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EH.NET BOOK REVIEW
Published by EH.NET (April 1998)
David S. Landes, _The Wealth and Poverty of Nations: Why Are Some So Rich
and Others So Poor_. New York: W.W. Norton, 1998. 544 pp. $30.00 (cloth)
ISBN: 0393040178.
Reviewed for EH.NET by J. Bradford De Long, Department of Economics,
University of California-Berkeley. <[log in to unmask]>
David Landes has studied the history of economic development for more than
half a century. His look at economic imperialism and informal empire in
nineteenth-century Egypt (Bankers and Pashas) tells the story of how small
were the benefits (either for Egyptian economic development or for the
long-run power and happiness of the ruling dynasty) bought at extremely
high cost by borrwing from European bankers. His unsurpassed survey of
technological change and its consequences in Europe since 1750 (The Unbound
Prometheus) remains the most important must-read book for serious students
of the industrial revolution. His study of clock-making as an instance of
technological development (Revolution in Time) provides a detailed look at
a small piece of the current of technological development. His works are
critical points-of-reference for those who seek to understand the
Industrial Revolution that has made our modern world.
Now David Landes turns to the grandest question of all: the causes of the
(so far) divergent destinies and relative prosperity levels of different
national economies. The title echoes Adam Smith, but Landes is interested
in both the wealth and poverty of nations: Adam Smith lays out what went
wrong as the background for his picture of how things can go right, while
Landes is as interested in the roots of relative--and absolute--economic
failure as of success.
He pulls no punches--of Columbus's followers treatment of the inhabitants
of the Caribbean, Landes writes that "nothing like this would be seen again
until the Nazi Jew hunts and killer drives of World War II." Landes makes
no compromises with any current fashion. Readers will remember how
columnist after columnist decried high-school history standards (which,
truth be told, were not very good) that required students to learn about a
fourteenth-century African prince, Mansa Musa, but not about Robert E. Lee;
readers of Landes will find three pages on Mansa Musa, and none on Master
Robert.
We are all multiculturalists now; or, rather, serious historians have long
been multiculturalists.
Nevertheless, Landes's economic history is a profoundly Eurocentric
history. It is Europe-centered without apologies--rather with scorn for
those who blind themselves to the fact that the history of the past 500
years is Europe-centered.
Now Landes does not think that all history should be Eurocentric. For
example, he argues that a history of the world from 500 to 1500 should be
primarily Islamocentric: the rise and spread of Islam was an "explosion of
passion and commitment... the most important feature of Eurasian history in
what we may call the middle centuries."
But a history oriented toward understanding the wealth and poverty of
nations today must be Eurocentric. Goings-on in Europe and goings-on as
people in other parts of the world tried to figure out how to deal with
suddenly-expansionist Europeans make up the heart of the story of how
some--largely western Europe and northwest Europe's settler
ex-colonies--have grown very, very rich.
Moreover, relative poverty in the world today is the result of failure on
the part of political, religious, and mercantile elites elsewhere to pass
the test (rigged very heavily against them) of maintaining or regaining
independence from and assimilating the technologies demonstrated by the
people from Europe--merchants, priests, and thugs with guns in the old
days, and multinationals, international agencies, and people armed with
cruise missiles in these new days--who have regularly appeared offshore in
boats, often with non-friendly intent. To try to tell the story of
attempted assimilation and attempted rejection without placing Europe at
the pivot is to tell it as it really did *not* happen.
Thus Landes wages intellectual thermonuclear war on all who deny his
central premise: that the history of the wealth and poverty of nations over
the past millennium is the history of the creation in Europe and diffusion
of our technologies of industrial production and sociological organization,
and of the attempts ot people elsewhere in the world to play hands largely
dealt to them by the technological and geographical expansions originating
in Europe.
He wins his intellectual battles--and not just because as author he can set
up straw figures as his opponents. He wins because in the large (and
usually in the small) he has stronger arguments than his intellectual
adversaries, who believe that Chinese technology was equal to British until
1800, that had the British not appeared the royal workshops of Mughal India
would have turned into the nucleus of an industrialized textile industry,
that equatorial climates are as well-suited as mid-latitude climates to the
kind of agriculture that can support an Industrial Revolution, that
Britain's industrial lead over France was a mere matter of chance and
contingency, or any of a host of other things with which Landes does not
agree.
Landes's analysis stresses a host of factors--some geographical but most
cultural, having to do with the fine workings of production, power, and
prestige in the pre-industrial past--that gave Eurasian civilizations an
edge in the speed of technological advance over non-Eurasian ones, that
gave European civilizations an edge over Chinese, Arabic, Indian, or
Indonesian, that made it very likely that within Europe the breakthrough to
industrialization would take place first in Britain.
