inventiveness or accumulation too much role fails to convince. Industrial Revolu-tion needed more than one kind of impetus. At least one of these can be found in trade – not just in plunder, but in the very long and slow process of European ascendancy in the world’s waters that began almost a thou-sand years ago and that drew strength from a whole lot of global and local variables.The Great DivergenceWhy did Europe forge ahead from the 18th century, whereas Asia, until then a major centre of industry and commerce, did not? This question has seen a big comeback in world history scholarship with the publi-cation of works challenging conventional wisdom. The notion that the non-west had been economically backward to begin with has been questioned. The notion that Europe had privileged access to superior knowledge has been questioned too, by authors who point out the mobility of use-ful knowledge, a point discussed before. And yet, the verdict remains open, for research is still in a very elementary stage on a number of key subthemes.Well-balanced and insightful on “the rise of the west”, the book cautiously skirts around the “stagnation of the rest” issue, noting that “if the focus is on ‘why Asia did not rise’, ...then very different explanations are going to be required to account for the experiences of economies and societies as different from each other as the Chinese Empire, The Muslim World, or Southeast Asia” (p 357). This postmodern call to give up the search for a grand narrative on the non-west is unconvincing, and I believe the book could make bolder statements on patterns of relationship between Power and Plenty in the non-western world.Indeed, one of the great black boxes in what has come to be known as the diver-gence debate is the state. Apropos the state, one pattern of difference is halfway ac-knowledged in the book. Competition among states in western Europe, in some accounts, made them more ambitious about reaching out and taking control of resources in the outside world. By extension of the same argument, the great empires of Asia – the Indic, the Ottoman, or the Chinese – remained inward-oriented, for they needed to mind internal cohesion much more and needed to spend huge resources on keeping the territory together. They had neither time nor money to design policies of con-quest for economic gain. Until the period of European colonialism, large empires almost everywhere were beset by diseconomies of scale. In the 13th century, Egypt or Turkey, the rulers tried to build a standing army of professionals made up of non-hereditary slave soldiers, but paid too high a price for the enterprise. In Mughal India, the empire relied on the cooperation of semi-autono-mous regional constituents, increasing the chances ofrebellion and resistance. Pre-modern Asian empires, facing such prob-lems of scale, had a different perception of priorities compared with the English or the Dutch of the 17th century. These empires were not only inward-oriented, but also in-volved systematic leakage and dissipation of tax resources.There is more to be said on the state. Was there enough money available in the first place? Another pattern in the history of the non-western world merits particular atten-tion, the geographical underpinnings of fis-cal strength. Geography has many dimen-sions, of course. One of these, the coastline, receives attention in this book. But another is the “hinterland”, which does not. A strong and adventurous state that could make economic and military campaign on a sustained basis would need a stable source of revenue above all, which came mainly from land until the end of the 18th century. A rich and contented countryside made an ambitious state possible. Early modern England and Holland satisfied that condition. Much of the non-west did not (south Asia does not even today). An effi-cient low-cost system of taxation and finan-cial institutions that could convert taxable capacity into public debt mattered, in the English case, to sustain outward orientation.Fiscal health, however, was more than a matter of institutions; it was also a function of the productive power of land. In the tropi-cal world that dominates the non-west, by contrast with western Europe, productive power of land was low and variable. No-mads, deserts and drylands, forests, preda-tors both human and animal, diseases and epidemics, floods-storms-earthquakes, fam-ines, fierce contests over fertile soil and wa-ter made states poorer, more unstable and more risk-averse. The relationship between rulers and traders could be characterised neither as predation nor as patronage, but in terms of distance and indifference. Early modern states in China, India, south-east Asia, or Africa, despite the pomp and gran-deur of their capital cities, were arguably not wealthy enough to play mercantilist games on a transoceanic scale. They were interest-ed in enabling trade just as anybody else; but they had serious and persistent worries about peasants, their bread and butter, to concentrate energies on merchants.Not least by expanding the scope of such debates, the book represents a remarkable achievement. It sets a high benchmark for economic history as a discipline, is an in-dispensable aid for teachers and research-ers of the field, a fascinating and challeng-ing read for the curious non-specialist, and a strongly recommended background read-ing for the economic theorist of trade.Email: t.roy@lse.ac.uk
