I've been an avid reader of Niall Ferguson's books ever since he
wrote the definitive history of the Rothschild banking family in
1999, The House of Rothschild. He's a prolific writer and I haven't
read all his books, but most of them -- sufficient for me to keep in
touch with the gradual development of his thinking. However, as his
scope became increasingly world-wide in successive books, I'm no
longer an admirer. I think he has gone increasingly awry. In his
latest book, Civilisation: The Six Ways the West beat the Rest, he
has gone badly wrong.
His basic assumption is that powerful empires or countries (modern
America is his principal target) may take a relatively long time to
reach their zenith but they can crash very quickly. I don't quarrel
with him there. The main message of his book, though, is that, since
the 17th century, the West came to the fore, as against Asia, for six
main reasons -- "killer applications" as he calls them. These are, in
brief, the following: 1. A fractured Europe produced a more
competitive culture; 2. The Scientific Revolution occurred in Europe;
3. The Rule of Law and Representative Government were more advanced
in Europe (and then in America); 4. The development of Modern
medicine; 5. The development of the Consumer Society; 6. The Work Ethic.
I don't quarrel that all six were important. However, just as all
six enabled Europe to establish a 400-year clear lead over Asia,
Niall Ferguson hasn't explained why England was enabled to establish
something like a 200-year clear lead over the rest of Europe and
America in the 17th and 18th centuries. It was only until the last
few decades of the 18th century and the early decades of the 19th
century that Europe (principally Germany) started catching up. To be
more rigorous and comprehensive, he ought also to have explained our
particular lead over the rest of Europe.
The reason is that England had a high density of provincial banks as
well as a high density of merchant banks in its principal port-city,
London. As to merchant banks, Europe had several port-cities with
many of them (e.g. Amsterdam, Stockholm, Hamburg, Gdansk), but no
European country had any provincial banks worth speaking of. The
reason is that the European countries, living cheek by jowl with one
another, were constantly at war. Banks in the countryside were never
safe. Most folk with money, rich landowners or middling farmers, kept
their money under the mattress. It was only a few port-cities that
were rich enough to afford their own private armies for protection
which had banks. In continental Europe there was never enough money
heaped together as capital in countryside banks able to invest in any
local industrial projects that might arise because of the growing
scientific revolution. In England, there were not only plenty of
provincial banks able to invest in local projects but they were also
able to tap into further rich sources of funds of the merchant banks
of London. This reason should have been added to Ferguson's "killer
apps" as the absolutely necessary precursor to the other six.
But this then leads Ferguson to a more serious error in his final
verdict. This is that several Asian countries will now overhaul the
West in every way (once again, America being his principal target).
He advances several reasons. What makes one instantly suspicious is
that he too frequently compares various inferiorities of the West
with Hong Kong and Singapore rather than compared with South Korea,
China or Japan. But Hong Kong and Singapore are city-states which are
not fully typical of Asia. They both still have a strong residual
English culture which was implanted 200 years ago. They're much more
Chinese than English, of course, but, nevertheless, they are not
typical of the growth countries of Asia. Even Hong Kong remains
distinct from mainland China in many ways.
Ferguson lays great emphasis on the high scores of Asian
schoolchildren in mathematical tests -- as though these were the only
criteria of future economic success. He doesn't mention that both the
Chinese and Japanese governments happen to be deeply worried that
their authoritarian teaching methods also severely cramp the creative
abilities of their young people. They'd dearly love to be able to
transplant Western schools into their country. Ferguson also cites
the large and growing number of patent applications by China, Japan
and South Korea. He doesn't realise that 99% of all patent
applications are not new ideas at all but merely refinements of
existing products and methods, usually carried out within large
corporations. He says that the overwhelming number of Nobel prizes
won by America, Germany and the UK don't count for all that much
because the recipients are old men by the time they receive them.
This is a poor argument. Also, he doesn't mention that although
China, Japan and South Korea have been industrialized for a century,
none of them have initiated any brand new technologies as America,
Germany and the UK have done. Nor has any Asian country opened up any
brand new scientific disciplines.
Many brilliant, creative young Asian scientists are coming well to
the fore in research and are increasing their appearance in
heavyweight scientific journals in the more complex scientific
subjects such as particle physics and genetics but almost all of
these are second-generation Asians born in the West or are post-doc
graduates who've lived in the West for a number of years and absorbed
our culture. Thousands of rich Chinese are now migrating every year
to the West in order that their children will be given a freer, more
liberal education; and scores of thousands more rich and middling
Chinese are sending their children to Western schools and universities.
In short, although China, Japan and South Korea may yet supply the
whole world with all the consumer goods that it can afford (and
probably will), they will still be deficient in new ideas,
fundamental research and advanced technologies. Until their
authoritarian cultures change, these countries will be followers, not
leaders. This is not to say that America will never crash. I think
it will suffer a major currency catastrophe as the dollar becomes
increasingly inflated, but so will Western Europe and China at the
same time because we're so interlinked by trade. When a new world
trading currency is devised (and this will have to be done within
days) then maybe the chastised governments of all nation-states,
particularly America, will become a great deal more modest in the
monetary and economic control they think they have now.
Altogether in his latest book, Niall Ferguson has become much too
simplistic and, in particular, much too harsh about the country which
a few years ago offered him a much larger salary than he was earning
at Oxford. His is the classic Aesop's tale of the traveller who took
pity on a frozen snake and put it near his camp fire to warm up.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com
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