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Published by EH.Net (November 2022).

Response to Tirthankar Roy’s review of Ashok Sanjay Guha, Reversals of Fortune: Why the Hierarchy Of Nations So Often Turns Topsy-Turvy – by Ashok Sanjay Guha, Professor Emeritus in Economics, School of International Studies, Jawaharlal Nehru University.

 

Professor Roy’s review mischaracterizes my book. The central argument of the book – about the basic mechanism of the reversals of fortune – is not even mentioned in the review. The book argues that truly transformative innovations, as public goods, require state support in their early experimental stage, but that no state will support an innovation that is against the interests of its dominant elite. Since this elite, in any highly successful state, has flourished under the old technology, it will resist radical innovation. In states less adapted to the old technology but better fitted to the new, the opposite set of incentives emerges. Once the new technology is well established, it will spread to other regions which are possibly even better suited for it. Apart from this last sentence, the rest of the argument seems to have eluded the reviewer totally.

Sixty percent of the review focuses on five pages dealing with colonial India, which are in chapter 3. The other chapters, as well as the remaining 22 pages of chapter 3, are dismissed in a sentence or two each, purporting inaccurately to summarize each chapter’s argument. The reviewer does not seem to have read the last chapter at all, since he says that the book concludes with the previous chapter.

As for the five pages on colonial India, I have no wish to educate the reviewer on balance-of-payments theory and foreign trade multipliers. He is also entitled to believe, contrary to what I wrote, that British rule accelerated Indian economic growth – despite the fact that in the last 60 years of the British raj, India’s per capita GDP increased by just 10 percent, while in the next 60 after Independence, it rose by 482 percent.

What he is not entitled to is factual inaccuracy in the review process. For example, “The best the book can do is insist that European colonial rule underdeveloped the third world.” NO, emphatically not. In chapter 6, on pp. 77-79, there is a detailed model explaining why, under free trade and free markets and without colonial constraints, a densely populated low-wage economy would probably have stagnated before 1960. Colonialism was certainly not the only factor behind India’s – or more generally low-wage Asia’s – stagnation. I refer to it only in the specific context of Asia’s failure to adapt to the new technology of ocean navigation (“the critical factor that made the West forge ahead”), which led eventually to colonial subjugation. I argue simply that colonial subjugation certainly did not help, not that it was the only explanation for our stagnation.

Or consider the following: “Despite the claim of the book to offer a single narrative on inequality covering the whole world,” it is not persuasive “as a historiography of the third world.” I have not made any such claim. The book is not about inequality at all. It is about the subject mentioned in the title Reversals of Fortune. It examines a large number of such reversals, some large and some small, between the continental Asian empires and Western Europe (typified by Ming China and Portugal), between Iberia and northwest Europe in the 16th and 17th centuries, between England and Holland in the 17th and 18th centuries, between England and the US, Germany and Russia in the late 19th and early 20th centuries, between Central America, the Caribbean islands and the US South on the one hand and the US Northeast and Midwest on the other, and finally between the advanced West and East and South Asia in the 1960s. It looks for a common pattern, generally related to the specific geographies of the countries involved and to the technologies of the time. I do not ever claim to do a “historiography of the third world.” For one thing, I do not claim to know anything about Africa, Australia, New Zealand, and parts of Latin America. For another, I do not use the phrase “the third world,” not in this book or anywhere else.

Nor do I offer “a general reading of colonialism” as the reviewer implies. In fact, my reference to colonialism is limited to East and South Asia and in a specific context (see above). Yet the tone of the reviewer and his overwhelming concentration on the colonial issue so distort the general picture he gives of the book that any reader of the review would be misled into believing that this is a book on colonialism, which it certainly is not.

On matters of detail, the reviewer berates me for ignoring the benefits that British railway building conferred on the Indian economy. In fact, I had detailed all this — along with pacification and unification of the internal market and large-scale irrigation in the Punjab — on p. 44 as unintended consequences and collateral benefits of British rule. So what purpose was the reviewer’s critique on this point supposed to serve except to mislead readers?

Similarly, he falsely implies that I ignored the development of the Bombay cotton textile industry in the late nineteenth and early twentieth centuries. This I most certainly did not do. I did not of course regard it as a cause for celebration. After all, if a country that, in 1750, supplied 25% of the world’s manufactures and exports, manages, after a century of total destruction, to crawl back in the next 75 years to a point where it almost captures the domestic market, I could not regard this as a ringing endorsement of colonialism.

But, above all these details is the fact that the book that Professor Roy reviewed is not mine. He built a straw man and knocked it down to his own satisfaction. Unfortunately, in the process, he gave potential readers a false picture of what the book is about.

 

Tirthankar Roy replies: I welcome Professor Guha’s restatement of his book’s arguments. But his response misses the main point of my criticism, that the third world gets short shrift in the book. The book’s project requires a credible, evidence-based account of why the third world fell behind, which the book does not offer. Its discussion of comparative economic history relies upon a few papers using a controversial, even discredited, method called persistence study. The main growth area in the economic history of the world has been studies of Asia, Africa, and Latin America, which discard or question the key ideas and assumptions that once governed research on these regions. The Economic History of Developing Regions, the Australian Economic History Review, and mainstream economic history journals collectively contain more than 100 such studies. I specifically mentioned colonialism in the review because this is an area where massive revisions are taking place, contrary to the book’s old-fashioned summation of that history. My criticism did not stem from what story I “believe in” but the book’s disregard for a scholarship that is changing everything we know.

 

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