Source: Reason, August 2001 v33 i4 p72.
Title: How the East Grew Poor.(Review)_(book review)
Author: L. E. Birdzell Jr.
Subjects: Books - Reviews
People: Davis, Mike
Nmd Works: Late Victorian Holocausts (Book) - Reviews
Magazine Collection: 107J3189
Electronic Collection: A77010129
RN: A77010129
Full Text COPYRIGHT 2001 Reason Foundation
Imperial weather and the poverty of nations
The "development gap" that divides advanced nations from the Third World in
income, wealth, and many other measures of human welfare is a scandal of both
politics and economics. The present magnitude of this gap is indicated
succinctly, though incompletely, by comparisons of per capita gross national
product: $450 for India, $780 for China, and $22,640 for the United Kingdom,
according to 1999 World Bank figures.
Mike Davis' new book, Late Victorian Holocausts, is one of several recent
attempts by sensitive Westerners, among them David S. Landes and Jared
Diamond, to demonstrate that this gap is no fault of the Third World
countries, nor due to any superiority of the West except in the arts of war
and oppression. Davis became widely known for his contrarian views of urban
growth and planning in Los Angeles, expressed in City of Quartz (1990) and
Ecology of Fear(1998). In his preface, Davis offers a "key thesis" that
"income and wealth inequalities" between the Third World and the rich
economies "were shaped decisively in the last quarter of the nineteenth
century, when the great non-European peasantries were initially integrated
into the world economy."
Davis claims that the difference in living standards in 1789 between a French
sans culotte and an Indian farmer of the Deccan plain were "insignificant"
compared to the difference between them and their respective "ruling classes."
In contrast, by the end of Victoria's reign (1901), "the inequality' of
nations was as profound as the inequality of classes." In a surprising triumph
of pessimism over the widely known achievements of several former Third World
countries such as Japan and South Korea, Davis informs us that by the start of
the 20th century, "Humanity had been irrevocably divided."
In support of this thesis, Davis devotes six chapters to late-19th-century
famines in India, China, Egypt, Africa, and Brazil. Most of these were caused
by drought. For reasons not easy to follow, Davis keeps referring in these
chapters to the possible connection of El Nino to the droughts. (Davis defines
El Nino not as the familiar Christmastime warm currents off the coast of
Ecuador and Peru, but as the warm extreme of a Pacific Basin--wide oscillation
in air mass and ocean temperature known as ENSO, for El Nino Southern
Oscillation.) Davis finally offers a more focused discussion of the El Nino
literature in two subsequent chapters.
But the connection between 19th-century weather and El Nino's oscillations
back and forth in the Pacific suffers from lack of records and uncertainties
about El Nino's chronology, which Davis candidly outlines in the concluding
pages of Chapter 8. Such lack of proof might have led a skeptic to leave the
subject to further necessary research.
Davis quite rightly argues that by the 1870s, advances in transportation had
made the death toll from famines mainly a function of the adequacy of
government and private relief, not an inevitable consequence of natural
disaster. El Nino's oscillations had no conceivable connection to the
government failures that turned the "Victorian" famines into mass killers,
other than providing an opportunity for the exercise of governmental
misjudgment and incompetence. Weather was surely not under British management.
Under the circumstances, the issue seems a dispensable digression from the
book's main argument--perhaps it was simply research the author could not bear
to omit.
Chapter 9, titled "The Origins of the Third World," argues that the rise of
commercial agriculture increased the vulnerability of India's villages to
famine: "The forcible incorporation of smallholder production into commodity
and financial circuits controlled from overseas tended to undermine
traditional food security." This theme is expanded in the chapters for India,
China, and Brazil, with emphasis on the adverse effects on the Asiatic poor of
British tariff policy, the gold standard, the sale of Bengal opium to China,
and terms of trade.
