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Power and Plenty: Trade, War and the World Economy in the Second Millennium

Author(s):Findlay, Ronald
, Ronal

Published by EH.NET (August 2008)

Ronald Findlay and Kevin H. O?Rourke, Power and Plenty: Trade, War and the World Economy in the Second Millennium. Princeton: Princeton University Press, 2008. xxvi + 619 pp. $39.50 (cloth), ISBN: 978-0-691-11854-3.

Reviewed for EH.NET by ?evket Pamuk, London School of Economics and Bogazi?i-Bosphorus University.

Ronald Findlay of Columbia University and Kevin H. O?Rourke of Trinity College, Dublin have written a magisterial account of the history of international trade during the last millennium. They provide a theoretically coherent account of the interaction between the patterns and evolution of inter-regional trade, on the one hand, and long-term global economic and political developments, on the other. The two way interaction between power and plenty as formulated by Jacob Viner but going back much earlier in its origins, constitutes the analytical backbone of the volume. Findlay and O?Rourke argue convincingly that no history of international trade can ignore conflict, use of force, military exploits, and in turn, geopolitics. They draw upon a large volume of secondary historical and political literature as well as economic theory and succeed in integrating a vast amount of detail as well as their own research into their conceptual framework.

A large part of the exposition and analysis of the major developments in international trade proceeds in terms of the interaction between the seven regions of Eurasia as defined by the authors and the contributions arising from these interactions, in terms of the movements of people, crops, ideas, and techniques as well as commodities. A good deal of emphasis is placed on the importance of geography in explaining the interactions between the seven regions with very different physical features and endowments. This skillfully written volume is a work of extraordinary scope, a major achievement.

For the first half of the millennium, the authors should be commended for focusing on two key events, the Pax Mongolica and the Black Death, both of which involved most, if not all, of the seven regions. The unification of the central Eurasian landmass by the Mongols in the thirteenth and early fourteenth centuries facilitated the interaction of Western Europe and different regions of Asia from the Atlantic to the Pacific Ocean. Mongols encouraged trade and made the routes across Eurasia safer and busier. Arguably, this was the first episode of globalization in history. Moreover, it was the disintegration of the Pax Mongolica and the shift of the trade to the southern routes across the Indian Ocean and the Middle East that led to the search for alternative ways of reaching Asia by western Europeans. As the authors point out, the ultimate legacy of the Pax Mongolica was not, perhaps, the increase in the interaction between Europe and Asia but the mutual discovery of Europeans and native Americans.

The Black Death, which originated in Mongol-controlled Asia but ended up in the Middle East and Europe, brought about far-reaching consequences for these regions. The sharp decline in the population led to an even sharper rise in wages. This high-wage environment, which lasted for at least two centuries, brought about very different demographic, economic, social and other responses not only between Europe and Asia but also within Europe, between the northwest and the south. As the authors make clear, the long-term consequences of the Black Death have not been fully analyzed and deserve more attention from economic historians.

For the second half of the millennium the focus of the volume is on the rise of an international economy and its contribution to the Industrial Revolution. The authors see the Industrial Revolution as the culmination of a long historical process involving the interaction of all the world?s regions through trade and transfer of technology. Findlay and O?Rourke emphasize that any account of the ?Rise of the West? that focuses purely on domestic developments ? such as western institutions, cultural attributes or endowments and ignores the vast web of interrelationships between Western Europe and the rest of the world ? is hopelessly inadequate. They argue that the Industrial Revolution needs to be understood as the outcome of a historical process with multiple causes going back to the medieval era in which international movements of commodities, warriors, microbes and technologies all played important roles. They also make clear that the Industrial Revolution not only transformed the international trading system but also gave rise to huge disparities around the globe as the spread of industrialization has been very uneven in the two centuries since.

Plunder or primitive accumulation may not have fueled the Industrial Revolution directly, but the authors emphasize that by expanding markets and ensuring the supply of raw materials, mercantilism and imperialism were an important part of the story. Violence did matter and often shaped the environment in which this exceptional event took place. The authors acknowledge that Asians and those from other regions of the world were not passive actors. They also ask two key questions with regard to the Industrial Revolution: why Britain and why Europe? The answers to both include not only the domestic factors but also control of long distance trade, overseas markets and raw materials. They emphasize in many parts of the text the key role played by the British navy in a world in which nations systematically excluded their enemies from protected markets.

The remaining chapters of the book are devoted to the analysis of the unprecedented expansion of international trade during the last two centuries, based on the ?Great Specialization? (manufactures vs. agriculture) that emerged in the aftermath of the Industrial Revolution and remained in place until recently. The ratio of world trade to GDP is sharply higher today than it was two centuries ago, but this rise has not been continuous. The powerful trend for globalization during the nineteenth century was followed by the collapse of world trade or deglobalization after 1914 and a more or less steady expansion of trade once more or reglobalization since the end of World War II.

One theme that is conspicuously absent in this volume is institutions ? which have occupied center stage not only in the economic history literature but also in economic theory in recent years ? and their impact on trade and economic development. While the authors emphasize the importance of international trade for the ?Rise of the West,? they could have focused more explicitly on the linkages between international trade and institutional change. One can think of at least two major channels through which long distance trade facilitated institutional change in Europe. During the period before 1000 and even until 1500, trade with other regions allowed Europe to learn about and then adapt some commercial, monetary and financial institutions. The transmission of the Islamic institution of business partnership or the mudaraba to the north of the Mediterranean in the form of the commenda is an important example of such borrowing and adaptation. These exchanges were very important for the development of western European institutions and the authors mention some of them. In the early modern era (that is after 1500) trade with other regions of the world led to institutional change in Europe through another mechanism. By giving greater power to merchants, long distance trade enabled them to shape the institutions in early modern Europe more forcefully in the direction of capitalism, as Acemoglu, Johnson and Robinson have recently emphasized. Arguably, greater political as well as economic power for merchants is an important characteristic that sets Europe apart from the other regions. It also provides another dimension to Viner?s power and plenty couple which is at the analytical center, as well as the title, of this book.

This is a well researched volume which is simply delightful to read. In most of the topics about which I have some knowledge, I found the analyses and the judgments offered by the authors both balanced and insightful. I expect this book will remain the standard text for many years to come.

?evket Pamuk teaches economic history and political economy at the London School of Economics and Political Science and Bogazi?i-Bosphorus University, Istanbul. His recent publications include A Monetary History of the Ottoman Empire (Cambridge University Press, 2000) and ?The Black Death and the Origins of the Great Divergence inside Europe, 1300-1600,? European Review of Economic History, 2007.

Subject(s):Military and War
Geographic Area(s):North America
Time Period(s):Medieval