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ahorbinskiBibliographic Data: Pomeranz, Kenneth. The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton, NJ: Princeton University Press, 2000.
Main Argument: I'm going to quote the first sentence, which to me deserves to be as familiar as the opening line of Pride and Prejudice:
Historiographical Engagement: This is a book that is totally immersed in many notable books in the social sciences in the past century, mostly to argue with and overcome them. R. Bin Wong's China Transformed gets a favorable mention, and Pomeranz builds explicitly on the work of people like Tom Smith, William Wayne Farris, and Kären Wigen and many others, without whose research on China and Japan this book could not have been written.
Introduction: Argument, Sources, Examples In the first of many complex chapters, Pomeranz begins by explicating the problems with the "either/or framework" in which "either a Europe-centered world system carrying out essential primitive accumulation overseas or endogenous European growth" are "called upon to explain almost everything" (5). As Pomeranz notes, recent scholarship in European economic history has become even more inward looking for several reasons (finding market forces earlier in European history, reducing European development to market-driven growth alone, and treating the Industrial Revolution as a European phenomenon), which tendency has unhelpful consequences such as eliding the crucial role of overseas empire and fudging the units of comparison. Britain is not really comparable to India or China; those large units are much more properly compared with Europe as a whole, and Britain with certain regions within it such as the Yangzi Delta. Rather than look for things that made Europe "different," it is better to look for things that made England not like the Yangzi Delta. Visualizing the Industrial Revolution in Britain as a rupture that needs to be explained allows us to see the question of when Europe became uniquely rich as being closely linked to the question of its escape from Malthusian (and Smithian) limits into sustained per capita economic growth. It also reminds us that industrial capitalism is solely a phenomenon of the 1800s, and that European industrialization was quite limited outside of Britain until at least 1860--both important facts that are often forgotten in constructing these arguments.
Chapter 1: Argument, Sources, Examples This chapter explores "Population, Capital Accumulation, and Technology in Explanations of European Development." The main title is "Europe Before Asia?" and it seeks to demolish the general, mainstream argument that "industrialization was not the point at which European economic history departed from other Old World trajectories; instead, it represents the full flowering of differences that had been more subtly building for centuries" (31). The argument is that "Europeans" (whoever they actually were) had advantages in capital accumulation, particularly livestock; that they were healthier and had more stable population levels (NB: this argument makes no sense to anyone who actually knows anything about early modern East Asia, which most Europeanists don't), and that they had technological advantages as well. As Pomeranz writes, "in fact there is little evidence to suggest a quantitative advantage in western Europe's capital stock before 1800 or a set of durable circumstances--demographic or otherwise--that gave Europe a significant edge in capital accumulation" (ibid). Nor were they healthier, longer-lived, or more productive. Europe also had significant technological disadvantages in comparison to the most advanced areas of East Asia, particularly "in areas of agriculture, land management, and the inefficient use of certain land-intensive products (especially fuel wood)" (32). Moreover, more livestock is only an advantage in European-style farming, which is far more power-intensive than rice-farming at several stages of the process. Although livestock were also used for transport, Asia still had an overall transport advantage due to its riverine networks. The grain trade of Shandong province per annum was comparable to all of Europe's long-distance grain trading. As for lifespan, rural Japanese lived at least as long as Europeans, and probably longer; the average Chinese person's lifespan was also comparable, or possibly better, than the average European's. China's death rates were lower than European ones overall, and birth rates in east Asia were lower, by choice, than European ones for almost all of this period. The picture that emerges in response to the question of "technology" is more complex--clearly Europeans had an obvious advantage by 1850 (though the degree of the adoption of this technology was not universal). However, as Pomeranz concludes, "non-European societies retained significant advantages in many areas [i.e. agriculture, pottery and textile production] even in the late 18thC, and it was not inevitable that they would turn out to seem relatively unimportant in the long run" (47). Moreover, the case of spinning cellars in north China shows that even in the absence of a "scientific culture" (i.e. the republic of letters of the Enlightenment) it was possible for technological innovations to spread like wildfire even among the poorest members of east Asian societies. Beat that with a stick, Europeanists. Pomeranz spends the remainder of the chapter evaluating the claims that "the crucial phenomenon was the rise of a labor-saving emphasis in European technological innovation" (49). [See Andre Gunder Frank's ReORIENT for a pro-Asia take on this argument: essentially, the idea goes that Euroamerican technological innovation was driven by employers' desperation to lower wage bills and replace expensive people with cheap machines. Note the anachronisms inherent.] The argument fails because a) "it seems likely that average incomes in Japan, China and parts of southeast Asia were comparable to (or higher than) those in western Europe even in the late 18thC" (49). B) The evidence for very cheap wage labor in east Asia is far from conclusive, and as Pomeranz notes, it is anachronistic to project backwards the idea that industrialization is always labor saving and capital demanding; this was not the declared goal of patentees in 18thC England, for example, and was probably not the case in the Industrial Revolution as a whole. C) There is not much real evidence that low wage costs inhibit the adoption of labor-saving technology at any point, even the present day. The case of the crucial sector of textile production, however, is a qualified exception, which shows the importance of not attempting to generalize about "industrialization" as a whole. Instead, Pomeranz argues, "a big part of the European achievement in the Industrial Revolution was to escape a long-standing pattern in which all growth placed significant incremental demands on the land" (57), primarily through the increased use of coal, the adoption of New World food crops for greatly increased calories per acre, the adoption of colonially-tested and colonially-proven techniques of land and forest management, and the application of existing know-how to overseas territories: "empire helped Europe erase its technological disadvantage in afro-forestry (through the potato, through ecology, and through numerous important influences on botany), providing crucial imports of knowledge along with the imports of resources" (59). Coal is important enough to deserve its own discussion: it is, Pomeranz says, "the most likely European technological advantage that was purely homegrown, crucial to its 19thC breakthrough, and (unlike textiles) not dependent for its full flowering on European access to overseas resources" (61). There are two interlocking sets of factors which led Britain in particular to leap to the forefront of coal production and then steam engine technology (the two in fact were related through a virtuous cycle). Europe's real technological advantage in the 18thC was not in machines but in gunmaking, and instruments, i.e. clocks and navigational devices (chronometers and sextants). The transfer of the technical knowledge from these sectors to the steam engine radically increased its efficiency and thus its usefulness. Britain in particular was also fortuitously possessed of significant coal deposits close to major population centers. China had possessed this latter constellation of factors earlier in its history--Chinese coal production in 1080 exceeded that of non-Russian Europe in 1700--when the center of China was in the North. But from the years 1100 to 1400, the population centers shifted irrevocably south due to a series of disasters, and although the production of iron eventually recovered, the coal-iron production complex did not. Moreover, the problem of British coal mines (filled with water) was such that it led to the development of the steam engine (the Engine to Move Water By Fire), rather than the problem of Chinese mines (dry to the point of spontaneous combustion), which led to attempts at better ventilation. Europe backed the right horse, by happy contingency, but without additional benefits from overseas territories, even the increasing technical acumen and resource benefits of coal production would not have been enough to allow the continent to escape Smithian/Malthusian limits on economic and population growth.
