Sunday, May 25, 2008

When Histories Collide: The Development and Impact of Individualistic Capitalism   posted by Razib @ 5/25/2008 06:10:00 PM

A few weeks ago Steve mentioned Raymond Crotty's When Histories Collide: The Development and Impact of Individualistic Capitalism. When I clicked through the link the cover looked familiar; turns out that I'd seen it at my local used book store and had passed on it since I already had a backlog of economic history I was working through. But Steve's post piqued my interest, and Greg also had mentioned Crotty's lactose tolerant-centric theory of history. So I purchased it, and read it over the past week. Even including the foreword and preface this is a short work, around 300 pages, but When Histories Collide is relatively data dense and at times almost inscrutable to anyone not stepped in Irish agricultural economics & cliometrics. The text has a disjointed feel, and Crotty's son who had to edit the work after his father's death notes that he placed the Irish chapters near the end of the narrative despite the fact that they would likely have been interspersed through the text seamlessly if his father had his way. Though the author's death before the final revisions to When Histories Collide might have dampened its public reception somewhat, I have to observe that Crotty's swan song is laced with far more quantitative econometric detail than Greg Clark's Farewell to Alms. Combined with the constant algebra of factors of production and implicit references to comparative statics, I believe that When Histories Collide simply lacks the literary elegance to have had any mass market appeal. That being said, who cares about mass market appeal? I don't. When Histories Collide is larded with just the type of data which keeps you turning the page.

Of course, data isn't the only item on the menu here, as an economist Crotty brings some noticeable theoretical baggage. His central thesis is that the rise of individualistic capitalism in West Central Europe1 is sui generis, as distinct from hunter-gatherer, pastoralist and Asiatic modes of production (he uses the term riverine agriculture, but it's pretty clear that most people would recognize this as Asiatic mode of production). Additionally, there are a few other types, such as the slave based individualistic capitalism of the ancient Mediterranean, and the elite capitalism of post-colonial states (e.g., Latin America). Crotty's macrohistorical model as it applies to development economics is rather straightforward: individualistic capitalism emerged in a particular place and time, and the Great Divergence is a byproduct of those conditions. These means the export of this system of economic development and productivity is going to be problematic; the societies of East Asia are a particular exception because they were not colonized and so their indigenous cultural systems were not extinguished. Rather, these societies integrated Western ideas and tools in an eclectic manner in keeping with their cultural biases and strengths. Crotty labels the East Asian Tigers as "collectivist capitalism." From what little I know of East Asian economic production I don't think this is an unfair characterization, though globalization is making these typologies less relevant when transnational companies span civilizational boundaries.

Despite the editing which places the Irish material toward the end of the book it is quite clearly foreshadowed throughout the book. It is Crotty's deep case study which illustrates just how sui generis individualistic capitalism is, and how difficult, nigh, impossible, it is to export it to colonized societies which are habituated toward a different mode of production (Ireland leans towards pastoralism). Ireland, being the British nation's first large scale colony, and the longest experiment in such a relationship (lasting from the Tudor period down to 1921), is therefore ideally placed to illustrate the general dynamics. Additionally, a few particularities of Ireland such as its proximity to the colonizing country and its later assimilation into the European Economic Community bring into sharper focus the causal factors behind its deviations from the standard post-colonial narrative.

There is unfortunately an awkward problem; the Celtic Tiger. Crotty died in 1994, and he was clearly writing until the end as his statistics are up to date as of 1992. But it is also obvious that a great deal of the material draws upon the author's nearly 40 years of scholarship in the field of agricultural economics, so the echo of the Ireland of 1960 looms large. From what I can tell it seems that Crotty assumed that the economic robusticity of the Ireland of the second half of the 20th century was a credit driven mirage which would ultimately founder on the lack of institutional support; and it seemed that he believed he saw it already occurring by the early 1990s. I am well aware that there is a great deal of debate about Ireland's economic growth and how to interpret the various indices. As with much social science there is plenty of revisionism which attempts to dig out more nuance from the "first look" impressions generated by something like per capita income. I'll grant that on the margins there is something to debate, but I think it's pretty clear at least over the past 15 years Crotty was just not right about Ireland and its inability to join the other nations of Europe on their level and terms. The foreword for When Histories Collide was penned by a colleague of the author in 2001; and I felt his assessment of the Irish economy since Crotty's death was telling, as he made only the most perfunctory attempts to defend his friend's doom & gloom prognostication. It seemed implicitly to be suggesting that prediction is less critical in a work of such grand scope as When Histories Collide, at least over normal human time frames, and the insights which one might gather are still worth an examination of the full structure of the argument.2

