Why has the world become increasingly unequal? Both ‘fundamentals’ like geography, institutions, or culture and ‘accidents of history’ played a role.
Introduction
Robert C. Allen's "Global Economic History: A Very Short Introduction" is a concise yet comprehensive exploration of the economic forces that have shaped our world over the past 500 years. Published in 2011 as part of Oxford University Press's "Very Short Introductions" series, this slim volume packs a wealth of information and analysis into its pages. Allen, a distinguished economic historian, brings his expertise to bear on the complex subject of global economic development, offering readers a clear and accessible overview of how and why some parts of the world grew rich while others remained poor.
Synopsis
Allen's book is structured chronologically and geographically, tracing the evolution of the global economy from the eve of the Industrial Revolution to the present day. He begins by examining the economic landscape of the world around 1500, setting the stage for the dramatic changes that would follow.
The author then dives into the heart of his narrative: the rise of the West. Allen explores the factors that led to the Industrial Revolution in Britain, including the unique combination of high wages and cheap energy that incentivized labor-saving innovations. He contrasts this with the situations in other parts of Europe and Asia, explaining why industrialization occurred first in Britain and not elsewhere.
Moving forward in time, Allen discusses the spread of industrialization to other parts of Europe and North America, as well as the economic transformations of Japan and Russia. He then turns his attention to the challenges faced by the developing world in the 20th century, examining the successes of the "Asian Tigers" and the struggles of many African and Latin American nations.
The book concludes with a look at the current state of the global economy, including the rise of China and India, and offers some thoughts on future prospects for economic growth and development.
Thematic Analysis
1. The Great Divergence
A central theme of Allen's work is explaining the "Great Divergence" - the process by which Western Europe and its offshoots pulled ahead of the rest of the world economically. Allen challenges simplistic cultural or institutional explanations, instead focusing on the specific economic conditions that made industrialization profitable in Britain. His emphasis on the role of factor prices (high wages and cheap energy) in spurring innovation offers a nuanced understanding of why the Industrial Revolution happened where and when it did.
2. The Importance of State Policy
Throughout the book, Allen highlights the crucial role of government policy in shaping economic outcomes. From Britain's protectionist policies that nurtured its infant industries to Japan's state-led industrialization in the Meiji era, to the developmental states of East Asia in the post-war period, Allen shows how smart government intervention can foster economic growth. This stands in contrast to simplistic free-market narratives and offers a more complex view of the relationship between states and markets in economic development.
3. The Power of Technology
Allen places great emphasis on technological innovation as a driver of economic growth. He explores how new technologies, from the steam engine to modern information technology, have transformed production processes and economic structures. However, Allen also shows that the adoption of new technologies is not automatic but depends on economic incentives and local conditions.
4. Globalization and Its Discontents
The book traces the long history of economic globalization, from the colonial era to the present day. Allen shows how international trade and investment have contributed to economic growth but also acknowledges the uneven distribution of these benefits. He discusses how globalization has created both winners and losers, within and between nations, providing a balanced view of this complex phenomenon.
5. The Persistence of Poverty
While celebrating the enormous increases in living standards that economic growth has brought to many parts of the world, Allen also grapples with the persistent problem of global poverty. He examines why some regions, particularly in Africa, have failed to achieve sustained economic growth and considers various explanations, from the legacy of colonialism to contemporary issues of governance and economic policy.
Conclusion
Robert C. Allen's "Global Economic History: A Very Short Introduction" is a remarkable achievement in its ability to distill centuries of complex economic history into a clear and engaging narrative. Allen's approach is both analytical and accessible, making the book valuable for students, general readers, and even specialists looking for a concise overview of the field.
However, the book's brevity, while making it accessible, also means that some topics receive only cursory treatment. Readers looking for in-depth analysis of specific issues or periods may need to supplement this book with more specialized works.
In an era of rapid global change and economic uncertainty, understanding the historical processes that have shaped our world is more important than ever. Allen's book provides readers with the tools to comprehend these long-term trends and to think critically about the economic challenges and opportunities of the 21st century. Whether you're a student, a policymaker, or simply a curious reader, "Global Economic History: A Very Short Introduction" offers valuable insights into how our global economic system came to be and where it might be headed in the future.