Tag Archives: history

Globalisation past and future

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Sitting in quarantine in my office is the Piketty tome, Capital and Ideology, the book that’s so ridiculously massive it arrived with its own tote bag. I’d got far enough in to it to reach the long historical section, to which my first reaction was he didn’t need to show us all his workings in such immense detail.

Another economist who has turned to history is Jeff Sachs in his latest, The Ages of Globalisation: Geography, Technology and Institutions. Sachs has long been alert to the implications of geography for economic outcomes; in this book he adds a very long historical perspective. So long that we start in paleolithic times at 10,000 BCE. The narrative is framed in terms of seven ages: paleolithic, neolithic, equestrian (domestication of horses), classical (Rome/Han China, ocean (start of European empires), industrial and digital.

There has been a trend towards these long-perspective books in recent times: Ian Morris’s Why the West Rules (For Now), Jared Diamond’s Guns, Germs and Steel and Collapse, James Scott’s Against the Grain, the dreadful Sapiens by Yuval Noah Harari. If you have read a number of these, then much of the ground covered in Sachs’s book will seem familiar; there’s only so much that is known about paleolithic times. Its great merit – especially if you haven’t read any of the others – is that it’s concise, and sends the interested reader to other sources. It doesn’t need its own tote bag, and Sachs wears his own extensive reading lightly. He’s a very clear writer, too, and the book has some lovely (colour) charts and maps.

The pitfall of taking this synoptic approach is that a lot hangs on the narrative thread and underlying argument. Sachs’s seven ages work quite well in this regard, and do include sections on China, India, and the Islamic world. The argument in this book – a bit like Martin Sandbu’s new book, The Economics of Belonging, which I am reviewing for another publication – is that we shouldn’t be turning our back on globalisation. It can be made to work better for the many, not just the few, if we take the SDGs and international organisations seriously and reform the latter.

I’m sceptical that reforming the UN will fix anything. One of the earlier threads that gets lost in the final ‘what to do’ chapter is the way technologies shape what is feasible in terms of governance as well as shaping the form of economic globalisation that occurs. Still, it’s a good thing there are still some advocates for globalism rather than nationalism, and for the global public good. It’s a pre-pandemic book but post-publication events suggest this is the time to argue for at least some parts of the international order to be strengthened.

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The end of capitalism as people knew it

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After a week on holiday reading detective fiction, I’ve devoured 1931: Debt, Crisis and the Rise of Hitler by Tobias Straumann. I’d never picked out 1931 as a particularly significant year, knowing nothing about the German banking crisis that year. Yet, the book argues, what hapened “is a story of almost biblical proportions, demonstrating how quickly a situation that seems manageable at first can spin out of control.” Greek tragedy was the comparison that came to my mind: every person doing exactly what they inevitably had to, ending in disaster because of the situation.

The book, which is highly readable, starts with an economist I’d never heard of, ‘The Raven of Zurich’, Felix Somary, the Cassandra who warned of disaster staring as early as January 1930. It didn’t happen for another 18 months, with the collapse of German banks after the Credit Anstalt collapse, so Somary was mocked. But had seen the inevitable consequences of the combination of the Depression, the burden of reparations on Germany, the international imbalances that resulted from the country seeking short term foreign capital, and the efects of consequent repeated rounds of austerity on German politics.

The circumstances were of course highly specific, yet throughout the book, there are alarming parallels with the post-GFC west. Take the Smoot-Hawley tariffs, signed into law by President Hoover despite the fact that over 1000 American economists warned him against doing so. In Germany itself, the parliamentary processes of the already weak Weimar republic were increasingly debased by extremists. The latter, prominently the Nazi party, welcomed the chaos.

By mid-1931, wages and pensions had been cut, unemployment was high and rising, there was no prospect of relief from the burden of reparations or indeed further short term financing to help Germany meet those payment – and then the main banks started to topple and experienced massive bank runs. “It felt like the end of capitalism as people knew it.” Arnold Toynbee wrote that “men and women all over the world were seriously contemplating and frankly discussing that the western system of society might break down and cease to work.” In important ways they were right.

