The Wealth and Poverty of Nations, by David S. Landes
Earlier this year, one of my professors, who is an economic historian, recommended the book The Wealth and Poverty of Nations: Why Some are So Rich and Some So Poor, by David S. Landes to me. So obviously I jumped on it and have just recently finished reading it.#
The book is very much like Guns, Germs, and Steel, by Jared Diamond, in that it covers such a large span of time and is very convincing in its arguments. I have the feeling that many would compare it to Diamond, so I feel like I shouldn't -- but I really think they would make a good reading couple.#
The basic argument is that wealth comes from intelligent economic policies that ensure free markets and the occasional protection from outside competition. (A non-standard result from your average economist.)#
0. Introduction#
Landes explains that his purpose in writing this book is to describe the conditions that lead to "the greatest single problem and danger facing the world":
The old division of the world into two power blocs, East and West, has subsided. Now the big challenge and threat is the gap in wealth and health that separates rich and poor. These are often styled North and South, because the division is geographic; but a more accurate signifier would be the West and the Rest, because the division is also historic. Here is the greatest single problem and danger facing the world of the Third Millennium. The only other worry that comes close is environmental deterioration, and the two are intimately connected, indeed are one. They are one because wealth entails not only consumption but also waste, not only production but also destruction. It is this waste and destruction, which has increased enormously with output and income, that threatens the space we live and move in. [p. xx]
1. Nature's Inequalities#
This is the chapter that I would say is most like Diamond's work, good to get it out right at the beginning. He talks about the geographic conditions that can often attribute greatly to the wealth of nations. This ranges from climate, with its connotations of ability to work all hours and the fertility of the soil, to the natural preallocation of resources and trade routes.
And interesting comment on such types of discussions:
A civilization like ours, with its drive to mastery, does not like to be thwarted. It disapproves of discouraging words, which geographic comparisons abound in.
Geography, in short, brings bad tidings, and everyone knows what you do to that kind of messenger. As one practitioner puts it: "Unlike other history... the researcher may be held responsible for the results, much as the weather forecaster is held responsible for the failure of the sun to appear when one wishes to go to the beach."
Yet we are not the wiser for denial. [p. 5]
The encouragement that can be found in this chapter is that "geography [is not] destiny" (p. 15) and that through technology and science many of nature's inequalities can be bested. A good example of this is how productivity in the Southern United States, states like Texas, shot up after World War II and the introduction of cheaper civilian air conditioning to bat away the slowing effect of heat exhaustion.
2. Answers to Geography: Europe and China#
One of the central issues that Landes suggest influences prosperity is the ingrained culture in an area. Cultural predispositions such as "early and universal marriage" (p. 22) can have a stunning effect on well-being and wealth--because of the strain that children represent. The South East Asian countries like China and India were particularly mentioned for this quality, and Landes contrasts these to Europe:
In contrast, Christian and especially western Europe accepted celibacy, late marriage (not until one could afford it), and more widely spaced births. Medieval Europeans saw children as a potential burden in time of need. Recall the stories of Hansel and Gretel and Tom Thumb--the children left in the forest to to die far from the eyes of their parents. The riverine civilizations maximized population; the Europeans focused on small households and strategies of undivided inheritance and interfamilial alliance. [p. 22]
The reason why population is interesting is not only because it represents an increased demand in food supply, but also it seems to suggest more energy available for agriculture. The way history has turned out, it seems like population isn't essential for success. Part of the reason may have been how effective these populations were--the quantity of despotic rulers with throngs of slaves in the Asians countries did not help prosperity by focusing more on monuments based on forced labor than free enterprise.
There is a bit of discussion about why China lead rulers in the direction of totalitarianism and slavery. A number of theories are mentioned, but the reliance on particular waterways and the ease with which they could be controlled is top among them.