BOOK REVIEWEconomic & Political Weekly EPW july 11, 2009 vol xliv no 2833Globalisation: The Big PictureTirthankar RoyThis is a magnificent book, written by two eminent economic historians, presenting an outline of world trade and economic change in the last one thou-sand years. Although trade is the centre of the narrative, the book is by no means a conventional account of goods and desti-nations. The interest of the book is in the forces working for and those working against economic integration of large re-gions, the means of such integration, and its consequences for the peoplesengagedin exchange. As one would expect,overone thousand years, these forces, means, and consequences did not remain invariant. Shock factors played a large role too. And yet, the ebbs and flows in the long history of globalisation were not randomly gener-ated. There were turning points, and there were recurring patterns. The book com-bines an impressive and always sensitive reading of a very large historical scholar-ship with an economist’s eye for patterns and significant moments of transition.The book has nine chapters, which cover the one thousand years chronologically. The opening chapter divides the world into seven regions using the rule that “economic integration was more advanced within each region than between these regions” (p 3). Each narrative chapter deals with a time-span, in turn, defined by one or more transi-tional episodes with worldwide implica-tions. Each chapter also describes the expe-riences of the seven regions separately and in mutual relation. In this way, we travel from European feudalism, Sung economic miracle, Mongol invasion, Black Death, voy-ages of discovery, settlement of the New World, mercantilism, colonisation, the Industrial Revolution, the age of specialisa-tion, deglobalisation in the interwar period, and reglobalisation in the late 20th century.Politics and TradeOne pattern among many dominates the narrative. Prosperity through private enter-prise is almost always dependent on politi-cal power. The relationship between Power and Plenty has too many dimensions to be reduced to alternative models of either pre-dation upon or patronage of merchants by states. But the relationship is close, endur-ing, and especially evident during great turning points. A second underlying theme is the close interdependence between power and culture in preindustrial times. “Trade expansion was combined with active cul-tural contact and political interaction” (p 69). Much knowledge was embodied in people, in contrast with the present times when knowledge can be found from books and media. Merchants and artisans were the most mobile groups, and sometimes re-settled themselves permanently or were invited to do so in other lands. Trade trans-mitted useful knowledge, knowledge of the arts and crafts and religion. Religion, in turn, was allied to statecraft, so that these cultural contacts could potentially influ-ence state-making, as the contact between south India and south-east Asia at the be-ginning of the second millennium illustrat-ed. Politics as a handmaiden of trade, and the “invisible cargo” of knowledge that merchants carried with them have received attention in recent economic history schol-arship, especially of maritime trade. The rich narrative shows the many ways that these correlations revealed themselves.Turning PointsOne of the great turning points in history came with the increasing control of the Mediterranean by the Arab Caliphate in the seventh century, which, according to the famous thesis advanced by the Belgian historian Henri Pirenne, led to the retreat of Europe from overseas trade, turned it into a rural backwater after the once-thriving cities of the Roman empire suf-fered decline, and gave rise to the agrarian self-sufficient economic structure that became the foundation of a feudal system. The Pirenne thesis has been the subject of an unresolved debate. Was Islam the cause of European isolation? On the contrary, it has been argued, the materially more ad-vanced Arab world stimulated alternative trading worlds and trade-routes in the eastern part of the continent, and indirectly turned Europe into a productive periphery, which had incentives to expand supply of resource-based goods, including grain and slaves, in exchange for manufactures. Early medieval Europe saw agrarian ex-pansion, technological change in agricul-ture, predatory slaving raids, and increas-ing monetisation despite loss of control of the Mediterranean. The Islamic empires themselves were weakened by both the Mongol invasion, and their own military structures that imposed rather high govern-ance costs. One consequence of a divided world was the rise of Venice as the middle-man between the two halves, indeed, as a point of contact between Europe, the Islamic world and distant China.While western Europe was spared a Mongol invasion, it was devastated by the Black Death, possibly a plague epidemic, of the mid-14th century. Catastrophic in its impact upon lives, the impact of plague on the economic prospect of survivors was a positive one, as one would expect given that production was intensive in land and labour and economic well-being followed a Malthusian dynamic. Land-labour ratio im-proved dramatically, wages increased, rents fell. But there was more. For generations to come, the plague improved the bargaining power of the peasant elite vis-à-vis the feudal landlords. The consequences of this huge shift in political balance were apparently very different between western and eastern Europe. In the east the rulers supported the landlords’ demand for more power to tie in labour to land by means of serfdom, where-as in the west, the state did not take sides in the same way, and peasant rights grew stronger as a result. A key factor in the new equation was the urban economy. “Trade and population recovery favoured urban interests in the west and rural interests in the east” (p 123). In this way the Black Death ended European isolation, increased the chances of non-Venetian middlemen to seek coveted foreign goods such as gold and spices, and in the words of the late Stephan Epstein, set the stage for the long 16th century boom (cited p 119).Power and Plenty: Trade, War, and the World Economy in the Second Millenniumby Ronald Findlay and Kevin H O’Rourke (Princeton and Oxford: Princeton University Press), 2007; pp xxviii + 619 , $39.50.