Chapter 2: Argument, Sources, Examples This chapter looks at "Market Economies in Europe and Asia." Arguing against the idea that "Europe" industrialized first because of its superior market institutions, Pomeranz makes the frankly incendiary claim that "18thC China (and perhaps Japan as well) actually came closer to resembling the neoclassical ideal of a market economy than did western Europe" (70). [NB: In other words, in this chapter Pomeranz is demolishing Philip Huang's "involution" argument.] Contrary to western Europe, in China the overwhelming majority of land was freely alienable since at least the middle of the Ming dynasty, and even in cases of tenant farming, there is no evidence that customary rights prevented farmers from making improvements to the land they worked despite not owning it. By contrast, even in the 19thC at least 50% of England was entailed in family estates and totally inalienable. Here follows a revisitation of the story of Enclosure and How It Caused the Industrial Revolution (those goddamn sheep), with Pomeranz arguing that the idea that land was not a scarce resource means that using total factor productivity to measure the increase in output secondary to enclosure "understates the costs of institutions that stood in the way of enclosures" (77). The rather slow spread of productivity-enhancing agricultural practices in multiple western European countries is unquestionably a "market failure" that requires institutional explanations (what was those Europeans' problem, anyway?). At both ends of Eurasia bound labor was not entirely unknown but had ceased to be economically significant (in Europe, in the most productive economies) by the 18thC, theoretically allowing people to migrate to capital-rich or labor-scarce areas. However, the European labor market was very illiquid compared to China's in that significant legal and economic barriers remained to Euro-American internal migration. In China, however, the state encouraged the migration of over 10 million people in the 17th and 18thC to scare-labor areas. Conversely, European societies that were not horribly capital-scarce made it easier to migrate medium distances to more capital-rich areas than did China. As an added bonus, the Qing state made it a policy to guard against the establishment of monopsonies, thus avoiding the cycle of peasant indebtedness that plagued many English and French producers whose rulers had no such cares. Chinese peasants also "were considerably freer than many of their European counterparts to engage in commercial handicraft production and to sell these manufactures to competing buyers" (86). Most European countries had poorly integrated labor markets (meaning that there was a sharp divide between rural and urban wages) that was not found in China and Japan, another deviation from Smithian efficiency. In terms of family labor, rather than Philip Huang's "involution" argument, it is clear that Jan de Vries' "industrious revolution," in which people in the highest performing societies at both ends of Eurasia expanded output through the application of larger and larger amounts of labor from 1500 to 1800. In Europe, moreover, there is no clear evidence that all this work improved the standard of living much or at all; meat consumption per capita declined from the late medieval period to 1800, and there is no trend for per capita bread consumption in cities in the early modern period. Proto-industrialization, moreover, was as likely to to lead to an economic dead end (in that it indirectly put increasing downward pressure on wages) as to a breakthrough. The same pressures of increasing labor input, decreasing resources, and stagnant living standards are as visible in Europe as they are in China prior to 1800. In Europe as well as in China, moreover, cultural resistance to a perfect economic existence (i.e. all work, no leisure) remained, and is not evidence for "non-industriousness." Both Huang's and Jack Goldstone's "involution" hypotheses depend fundamentally on the notion that Chinese women did not earn the cost of their subsistence, but the available evidence suggests that the male-female wage gap in China was narrower than it was in England (since women were employed in sericulture, which is quite lucrative even as an entirely home-based employment). In conclusion, the most developed parts of Eurasia "shared crucial economic features--commercialization, commodification of goods, land, and labor, market-driven growth, and adjustment by households of both fertility and labor allocation to economic trends" (107). Moreover, these patterns of development in and of themselves were not naturally leading to a breakthrough anywhere.
Chapter 3: Argument, Sources, Examples This chapter, "Luxury Consumption and the Rise of Capitalism," examines arguments that "Europe" got ahead of "Asia" due to arguments about either the "objectification of luxury"--i.e. status increasingly came to be displayed among elites not by large retinues of people but by expensive manufactured objects, thus stimulating production--or about the "transformation of luxury", the process by which former luxury goods became everyday goods first for the middle classes and eventually for the poor. Rather than large durable goods these products are small and quickly consumed, and mostly are the "drug foods" (sugar, cocoa, tobacco, coffee, and tea). Looking at what data there for the consumption of the drug foods suggests that the European advantage in their consumption emerged much later than commonly assumed. In the case of sugar, for example, one of the most blood-soaked and transformative crops in history, "despite using slave labor to grow cheaper sugar, consumption was not on a steady upward trend throughout Europe" (118), and looking at sugar consumption broken down into Europe, Europe ex-Britain, and Britain categories shows again that at least until the 1850s the revolution was British, not European. By contrast, 18thC sugar consumption in non-British Europe stagnated. Chinese sugar consumption was higher than Europe's at least until 1750 and probably until 1800, but declined thereafter while Europe's soared--partly because the Chinese population grew in poorer areas, rather than in richer ones as in Europe, and partly because in Europe sugar became a staple carbohydrate for the lower classes after 1850 due to inadequate grain supply, a transition that it never made in China because grain production kept up with population growth. The story of durable goods is somewhat higher to track due to the variations of the documentary record, but "in Europe, China, Japan, and India [from roughly 1400 to 1800], one finds a striking increase in the quantity and variety of home furnishings, elaborate clothes, eating utensils, and what would today be called 'collectibles' among the wealthiest people" (127). Pomeranz draws on Arjun Appadurai's discussion of a continuum from "fashion systems" to "coupon" or "license systems"; in "fashion systems" anyone can buy status-conferring goods with enough money, while in "license systems" status goods can only be held by those with the social "license" to do so. All societies even today contain elements of both "economy" and "culture" societies, which handily avoids replicating a dichotomy between "materialist moderns" and "anti-materialist unmoderns." Pomeranz sketches out several features of an increasingly consumerist society (increased quantity and velocity of circulation of socially significant goods, increased number of people able to posses them and their ability to acquire them from strangers; increase in imitative consumption and the emergence of different strata of goods aimed at different strata of people; proliferation of discussion about the proper ways to consume these items). There is strong positive evidence for all these things in the core areas of Europe, and strong negative and some positive evidence for the same in core areas of China and Japan, and much less so for India. Quantitative evidence for income distribution across these societies is spotty, but qualitative evidence for peasant demand in core China and Japan certainly exists; taken together, for example, Chinese textile consumption compares quite favorably against that of Europe in the 18thC. Housing presents a different case, one in which core China and Japan are at a disadvantage relative to Europe. Given the uneven spatial distribution of consumerist society and its goods across all these countries, Pomeranz concludes that it at least there is "little reason to think that the gaps between richer and poorer regions were larger in China and Japan than they were in Europe" (149). The question of the consumption of durable luxury goods is more fraught; it is plain that the speed of European fashion in these goods accelerated astronomically beyond that of China and Japan in this period. In both Europe