3. European Exceptionalism: A Different Path#
European customs are compared against others:
Linked to the opposition between Greek democracy and oriental despotism was that between private property and ruler-owns-all. [...] Today, of course, we recognize that such contingency of ownership [on the ruler's whim] stifles enterprise and stunts development; for why should anyone invest capital or labor in the creation or acquisition of wealth that he may not be allowed to keep? In the words of Edmund Burke, "a law against property is a law against industry." In Asian despotism, however, such arrangements were seen as the very raison d'être of human society: what did ordinary people exist for, except to enhance the pleasure of their rulers? [p. 31-32]
Even the Church, with its belief that the true owner of everything was the Lord and the Pope his vicar had "elaborate paperwork that accompanied the transfer of gifts of the faithful [to bear] witness to" the duty to maintain private property. (p. 35)
Something that I found very interesting:
Ironically, the, Europe's great good fortune lay in the fall of Rome and the weakness and division that ensued. (So much for the lamentations of generations of classicist and Latin teachers.) The Roman dream of unity, authority, and order ( the pax Romana) remained, indeed has persisted to the present. After all, one has usually seen fragmentation as a great misfortune, as a recipe for conflict; it is no accident that EUropean union is seen today as the cure for the wars of yesterday. And yet, in those middle years between ancient and modern, fragmentation was the strongest brake on willful, oppressive behavior. Political rivalry and the right of exit made all the difference. [p. 37-38]
4. The Invention of Invention#
A great deal is written about why China invented so many things but promptly forgot them as well. It seems strange that knowledge would not accumulate and lead to what happened in Europe. The best possible explanation offered is that the totalitarian government did not value such things--the could detract from its power--and had the means to stop them completely.
[Quoting Etienne Balazs...]
...if one understands by totalitarianism the complete hold of the State and its executive organs and functionaries over all the activities of social life, without exception, Chinese society was highly totalitarian....No private initiative, no expression of public life that can escape official control. There is to begin with a whole array of state monopolies, which comprise the great consumption stables: [...] There is a monopoly of education, jealously guarded. There is practically a monopoly of letters (I was about to say, of the press): anything written unofficially, that escapes the censorship, has little hope of reaching the public. But the reach of the Moloch-State, the omnipotence of the bureaucracy, goes much farther. Their are clothing regulations, a regulation of public and private construction (dimensions of houses); the colors one wears, the music one hears, the festivals--all are regulated. There are rules for birth and rules for death; the providential State watches minutely over every step of its subjects, from cradle to grave. It is a regime of paper work and harassment, endless paper work and endless harassment. [p. 57]
First, I didn't realize that such qualities of China go back to time immemorial, I had assumed the Communists created such things, but apparently not. Second, how many of those statements about what is regulated could be said about the modern United States? And thirdly, a topic I must remember to look up--Is Feng Shui the descendent of some of the rules related to building? (I don't know.)
Why did Europe do all the important, lasting, invention?
In the last analysis, however, I would stress the market. Enterprise was free in Europe. Innovation worked and paid, and rulers and vested interests were limited in their ability to prevent or discourage innovation. Success bred imitation and emulation; also a sense of power that would in the long run raise men almost to the level of gods. The old legends remained--the expulsion from the Garden, Icarus who flew too high, Prometheus in chains--to warn against hubris. (The very notion of hubris--cosmic insolence--is testimony to some men's pretensions and the efforts of others to curb them.)
But the doers were not paying attention. [p. 59]
5. The Great Opening#
This chapter is primarily about the discovery of the new world. Reading it while reading the first chapter of A People's History of the United States, by Howard Zinn, is priceless, they're talking about each other when the complain about the different ways of writing about this historic event.
Landes describes the political climate around the 500 year anniversary:
Columbus was now portrayed as a villain; the Europeans as invaders; the native inhabitants as innocent, happy people reduced to bondage and eventually wiped out by the rapacious, disease-carrying white man. In Berkeley, California, long a secessionist, irreverent (or rather, differently reverent) municipal enclave with its own foreign policy, the City Council renamed Columbus Day Indigenous Peoples' Day and offered two performances of an opera entitled Get Lost (again), Columbus, the work of a Native American composer named White Cloud Wolfhawk. [...] No praise for conquistadors.
