Economic Change in Global History, 1500-2000
International Workshop co-organised by the Economic History Department, London School of
Economics and the Global History and Culture Centre, University of Warwick
London School of Economics
27-28 May 2016
The origins of the international economy is a central question for comparative economic
history. In the past, major works in the field constructed arguments by studying mainly Western
Europe and North America from the nineteenth century to the present times. In the last
decade, the field of global economic history has contributed path-breaking new research on
Asia, Africa, and Latin America, and has pushed the boundaries of the debate at least a hundred
years further back from the nineteenth century.
The divergence literature has also highlighted at least three different modes of doing
global economic history, which draw on each other but also maintain a certain distance and
autonomy from each other. One of these is comparative history and deals with mainstream
questions in economic and business history, such as, whether pre-modern commerce led to
modern economic growth or not, and why its growth potentials varied in quality and scale
between regions. This part of global history has seen animated debates in the recent times,
joined often by applied economists, but it often involves working with simplified models of the
pre-modern economy.
A second paradigm in global history deals with commercial linkages as such, and goes to
great lengths to show the diversity and complexity of these linkages. A fine example of this
paradigm is the scholarship on Indian Ocean trade, which has shown how the Indian Ocean
trading world contained many sub-regional trading worlds within it, before the advent of the
European chartered companies in the region. If the former is comparative history, the latter can
be called history of connections.
A third paradigm yet engages in both comparisons and connections, but from the
vantage point of specific world regions. Such works explore connections and tests models of
divergence mainly by re-examining the evidence of specific regions, which can be very large and
complex entities in themselves.
This workshop brings together a group of scholar to consider these different
methodological perspectives to the study of economic change over the longue durée.
This workshop is supported by the Economic History Society, the LSE Economic History Department, the Warwick
History Department and the Warwick Global History and Culture Centre.
Thursday 26 May 2016
19.30 - Dinner
Friday 27 May
9.00-9.20 - Introduction
Globalization and Economic Change in History – Tirthankar Roy and Giorgio Riello
9.20-11.20 – Session 1. Divergence in Global History (I)
Prasannan Parthasarathi (Boston College) and Kenneth Pomeranz (Chicago University), The
Great Divergence Debate
Jack Goldstone (Hong Kong University of Science and Technology), A Revolution in Two
Steps: Great Reversals in World History
Maarten Prak (Utrecht University) and Regina Grafe (EUI), State Formation and Empire: The
construction of institutions for economic growth
11.20-11.40 - Coffee Break
11.40-13.00 – Session 2. The Emergence of a World Economy (I)
Tirthankar Roy (London School of Economics) and Giorgio Riello (University of Warwick), Trade
and the Emergence of the World Economy
Bernd-Stefan Grewe (Pädagogische Hochschule Freiburg), Global Commodities and Commodity
Chains
13.00-14.00 - Lunch
14.00-16.00 – Session 3. Divergence in Global History (II)
Kaoru Sugihara (National Graduate Institute for Policy Studies (GRIPS)), Varieties of
Industrialization
Maxine Berg (University of Warwick), Consumption and Global History
Patrick O'Brien (London School of Economics), Technology and Useful and Reliable Knowledge
16.00-16.30 – Coffee break
16.30-18.30 – Regional Perspectives to Global Economic Change (I)
Gareth Austin (Cambridge University), Sub-Saharan Africa
Alejandra Irigoin (London School of Economics), The Americas
Peer Vries (University of Vienna), Europe
19.30 - Dinner
Saturday 28 May
9.00-10.20 – Session 4. The Emergence of a World Economy (II)
Alessandro Stanziani (EHESS), Migration and Labour Regimes
John McNeill (Georgetown University), The Environment and the World Economy
10.20-10.50 – Coffee break
10.50-12.50 – Regional Perspectives to Global Economic Change (II)
J. Thomas Lindblad (Leiden University), Changing Destinies in the Economy of Southeast Asia
Debin Ma (London School of Economics), Economic Change in East Asia in 1700-1950
Bishnu Gupta (University of Warwick), Colonization and Structural Change in India
13.00-13.30 – Final discussion
13.30 - Lunch
ORGANISERS
Tirthankar Roy, LSE, t.roy@lse.ac.uk
Giorgio Riello, Warwick, g.riello@warwick.ac.uk
PARTICIPANTS
Gareth Austin, Cambridge University
Maxine Berg, University of Warwick
Jack Goldstone, Hong Kong University of Science and Technology
Regina Grafe, EUI
