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

by David S. Landes

  4. Cf. Peyrefitte, Du “miracle,” pp. 146-47.

  5. Cf. Israel, The Dutch Republic, pp. 183-84.

  6. Directors to Admiral Pieter Verhoef, 29 March 1608, cited in Masselman, Cradle of Colonialism, pp. 257-58. The anticipated deadline for a territorial freeze was 1 September 1609. On profit from rare spices, see Prakash, “Dutch East India Company,” p. 189 and n. 6.

  7. J. P. Cocn to the Heeren XVII (the board of directors of the VOC), 27 December 1614, cited by Boxer, Dutch Seaborne Empire, p. 107. On the career of Coen, see Masselman, Cradle of Colonialism.

  8. . P. Coen to the Heeren XVII, in Boxer, Dutch Seaborne Empire, p. 107.

  9. Cf. C. P. Thunberg, Travels in Europe, Africa and Asia, 1770-1779, I, 277, cited in Boxer, Dutch Seaborne Empire, pp. 238-39.

  10. Hannay, The Great Chartered Companies, cited in Boxer, Dutch Seaborne Empire, pp. 225-26.

  11. Furnivall, Netherlands Indies, p. 49.

  12. Early on, in the 1620s, the VOC apparently accepted to share with the English its monopoly in the Spice Islands, on condition that the English share the cost of garrisoning the area. The English found it cheaper to withdraw—Prakash, “Dutch East India Company,” p. 188.

  13. Furnivall, Netherlands India, p. 39.

  14. In regard to English (British) trade with the North American colonies, Adam Smith reasons that monopoly due to the navigation acts raised the rate of profit above what it would have been in a free market—Wealth of Nations, Book IV, ch. 7, Part 3. But he does not factor in the effect on revenue in the colonies and hence on tax revenues to the mother country. Had he done so, he would have found one more reason to disapprove of such interference with the market.

  15. Furnivall, Netherlands India, p. 39; Vlekke, Nusantara, pp. 203-04.

  16. Wealth of Nations, Book III, ch. 7, Part 3.

  17. Braudel, Civilisation matérielle, III: Le temps du monde, p. 191.

  18. Braudel notes (ibid.) that Johannes Hudde, chairman of the board at the end of the seventeenth century, was well aware of the difficulty and tried to revise (transform) the system of accounts. He never succeeded. “For a thousand reasons and real difficulties. But perhaps also because the directors of the Company were not keen on publishing clear accounts.” Opacity has its advantages. This too is not unknown in modern business management, the more so when there are conflicts of interest among owners, directors, and managers.

  CHAPTER 11

  1. Sainsbury, ed., Calendar of State Papers, East Indies, para. 321, cited in Masselman, Cradle of Colonialism, p. 281.

  2. The English, building on an imperial firman exempting them from custom duties, took all manner of merchants under their protection and sold them passes, while levying upon agents and representatives of the Nawab and taxing land transfers and marriages in the area under their control. The result: a constant outcry at the court of Bengal that made war inevitable—Edwardes, Battle of Plassey, pp. 23-24, citing Captain Rennie, in 1756.

  3. Cited in Bhattacharya, East India Company, p. 19 f.

  4. Both ibid., p. 22.

  5. Edwardes, Battle of Plassey, p. 24.

  6. Chaudhuri, Trading World of Asia, p. 195.

  7. On all this, see Steensgaard, “Trade of England,” pp. 123-26. His Table 3.8 shows summary estimates of imports of Indian (plus some Chinese) textiles into Europe, 1651-1760, by VOC and EIC. These data show that the EIC was in a stronger position than its rivals even before the Battle of Plassey. Steensgaard attributes this among other things to the greater decentralization of the English company and the initiative allowed its agents in the field.

  8. Journal of the House of Commons, 14 February 1704, XIV, 336, cited in Chaudhuri, Trading World of Asia, p. 277.

  9. Moreland, India at the Death of Akbar, pp. 9-22; cited in Habib, “Potentialities,” p. 54, n. 6.

  10. Habib, “Population,” p. 167, gives a probable figure of “a little under 150 million in 1600.” Habib, “Potentialities,” pp. 34-35. Comparing 1600 and 1900, Habib argues that, balancing abundant land in the earlier period (hence higher average fertility) against increased social overhead capital in the later (British investments in irrigation canals, railroads, etc.), and allowing for stagnant techniques of cultivation over the interval, one may infer that productivity per head in Indian agriculture was at least as high at the earlier date as at the later. He also thinks that per capita productivity in Moghul India was “not in any way backward when compared with other contemporary societies, including those of western Europe.” I think this unlikely. For similar arguments, cf. Parthasarathi, “Rethinking Wages.”