Now, it was obviously not possible to erase or reverse history. No one was planning to evacuate and return to Europe; it was too late for Columbus to find his way. BUt there was enough anti-Columbus sentiment, especially in politically correct circles, to make rejoicing as out of place as a jig at a wake. [p. 61]
Landes on writers like Zinn: "They aim to delegitimate rather than illuminate. The target is European (Western) dominion and the gains therefrom. The purpose: to impute guilt, provoke consciences, justify reparations. We can do better by asking what happened and why." (p. 63)
6. Eastward Ho!#
After the Spanish discovered America, the race was on in Europe to locate other tracts of land for profit. Portugal looked east and found more wealth, but only a minor increase in power.
In early 1500, less than six months after da Gama's triumphal return, the Portuguese sent out a second fleet to the Indies--thirteen ships this time and one thousand two hundred men, including soldiers--under the command of Pedro Alvares Cabral. They sent him to make money and told him not to look for trouble; but if a hostile vessel should try to do him harm, he was not to let it come near, but rather to stand off and blow it out of the water.
Nothing better illustrates awareness of superiority. For it is well known that those who possess stronger arms can kill from a distance at no risk to themselves; whereas those in a position of weakness must close and rely on personal valor and strength to gain a victory. Cabral's instructions signaled a new balance of world power. The Asians, so much more numerous than the Portuguese, also richer and in many ways more civilized, would not have understood this, could not have imagine it. Yet there it was: Europe could no plant itself anywhere on the surface of the globe within the reach of naval cannon. [p. 89]
More discussion of the peculiarities of China later in this chapter with regards to why they did not sail around Africa first, in spite of invented larger oceangoing ships earlier than the Europeans. Again, it was the totalitarian whim of one emperor who closed the harbors and forbade ocean trade. We will see another decision later on in Japan, but luckily reverse in time.
7. From Discoveries to Empire#
Again America and the Spanish conquistadors are discussed, and there is an interesting explanation of the rise of the Aztecs prior to the European invasion.
So with the Aztecs, alias the Mexica. They were a small group, a rough nomadic people come into the sedentary areas of the south from primitive desert lands to the north (what is now the southwestern United States). They found no welcome and even served a time as slaves to a more civilized people on the shores of the great lakes of the valley of Mexico (a lake long since dried up and today the precarious, subsiding seat of the world's most populous city). Slavery was a school for war and power. When the Aztecs broke free, they fled into reed-choked fastnesses and sheltered there until they grew in numbers and strength. When they came out, originally because they needed drinkable water, the conquered one people after another, using a combination of art, prowess, and above all a terror that unstrung their adversaries and brought them to surrender before they were defeated.
Aztec terror took the form of the industrialization of blood sacrifice. [...]