and China the consumption of exotic goods became prestigious, but in Europe these exotic goods (i.e. the drug foods) were often more easily convertible to "everyday luxuries" than comparable exotics in China (i.e. birds' nests), and in Europe exotic goods also encompassed exotic manufactured goods, unlike in China and Japan. What China did import from from the West was silver. [This next part is important, so pay attention.] The trick is that silver in China after 1400 became a store of value, the money of account, and the medium of state payments for the largest economy in the world, because China after 1400 was essentially remonetizing its economy after the disastrous Yuan monetary policy and the chaos of the 14thC had left the country without any widely accepted monetary medium. As Pomeranz says, to get beyond the idea that huge silver imports = cultural conservatism, we need not to treat silver as modern "money" (i.e. a residual store of abstract value used to make up the European "trade deficit") but "as a good: a refined product with a mineral base, which was well suited to an important function and which the West could produce far more cheaply than any place in Asia" (160). As Pomeranz notes, seeing silver as residual store of value reinforces the Orientalist stereotype of the West as the active, desiring agent in the suturing together of the world economy. "But once we think about the dynamic created by changing the monetary base of perhaps as much as 40 percent of the world's economy in this period (once we add in China's tributary states, which were also 'silver-izing'), it becomes hard not see China's silver demand as every bit as much an 'active' force in creating a global economy as was the West's demand for porcelain, tea, and so on" (161). China's voracious demand for silver helps explain the speed of European fashion, as "the West's huge comparative advantage in the export of silver sucked in trendsetting prestige goods from Asia. […]--they paid for silver. […] And, given the way Europe acquired and ran the American silver mines, it reminds us of the tremendous significance of coercion in generating Europe's economic edge" (ibid). In the end, then, in matters of consumption Europe, China, and Japan resembled each other far more than any of them resembled anywhere else.
Chapter 4: Argument, Sources, Examples This chapter discusses "Visible Hands: Firm Structure, Sociopolitical Structure, and 'Capitalism' in Europe and Asia." In this chapter Pomeranz takes on Fernand Braudel and his followers such as K.N. Chaudhuri, who have argued that "the ideal conditions for concentrated capital accumulation--a.k.a. 'capitalism'--included the widespread of development of property rights (including secure rights in financial assets) and competitive markets, but also arrangements that allowed some people to profit by circumventing competitive exchanges, limiting their liability, and securing rights in such no market or anti-market privileges as monopolies and tax farms" (167), and that these things (duh) only happened in Europe. Pomeranz reviews much newer research and points out several interrelated phenomena: Asian merchants competing with Europeans in spheres in which Europeans did not tip the scales their way with violence were quite successful, even without using the "corporation" model developed in Europe to finance New World ventures. (The idea that the corporation is automatically more competitive has an implicit bias towards the climatological model of the Atlantic, which is much different than, say, the Indian Ocean.) Moreover, it could equally be argued that, for example, the Chinese state "interfered less with its merchants than its European counterparts, but also created fewer opportunities and privileged niches of them" (173). (The same statement could be made for Japan until at least the 1760s.) Moreover, new research indicates that financial institutions were not less secure in not-Europe than in Europe. Additionally, looking at interest rates as the sole measure of strength of financial institutions and "cultures of credit" has significant shortcomings, the most important being that "the interest rate was not the only nor even necessarily the most important influence on people's willingness to borrow for investment" (179). The evidence is clear that "none of our core areas suffered from an absolute insufficiency of capital for industrialization" (ibid). Furthermore, early mechanized industry and its growth had very little to do with the corporate form or interest rates altogether: as Pomeranz points out, "The British coal industry, which made possible the most important break with preindustrial constraints, raised its capital almost entirely from families and local contacts until the mid- to late 19thC" (181), and Holland, which had the worlds cheapest credit in the 17th and 18thC, did not produce the energy breakthrough needed to power the Industrial Revolution: "thus, it seems unlikely that differences in capital markets were terribly significant for production before the Second Industrial Revolution, in the late 19thC" (ibid). Even in overseas commerce, supposedly their forte, Europeans triumphed only where they could form monopolies or near-monopolies or could bring their skill at violence to bear. Pomeranz considers the question of whether the financial assets Europeans accumulated in the New World were crucial to the Industrial Revolution and concludes that it must have made some contribution to European coffers (Europeans were greedy enough that if they weren't making bank subjugating and exploiting the New World, they wouldn't have kept doing it), but that "with or without a contribution from overseas coercion, late 18thC Europe still did not have an edge in the way it amassed, protected, or deployed commercial capital (from whatever source) that can explain very much about its long-term path" (188). European luxury demand, consumerism, and capitalist political economy, however, clearly played a major role in stimulating the growth of the slave trade and New World economies. Pomeranz revisits the silver trade and concludes that European fashion and luxury demand "mattered only in conduction with the New World silver itself, the productive capacity of Asian proto-industries, and the unprecedented demand in those economies for huge imports of an item of daily use (silver). But surely the growth of European demand--both in its familiar and unusual features--needs to be part of the story, even for silver-dependent, and thus China-dependent, New Spain" (191). Further examination of the Western corporate form indicates that it evolved to meet the unique challenges of long-distance, "coercion-intensive colonial trade; only much later (with railroads) was it needed for a project at home" (193). All in all, the smoking gun amongst these arguments seems to be the dark horse, namely early modern Europe's political economy. Much ink has been spilled about the "military fiscalism" of Europe and its attendant phenomena (viz. technological innovation). In the short term these may have been as much negative as positive effects, due to warfare killing people (i.e. potential consumers and producers) and driving up the cost of doing business. Pomeranz concludes that "what ongoing warfare did help to secure was something quite different: property in privileges, ranging from tax farms and venal office to state-granted monopolies and confirmations of guild privilege" (196). Even so, as Charles Tilly's work shows, though the "capital-intensive" pathway to state-building was overwhelmingly successful, the "coercion- and capital-intensive" or even the "coercion-intensive" paths to state-building each had clear examples of successes and failures. Moreover, not all of the changes that Pomeranz separates out as significant--"firmer property rights, the development of representative government (at least for the propertied), and the spread of certain civil liberties" (197-97) "had the same relationship to either warfare or internal competition" (ibid). Comparisons with Chinese overseas communities and the lack of mass colonization efforts by Chinese on the Asian mainland suggest that the features of a Braudelian "capitalism" were "essential to the unique economic effects of Europe's New World intrusion" (200). In conclusion, what seems most likely is that no part of the world was necessarily headed for the absolute rupture of the Industrial Revolution, which no one saw coming; European political economy and "violent interstate competition, combined with some very luck (for Europe) global conjunctures, made European (especially British) relations with the rest of the Atlantic world among core-periphery relationships" (185). These relationships, in turn, gave Britain unique advantages of access to land-intensive products that were running short in all major Eurasian cores by 1800.
