The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor
Page 28
Table 16.1. Estimates of Real GNP per Capita for Selected Countries (in 1960 $ U.S.)
1830
1860
1913
1929
1950
1960
1970
Belgium
240
400
815
1020
1245
1520
2385
Canada
280
405
1110
1220
1785
2205
3005
Czechoslovakia
—
—
500
650*
810
1340
1980
Denmark
225
320
885
955
1320
1710
2555
France
275
380
670
890
1055
1500
2535
West Germany
240
345
775
900
995
1790
2705
Italy
240
280
455
525
600
985
1670
Japan
180
175
310
425
405
855
2130
Netherlands
270
410
740
980
1115
1490
2385
Norway
225
325
615
845
1225
1640
2405
Portugal
250
290
335
380
440
550
985
Russia/Soviet Union
180
200
345
350
600
925
1640
Spain
—
325
400
520
430
640
1400
Sweden
235
300
705
875
1640
2155
2965
Switzerland
240
415
895
1150
1590
2135
2785
United Kingdom
370
600
1070
1160
1400
1780
2225
United States
240
550
1350
1775
2415
2800
3605
SOURCE: Bairoch, “Main Trends in National Economic Disparities,” in Bairoch and Levy-Leboyer, eds., Disparities in Economic Development, p. 10.
That is the theory. The statesmen who guided the destinies of European nations did not have access to this logic; and if they had, they would have paid it little mind. They linked industrial advance to power.
The material and social advance of England could not fail to draw the attention of commercial and political rivals: Spain, to begin with, which came a cropper in its project to invade and dominate this sassy island; then Holland, which saw the little pretender pass it in trade and drub it on the high seas; and finally and persistently, France, immemorial enemy, bigger and more populous, pretender to European hegemony and yet repeatedly loser to Britain’s naval strength, financial sinew, and commercial enterprise. Some French wrote of England in admiration, by way of holding an example to their own government. “England does not make the quarter of France,” observed Pierre Le Pesant, seigneur de Boisguillebert (1656-1714), French magistrate and economist, toward the end of the seventeenth century, “neither in number nor the fertility of its land…. Yet England has been able to yield the Prince of Orange for the last three or four years revenues of 80 million livres [say 3 million pounds sterling], and do it without reducing the population to begging or forcing them to abandon their land.”2
Others wrote in fear, seeing England not only as their country’s enemy but as a commercial power of unlimited potential. Thus the first secretary (premier commis) of the Ministry of Foreign Affairs, preparing for the negotiations that led to the Treaty of Utrecht (1713), warned his superiors against letting England obtain a foothold in the Pacific. If, for example, one were to let them have a small island in the Juan Fernandez group off the coast of Chile—a place whose sempiternal solitude recommended it to Defoe as the locale of Robinson Crusoe—
one can be sure that, however deserted it may be today…if it came into English hands, one would see there, in a few years, a large number of inhabitants, built-up ports, and the greatest entrepot in the world of European and Asian manufactures, which the English would then purvey to the kingdoms of Peru and Mexico…. Sixty millions in gold and silver coming from the mines of those countries would be the object and reward of their industry. What efforts would this nation, so skillful in trade and rich in vessels not be ready to make to get for itself this immense revenue from America!…and what a loss for France to lose this market for its gildings [dorures], its silks, its linens; because, since the English don’t make these things, they’d go buy them in China and the East, and while these islanders got rich, indeed became the strongest European nation, France would grow weak.3
Perfidious Albion as superpower. To this day, and in spite of two world wars, the average Frenchman thinks of Britain as his country’s chief rival and adversary in Europe. One does not forget Agincourt and Joan of Arc that quickly.
These animadversions, of course, were unconscious salutes to English success. The French, as we have seen, were particularly vexed to watch the British pull ahead. They viewed economic growth and the accumulation of wealth as the keys to political power, and they correctly associated the succession of British victories in European and overseas combat with the resources the British could mobilize: the numerous ships (over a hundred thousand of theirs, only twenty thousand of ours), the countless seamen. Some French even imagined that England was an island without an interior, all coasts and harbors, a land without cultivators, composed entirely of sailors and city dwellers. Others, like Boisguillebert, were overawed by British wealth, the revenues of the crown, the ability to borrow both at home and abroad.