[Graphic omitted]To evaluate the claim that British imperialism, political and
economic, explains the development gap, we need to start by recognizing that
the gap was a very long time coming. The living standards of Western European
farmers and other humble folk began to improve about A.D. 1000 at a rate fast
enough to be noticeable from century to century, though not from decade to
decade. Asian and Islamic farmers were probably living better than Europeans
in 1000, but they did not experience a comparable, long-sustained improvement
during the second millennium. At some much-debated time between 1450 and 1820,
European living standards inched past Asian and Asiatic standards.
Then, about 1820, as Europe settled down from the Napoleonic wars, the
European rate of improvement turned up sharply, which, in this context, means
an increase from an average rise in per capita real national income from about
0.3 percent a year to around 1.5 percent a year. There was no similar upturn
in the Third World, and the wonders of compounding growth over 180 years
produced the present large and growing gap.
Thus the gap "shaped decisively," according to Davis, in the last quarter of
the 19th century, had begun to widen unmistakably by 1820, more than half a
century earlier. It continued to widen through the late Victorian period, the
decades until India gained its independence in 1947, and still continues to
expand more than half a century later.
A large part of the present development gap is attributable to rural poverty,
particularly in India and China, and Davis is right to stress rural poverty
and its causes. Here, too, the roots of poverty are ancient. The limitations
of agricultural technology before the 19th century required that the great
majority of the people of all civilizations be farmers. Over a period of more
than 5,000 years, wherever farmers produced a surplus of food over their own
needs, the urban elites, possessing military power, could be counted on to
take advantage of their power to appropriate their food supply and in the
process reduce the farmers to penury.
Economic historian Alan Macfarlane recounts the emergence of a viable
agriculture of family farms in England (in 1978's The Origins of English
Individualism). He describes the history of peasant societies as a crisis
cycle of population expansion, followed by a reduction in population through
war, famine, or disease.
Modern economic development literature is concerned with two very different
types of growth, not always clearly separated. One type roughly parallels the
upswings in Macfarlane's "crisis" cycles, when societies recovering from
disaster repopulate themselves and, one hopes, experience a recovery in living
standards. This is a painless and ever-welcome kind of growth, in that it
consists in a moderate rise in per capita output of much the same goods by
people in the same occupations as before, without severely discommoding
anybody. Significant technological advances are welcome but by no means
required. The peaks are remembered as "Golden Ages," though they are golden
only in comparison to the troughs. By the standard of modern growth economies,
the golden ages were marked by short life expectancy, high infant-death rates,
deficient nutrition, dwarfed human beings, coerced religious conformism,
negligible medical care, widespread illiteracy, little or no vertical economic
mobility, and despotic government. Tha t is what made a fall from a Golden Age
truly a disaster.
The other type of growth is the one that produced the $22,640 side of the
development gap. This type of growth is not linked to any historical cycles
and is uniquely Western European in origin. In contrast to Third World
countries, growth economies moved from labor-intensive production to
capital-intensive and energy-intensive production. The result was an immense
increase in physical output. Labor did not respond with a fully off-setting
rise in the birth rate, as Malthus had predicted, and the effect was a shift
to economies in which labor is scarce and expensive and capital and energy are
abundant and cheap--though that is not the way populists usually perceive
them.
Western European growth and its $22 640 incomes depended critically upon a
rate of scientific and technological advance more rapid than any experienced
anywhere before 1600. It entailed a slow but complete change in society and
almost everybody's role in it. For example, advances in agricultural
technology have reduced the current proportion of the American population
engaged in agriculture from 44 percent in 1880 to 2 percent currently. The
whole pattern of economic output changed, not once but continuously. Over the
past 200 years, economically advancing societies transformed themselves from
rural to urban to suburban, from despotic to democratic, from work-energy
supplied by wind, waterwheels, humans, horses, and oxen to work-energy
supplied by steam and other mechanical sources, and from majority illiteracy
to nearly universal literacy. They transformed themselves also by repeated
radical physical changes in their infrastructures, housing, and stocks of
capital goods. The West's numerically dominant "pea santries" faded into
small, government-subsidized minorities practicing capital-intensive and
land-intensive agriculture.
