European Economic History: From Mercantilism to Maastricht and Beyond

Published by EH.NET (September 2002)

Ejvind Damsgaard Hansen, European Economic History: From Mercantilism to

Maastricht and Beyond. Copenhagen: Copenhagen Business School Press, 2001.

528 pp. ?34, $54, *56 (hardcover), ISBN: 87-630-0017-2.

Reviewed for EH.NET by Jaime Reis, Institute for Social Sciences, University of

Lisbon.

This is an ambitious book. It seeks no less than to compress all the variety

of the last five hundred years of Europe’s economic experience (including two

preliminary chapters that cover the period 500-1500 AD) into roughly five

hundred pages. Even allowing for the fact that it claims to be no more than a

college textbook aimed at an audience of mostly students of Business

Administration, this is still no mean feat. Indeed, some might argue that the

requirements posed by such a specification are even more daunting than those

for the normal academic monograph. Be that as it may, the task E. Damsgaard

Hansen has set himself is not much less than encyclopedic. It requires an

immense and diverse fund of personal scholarship, a masterful capacity for

synthesis and an ability to separate the essential from the accessory to a

degree that only a tiny minority is fortunate enough to possess. Nevertheless,

this is definitely a brave and meritorious effort, which will doubtless find

its public and will serve it well, but it does not match the exacting standards

of this most demanding of genres. Probably, if for no other reason, this is why

there are so few broad scope textbooks on the economic history of single

continents and why even fewer readily come to mind.

The book is divided into six parts, each of them comprising between three and

five chapters. Most of these in turn are divided into two parts, the first

advancing an overview, and the second providing country-based narratives

showing how local lines of development gradually shaped the emergence of the

national differences that are so characteristic of Europe. This is a useful

expository device, not the least because it leads to a serious effort being

made throughout the book not to confine these national narratives to the major

powers of Europe, but to include the Low Countries, Scandinavia, Italy and the

Iberian Peninsula, as well. On the other hand, on occasions one wishes that the

time and space devoted to some of these inevitably perfunctory national

accounts (e.g. just over a page for Belgium and the Netherlands between 1875

and 1914) were dedicated to a stronger development of the chapter overviews and

to a more intense and explicit comparative effort. Students might even enjoy

this more and it would certainly be more beneficial to them.

The first of the six parts takes the reader briefly through the first thousand

years after the fall of Rome and then, more slowly up to the mid eighteenth

century and the onset of industrialization. The main thrust here is the

circumstances which made the Industrial Revolution possible, in other words

that fostered the technological breakthrough underpinning the emergence of mass

production and distribution. The talk is of the growth of food surpluses, the

development of markets and long distance trade, the establishment of

institutions favorable to complex but stable economic relationships, and the

rise of a moderately comfortable standard of living for a considerable part of

the population. One may note with approval already here the accent, inspired by

the New Institutional Economics, placed on political and institutional

development as a major influence on the course of economic change, and which

grows understandably stronger and stronger as one moves through the text

towards the end of the twentieth century. Whether, however, this justifies the

pre-eminence accorded to mercantilism, considered here as the state

building ideology of early modern Europe, putting it in the subtitle of the

book (along with Maastricht!) and giving it five pages of text as opposed to

one for the modern textile industry or the steam engine and a half for the iron

industry, seems rather more debatable.

The tempo increases with parts 2 and 3, which cover the next two hundred years

down to the Second World War. Part 2 recounts the gathering speed of

technological progress, the uneven spread of industrialization up to 1914, and

the reduction of the national state’s role in the economy, including the

shrinkage of the importance of policy. Although some attention is paid to the

“internationalization” of economic life, this is restricted to topics such as

the transmission across borders of new technologies, the hastening of

communications and the increasing export of capital by core countries. There is

no mention, however, of the recent and important debate on late nineteenth

century globalization and convergence. For a book which makes a laudable effort

to show how history can illuminate present-day events, it is not a little

surprising that nothing is said either about this, about mass migration, or

about the role of human capital in explaining national differences in

macroeconomic performance. Likewise, though the history of modern steam-powered

transport gets suitable consideration, readers will not learn anything here

about an old but no less important controversy concerning the economic impact

of railways and the use that was made in it of the concept of “social savings.”

In part 3, the “second European thirty years war” (1914-45) is presented as an

altogether “bad” experience for Europeans. The silver lining, however, is that

at least it served to provide the lessons on which the far more successful

policies of the second half of the century were founded. Otherwise, it was a

time of bungling, crisis and outright destructive war. A fairly conventional

gloomy picture of the era is thus retailed, but although with a concentration

on the disastrous nature of most policies, the narrative never omits to explain

that behind them there were reasons (even if not always reason) and not simply

whims. This is a valuable corrective for students who may be tempted to shun

the past when seeking to understand why governments make the decisions in

economic matters that they do.

This book finally comes into its own in its second half. This is where it deals

with post-war reconstruction, the subsequent ups and downs of the advanced

western economies, and the tortuous but apparently successful progress of the

process of integration of the European nation states. The narrative now becomes

informative and well structured, the essential themes emerge with clarity, and

the heavily intertwined relations among politics, policy and economics make

sense. A number of technical concepts, e.g. federalism, functionalism,

multilateralism, which are probably new or obscure to the target audience, are

introduced in a helpful manner. The evolution of institutions with complex

international roles, such as GATT, the IMF or the OEEC/OECD is rendered

accessible to the less informed reader without sacrificing their respective

histories too much. It seems safe to say that a beginner who studies parts 4, 5

and 6 properly ought to come away with a fair and balanced understanding of

this period’s major events and trends. This is still not, however, a proper

economic history of these decades. There is still too much here about

politics and policy and too little economic analysis, for instance, of the

Golden Age and its not-so-golden sequel after 1973. An excellent and burgeoning

literature is available for correcting the imbalance and could be harnessed to

this end. This would make this textbook as useful to the student reader as is

the often illuminating account it presents of Europe’s long term evolution

towards integration in the twentieth century.

Jaime Reis is currently Senior Research Director at the Institute for Social

Sciences of Lisbon University. Recently he published “How Poor Was the

Periphery before 1850? The Mediterranean versus Scandinavia” in Jeffrey

Williamson and Sevket Pamuk, editors, The Mediterranean Response to

Globalization before 1950 (Routledge).