Chapter 5: Argument, Sources, Examples This chapter examines ecological constraints in western Europe and East Asia and concludes that "despite being less densely populated in absolute terms than either China or Japan, western Europe faced comparably serious ecological problems" (212). All the areas examined had cores "where only major technological change, vastly increased trade with peripheries, or both could sustain further growth in population and consumption" (ibid). Europe lagged behind east Asia in terms of uptake of more efficient intensifying agricultural techniques, but until roughly 1850 (the Second Industrial Revolution) whatever slack was being taken up by introducing these practices was consumed by soaring population growth. Britain was operating at a net food deficit for much of the years 1750-1850, one that left it increasingly dependent on the New World. At the same time, more productive Britons consumed fewer calories even as the population and per capita income grew, because of industrialization depressing the need for calories. Meanwhile, supplies of fuel and building material across western Europe were considerably more inelastic than food and fiber supplies, and increasing deforestation threatened all four. Despite a larger population, and the unevenness between north and south China, it seems possible that "Chinese pressure on the land was probably not worse than that in Europe (or Japan) in 1800" (236). Moreover, China's peripheries were operating on a relatively thin ecological margin of error, and when a series of natural and human disasters combined in the mid-19thC, the results were disastrous overall. China experienced none of the fortuitous changes that western Europe did and which served to halt its ecological decline. Still, in the late 18thC, China and Japan were not "overpopulated" compared to western Europe. Looking at import substitution, a favored strategy of underdeveloped countries in the 20thC, shows that it seems to have happened naturally in the pre-1800 world: it was, essentially, the choice to participate in the "industrious revolution," which people were free to make. It's important to note, however, that proto-industry in east Asia showed a much less marked regional, and more marked gender, divide than proto-industrial England. In the pre-1800 world, "underconsumption emerges as a problem created by social structure and demographic conditions in some preindustrial peripheries themselves (which is why they exported more than they imported) and is seen to have hampered the effort of preindustrial cores (which were short of certain supplies, not of consumers) to obtain the land-intensive goods they needed" (261).
Chapter 6: Argument, Sources, Examples This chapter presents the climax of Pomeranz' overarching argument, namely that western Europe "was able to escape the proto-industrial cup de sac" because "the exploitation of the New World made it unnecessary to mobilize the huge numbers of additional works who would have been needed to use Europe's own land in much more intensive and ecologically sustainable ways" (264). It is important to understand the role of New World in this system: "a demographic catastrophe, colonial legislation, and slavery combined to create a periphery that was an ever-expanding source of raw materials in an era before most production required expensive capital goods and when most people still had some connection to subsistence production. … Without the peculiar conditions created in the circum-Caribbean regain, the mere existence of trade between a rich, free labor core and a poorer, bound labor periphery would not have had such epochal effects" (268). As Pomeranz notes, "the New World and the slave trade offered what an expanding home market could not have: ways in which manufactured goods created without much use of British land could be turned into ever-increasing amounts of land intensive food and fiber (and later timber) at reasonable (and even falling) prices" (269). As far as New World precious metals (gold, but even more the crucial silver) go, the distinction between bullion extracted through coercion versus trade is artificial; three streams of metals brought silver to gold ratios in China and Europe by about 1640, after which the trade in bullion only recovered in the 18thC. These were 1) to ecological rich small market zones in the Old World, in which silver was used more or less as a modern currency reserve; 2) exchange of metals for Asian (usually Indian) manufactured products, which then were used to pay down the costs of acquiring slaves for the Americas; 3) the largest, in which silver was traded as a good to the commercial cores of Asia, where it was used as a medium for transaction, and which yielded other goods in return. In the concluding portions of his argument, Pomeranz concludes that western Europeans' "innovations in organizing for exploration and durable conquest and in creating institutions that combined entrepreneurship with intense coercion…gave them much of their edge" in the 19thC (285). Having set themselves up in a privileged position, they were able to exploit the rest of the world as the biological "new regime" began to emerge. Pomeranz concludes that extra-European and non market factors made the crucial difference in the already connected and similar world of 1800 CE: "rather than pretend that we are seeking the differences among truly independent entities on the eve of industrialization, we must acknowledge the importance of pre-existing connections in creating those differences" (297).
Critical assessment: If I could work my will, every historian of Euro-America would read this book. I've heard friends of mine who do economic history express skepticism about aspects of Pomeranz' arguments, but I've never been able to actually pin them down as to what exactly they object to; while it's certainly possible to quibble with aspects of Pomeranz' argument (for instance, he phrases aspects of his arguments about Japan in ways that are misleading at best and in a few instances flat-out wrong), I suspect that on the whole he's generally correct. This massive book is a masterpiece of comparative history.
Further reading: DeVries, Braudel, etc.
Meta notes: "The greatest trick the Devil ever pulled was to convince the world he didn't exist." Similarly, the greatest trick western Europe ever pulled was massacring and exploiting two continents and enslaving another, then stumbling into the absolute rupture of the Industrial Revolution by happenstance and creating all of sociology and history as academic disciplines to justify their success as innate and natural ex post facto. Pomeranz' work is essential in rebalancing the scales, and he has done an excellent job of it.
