276
ReORIENT
cycle in whose downward "B" phase one after another region and em
pire in Asia declined. Then, the previously rather marginal Europeans
and later the North Americans were able to take advantage of this Asian
cyclical "E" phase decline, like the East Asian NIBs today: it is then that
the Europeans staked out their own claim to leadership and hegemony
in the world economy- temporarily! However, not only did "the Rise
of the West" follow "the Decline of the East." The two were also other
wise structurally and cyclically dependent on each other as inextricably
interrelated parts of a single global economy. That is what I seek to
demonstrate in the following sections.
How Did the West Rise?
So how did the West rise to win this competition- tem
porarily? The introduction to this book reviewed a number of received
theories and answers, all of which allege one or another or a whole
combination of European and by extension Western exceptionalisms.
The introduction also contended that all of these theories, Marxist, We
berian, and/or whatever, are fundamentally flawed by their EurCi
centrism.
J.
M. Blaut's (I993a)
Tbe Colonizers Model of the World: Geo
grapbical Diffusionism and Eurocent'ric History analyzes a dozen of these
answers and dleir flaws chapter and verse. Our first chapter cites Goody;
Said, Bernal, Amin, Hodgson, Tibebu, and Lewis and Wigen, who also
demystify this Eurocentrism. However, they mosdy concentrate on
ideological critiques of the manifest and hidden ideologies under re
view. Also cited is my own critique (Frank 1994,
1995) of the "modern
capitalist world-economy/system" alternative proposed by Braude! and
Wallerstein. But my earlier work too is limited mostly to a critique,
although Frank and Gills (1993) offers an alternative world system inter
pretation of world history before 1500.
The historical/empirical sections of the present book demonstrate
that the real world during the period from
I400
to 1800, not to men
tion earlier, was very different from what received theory has alleged.
Eurocentric history and "classical" social theory, but also still Wal�
lerstein's «modern world-system" suppose and/or allege European pre�
dominance, which simply did not exist. Until about
1800
the world
economy was by no stretch of the imagination European-centered nor
in any significant way defined or marked by any European-born
(arid
WHY DID THE WEST WIN (TEMPORARILY ) ?
.
2.77
European-borne) "capitalism," let alone development. Still less was
there any real "capitalist development" initiated, generated, diffused, or
··
· ·· otherwise propagated or perpetrated by Europeans or the West. That
occurred only by the stretch of the Eurocentric imagination) and even
that only belatedly after the nineteenth century, as Bernal has already
emphasized. A related question then is whether there had already been
·· · · any
"capitalist
[development of]
underdevelopment."
For Latin
America and the Caribbean, that argument (Franle 1966, 1967) can
probably still stand, and perhaps for the slave trade regions of Africa as
• • . ·. well
.
The argument was that
in India, this process only began after the
Battle of Plassey in 1757 (Frank 1975, 1978a). However, this historical
review does raise some question as to what extent the Indian and other
Asian decline was "imposed" by Europe, not to mention by "capi
· talism."
For, the data in the preceding sections have shown unequivocally
that the world economy was preponderantly Asian-based. Europeans
had been clamoring to attach themselves to it for centuries before Co
lumbus and Vasco da Gama, which is what propelled them to seek
some, any, and especially a golden way to do so in the first place. And
yet for centuries after these European (not worldl ) pioneers, other Eu
topeans still only clambered very belatedly, slowly, and marginally to
attach themselves to the Asian economic train .
Only in the nineteenth
century did they succeed in finding a place in the locomotive.
CLIMBING UP ON ASIAN SHOULDERS
So how did the West rise? The answer, literally in a word,
is that the Europeans bought themselves a seat, and then even a whole
railway car, on the Asian train. How were any-literally- poor Europe
ans able to afford the price of even a third-class ticket to board the Asian
economic train? Well, the Europeans somehow found and/or stole, ex
torted, or earned the money to do so. Again, how so?
The basic answer is two-fold, or three-fold. The mOst impoltant an
sWer is that Europeans obtained the money from the gold and silver
mines they found in the Americas. The secondary answer is that they
�'made" more money, in the very good business first of digging up that
silver-or more accurately, obliging the indigenous peoples of the
Americas to dig it up for the Europeans. The Europeans also engaged
iIi a . variety of other profitable businesses they ran in- and to- the
Americas. These were first and foremost the slave plantations in Brazil,
the Caribbean, and the North American South; and, of course, the slave
trade itself to supply and run these plantations. The Europeans em
ployed and exploited perhaps a million workers at any one time in this
profitable business, by Blaut's estimate (1993a: 195). Europeans were
able to make still more money selling their own European-made prod
ucts to these and other people
in the Americas, products for which Eue
rope otherwise would have found no other market, since they were not
competitively salable in Asia.