Bernd-Stefan Grewe, Pädagogische Hochschule Freiburg
Bishnu Gupta, University of Warwick
Pat Hudson, Cardiff University
Alejandra Irigoin, LSE
J. Thomas Lindblad, Leiden University
Debin Ma, LSE
John McNeill, Georgetown University
Prasannan Parthasarathi, Boston College
Marteen Prak, Utrecht University
Patrick O'Brien, LSE
Alessandro Stanziani, EHESS
Kaoru Sugihara, Tokyo University
Peer Vries, University of Vienna
ABSTRACTS
State Formation and Empire: the construction of institutions for economic growth - Maarten
Prak and Regina Grafe
The fundamental question addressed in this chapter is, which role social norms, economic
organisations, and political institutions played in the construction of political forms of
governance and in turn how the polities thus constituted favoured or hindered economic
growth across different parts of the globe. We envisage looking at the interplay between
institutions and economic growth at three deeply interrelated levels. The first one encompasses
mostly social and religious norms that regulate individual and family behaviour, including
reproduction, economic strategies, or identity formation. To give but one example, Greif has
argued that family structures that tended to impose a logic of collective behaviour in Asia and
the Middle East, placed these societies in the very long run at an economic disadvantage vis-avis Western European family norms, which favoured individualistic behaviour. Other themes
include religious attitudes to lending and wealth preservation. The second level looks at the
written and unwritten rules, laws and the organisations they underpinned supported economic
growth in the short, medium and long run. Thus, an intense debate exists about the role of
trading diasporas and mercantile companies or guilds in fostering commercial expansion.
Equally contested is how diverse ways of organising the crafts mostly across Eurasia impacted
on skill formation and transmission, social welfare of workers, and inequality. Finally, the third
level looks at political governance proper. Can we observe a systematic relationship between
forms of political organisation, city states, territorial states, empires, and their ability and
willingness to foster economic and social development? Was state capacity a necessary
condition for growth? What determined legal and fiscal capacity to use the terms of Besley and
Persson? Finally, can we historically observe why some societies seem to enter a virtuous cycles
of institutional development and growth, while others seem trapped in the opposite
predicament.
Varieties of Industrialization - Kaoru Sugihara
This chapter considers types of industrialization, which took place in different parts of the
world, especially in Western Europe, East Asia and South Asia, in comparative perspective. The
approach adopted is a reciprocal and multi-polar one, and takes all three regional patterns as
substantially “autonomous”, in the sense that each region had an ability to respond to its local
resource constraints such as the availability of land, water and energy resources, as well as the
quality of labour, essentially in accordance with its own values and norms. While the scientific
revolution in Western Europe was accompanied by a set of modern norms and values, and the
industrial revolution in England enabled the exploitation of fossil fuels, incorporating vast
resources of North America into the orbit of the high-wage, resource-intensive economy and
raising the standard of living to a new height, land-scarce parts of East Asia (Japan and core
regions of China) exhibited quite a different kind of response to industrial technology and
modern institutions, leading to a labour-intensive and often resource-saving type of
industrialization. The norms and values which drove the peasant household in Meiji Japan, from
which an industrial workforce was drawn, paid more attention to general, managerial and interpersonal skills than to special, technical and individual ones, in order to work a small plot of
land. The level of labour productivity did not match the West, but labour was comparably
disciplined. Meanwhile, South Asia, handicapped by the poor quality of land and the high
variability of annual and seasonal water supply but equipped with social norms and institutions
to hold a very large population, took longer to proceed with industrialization. However, it now
appears set to take advantage of abundant labour supply of an improved quality and rich stock
of knowledge of negotiating with the diversity and uncertainty of nature. The chapter argues
for the importance of understanding of global industrialization from a multi-polar perspective
by appreciating vast regional differences in resource endowment and equally impressive social
capacities to respond to them. It is a vital step towards understanding what entails to address
the issues of global environmental sustainability.
