POWER AND PLENTY - ZODML

1 POWER AND PLENTYTHE PRINCETON ECONOMIC HISTORYOF THE WESTERN WORLDJoel Mokyr, EditorGrowth in a Traditional Society: The French Countryside, 1450 1815,by Philip T. HoffmanThe Vanishing Irish: Households, Migration, and the Rural Economy inIreland, 1850 1914, by Timothy W. GuinnaneBlack 47 and Beyond: The Great Irish Famine in History, Economy, andMemory, by Cormac Gr daThe Great Divergence: China, Europe, and the Making of the ModernWorld Economy, by Kenneth PomeranzThe Big Problem of Small Change, by Thomas J. Sargent and Fran ois R. VeldeFarm to Factory: A Reinterpretation of the Soviet Industrial Revolution,by Robert C. AllenQuarter Notes and Bank Notes: The Economics of Music Composition inthe Eighteenth and Nineteenth Centuries, by F. M. SchererThe Strictures of Inheritance: The Dutch Economy in the Nineteenth Century,by Jan Luiten van Zanden and Arthur van RielUnderstanding the Process of Economic Change, by Douglass C.

2 NorthFeeding the World: An Economic History of World Agriculture, 1800 2000,by Giovanni FedericoCultures Merging: A Historical and Economic Critique of Culture,by Eric L. JonesThe European Economy since 1945: Coordinated Capitalism and Beyond,by Barry EichengreenWar, Wine, and Taxes: The Political Economy of Anglo-French Trade,1689 1900, by John V. C. NyeA Farewell to Alms: A Brief Economic History of the World, by Gregory ClarkPower and PLENTY : Trade, War, and the World Economy in the SecondMillennium, by Ronald Findlay and Kevin H. O RourkePower over Peoples: Technology, Environments, and Western Imperialism,1400 to the Present, by Daniel R. HeadrickPOWER AND PLENTYTRADE, WAR, AND THE WORLD ECONOMYIN THE SECOND MILLENNIUMR onald FindlayKevin H. O Rourkeprinceton university pressprinceton and oxfordCopyright 2007 by Princeton University PressPublished by Princeton University Press,41 William Street, Princeton, New Jersey 08540In the United Kingdom: Princeton University Press,6 Oxford Street, Woodstock, Oxfordshire OX20 1 TWAll Rights ReservedSixth printing, and first paperback printing, 2009 ISBN: 978-0-691-11854-3 (cloth)ISBN: 978-0-691-14327-9 (pbk.)

3 Library of Congress Control Number: 2007931677 British Library Cataloging-in-Publication Data is availableThis book has been composed in UtopiaTypeset by T&T Productions Ltd, LondonPrinted on acid-free paper. in the United States of America109876 For Jane and RoseannThrough aTriumphantArch, seeAlbionplas t,InHappysite, inNeptunesarmes embras t,InPowerandPlenty,onherCleevyThroneCirc led withNatures Ghirlands, being aloneStil dth Oceans : abounding in cleves or cliffs (Oxford English Dictionary).Michael Drayton, : M. Lownes, I. Brown, I. Helme, I. Busbie, page intentionally left blankCONTENTSA cknowledgmentsxiiiPrefacexvi1 Introduction: Geographical and Historical Background1 Western Europe4 Eastern Europe11 North Africa and Southwest Asia: The Islamic World15 Central (or Inner) Asia24 South Asia29 Southeast Asia33 East Asia (China, Korea, and Japan)372 The World Economy at the Turn of the First Millennium43 The Golden Age of Islam48 China: The Sung Economic Miracle61 The Indian Ocean and Southeast Asian Trade67 The Pirenne Thesis71 Eastern Europe: The Viking Connection73 The Economy of Western Europe803 World Trade 1000 1500.

