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An Economic History of Nineteenth-Century Europe: Diversity and Industrialization

Author(s):Berend, Ivan T.
Reviewer(s):Voth, Hans-Joachim

Published by EH.Net (March 2014)

Ivan T. Berend, An Economic History of Nineteenth-Century Europe: Diversity and Industrialization. Cambridge: Cambridge University Press. 2013.  xviii + 521 pp. $45 (paperback), ISBN: 978-1-107-68999-2.

Reviewed for EH.Net by Hans-Joachim Voth, Department of Economics, University of Zurich.

Like a mythical animal out of an old fable, Ivan Berend’s latest book is a two-headed creature. On the one hand, it is an erudite, readable, and insightful overview of nineteenth-century economic history, written by a scholar who commands encyclopedic knowledge with ease, and more often than not displays an ability to package all this wisdom intelligently. On the other hand, there are serious lapses of judgment, oversights, and missing key concepts and references in the literature; and there are also serious issues with the writing, structure, and analysis.

The first chapters bring the reader up to speed about how the author thinks economic history should be done, and what happened before the nineteenth century (part I). Part II looks at success (“Successful Industrial Transformations of the West”), and Part III describes the causes of failure in the periphery. The part on success contains chapters that look at science and education, agriculture, transport, business and finance, demography, and the role of the state. A full section examines Europe’s interactions with the rest of the world. The part on failure examines mechanisms for the transmission of the “Western spark,” at the advantages of being on the periphery, and the state as predator (Balkans and the borderlands of Austria-Hungary). Throughout, the author weaves together an enormous literature with a light touch. The description of how in Bosnia-Herzegovina in the period before World War I, illiterate teachers taught prayers to children, with neither understanding what the words meant, is a perfect way to start the section on stagnation in the periphery. Oddly, the same anecdote is repeated, almost word for word, later in the book.

The Industrial Revolution takes center stage – as is only to be expected in a book on nineteenth century European economic history. The author moves from the description of (in the words of an anonymous schoolboy cited by T.S. Ashton [1]) the “wave of gadgets” that washed over England in the eighteenth century to broader explanations of why industrialization occurred and how it spread. Some parts here feel like a throwback to the days of W.W. Rostow’s stages of economic growth [2], with a mechanical summary of how many boxes on the list of requirements for take-off a country has managed to tick. Berend also approvingly cites Robert Allen’s recent work on the role of high wages (and cheap coal) in explaining why the Industrial Revolution was British [3] – the argument being that dear labor and abundant energy gave strong incentives to create technologies that economized on the former by using the latter. This is an example of what economists call directed technological change, and it is typically invoked to explain, say, the rising college premium in an age of falling energy prices. There are several issues with this view (not least the fact that English wages were not very high once one factors in high levels of productivity – as pointed out by Cormac O’Grada, Morgan Kelly, and Joel Mokyr [4] – and not cited by Berend), and the book does not quite rise to the level of even-handed and insightful discussion that this reviewer would have liked to see.

The conclusion at the end of Chapter 1 illustrates some of the issues and problems in this book: “The reasons behind the British Industrial Revolution are extremely complex (my emphasis). … The British Industrial Revolution … was not a deus ex machina, but rather the outcome of six hundred years of gradual progress and change inside Europe… Industrialization is a complex civilizing process, ‘a phenomenon which exists only on a certain level in the cultural, economic, social … evolution of man’ (Zamorski 1998, 36). Socio-economic and cultural developments occurred in a very symbiotic way, inspiring and engendering one another” (p. 77). We never learn what these symbiotic relationships actually are. A lack of clarity pervades the analysis here; there is no ordering of factors, no discussion of what mattered more or less, no description of what produces complex interactions. The book itself has actually surprisingly little to say on cultural and social antecedents of industrial development.

There are significant lacunae in several sections. Institutional approaches, especially when married to rigorous economic analysis, are unevenly covered. For example, this must be one of the few books on economic development published in the last decade or so that does not cite a single book or paper by Daron Acemoglu. Important work on the “Rise of Atlantic Europe” gets no billing [5], nor does the attempt to identify the effects of exogenous institutional change through the French Revolution. Similarly, demographic forces and their interaction with living standards are not given much room (though Greg Clark’s theory that differential reproductive process is at the heart of development makes a cameo appearance). Given that in the mind of many, the nineteenth century marks the point in history when Malthusian forces started to weaken, this is more than just an oversight. While citing such obscure works as Joseph Love’s Crafting the Third World: Theorizing Underdevelopment in Rumania and Brazil (1996), the book builds no bridges to current influential work in economics on the determinants of long-run growth. Inexplicably, it misses “unified growth theory” (and all the associated empirical analysis) entirely [6, 7, and 8].

