An Asian World Economy? continued: Proposition 5, the thesis about Asia's decline, is the real can of worms. Empirically, the argument is that population growth accelerated in Asia leading to a resource imbalance. What has that to do with the world economy? The theoretical centerpiece of the demographic argument is that 'more money and population reinforce each other' (p 305). More money came from Asia's dominance. A further depressant on wages was hierarchy. Frank agrees, rightly, with views that labour was probably overdominated in the Asian societies and inequality was larger, at least in south Asia. What I find unproven here are two crucial links that are needed for Frank's thesis to stand: (a) population growth did accelerate, and (b) it did so because of prosperity, that is because of world economic changes and not societal characteristics. Frank draws on Mark Elvin's interpretation of 18th century China to argue that population growth accelerated in China and created a general problem of overabundance of labour. But he then generalised this to the rest of Asia on the basis of much more conjectural works. As for south Asia, unless I see a careful discussion of the population statistics, I am not buying the argument about demographic inflection. The link between 'money' and population is superficial to say the least. First of all, the quality of empirical support on this point is crude in the extreme. In a section on big demographic changes, the causes working on fertility and mortality are not clearly distinguished. It is not clear what changed in the long run - fertility or mortality - in response to changes in the quality of life. There is no clear answer emerging as to why and how world trade should influence the age of marriage. Second, when talking about demography or inequality, Frank has moved quietly into the realm of peasant society that was poorly if at all integrated with the tradable segment. Third, if there is an underlying theory here that more economic security makes individuals reproduce more, that theory is deeply questionable for premodern Asia. As Frank acknowledges, the poor did not necessarily benefit from the world economic success because of social structure. Further, for monsoon Asia where mortality rates tended to be among the highest due to famine risks, it can be argued that it was insecurity of life that decided fertility rates. In that case, more security should have no impact on population growth. That is, lower mortality should induce lower fertility, unless one brings in cultural factors. Fourth, the time-series argument and the cross-section evidence seem contradictory to me. In the theory of demographic transition, the first inflection derives mainly from mortality changes, at least in the mainstream view. It is noteworthy that whereas Europe did experience a population growth in the 19th century, the rates were always lower than those in Asia at its comparable stage of population history. The difference derived from fertility rates. Asia was poorer but it always had higher fertility rates. This points to both cultural factors working on fertility, and environmental factors working on mortality rates. Both represented structural differences between Asia and Europe. If culture rules, Frank's historiography sinks. The key variables in Frank's thesis of an Asian decline are demography and resources, reinforced by class structure, and by predatory and oppressive state and civil society relation. These four together constitute nothing that is either global or cyclical, unless there is a cogent empirical and theoretical ground for believing so. Without such a ground, each one of these variables can be seen as essentially endogenous and societal. They add up to a theory of Asian exceptionalism, precisely what Frank does not like about conventional historiography. The story of an Asian decline is then quickly generalised into the 19th century. Here Frank has it easy, at least as far as south Asia is concerned. He simply falls back on the long-obsolete 1960s vintage of crude left-nationalist argumentation, with a confused demographic twist. In this story, which took him less than 100 words to write (p 314), endogenous decline and British colonialism, via 'drain', finished off India. Capital flight from India plays a role consistent with Frank's story that capital inflow enabled technological change in Europe. But being consistent is not the same thing as being objective. If an undergraduate student in India wrote these words on an exam paper, s/he should fail the exam, for making one of the most contested propositions of colonial economic history look like an accepted fact. Frank has no time for such subtlety. What can we retain from Frank's arguments about comparative development? Two things essentially. That Europe and Asia had, from long back, different resource endowments, reinforced by their respective demographic histories. This difference played a role in their subsequent developmental paths. We can also retain the importance of American treasure in early modern world trade. On the other hand, there are three things that Frank fails to prove. First, the thesis that industrialisation was causally related to metals in a strong way remains unproven and half-baked. Second, the insistence that resource endowments and demographic features changed due to mainly global and not local reasons remains unfounded. And third, the very idea of an absolute decline in Asia remains unproven. In short, what is proven in this book is unoriginal, and what is original is unproven. To argue an emphatically global perspective on comparative development, Frank needed to tackle theories that suggest local factors matter. The idea that the roots of growth are, at least in an important sense, local, can be stated in two forms. The general form is that, culture matters to economic growth. 