The simplest strategy for Third World countries that want to become growth
economies is to imitate, to the best of their ability, the Western
institutions and practices that appear to have played a part in growth. The
feasibility of doing so has been demonstrated by a number of countries that
deliberately imitated Western means to economic growth and are, by and large,
well on their way to imitating Western results.
In the process they have overcome most of the differences of geography,
history, politics, culture, and experiences with war, foreign conquest, and
natural disaster that have been advanced as reasons why progress was
impossible. Even in China and India, the per capita income of urban dwellers
is rising, and the South Koreans, whose colonial experience at the hands of
the Japanese was exceptionally degrading, shine in contrast to the leftist
famine culture of their fellow Koreans to the north.
Given the existence of an obvious and tested development strategy, there are
at least two reasons for the long delay in closing the development gap. One is
the intrinsic difficulty of shifting the huge rural populations of China and
India to a land-and capital-intensive agriculture. The other is that
objections to some or all of the institutional means of Western economic
growth are part of the working ideologies of influential people in both
Western and Third World polities. A faithful soldier of the left like Mike
Davis should have no difficulty understanding why Asian and African societies
did not quickly borrow the economic institutions that produced the gap. They
agreed with neo-Marxist, anti-free market, anti-individualist ideology similar
to his.
Russia was perhaps the first deliberate cross-cultural imitator, beginning
with Peter the Great's Western European tour of 1697-8. The next, Japan, began
its effort 161 years later, after 1859. The Chinese were much slower to decide
to emulate "foreign devils" (if indeed they ever made such a conscious
decision), and India may not have reached the required consensus until 30
years after Gandhi's death. In both China and India, even after a certain
consensus to "modernize" emerged, the beginnings of success were postponed by
experiments with socialism, so that the effective adoption, even sub silentio,
of a policy of borrowing Western economic institutions can be dated as late as
1991, when the implosion of the Soviet system clarified a good many minds.
Islam, Africa, and Latin America each have their own stories, but in some
countries (fortunately a declining number) straightforward attempts to follow
the Western path to the pot of gold at the end of the rainbow are either very
recent or yet to begin. Everybody wants economic growth, but nobody wants to
give up old ways that offer high pay, status, and power.
That said, there is no reason to be optimistic about an early solution to the
immense problem of Third World rural poverty, notably in China and India, but
for reasons far from Davis' version of Victorian economic and political
history. In India and China, as well as some other Third World economies,
farmland has been scarce and people plentiful. Small farming is a high-risk
business, in which long-term survival requires farms large enough and
productive enough to enable the farmer to set aside adequate reserves for bad
years.
If there is a chronic choice between immediate hunger and adequate reserves,
the reserves will likely suffer, whether they are in cash or kind, or set
family-by-family or by a village patriarch or commissar. The communal village
visualized by Davis is not and never was a solution for the real system fault:
too little land for too many people.
Converting a labor-intensive agriculture to a land- and capital-intensive
agriculture, with far fewer workers but a much higher marginal product, is
arithmetically impossible without a reduction in the supply of agricultural
labor. The desirability of shifting rural workers into urban employment is
limited by the depressing effects of an excess supply of labor on urban labor
markets.
Europe went through such a shift, and wage rates did not clearly escape its
effects until well into the 20th century. Birth rates can change, as is
illustrated by lower birth rates in cities almost everywhere. But the
circumstances that make large families appear highly desirable in rural areas
are not easily changed, and policy attempts to reduce birth rates lead to
intractable, highly emotional conflicts over religion, sociology, morality,
and politics. Those conflicts are unlikely to be resolved by discovering an
obligation in urbanites or foreigners to subsidize Third World rural poverty
indefinitely. The Indian and Chinese farmers most immediately concerned may
not think a solution that ends their way of life is worth the cost.
L. E. Birdzdll Jr. a clawyer, is co-author with Nathan Rosenberg of How the
West Grew Rich: The Economic Transformation of the Industrial World (1986).
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