The Aztec innovation was the work of a member of the royal family, Tlacallel, kingmaker and adviser to a series of emperors. This prince of darkness thought to impose and substitute for other, milder gods the Aztec tribal god Huitzilopochtli, the humming bird of the south, a bloodthirsty divinity all wings and claws; and behind those beating wings, to make of the sacrificial cult a weapon of intimidation. Where once the sacrifice touched a handful, Tlacallel instituted blood orgies that lasted days and brought hundreds, then thousands, of victims to the stone, their hearts ripped out while still beating, their blood spattered and sprinkled on the idols, their bodies rolled down the steps and butchered to furnish culinary delicacies to the Aztec aristocracy. [p. 103-104]
Landes contends that while the story of the European conquest of America "is a bloody story, full of cruelty and bad faith, condescension and sancitimony [...] one must not judge these events in terms of the good, the bad, and the ugly. They all deserved one another." He resolves that the Incas, and the others, cannot say like Diamond does that they did not have experience with invading peoples, because they "should have known themselves." (p. 108)
8. Bittersweet Isles#
Landes discusses the development of the plantations on the islands of the Caribbean. The treatment of the slaves is interesting and Landes says a curious thing about the comparison between the slaves and the animals:
The brutalities perpetrated by these plantations and ingenios can only be explained by the assumption that blacks were seen as no better than inanimate pieces of equipment, to be used up and replaced as needed, or as fuel to be consumed in the fires. Work during the grinding season ran around the clock. Overseers and drivers imposed near-continuous toil; adult males worked twenty hours a day. Food was typically provided by the master, but some masters felt no obligation to feed their hands. Some gave the slaves a free day on Sunday to work their plots and gather food for the week; others simply left their slaves to fend for themselves. In general the masters had more care for their animals than for their slaves, resting them as needed--not presumably because of love for animals, but because these dumb creatures would simply stop where a slave, who had the mind and imagination to fear worse, would work on. [p. 123]
9. Empire in the East#
Cute little note about spices:
People of our day may wonder why pepper and other condiments were worth so much to Europeans of long ago. The reason lay in the problem of food preservation in a world of marginal subsistence. Food supply in the form of cereals barely sufficed, and it was not possible to devote large quantities of grain to animals during long winters, excepting of course breeding stock, draft animals, and horses. Hence the traditional autumnal slaughter. To keep this meat around the calendar, through hot and cold, in a world without artificial refrigeration, it was smoked, corned, spiced, and otherwise preserved; when cooked, the meat was heavily seasoned, the better to hide the taste and odor of spoilage. Hence the paradox that the cuisine of warmer countries is typically "hotter" than that of colder lands--there is more to hide.
Condiments brought a further dividend. The people of that day could not know this, but the stronger spices worked to kill or weaken the bacteria and viruses that promoted and fed on decay. Tabasco and other hot sauces, for instance, will render infected oysters safer for human consumption; at least they kill microorganisms in the test tube. Spices, then, were not merely a luxury in medieval Europe but also a necessity, as their market value testified. [p. 132-133]
10. For Love of Gain#
This chapter is primarily about the Dutch experience in the east and there is a particular insight into the monopolies imposed on the people:
Yet in the long run the monopolies were precarious. To maintain them against native and outsiders required the use of force so expensive that only a sovereign with taxing power could hope to pay the bill. Inevitably, the VOC was led to substitute its own governance for that of native princes. The VOC thereby incurred the kind of non-business expenses that are open-ended and unpredictable; that do not show up in the books because they are so easily spread about; that grow insensibly until too late. (Compare the budgetary deficits that afflict modern nation-states.) [p. 146]
11. Golconda#
On the consequences of securing power in India:
The tyranny of these Muslim rulers [the Moghuls]--no better or worse than that of Hindu despots--was aggravated by the measures taken to prevent sedition. This is a classic problem of autocracies: how to prevent lieutenants from taking root and creating rival centers of power. In medieval Europe, the grant of landed fiefs was originally personal, not heritable, but over time local lords tended to stay put and pass domains down to their heirs, bonding with the landed elites of the area and creating the fragmented authority we know as feudalism. In Moghul India, as in other Turkic states, agents of the ruler were moved about. This limited local power, but also destroyed the official's commitment to his territory. His aim became to make and take as much as possible as fast as possible, spending little on social capital. All take and no give. In those regions dependent on irrigation, this neglect of communal equipment could be disastrous, as the annals of Indian famines testify.