'Culture' in a broad sense, to include institutions, or such behaviour patterns that lead to differential demographic histories, for example. The second and more specific form is that culture originates in given ethnic features. Frank in his critique (Chapter 1) attacks the second thinking that he is attacking the first. The effort is wasted, for the second thesis has long been a dead horse since ethnicity itself began to be seen as a construction. The first version, on the other hand, has proven to be remarkably tenacious. The version most influential in theoretical economic history arises from a realisation that economic growth is not an automatic outcome of individual rationality, which fails or produces bad outcomes under a variety of situations. Growth requires something called collective rationality or coordinated action. Such things appear in a variety of forms, cooperation, a contractarian state, 'social capital', formal institutions, etc. There is nothing necessarily and fundamentally global about the scale or efficiency with which such systems function. There is so far no compelling critique of the position that some societies were able to set up these institutions earlier and more easily than others. Frank does not even attempt a serious critique. Relevance of World History Finally, there is a question of method. How much can we say about 'rise' and 'fall' of big regional units like India and China based only on their external transactions? At some point Frank seems to jump from fortunes in trade to overall capability of the regional economies to generate and sustain economic growth. How sound is this step? Let YA be the total income of Asia and YE the total income of Europe. Now, how much we can infer about growth or decline in YA and YE from trends in A (Asia's export) and E (Europe's export) depends on the size of the ratios A/YA and E/YE. There is, first of all, not a shred of evidence on these ratios in the book. Secondly, A/YA need not change at all if the so-called 'fall' of Asia occurs only in a relative sense, that is, driven by no other change than correlated increases in E, W, and YE. In that case, there is no change whatever in Asia's trade-orientedness or economic prospects by Europe's rise in relative and absolute sense. Let me dwell on this point a little more. A fallacy pervades Frank's analysis, and possibly a substantial section of world history scholarship as well. The book is not, I repeat not, about the economies of Asia, Europe, America, and so on. It is about relationships or transactions between them. That is, it is about that outward-oriented part of these so-called 'regions' which participates in international flow of goods, labour, services, capital, and metals. Based on a description of that outward-oriented part, if we wish to generalise about 'rise' and 'fall', growth and decline, or generally about the capability of these economies as a whole, we need additional facts. We need, most of all, solid ground to believe that the outward-oriented part was large enough in relation to that part which did not participate in a significant way in international flow of goods, metals, capital, etc. That is, we need ground to believe that outward-orientation mattered, in a quantitative sense, to the long-term prospects of these economies. We also need descriptions of channels by which the outward-oriented part influenced the rest of the economy. For a critique of colonialism, we need to show that these channels were significantly political and not economic. Admittedly, outward-orientation mattered in varying degrees in the early modern world. It did in quite an obvious way and quite strongly in the case of South America. On the other hand, in the case of south Asia, available evidence on the relative size of the traded and non-traded sectors and their relationship is at best ambiguous and at worst challenges the belief that outward-orientation was of much consequence. Consider some figures. At the end of the 18th century, export of Indian textiles, the most hyped commodity in world trade of this time, came to about 50 million yards [Twomey 1983]. At 1900, total cloth consumption of India was close to 4,000 million yards. With reliable estimates of growth of population and real income, the level of consumption in 1800 might be 3,000-3,200 yards (or much more than 4,000 yards if we agree with Frank that British rule wrecked India). Export of textiles would account for less than 2 per cent of production. How does international trade matter to the overall strength of the textile industry? And if trade matters little to textiles, it