And by and large it is these same factors that have made it so damnably
difficult since the Industrial Revolution for people elsewhere to acquire
the modern machine technologies and modes of social and economic
organization found in the world economy's industrial core.
Landes's account of why Eurasian civilizations like Europe, Islam, and
China had an edge in technological development over non-Eurasian (and
southern Eurasian) civilizations rests heavily on climate: that it is
impossible for human beings to live in any numbers in "temperate" climates
before the invention of fire, housing, tanning, and sewing (and in the case
of northern Europe iron tools to cut down trees), but that once the
technological capability to live where it snows has been gained, the
"temperate" climates allowed a higher material standard of living.
I am not sure about this part of his argument. It always seemed to me that
what a pre-industrial society's standard of living was depended much more
on at what level of material want culture had set its Malthusian thermostat
at which the population no longer grew. I have always been impressed by
accounts of high population densities in at least some "tropical"
civilizations: if they were so poor because the climate made hard work so
difficult, why the (relatively) dense populations?
It seems to me that the argument that industrial civilization was
inherently unlikely to arise in the tropics hinges on
an--implicit--argument that some features of tropical climates kept the
Malthusian thermostat set at a low standard of living, and that this low
median standard of living retarded development. But it is not clear to me
how this is supposed to have worked.
By contrast, I find Landes's account of why Europe--rather than India,
Islam, or China--to be very well laid out, and very convincing. But I find
it incomplete. I agree that it looks as if Chinese civilization had a clear
half-millennium as the world's leader in technological innovation from 500
to 1000. Thereafter innovation in China appears to flag. Little seems to be
done in developing further the high technologies like textiles,
communication, precision metalworking (clockmaking) that provided the
technological base on which the Industrial Revolution rested.
It is far from clear to me why this was so. Appeals to an inward turn
supported by confident cultural arrogance under the Ming and Ch'ing that
led to stagnation leave me puzzled. Between 1400 and 1800 we think that the
population of China grew from 80 million to 300 million. That doesn't
suggest an economy of malnourished peasants at the edge of biological
subsistence. That doesn't suggest a civilization in which nothing new can
be attempted. It suggests a civilization in which colonization of internal
frontiers and improvements in agricultural technology are avidly pursued,
and in which living standards are a considerable margin above
socio-cultural subsistance to support the strong growth in populations.
Yet somehow China's technological lead--impressive in printing in the
thirteenth century, impressive in shipbuilding in the fifteenth century,
impressive in porcelain-making in the seventeenth century--turned into a
significant technological deficit in those same centuries that China's
pre-industrial population quadrupled.
Landes's handling of the story of England's apprenticeship and England's
mastership--of why the Industrial Revolution took place in the
northwest-most corner of Europe--is perhaps the best part of the book. He
managed to weave all the varied strands from the Protestant Ethic to Magna
Carta to the European love of mechanical mechanism for its own sake
together in a way that many attempt, but few accomplish. Had I been Landes
I would have placed more stress on politics: the peculiar tax system of
Imperial Spain, the deleterious effect of rule by Habsburgs and Habsburg
puppets on northern Italy since 1500 (and the deleterious effect of rule by
Normans, Hohenstaufens, Valois, Aragonese, and Habsburgs on southern Italy
since 1000), the flight of the mercantile population of Antwerp north into
the swamp called Amsterdam once they were subjected to the tender mercies
of the Duke of Alva, more on expulsions of Moriscos, Jews, and French
Protestants (certainly the Revocation of the Edict of Nantes was an
extraordinary shock to my seventeenth-century DeLong ancestors), the
extraordinary tax burden levied on the Dutch mercantile economy by the
cumulated debt of having had to spend from 1568 to 1714 fighting to achieve
and preserve independence, and so forth.
I also would spend more time on Britain itself. I, at least, find myself
wondering whether Britain's Industrial Revolution was a near-run
thing--whether (as Adam Smith feared) the enormous burden of the Hanoverian
fiscal-military state might not have nearly crushed the British economy
like an egg. Part of the answer is given by John Brewer's _Sinews of
Power_, a work of genius that lays out the incredible (for the time)
efficiency of Britain's eighteenth-century fiscal-military state. Most of
the answer is the Industrial Revolution. And some of the answer is (as
Jeffrey Williamson has argued) that the burden of the first British Empire
did indeed significantly slow--but not stop--industrialization.