In all this the link to trade was self-evident; Voltaire expressed it with characteristic abandon:
What has made England powerful is the fact that from the time of Elizabeth, all parties have agreed on the necessity of favoring commerce. The same parliament that had the king beheaded was busy with overseas trading posts as though nothing were happening. The blood of Charles I was still steaming when this parliament, composed almost entirely of fanatics, passed the Navigation Act of 1650.4
Contrary to French adage, to understand is not necessarily to forgive. English commercial protectionism, and even more English success, aroused more resentment than admiration. In 1698, Louis XIV gave advice to his ambassador in London: “Nowhere in the world are the rules of Equality, so right and necessary for trade, more flouted than in England.”5 Other Frenchmen felt the same. One even complained that, so far did the British push their contempt for fair play, they tried to stop foreigners from smuggling in contraband.6
In general, the critical foreigner condemned the English for their greed and materialism. “The notorious avarice of the Dutchman,” wrote a German traveler circa 1800, pales before that of the Briton, as the shadow before the li
ght.”7 And a French visitor, the comte de Mirabeau: “Accustomed as [the British] are to calculate everything, they calculate talents and friendship….”
(To this day, the French like to think and pretend to others that they do not care for money. They are not alone: idealism is the affectation of those who feel they have less than they deserve in the presence of those who have more. In the eighteenth century, Continental observers saw the English as great materialists. A hundred years later, the Americans became the new target of obloquy, the British now joining their erstwhile critics in scorning these nouveaux riches.)
In short, you couldn’t trust these Brits.8 Some French took comfort in antique precedent: Britain was the “modern Carthage” France, the heir of Rome. In the last analysis, an island-nation of rootless traders (shopkeepers) could not hold its own with a solid, terra fìrma kingdom. Another big mistake.
In the European world of competition for power and wealth, then, Britain became the principal target of emulation from the beginning of the eighteenth century. Other countries sent emissaries and spies to learn what they could of British techniques. Merchants and industrialists visited the island to see what they could. Governments did their best to stimulate enterprise by the usual array of incentives: subsidies, monopoly privileges, exemptions from taxes, assignment of labor, bribes. Such efforts had mixed results, pardy because these very encouragements, by their partiality, prevented or retarded the diffusion of techniques; but even more because the follower countries were not yet ready to learn and adopt the new mode of production. What’s more, just about the time when the Continental countries became aware of the extent of the British lead and were making their first, tentative gains in the crucial cotton manufacture, the French Revolution brought political turmoil, interrupted communications, and imposed a time-out. Not absolute: intervals of peace, partial or general, permitted British expats and Continental competitors to get on with the task—to introduce machine spinning, for example, in the southern Netherlands (Ghent and Verviers) and northern France. Innovation was necessarily spotty, however, and the technologies were already out of date. Not until the defeat of Napoleon at Waterloo in 1815 brought a definitive end to the fighting could Europe get on with the process of catch-up. (There is no street named Waterloo in Paris, nor Napoleon, for that matter.)
Karl Marx saw the British experience as an expression of historical logic. Capitalist production had its laws: “It is a question of these laws themselves, of these tendencies working with iron necessity towards inevitable results. The country that is more developed industrially only shows to the less developed, the image of its own future.”9
Yes and no. On a larger, metaphorical level—Adam Smith’s “natural progress of opulence”—Marx was right. But in detail—timing, composition, direction of change—he was wrong. Every country has its own resources and capabilities, and if it permits reason and the market to rule, its economic development will follow those paths that make the most of its means. Thus a country rich in coal will engage in fuel-intensive branches of industry and adopt techniques that a coalless country would eschew. A country short of coal but rich in running streams will rely, when possible, on waterpower rather than steam engines.