For similar reasons, the peasant (and indeed all subjects) had no reason to improve the land, holding it as he did at the pleasure of the ruler. [p. 157]
This type of leadership in India prior to the British did not help in defending them from the British:
The Achilles heel of aristocratic empires like the Moghul and its parts: What loyalty? The nawab began the battle with fifth thousand troops, against three thousand for the British. Of the fifth thousand, only twelve thousand actually fought for him, and these withdrew so quickly that they suffered only five hundred casualties. British losses numbered four Europeans and fourteen sepoys. And this was one of history's decisive battles. [p. 160]
12. Winners and Losers: The Balance Sheet of Empire#
Ironically, the nations that had started it all, Spain and Portugal, ended up losers. Here lies one of the great themes of economic history and theory. All models of growth, after all, stress the necessity and power of capital--capital as substitute for labor, easer of credit, balm of hurt projects, redeemer of mistakes, great enterprise's second chance, chief nourisher of economic development. Given capital, the rest should follow. And thanks to empire, Spain and Portugal had the capital.
Spain particularly. Its new wealth came in raw, as money to invest or spend. Spain chose to spend--on luxury and war. War is the most wasteful of uses: it destroys rather than builds; it knows no reason or constraints; and the inevitable unevenness and shortage of resources lead to ruthless irrationality, which simply increases costs. Spain spend all the more freely because its wealth was unexpected and unearned. It is always easier to throw away windfall wealth. [p. 171]
At this point Landes discusses the varying cultural opinions of wealth, and I found this to be entertaining and illuminating:
A good Calvinist would say, that was what was wrong with Spain: easy riches, unearned wealth. Compare the Protestant and Catholic attitudes toward gambling in the early modern period. Both condemned it, but Catholics condemned it because on might (would) lose, and no responsible person would jeopardize his well-being and that of others in that manner. The Protestants, on the other hand, condemned it because one might win, and that would be bad for character. It was only much later that the Protestant ethic degenerated into a set of maxims for material success and smug, smarmy sermons on the virtues of wealth. [p. 176-176]
13. The Nature of Industrial Revolution#
14. Why Europe? Why Then?#
Landes lists the three most important reasons why the Industrial Revolution happened in Europe when it did:
- the growing autonomy of intellectual inquiry;
- the development of unity in disunity in the form of a common, implicitly adversarial method, that is, the creation of a language of proof recognized, used, and understood across national and cultural boundaries; and
- the invention of invention, that is, the routinization of research and its diffusion. [p. 201]
On the establishment of the scientific method, Landes describes that some people were not happy about losing magic:
Note that for some, this is cause for regret, as at a self-impose impoverishment: "... the new quantitative and mechanistic approach eventually established a metaphysics which left no room for essences, animism, hope, or purpose in nature, thus making magic something 'unreal,' or supernatural in the modern sense." Not to feel bad: the road to truth and progress passed there. As David Gans, an early seventeenth-century popularizer of natural science, put it, one knows that magic and divining are not science because their practitioners do not argue with one another. Without controversy, no serious pursuit of knowledge and truth. [p. 203]
Be reminded of this when discussing echo chambers and complaining that certain group or study does not show unity.
15. Britain and the Others#
Landes describes the ideal society for technological and economic progress.
Let us begin by delineating the ideal case, the society theoretically best suited to pursue material progress and general enrichment. Keep in mind that this is not necessarily a "better" or a "superior" society (words to be avoided), simply one fitter to produce goods and services. This ideal growth-and-development society would be one that
- Knew how to operate, manager, and build the instruments of production and to create, adapt, and master new techniques on the technological frontier.
- Was able to impart this knowledge and know-how to the young, whether by formal education or apprenticeship training.
- Chose people for jobs by competence and relative merit; promoted and demoted on the basis of performance.
- Afforded opportunity to individual or collective enterprise; encouraged initiative, competition, and emulation.
- Allowed people to enjoy and employ the fruits of their labor and enterprise.
These standards imply corollaries: gender equality (thereby doubling the pool of talent); no discrimination on the basis of irrelevant criteria (race, sex, religion, etc.); also a preference for scientific (meansend) rationality over magic and superstition (irrationality). [p. 217]
This continues to the ideal type of government. The bottom line is that the things that are good for industry and prosperity are generally things that people want anyways and provided that people value their own well-being and are free to seek whatever means to secure it for themselves, they should not care whether they make money from a woman, a black, or a homosexual. Money does not smell.