A Revolution in Two Steps: Great Reversals in World History – Jack Goldstone
Attention has recently focused on the causes and timing of the “Great Divergence.” Yet
“Divergence” is misleading; it suggests initial parity followed by sustained and growing
difference. This is NOT the pattern of world history. Instead that pattern is one of repeated
reversals, with initial divergence followed by convergence and inversion: the center of Europe’s
growth shifted from the eastern Mediterranean and northern Italy to the Atlantic, then to the
northwest, with England and the Netherlands moving from far behind to far ahead. Shortly
thereafter this “little reversal” was followed by a “great reversal,” in which the leading
manufacturing and imperial powers of the world economy – India and China – were left behind
by the manufacturing and military rise of Britain. This great reversal was not final either; Britain
was surpassed by two powers originally behind it: first Germany, then the United
States. Today, the United States’ growth rate is far surpassed by that of China, and at some
point it will inevitably fall behind in total economic output as well. In sum, world history shows
a pattern of repeated reversals in global power, driven by the “Advantages of backwardness”
and “satisfactions of success.” The Industrial Revolution was the most dramatic of such
reversals, and had the greatest impact on the long-term increase of GDP; but it did not change
this overall long-term pattern.
Trade and the Emergence of a World Economy, 1600-1960 – Tirthankar Roy and Giorgio Riello
The chapter will review four major themes that underlie the transformation of the world
economy in the early modern and modern era. It will consist of fourth sections. The first section
will present an overview of scale, commodity composition, and chronology, focusing especially
on transoceanic trade of the seventeenth and eighteenth centuries and the first wave of
globalization. The narrative part will end with the mid-twentieth century decolonization, and
that process reshaped the world trading order. The second section will discuss business history,
in particular, the role of the East India Companies, European private firms, kinship groups and
communities. It will draw lessons on the institutional foundations of commercialization. The
third section will present a review of historiography. The section will touch on the significance
of commercialization for economic growth in individual regions, and discuss the factor price
literature on industrialization and deindustrialization (Jeffrey Williamson, for example). This
discussion will also consider other growth-and-inequality-centred concepts connected with the
history of world trade, such as, industrious revolution, world systems versus regional systems,
and geographical constraints on trade. The fourth section will deal with a major theme in the
history of trade, the link between Empire and globalization. A series of works in imperial history
in recent years has traced the prehistory of the first wave of globalization in imperialism,
especially British imperialism and the spread of settler societies (books written or edited by C.A.
Bayly, John Darwin, James Belich, A.G. Hopkins, Niall Ferguson, among others, are examples).
Others synthesizing this scholarship propose that the networks of exchange had a distinctly
cultural aspect, not only in emphasizing British identity where there was scope to do so, but
also in the existence of networks of trust (Gary Magee and Andrew Thompson), as well as a
political and institutional dimension in the shape of military and naval protection and a uniform
legal framework. In turn, the reinterpretation of the empire as an agent of a particular form of
globalization based more on politics, settlements, and ethnicity than on communication links as
in the present times, had roots in an older scholarship on the economic history of the empire
(P.J. Cain and A.G. Hopkins, Lance Davis and Robert Huttenback). Much of this literature is
written from the perspective of the imperial nation, overwhelmingly Britain. This section of the
chapter will survey this scholarship, while looking beyond Britain towards other empires and
colonized regions.
Global Commodities and Commodity Chains - Bernd-Stefan Grewe
The world economy has changed in significant ways during the past two centuries and the
global interconnections have become more evident in many fields, most visible perhaps in
trade and transport. In many countries, the growing integration of the global economy has
provided the opportunity for substantial economic and income growth. But the process of
globalization always had a dark side and a tendency towards an imbalance of profits and
poverty within and between countries. The global political economy and the international
division of labour and profit as evolved in the second half of the 19 th century can be studied by
following the historical pathway of commodities. Commodity chains can be traced from the raw
material, the transportation mechanics and the labour input into each of the material process
up to its marketing on markets that often had barriers to inhibit new actors to enter them. This
commodity chain approach in its different varieties can help us to better understand the
growing global inequality. This chapter will present some of these approaches that follow the
historical chains of some commodities. It will openly discuss the advantages, but also the
limitations of the commodity history approach.