I agree with this. Because of my general skepticism of the predictions made in When Histories Collide I will avoid detailing the Georgist prescription which Crotty offers as his ultimate plan for how to ameliorate poverty. But, I want to highlight one more systematic flaw: a general tendency toward historical sloppiness. This seems to be a major feature of economic history in general; the preoccupation with macroeconomic forces tends to sweep aside details of history to the point where falsity and misrepresentation regularly creep in. John Nye's War, Wine, and Taxes: The Political Economy of Anglo-French Trade, 1689-1900 is a nice exception to this general rule, but I suspect the rather narrow purview of this work explains the tight fidelity to reality as opposed to the standard stylized historical sketches borrowed from high school textbooks.

I will offer two examples which illustrates the weakness in the area of historical details which plague When Histories Collide. First, Crotty offers a model for the emergence of ancient Mediterranean civilization predicated on the synthesis of Indo-European pastoralists with indigenous Phoenician agriculturalists. What's the problem here? Phoenicians were a specific group of Semitic speaking peoples who flourished in what is today's Lebanon. As a colonizing people they do not pre-date ~ 1000 BCE. We know that Greek was spoken in Greece by ~1500 BCE; and likely Indo-European languages were extant on the northern shore of the Mediterranean well before 1500 BCE. Additionally, note that I stated on the northern shore of the Mediterranean, Phoenician colonies as it happened were almost all planted in non-Indo-European areas, and mostly on the south shore. By Phoenician Crotty actually means the diverse pre-Indo-European speaking substrate of the northern Mediterranean which the Greeks, Latins and other assorted peoples replaced and assimilated (some of these pre-Indo-European speakers remained down to the Roman period, e.g., Iberian).

Of course, I will admit that to some extent the error doesn't truly undermine the structure of the author's thesis: that there was a synthesis between these two broad cultural types (whatever you may term them) which resulted in the civilization of the Mediterranean. The second argument is specifically about the economic motor of the ancient Mediterranean, and I believe it to be a more telling error. In short, Crotty argues that the creativity of ancient Mediterranean capitalism was contingent upon the ubiquity of slavery. Slavery was a normal institution before the modern period; all societies had some forms of slaves, but different societies practiced slavery to different quantitative extents. The cultures of the ancient Mediterranean, specifically Greece and Rome, as well as the more recent race-based slave societies of North America and the Caribbean, are exceptional in the centrality of slavery in terms of economic production (in many societies slaves are luxuries or a trivial demographic). Though slaves were only a minority in the Roman world (around 25% of the population) Crotty argues that their economic productivity was the engine which drove the efflorescence of ancient civilization. Slaves could not consume the fruit of their own labors, so their productivity so sequestered freed up ancient elites as surplus for leisure and warfare. The structure of the argument here is plausible, but the problem is when Crotty makes the argument about where the slaves came from: the steppe. Here Crotty his going back to his history where Indo-Europeans and Phoenicians came together to produce Mediterranean civilization; the steppe is a region where the need for labor is minimal because of the pastoral lifestyles, it is land that is limiting, and so the excess population is driven into the cauldron of civilization. Here, they are enslaved and their productivity drives Mediterranean society. The problem is that it seems to me totally implausible that the steppe had a large enough population that it could ever have supplied enough human beings to replenish the constantly dying 1/4 of the Roman Empire's population which consisted of slaves. As a point of fact it seems that Northern Europeans, especially those from beyond the limes, were the primary exogenous source of slaves. But, I also have read that the Romans bred slaves on farms in Sicily, so there was also endogenous production. Crotty's argument is that when the Roman Empire reached its natural limit and was no longer sucking in slaves through wars it naturally collapsed because of the diminishing of its economic engine. I don't believe this, it oversimplifies some real complexities of the period between Augustus (the early Empire) and Late Antiquity, when the classical state collapsed. The consensus scholarship seems to be that the Roman Empire recovered from a near collapse in the 3rd century in the 4th, and though society was reconstituted so that we could see the vaguest of outlines of the medieval system already in the post-Diocletian period, it may be only that repeated exogenous shocks in the 5th century succeeded where those of the late 2nd and 3rd failed. Instead of a historical deterministic process, what we have is historical contingency which would have lead to a fall probabilistically at some point.

