political science -04

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Which theory or theories of development are best suited to explaining variations in the relative development performance of the West and the rest of the world since the Great Divergence? Do you find the same theories compelling for the West and those that developed later, or are different theories needed to explain these cases? Explain why you use the same theory or different theories to address this comparison.

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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 streng ...
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