4 The Economic Consequences ofGenghis Khan87 Trade and War in the Mediterranean andthe Black Sea, 1000 135088 The Indian Ocean and the South China Sea, 1000 135098 ThePax Mongolicaand Overland Trade, 1000 1350101 Eurasia on the Eve of the Black Death109 The Black Death111 Trade between Western and Eastern Europe, 1350 1500120 Overland Trade, 1350 1500: The Aftermath ofthePax Mongolica124 The Emergence of Russia126 The Middle East, the Mediterranean, and International Trade,1350 1500127 Southeast Asia and China, 1350 1500133 Quantifying the Late Medieval Spice Trade140xCONTENTS4 World Trade 1500 1650: Old World Trade andNew World Silver143 Portugal, the Atlantic, and the Indian Ocean145 Spain, Portugal, and the New World158 The Pacific and East Asia167 The Dutch Rise to Primacy in World Trade175 Russia, Sweden, and the Baltic, 1500 1650187 Southeast Asia during the Age of Commerce194 The Cape Route, Venice, and the Middle East204 Silver, Silk, and Spices2125 World Trade 1650 1780: The Age of Mercantilism227 Origins of the British Empire: Trade, Plunder, and Settlement229 Mercantilism, Commercial Rivalry, andthe Anglo-Dutch Wars238 Britain, France, and the Dutch Republic245 Britain and France: Commercial Expansion and the SecondHundred Years War247 India.

5 The Disintegration of the Mughal Empire andthe Transition to Colonial Rule262 Southeast Asia and the End of the Age of Commerce275 The Manchu Empire284 China s Overseas Trade286 Chinese and Russian Overland Trade295 Conclusion3046 Trade and the Industrial Revolution311 Trade during the Industrial Revolution324 Trade, Overseas Expansion, and the Industrial Revolution330 Why Britain? Why Europe and Not Asia?346 Conclusion3647 World Trade 1780 1914: The Great Specialization365 War and Revolution366 The Revolutionary and Napoleonic Wars:Short-Run Implications369 The Revolutionary and Napoleonic Wars:Long-Run Implications371 The Industrial Revolution and Transportation Technology378 Bulk Commodities and Heckscher Ohlin Effects383 Nineteenth-Century Imperialism387 Nineteenth-Century Trade Policy395 Commodity Market Integration, 1815 1914402 Complementary Factor Flows and the Great Frontier407 Trade and the Global Division of Labor411 Trade, Tropical Frontiers, and the Great Divergence414 The Terms of Trade424 Conclusion425 CONTENTSxi8 World Trade 1914 39.

6 Deglobalization429 World War I429 The Aftermath of War435 Interwar Commercial Policy443 Transport Costs455 The Volume of World Trade458 Price Convergence and Divergence461 The Great Depression, the Collapse of World Trade, andthe Developing Countries465 The Collapse of the Ottoman Empire469 Conclusion4719 Reglobalization: The Late Twentieth Century inHistorical Perspective473 World War II473 Geopolitical Consequences: Communism, the Cold War, andDecolonization476 The Gradual Reconstruction of the AtlanticEconomy: 1950 70489 Policy Divergence: 1945 80493 Reglobalization: 1980 2000496 International Transport Costs501 Trends in Openness: Quantities and Prices505 Unraveling the Great Specialization512 Openness and Convergence in the Late Twentieth Century515 Conclusion52510 Globalization at the Dawn of the Twenty-First Century527 The Future of Globalization: Economic Challenges534 The Future of Globalization: Political Challenges539 Bibliography547 Index593 This page intentionally left blankACKNOWLEDGMENTSThis book has beena long time in the making, and we have accu-mulated an embarrassingly long list of debts along the way.