I've harped on the negative points of the book to this point because I don't want people to purchase this assuming that they'll get a literary tour de force on the scale of Guns, Germs and Steel; rather, When Histories Collide exhibits all the strengths and weaknesses of Farewell to Alms magnified. But what are those strengths? Here's a sample of what I think is worth reading through all the issues above for:
...Very roughly, the same pastoral resources will, in a year produce 400 gallons of milk (the yield from a mediocre cow) or 250 lbs. liveweight gain from a bullock, or ox.

The milk, which weighs roughly 10 lbs. per gallon and has about 12 percent dry matter content, gives 400 X 10 X 0.12 = 480 lbs. of digestible dry matter. The bullock liveweight gain will convert into carcass at around 55 lbs. carcass per 100 lbs. liveweight. The carcass has about 70 percent meat and fat (the balance being inedible bone), of which the dry matter content is about 50 percent. The bullock liveweight gain gives therefore 250 X 0.55 X 0.70 X 0.5 = 48 lbs. (approx.) of digestible dry matter

Thus the acquisition through natural selection under these crop-less circumstances of the ability to consume milk from other species beyond infancy and, indeed, as in the case of the Tutsi in Rwanda, to live on an almost exclusively milk diet, made it possible for more people, therefore more efficient and powerful people, to live on given pastoral resources.

Consider that. The milking of cows can increase the agricultural productivity of a unit of land by an order of magnitude! (assuming that the land is not arable) No wonder lactose tolerance swept across many populations so fast! Crotty identifies three general cow-cultures:

1) The pastoralist model

2) The South Asian model, the "apotheosis of the cow"

3) The European model; in particular, the model associated with the rise of individualistic capitalism

The pastoralist model is pretty straightforward; man have cow, man milk cow, man defend cow from enemy. This way of life puts a premium on land but requires little labor or capital inputs; you put the cattle out to pasture and make sure that they do their thing and protect them from predators and rustlers. Crotty presumes that this was the culture which arose among the Proto-Indo-Europeans on the steppe, and it is what exists among the Nilotic peoples of Africa, and also was the norm among the pre-modern Irish. The apotheosis of the cow doesn't need much description, everyone knows that South Asians (Hindus and affinal groups specifically) do not consume beef and hold the cow to be sacred. The standard economic explanation here is that cows are more efficient bundles of calories integrated over time through milk extraction than as a one time item for slaughter. But there's a twist to this in India which I only know because of Marvin Harris' Cows, Pigs, Wars, and Witches: The Riddles of Culture: the cows which wander the cities and countryside of India are generally cows, that is, female. Where are all the bulls? They're being used as draught animals! South Asian agriculture is obviously extremely intensive in labor, and cattle serve the role that water buffalo do in the moister regions of Asia (including the margins of South Asia). Crotty doesn't mention this, but I think that's another part of the puzzle. And it fits in which another datum which plays a role in the thesis of how and why individualistic capitalism arose: Indian cows need to have their young reared to give milk. Obviously you couldn't kill the calf which was the reason for the milk production.

The final cattle culture is that of Western Central Europe; the region of northern France, the Low Countries and Western Germany characterized by 3-crop rotation and draft animals with mouldboard plough by the medieval period. I can't do justice to the detail of Crotty's argument here, and to some extent I don't think it all fits together, but there are many intriguing pieces. Lactose tolerance comes into the picture because when the Proto-Indo-Europeans brought the cow and their ability to digest milk into Central Europe they opened up the possibility for a new lifestyle. Because of the low agricultural productivity in this region in regards to cereals, using these crops as fodder for cattle was attractive. Middle Eastern cereals were simply not well adapted during the early phases to the Northern European climatic regime. Additionally, low quality or unpalatable crops like oats were sometimes the only option, and these were more productively fed to cattle to convert into more palatable nutritional items (whether as milk or meat). But there's a problem here: European winters mean that there's no pasturage to keep the cattle alive through the winter. So fodder is of the essence. Because this is relatively limited Europeans would have to kill most calves so as to maximize the feed for the adult cows. After you kill an animal, of course you eat it since to do otherwise would waste valuable protein and fat, so there is no apotheosis of the cow in a society where the cow may nevertheless be a central fixture.

