6 of 6 people found the following review helpful
Brilliant study of world trade,
This review is from: Power and Plenty: Trade, War, and the World Economy in the Second Millennium (The Princeton Economic History of the Western World) (Hardcover)
Ronald Findlay, a professor of economics at Columbia University and Kevin O'Rourke, a professor of economics at Trinity College, Dublin, have written a fine history of world trade since 1000. They pick out three events as world-historical - the Black Death, the opening of the New World, and the Industrial Revolution.
They describe Genghis Khan's unification of most of the Eurasian landmass. Plague then killed between 25 million and 80 million people in Europe in 1348-51. But the resulting labour shortage made wages rise between 1350 and 1500. By contrast, population growth, as in the 13th century, reduced wages.
The age of mercantilism, based on British industry, American agriculture and African slaves, lasted from 1650 to 1780. Empires struggled for control of the New World's resources, land and trade. The Americas provided elastic supplies of land; Africa provided elastic supplies of cheap labour. Britain, atypically, industrialised with free trade, but our industrialisation did not depend on the slave trade: in 1770, its profits were only 0.54% of Britain's national income.
The 1792-1815 wars ended mercantilism. The authors call 1780-1914 the great specialisation, when the West European empires deindustrialised India and China and forced them to supply cheap raw materials and labour. World War One ended the liberal economic order of the late 19th-century.
The authors call World War One `an exogenous shock to the international economic system' and the Great Depression `a second major shock'. But both resulted from capitalism. They call 1914-39 the era of deglobalisation and note, "tariffs were positively associated with growth across countries in the interwar period."
1939-2000 saw reglobalisation. The authors claim that the median developing country failed to grow between 1980 and 1999 `despite the trend toward greater openness' - but that is only if you wrongly assume that openness brings growth.
As they admit, "Simple monocausal relations between openness and growth are not supported by the data ... Growth depends on a wide range of variables other than exposure to trade". To grow, countries need to boost investment in equipment, R&D and education, and to employ a larger portion of the population in industry.
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Initial post: 12 Sep 2010 12:49:03 BDT
"...our industrialisation did not depend on the slave trade: in 1770, its profits were only 0.54% of Britain's national income." They also say that this is a red herring and that slavery accounted for 30% of the economy and that 'elastic' supply of African labour was fundamental to the exploitation of 'elastic' supplies of New World land. From this point of view slavery was fundamental. Stalin did something similar to Russian and Ukranian peasants in the 1930s with similar effects.
In reply to an earlier post on 13 Sep 2010 09:49:21 BDT
"slavery accounted for 30% of the economy" - what does this mean? 30% of production in the empire?
30% of all the profits?
My point about industrialisation was that the profits from slavery in the empire did not get invested back home in industry. That is, industry did not depend on empire.
In reply to an earlier post on 21 Sep 2010 13:14:04 BDT
If you read pp. 334-345 again, you'll see.
In reply to an earlier post on 22 Sep 2010 09:32:37 BDT
Yes, but I disagree with Professor Findlay: I maintain that the profits from slavery in the empire did not get invested back home in industry, but usually got wasted on conspicuous consumption and display, eg. Beckford's Gothic folly.
In reply to an earlier post on 22 Sep 2010 10:00:42 BDT
Last edited by the author on 27 May 2012 13:08:10 BDT
You may be right but the point is that the resources for such consumption would have come from a net economic gain (to the boss class). With profits from slavery available for luxuries there would be more available for necessities. Note that economic speculation is a gamble and that gambling is a luxury too.
In reply to an earlier post on 22 Sep 2010 10:02:38 BDT
Last edited by the author on 7 Apr 2011 12:58:09 BDT
PS your reviews are always interesting, do you write anywhere else on t'interweb?
In reply to an earlier post on 22 Sep 2010 13:41:34 BDT
Thank you for your kind comment.
No, I'm afraid I don't do blogs or twitter, but I also contribute to Red Pepper's forums.
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Power and Plenty: Trade, War, and the World Economy in the Second Millennium (The Princeton Economic History of the Western World)(7 customer reviews)
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