Main Argument: I'm going to quote the first sentence, which to me deserves to be as familiar as the opening line of Pride and Prejudice:
Much of modern social science originated in efforts by late nineteenth- and twentieth-century Europeans to understand what made the economic development path of western Europe unique; yet those efforts have yielded no consensus. (3)One prominent strand, perhaps best epitomized by Max Weber, argues that something special in "Western European culture" gave it this unique development path; others have highlighted the despoilment of the material and human resources of three continents, although this has been shown to be incomplete as a cause, given evidence for the accumulation of surplus in Europe itself. Pomeranz argues instead that we must call upon "the fruits of overseas coercion to help explain the difference between European development and what we see in certain other parts of Eurasia (primarily China and Japan)" (4). Highly developed areas at both end of the Eurasian landmass shared many similarities at the end of the 18thC; what put Western Europe--and Britain in particular--over the top in the 19th was the combination of overseas resources, and the affordances they offered, with both pan-Eurasian patterns and British peculiarities. Rather than tell the same old inaccurate Europe-centered story again, which gets us no closer to actually answering the great question of Why the Industrial Revolution? than ever, Pomeranz challenges historians to look for meaningful differences from a holistic perspective, rather than sticking with tried and true, biased, and incorrect arguments.
Historiographical Engagement: This is a book that is totally immersed in many notable books in the social sciences in the past century, mostly to argue with and overcome them. R. Bin Wong's China Transformed gets a favorable mention, and Pomeranz builds explicitly on the work of people like Tom Smith, William Wayne Farris, and Kären Wigen and many others, without whose research on China and Japan this book could not have been written.
Introduction: Argument, Sources, Examples In the first of many complex chapters, Pomeranz begins by explicating the problems with the "either/or framework" in which "either a Europe-centered world system carrying out essential primitive accumulation overseas or endogenous European growth" are "called upon to explain almost everything" (5). As Pomeranz notes, recent scholarship in European economic history has become even more inward looking for several reasons (finding market forces earlier in European history, reducing European development to market-driven growth alone, and treating the Industrial Revolution as a European phenomenon), which tendency has unhelpful consequences such as eliding the crucial role of overseas empire and fudging the units of comparison. Britain is not really comparable to India or China; those large units are much more properly compared with Europe as a whole, and Britain with certain regions within it such as the Yangzi Delta. Rather than look for things that made Europe "different," it is better to look for things that made England not like the Yangzi Delta. Visualizing the Industrial Revolution in Britain as a rupture that needs to be explained allows us to see the question of when Europe became uniquely rich as being closely linked to the question of its escape from Malthusian (and Smithian) limits into sustained per capita economic growth. It also reminds us that industrial capitalism is solely a phenomenon of the 1800s, and that European industrialization was quite limited outside of Britain until at least 1860--both important facts that are often forgotten in constructing these arguments.
Chapter 1: Argument, Sources, Examples This chapter explores "Population, Capital Accumulation, and Technology in Explanations of European Development." The main title is "Europe Before Asia?" and it seeks to demolish the general, mainstream argument that "industrialization was not the point at which European economic history departed from other Old World trajectories; instead, it represents the full flowering of differences that had been more subtly building for centuries" (31). The argument is that "Europeans" (whoever they actually were) had advantages in capital accumulation, particularly livestock; that they were healthier and had more stable population levels (NB: this argument makes no sense to anyone who actually knows anything about early modern East Asia, which most Europeanists don't), and that they had technological advantages as well. As Pomeranz writes, "in fact there is little evidence to suggest a quantitative advantage in western Europe's capital stock before 1800 or a set of durable circumstances--demographic or otherwise--that gave Europe a significant edge in capital accumulation" (ibid). Nor were they healthier, longer-lived, or more productive. Europe also had significant technological disadvantages in comparison to the most advanced areas of East Asia, particularly "in areas of agriculture, land management, and the inefficient use of certain land-intensive products (especially fuel wood)" (32). Moreover, more livestock is only an advantage in European-style farming, which is far more power-intensive than rice-farming at several stages of the process. Although livestock were also used for transport, Asia still had an overall transport advantage due to its riverine networks. The grain trade of Shandong province per annum was comparable to all of Europe's long-distance grain trading. As for lifespan, rural Japanese lived at least as long as Europeans, and probably longer; the average Chinese person's lifespan was also comparable, or possibly better, than the average European's. China's death rates were lower than European ones overall, and birth rates in east Asia were lower, by choice, than European ones for almost all of this period. The picture that emerges in response to the question of "technology" is more complex--clearly Europeans had an obvious advantage by 1850 (though the degree of the adoption of this technology was not universal). However, as Pomeranz concludes, "non-European societies retained significant advantages in many areas [i.e. agriculture, pottery and textile production] even in the late 18thC, and it was not inevitable that they would turn out to seem relatively unimportant in the long run" (47). Moreover, the case of spinning cellars in north China shows that even in the absence of a "scientific culture" (i.e. the republic of letters of the Enlightenment) it was possible for technological innovations to spread like wildfire even among the poorest members of east Asian societies. Beat that with a stick, Europeanists. Pomeranz spends the remainder of the chapter evaluating the claims that "the crucial phenomenon was the rise of a labor-saving emphasis in European technological innovation" (49). [See Andre Gunder Frank's ReORIENT for a pro-Asia take on this argument: essentially, the idea goes that Euroamerican technological innovation was driven by employers' desperation to lower wage bills and replace expensive people with cheap machines. Note the anachronisms inherent.] The argument fails because a) "it seems likely that average incomes in Japan, China and parts of southeast Asia were comparable to (or higher than) those in western Europe even in the late 18thC" (49). B) The evidence for very cheap wage labor in east Asia is far from conclusive, and as Pomeranz notes, it is anachronistic to project backwards the idea that industrialization is always labor saving and capital demanding; this was not the declared goal of patentees in 18thC England, for example, and was probably not the case in the Industrial Revolution as a whole. C) There is not much real evidence that low wage costs inhibit the adoption of labor-saving technology at any point, even the present day. The case of the crucial sector of textile production, however, is a qualified exception, which shows the importance of not attempting to generalize about "industrialization" as a whole. Instead, Pomeranz argues, "a big part of the European achievement in the Industrial Revolution was to escape a long-standing pattern in which all growth placed significant incremental demands on the land" (57), primarily through the increased use of coal, the adoption of New World food crops for greatly increased calories per acre, the adoption of colonially-tested and colonially-proven techniques of land and forest management, and the application of existing know-how to overseas territories: "empire helped Europe erase its technological disadvantage in afro-forestry (through the potato, through ecology, and through numerous important influences on botany), providing crucial imports of knowledge along with the imports of resources" (59). Coal is important enough to deserve its own discussion: it is, Pomeranz says, "the most likely European technological advantage that was purely homegrown, crucial to its 19thC breakthrough, and (unlike textiles) not dependent for its full flowering on European access to overseas resources" (61). There are two interlocking sets of factors which led Britain in particular to leap to the forefront of coal production and then steam engine technology (the two in fact were related through a virtuous cycle). Europe's real technological advantage in the 18thC was not in machines but in gunmaking, and instruments, i.e. clocks and navigational devices (chronometers and sextants). The transfer of the technical knowledge from these sectors to the steam engine radically increased its efficiency and thus its usefulness. Britain in particular was also fortuitously possessed of significant coal deposits close to major population centers. China had possessed this latter constellation of factors earlier in its history--Chinese coal production in 1080 exceeded that of non-Russian Europe in 1700--when the center of China was in the North. But from the years 1100 to 1400, the population centers shifted irrevocably south due to a series of disasters, and although the production of iron eventually recovered, the coal-iron production complex did not. Moreover, the problem of British coal mines (filled with water) was such that it led to the development of the steam engine (the Engine to Move Water By Fire), rather than the problem of Chinese mines (dry to the point of spontaneous combustion), which led to attempts at better ventilation. Europe backed the right horse, by happy contingency, but without additional benefits from overseas territories, even the increasing technical acumen and resource benefits of coal production would not have been enough to allow the continent to escape Smithian/Malthusian limits on economic and population growth.