The Keynesian multiplier did however operate also in Europe, first
through the infusion of the American-derived money itself, and then
also
through the repatriation and investment in Europe of profits from
the Americas, Mrica, and from the "triangular" -including especially
the slave-trade among them. Of course, Europe also derived profits
from the aforementioned European production and export of its goodS
to the Americas and Africa. All these European sources of and machines ·
for finding and making money have been alluded to in the earlier empir
ical sections of this book. They need not be elaborated on here, because
they have already been researched and demonstrated countless times
over, without however seeing some of their implications nor drawing
the necessary conclusions, outlined below.
In order to avoid a tedious recounting or Marx's language of "capital
dripping
with
blood and sweat," it should be sufficient to allude to
everybody'S favorite observer, Adam Smith:
Since the first discovery of America, the market for the produce
of its silver mines has been growing gradually more and more
extensive. First, the market of Europe has become mote extensive.
Since the discovery of America, the greater part of Europe has
improved. England, Holland, France and Germany; even Swe
den, Denmark and Russia have all advanced considerably both in
agriculture and manufactures. .
Secondly, America is itself a
new market for the produce of its own silver mines; and as it
advances in agriculture, industry and population . . . its demand
must increase much more rapidly. The English colonies are
alto
gether a new market. .
The discovery of America, however
made a most essential [contribution]. By opening up a new and
inexhaustible market to all commodities of Europe, it gave occa
sion to a new division of labour and improvements of art, which,
in the narrow circle of ancient commerce could never have taken
place for want of a market to take off the greater part of their
produce. The productive powers of labour were improved, and
WHY DID THE WEST WIN (TEMPORARILY) ?
279
its produce increased in all the different countries of Europe, and
together with it the real revenue and wealth of the inhabitants.
(Smith
[1776]1 937 = 202, 416)
As Smith knew, it was America (in a word) that accounted for the in
crease in the real revenue and wealth of the inhabitants of Europe.
Moreover, Smith repeatedly argues that even Poland, Hungary, and
other parts of Europe that did not trade with the Americas directly,
nonetheless also derived indirect benefit for their own industries from
die same. Moreover of course, as Ken Pomeranz
(1997) emphasizes and
analyzes, the European exploitation of native, bonded labor and slave
labor imported from Mrica in combination with the resources of tlle
.Americas not only afforded Europe additional resources for its own
Consumption and investment but also lightened the pressure on scarce
resources in Europe itself.
Smith also recognized Asia as being economically far more advanced
and richer than Europe. "The improvements in agriculture and manu
factUres seem likewise to have been of very great antiquity in the prov
inces of Bengal in the East Indies, and in some of the eastern provinces
bf China. . . Even those three countries [China, Egypt, and Indostan] ,
the wealthiest, according to all accounts, that ever were in the world,
are chiefly renowned for their superiority in agriculture and manufac
tures . . . . [Now, in 1776] China is a much richer country than any part
of Europe" (Smith [1776]1937 : 20, 348, 169).
Moreover, Smith also understood how the poor Europeans were able
to use their new money and increased wealth to buy themselves tickets
. on the Asian train. Continuing with the third point in his discussion
excerpted above, Smith writes:
Thirdly, the East Indies [Asia] is another market for the produce
of the silver mines of America, and a market which, from the time
of the discovery of those mines, has been continually taking off a
greater and greater quantity of silver.
Upon all these accounts,
the precious metals are a commodity which it always has been,
and still continues to be, extremely advantageous to carry from
Europe to India. There is scarce any commoditY which brings a
better price there [and it is even more advantageous to carry silver
to China] . .