  11. Kautsky, Politics, p. 188, citing Lybyer, The Government of the Ottoman Empire, p. 295. And Kautsky points out that since these estimates were based on pre-World War I dollars, one would have to multiply them by 10 to convert to 1981 values. My own multiple would be 20 or 25 to match 1994 values.

  12. Lybyer, Government, p. 293, quotes Alexander Dow, The History of Hindostan, 3 vols. (London, 1770-72), that “to be born a prince” of the Moghul empire was “a misfortune of the worst and most embarrassing kind. He must die by clemency, or wade through the blood of his family to safety and empire.” Cited in Kautsky, Politics, p. 240; he also quotes Herbert A. Gibbons, The Foundation of the Ottoman Empire, p. 180, who refers to the theological sanction for these bloody intrafamilial conflicts: “The new emir justified this crime by a verse conveniently found for him by his theologians in the Koran: ‘So often as they return to sedition, they shall be subverted therein; and if they depart not from you, and offer you peace and restrain their hands from warring against you, take them and kill them wheresoever ye find them’ (Sura IV, verse 94). They declared that the temptation to treason and revolt was always present in the brothers of the ruler, and that murder was better than sedition.”

  13. On the huge personal fortunes of the Moghul ruling class and the consequences of their systematic hoarding, see Raychaudhuri, “The Mughal Empire,” p. 183. The ultimate beneficiaries were the British, who pensioned off the local potentates and still had plenty to spare for the Raj (the British government in India) and themselves.

  14. Cf., among many others, Chaudhury, “Trade, Bullion and Conquest.” At stake here are larger issues about the role of the Europeans in a world already prosperous: Why so much fuss about them? Who needed them?

  15. Cf. Root, “Le marché des droits de propriété,” p. 299.

  16. J. Ovington, A Voyage to Surat in the Year 1689, ed. H. G. Rawlinson (London, 1929), cited by Raychaudhuri, “The Mughal Empire,” p. 185, who calls this description of “fear and servitude” “typical of a hundred others.”

  17. Macaulay, “Lord Clive,” p. 222.

  18. On the business interests of the company and its agents, many of them engaged in all manner of private enterprises, and the British desire to help the local government into friendly hands, see Chaudhury, “Trade, Bullion and Conquest,” pp. 27-30.

  19. The quote is from a letter of 9 April 1757 from Luke Scrafton to “Clive’s confidant” John Walsh—Chaudhury, “Trade, Bullion and Conquest,” p. 28.

  20. Cf. Adas, “‘High Imperialism’ and the ‘New History,’” pp. 9-10; also Edwards, Battle of Plassey.

  21. Keay, Honourable Company, pp. 318-19.

  22. Macaulay, “Clive,” p. 253.

  23. Ibid., p. 250.

  24. Marshall, Problems of Empire, p. 60.

  25. Cf. Pearson, “India and the Indian Ocean,” p. 72: “For the sixteenth century, we are distressingly dependent on European sources.”

  26. Habib, Agrarian System, pp. 90, 350, 390. The latter story is from John Fryer, A New Account of East India and Persia being Nine Years’ Travels, 1672-81. The whole is cited from Kautsky, Politics of Aristocratic Empires, p. 103, n. 14.

  27. Thus Andre Wink affirms that “at the dawn of the Industrial Revolution income per capita was possibly higher in many parts of Asia than in Europe.”—Wink, “‘Al-Hind,’” p. 65. Cf. Bairoch, “Ecarts internationaux,” and “The
Main Trends in National Economic Disparities,” p. 7. Also Parthasarathi, “Rethinking Wages.”

  28. Cf. Alam, “How Rich Were the Advanced Countries in 1760 After All?”

  29. Macaualay, “Clive,” p. 228.

  CHAPTER 12

  1. Thus Salaman, History and Social Influence; and Langer, “Europe’s Initial Population Explosion.”

  2. And not only the early centuries. Cf. S. K. Coll, “Anti-Malaria Drugs Post Hard Choice for Parents,” Int. Herald-Tribune, 18 October 1996, p. 11.

  3. Curtin, “Epidemiology and the Slave Trade,” Table 1, p. 203, cited in Sheridan, Doctors and Slaves, p. 12. These figures are based on the mortality of British military personnel, white and black, posted to different parts of the world, 1817-36. On the assumption of some learning, death rates were presumably lower then than they had been in the seventeenth and eighteenth centuries.

