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Why are some countries rich and others poor? In 1500, global income differences were small, but disparities have grown dramatically since Columbus reached America. In this Very Short Introduction, Robert C. Allen shows how the interplay of geography, globalization, technological change, and economic policy has determined the wealth and poverty of nations. Allen shows how the industrial revolution was Britain's path-breaking response to the challenge of globalization. Western Europe and North America joined ...
Why are some countries rich and others poor? In 1500, global income differences were small, but disparities have grown dramatically since Columbus reached America. In this Very Short Introduction, Robert C. Allen shows how the interplay of geography, globalization, technological change, and economic policy has determined the wealth and poverty of nations. Allen shows how the industrial revolution was Britain's path-breaking response to the challenge of globalization. Western Europe and North America joined Britain to form a club of rich nations, pursuing four polices—creating a national market by abolishing internal tariffs and investing in transportation, erecting an external tariff to protect their fledgling industries from British competition, creating banks to stabilize the currency and mobilize domestic savings for investment, and promoting mass education to prepare people for industrial work. Together these countries pioneered new technologies that have made them ever richer. A few countries—Japan, Soviet Russia, South Korea, Taiwan, and perhaps China—have caught up with the West through creative responses to the technological challenge and with Big Push industrialization that has achieved rapid growth through coordinated investment.
1. The great divergence
2. The rise of the west
3. The industrial revolution
4. Continental industrialization and the 20th century
5. The great empires
6. The Americas
8. East Asia
Posted March 22, 2012
Ever since the seminal eponymous work by Adam Smith, the wealth of nations has been one of the most intriguing topics of intellectual curiosity and research in both the economics and history. For the most of human history the relative wealth of individuals around the world did not vary much. Poor peasants in the Roman empire had just about enough resources to satisfy their most basic needs, and the same can be said about the, say, Australian aborigines at the same point in time. All of this started to change rater dramatically around the year 1500 AD. At around that time Europe started to diverge from the rest of the world, and this trend has continued to this day. Some parts of the world that were under the European influence managed to keep the pace with Europe, but many had settled into the slower developmental progress. Why was Europe in particular able to advance so rapidly, and what has happened in the other parts of the world, are some of the questions that “Global Economic History – A Very Short Introduction” tries to answer.
If you have never thought about the abovementioned questions, then the material that is presented in this short book can be revelatory. For such a small resource this book contains a remarkable collection of charts, graphs, and other data that can shed a lot of light on the way that wealth and prosperity can be defined through history. Robert Allen bases his analysis on this wealth of data and offers his insights into their meaning in the context of economic development. Economics is notorious for the variety of often opposing views that are invoked to elucidate the real-world phenomena, and it’s virtually certain that this short introduction will have its own share of detractors on at least some issues. (For instance, I question the spread of universal elementary education as a cause –rather than the consequence – of economic development.) Nonetheless, Allen presents his points from a very economically sound perspective, and all of the points in this book are well worth paying heed to. The book offers a lot of credibility to the “usual suspects” of the economic development – geography, natural resources, industrialization, functioning institutions, etc. – but it also challenges many widespread assumptions about them, and gives credence to a few others.
One of the most remarkable aspects of this book is its breadth; it is not just a book based on a few case studies, but an attempt to give a convincing account of the economic development in the entire world over the past half a millennium. In my estimation, given the constraints of the very short introduction format, it manages this aim remarkably well. The book is an invaluable and sober introductory resource that provides a lot of insight into the economic development of nations, and manages to accomplish this without resorting to cheap overarching ideological crutches. It is well worth reading for anyone with even a passing interest in these topics.
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