The silver of the new continent seems in this man
ner to be one of the principal commodities by which the com
merce between the two extremities of the old one is carried on,
and it is by means of it, in great measure, that those distant parts
of the world are connected with one another. . . . The trade to the
280
ReORIENT
East Indies, by opening a market to the
commodities of Europe,
which is pur
chased with those commodities, must necessarily tend to increase
the annual production of European commodities. . . Europe, in
stead of being the manufacturers and carriers for but a small part
of the world .
have now [1776] become the manufacturers for
the numerous and thriving cultivators of America, and the carri
ers, and in some respect the manufacturers too, for almost all the
different nations of Asia, Mrica, and America. ( Smith [1776]1937:
206, 207, 417, 591; my emphasis )
01; whra comes to the same thing, the gold and silver
The Asian market for the Europeans was the same thing as silver, as
Smith remarked, for t';vo related re as ons : One is that silver was their
only means ofpayment. The other is that therefore the Europeans' main
business was the production and trade of silver as a commodity itself.
That was the main source of the profits Europeans derived from their
trade both within Asia and between Asia and Europe.
Braudel declares himself "astonished," "as a historian of the Mediter
ranean," to find that the late eighteenth-century Red Sea trade was still
the same "vital channel" in the outflow of Spanish-American silver to
India and beyond as in the sixteenth century. This influx of precious
metal was vital to the movements of the most active sector of the In
dian, and no doubt Chinese economy" (Braudel 1992: 491). India "had
in fact been for centuries subject to a money economy, partly through
her links with the Mediterranean world" (Braudel 1992: 498) . "Cambay
(another name for Gujarat) could only survive, it was said, by stretclling
out its arm to Aden and the other to MaIacca" (Braudel 1992: 528). Gold
and silver "were also the indispensable mechanisms which made the
whole great machine function, from its peasant base to the summit of
society and the business world" (Braudel 1992: 500) . Braudel himself
concludes that "in the end, the Europeans had to have recourse to the
precious metals, particularly American silver, which was the 'open ses
ame' of these trades" (Braudel 1992: 217) . "From the start, Spanish
America had inevitably been a decisive element in world history"
perhaps the tme explanation
(Braudel 1992: 414). "Is not America
of Europe's greatness?" (Braudel 1992: 387).
Precisely that is also the explanation ofBlaut (1977, 1992, 1993a), who
in all these regards seems to be the modern alter ego of Adaill Smith.
Both understand and explain the first two answers to the question of
how the poor Europeans managed access to the thriving Asian market:
(1) they used their American money, and (2) they used the profits of
both their production/imports from and their exports to America and
"
WHY DID THE WEST WIN (TEMPORARILY ) ?
281
Africa, and their investment of the proceeds of all of these in Europe
itself.
However, the third answer alluded to above is that Europeans also
used both the American silver money and their profits to buy into the
wealth of Asia itself. As Smith noted, and all the evidence reviewed
above shows, Europe used its commodities, or what comes to the same
thing, the only commodities it could sell in Asia, that is its American
gold and silver, to buy Asian products. Moreover, as also documented
above, Europe used its silver purchasing power to muscle in on the
intra-Asian trade, which the Europeans called "country trade." As noted
above, it was the silver- and gold-trade itself that was really the main
stay of the European companies. Consider for instance this summary of
Dutch VOC strategy:
The European precious metals, the Japanese silver obtained
mainly against Chinese silk and other goods, and the gold ob
tained in Taiwan mainly against Japanese silver and Indonesian
pepper were invested primarily in Indian textiles. These textiles
were exchanged largely for Indonesian pepper and other spices
but also sent to Europe and various Asian factories. The bulk of
the pepper and other spices was exported to Europe but a certain
amount [was] used for investment in various Asian factories such
as those in India, Persia, Taiwan and Japan. Raw silk from Persia
and China also found its way to Europe.
The pattern of Dutch
participation in intra-Asian trade was detennined in part by the
requirements of the trade with Japan which was by far the most
important Asian source of precious metals for the Company dur
ing the seventeenth century.
In certain years precious metals
procured in Japan were of greater value than those received at
Batavia from Holland. (Prakesh 1994: 1-192, 193)
More graphical still is a frequently quoted description of Dutch trade
in 1619 from VOC director Jan Pieterswn Coen himself:
Piece goods from Gujarat we can barter for pepper and gold on
the coast of Sumatra; rials and cottons from the coast [of Coro
mandel] for pepper in Bantam; sandalwood, pepper and rials we
can barter for Chinese goods and Chinese gold; we can extract
silver from Japan with Chinese goods; piece goods from tlle Cor
omandel coast in exchange for spices, other goods and gold from
China; piece goods from Surat for spices; other goods and rials
from Arabia for spices and various other trifles -one thing leads
to another. And all of it can be done without any money from the
Netherlands and with ships alone. We have the most important
282
ReORIENT
spices already. What is missing then? Nothing else but ships and
a little water to prime the pump. .