The production and generation of fodder for cattle by smallholders is a critical part of the story of the generation of individualistic capitalism. In short, it habituates the average person toward low time preference as an interlocking set of agricultural operations are set into motion to maintain subsistence in an ecologically marginal environment. For Crotty the "bottom up" nature of this societal shift is critical as the emphasis on capital over land or labor as the factor of production which would increase marginal product is what will lead to the takeoff of the Great Divergence thousands of years into the future. Unlike classical Mediterranean civilization Western European individualistic capitalism can weather famine, pestilience, and other exogenous shocks of God. Capital persists while slaves die. The dispersal of technological initiative through society gives it a redundant robusticity lacking in other top-down civilizations. In our modern world the power of capital in the form of technological innovation in perpetuating a world of plentitude always outrunning the Malthusian Trap is obvious, but only Central West Europe managed to hit upon that formula in the pre-modern world because of the confluence of particular ecological and cultural parameters at a particular moment in time. Crotty argues that the capital intensive post-Malthusian Developed World was not inevitable, but a contingent fact of history.

Ecological constraints play a large role in explaining why Ireland is different in this model; the mildness of Ireland's maritime regime means that winter fodder is unnecessary. Transhumance and semi-pastoralism is feasible in this scenario; and, critically it is important to note that pre-modern Irish cattle were more like their South Asian cousins than continent European lineages. They only gave milk when with calf! The selection process whereby only the best milk producing lineages were kept and most calves killed in the fall did not apply to Ireland. From this ecological difference flows the great differences between the folkways of the Irish and those of peoples to the East. Speaking of which, When Histories Collide takes occasional forays into Eastern Europe, where it is explained that autocratic capitalism developed along the Slavic frontier. Here obviously land was not limited, and labor was at a premium, but capital intensive methods from the West could be introduced periodically to push the frontiner outward. By the time of the gunpowder empires the steppe ascendency in terms of arms was finally banished and a synergistic alliance of peasants (labor) and boyars (capital) swept across the land. But the fundamental distribution of techniques remained distinct from those of Western Europe, where technological innovation bubbled up from below rather than horizontally via elites. In the north, in Scandinavia, the local human capital was well equipped to leverage the horizontally transmitted suite of the Western European economic system, replicating individualistic capitalism once the technological wavefront had pushed far enough to overcome ecological hurdles.

Obviously this is only a small slice of the arguments presented in Raymond Crotty's magnum opus, but it's a representative taste. Clearly I think there are some serious issues with the depth of the scholarship on the margins, but the details of history which I think are rather embarrassing in the ignorance that they bespeak is not entirely out of place in the corpus of economic history. That being said, as I noted above some of the arguments about the slave-based individualistic capitalism of the ancient Mediterrean are premised on unrealistic assumptions which derive directly from the lack of a dense network of historical priors. Crotty's analytic tools were ones of mathematical economics, and his empirical database was one of agricultural economics, in particular Irish agricultural econometrics and history. The limits to his disciplinary horizons often shows. Nevertheless, I don't believe that Crotty falsified the tables or the quantitative data he repeats, and those alone are worth perusing this book. Who knew that for most of history the per unit productivity of agriculture in China was about twice that of South Asia? Crotty did, and I didn't. I don't think that the grand theoretical arguments should be taken without some major salting and curing; as I said recent history seems to have proved him wrong in Ireland, and to a lesser extent the post-colonial world as a whole. His model of the past has great descriptive flaws and would have been better served with a more robust cliometric framework. But by & large When Histories Collide is a good complement to more polished recent works such as Farewell to Alms and The Great Divergence.

Related: 10 Questions for Greg Clark, A World of Difference: Richard Lynn Maps World Intelligence, Group lifespan differences? Maybe it's agriculture and The Horse, the Wheel, and Language: How Bronze-Age Riders from the Eurasian Steppes Shaped the Modern World. Do note that Amazon is telling me that those who purchased When Histories Collide also bought The Horse, the Wheel, and Language: How Bronze-Age Riders from the Eurasian Steppes Shaped the Modern World. Not surprising, but shows the general slant of Crotty's macrohistory.

1 - By West Central Europe one can imagine the lands which are just to the West and East of the Rhine; northern France, the Low Countries and western Germany.

2 - Crotty also asserts that post-colonial poverty will increase in the future do the poor fit between individualistic capitalism and most societies. I think on the balance Crotty has again been proven wrong; even removing China from the equation it seems that on the whole the world has not seen economic retrogression with the possible exception of large swaths of Africa. Despite the Asian flu of '98 and rollback from the Washington Consensus, both Southeast Asia and Latin America seem to be better off than they were a generation ago.

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