Monday, July 25, 2016

Jacob Levy Review's Sven Beckert's Empire of Cotton

See Cotton, Coercion, and Capitalism: A sweeping history aims to change the way we think about the origins of capitalism. Excerpt:
"Even the book's valuable central chapters are hardly flawless. All too often, Beckert's focus on cotton leads him to ignore other industrial sectors that might compete with it for land, labor, capital, and political power. The last, at least, is given some attention in the context of the run-up to the Civil War. And he is clear enough that subsistence agriculture and traditional cotton farming and weaving competed, often successfully, with the cotton monoculture and with industrial spinning and weaving. But once industrialism takes hold, other sectors become invisible.

This might not be a serious problem in telling the history of the first, cotton- and textile-led, industrial revolution. But it gets progressively worse as time goes on, and is a source of serious confusion by the time Beckert discusses rich countries' 20th-century shift out of textile manufacturing. The idea that land, labor, and capital could increasingly find higher returns elsewhere in growing economies simply plays no part in his explanation for this transformation, even though by now it is a familiar thought that developing countries tend to grow out of an early emphasis on textiles as they move up the value chain.

This neglect of other sectors also means that protectionist tariffs and other trade barriers occupy a very strange place in the book, which presents them as apparently costless boons to each country's cotton manufacturing. This was, of course, how the cotton industrialists themselves described the protections they sought, and Beckert has immersed himself in their documentary history. But that is no excuse for treating their word as the last word, for not looking at where the costs fell. In his eagerness to explode myths and show that capitalism emerged out of state planning, Beckert almost certainly overemphasizes the importance of protectionist industrial policy. His own account of the jaw-dropping advances in productivity brought on by early technological improvements—a 370-fold increase in spinning productivity in 30 years in Britain, for example—is easily enough to explain revolutionary economic transformation.

While he exhaustively documents interventions by European states to subsidize and protect their domestic cotton industries in order to show that capitalism was centrally dependent on the emerging modern state, Beckert does very little to establish the actual importance of such interventions compared with the scale of the underlying economic and technological changes. Indeed, he writes that of all the "market making" activities that states engaged in, the "most important of all" were "the road building, canal digging, and railway construction that characterized assertive states in the first half of the nineteenth century." But these "most important" interventions occupy two sentences, a tiny fraction of the space given to protectionism and various forms of industrial policy. And the costs of protectionist policies to other sectors of each country's economy—including its industrial economy—go unmentioned, as if cotton were not only the most important part of capitalism but the whole thing.

But at its best this is an extraordinary book that sets a new standard for history across long periods of time and worldwide space. If Hayek is right about the influence of the historians, Beckert's text may well re-set the terms for how the history of capitalism is understood for a generation to come. Defenders of modern market economies have been issued a powerful challenge, and one worth meeting."

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