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from jbdelong@home.com (delong@econ.berkeley.edu)
I find myself worried that we might be about to fall into what I think of as the Rostow strap. A generation ago W.W. Rostow knew that the industrial revolution was important, and concluded that it must have shown itself in a rapid jump in economy-wide productivity levels and rates of economic growth.

It didn't.

Even large structural changes in a small sector have--initially-- little effect on economy-wide averages.

Today I think that we are in danger of making that mistake in reverse: just because we can see no large productivity differentials at the level of the economy as a whole between, say, southern France and Lingnan (:-) I'm learning) in the eighteenth century doesn't mean that the differences in technology, economic structure, ideology, politics, and culture weren't important...

>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 think that David Landes's treatment of non-European Eurasia and North Africa is probably wrong in two different dimensions, but let me concentrate only on the first. The first is Landes's belief that climate near the equator somehow militates against first commercial development and second industrialization. The second is his overly- static picture of the agrarian civilizations of temperate-zone Asia.

Landes wants to argue that because tropical climates are hot and disease-ridden, that human productivity there is low, hence no civilization can ever amass the surplus above biological subsistence necessary to set out on the road that eventually leads to industrialization.

The problem is that Landes is also a follower of the tradition of M.M. Postan (as am I) --that before the industrial revolution it is probably informative and insightful to try to analyze human civilizations from the perspective of ecologico-cultural equilibrium. When living standards are relatively high, birth rates are high and death rates are low; when living standards are relatively low birth rates are low and death rates are high (or, rather, variable). This means that if technological progress is sufficiently slow (and before the industrial revolution it was "sufficiently slow" always and everywhere), then a civilization's population density will within several generations adjust itself to resources and technologies in such a way that keeps living standards oscillating around the civilization's set-point of rough population balance.

Thus in the long-run of a century or so, a civilization's living standards are determined not by its summer temperature or by the prevalence of pinworms, but by its ecological and cultural practices that determine its set-point. A civilization like northwest Europe can have a relatively high set-point if culture delays marriage until the male member of the couple has a farm or a secure place. A civilization like that of the Yangtse delta as described by Ken Pomeranz can have a relatively high set-point if heads of lineage restrict their younger siblings fertility . A civilization like that of Poland can have a relatively low set-point if the second serfdom turns large proportions of the population into landless laborers with no incentive to delay nuptuality or diminish fertility. A civilization like that of the Yellow River valley can have a relatively low set-point if senior members' control over lineage juniors breaks down.

As a result, I think that Landes's argument that regions near the equator were always extremely unlikely places for commercial and industrial revolutions is deeply flawed. Hot summers and the consequent difficulty of hard summer work might keep Ceylon from having the pre-industrial population density of the Rhine delta (or the Yangtse delta), but I don't think that they have any implications for pre-industrial average living standards. If you wanted to rescue Landes's argument about climate, I think you would have to identify a line of causation running from location near the equator to some particular set of ecologico-cultural practices that leads to a relatively low living-standard set-point...

>- 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.

I have often wondered whether late seventeenth, eighteenth, and early nineteenth century European perceptions that labor was cheap in the Orient might not have been consequences of American silver and the price revolution: wages were low in the Orient, but subsistence was cheap as well. Large nominal wage differentials (large enough to make China and India super-competitive with Europe as producers of cotton textiles, ceramics, and silks) are perfectly consistent with relatively equal real wages and living standards, with a higher nominal price level in Europe, and with a consequent flood of specie out of Europe to Asia. (And, later, a flood of EOC opium out of India to China.)

>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.

A point for Gunder Frank is the failure of the industrial revolution to take root first in the Netherlands. It seems as though the Dutch had better--more productive and more value-adding--things to do than to monkey with steam engines and put workers who could be adding lots of value on the Amsterdam docks to work watching early spinning machines.

Or so I read Jan de Vries and Adrian van der Woude...

(posted 8750 days ago)

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