The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

by David S. Landes

  † Not everyone would agree that Iraq was the predator in invading Kuwait. Some scholars, both Arab and Western apologists for the Iraqi position, have argued that Saddam Hussein was lured in (Samir Amin), or “almost invited in” (Edward Said); or that the attack was justified in the higher cause of Arab unity, or of the mobilization against Zionism (Saddam as Bismarck or Saladin); or, implicitly, that this was a not unreasonable way to raise issues of international disagreement (Noam Chomsky). Such arguments tell volumes about the appeal and immanence of violence in the Arab world (even if Israel did not exist, they would be at one another’s throats)—more on this below; and about the debasement and corruption of truth and intellectual argument in the higher cause of nationalism and anti-Westernism (anti-Americanism). The best source is Makiya, Cruelty and Silence, ch. 8: “New Nationalist Myths.”

  * Thus Islam has long exercised a retardative influence on Arab intellectual and scientific activity. New knowledge and ideas have fallen under suspicion as bid’a or heresy. The subtext is that they represent an unacceptable insult to timeless truth. Cf. Tibi, Islam, chapter 10.

  * Cf. a mini-review (TLS, 1 Oct. 1993, chapter 17) of a book by Arlene E. MacLeod, Working Women, the New Veiling, and Change in Cairo (New York: Columbia, 1993), which argues that veiling is both symbolism and the resolution of a double dilemma: it protests loss of identity and status and “signals women’s acceptance and acquiescence to a view of women as sexually suspect and naturally suited only to the home.” So we have resistance cum acquiescence—an “accommodating protest.” If such double-think and double-talk are true—and they may be—abandon all hope, ye women of Cairo.

  † Nor will they be cowed by feminist political agitation in other, more liberal Muslim lands. On the effort to redefine Islam in this regard, see Barbara Crossette, “Muslim Women’s Movement Is Gaining Strength,” N.Y. Times, 12 May 1996, p. A-3. On contrasts within Islam, see Ash Devare, “For Indonesian Families, Smaller Is Now Better,” Boston Globe, 23 June 1996, chapter 5.

  ** Not everyone would agree. In a letter to The New York Times of 26 July 1995, William J. Parente, who signs as professor of political science in the University of Scranton, argues against the “liberation of women” in Arab countries because they “would flood Arab labor markets and further depress wages.”

  ‡ The demographic consequences are also serious. The ability of women to earn money in the workplace is critical to their status within the household and their say in family planning. It is negatively correlated, for example, with reproduction. Cf. Dasgupta, “Population Problem.” It is no accident that a decision by a Muslim wife (often a woman of non-Muslim origin) to go to work outside the home (or even to leave the home without the husband’s consent) is perceived as a threat to marital harmony and to the dignity and honor of the husband, and is treated accordingly. Cf. Goodwin, Price of Honor, passim; Barakat, Arab World, chapter 7.

  * They will do it now, says Mohammed Talbi, historian and former dean at the University of Tunis. Talbi reminds us that for all the episodes of Muslim intolerance, the Muslim world has not been guilty of “systematic forcible conversion, nor arbitrary ghettoization, nor total and massive expulsion, nor genocide, nor, need it be said, a Holocaust.” Le Figaro, 27 March 1997, p. B-27. His account is somewhat overkind, but the favorable comparison of Islamic with Christian persecution of minorities (implicitly Jews) is correct.

  † The last of them, Fred Perry, champion in the 1930s, is memorialized by a statue at the entrance to Wimbledon: a memento of and salute to a happier era.

  ** An article by Jean-Paul Mari, “Enquête sur le massacre d’un peuple: Algérie: au delà de l’horreur,” Le nouvel observateur, 23-29 March 1995, chapter 4, remarks: “Algeria has always believed that only violence can found [establish] something.” For more on this, see Miller, God Has Ninety-nine Names, pp. 168 ff. See also Fisk, “Sept journées.”