The Rise of Global Finance - Youssef Cassis
This chapter will discuss the rise of global finance since the mid-nineteenth century –when
international capital flows started their long upswing wave, which would continue until 1914
and even 1931; while new financial institutions and markets emerged in all advanced
economies, in particular with the rise of the big banks and the development of the securities
markets. In order to deal with these two interconnected trends, the chapter will be structured
around the development of financial centres in both the core industrial countries and the
periphery, paying attention to the differences/similarities as well as the interactions between
them. The chapter will follow a chronological sequence in order to convey the dynamics of
change brought about by economic forces (long-term economic growth, financial crises,
financial innovations, etc.), political choices (regulation and deregulation, nationalisations and
privatisations, etc.) and international relations (war and peace, colonisation and decolonisation,
etc.). It will be divided in four main parts: the first modern globalisation from the 1860s to
1914; wars and depression, 1914-1945; growth and regulation, 1945-1980; and deregulation
and globalisation, 1980-2008. An epilogue will consider the effects of the financial debacle of
2008, as well as the rise of new economic powers, above all China, on global finance.
Migration and Labour Regimes - Alessandro Stanziani
Since the eighteenth century, comparative analyses of labor institutions and labor markets have
been developed as if the boundary between free and unfree labor were universally defined.
Thus free labor in the West is frequently contrasted with serf labor in Russia, slaveries in the
Atlantic, the Indian Ocean world, Africa and some Asiatic regions. This chapter intends to show:
-1 that the historical definitions and practices of labor, labor relationships and mobility require
to be reassessed and,
-2 that the history of wage labor and that of slavery (and serfdom) are not distinct but are
intimately linked and enter one single global process.
In particular:
Point 1. Between the mid-seventeenth century and WWI, in most Western countries labor was
similar to service, and wage conditions resembled those of domestic servants, with numerous
constraints imposed on work mobility. From the sixteenth to the end of the nineteenth century
in Britain and Europe, free labor, even where a contract existed, was considered the property of
the employer and a resource for the whole community to which the individual belonged.
1 bis One major implication of this point is that the long-term movement of labor and its rules
hardly confirm the traditional argument that labor freedom supported the Industrial
Revolution. On the contrary, the Industrial Revolution was accompanied by subjecting workers
to increasingly tough regulations and punitive sanctions. Increasing legal constraints on labor—
not increasing free wage labor—went hand in hand with the Industrial Revolution.
2 In colonies, a similar trend was at work: colonization and then plantation gave rise to extreme
forms of dependency, not only under slavery, but also before and after it (e.g., white
indentured labor in the 17th-18th centuries, then “colored” indentured immigration in the
nineteenth century).
3 these institutions and practices were related. From the institutional perspective, the
transmutation of villeinage, war captives, seamen, convicts into an imperial context supported
the European (including Russian) expansion of the sixteenth through the early eighteenth
centuries.
Then, later, it would have been impossible to develop the indenture contract in the British
Empire if the British wage earner had not been a servant, subject to the multiple Master and
Servant Acts. The same was true for France.
3 These connections cannot be interpreted only as an influence of the “center” over the
“periphery”. England or France sought to export their own notions and practices of labor into
their colonies. Yet the outcome varied between, saying, northern American colonies, India and
Africa. Those different issues require to be detailed and explained. For example, the evolution
of labor relationships and jurisprudence in India influenced the evolution of the Masters and
Servants Acts in Britain.
After institutions, labor practices:
4 Why so many constraints on labor mobility? Unfree labor and forms of coercion were
perfectly compatible with market development— economic growth between the seventeenth
and the mid-nineteenth century in Russia, Europe, and the Indian Ocean region was achieved
through the wide use of bondage and legal constraints on labor. This was not so because the
population was somehow lacking for demographic crisis, but because, despite the increase in
population, consistent labor intensive growth took place throughout Eurasia at that time.
Family units, landlords, estate owners, proto-industrial and manufacturing employers, and state
and public administrations all required labor. Quantitative evidence on labor/capital
intensification not only in the colonial world and the plantation system or Russia, but also in
Europe (including Britain until the mid-nineteenth century) will be added.
4 bis. There was a strong correspondence between labor intensive growth and rules limiting the
mobility of labor between the mid-seventeenth and the end of the nineteenth century. Labor
demand exceeded population increase and efforts to limit the mobility of labor and increase
coercion were the response to this. Nominal wages smoothly increased but real wages did not
progress until after 1870 (“pessimism perpetuated”, Allen, Feinstein).