7 We startedworking together on the history of world trade in 2000, when preparingfor an NBER conference on Globalization in Historical Perspective. This took place in Santa Barbara, California, in May 2001, and resultedin an early joint publication (Findlay and O Rourke 2003). We areextremely grateful to the organizers of that conference, Michael Bordo,Alan Taylor, and Jeffrey Williamson, as well as to the NBER for prompt-ing us to embark on what has proved to be a seven-year those seven years, a great many people have helped uswith queries, provided us with data, and shared their knowledgeand experience with us. The process has yet again reminded us ofhow fortunate we are to be working in this wonderful field. Amongthose who have provided us with help or encouragement are OlivierAccominotti, Lee Alston, Remo Becci, Steve Broadberry, Andre Burg-staller, Bruce Campbell, Rich Clarida, Greg Clark, Bill Collins, BrendanConroy, Max Corden, Eric Del pine, Brendan Dempsey, Javier CuencaEsteban,GuillaumeDaudin,MikeEdelst ein,BarryEichengreen,DavidEltis, Antoni Estevadeordal, Bouta Etemad, Zo Fachan, Rob Feenstra,Niall Ferguson, Michael Finger, Marc Flandreau, Dennis Flynn, OdedGalor, Frank Geary, Mike Gibney, Arturo Gir ldez, Barry Goodwin,Ann Harrison, Marc Harrison, Tim Hatton, Masahiro Hayafuji, BobHolton, John Hegarty, David Hummels, Joe Inikori, Dominick Jenkins,Ron Jones, Koichi Kimura, Herb Klein, Jan Tore Klovland, DeepakLal, Philip Lane, A.

8 J. H. Latham, Jim Livesey, Mats Lundahl, AngusMaddison, Connie Malone, Jacques Mollard, Bob Mundell, AntoinMurphy, P draig Murphy, Patrick O Brien, Lawrence Officer, Cormac Gr da, Marcelo Olarreaga, William O Neill, Bernhardine E. Pejovic,David Richardson, Jim Robinson, Lennart Sch n, Barbara Solow,Robert Solow, Yuji Tamura, Peter Temin, John TePaske, Joachim Voth,Jan de Vries, Stan Wellisz, and Martin Wolf. We thank all of themmost sincerely, as well as participants at the aforementioned NBER event, and any colleagues whom we may have inadvertently several sections of the book, we draw heavily upon joint researchwith other colleagues, particularly Mats Lundahl and Jeff Williamson,and we are most grateful to them for allowing us to do would also like to particularly thank those colleagues who tookthe time to read sections of the manuscript and provide us withdetailed comments: Bob Allen, Rosemary Byrne, Fran ois Crouzet,Stan Engerman, Sevket Pamuk, Alan Taylor, and Jeff Williamson.

9 NickCrafts, Doug Irwin, and Eric Jones actually went so far as to read theentire first draft of this book, and their feedback has helped improveit considerably. We are extremely grateful to all three. Regina Grafeand Joel Mokyr forced us to considerably tighten our argument at keystages of this book, and have our unreserved thanks for their probingand incisive comments. Vanessa Schaefer was an early and alertproofreader, as well as being a forceful critic of an earlier version of themanuscript. A special debt of gratitude is owed to Andrew O Rourke,who read the entire manuscript in something close to its final version,and whose eagle eye enabled us to improve it in innumerable research assistants helped us with our work and deserve ourthanks. They are Silvi Berger, Mark Clements, Maria Coelho, WilliamHynes, Paula Labrecciosa, Patrick Leahy, Sibylle Lehmann, RonanLyons, Matthew Pham, Alan Reilly, and Theodore O Rourke began working on this book while a Governmentof Ireland Senior Research Fellow, and he thanks the Irish ResearchCouncil for the Humanities and Social Sciences for their generousfinancial support.

10 Further financial support was provided by the Insti-tute for International Integration Studies at Trinity College Dublin,and by the European Union, under its Research Training Networksprogram (contract numbers MRTN-CT-2004-512439 and HPRN-CT-2002-00236), for which we are both grateful. The IIIS enabled us towork together at a critical stage in Dublin in the spring of 2006. KevinO Rourke also thanks Alan Matthews for allowing him to take a furtheryear s unpaid leave to continue writing the book, Marc Flandreau andSciences-Po, as well as Mike Bordo, for making this a financially viableoption, and the people of Le Villard and the Entremonts valley forproviding him with such a congenial environment within which towork on this special word of thanks has to go to Maura Pringle, who preparedthe maps.