BOOK REVIEWEconomic & Political Weekly EPW july 11, 2009 vol xliv no 2835long-drawn-out affair, confined to a few sec-tors to begin with, and having rather little ripple effect upon manufacturing as a whole. In the early 19th century its signifi-cance lay not in an upsurge in total factor productivity. The revolution was a revolu-tion because it made the Malthusian trap obsolete. Rapid population growth in a small island with limited land, for the first time in history, did not lead to a loss of liv-ing standards, for the working population was able to increase labour productivity rather than having to exploit limited re-sources. What factors made this momen-tous change possible? Specifically, did trade contribute to industrialisation?Until the recent past, economic historians addressing this question seemed to belong in two opposite camps. The neoclassical school explained industrialisation as an out-come of the exceptional qualities of European societies – free enterprise, open society, printed books, strong states kept in check by strong citizenship, and others – and implied that these qualities had been missing in the non-western world. The neo-Marxist school considered that the plunder of resources from the non-western world, by means of a brutal trade system and profits from the slave trade made it possible for England to maintain a relatively high rate of private investment. The book presents a bal-anced discussion of the debate, and con-cludes persuasively that a model that places either inventiveness or accumulation too much role fails to convince. Industrial Revolu-tion needed more than one kind of impetus. At least one of these can be found in trade – not just in plunder, but in the very long and slow process of European ascendancy in the world’s waters that began almost a thou-sand years ago and that drew strength from a whole lot of global and local variables.The Great DivergenceWhy did Europe forge ahead from the 18th century, whereas Asia, until then a major centre of industry and commerce, did not? This question has seen a big comeback in world history scholarship with the publi-cation of works challenging conventional wisdom. The notion that the non-west had been economically backward to begin with has been questioned. The notion that Europe had privileged access to superior knowledge has been questioned too, by authors who point out the mobility of use-ful knowledge, a point discussed before. And yet, the verdict remains open, for research is still in a very elementary stage on a number of key subthemes.Well-balanced and insightful on “the rise of the west”, the book cautiously skirts around the “stagnation of the rest” issue, noting that “if the focus is on ‘why Asia did not rise’, ...then very different explanations are going to be required to account for the experiences of economies and societies as different from each other as the Chinese Empire, The Muslim World, or Southeast Asia” (p 357). This postmodern call to give up the search for a grand narrative on the non-west is unconvincing, and I believe the book could make bolder statements on patterns of relationship between Power and Plenty in the non-western world.Indeed, one of the great black boxes in what has come to be known as the diver-gence debate is the state. Apropos the state, one pattern of difference is halfway ac-knowledged in the book. Competition among states in western Europe, in some accounts, made them more ambitious about reaching out and taking control of resources in the outside world. By extension of the same argument, the great empires of Asia – the Indic, the Ottoman, or the Chinese – remained inward-oriented, for they needed to mind internal cohesion much more and needed to spend huge resources on keeping the territory together. They had neither time nor money to design policies of con-quest for economic gain. Until the period of European colonialism, large empires almost everywhere were beset by diseconomies of scale. In the 13th century, Egypt or Turkey, the rulers tried to build a standing army of professionals made up of non-hereditary slave soldiers, but paid too high a price for the enterprise. In Mughal India, the empire relied on the cooperation of semi-autono-mous regional constituents, increasing the chances ofrebellion and resistance. Pre-modern Asian empires, facing such prob-lems of scale, had a different perception of priorities compared with the English or the Dutch of the 17th century. These empires were not only inward-oriented, but also in-volved systematic leakage and dissipation of tax resources.There is more to be said on the state. Was there enough money available in the first place? Another pattern in the history of the non-western world merits particular atten-tion, the geographical underpinnings of fis-cal strength. Geography has many dimen-sions, of course. One of these, the coastline, receives attention in this book. But another is the “hinterland”, which does not. A strong and adventurous state that could make economic and military campaign on a sustained basis would need a stable source of revenue above all, which came mainly from land until the end of the 18th century. A rich and contented countryside made an ambitious state possible. Early modern England and Holland satisfied that condition. Much of the non-west did not (south Asia does not even today). An effi-cient low-cost system of taxation and finan-cial institutions that could convert taxable capacity into public debt mattered, in the English case, to sustain outward orientation.Fiscal health, however, was more than a matter of institutions; it was also a function of the productive power of land. In the tropi-cal world that dominates the non-west, by contrast with western Europe, productive power of land was low and variable. No-mads, deserts and drylands, forests, preda-tors both human and animal, diseases and epidemics, floods-storms-earthquakes, fam-ines, fierce contests over fertile soil and wa-ter made states poorer, more unstable and more risk-averse. The relationship between rulers and traders could be characterised neither as predation nor as patronage, but in terms of distance and indifference. Early modern states in China, India, south-east Asia, or Africa, despite the pomp and gran-deur of their capital cities, were arguably not wealthy enough to play mercantilist games on a transoceanic scale. They were interest-ed in enabling trade just as anybody else; but they had serious and persistent worries about peasants, their bread and butter, to concentrate energies on merchants.Not least by expanding the scope of such debates, the book represents a remarkable achievement. It sets a high benchmark for economic history as a discipline, is an in-dispensable aid for teachers and research-ers of the field, a fascinating and challeng-ing read for the curious non-specialist, and a strongly recommended background read-ing for the economic theorist of trade.Email: t.roy@lse.ac.uk