Chapter 2: Argument, Sources, Examples This chapter looks at "Market Economies in Europe and Asia." Arguing against the idea that "Europe" industrialized first because of its superior market institutions, Pomeranz makes the frankly incendiary claim that "18thC China (and perhaps Japan as well) actually came closer to resembling the neoclassical ideal of a market economy than did western Europe" (70). [NB: In other words, in this chapter Pomeranz is demolishing Philip Huang's "involution" argument.] Contrary to western Europe, in China the overwhelming majority of land was freely alienable since at least the middle of the Ming dynasty, and even in cases of tenant farming, there is no evidence that customary rights prevented farmers from making improvements to the land they worked despite not owning it. By contrast, even in the 19thC at least 50% of England was entailed in family estates and totally inalienable. Here follows a revisitation of the story of Enclosure and How It Caused the Industrial Revolution (those goddamn sheep), with Pomeranz arguing that the idea that land was not a scarce resource means that using total factor productivity to measure the increase in output secondary to enclosure "understates the costs of institutions that stood in the way of enclosures" (77). The rather slow spread of productivity-enhancing agricultural practices in multiple western European countries is unquestionably a "market failure" that requires institutional explanations (what was those Europeans' problem, anyway?). At both ends of Eurasia bound labor was not entirely unknown but had ceased to be economically significant (in Europe, in the most productive economies) by the 18thC, theoretically allowing people to migrate to capital-rich or labor-scarce areas. However, the European labor market was very illiquid compared to China's in that significant legal and economic barriers remained to Euro-American internal migration. In China, however, the state encouraged the migration of over 10 million people in the 17th and 18thC to scare-labor areas. Conversely, European societies that were not horribly capital-scarce made it easier to migrate medium distances to more capital-rich areas than did China. As an added bonus, the Qing state made it a policy to guard against the establishment of monopsonies, thus avoiding the cycle of peasant indebtedness that plagued many English and French producers whose rulers had no such cares. Chinese peasants also "were considerably freer than many of their European counterparts to engage in commercial handicraft production and to sell these manufactures to competing buyers" (86). Most European countries had poorly integrated labor markets (meaning that there was a sharp divide between rural and urban wages) that was not found in China and Japan, another deviation from Smithian efficiency. In terms of family labor, rather than Philip Huang's "involution" argument, it is clear that Jan de Vries' "industrious revolution," in which people in the highest performing societies at both ends of Eurasia expanded output through the application of larger and larger amounts of labor from 1500 to 1800. In Europe, moreover, there is no clear evidence that all this work improved the standard of living much or at all; meat consumption per capita declined from the late medieval period to 1800, and there is no trend for per capita bread consumption in cities in the early modern period. Proto-industrialization, moreover, was as likely to to lead to an economic dead end (in that it indirectly put increasing downward pressure on wages) as to a breakthrough. The same pressures of increasing labor input, decreasing resources, and stagnant living standards are as visible in Europe as they are in China prior to 1800. In Europe as well as in China, moreover, cultural resistance to a perfect economic existence (i.e. all work, no leisure) remained, and is not evidence for "non-industriousness." Both Huang's and Jack Goldstone's "involution" hypotheses depend fundamentally on the notion that Chinese women did not earn the cost of their subsistence, but the available evidence suggests that the male-female wage gap in China was narrower than it was in England (since women were employed in sericulture, which is quite lucrative even as an entirely home-based employment). In conclusion, the most developed parts of Eurasia "shared crucial economic features--commercialization, commodification of goods, land, and labor, market-driven growth, and adjustment by households of both fertility and labor allocation to economic trends" (107). Moreover, these patterns of development in and of themselves were not naturally leading to a breakthrough anywhere.