One of the early chapters makes it clear where the author positions himself in the profession – firmly in favor of “old-style” economic history in the tradition of Fernand Braudel and Carlo Cipolla, and opposed to new-fangled Cliometrics. This chapter cites some negative remarks about quantitative economic history by Nobel Laureate Robert Solow, before then moving on to note that some of new economic history is perhaps not all bad. The book also makes bold claims about how economics-inspired economic history can never take culture and social dynamics seriously: “Socio-political and cultural factors, and all of those other phenomena that are impossible to quantify or incorporate into a few factors of an economic model, are evidently marginalized in the analysis. In many ways, however, it is precisely those qualitative features, those knowledge, social-cultural, and behavioral patterns and those historically determined characteristics that are the most profound factors influencing economic growth” (p. 16).  It is hard to take the confident verdict (“impossible to quantify or incorporate…”) seriously. The author arrives at this conclusion by ignoring a vibrant, rapidly growing literature that thinks about precisely these questions – with seminal contributions by Alesina, Guiso, Sapienze, Zingales, Nunn, Becker and Woessmann, to name only a few [9, 10, 11, and 12]. Similarly startling is the absence of any reference to the recent work by Besley, Persson, and others on state capacity [13, and 14] – a topic the book touches on but never quite gets to grip with.

To sum up, inside the actual book, there is an ambitious, erudite, wide-ranging, and often highly insightful manuscript that is struggling to get out – but failing. Apparently, the project did not receive the tender, loving care from the editorial process that could have helped. The publisher (Cambridge University Press) did not produce professional graphs; the book is adorned with numerous charts straight out of Excel that would look poor in a fifth-grader’s class report, with 3-D lines thrusting upwards at weird angles to illustrate that three numbers increased over time, pointless legends (“S1″) right next to graphs with a single line, and pie charts drawn from such an angle as to distort the proportions completely. The index is almost comically bad. For example, the entry on “Western Europe” comes with no less than 111 individual page entries (“272, 273, 274, 276, 277…”), but only six sub-headings – which virtually guarantees that no reader will be able to find anything in this book other than by playing search-and-cite.

Despite the numerous shortcomings, this book contains a broad-ranging overview of key developments in the European economy between 1800 and 1900. As such, it can usefully serve as a textbook for an introductory class on European economic history – provided it is supplemented with all the essential readings the author left out.

References:
1. T.S. Ashton, The Industrial Revolution, 1760-1830 (CUP Archive, 1948).
2. W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (University Press, Cambridge, 1960).
3. R.C. Allen, The British Industrial Revolution in Global Perspective (Cambridge University Press Cambridge, 2009).
4. M. Kelly, J. Mokyr, and C.Ó. Gráda, “Precocious Albion: Factor Prices, Technological Change and the British Industrial Revolution” (2012).
5. D. Acemoglu, S. Johnson, and J. Robinson, “The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth,” American Economic Review 95, 546–579 (2005).
6. O. Galor, From Stagnation to Growth: Unified Growth Theory (Elsevier, 2005; http://ideas.repec.org/h/eee/grochp/1-04.html), pp. 171–293.
7. O. Galor, and O. Moav, “Natural Selection and the Origin of Economic Growth,” Quarterly Journal of Economics 117, 1133–1191 (2002).
8. Q. Ashraf, and O. Galor, “Dynamics and Stagnation in the Malthusian Epoch,” American Economic Review 101, 2003–41 (2011).
9. L. Guiso, P. Sapienza, and L. Zingales, “Long Term Persistence” (NBER Working Paper 14278, 2008).
10. S. O. Becker, and L. Woessmann, “Was Weber Wrong? A Human Capital Theory of Protestant Economic History,” Quarterly Journal of Economics 124, 531–596 (2009).
11. N. Nunn, and L. Wantchekon, “The Slave Trade and the Origins of Mistrust in Africa,” American Economic Review 101, 3221–3252 (2011).
12. N. Fuchs-Schundeln, and A. Alesina, “Good-Bye Lenin (Or Not?),” American Economic Review 97, 1507–1528 (2007).
13. T. Besley, and T. Persson, “The Origins of State Capacity: Property Rights, Taxation, and Politics,” American Economic Review 99, 1218–1244 (2009).
14. T. Besley, and T. Persson, “State Capacity, Conflict, and Development,” Econometrica 78, 1–34 (2010).

Hans-Joachim Voth is the author (with Mauricio Drelichman) of Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II (Princeton University Press, 2014).

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Industry: Manufacturing and Construction
Geographic Area(s):Europe
Time Period(s):19th Century