Thank You One and All for your interest, attention, consideration and patience with me. A family medical emergency is the real reason and David Landes' absence the official excuse for the tardiness of this my first general response and the delay till still later of my detailed reply.(posted 8757 days ago)I fully agree with Taylor and others that circa 1800 represents a disjuncture, and that it remains to be explained by me and others. I say 'remains to be' because I disasgree with Taylor et al when they contend that received theory has offered some satisfactory explanations. I contend that they are not even minimally satisfactory or accetable, and under title 2 below I again summarize - in three short paragraphs - my general reservations, written long before reading Landes's new book and your reactions to my critique thereof.
Under title 3 below, I then append MY OWN ALTERNATIVE EXPLANATION as a somewhat longer but still excessively short summary extract from my book ReORIENT. Of course, that is intended as a challenge to others to join in to the still outstanding task of constructing a holistic real world or really holistic global/world embracing explanation, in which Ken Pomeranz is also engaged, but alas David Landes is not [yet?].
I beg indulgence to postpone my detailed reply to critiques until I catch up with the backlog accumulated during the above mentioned medical problem and I sort out and put in order your responses that I have received via 5 e-mail diuscussion lists in differently assembled and packaged but also often duplicated/ triplicated form [which I offered to David Landes also to do for him in his absence aboad]. Then, I promise to try to address your specific comments, critiques and related or alternative explanations [thank you again] in a future detailed and organized 'comprehensive' reply. So for now, here goes only what I already wrote BEFORE I read what you just wrote, but after long-winded other discussions with some colleagies named below.
2. SUMMARY CRITIQUE OF RECEIVED THEORY AGAIN
Received theory attributes the industrial revolution and the "rise" of the West to its alleged "exceptionality" and "superiority." The source of the same is sought in turn in the also alleged long standing or even primeval Western preparation for take-off. This contention mistakes the place and misplaces the "concreteness" of the transformation by looking for it in Europe itself. Yet the "causes" of the transformation can never be understood as long as they are examined only under the European streetlight and must instead be sought under the world- wide global illumination in the system as a whole. That turns all received theory on its head.
The argument - and the evidence! - is that world development between 1400 and 1800 reflects not Asia's weakness but its strength, and not Europe's nonexistent strength but rather its relative weakness in the global economy. For it was all these regions' joint participation and place in the single but unequally structured and unevenly changing global economy that resulted also in changes in their relative positions in the world. The common global economic expansion since 1400 long benefited the Asian centers earlier and more than marginal Europe, Africa, and the Americas. However, this very economic benefit turned into a growing absolute and relative disadvantage for one Asian region after another in the late eighteenth century. Production and trade began to atrophy as growing population and income, but also their economic and social polarization, exerted pressure on resources, constrained effective demand at the bottom, and increased the availability of cheap labor in Asia more than elsewhere in the world. That world economic change also opened the door to the "Rise of the West,' which smust be re-examined in terms the more important global historical continuity instead of any and all its dis- continuities. The perception of a major new departure in 1500, which allegedly spells a dis-continuous break in world history, is substantially [mis] informed by a Eurocentric vantage point. Once we abandon this Eurocentrism and adopt a more globally holistic world or even pan EurAsian perspective, dis-continuity is replaced by far more continuity. Or the other way around? Once we look upon the whole world more holistically, historical continuity looms much larger, especially in Asia. Indeed, the very "Rise of the West" itself then appears derived from this global historical continuity. East Asia's renewed rise to world economic prominence makes it all the more urgent to focus on the long historical continuity of which this process is a part.
3. GUNDER FRANK'S ALTERNATIVE SUMMARY EXPLANATION:
A WORLD DEMOGRAPHIC/ ECONOMIC/ ECOLOGICAL EXPLANATION OF THE DECLINE OF THE EAST AND THE RISE OF THE WEST
My explanation has three related parts. A combination of demographic and micro-/macro-economic analysis identifies an inflection of population and economic productivity growth rates that led to an "exchange" of places between Asia and Europe in the world economy/system between 1750 and 1850. Microeconomic analysis of world- wide supply-and-demand relations and relative economic and ecological factor prices can show how they generated incentives for labor and capital saving and energy producing invention, investment and innovation, which took place in Europe. On the other hand, macroeconomic analysis of cyclical distribution of income and derivative effective demand and supply in Asia illuminate the opportunity to do so profitably in world economic terms.
This sumamry eplanation of the related "Decline of the East" and "Rise of ther West" may be briefly elaborated as follows: The simple hypothesis is that technological innovations were a function of demand and supply and of relative factor prices of inputs like labor, capital, and land. Therefore it was primarily the higher wages and relatively abundant capital in Europe that eventually generated labor saving and energy producing technology. This argument may be challenged by the observation [eg. by Pomeranz 1997] that the "industrial revolution" was less labor "saving" than labor "extending" and that it increased the productivity of both labor and capital. Direct wage rates or costs may also have been as high [or even higher] in some parts of China, eg. in the Yangtze Valley and the South, though probably not anywhere in India, than in some parts of Europe, especially England.