  * I consider the outside-inside dichotomy to be the most unfortunate, anti-intellectual aspect of the “orientalist” thesis. Interestingly, in an essay at self-definition destined to appear as afterword to a new edition of the Said book, he says nothing about this. Instead, he focuses on criticisms of the book’s alleged anti-Westernism, which he says take the form of one or both of two erroneous inferences: that orientalism is symbolic of the entire West; and that, in distorting Islam and the Arabs, it is by implication an assault on a “perfect” system. A vigorous defense against strawmen. Said, “East Isn’t East.”

  * For an excellent discussion of these terms and distinctions over time, space, and ideologies, see Klor de Alva, “Postcolonization.” He is more discriminating than I, especially in his use of imperialism and colonialism and in his distinction between postcolonialism and postcoloniality. His approach has its advantages, but I shall trade nuance for brevity.

  * Cf. die Polyptique of Irminon, a census of the population of the estates of the abbey of Saint-Germain (just outside of Paris) in the early ninth century. Who bears a Frankish name and who a Gallo-Roman one?

  † Later incursions and invasions by Danes led in the ninth century to cession of a substantial area in eastern England that was known as the Danelaw (Danelagh). The Danish invaders intermarried with the residents, and a half-century later the area was reabsorbed into the English kingdom.

  * Exception is sometimes made for modem Japan; but what of precolonial Africa? The same “progressive” thinkers who denounce European colonialism are quick enough to take pride in the expansion of the Zulu or Ashante. On this manichean view of world history, setting the demonic white man against victimized people of color, see Bruckner’s emphatic Tears of the White Man.

  † Thus the Spanish government originally envisaged keeping Spaniards and Indians apart, but the inevitable unions of invaders and natives (castas) led to a large mixed population that, owing to the ravages of disease, almost came to equal in numbers the Indians of pure race. It was this mestizo and criollo group that deliberately separated itself from the castas and eventually led the rebellion against Spanish rule and took over the new nations—Klor de Alva, “Postcolonization.”

  ** Contrast in this regard Portuguese empire in Asia with that in South America (Brazil) and Africa (Angola and Mozambique). On these other continents, they encountered sparse populations lacking the political organization to oppose a serious resistance. So they took territory, with boundaries long undefined.

  * Here is Sir George Robinson, Superintendant of British traders at Canton, groveling before Lord Palmerston in London: “I trust it is not necessary for me to add anything like an assurance of the most profound deference and respect with which I shall implicitly obey and execute the very spirit of such instructions as I may have the honour to receive, on this or any other point. Strict undeviating obedience to the orders and directions of which I may be in possession…is the foundation on which I build….” At the end of two years of this, this toady was peremptorily fired. In mitigation, Sir George was acting in the best English courdy tradition. Cf. William Pitt’s effusive gushings to King George III—Cook, The Long Fuse, chapter 7.

  * Frontiers were the lines of encounter of stronger and weaker, hence loci of testing and conflict. The Earl of Carnarvon spoke in 1878 of “the difficulties of frontier”: “The same provocations, real or supposed…the same temptation of those on the spot to acquire territory” were a universal characteristic of empire—Hyam, Britain’s Imperial Century, chapter.18. On imperialism as an expression of disparity of power, see Landes, “Some Thoughts on the Nature of Economic Imperialism” and “An Equilibrium Model of Imperialism.”

  * The formal declaration was made by President James Monroe in 1823, but was in fact written by John Quincy Adams and was foreshadowed by earlier statements of George Washington and Thomas Jefferson. The immediate impetus came from the successful revolt of the former Spanish colonies and the threats of European intervention to restore the status quo ante; also from hints of possible Russian expansion along the Pacific coast of North Ame
rica. The declaration was never formalized by an act of Congress but it was accepted thereafter as an expression of American policy.

  † The only reason that worked even for a short time was that the United States was busy with its own Civil War. But once the Americans turned their attention to this interloper and gave aid to the native resistance, Maximilian was doomed. His own European sponsors wrung their hands but abandoned him to the firing squad—raison d’état.

