The Age of Equality: The Twentieth Century in Economic Perspective
Published by EH.Net (April 2012)
Richard Pomfret, The Age of Equality: The Twentieth Century in Economic Perspective. Cambridge, MA: Harvard University Press, 2011. xi + 283 pp. $29 (hardcover), ISBN: 978-0-674-06217-7.
Reviewed for EH.Net by Michael Huberman, Department of History, Universit? de Montr?al.
Remember the 1970s? As an undergraduate I recall taking a course in Comparative Economic Systems which dealt with different manners of organizing production and economies more broadly. We studied the interdependence of politics and economics, using as examples workers? self-management in Yugoslavia, countervailing forces in the U.S., import-substitution policies in India, and the social market economy of the German Federal Republic. Richard Pomfret must have taken a similar course ? and done extremely well at it.
In this brief but immensely rich, provocative, and rewarding book, Pomfret organizes world economic history in the last century around the battle of competing systems. There are obvious pitfalls with this conceptual framework, but Pomfret, who is a consummate author, is extremely agile in avoiding them. The story begins with the Age of Liberalism attached to the industrial revolution. While the application of new technologies generated a lot of wealth during the long-nineteenth century, not all the gains trickled down and were distributed fairly. Liberal reform in theory was predicated on the idea of equality in opportunities and not outcomes.
The Age of Equality, which comprises the bulk of the book, sought to redress the balance. Pomfret is careful not to fall into the Polanyi-like trope of markets versus states, underlining the plurality of responses, their overlap, and how states borrowed from each other. The sections here on the New Deal, Soviet planning, and Nazi rearmament provide a concise and thorough review of the literatures. Even the Asian Tigers established indigenous styled welfare states. More controversial is the claim of convergence of within-country, if not between-country, inequality. ?By the 1960s the Soviet Union had ensured almost universal satisfaction of basic needs. In this sense equality had been achieved, although attempts to measure the distribution of income suggest that it was not so different from that in some Western European countries? (pp. 74-75). This balance across and between economies seems to have prevailed into the middle to later decades of the century, despite attempts by Reagan and Thatcher to tilt rewards toward the upper end of the distribution.
These claims may come as something of a surprise to 99 percent of readers. But Pomfret is as much interested in ideas as with outcomes. Leaving hard evidence aside, each historical epoch has an overarching vision, ideas in the air, which cut across different economic systems. The author never actually spells out the relation between ideas and, say, technological advance and levels of education ? what drives what ? leaving the reader to identify the feedback mechanisms. There are also issues with timing. Different ideas may be related to different stages in the development process, and there is no reason to expect that ideas will coincide across space.
As for the decline of central planning, Pomfret attributes failure to internal inconsistencies. He cites the minimal impact of piecemeal measures when substantive reform had to come from above. Drawing on his own research on the transition from central planning, the biggest challenge was establishing the appropriate institutional framework protecting property ownership and encouraging governance. The transition was facilitated where there was agreement over an accepted model of institutional change. A penultimate chapter, ?The End of the Third World,? treats the demise of import-substitution policies. ?By 2000 there was no longer serious debate about the desirable economic system? (p. 185).
With the fall of the Soviet system and the adoption of market reforms in China and India, we have entered the age of fraternity in which political control of nation states has slowly eroded to be replaced by an international community in which common interests trump national preoccupations. Ever the optimist, Pomfret contends that nation states will be willing to cede control so as to assure and extend the gains of the now dominant market based systems. One may wonder about the seemingly linear sequence and deterministic approach to the succession of major epochs, but in presenting the variety of experiences the author skates around this criticism.?
The book targets the general reader and succeeds eminently. The argument is compelling, while not always convincing. Pomfret is concise without being terse, wide ranging without being superficial, eclectic without sacrificing direction. A virtue is that East and West, and North and South get equal attention. Technical material is left for the footnotes and the reference list is comprehensive. Even if courses on comparative economic systems have seen their salad years, this book will find an enthusiastic audience.
Michael Huberman is Professor of History at the Universit? de Montr?al. He is the author of Odd Couple: International Trade and Labor Standards in History (New Haven: Yale University Press, 2012).
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