He seems to sadden when he writes, "No society on earth has ever matched this ideal. Leaving ignorance aside (how does one know who is better or more meritorious?), this is the machine at 100 percent efficiency, designed without regard to the vagaries of history and fate and the passions of human nature. The most efficient, development-oriented societies of today, say those of East Asia and the industrial nations of the West, are marred by all manner of corruption, failures of government, private rent-seeking. This paradigm nevertheless highlights the direction of history. These are the virtues that have promoted economic and material progress. They represent a marked deviation from earlier social and political arrangements; and it is not a coincidence that the first industrial nation came closest earliest to this new kind of social order." [p. 219]
16. Pursuit of Albion#
This chapter primarily talks about the changes in Europe that ended feudalism and serfdom, and then the reasons why these things persisted so much longed in Eastern Europe and Russia. On slavery and serfdom in early Russia:
In general, whenever industry located in empty places, usually to minimize transport costs (also in connection with canal and road projects), the only solution was to move in forced labor. This was Russia's school for wastage, an anticipation of the gulag. Even in more densely settled areas, where casual layabouts and "street people" could be had for food and booze to do loading, unloading, carting and hauling, steady work called for servile labor assigned to the job. Entire villages, often belonging to the state, were moved about in this way.
In the long run, of course, the system failed. Unfree labor would not work well or honestly. In the words of a report on the Tula Armory in 1861: "It would seem to be generally indisputable that only free men are capable of honest work. He who from childhood has been forced to work is incapable of assuming responsibility as long as his social condition remains unchanged." [p. 241]
For this reason, that slavery cannot compete with freedom in the marketplace, I think that there is more or less no reason to actively fight for freedom--except if you consider competing with slavery-driven industries a fight. Free will and personal gain know no bounds, but slaves only work has hard as they can get away with. Of course, sometimes "the long run" is long indeed, and this dissuades some people.
17. You Need Money to Make Money#
Primarily about developing countries and why you need investment for industry. An interesting note on why developing countries still need capital, despite being labor-rich:
Late growth, says Gerschenkron, also tends to be based on "the most modern and efficient techniques," because they pay the most and nothing less can compete with more advanced nations. These techniques are typically capital-intensive, which would seem to be irrational for countries that abound in cheap labor. Gerschenkron recognizes the paradox, but explains it by the quality of the workforce. Good, well-disciplined labor is in fact scarce, he says, scarcer than in richer, more advanced countries. SO it pays to substitute capital for labor. [p. 274]
18. The Wealth of Knowledge#
19. Frontiers#
This chapter is mostly about the development of the early United States, but it does compare with Europe, and during that comparison I saw this fantastic footnote:
The meanness of the French Post Office was notorious. Until the 1990s, airmail letters overseas paid a surcharge above a weight of 5 grams, stamps included. That meant using specially thing and pricey paper--a boon to the stationery industry. Even so, the post office would not always have a single stamp for the postage required and would combine two or three to make the amount, and then these would tip the scale. One had to experience these exercises in petty tyranny to understand the retardative effects of bureaucratic constipation. Fortunately for the French, the European Community has imposed new standards. [p. 306-307]
20. The South American Way#
I found this critique of comparative advantage used to prescribe action, rather describe benefit to be inspiring:
South America's industrial beginnings did not generate an industrial revolution. Even the construction of railways did not do the trick. Some things had to be done at home: the machines had to be serviced and repaired, for example. But these shops stuck to maintenance; almost never did they move on to manufacturing on their own. Once again, natural and social circumstances were unfavorable. Fuel and materials cost more than in Europe or the United States, and skills were wanting. It was all very rational: comparative advantage made it easier and cheaper to buy abroad.
