A Deus ex Machina Revisited: Atlantic Colonial Trade and European Economic Development

Published by EH.NET (January 2007)

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P.C. Emmer, O. P?tr?-Grenouilleau and J.V. Roitman, editors, A Deus ex Machina Revisited: Atlantic Colonial Trade and European Economic Development. Leiden: Brill, 2006. xxix + 358 pp. $134 (cloth), ISBN: 90-04-15102-8.

Reviewed for EH.NET by Stanley L. Engerman, Departments of Economics and History, University of Rochester.

These fourteen essays, based upon a conference held in September 2001, all by European scholars and with all but one by historians, are concerned with two major staples of the study of modern European economic development. First is the role of foreign trade, particularly colonial trade, upon the economic expansion of the different European economies. Second is the related issue of the impact of external versus internal forces on institutions and market size, and thus on economic changes. Several touch on the Eric Williams question of the role of the slave trade in industrialization, but this is not a major concern in this volume relative to the broader issue of colonial shipping and trade.

The essays differ in method, approach, and at times, conclusions, but all are useful in providing information about the areas studied. Only half the essays contain tables, making for a total of thirty-seven, while fewer provide the nine figures. Nonetheless most essays are quite useful in presenting relevant data, and there are numerous useful sources to the examination of specific countries and colonies. As often in these type of studies, authors play down the role of so-called small numbers in suggesting a limited impact for trade, using terms such as “dynamic,” “at the margin,” “qualitative,” “spill over effects,” “important and dynamic side effects,” and “cultural factors” to bolster the argument for importance. In discussing the claim that small causes have large effects, Patrick O’Brien astutely notes that “we might rhetorically inquire if small outcomes could flow from large changes to endogenous variables.”

The short introduction by the editors is well-done and provides a useful summary of the conclusions of most of the essays. The three main general conclusions are: (1) “With the possible exception of Britain — trade to and from the non-Western world was marginal and served as a chasse gard?e for uncompetitive firms,” since mercantilist policies permitted them to be non-competitive. And the taxes and losses in warfare needed to define and administer colonies were quite expensive. Trade within Europe “was many times larger” than trade with the rest-of-the-world. (2) “Spin-off effects of non-European trade were limited in economic as well as in geographic scope.” (3) The “‘British model’ of expansion and colonial trade seems to have been the exception, not the rule,” although “even in the British case, there are signs that the exploitation of its colonial empire benefited a few at the expense of many.”

The substantive essays are of two types. First are the more general ones covering the entire continent, and second are the several country studies of the leading European nations. These are Spain, Portugal, the Netherlands, Britain, France (given two essays), the Baltic Nations, Denmark-Norway, and Sweden. Their coverage runs from the fourteenth to the twentieth century, with most attention to the years after1600.

The first two essays, by Patrick O’Brien and Michel Morineau, provide excellent surveys of different aspects of the major debates. O’Brien places the writings of Smith, Marx, Weber, and more recent analysts in perspective, in explaining Asian-European differences, and points to a recent “Eurocentric Comeback,” in explaining the start and the sustaining of the Industrial Revolution. Morineau describes trading patterns between Europe and its colonies, and argues for the role of foreign markets and the colonial use of slave labor in spurring economic development in the West. Bouda Etemad presents a very useful set of tables on trade and related data for six major European countries for the period between 1860 and 1913. He points to a shift back to the importance of intra-European trade after the start of the nineteenth century. In his description of changing patterns of trade by France, Patrick Verley states that, within Europe, “the colonies played a minor role in industrialization.” This was apparently true not only of France, which fell behind, but of England, which maintained its leads in trade and economic development despite the gains of Germany and the U.S. after the last third of the nineteenth century. In an interesting discussion of intra-European trade, based on coastal shipping data from 1400 to 1900, G?rard Le Bou?dac, sketches the changing fortunes of the European nations over time, including the sharp decline of France, losing out, first, to the Dutch, and then to the British.

The study of the Spanish colonial trade by Manuel Bustos Rodr?guez details the patterns under mercantile control and then the rise of free trade in 1778, focusing on regional differences within Spain. Niels Wiecker and Horst Pietschmann’s essay on Portugal does not present any overall analysis, but does provide an excellent bibliographic review of the relevant literature in several languages. Pieter Emmer’s essay contains a useful survey both of the general pattern of European colonization and a detailed description of the Dutch developments over several centuries, dealing with the initial rise of Dutch shipping and then its decline with the British expansion. The reasons given for the Dutch decline are the superior British system of revenue collection, the willingness of British migrants to leave Britain and to go the Americas, and the acceptance by British consumers of the payment of subsidies to British shippers and West Indian planters.

Based upon his many years of excellent research and analysis, Fran?ois Crouzet discusses British exports from 1701-1913, emphasizing the changes over time in the importance of the different markets for British exports. Two essays on France approach the problem quite differently. Guillaume Daudin attempts to measure profits from intercontinental and colonial trade. While these added only a small percentage to French income and savings, Daudin argues for a large effect because of the additional impact upon capital formation. On the other hand, Olivier P?tr? Grenouilleau examines the relevant literature from 1600 to 1960, arguing that the foreign trade had limited impact on economic growth but only after the late nineteenth century and not in the period of industrialization. This was due, in part, to the earlier impact of colonial trade having had undesirable effects, limiting the pace of economic growth.

The three essays in the section on the Baltic Region cover areas not generally discussed in the industrialization debate. A regional overview by Pierrick Pourchasse describes the failures of France and the Netherlands and the rise of the British in shipping and in shares of trade after the start of the eighteenth century, permitting them “to gain control of the trade with the North and, therefore, to supply without difficulty the industrial sectors of prime importance to the British economy, such as shipbuilding and the metal industry.” Dan H. Andersen’s study of Denmark does give some attention to the role of the slave trade, and the African and Caribbean markets. The conclusion that is slavery and sugar did not have a very great impact on the Danish economy, nor since Danish industrialization did not really start until the middle of the nineteenth century, on overall industry, except for sugar refining. The discussion of Swedish economic development by Leos M?ller points to the “invariably insignificant” Swedish colonial trade, not surprising since the Swedish colonial empire was rather small and transient. There were foreign markets for Swedish exports of iron, at first to the Netherlands and then to Britain. Also of note is the discussion of the trade between Sweden and China, which contributed to Swedish growth, as did, according to M?ller, Swedish trade in general.

The value of this volume is in its wider geographic coverage, and the primary focus of these essays on the nature and role of colonial and foreign trade. There are questions to be raised about aspects of the analysis in many of the essays and the particular conclusions reached, but that will not reduce their value in presenting information. This is an important book, to be read by historians of early modern Europe and of the economic changes in those years.

Stanley L. Engerman is John H. Munro Professor of Economics and Professor of History at the University of Rochester.