I don't know what I think of all the issues in the interaction of the first
British Empire, the British state, and British industrialization. Thus I
find myself somewhat frustrated when Landes quotes Stanley Engerman and
Barbara Solow that "It would be hard to claim that [Britain's Caribbean
Empire was] either necessary or sufficient for an Industrial Revolution,
and equally hard to deny that [it] affected its magnitude and timing," and
then says "That's about it." I want to know Landes's judgment about how
much. Everything affects everything else, and when economic historians have
an advantage over others it is because they know how to count things--and
thus how to use arithmetic to make judgments of relative importance.
But the complaint that a book that tries to do world history in 600 pages
leaves stuff out is the complaint of a true grinch.
So where does Landes's narrative take us?
If there is a single key to success--relative wealth--in Landes's
narrative, it is openness. First, openness is a willingness to borrow
whatever is useful from abroad whatever the price in terms of injured elite
pride or harm to influential interests. One thinks of Francis Bacon writing
around 1600 of how three inventions--the compass, gunpowder, and the
printing press--had totally transformed everything, and that all three of
these came to Europe from China. Second, openness is a willingness to trust
your own eyes and the results of your own experiments, rather than relying
primarily on old books or the pronouncements of powerful and established
authorities.
European cultures had enough, but perhaps only barely enough. Suppose
Philip II Habsburg "the Prudent King" of Spain and "Bloody" Mary I Tudor of
England had together produced an heir to rule Spain, Italy, the Low
Countries, and England: would Isaac Newton then have been burned at the
stake like Giordano Bruno, and would the natural philosophers and
mechanical innovators of seventeenth and eighteenth century England have
found themselves under the scrutiny of the Inquisition? Neither Giordano
Bruno, Jan Hus, nor Galileo Galilei found European culture in any sense
"open."
If there is a second key, it lies in politics: a government strong enough
to keep its servants from confiscating whatever they please, limited enough
for individuals to be confident that the state is unlikely to suddenly put
all they have at hazard, and willing once in a while to sacrifice official
splendor and martial glory in order to give merchants and manufacturers an
easier time making money.
In short, economic success requires a government that is, as people used to
say, an executive committee for managing the affairs of the bourgeoisie--a
government that is responsive to and concerned for the well-being of a
business class, a class who have a strong and conscious interest in rapid
economic growth. A government not beholden to those who have an interest in
economic growth is likely to soon turn into nothing more than a
redistribution-oriented protection racket, usually with a very short time
horizon.
Landes writes his book as his contribution to the project of building
utopia--of building a much richer and more equal world, without the
extraordinary divergences between standards of living in Belgium and
Bangladesh, Mozambique and Mexico, Jordan and Japan that we have today. Yet
at its conclusion Landes becomes uncharacteristically diffident and
unusually modest, claiming that: "the one lesson that emerges is the need
to keep trying. No miracles. No perfection. No millennium. No apocalypse.
We must cultivate a skeptical faith, avoid dogma, listen and watch well..."
Such a change of tone sells the book short, for there are many additional
lessons that emerge from Landes's story of the wealth and poverty of
nations. Here are five: (1) Try to make sure that your government is a
government that enables innovation and production, rather than a government
that maintains power by massive redistributions of wealth from its friends
to its enemies. (2) Hang your priests from the nearest lamppost if they try
to get in the way of assimiliating industrial technologies or forms of
social and political organization. (3) Recognize that the task of a
less-productive economy is to imitate rather than innovate, for there will
be ample time for innovation after catching-up to the production standards
of the industrial core. (4) Recognize that things change and that we need
to change with them, so that the mere fact that a set of practices has been
successful or comfortable in the past is not an argument for its
maintenance into the future. (5) There is no reason to think that what is
in the interest of today's elite--whether a political, religious, or
economic elite--is in the public interest, or even in the interest of the
elite's grandchildren.
It is indeed very hard to think about problems of economic development and
convergence without knowing the story that Landes tells of how we got where
we are today. His book is short enough to be readable, long enough to be
comprehensive, analytical enough to teach lessons, opinionated enough to
stimulate thought--and to make everyone angry at least once.
I know of no better place to start thinking about the wealth and poverty of
nations.
(This review is a long first draft of a review subsequently published (at
1/3 the length) by the Washington Post..)
J. Bradford De Long
Department of Economics
University of California- Berkeley
De Long is co-editor, _Journal of Economic Perspectives_; Research
Associate with the National Bureau of Economic Research;
visiting scholar, Federal Reserve Bank of San Francisco; and former
(1993-1995) deputy assistant secretary (for economic policy), U.S.
Treasury.
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