  * France is a holdout for global dominion, primarily for reasons of prestige and self-esteem. Such vanity costs, and the French, pressed by European constraints to reduce their budget deficit, are supposedly reconsidering—Wall Street Journal, 25 January 1996, p. 1. Don’t count on it.

  * Thus, after good years in the 1960s and 1970s, the Cote d’Ivoire showed negative growth over the next decade, -4.7 percent per year per head from 1980 to 1992—World Bank, World Development Report 1994, Table 1. Algeria and Nigeria show a similar pattern, although their rates of decline are lower, -0.5 and -0.4 percent from 1980 to 1992. In die latter two, civil war has had a disastrous effect on the economy, in Nigeria from 1967 to 1970, in Algeria today.

  * Two examples from pre-modern history: the ancient Israelites after the exodus from Egypt; and the Aztecs who fled slavery into the marshes and emerged to conquer all the peoples around.

  † The significance of resistance and pride is the principal theme of much of the new work on the history of imperialism—what Michael Adas conveys as “The End of the White Hero in the Tropics”—“‘High’ Imperialism and the ‘New’ History,” chapter 20. Whereas older studies focused on European conquistadors, governors, and entrepreneurs, on European modernity vs. native backwardness, on improvement vs. stagnation, the recent stress has been on the forms and consequences of resistance, not only the rebellions, riots, and “mutinies,” but also the quotidian sabotage and withholding of cooperation. On this last, cf. Scott, Weapons of the Weak. The point is to restore “agency,” that is, to show passive victims as purposeful actors and indigenous cultures as sources of energy and inspiration.

  * In some instances, these subjugated peoples had built their own empires before the white man came: the Aztecs and Incas of course; but also the Annamites in Indochina, the Burmese in Burma; die Zulus in Africa; and so on. Freedom did not necessarily entail the restoration of equality. Equality had never existed, and new state structures rested on old hierarchies.

  * Note that the technical quality of the Indian railways was low; also that it was the Indian taxpayer who involuntarily paid much of the cost in the form of guaranteed returns to the British investors. (For all their occasional wealth, the Indians were not interested in investing in these projects.) On this checkered story, see Headrick, Tentacles of Progress, ch. 3.

  * Among the powerful anti-imperialist statements: Joseph Conrad’s short novel Heart of Darkness (1902). This eloquent testimony to the abuses of imperialism and the-hypocrisy of the West was based on personal experience in the heart of Africa: “Going up that river was like travelling back to the earliest beginnings of the world….” The novella has since been denounced as a racist, “orientalist” document and hence to be excluded from the literary canon. Conrad, we are told, presented the native Africans as primitive and helpless (Africa as the heart of darkness), and we can’t have that. Such are the anachronistic imperatives of political correctness. This assault on what has always been considered a masterpiece of empathy and humanity has produced what the current jargon awkwardly calls a “site of contestation.” See the fascinating article by David Denby, “Jungle Fever.”

  * The First Man (New York: Alfred Knopf, 1995), an autobiographical novel.

  † Pieds-noirs: literally “blackfeet.” The term given to European settlers in Algeria, by analogy with barefoot natives.

  * Much of the literature on this subject tacitly uses the term decline to denote relative rather than absolute loss of place. It were better to specify that explicitly.

  * His laconism in this instance may lead us to believe that his comparison, whatever its accuracy, was of nominal rather than real wages—in other words, not based on purchasing power.

  † “The trade of Holland, it has been pretended by some people, is decaying, and it may perhaps be true that some particular branches of it are so.”

  ** They might also have paid more because English business was bad, risks greater, and they were looking for outside gulls to save the day—like Mexico in 1994. (Not true, of course.) Prices are determined by demand as well as supply. In this instance Smith looks only at the Dutch side—supply—and ignores demand.

  * An estimate of 1614 figured that dyeing and dressing would add 50 to 100 percent to the value of exports—see Supple, Crisis and Change, pp. 33-51. The scheme failed because exporters of unfinished cloth (the company of Merchant Adventurers) had their own clout and more money. And of course the Dutch fought the import of finished cloth.