Yet, despite coercive rules, people did move. This was so because of the tensions and unfair
competition between competing actors all seeking to retain labor without increasing wages:
small and big estate owners; the state (for recruiting, colonization) and private actors; family
units and landlords, or merchants; rural and urban world. The final issue between ambitions
and real dynamics depended on the stickiness of labor markets, regional differentiation,
technical solutions and political-institutional distribution of power.
Issues were different not only (and not so much) in different countries, but also in different
areas of the same country. Labor mobility and labor relationships in south-east England and the
North was different, the same was true in Russia, India or North America. The final outcome in
labor mobility must also be related to broader geo-political factors such as Empire building and
Empire dislocation.
5 This world did not collapse with the French Revolution or the British Industrial Revolution, but
only with the second Industrial Revolution and the rise of the welfare state, between 1870 and
1914 when “new” labor contract and eventually collective agreements were introduced in so
many countries as France, England, Belgium, Italy, and Germany.
6 Origins of this shift: first, the political movements since the 1870s and increasing power of
unions, then socialist parties altered the social and political equilibrium. This outcome added to
the first raise of the welfare state in all the mentioned countries between 1875 and WWI. Both
those processes increased the cost of labor and encouraged the adoption of labor saving
processes.
7 Yet this process involved only a minority of workers in the West (mainly workers in large
units), while small units, agriculture, and, above all, the European colonies were only marginally
affected until the mid-twentieth century at the earliest. This selective welfare was one of the
major origins of the violent conflicts and unrest of the twentieth century supported by artisans,
small units, agrarian groups and the colonial world. Still nowadays, in Europe, the defense of
the welfare state for Europeans and the free circulation of labor (mostly non-European
immigrants) are seen as in opposition between them.
The Environment and the World Economy - John McNeill
This chapter will address a handful of the countless aspects of the linkage between economic
globalization and environmental change. These include: (1) the global redistribution of useful
crops and animals, and unhelpful diseases and weeds, resulting from the navigation of the high
seas after 1492. This goes a bit beyond the Columbian Exchange (of A. Crosby) by including
more African instances and more recent biological exchanges and invasions, especially those
generated by shipping; (2) the environmental consequences of international markets for hides
and furs in the 16th-18th centuries, drawing on the work of J.F. Richards; (3) the environmental
implications of the creation and expansion of plantation economies, mainly in the American
tropics after 1640; (4) the global environmental implications of industrialization, first in the UK,
later elsewhere, including post-1980 in mainland E and SE Asia. This will concern raw materials
such as cotton, wool, iron, tin, palm oil, bison hide, etc. (5) climate change and the global
economy, including the impacts of the Little Ice Age upon economies, and the impact of
industrial economies upon the climate; (6) a conclusion that ruminates on the concept of the
Anthropocene.
Sub-Saharan Africa - Gareth Austin
Over the last seventy years, specialists in African history have challenged the traditional
perception that economic change in the Sub-Saharan subcontinent was largely absent or
essentially exogenous. Yet the old view continues to frame the way in which many social
scientists view African issues. This is partly because the revisionist research has tended to be
local in focus, whereas the older views have been restated at a general level, in the categories
of successive theories (dependency and world systems, rational-choice institutionalism) that
have themselves been used to re-dress (rather than redress) the narrative of European
exceptionalism: against which Sub-Saharan Africa continues to be used as a convenient ‘other’.
This chapter offers a broad description and analysis of economic change in the region,
accepting the truism that environments and experiences have always varied greatly within it,
but working towards a synthesis that does not treat the exceptional cases (notably Ethiopia, in
several respects) not as mere outliers but seeks to integrate them within the explanation, as
‘proving the rule’. In placing Sub-Saharan Africa within the global history of economic change,
the chapter will: 1. Highlight the overlapping perspectives of both comparison and (entangled)
connection: asking about the distinctiveness and otherwise of African economic history, and
what that history reveals about the sources of economic change in human history generally;
while noting that, over many centuries, the strategies of African decision-makers (from
households to ruling elites) in response to the domestic constraints that they faced often
involved exploiting resources derived from other world regions. 2. Similarly, distinguish
different timescales of change in African economic history (from the ‘conjunctures’ of
colonization, decolonization and ‘Structural Adjustment’ to the very long-term, mostly
cumulative struggle to overcome environmental obstacles to higher labour productivity, in
pursuit of greater food security and prosperity), noting when the latter interact (as in the
population take-off in the twentieth century, made possible by a very long-established set of
cultural responses to age-old labour scarcity, but also by political and technological changes
over a few decades).