Chapter 3: Argument, Sources, Examples This chapter, "Luxury Consumption and the Rise of Capitalism," examines arguments that "Europe" got ahead of "Asia" due to arguments about either the "objectification of luxury"--i.e. status increasingly came to be displayed among elites not by large retinues of people but by expensive manufactured objects, thus stimulating production--or about the "transformation of luxury", the process by which former luxury goods became everyday goods first for the middle classes and eventually for the poor. Rather than large durable goods these products are small and quickly consumed, and mostly are the "drug foods" (sugar, cocoa, tobacco, coffee, and tea). Looking at what data there for the consumption of the drug foods suggests that the European advantage in their consumption emerged much later than commonly assumed. In the case of sugar, for example, one of the most blood-soaked and transformative crops in history, "despite using slave labor to grow cheaper sugar, consumption was not on a steady upward trend throughout Europe" (118), and looking at sugar consumption broken down into Europe, Europe ex-Britain, and Britain categories shows again that at least until the 1850s the revolution was British, not European. By contrast, 18thC sugar consumption in non-British Europe stagnated. Chinese sugar consumption was higher than Europe's at least until 1750 and probably until 1800, but declined thereafter while Europe's soared--partly because the Chinese population grew in poorer areas, rather than in richer ones as in Europe, and partly because in Europe sugar became a staple carbohydrate for the lower classes after 1850 due to inadequate grain supply, a transition that it never made in China because grain production kept up with population growth. The story of durable goods is somewhat higher to track due to the variations of the documentary record, but "in Europe, China, Japan, and India [from roughly 1400 to 1800], one finds a striking increase in the quantity and variety of home furnishings, elaborate clothes, eating utensils, and what would today be called 'collectibles' among the wealthiest people" (127). Pomeranz draws on Arjun Appadurai's discussion of a continuum from "fashion systems" to "coupon" or "license systems"; in "fashion systems" anyone can buy status-conferring goods with enough money, while in "license systems" status goods can only be held by those with the social "license" to do so. All societies even today contain elements of both "economy" and "culture" societies, which handily avoids replicating a dichotomy between "materialist moderns" and "anti-materialist unmoderns." Pomeranz sketches out several features of an increasingly consumerist society (increased quantity and velocity of circulation of socially significant goods, increased number of people able to posses them and their ability to acquire them from strangers; increase in imitative consumption and the emergence of different strata of goods aimed at different strata of people; proliferation of discussion about the proper ways to consume these items). There is strong positive evidence for all these things in the core areas of Europe, and strong negative and some positive evidence for the same in core areas of China and Japan, and much less so for India. Quantitative evidence for income distribution across these societies is spotty, but qualitative evidence for peasant demand in core China and Japan certainly exists; taken together, for example, Chinese textile consumption compares quite favorably against that of Europe in the 18thC. Housing presents a different case, one in which core China and Japan are at a disadvantage relative to Europe. Given the uneven spatial distribution of consumerist society and its goods across all these countries, Pomeranz concludes that it at least there is "little reason to think that the gaps between richer and poorer regions were larger in China and Japan than they were in Europe" (149). The question of the consumption of durable luxury goods is more fraught; it is plain that the speed of European fashion in these goods accelerated astronomically beyond that of China and Japan in this period. In both Europe and China the consumption of exotic goods became prestigious, but in Europe these exotic goods (i.e. the drug foods) were often more easily convertible to "everyday luxuries" than comparable exotics in China (i.e. birds' nests), and in Europe exotic goods also encompassed exotic manufactured goods, unlike in China and Japan. What China did import from from the West was silver. [This next part is important, so pay attention.] The trick is that silver in China after 1400 became a store of value, the money of account, and the medium of state payments for the largest economy in the world, because China after 1400 was essentially remonetizing its economy after the disastrous Yuan monetary policy and the chaos of the 14thC had left the country without any widely accepted monetary medium. As Pomeranz says, to get beyond the idea that huge silver imports = cultural conservatism, we need not to treat silver as modern "money" (i.e. a residual store of abstract value used to make up the European "trade deficit") but "as a good: a refined product with a mineral base, which was well suited to an important function and which the West could produce far more cheaply than any place in Asia" (160). As Pomeranz notes, seeing silver as residual store of value reinforces the Orientalist stereotype of the West as the active, desiring agent in the suturing together of the world economy. "But once we think about the dynamic created by changing the monetary base of perhaps as much as 40 percent of the world's economy in this period (once we add in China's tributary states, which were also 'silver-izing'), it becomes hard not see China's silver demand as every bit as much an 'active' force in creating a global economy as was the West's demand for porcelain, tea, and so on" (161). China's voracious demand for silver helps explain the speed of European fashion, as "the West's huge comparative advantage in the export of silver sucked in trendsetting prestige goods from Asia. […]--they paid for silver. […] And, given the way Europe acquired and ran the American silver mines, it reminds us of the tremendous significance of coercion in generating Europe's economic edge" (ibid). In the end, then, in matters of consumption Europe, China, and Japan resembled each other far more than any of them resembled anywhere else.
Chapter 4: Argument, Sources, Examples This chapter discusses "Visible Hands: Firm Structure, Sociopolitical Structure, and 'Capitalism' in Europe and Asia." In this chapter Pomeranz takes on Fernand Braudel and his followers such as K.N. Chaudhuri, who have argued that "the ideal conditions for concentrated capital accumulation--a.k.a. 'capitalism'--included the widespread of development of property rights (including secure rights in financial assets) and competitive markets, but also arrangements that allowed some people to profit by circumventing competitive exchanges, limiting their liability, and securing rights in such no market or anti-market privileges as monopolies and tax farms" (167), and that these things (duh) only happened in Europe. Pomeranz reviews much newer research and points out several interrelated phenomena: Asian merchants competing with Europeans in spheres in which Europeans did not tip the scales their way with violence were quite successful, even without using the "corporation" model developed in Europe to finance New World ventures. (The idea that the corporation is automatically more competitive has an implicit bias towards the climatological model of the Atlantic, which is much different than, say, the Indian Ocean.) Moreover, it could equally be argued that, for example, the Chinese state "interfered less with its merchants than its European counterparts, but also created fewer opportunities and privileged niches of them" (173). (The same statement could be made for Japan until at least the 1760s.) Moreover, new research indicates that financial institutions were not less secure in not-Europe than in Europe. Additionally, looking at interest rates as the sole measure of strength of financial institutions and "cultures of credit" has significant shortcomings, the most important being that "the interest rate was not the only nor even necessarily the most important influence on people's willingness to borrow for investment" (179). The evidence is clear that "none of our core areas suffered from an absolute insufficiency of capital for industrialization" (ibid). Furthermore, early mechanized industry and its growth had very little to do with the corporate form or interest rates altogether: as Pomeranz points out, "The British coal industry, which made possible the most important break with preindustrial constraints, raised its capital almost entirely from families and local contacts until the mid- to late 19thC" (181), and Holland, which had the worlds cheapest credit in the 17th and 18thC, did not produce the energy breakthrough needed to power the Industrial Revolution: "thus, it seems unlikely that differences in capital markets were terribly significant for production before the Second Industrial Revolution, in the late 19thC" (ibid). Even in overseas commerce, supposedly their forte, Europeans triumphed only where they could form monopolies or near-monopolies or could bring their skill at violence to bear. Pomeranz considers the question of whether the financial assets Europeans accumulated in the New World were crucial to the Industrial Revolution and concludes that it must have made some contribution to European coffers (Europeans were greedy enough that if they weren't making bank subjugating and exploiting the New World, they wouldn't have kept doing it), but that "with or without a contribution from overseas coercion, late 18thC Europe still did not have an edge in the way it amassed, protected, or deployed commercial capital (from whatever source) that can explain very much about its long-term path" (188). European luxury demand, consumerism, and capitalist political economy, however, clearly played a major role in stimulating the growth of the slave trade and New World economies. Pomeranz revisits the silver trade and concludes that European fashion and luxury demand "mattered only in conduction with the New World silver itself, the productive capacity of Asian proto-industries, and the unprecedented demand in those economies for huge imports of an item of daily use (silver). But surely the growth of European demand--both in its familiar and unusual features--needs to be part of the story, even for silver-dependent, and thus China-dependent, New Spain" (191). Further examination of the Western corporate form indicates that it evolved to meet the unique challenges of long-distance, "coercion-intensive colonial trade; only much later (with railroads) was it needed for a project at home" (193). All in all, the smoking gun amongst these arguments seems to be the dark horse, namely early modern Europe's political economy. Much ink has been spilled about the "military fiscalism" of Europe and its attendant phenomena (viz. technological innovation). In the short term these may have been as much negative as positive effects, due to warfare killing people (i.e. potential consumers and producers) and driving up the cost of doing business. Pomeranz concludes that "what ongoing warfare did help to secure was something quite different: property in privileges, ranging from tax farms and venal office to state-granted monopolies and confirmations of guild privilege" (196). Even so, as Charles Tilly's work shows, though the "capital-intensive" pathway to state-building was overwhelmingly successful, the "coercion- and capital-intensive" or even the "coercion-intensive" paths to state-building each had clear examples of successes and failures. Moreover, not all of the changes that Pomeranz separates out as significant--"firmer property rights, the development of representative government (at least for the propertied), and the spread of certain civil liberties" (197-97) "had the same relationship to either warfare or internal competition" (ibid). Comparisons with Chinese overseas communities and the lack of mass colonization efforts by Chinese on the Asian mainland suggest that the features of a Braudelian "capitalism" were "essential to the unique economic effects of Europe's New World intrusion" (200). In conclusion, what seems most likely is that no part of the world was necessarily headed for the absolute rupture of the Industrial Revolution, which no one saw coming; European political economy and "violent interstate competition, combined with some very luck (for Europe) global conjunctures, made European (especially British) relations with the rest of the Atlantic world among core-periphery relationships" (185). These relationships, in turn, gave Britain unique advantages of access to land-intensive products that were running short in all major Eurasian cores by 1800.