An unequal distribution of income generates luxury and import demand at the top and a large supply of cheap labor at the bottom. I contended that this was the case moreoso, and Pomeranz (1997) that it was not so, in China than in Europe, although we agree that it probably was more unequal than either in India. N9 But the problem of absolute, relative and world wide comparative wage costs - in entrepreneurial calculation as in our analysis of the same - is related also to local and regional problems of labor allocation. And there were some economic differences in labor allocation especially between agriculture and industry, which were related to some institutional differences. However, it is less clear to what extent these differences were underlying causes or of the observed allocation of labor or whether they were only different institutional mechanisms through which the labor allocation were organized. Particularly important differences were: A. Bonded labor in India (Pomeranz 1997). B. Women were tied to the village and their labor was restricted to agriculture and dopmestic industry, eg. spinning, in China (Goldstone 1996). C. Some industrial workers could still draw directly on some subsistence goods produced by women-village- agriculture in China but less so in England without having to aquire these through the market (Pomeranz 1997). D. Enclosures [to produce more cheaper wool for textiles on more land - "sheep ate men"] expulsed male and female labor from the land into urban un/employment in England [and elsewhere in Europe?].
The industrial "revolution" was initiated with cotton textiles, but these required both a growing "external" supply of cotton [for Europe - from its colonies] and a "world" market for all in which everybody had to compete [except China, which still had a growing and protected domestic and regional market]. The industrial "revolution" also required and took place in the supply and production of more and cheaper energy, especially through coal and its use in making and using machinery to generate steam power, first stationary and then also mobile. The critical role of coal and its replacement of wood as a source of fuel in Britain is demonstrated by Wrigley (1994). These sources of power technically and economically first required [and permitted] concentration of labor and capital in mining, transport, and production. Then they also permitted faster and cheaper long distance transport via steam powered railway and shipping.
Investment in such "revolutionary" industrial power, equipment, organization and the labor necessary to make them work was undertaken wherever, but also only where, it was economically rational and possible to do so, in terms of (A) Labor allocation and cost alternatives; (B) Location and comparative costs of other productive inputs [eg. timber/coal/animal/human sources of power and transport,as well as raw materials like cotton and iron], which were related to the geographical location of these resources and to ecological changes in their availability; (C) capital availability and alternative profitable uses; and (D) Market penetration and potential.
At the turn of the eighteenth-nineteenth centuries the above mentioned factors in world economic competitive and comparative circumstances, changes, and transformation generated the following results:
- India continued but was threatened in its competitive dominance on the world textile market on the basis of cheap and also bonded skilled labor. Domestic supplies of cotton, food and other wage goods continued to be ample and cheap; and productive, trade and financial organization and transport remained relatively efficient despite suffering from increasing economic and political difficulties. However, supplies of alternative power and materials, eg. from coal and iron/steel, were relatively scarce and expensive. Therefore, Indians had little economically rational incentive to invest in innovations at this time. They were further impeded from doing so first by economic decline beginning already in the second quarter of the eighteenth century or earlier; then by the [resulting?] decline in population growth and British colonialism from the third quarter onwards; and finally from a combination of both decline and colonialism as well as "Drain" of capital from India to Britain. India switched from being a net exporter to being a net importer of cotton textiles in 1816. However India did continue to struggle on the textile market and began again to increase textile production - by then also in factories - and exports in the last third of the nineteenth century.
- China still retained its world market dominance in ceramics, partially in silk and increasingly in tea, and remained substantially self-sufficient in textiles. China's balance of trade and payments surplus continued into the early nineteenth century. Therefore China had availability and concentration of capital from both domestic and foreign sources. However, China's natural deposits of coal were distant from its possible utilization for the generation and industrial use of power, so that progressive deforestation still did not make it economical to switch from wood to coal for fuel. Moreover, transport via inland canals and coastal shipping, as well as by road, remained efficient and cheap [but not from outlying coal deposits].