  4. Cited by Edwy Plénel, “Le conquérant oublié,” Le Monde, 1-2 September 1991, p. 2. One can find similar orgies of destructive self-indulgence among the oil-rich countries of the late twentieth century.

  5. Spanish industry was not equal to that of Italy or the countries of northwestern Europe; but neither was it negligible in the sixteenth century. Cf. Peyrefitte, Société, p. 134. On shrinkage in the seventeenth, see Lynch, Hispanic World, pp. 210 ff.

  6. Alfonso Nuñez de Castro, quoted in Cipolla, Before the Industrial Revolution, p. 251.

  7. Cited in Lewis, Muslim Discovery, p. 197. The Italian historian and statesman Francesco Guicciardini said much the same thing, though he put it in terms of who got the value added. Guicciardini, Relazione di Spagna, p. 131, quoted in Cipolla, Before the Industrial Revolution, p. 250.

  8. Bernaldez, ch. cxii, p. 257, cited in Bernand and Gruzinski, Histoire du nouveau monde, I, 78-79, 643. Note that in some cultures, tanning and leather trades have been traditionally despised as intrinsically foul and degrading; thus Japan, which included such workers among the eta, a group of social untouchables that also included undertakers and gravediggers. In Ottoman Turkey, a society that like Spain cultivated the arts and habits of war, industrial crafts were primarily in the hands of religious minorities, notably the Armenians.

  9. Cf. Peyrefitte, Société, pp. 141-42.

  10. On the riches and trade of the North Atlantic, see Axtell, “At the Water’s Edge: Trading in the Sixteenth Century,” in his After Columbus, pp. 144-81. Of whale oil, he writes (p. 146), it was “as profitable as liquid gold” (but much less tempting to freebooters). “For whale oil lit the lamps of Europe, made soap and soup, lubricated everything from frying pans to clocks, and, since the whale was classified as a fish, served as lard de caréme—Lenten fat—during holy days when meat products were prohibited.”

  11. On the decline of the Italian textile manufacture (far and away the principal branch of industrial production), see Cipolla, Before the Industrial Revolution, pp. 253-63. We have much to learn about new industries taking hold in smaller towns and even in the countryside. Cf. Ciriacono, “The Venetian Economy” and “Venise et la Venetie.” But the older urban centers seem to have used economic and political power to keep these in their modest place. See Sella, Crisis and Continuity, and Moioli, “De-Industrialization in Lombardy.”

  12. [Anthony Walker], The Holy Life of Mrs Elizabeth Walker (1690), cited in Thomas, “Cleanliness and Godliness,” p. 56. Thanks to Keith Thomas for making this available in advance of publication.

  13. Baxter, “Of Redeeming Time,” Practical Works, p. 228. Again, thanks to Keith Thomas.

  14. Cf. H. M. Robertson, Aspects of the Rise of Economic Individualism.

  15. On this older, defensive ethic of gentility, see the important article of Arthur Livingston, “Gentleman, Theory of the,” in the Encyclopedia of the Social Sciences. Also Kautsky, Politics of Aristocratic Empires, pp. 177-97.

  16. Candolle, Histoire des sciences et des savants. Some have dismissed these figures on the ground that Candolle’s counting starts in the 1660s, when the scientific revolution was already well under way. Cf. Smith, Science and Society, p. 48. Such an objection does not, of course, rule out the possibility that a similar survey of the earlier period might yield similar results; but the implication is that it would not. The point is that Candolle had countable data to work with after the founding of the scientific academies. It would seem unreasonable to dismiss them for the period they deal with, where Protestant leadership in science would seem to be a fact. Whether the explanation lies in Protestantism or Catholic hostility to the new science, or both, is another matter.

  17. Cited by Mason, “Scientific Revolution.”

  18. This is the Swedish historian Kurt Samuelsson, in a slim monograph translated into English as Religion and Economic Action.

  19. Samuelsson’s statistical critique of Weber’s data on Baden, for example, is unper-suasive, although he makes the point that Protestants were likelier to live in urban areas where technical schools were invariably located. But that was no accident either.

  20. Landes, Revolution in Time, pp. 92-93. Cf. de Vries, Dutch Rural Economy, p. 219: on the basis of household inventories, possession of clocks in the Leewarderadeel district rose from 2 percent in 1677-86 to 70.5 percent in 1711-50. Of course these were households sufficiently well off to make an inventory after death.