It’s a relatively short book that reads like a thriller, and – as Straumann concludes – illustrates the fundamental point that “Only when domestic electorates are prepared to accept a loss of sovereignity for the benefit of cross-border co-operation can international institutions and agreements have a chance of working effectively.” When a debt crisis makes sustained growth difficult and  leads to repeated austerity measures, electorates start to wonder what the point is.

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What numbers make visible & what they erase

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That I read Caitlin Rosenthal’s Accounting for Slavery: Masters and Management was a bit random – we’re going away for a week and I didn’t want to start a holiday book, so pulled this bound proof the publisher had sent me off the pile. I’m glad I did. It’s a terrifically interesting book. It’s in effect a business history of slavery in the Caribbean and the American south, using the detailed management records that remain to understand how plantations were run – just as business historians would later use similar documentary evidence to trace the practices of management in industry. As she writes, “Scale required structure.” The sugar and cotton plantations were sometimes very large scale indeed. And the science of management emerged in this context before any manufactories grew to the same kind of scale.

There is a particularly illuminating section on the standardisation of record keeping: “Preprinted forms were an important and overlooked technology in organizing plantation labor.” Early records were hand written and ruled, with documents often sent to absentee owners in England – this was, Rosenthal points out, also one of the earliest instances of the separation of ownership and control, as large plantations were often run by professional managers. (The role of earnings from slavery in fuelling the growth of financial instruments and the City in England are the subject of this UCL research project, Legacies of British Slave-ownership) The availability of standard forms helped spread the ‘scientific management’ techniques – again, ahead of Taylor’s famous introduction of scientific management in industry. (This reminded me of Donald Mackenzie’s brilliant essay on how the commercial availability of options prices calculated by computers helped grow derivatives markets.)

Rosenthal also covers the role of slaves as, literally, human capital. Plantation managers kept inventory records and appied several different valuation techniques. As she observes, this was fundamentally an issue about property and therefore about power and politics, property being something defined by law. (And property in the form of people is more political than most.) By the eve of the Civil War, the total value of enslaved human capital was over $3 billion. (Before anyone takes this particularly noxious version of human capital as an opportunity to knock economics, economists were prominent in the abolition campaign, and historian Thomas Carlyle named economics the ‘dismal science’ for not respecting the property rights of slave owners.)

Rosenthal (formerly a management consultant) ends by pointing out that labor conditions for many people in the world still leave much to be desired: “Confronting plantation account books can remind us how easy it is to overlook the conditions of production from the comfort of a counting house or safety of a computer screen. Reckoning with the ways planters accounted for slavery should encourage us to rethink the kinds of data we record and how we use it. Quantitative records can help us to see farther, but only if we remember what the numbers make visible and what they erase.”

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Global Britain and national Britain

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It has taken me a while to finish David Edgerton’s new book, The Rise and Fall of the British Nation: A Twentieth Century History. This is because of the packaging rather than the contents – it’s a heavy volume I’ve had to read at home propped up with cushions. So although I’ve enjoyed the book, I have a rather impressionistic take on it.

The chief impression is that there isn’t a single piece of received wisdom about Britain in the 20th century the author doesn’t challenge. Edgerton has challenged the ‘declinism’ thesis in his previous books and does so again. But there are other myths to bust. The welfare state wasn’t distinctively new after 1945 – a lot of it had been established in the 1920s. The Labour Government of Harold Wilson wasn’t especially technology-friendly. It is nonsense to claim the Establishment consisted of anti-scientific art historians and classicists, there were loads of technologists and scientists in government. It is indeed refreshing to read such an upbeat take on the 1950s and 60s.

Above all, the book argues, the key phenomenon of the post-world war 2 decades was not welfarism or corporatism but  the creation of a distinctive British nation – until Mrs Thatcher started to turn the country back into an internationalist capitalist one, as it had been in the early 20th century. Edgerton’s British nation lasts only from 1945 to 1979.

This makes for a refreshing read, there’s nothing like a bit of lively contrarianism. In fact, you can see Edgerton’s compulsion to be contrary in his challenge to both industrial declinism and techno-boosterism simultaneously, which – while surely the correct stance – is also pretty argumentative.