This economic efficiency and competitiveness of the Chinese on both domestic and world markets also rested on absolutely and comparatively cheap labor costs. Even if per-capita income was higher than elsewhere, as Bairoch notes, and its distribution was no more unequal than elsewhere [as Pomeranz and Goldstone claim], the wage good cost of production was low, both absolutely and relatively. Labor was abundant for agriculture and industry, and agricultural products were cheaply available also for industrial workers and therefore to their employers, who could pay their workers low subsistence wages. Goldstone (1996) emphasizes one reason: Women were tied to the villages and therefore remained available for [cheap] agricultural production. Pomeranz (1997) emphasizes a related reason: Urban industrial workers were still able to draw for part of their subsistence on "their" villages, which was produced cheaply in part by the women to whom Goldstone refers. In other words from an entrepreneurial industrial employer and market perspective, wage goods were absolutely and relative cheap; because agriculture produced them efficiently and cheaply also with female labor. The "institutional" distribution of cheap food to urban and other workers in industry, transport, trade and other services was functionally equivalent to what it would also have been if the functional distribution of income had been MORE unequal than it was. The availability of labor was high, its supply price low, its demand for consumer goods attenuated; and there was little incentive to invest in labor saving or alternative energy using production or transport. Elvin (1973) sought to summarize such circumstances in his "equilibrium trap." Even so, China still remained competitive on the world market and maintained its export surplus. Emperor Ch'ien Lung said in his 1793 message to King George III of England "I set no value on objects strange and ingenious and have no use for your country's manufactures" (Schurman and Schell 1967, I:108-109).
- Western Europe and particularly Britain were hard put to compete especially with India and China. Europe was still dependent on India for cotton textiles and on China for ceramics and silks that Europe re-exported and from which it profited in its [economic and/or political] colonies in Africa and the Americas. Moreover, Europe remained dependent on its colonies for most of the money it needed to pay for these imports, both for re-export and for its own consumption and other use, eg, as inputs for its own production and export. In the late eighteenth and early nineteenth centuries, there was a decline in the marginal if not also the absolute inflow of precious metals and other profits through the slave trade and plantations from the European colonies in Africa and the Americas. To recoup and even to maintain - never mind to increase - its [world and even domestic] market share Europeans collectively and its entrepreneurs individually had to attempt to increase their penetration of at least some markets, and to do so either by eliminating competition politically/militarily or by undercutting it by lowering its own costs of production, or both.
Opportunity to do so knocked when the "Decline" began in India and West Asia, if not yet in China. Wage and other costs of production and transport were still uncompetitively high in Britain and elsewhere in Europe. However especially after 1750, rising incomes and declining mortality rates sharply increased the rate and amount of population growth. Moreover, the displacement of surplus labor from agriculture increased its potential supply to industry. At the same time, the imposition of British colonialism on India reversed the perennial capital outflow to India and turned it into "The Drain" from India and into Britain. Moreover, a combination of commercial and colonial measures would permit the import of much more raw cotton to Britain and Western Europe. Deforestation and ever scarcer supplies of wood and charcoal and rendered these more expensive.
At the same time since the second third of the eighteenth century, first relative and then absolute declines in the cost of coal made the replacement of charcoal [and peat] by hard coal increasingly economical and then common in Britain. The Kondratieff B phase in the last third of the eighteenth century generated technological inventions and improvements in textile manufacturing and steam engines [first to pump water out of coal pits and then also to supply motive power to the textile industry]. At the turn of the eighteenth- nineteenth centuries, the "first" A phase [identified by Kondratieff] and the Napoleonic wars generated increased investment in and the expansion of these new productive facilities and then also of transport equipment. Ever more of the available but still relatively high cost labor force was incorporated into the "factory system." Production increased rapidly; real wages and income declined; and "the workshop of the world" conquered ever more foreign markets through "free trade." Yet even then, British colonialism had to prohibit free trade to India and recurred to the export of its opium to force an "Open Door" into China.
- Most other parts of the world still fall through the cracks of our world economic analysis. Yet in brief, we can observe that most of Africa may have had labor/land ratios at least as favorable to labor saving investment as Europe. However Africa did not have an analogous resource base [except the still undeveloped one in Southern Africa], and far from having a capital inflow, Africa suffered from capital outflow. The same was true of the Caribbean. Latin America had resources and labor, but also suffered from colonial and neo-colonial capital outflow as well as specialization in raw materials exports, while its domestic markets were captured by European exports. West, Central Asia, and Southeast Asia became increasingly captive markets for if not also colonies of Europe and its industry, to which they supplied the raw materials that they had previously themselves processed for domestic consumption and export. In the nineteenth century, only the European "settler colonies" in North America, Australasia, Argentina, and Southern Africa were able to find other places in the international division of labor, and China and Japan were able to continue offering significant resistance.
In short, changing world demographic/ economic/ ecological circumstances suddenly - and for most people including Adam Smith unexpectedly - made a number of related investments economically rational and profitable: in machinery and processes that saved labor input per unit of output, thus increasing the productivity and use of labor and its total output; increasing productive power generation; and increasingly productive employment and productivity of capital. This transformation of the productive process was initially concentrated in selected industrial, agricultural, and service sectors in those parts of the world economy whose comparative competitive POSITION made -- and then continually re-made -- such Newly Industrializing Economies [NIE] import substituting and export promoting measures economically rational and politically possible. Thus, this transformation was and continues to be only a temporally localized and still shifting manifestation of a WORLD economic process, e