must matter even less to the economy as a whole. Given that textile was an exception in terms of trade-orientation, and that the share of textiles in GDP could not have been more than 3-5 per cent, the proportion of trade in GDP about 1800 would be minuscule. The same conclusion is suggested by other methods too. Nobody would deny that outward-orientation mattered to certain regions of India, though even for Bengal, the proportion of export-oriented textile workers in textile employment comes out to be rather small for the 18th century. Bengal, Gujarat, or Coromandel did not exhaust south Asia. For the larger region that became British India, modern south Asia, and that seems to be Frank's unit of generalisation, as far as I can see outward-orientation mattered little. Why, then, do Frank and the likes of him go ecstatic about outward-orientation? Polemics apart, one reason is that they are victims of an observation bias. The major source of comparable quantitative data for the early modern period happens to be about international flow of commodities. We know next to nothing about the scale of domestic trade or the scale of simple non-trade (production for subsistence, production under patronage relations, or production for purely local exchange, a large sphere of the labour of women and children, etc). The sources of the available dataset, essentially on circulation and exchange, were not interested in the non-traded sector, in domestic trade, and only very marginally in the conditions that produced the traded goods. By using such datasets on circulation to generalise about production capability as a whole, one is likely to carry three types of bias. One is likely to exaggerate the importance of international exchange because they were so important for those who created the dataset. One might underestimate the non-traded sector because it was of no interest to those who created the dataset. And one is likely to homogenise the regional units because those who created the dataset looked only at the relatively similar commercialised segments of these regional economies. Frank's grand narrative falls into this observational error. The very scale of the units over which the generalisations are supposed to apply - 'Asia', 'Europe', 'India', 'China', etc - are the most obvious examples of this error. Such broad categories can be used as long as one confines to the trading segments within them, which do have certain common features between them. As soon as one recognises that there may be other forms of exchange or quasi-exchange within these categories, the categories themselves become non-viable. 'India' in this book does not mean anything except a trading unit. And so, statements such as 17th century India was 'highly developed', on the evidence that its supplies dominated world textile trade, means nothing either. Equally, differences between India and China are practically ignored thanks to the focus on their trading identity. And 'Asia' can become a viable unit of analysis only by levelling out all these differences within and between the regional units. Once, the centre of the world (according to the book) was 'Asia'. Asia ruled the world. Asia then decayed giving an opportunistic Europe the chance to get ahead. But wait, Asia is striking back! All this would be plausible if only 'Asia' had a clear meaning in this book. It does not. Asia and Europe here are relativist concepts. They make sense in a context of exchange. Asia makes sense only in terms of its trading identity. All other identities are either cursorily discussed or forced into an equation where the trading identity is the independent variable. Essentially, the book makes a dramatic and nonconformist claim about the later economic dominance of Europe by constructing the notion of an early-Asia as the superior Other of Europe. This is orientalism with the self-other hierarchy reversed. The bridge between trade and economic growth is never seriously built in this book. As a result, the point that explanations for growth or stagnation are necessarily global remains an assertion. Frank disputes the thesis that local institutions matter to economic success with exclusive reference to that part of the Asian economies which was commercially successful, whereas what one needed for such a test was a look at those parts which did not commercialise enough. It is in the context of segments of the economy where transactions were embedded in non-economic relations, and arguably held back because of the nature of these relations, that the Asia theses of Marx or Weber need to be evaluated. Local power relation, in particular, is an important element in that context. The book accepts that power relations mattered when it needs to argue that wages were relatively low in Asia. It denies that power relations mattered when it needs to argue that the nature of the state was of no consequence, for the state in India too made 'massive ' productive investments (p 206). Both points are factually weak, and together they create a contradictory scenario. Frank thinks that his 'integrative macro-history', the grand 'historical mosaic', is a construct that helps make better sense of the individual pieces. The truth is, he is making a mosaic