The trouble with such rationality is that today's good sense may be tomorrow's mistake. Development is long; logic, short. The economic theory is static, based on conditions of the day. The process is dynamic, building on today's abstinence to tomorrow's abundance. Some things will never happen if one does not try to make them happen. If the Germans had listened to John Bowring... That British economic traveler extraordinary lamented that the foolish Germans wanted to make iron and steel instead of sticking to wheat and rye and buying their manufactures from Britain. Had they heeded him, they would have pleased the economists and replaced Portugal, with its wine, cork, and olive oil, as the very model of a rational economy. They would also have ended up a lot poorer. [p. 315]
21. Celestial Empire: Stasis and Retreat#
Landes thinks that Chinese culture, developed by totalitarianism reinforced the boundaries of success. A stunning example:
These mandarin officials embodied the higher Chinese culture--its prestige, its wholeness and sublimity. Their self-esteem and haughtiness had ample room for expression and exercise on their inferiors, and were matched only by their "stunned submissiveness" and self-abasement to superiors. Nothing conveyed so well their rivalry in humility as the morning audience, when hundreds of courtiers gathered in the open from midnight on and stood about, in rain and cold and fair, to wait the emperor's arrival and perform their obeisance. They were not wasting time; their time was the emperor's. No mandarin could afford to be late, and punctuality fell short: unpunctual earliness was proof of zeal.
Such cultural triumphalism combined with petty downward tyranny made China a reluctant improver and a bad learner. Improvement would have challenged comfortable orthodoxies and entailed insubordination; the same for imported knowledge and ideas. In effect, what was there to learn? This rejection of the foreign was the more anxious for the very arrogance it justified. That is the paradox of the superiority complex: it is intrinsically insecure and brittle. Those who cherish it need it and fear nothing so much as contradiction. (The French today so trumpet the superiority of their language that they tremble at the prospect of a borrowed word, especially if it comes from English.) So Ming China--convinced of its ascendancy--quaked before the challenged of Western technology, which was there for the learning. [p. 336]
22. Japan: And the Last Shall Be First#
I never realized how amazing the Japan development was--its speed and completeness. Landes describes their ability to learn:
The Japanese were learners because they had unlimited aspirations. Their mythology told of a ruler descended from the sun goddess and a land at the center of creation. They thought of themselves as a people specially chosen, as warrior-dominators with all of East Asia as legitimate domain. They had long been culturally subordinate to China, takes rather than givers, students rather than teachers. Their ideographic writing and writing implements came from China; much of their language as well. Their knowledge of silk, ceramic, and printing, their furnishings and the style of their paintings, their Buddhist beliefs, their knowledge of Confucianism--all from China. Yet learning never made them feel smaller; on the contrary, they thought themselves inherently superior to the Chinese. [p. 353]
With this attitude for learning they quickly adopted many European qualities and characteristics, including Christianity. But, in the case of Christianity they realized it was a weapon of the Spanish, historically, and that could not stand:
The Japanese went about eradicating Christianity with characteristic ferocity. Nero would have been ashamed for his softness. Christians were compelled publicly to abjure. Those who refused or backslid were tortured and burned or beheaded. Those who helped missionaries, the same. The third Tokugawa shogun (army chief), Iemitsu, continuing the policy of his grandfather and father, often attended the torture sessions himself. Those who resisted were killed to the last babe in arms. [...] It was the Spanish Inquisition all over again, this time against Christians. [p. 355]
23. The Meiji Restoration#
In the background of talking about exploitation in the early Meiji economy, Landes clarifies the word "exploitation":
The Marxist term is one of the most misleading and abused words in the vocabulary of social science. It refers to a universal and inescapable condition of wage labor, whether in capitalist or socialist economies, hence has no meaning as a distinctive phenomenon; and in its attempt (pretension) to quantify a rate of exploitation by dividing wages by product (wage hours by total hours), it anomalously makes progressive, innovative capitalists--those who enhance labor productivity by investment in equipment and plant-- the more exploitative for their enterprise. [p. 382]
24. History Gone Wrong?#
This chapter reflects on why the Islamic countries have not developed modern economies.