The Americas – Alejandra Irigoin
Research in global history has been shaped in the last 15 years by the influence of the Great
Divergence debate and the extraordinary development of China’s economy. This has helped to
de-centre historical research away from Europe and to reframe her own history. It has also
challenged narratives available for the early modern period more generally. A new scholarship
of reciprocal comparisons now is changing the historiography of Africa, India, South East Asia
and Europe. Paradoxically the Americas have been estranged from this debate as the historical
research on –and from- the continent has withdrawn to an Atlantic World realm and economic
historians have mostly focused on comparative legacies of factor endowments and political
institutions within. Yet, as in the core of Pomeranz’ arguments, the Americas played a
substantial role in setting off the divergent path of England, and Europe more generally,
towards modern economic growth in the 19th century. In addition to relatively more favourable
access to coal and the ‘ghost acreage’ that offered Europeans an escape forward from an
otherwise inevitable Malthusian trap, the New World silver and crops obtained by means of a
particular political economy of colonialism serve the argument for the European divergence. In
that light the contribution that this recent research has brought to the understanding of early
modern New World has been minimal. This interpretation suffers from the conventional - if
slightly partial- characterization of the role of the New World in the period as merely a
producer of food, fibres and silver with coerced forms of labour for the profit of their European
metropolis. Little or nothing is said of her role as consumer; whereas paradoxically the
American silver is presented as the prime mover of the expansion and integration of the early
modern global economy there has not been an equivalent inquiry on the returns that the
American mined bullion apportioned to these regions. Thus the Americas by 1800 remain
absent –or partly mischaracterized- in the explanations for the early modern globalization. This
chapter will re-introduce the region in the development of the great divergence and highlight
the role of consumer of European and Asian goods, technologies and services – which together
with African labour- flowed to the New World from both the Pacific and the Atlantic. This, it is
argued, organized the establishment and settlement of Europeans in the New World. Bringing
back the New World to global history of the pre-industrial period may well still shed new light
on the various divergences that separate the early modern from the modern period.
Economic Change in East Asia in 1700-1950 – Debin Ma
Abstract: This chapter surveys main economic trends and economic changes during 1700-1950
in East Asia. It offers a brief survey of main existing political and economic institutions before
1850 and assesses the initial conditions on the eve of East Asia’s forced opening by the West.
These assessments will be conducted in relation to the ongoing Great Divergence debate. The
main part of the paper will be an assessment of economic modernization in Japan, China and
Korea from the 1850s onward.
Changing Destinies in the Economy of Southeast Asia - J. Thomas Lindblad
This chapter focuses on the spectacular economic changes that have taken place in Southeast
Asia from the late nineteenth century up to today. Three key themes are discussed: global
connections of this region, the emergence of national economies within the region, and
decisive shifts in terms of economic structure. The logical point of departure is the way in which
the region was traditionally linked to the world economy. Then follows the establishment of
colonial rule throughout the region (with the notable exception of Thailand), in turn facilitating
the formation of cohesive national economies. The final stage is marked by a shift away from
agriculture in favour of manufacturing and services in the aftermath of decolonization. As a
result of such changes, the potential for rapid economic growth has increased substantially but
so has the vulnerability to external shocks as became all too apparent during the Asian financial
crisis in the late 1990s. Since the late nineteenth century, Southeast Asia’s position in the world
economy has changed from being a loosely integrated supplier of raw materials in the
periphery into becoming a self-assertive dynamic force at the forefront of economic
development with considerable potential for further economic integration.
Colonization and Structural Change in India – Bishnu Gupta
The paper will look at the changing comparative advantage in India’s international trade. From
being a major exporter of textile, under what conditions India became a net importer. I will
focus not only on the effect of colonization and British trade policy, but also the effect of the
industrial revolution on the handloom sector in a globalized world. The paper will discuss the
nature of deindustrialization, but also the emergence of new industries that were facilitated by
the colonial connection, such as tea and others like cotton textiles, which developed despite
policies of free trade. The paper will analyse the changing structure of trade over the long
nineteenth century.