But not every bit of his myth-busting is wholly persuasive. On the NHS, for instance, Edgerton argues that most of the provision was in place prior to 1945, and those with low incomes did not have to pay for treatment. He offers some facts on the extent of municipal provision, the role of GPs, and so on. This surely greatly underplays the uncertainty and anxiety of getting medical treatment before the NHS. Even if it is true that people ended up being able to access treatment and not having to pay, I remember from my 1960s childhood the deep, deep financial worry illness caused older people, not habituated to the idea that you could turn up at a surgery or hospital and nobody would ask about your means.

The book is at its best on technology and industry, which is hardly surprising given Edgerton’s wonderful previous books on technology – particularly The Shock of the Old but also Warfare State and Britain’s War Machine. It ends with New Labour, and the attempt to define a forward-looking, techno-optimistic Global Britishness. In fact, it ends with Mrs Thatcher’s state funeral – the first accorded to a PM since Churchill’s:

“There were no cranes left to be dipped in respect by dockers in the unprecedented honour the London proletariat gave Churchill in 1965. In the old and distressed pit villages of England, Scotland and Wales, forgotten former miners celebrated bitterly. Tony Blair meanwhile was making money working for some of the vilest torturers and dictators on earth. Only satirists, not historians, could do justice to this turn of events.”

And then it stops. Hmmm. There were of course loads of cranes on the London skyline, contstructing rather than unloading, and nobody chose to dip them for the funeral. Mrs Thatcher’s governments had indeed ravaged the country’s economy outside of south east England – this book does far better than many histories of Britain in not being a wholly London- and Westminster-centric one, given its focus on industry – and the real criticism of the decision to give her a state funeral would surely be her divisiveness. It’s an unsatisfactory (lack of) ending to a very interesting book.

An earlier chapter considers the emerging divisions in society but also within the main political parties from the 1970s on and it would have been more satisfying to see this rounded out somehow with reference to current debates about the utter mess of Westminster politics, a devolving Britain, the polarisation over Brexit, and in the middle of all this ideas about industrial policy and the technology frontier. Unfair to ask a historian for comment on the present – but the idea of the British nation is surely at the heart of it all today?

Anyway, as noted, these are impressions. It isn’t just the bulk: there is a flavour of one thing after another, as sections plunge into detail – albeit always fascinating. This is well worth a read nevertheless (although in paperback maybe?)

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Economic history of the world, short version

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Daniel Cohen’s The Infinite Desire for Growth is a nice bird’s eye view of the debated issues concerning economic growth from the dawn of civilisation to the present and future. Translated from the French, it starts with a rather masterly synopsis of the issues debated in some of the recent works on growth in the distant past, such as Ian Morris’s Why the West Rules for Now, and some older ones like Jared Diamond’s Guns, Germs and Steel, Joel Mokyr’s Gifts of Athena (not to mention French works I haven’t read). The first section covers the distant past up to the Enlightenment and Industrial Revolution.

The second part canters through some of the recent debates: the singularity, automation and robots, the stagnation versus measurement of digital debate, Piketty and inequality, and the vulnerability of the interconnected global economy to crisis and collapse. Cohen agrees with Robert Gordon‘s contention that innovation just ain’t what it used to be. There’s a final section with some reflections on culture, happiness (lack of), and the question of the demise of democracy. This cites Daniel Bell’s marvellous Cultural Contradictions of Capitalism. The question is whether our societies are capable of dealing with future upheavals – be they tech related or a crisis of climate or contagion – if growth has permanently slowed. I would say the conclusion here is a resounding ‘don’t know’. Which is fair enough.

All of this fits into 153 pages. I’m a bit of a fan of short books, so say this just to indicate the focal length here. The book kept me happily occupied for a 2 hour train ride. And it’s a real service to summarize some very chunky economic histories.

My main complaint – which grew in force as I read on – is that a book citing a vast literature only mentions three women’s names, one of them being Margaret Thatcher. The others are Esther Boserup (who gets a proper name check) and Sandra Black (in a footnote). Do women really have nothing to say about all of human (economic) history and the future economy?

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