EH.net is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

Network Origins of the Global Economy: East vs. West in a Complex Systems Perspective

Author(s):Root, Hilton L.
Reviewer(s):Yang, Clair Z.

Published by EH.Net (October 2021)

Hilton L. Root, Network Origins of the Global Economy: East vs. West in a Complex Systems Perspective. New York: Cambridge University Press, 2020. xxxi + 306 pp. $40 (hardcover), ISBN: 978-1-108-77360-7.

Reviewed for EH.Net by Clair Z. Yang, Jackson School of International Studies, University of Washington, Seattle.

 

How can we systematically compare the structures of economies and societies from different historical periods and in disparate parts of the world? Are there any universal rules by which history shapes the present and, if so, how can they help us predict the future? This book, Network Origins of the Global Economy by Hilton L. Root, offers a new perspective on the study of historical political economy. It applies the tools of complex system and network science to investigate three major transitions in world history and two in the contemporary period, with a special focus on Europe and China. This social network approach helps bridge the gap in the micro-macro dichotomy that we economists are most familiar with, and offers a powerful new tool to conduct truly comparative studies in political economy and economic history.

Despite being deeply rooted in the theories of complex systems, the book is very accessible for newcomers to the field. The first three chapters introduce the concepts and a range of structural network properties that are applied later. Chapters 4 to 6 examine the first great transition: the gradual formation and sudden demise of kingship networks in historical Europe and China. The argument builds on the conventional debate of centralization versus decentralization in the Great Divergence literature, and moves beyond it by utilizing social network topology to contemplate its implications on stability versus resilience, efficiency of information flow, and the regions’ long-term developmental trajectories. It maintains that the hub-and-spoke structure of China was the outcome of one single process of optimization by the ruling dynasty, while Europe’s scale-free network derived from the independent decision making of numerous decentralized nodes. Hence, the former led to dramatic dynastic cycles of prosperity and chaos, while the latter endured throughout the medieval era with localized modifications and helped determine the borders of modern Europe.

Chapter 5 discusses the formation of the Western legal system through a confluence of Germanic customs and Roman codification. It points to the contractual nature of the Germanic tradition of fealty as the root of a Western legacy of limited government. This reasoning echoes that of many scholars, which emphasizes the importance of feudalism and parliamentary systems in constraining the predatory behavior of the monarch and promoting economic development. Root also stresses the other side of the story: the top-down rationalist imperative taken by the crown, which was aided by the rediscovery of the Justinian Code in the eleventh century, brought otherwise disconnected regions together on a common legal ground. Thanks to compromises on both sides, strong and limited governments emerged throughout Western Europe. Chapter 6 concludes the first part of the book with a thorough review of the commercialization, the innovation, and the industrialization processes that eventually led to the Great Divergence. The historical analysis culminates in the assertion that the global network structure is a key determinant of innovation incubation, information diffusion, and system-wide resilience.

The book then moves to the present day. Leveraging these lessons from history, Root first examines China’s recent emergence as a global power and the challenges that it brings to the global governance structure. When the centuries-old kingship networks of Europe started to collapse following World War I, the United States, then a peripheral player, proposed a new global order premised on democratic universalism. Based on level of conformity with this ideology, the world was divided into two camps, each with its own hierarchy. To bring the discussion to the present, Root provides quantitative evidence of a new decentralization trend in global networks since the end of the Cold War, using data on diplomatic voting, military arms transfers, and international trade. He demonstrates that a jump in network density, as peripheral countries increasingly connect with each other, is driving down global hegemony and giving birth to a new multipolar order.

A theme that surfaces many times throughout the book is that power cannot be understood as a feature of an individual; it rises through an interaction between the individual and the overall network structure. When the global network transitions from a traditional hierarchy to a decentralized structure, multiple alternative flows develop and traffic reroutes. The central node loses its exclusivity even though its own features remain the same. In Root’s own words, “the concept of actor centrality is an incomplete measure of power within the system, and an incomplete framework for building global order. The degree of system centralization is paramount” (p. 234).

Root’s discussion opens up multiple avenues for future empirical research. To mainstream economics and political science, the paper points to social networks as a convincing foundation for history-dependence. There is increasing interest and bourgeoning evidence in the field of political economy that history matters. Most of these studies rely on the persistence of formal institutions or cultural inheritance, thus utilizing this perspective of social networks has the potential to bridge the two approaches and to promote new insights.

For example, world history has obviously witnessed a coevolution of political structures and social networks. But for social scientists, is it possible to distinguish the two directions of causality? Can we identify conditions under which political structures mold the topology of social networks, and vice versa? Could this line of reasoning lead us to factors even more fundamental?

The book also provides a useful analytical perspective on the dynamic evolution of the state-society relationship. The boundary between state and society becomes increasingly blurred the further back we travel in history. A few aristocratic families dominated the political arena in Europe for centuries, while the core of Chinese politics had shifted from family connections to state bureaucratic structures by the tenth century. At what point can we start calling an interconnected web of power a state? And how did multilateral bargaining shape the capacity, efficiency, and priorities of such a state?

The empirical directions pointed out by Root’s work are promising in light of recent developments in historical databases and big data methods. We have arrived at a stage where serious empirical analysis of social networks in historical contexts has become feasible. Detailed micro-level historical datasets are hard to obtain. It is thus of much empirical interest to know whether there exists a universal relationship between the behaviors of a society and the network structure of its elite, as well as under what conditions we can employ network structures of the elite as an indicator of more profound social and cultural changes.

 

Clair Yang is Assistant Professor of Economics at the Jackson School of International Studies at the University of Washington, Seattle. Her most recent paper is “A Longevity Mechanism of Chinese Absolutism,” with Yasheng Huang, forthcoming in the Journal of Politics.

Copyright (c) 2021 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (October 2021). All EH.Net reviews are archived at http://www.eh.net/BookReview.

Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):Asia
Europe
Time Period(s):General or Comparative