Wednesday, July 30, 2008

Killing the consensus with one thousand cuts   posted by Razib @ 7/30/2008 12:09:00 PM

Yesterday I finally finished Kenneth Pomeranz's The Great Divergence: China, Europe, and the Making of the Modern World Economy. This was no easy read, even at only ~300 pages. Will Ambrosini characterized Greg Clark's Farewell to Alms as a book length response to The Great Divergence, and I can see where he is coming from. Contra Clark and the dominant consensus in economic history Pomeranz marshals the evidence which suggests that China & Japan were basically as wealthy as western Europe during the 18th century, and that many of the presumed necessary preconditions for the economic liftoff which we term the Industrial Revolution after the fact also held for eastern Eurasia. But Pomeranz has his own solution for why the West, and in particular England, rose to prominence when it did: the location of coal near the core economic regions combined with the massive input of land due to the opening up of the New World.

Those of us who are a bit younger no doubt encountered a fair amount of revisionist history. Instead of a "Whiggish" vision where civilization ascended in a linear fashion from Greece, to Rome, to the Middle Ages and onto the culmination of the Anglo-American culture, we were reminded that during the medieval period the West was much less than the rest, while even during the height of Imperial Rome Han China flourished with relative parity. Instead of these impressionistic generalizations the central figures in economic history, such as Angus Madison, emphasize that the revisionism might have been true in economic terms in 1000, but not by 1500. In the year 1000 western Europe was a rather poor region compared to the Islamic societies or China. By 1500 the conventional wisdom seems to be that much of western Europe was at least at parity, and likely one of the wealthier regions of the world on a per capita basis, if not the wealthiest. Because of the raw size of China and India Asia was still the economic center of the world, but by 1500 Europe, in particular its west, was no longer marginal. Between 1500 and 1800 western Europe might have been the wealthiest and most powerful region of the world on a per unit basis, but non-European powers could still operate on the same playing field, as evidenced by the need for European powers such as Britain and France to curry favor with Asian potentates to obtain trading rights. During the 19th century this changed; what was a difference in wealth on the margins transformed into one characterized by a qualitative chasm (symbolized by the maxim machine gun).

The Great Divergence tries to throw some cold water on the metrics used to make the case that Europe was already wealthier, and more well positioned institutionally, to achieve liftoff at the end of the 18th century. It is obvious that Pomeranz is correct when he seems to imply that there are apples to oranges comparisons; much of eastern Europe remained quite poor, so it was not Europe as a whole which was wealthy (there were even extremely large variations within nations, such as the Rhineland vs. eastern Prussia). Additionally, China was characterized by a great deal of the regionalism so that the most dynamic subunits of that civilization are more usefully compared to with France, Britain and the Low Countries, the most advanced subunits of the greater European economic region. All that being said, only someone who is rather well versed in the literature in economic history could appreciate much of the material that Pomeranz references throughout the narration; to a great extent The Great Divergence was argument by filibuster. Those who are familiar with the full body of the literature may be able to evaluate the power of the argument, but for those of us who are relatively uninformed we are simply confronted with an undifferentiated mass of data.

Some of the data and insight was very useful. For example, cultural historians often attempt to claim that one reason that the Chinese imported so little from European nations was because of their own superior attitude. In other words, the dynamics we observe were driven by variations in taste. This is an entirely plausible argument, and one which I accepted. Entire swaths of scholarship are based for example on the contempt which the Chinese government directed at European trade delegations and their wares. Pomeranz makes the argument that the imbalance in trade was a function of the fact that China was re-monetizing their economy with silver, and Europeans were there to provide silver through the opening of New World mines. The difference in value of silver in China and the rest of the world naturally resulted in an arbitrage opportunity so that the Middle Kingdom was a magnet for this metal; naturally the Chinese had to pay for silver with products, ergo, the export in finished goods such as porcelain. This economic argument does not negate the cultural explanation, one might admit that cultural and economic trends often dovetail or play off each other synergistically, but this sort of datum is gold in trying to understand how history plays out.

With that, I'll open up the comments to those who know the literature and what their opinions might be.

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