  21. Cf. Michaud, “Orleans au XVIIP siècle,” p. 11. Even so, certain orders of chivalry were closed to such new men, and such exclusions worked against these efforts to honor business success, to the point where some argued for the creation of a new kind of order by way of raising the status of these underappreciated achievers. These protestations of esteem do not ring hollow; but they tell us that other people did not agree.

  22. Bennassar, L’Inquisition espagnole, ch. viii: “Refus de la Réforme,” especially pp. 289-90. Once again Spain’s reaction was shaped, to its own cost, by its long history of uncompromising religious conformity and the passions it engendered. Cf. Goodman, “Scientific Revolution,” pp. 163-64, who suggests that the dearth of Old Catholic physicians in sixteenth-century Spain may have reflected the racial (congenital) link that some Spaniards made between Jewishness and medicine. “It could well be that, in a society which gave esteem to those who could establish freedom from Jewish or Moorish descent, the Old Christians avoided the medical profession in case success there might arouse suspicions of Jewish blood.” Poisoned bread upon the waters.

  23. Goodman, “Scientific Revolution in Spain and Portugal,” in Porter and Teich, eds., Scientific Revolution, p. 172. Some Spanish historians, seeking to defend the indefensible, have argued that outside universities were so poor and hidebound that Spanish students were not missing much. Perhaps; although Protestant universities, in England and Holland for example, were substantially better. But drinking at the fountain of heresy was simply out of the question. Cf. Smith, Wealth of Nations, Book V, ch. i, Part 3, Article 3d, on the drain of talent from university teaching to the Church in Catholic countries.

  24. Crow, Spain: The Root and the Flower, p. 149.

  25. In his Carta filosofica, medico-chymica (Madrid, 1687), cited by Goodman, “Scientific Revolution,” p. 173.

  26. Trevor-Roper, “Religion, the Reformation and Social Change,” in the collection of essays of the same title. The paper was originally delivered in 1961 to the Fifth Irish Conference of Historians in Galway. It must have upset many listeners.

  27. On Bruno and the Church campaign to domesticate science, see Minois, L’Eglise et la science, I, ch. ix: “Contre-Réforme et reprise en main des sciences.” On the provenance of Bruno’s “science,” see Yates, Giordano Bruno, and the discussion in Copen-haver, “Natural Magic.”

  28. Grenet, Passion des astres, p. 87.

  29. Ibid., p. 79.

  30. See especially La Lumia, Histoire de l’expulsion des Juifs de Sicile.

  CHAPTER 13

  1. OED, s.v. Revolution, III, 6, b.

  2. On the breast wheel: Mokyr, Lever of Riches, pp. 90-92. On waterpowe
r vs. steam: Tunzelmann, Steam Power; and Greenberg, “Reassessing the Power Patterns.”

  3. This is the traditional explanation—see Ashton, Iron and Steel. Hyde, Technological Change, p. 40, argues that this was not the reason; rather that Darby succeeded because he knew how to cast thin-walled iron vessels using sand instead of loam, thereby saving one half the metal, and these could be more easily made from coke-blast pig-

  4. John U. Nef, Rise of the British Coal Industry. The scholar who has argued most cogently for the importance of fossil fuel and steampower is E. A. Wrigley. See his Continuity, Chance and Change and his essay on “The Classical Economists, the Stationary State, and the Industrial Revolution,” p. 31. Adam Smith, Wealth of Nations, Book V, ch. 2, Art. 4, notes the tendency of British industry to concentrate near coal deposits. He attributes it to the effect of cheap fuel on wages (they could be lower) and on the costs of such fuel-intensive (heat-using) industries as glass and iron. He does not speak of coal as fuel for engines and machines; for that matter, he does not speak of steam engines and says little about machines. Smith had his blind spots.

  5. This is the estimate of A. P. Usher, History of Mechanical Inventions.

  6. A. Rees, The Cyclopaedia, Vol. 38 (London, 1819), cited in Randall, Before the Luddites, p. 13.

  7. Cited in Kindleberger, World Economic Primacy, viii, 6.

  8. This sequence led A. P. Usher, the pioneer student of the links between technology and industry, to track the progress and timing of the Industrial Revolution by just these data—Industrial History, pp. 304-13.

  9. Ibid., p. 306.

  10. Thus T. S. Ashton, whose classic and “classy” little handbook, The Industrial Revolution, takes as its terminal dates 1760 and 1830.

  11. Compare the similar analysis by Christopher Freeman of the slowdown in productivity gains in advanced industrial countries in the 1970s and 1980s—The Economics of Hope, pp. 86-89.

  12. Cf. Landes, “What Room for Accident in History?”

  13. McCloskey, “Statics, Dynamics, and Persuasion.”