Chapter 5: Argument, Sources, Examples This chapter examines ecological constraints in western Europe and East Asia and concludes that "despite being less densely populated in absolute terms than either China or Japan, western Europe faced comparably serious ecological problems" (212). All the areas examined had cores "where only major technological change, vastly increased trade with peripheries, or both could sustain further growth in population and consumption" (ibid). Europe lagged behind east Asia in terms of uptake of more efficient intensifying agricultural techniques, but until roughly 1850 (the Second Industrial Revolution) whatever slack was being taken up by introducing these practices was consumed by soaring population growth. Britain was operating at a net food deficit for much of the years 1750-1850, one that left it increasingly dependent on the New World. At the same time, more productive Britons consumed fewer calories even as the population and per capita income grew, because of industrialization depressing the need for calories. Meanwhile, supplies of fuel and building material across western Europe were considerably more inelastic than food and fiber supplies, and increasing deforestation threatened all four. Despite a larger population, and the unevenness between north and south China, it seems possible that "Chinese pressure on the land was probably not worse than that in Europe (or Japan) in 1800" (236). Moreover, China's peripheries were operating on a relatively thin ecological margin of error, and when a series of natural and human disasters combined in the mid-19thC, the results were disastrous overall. China experienced none of the fortuitous changes that western Europe did and which served to halt its ecological decline. Still, in the late 18thC, China and Japan were not "overpopulated" compared to western Europe. Looking at import substitution, a favored strategy of underdeveloped countries in the 20thC, shows that it seems to have happened naturally in the pre-1800 world: it was, essentially, the choice to participate in the "industrious revolution," which people were free to make. It's important to note, however, that proto-industry in east Asia showed a much less marked regional, and more marked gender, divide than proto-industrial England. In the pre-1800 world, "underconsumption emerges as a problem created by social structure and demographic conditions in some preindustrial peripheries themselves (which is why they exported more than they imported) and is seen to have hampered the effort of preindustrial cores (which were short of certain supplies, not of consumers) to obtain the land-intensive goods they needed" (261).
Chapter 6: Argument, Sources, Examples This chapter presents the climax of Pomeranz' overarching argument, namely that western Europe "was able to escape the proto-industrial cup de sac" because "the exploitation of the New World made it unnecessary to mobilize the huge numbers of additional works who would have been needed to use Europe's own land in much more intensive and ecologically sustainable ways" (264). It is important to understand the role of New World in this system: "a demographic catastrophe, colonial legislation, and slavery combined to create a periphery that was an ever-expanding source of raw materials in an era before most production required expensive capital goods and when most people still had some connection to subsistence production. … Without the peculiar conditions created in the circum-Caribbean regain, the mere existence of trade between a rich, free labor core and a poorer, bound labor periphery would not have had such epochal effects" (268). As Pomeranz notes, "the New World and the slave trade offered what an expanding home market could not have: ways in which manufactured goods created without much use of British land could be turned into ever-increasing amounts of land intensive food and fiber (and later timber) at reasonable (and even falling) prices" (269). As far as New World precious metals (gold, but even more the crucial silver) go, the distinction between bullion extracted through coercion versus trade is artificial; three streams of metals brought silver to gold ratios in China and Europe by about 1640, after which the trade in bullion only recovered in the 18thC. These were 1) to ecological rich small market zones in the Old World, in which silver was used more or less as a modern currency reserve; 2) exchange of metals for Asian (usually Indian) manufactured products, which then were used to pay down the costs of acquiring slaves for the Americas; 3) the largest, in which silver was traded as a good to the commercial cores of Asia, where it was used as a medium for transaction, and which yielded other goods in return. In the concluding portions of his argument, Pomeranz concludes that western Europeans' "innovations in organizing for exploration and durable conquest and in creating institutions that combined entrepreneurship with intense coercion…gave them much of their edge" in the 19thC (285). Having set themselves up in a privileged position, they were able to exploit the rest of the world as the biological "new regime" began to emerge. Pomeranz concludes that extra-European and non market factors made the crucial difference in the already connected and similar world of 1800 CE: "rather than pretend that we are seeking the differences among truly independent entities on the eve of industrialization, we must acknowledge the importance of pre-existing connections in creating those differences" (297).
Critical assessment: If I could work my will, every historian of Euro-America would read this book. I've heard friends of mine who do economic history express skepticism about aspects of Pomeranz' arguments, but I've never been able to actually pin them down as to what exactly they object to; while it's certainly possible to quibble with aspects of Pomeranz' argument (for instance, he phrases aspects of his arguments about Japan in ways that are misleading at best and in a few instances flat-out wrong), I suspect that on the whole he's generally correct. This massive book is a masterpiece of comparative history.
Further reading: DeVries, Braudel, etc.
Meta notes: "The greatest trick the Devil ever pulled was to convince the world he didn't exist." Similarly, the greatest trick western Europe ever pulled was massacring and exploiting two continents and enslaving another, then stumbling into the absolute rupture of the Industrial Revolution by happenstance and creating all of sociology and history as academic disciplines to justify their success as innate and natural ex post facto. Pomeranz' work is essential in rebalancing the scales, and he has done an excellent job of it.