(By this I mean sufficient
means [money] so that the rich Asian trade may be established.)
Hence, gentlemen and good administrators, there is nothing to
prevent the Company from acquiring the richest trade in the
world. (quoted in Steensgaard 1987: 139 and by Kindleberger
1989, who cites Steensgaard I973 [same as 1972] but writes "suffi
cient money" and omits the last-and for present purposes the
most significant-sentence! )
That is, Europeans sought to muscle in o n «the richest trade in the world} »
but it took the Dutch rather more than just "a little water [meaning
money]" to pump this Asian well of treasures and capital, and of course
that money came from the Americas. Thus, Europeans derived 1mre
profits from their participation in the intra-Asian "country trade" than
they did from their Asian imports into Europe, even though many of
the latter in tum generated further profits for them as re-exports to
Africa and the Americas. So the Europeans were able to profit from the
much more productive and wealthy Asian economies by participating
in the intra-Asian trade; and that in turn they were able to do ultimately
only thanks to their American silver.
Without that silver- and, secondarily, without the division of labor
and profits it generated in Europe itself- the Europeans would not
have had a leg, or even a single toe, to stand on with which to compete
in the Asian market. Only their American money, and not any "excep
tional" European "qualities," which, as Smith realized even in 1776, had
not been even remotely up to Asian standards, permitted the Europeans
to buy their ticket on the Asian economic train and/or to talee a third
class seat on it. That is looking at this European "business" in Asia
from the demand side. The concomitant supply side, emphasized by··
Pomeranz (1997), is of course that their American money permitted the
Europeans to buy real goods, produced with real labor and resources
in Asia. These goods not only increased consumption and investment
beyond what it otherwise could and would have been in Europe; they
also diminished the pressure on resources in Europe itself.
To refer to another analogy, their American-supplied stakes permit
ted the Europeans an entry into the Asian economic casino. Why were
they ultimately able to prosper there? Only because of their unending,
albeit fluctuating, flow of American silver and gold. That is what pro
vided the Europeans with their one competitive advantage among their
Asian competitors, for these did not have money growing on Americari.
trees. However, even with that resource and advantage, the Europeans
WHY DID THE WEST WIN (TEMPORARILY)?
:1.83
\¥eie no more than a minor bit player at the Asian, indeed world, eco
hdtn1C table. Yet the Europeans gambled their American stakes for all
.they were worth in Asia and held out there for three centuries. Even
. though the Europeans also reinvested some of their Asian earnings to
.ibliy iilto
still more and better seats at the Asian economic table, they
> \vere able to continue doing so only because their supply of cash was
!Xing continually replenished from the Americas. Witness that even in
the eighteenth century, the Europeans had nothing else to offer any
Asians, for European manufactures were still not competitive. How
ever, Smith exaggerated worldwide sales of European manufactures,
hnless we read his qualification of "to some extent" as meaning almost
.... nothing.
i
Certainly, the Europeans had no exceptional, let alone superior, eth
. >tJ.iS rational, organizational, or spirit-of-capitalist advantages to offer,
diffuse, or do anything else in Asia. What the Europeans may have had,
we will consider further below and in our conclusions, is some of
:is
what Alexander Gerschenkron's
�ardness"
(1962) calls the advantages of "back(1997)
afforded by their position, as Chase-DUIUl and Hall
also observe, at the (semi-)periphery of the world economy!
So how is it that this otherwise apparently hopeless European gam
•
···. ble in Asia panned out - and finally hit the jackpot? Only because while
·
. .
..• . .
..
.•
.
.
the Europeans were gathering strength from the Americas and Africa,
as well as from Asia itself, Asian economies and polities were also be
coming weakened during part of the eighteenth century-so much so
that the paths finally crossed, as in Rhoades Murphey's
at about
•
(1977) diagram,
1815. However, in the half century before that, another-
fourth-element entered into the European/Asian equation. Adam
Smith is also known for arguing that colonies did not pay, even though
< he wrote a chapter "On Colonies" and argued primarily against colonial
monopolies. Moreover, Smith wrote just before the major technologi -
cal inventions and innovations of the industrial revolution in Britain
and Europe. This is not the place to enter into the arguments about
:Whether there really was such a "revolution" and whether European
rates of capital accumulation really did
Purchase answer to see full
attachment