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The Origins of Globalization: World Trade in the Making Of the Global Economy, 1500-1800

Author(s):de Zwart, Pim
van Zanden, Jan Luiten
Reviewer(s):O'Rourke, Kevin Hjortshøj

Published by EH.Net (July 2019)

Pim de Zwart and Jan Luiten van Zanden, The Origins of Globalization: World Trade in the Making Of the Global Economy, 1500-1800. Cambridge: Cambridge University Press, 2018. xvi + 338 pp. $30 (paperback), ISBN: 978-1-108-44713-3.

Reviewed for EH.Net by Kevin Hjortshøj O’Rourke, All Souls College, Oxford.

 
This is an engaging and generally very well written account of the world economy during the early modern period. It surveys a great range of literature not only on international trade — and, to a lesser extent, migration — in the three centuries following Columbus, but on the economic development during this period of each of the major regions of the world. Its focus is largely on intercontinental trade, but it also provides much useful information on international trade more generally. And its major purpose is to argue that these international trade links had profound effects on many, if by no means all, of the major economies of the early modern world. In arguing that the “soft globalization” (de Vries 2010) of the three centuries before the Industrial Revolution could have important economic effects, and in using international trade as a lens through which to tell the story of early modern economic development more generally, it is thus closely related to Findlay and O’Rourke (2007), and it has the advantage of being able to draw upon an additional decade’s worth of research. The main message to emerge, which admittedly will not come as a surprise to readers familiar with the work of Engerman and Sokoloff (2012) and others, is that trade had very different effects depending upon regions’ geographical endowments, institutional arrangements, and other factors.

The structure of the book is straightforward. The first substantial chapter surveys what we know about transportation costs, silver flows, trade and migration flows, and price gaps during the early modern period. The issue of how many people during this period might have been unaffected by any of this is not addressed head-on, and some readers may think that it should have been. Successive chapters then tell the story of how Latin America, Africa, North America, South Asia, Southeast Asia, East Asia, and Europe interacted with this emerging global economy, and what impact (if any) these interactions had on domestic economies. The concluding chapter argues strongly, based on the preceding material, for the importance of global interactions in influencing worldwide economic development between 1500 and 1800.

Some of the regional economic histories developed here are familiar, others less so. The description of early modern Latin America as a “transition economy” which experienced economic growth based on the introduction of markets is an arresting metaphor, although the sources cited by de Zwart and van Zanden suggest that statements such as “Commodity markets had hardly existed at all before 1500″ (p. 71) are greatly exaggerated. But the chapter makes a spirited case for the growing importance of wage labor during the early modern period, a useful corrective to accounts stressing coerced labor.

A second region where the authors take a strong stand on a disputed literature is Southeast Asia. The book argues against Anthony Reid’s well-known claim that the region’s “Age of Commerce” came to an end in the middle of the seventeenth century, when Europeans (and in particular the Dutch) consolidated their control over much of the region. On the other hand, the authors also cite evidence of declining Javanese real wages between 1600 and 1780 (or at least, depending on the source used, in the later seventeenth and early eighteenth centuries); sharply declining urbanization during the seventeenth and eighteenth centuries; and an increase in the gap between Southeast Asian and European heights. This may suggest that there is life in the Reid hypothesis yet, growth in the late eighteenth century notwithstanding.

A major theme of the book is the importance of silver flows during the period, and it is of course important to stress this. This reviewer did not find all of the monetary analysis persuasive: it seems inappropriate to cite Keynes in favor of the argument that silver may have been beneficial for long run growth in various regions during this period (p. 245), and the analysis of bullion inflows on Indian inflation (p. 157) is, frankly, confusing.

Overall, however, this is a book that will be of considerable use to teachers and students looking for an accessible introduction to a fascinating period in world economic history.

References:

Chase, Diane Z., and Arlen F. Chase. “Ancient Maya Markets and the Economic Integration of Caracol, Belize.” Ancient Mesoamerica 25, no. 1 (2014): 239-50.

De Vries, Jan. “The Limits of Globalization in the Early Modern World.” Economic History Review 63, no. 3 (2010): 710-33.

Engerman, Stanley L., and Kenneth Lee Sokoloff. Economic Development in the Americas since 1500: Endowments and Institutions. Cambridge: Cambridge University Press, 2012.

Findlay, Ronald, and Kevin H. O’Rourke. Power and Plenty: Trade, War, and the World Economy in the Second Millennium. Princeton, NJ: Princeton University Press, 2007.

 

 

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Subject(s):International and Domestic Trade and Relations
Geographic Area(s):General, International, or Comparative
Time Period(s):16th Century
17th Century
18th Century