(To be sure, the force of these material constraints will vary with technique: a lack of coal, for example, will be far more constraining if costly transport makes it impractical to bring in fuel from outside. In the eighteenth and early nineteenth centuries, the French iron industry was severely handicapped by the high cost of fossil fuel, and it was not until canals and railways were built that this constraint was eased, at least partially. Two hundred years later, it paid South Korean iron-makers to move coking coal from western Pennsylvania to the Great Lakes, ship it down the St. Lawrence to the Atlantic, and move it by ship through the Panama Canal and across the Pacific. Different times, different means, different possibilities. Meanwhile, a few miles away, Pittsburgh steel was dying. It takes more than cheap raw materials to make a successful industry.)
So we have no uniformity of sequence, no single way, no law of development. Each of the would-be industrializers, the so-called follower countries, however much influenced by the British experience—to some extent inspired, to some extent frightened or appalled—developed its own path to modernity. And if this was true of the early industrializers, how much more is it true today. Everything depends on timing. The content of modern technology is ever-changing and the task and means of emulation change with it. Developing countries today will necessarily skip stages and processes that occupied the British for decades: why should they repeat what they don’t have to?10
All of which does not make the British experience irrelevant. One must distinguish between objective and process. The nineteenth-century statesmen who tried to move their countries toward industrialization kept the British example before them, whether as model or countermodel. To understand them and the process, one has to know the point of departure and the goal. And of course historians have their own special needs: an ideal type has heuristic value, if only as measuring stick and counterexample, so long as one keeps in mind what one is doing.11
A map of the Europe of 1815 in terms of machine readiness would give the highest grades to those countries and regions already engaged in manufacture for the larger world economy. I say “regions,” because some of these industrial areas overlapped national boundaries, themselves unsettled and ephemeral; and because all these countries were socially and culturally heterogeneous.* Indeed, this temporal diversity (as though they were living in different times) was a critical aspect of economic preparedness. The lowest grades would go to those that had long lived in isolation from the currents of exchange, whether of commodities or ideas, the places were older agrarian structures of status and power were largely intact.
The machine-readiest societies lay in the northwest quadrant of the Continent: France, the Low Countries, the Rhineland, the Protestant cantons of Switzerland, and outliers in the northeast corner of Spain (Catalonia) and in Bohemia. Readiness fell, often precipitately, as one moved east across the Elbe to eastern Germany, Austria, Poland, and Russia and southeast into old Ottoman lands; also south to the Mediterranean (most of Iberia and the Kingdom of Naples). One economic historian speaks of a “developmental gradient,” a downward slope, and quotes from another who does not mince words: “To move east was likewise to go back in time, or in levels of economic development; in eastern Europe and Russia the industrial centers were oases in a sea of peasant sloth and bureaucratic inertia.”12
What our critic alludes to here is what I shall call “the medieval legacy”—what European (as opposed to British or American) historians would call “feudalism,” which they see as persisting to the French Revolution and, in other countries, beyond. The Old Regime, in other words.* This was a big complex of customs, laws, practices, attitudes, and values—the work of centuries—but for the purposes of this analysis, three aspects are specially germane.
The Status of the Peasantry
In the Middle Ages, most peasants had been reduced (or raised, for slaves) to a condition of bondage or serfdom. Typically the peasant was tied to the soil, not free to leave without the consent of his lord. Serfdom sometimes also implied a personal, “bodily” tie of serf to master, so that the lord could move the peasant about, and the peasant, even leaving with permission, continued to owe dues.
In western Europe during the high and late Middle Ages, these bonds relaxed, partly because the monetization of the economy and the growing appetite for exotic goods led landlords to commute labor services into money rents, even more because the rise of cities provided points of exit from the seignorial system. By 1500, England, France, the Low Countries, and western Germany had few serfs in the old sense. The process had proceeded farthest in England, where land was farmed either by yeomen or by free tenants; agricultural laborers, themselves often owners of small plots inadequate to their sustenance, were hired as needed. France and the others were not far behind
, except for local vestiges and the widespread persistence of seignorial dues over and above commercial rents. The French Revolution simply abolished these remnants in France and areas annexed. This did not mean the peasant stopped paying; he just acquired a new lord, the state, and his dues became taxes. The lords got no compensation for their loss, which was seen as overdue justice.