Book Review
The World That Trade Created: Society, Culture, and the World Economy, 1400 to the Present
The World That Trade Created: Society, Culture, and the World Economy, 1400 to the Present. By KENNETH POMERANZ and STEVEN TOPIK. Armonk, N.Y.: M. E. Sharpe, 1999. Pp. xvii + 256. $ 34.95 (cloth).
Kenneth Pomeranz and Steven Topik's book is a collection of articles previously published in the business magazine World Trade. Will Swain originated the venture and some of his pieces are included. The nature of the original publication excluded the traditional scholarly apparatus, and the authors decided to keep it that way, with the exception of a bibliography to provide further information on the topics and an index. But to discharge the book from the ranks of rigorous scholarship would be a serious mistake. Historians and social scientists would greatly benefit from the book's information, insights, and innovative theoretical approach. The authors prove persuasively how world trade was an essential process of the last five hundred years of history. These were the centuries in which all populated continents began to interact in a continuous and incremental way. Plants, animals, germs, people, commodities, and ideas were exchanged among continents transforming the life and landscapes of world population.
We are telling the story of the ebbs and flows of the creation of the world economy, done by people with cultures, not by homo economicus or by capital itself. The creation of trade conventions, variations in knowledge and goals, the inter-linking of politics and economics, social organization, and culture all are given attention. (p. xv)
Pomeranz and Topik state the central ideas of the book in the Introduction. Europeans were not the single entrepreneurs in the world economy. Non-Europeans played key roles in its history. Europeans often used violence to gain economic control. There are many examples in the book, such as the Atlantic slave trade and the Opium Wars. Powerful markets were established during this last five hundred years: They "were not natural or inevitable, always latent and waiting to be [End Page 482] 'opened up'; rather markets are, for better or worse, socially constructed and socially embedded" (p. xiv). The markets appear not to be a place of exchange with institutions regulating free agents and benefiting all participants. Activities like piracy, slavery, and the drug trade have been fundamental in the economic history of our world (for example, working in sugar plantations where African slaves provided essential foodstuffs to Britain, or the "Opium Wars" which "opened" the Chinese market, and more). If this kind of economic behavior was highly rewarded, the emerging global economy was not a moral place.
The book is organized with seven major themes: 1) The early modern market institutions; 2) the role of violence in capital accumulation and market formation; 3) the drug trade (coffee, tobacco, and opium) and their contribution to long distance trade; 4) the commodities involved; 5) transportation; 6) the standardization of money, time, measures, and the genesis of corporations; and 7) the final chapter on the industrialization process in different countries. Each chapter has an introductory essay outlining the major issues and discusses each topic followed by case studies to illuminate the crucial points in the authors' arguments.
Pomeranz and Topik masterfully weave their new perspectives with a variety of facts and anecdotes that make reading the text a genuine pleasure. A good example is the history of coffee related in Chapter 3, "The Economic Culture of Drugs" (pp. 86-94). Coffee began its recorded history in Yemen in the city of Mocca about 1400, and in the second half of the twentieth century the United Sates was the biggest consumer of such a brew: "By the 1950s, Americans drank a fifth more coffee annually that all of the rest of the world combined" (p. 92). Coffee was used by the mystical Sufis in Arabia--and coffeehouses became places of political intrigue, like the Paris Café Foy where the assault of the Bastille was planned. In London merchants gathered at Jonathan's and Garraway's establishments where, besides drinking coffee, they bought and sold stocks; "Lloyd's café became the world's largest insurance company" (p. 90). In Sweden King Gustav III pardoned the capital sentence to twin brothers on the condition that one of them drink coffee and the other tea. "The tea drinker died first--at age eighty-three--and Sweden became the world's largest per capita consumer of coffee" (p. 90). The demand for the new beverage was entangled in the slave revolt in Haiti during the French Revolution. The end of the Haiti coffee production stimulated Brazilian production and great numbers of slaves were imported from Africa to work on the plantations (p. 93).
The Treaty of Nanjing, ending a three-year war, brought into submission [End Page 483] the Qing dynasty, and, if we agree with Marx, propelled China into world history. John King Fairbank celebrated the British victory with the following words quoted in the text: "Britain represented all the Western states in demanding diplomatic equality and commercial opportunity" (p. 102). Such positive opinions do not explain the reasons behind British aggression. The surpluses generated in the Indo-Chinese opium trade made possible the prominent British position as a consumer and propelled England as a power in the financial markets. Without the opium trade, "the Atlantic economy would have grown much more slowly" (p. 105). The question remains how China paid for this trade: the possible answer is found in the world economy. Chinese workers from sugar plantations in Cuba and Hawaii, miners in the California gold rush, and merchants overseas sent remittances to their families in China (p. 105).
Pomeranz and Topik in Chapter 7 (pp. 214-39) discuss the fundamental role played by trade in the origins of the Industrial Revolution, the diverse consequences of participating in global exchanges, and the historical complexities that impeded the establishment of the "free trade" postulated by standard economic theory. They show how factory life began in the Caribbean's sugar plantations; how England's cotton industry was dependent on foreign trade for its cotton supply, and how after losing their competitive advantage, India provided a protected market essential to British manufacturers. Trade was also crucial to provide European workers with the foodstuffs needed when the peasants became industrial workers. Industrialization in Japan followed a different path. Strategic innovations in rice and silk production supplied most of Japan's exports and fed the urban population. Silk "made up 40 percent of Japanese exports year after year until 1900, and was still over 30 percent on the eve of World War II" (p. 235). At the same time peasants' taxes were used to build the necessary infrastructure.
The editor writes in the Foreword to The World that Trade Created: "This volume is an example of the new economic approach to world history" (p. xi). This brief history of what today is called "globalization" is one of the best examples of how intellectually relevant the relatively new approach of "world history" could be. The historical perspective taken by Pomeranz and Topik also implies how traditional economic ideas are inadequate to explain historical developments. For instance, the neoclassical and Marxist "labor theory of value" doesn't apply well to forests (p. 115). Market activities were thought by Adam Smith and David Ricardo to be the way to dissuade countries from [End Page 484] engaging in wars. Obviously they were wrong (p. 147). Ricardian's theory of "comparative advantage" as a theoretical base for the universal benefits of "free trade" doesn't agree with the tariffs imposed by United States and Germany during their nineteenth-century industrial growth (p. 218). And current notions of economic development conflict with ecological stability (p. 114). "In fact these essays serve as an important corrective to a tendency in academic and popular media to abstract markets from human motive and agency" (p. xi).
Historians, social scientists in general, and students at all levels should read this excellent introduction to the history of world trade. The publication of a cheaper paperback edition would greatly help instructors looking for reading materials but also mindful of students' budgets.
ARTURO GIRALDEZ
University of the Pacific
