Ronald Findlay and Kevin O'Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millenium (2007)

I read this book several years ago, but recent reading and discussions about the origins and changes in capitalism and my current class on Wealth and Power since 1945 led me to think it was time for a rereading. The book strikes a nice balance between historical description and narration, on the one hand, and theoretical explanation and argument, on the other. I learned a lot in both regards. For reasons that might have been explained more fully, the authors build their account around seven geographic-cultural regions in Eurasia, studying their interactions in several phases, as well as trade within regions and interactions with areas outside the seven, above all the Americas starting in 1492. At the broadest level, Findlay and O'Rourke argue that "geopolitical frameworks" created by conquest and power - the Islamic expansion, Genghis Khan, the Europeans after 1492, the British Royal Navy from the 18th century - establish the basic conditions for trade, until the tensions of a given framework lead to its revision or overthrow. Trade contributes to economic growth by facilitating an ever finer division of labor (Smithian growth) but also by providing incentives for technological innovation (Solowian growth). Findlay and O'Rourke employ traditional economic concepts such as comparative advantage and factor market effects (Heckscher-Ohlin), but also are comfortable describing the Islamic World during its golden age (700-1100) and Europe as an instance of center-periphery relations, and also speak of the Europeans' comparative advantage in violence around 1500. The authors have read very widely in economic and political history and they are not inclined to force the messiness of the real world into a Procrustean bed of any single theory. At the same time, their interest in "middle-range" theories is very fruitful and persuasive. For example, when they address the question of the relationship between British colonies and the industrial revolution, they give Eric Williams' argument in Capitalism and Slavery a respectful hearing, before, however, making the case that the connection had less to do with the profits generated by imperialism and more to do with supply- and demand-side elasticities. Without the "ghost acres" European powers gained in the Americas, key inputs in manufacturing such as cotton would have quickly become prohibitively expensive; without an imperial market, the flood of textiles produced by the new machines and factories would have pushed the price too far down. When it comes to the question Why Europe, and not China?, Findlay and O'Rourke evaluate several plausible explanations in what they insist much be a multi-causal explanation. As for Why England?, they reject the "neo-Whig" explanation of Douglass North and others that the Glorious Revolution gave Englishmen more secure property rights. Rather, they cautiously suggest that it was England's global power - itself due in part to the Glorious Revolution's establishment of Parliamentary supremacy and hence the British state's ability to borrow far more money than its European rivals - which created the aforementioned elastic global factor and product markets. In the coming years, I am sure that I will again be dipping into this instructive and stimulating book. p.s. I knew Kevin when he was a graduate student at Harvard and a resident of Lowell House, where I lived after freshman year. He was very friendly and unassuming - and, apparently, a superb economic historian.