  * The word recurs repeatedly. A small sample: Eatwell, Whatever Happened…The Economics of Decline; Gamble, Britain in Decline; Pollard, Britain’s Prime and Bintain’s Decline; Rubinstein, Capitalism, Culture, and Decline; Elbaum and Lazonick, eds., The Decline of the British Economy; Coates and Hillard, eds., The Economic Decline. Lorenz, Economic Decline in Britain, deals with a particular branch.

  * Thus Clapham, speaking of improvements in iron and steel technology: “Yet it is hard to believe that a process employed so extensively in 1925 and 1913 might not have been employed to advantage rather more than it was in 1901 and earlier”—Economic History, III, 148.

  * In the aftermath of World War II, British shipyards made over half the gross tonnage produced in the world—1.3 million tons in 1950. These were admittedly exceptional circumstances, for almost all potential competitors had been knocked out by war. Over the following quarter century, a period that saw the introduction of radically new ship types (giant tankers, for example) and rapid growth of the industry, British output stood still, and then in a dozen years (1975-87) plunged 96 percent. Wipe-out. E. Lorenz, Economic Decline in Britain, ch. 4, while pointing to protectionist policies and subsidies abroad, notes “the failure of British builders to benefit from…high throughput technology” and better methods of work organization, the latter due to “lack of trust between labour and management” (pp. 90-91). See also D. Thomas, “Shipbuilding,” in Williams, et al, Why Are the British Bad?, pp. 179-216.

  * One aspect of this semispontaneous, pluralistic approach was the appearance of evening classes, many of them for workers desirous of improving knowledge and skills. These courses harked back to the itinerant lecturers of the eighteenth century and were intended as a response to the shortcomings of the regular school system. Some have argued that they were substantial, even adequate compensation. I do not agree: voluntary evening classes for tired laborers are no substitute for full-time, professional, lab-centered, exam-monitored, sequential curricula.

  * And even earlier by some calculations. Estimates of annual growth in value added per hour in manufacturing, 1950-90, show Japan at 7.4 percent, France at 4.9, Germany at 4.5, Britain at 4.1, the USA at 2.6—Eaton and Kortum, “Engines of Growth,” chapter 1. Even allowing for error, we clearly are not in the presence of decline; rather, of apparent convergence.

  * From 1960 to 1973, U.S. total factor productivity (that is, gains in productivity after increases in capital and labor have been deducted) grew by 1.5 percent per year, against 6.3 percent for Japan. The oil shock of 1973 hit Japan hard, reducing TFP growth to 1.5 percent 1973-79, 2 percent 1979-88. But U.S. TFP actually turned negative 1973-79, rising to less than 0.5 percent in 1979-88—Hart, “Comparative Analysis,” chapter 14.

  † Nothing is riskier than building prognoses on the last year’s (or last quarter’s) performance. Japan seems to be doing better in 1996; but see the Wall St. J., 20 June 1996, p. A-13: “Despite a Spurt of Growth, Japan Isn’t in Fast Lane Yet.”

  * On the arrogant stupidity of the generals, see the comments passim i
n Len Deighton, Blood, Tears, and Folly. Deighton is primarily a writer of adventure and spy novels, but he also does nonfiction, and when he does, he has the story right.

  * In fact, the German record of racism and group hate in the decades preceding the Nazi regime gave ample warning that this was a very sick society. See Weiss, Ideology of Death.

  * Other currency commodities were coffee and silk or nylon stockings, but these were clearly less convenient. Cf. Kindleberger, Financial History, chapter 24.

  * On these (mal)practices, which many American economists are inclined to discount or trivialize and others dismiss as “Japan-bashing” (an expression invented to dispose of awkward charges without having to answer them), see Lincoln, Japan’s Unequal Trade. The word “bashing” is a favorite resort of the intellectual scoundrel.

  * On the technological links in Japan between industrial development and military strength, see especially Samuels, “Rich Nation, Strong Army.” The one thing I would add to his analysis is the role of export-oriented manufacture in expanding industrial capacity. The Japanese have not forgotten the strategic consequences of their relative industrial weakness in World War II.