out of systematically distorted and incomplete pieces. With so little hard data on volumes of trade, it is easy to go overboard in estimating the implications of international economic relations. Frank thinks it is a mistake to believe that our world is 'only just now undergoing a belated process of 'globalisation'' (p 38). In a broad sense of the word 'globalisation', this is of course true, if not original. But in a more specific sense, we need a term that refers to specific forms and scale of relationships in the late 20th century. Questions of scale are never raised in the book. Despite slave and metal exports, capital and labour were on the whole poorly mobile in the 1500-1800 period by 19th century standards. The composition of trade was simple in the extreme. The largest item of production anywhere - foodgrains - was poorly traded before the era of steam-ships, in turn limiting induced population mobility. Knowledge spread primarily as embodied in goods. Transportation costs were astronomical, so were risks. Formal and informal institutions were conflict-prone, rudimentary, and ethnically specific. The world at no time has been a constellation of mutually exclusive pockets of exchange. But the suggestion that globalisation in the post-industrial phase and that in the pre-industrial phase were in scale and effect remotely comparable phenomena, follows from the empirical and theoretical weaknesses of the book.
Conclusion Andre Gunder Frank, in this provocative book, argues two sets of theses, one relating to early modern trade, and the other to comparative economic growth. The first set proposes that Asia dominated world trade before the 17th century, and Europe entered the Asia-centred world economy by its fortunate access to American treasure. The second set argues that Europe industrialised and Asia declined from about the 18th century due to causes arising from the world economy and not from social-cultural-institutional sources. I have argued in this critique that the book does not prove either thesis adequately. The three central claims of the book - that Asia was once dominant, that Asia declined thereafter (in an absolute sense), and that both Asian decline and Europe's industrialisation derived from world factors - remain without acceptable statistical and theoretical foundation. Where do we stand? As said before, I agree with the book's emphasis on the role of treasure, Asian trade, comparative resource endowments, and demography for Europe's rise. I do not think that the story about Asia's superiority and subsequent decline is proven. I do not think the historiographic claim that changes in all of them derived fundamentally from world economic changes is established. And I do not think Frank gives adequate weight to or understands the implications of institutional differences. This critique leads to what I think are 'the correct questions' to ask in making sense of the link between the world economy and comparative development. (1) We all know world history matters. That is not the issue any more. But how much did world economic relation matter to comparative development? How large was the rest of the world to any regional economic unit in the early modern period? Clearly, world history needs far more solid quantitative grounding than available at present. At the very least it needs credible estimates of the share of trade in GDP, and share of regional trade in world trade. If we cannot have that, we will not have the most basic standards to evaluate claims such as made in this book. And only if we have such figures, can we properly answer the question: Was Asia ever dominant in world trade? (2) Did Asia decline economically? We need evidence other than population. We need signs of an absolute economic decline, such as average income or scale of transactions. (3) Did Asia decline due to changes in external transactions? To answer this we need estimates of the quantitative importance of trade, and estimates of what changed, scale of trade or the composition of trade. (4) If the issue is explaining why Europe grew rich and Asia stayed poor, it cannot be settled by tackling a straw-man, namely, the thesis that Asia was an insular, despotic, technologically and institutionally backward mass before the Europeans came onto the Indian ocean. Such a thesis has long been discarded. What we need to ask is, was Asia as outward-oriented, as commercialised, as well-developed in technological and institutional terms as early modern Europe? Ultimately, the debate is about scale of commercialisation, about quality and reach of institutions, and about the orientations of the state. Frank does not do justice to this question. Note [I thank Kaoru Sugihara for comments and suggestions on a draft. I have sole responsibility, however, for the views expressed here.] 1 A series of recent works theorising and reviewing the relationship between Europe's rise and the world economy has helped 'world history' establish itself as a major disciplinary branch, with a World History Association to represent it. Reference Twomey, M J (1983): 'Employment in Nineteenth Century Indian Textiles' in Explorations in Economic History, 20 (1). Sameeksha Trust EPW Research Foundation [EMAIL PROTECTED]