In general, the best clue to a nation's growth and development potential is the status and role of women. This is the greatest handicap of Muslim Middle Eastern societies today, the flaw that most bars them from modernity. To be sure, other societies depreciate women and adulate men. No one is pure. Think of Latin America with its machismo, or Japan with its male bonding and fatherless homes. Even the so-called advanced societies of the West can do better in this regard. But if we view gender relations as a continuum running from nothing to full equality, the Muslim countries, and especially the Arab Muslim countries, would bottom out the scale. The women are humiliated from birth. The message: their very existence is a disaster, their body a sin. [p. 413]
25. Empire and After#
Obviously a discussion of empire, but I was very happy with the way he describes empires not as the by-product of capitalism, but a historic and continual phenomenon:
To note that empires go back to the dawn of history may seem a truism, but in fact it is no trivial assertion. Some insist, for example, that imperialism, which peaked around the end of the nineteenth century, is somehow an invention or by-product of modern capitalism--in Lenin's words, "the highest stage of capitalism." Building on this, they argue that empire was necessary (indispensable) to the prosperity and survival of modern capitalism. The tenacity of this belief can be measured by a copious literature averring that imperialism aimed above all at material gain, even where it manifestly cost and lost. [p. 423]
One of the interesting things that are talked about are how backwards attitudes about who was responsible for the disappointing economies in former colonies made things even worse--people refused to be responsible for their actions, everything was the fault of the West.
26. Loss of Leadership#
27. Winners and...#
One of the things I noticed throughout the book is Landes' hostility towards traditional ideas of free trade and comparative advantage. On free trade:
All of Japan's big department stores have separate boutiques for these items: a country ready to spend a hundred dollars for a supermelon with a ribbon attached can afford to spoil itself. No room, though, for Kodak film; the Japanese have their own Fuji brand--and Japanese light is different.
This mercantilist policy has arouse indignation among trading "partners" and puzzlement among economists. Don't the Japanese understand that such a policy is a deliberate impoverishment of their own population, who pay that much more for what they buy? No one would call the Japanese fools, even if they do occasionally make mistakes. Don't they understand comparative advantage? Don't they know that free trade promotes growth and wealth?
To these rhetorical questions, the Japanese reply that the end of economic policy is not low prices and discount distribution. The goal is market share, increased capacity, industrial and military strength. Producers are more important than consumers. Anyone can buy, but not everyone can make. If people spend less now, they save more (about one third of income). Their children will have more and Japan will be the stronger. [p. 474-475]
28. Losers#
29. How Did We Get Here? Where Are We Going?#
The one lesson that emerges is the need to keep trying. No miracles. No perfection. No millennium. No apocalypse. We must cultivate a skeptical faith, avoid dogma, listen and watch well, try to clarify and define ends, the better to choose means. [p. 524]
Notable Quotables#
"Business, like love, laughs at locksmiths." In reference to laws against business. (p. 42)
"The Romans had a saying, Pecunia non olet--Money does not smell. People may not like the way it was made or the person who made, but they like, and will take, the money." (p. 150)
"Wealth is not so good as work, nor riches so good as earnings." In reference to the Spanish throwing away the fruits of empire and the United States of today buying everything from abroad and living in leisure. (p. 173)
"Intolerance, superstition, ignorance--these are easier to acquire and cultivate than to uproot." In reference to the expulsion of the Jews from Spain and Sicily and their "persistent backwardness." (p. 185)
"Native peoples soon learned to disappoint their conquerors by giving up too quickly. No killing; no medals and promotions." In reference to British battles in Africa. (p. 429)
"Even after the [Communist] regime has fallen--people fear the uncertainties of the market and yearn for safe tedium of state employment. Or for equality in poverty. As the Russian joke has it, peasant Ivan is jealous of neighbor Boris, because Boris has a goat. A fairy comes along and offers Ivan a single wish. What does he wish for? That Boris's goat should drop dead." (p. 518)