Routledge Handbook of the History of Global Economic Thought

Vincent Barnett, Vincent Barnett

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317644118
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

The Routledge Handbook of the History of Global Economic Thought offers the first comprehensive overview of the long-run history of economic thought from a truly international perspective. Although globalization has facilitated the spread of ideas between nations, the history of economics has tended to be studied either thematically (by topic), in terms of different currents of thought, or individually (by economist). Work has been published in the past on the economic thought traditions of specific countries, but this pioneering volume is unique in offering a wide-ranging comparative account of the development of economic ideas and philosophies on the international stage.

The volume brings together leading experts on the development of economic ideas from across the world in order to offer a truly international comparison of the economics within nation-states. Each author presents a long-term perspective on economics in their region, allowing global patterns in the progress of economic ideas over time to be identified.

The specially commissioned chapters cover the vast sweep of the history of economics across five world regions, including Europe (England, Scotland, Ireland, Italy Greece, Spain, Portugal, Germany, Sweden, Russia and the Ukraine), the Americas (the USA, Canada, Mexico and Central America, Spanish-Speaking South America, Brazil and the Caribbean), the Middle East (Turkey, Israel, Arab-Islamic Economics, Persia/Iran, North Africa), Africa (West Africa, Southern Africa, Mozambique and Angola), and the Asia-Pacific Region (Australia and New Zealand, China, Southeast Asia, the Asian Tigers, India.)

This rigorous, ambitious and highly scholarly volume will be of key interest to students, academics, policy professionals and to interested general readers across the globe.

1 Introduction

Vincent Barnett

DOI: 10.4324/9781315761084-1

This volume is devoted to documenting the development of economic thinking across the world and in all historical eras, partitioned on nation-state/geographical lines. If Ptolemy’s Cosmographia was an early attempt to delineate the world’s physical geography, then this Cosmoconomy (or Economographia) is a much more modest attempt to map the global contour-lines of economic ideas. As this is a very expansive focus, the volume cannot claim to provide an exhaustive account of the topic, or even an entirely comprehensive one: not every nation-state that exists today (or has existed in the past) is covered.

Part of the limitation here was the existing state of knowledge in this field: as the authors of the chapter on Southeast Asia imply, no-one had ever thought of writing a history of economics in the Malay Peninsula before. Hence, although an attempt to be geographically comprehensive was made in the commissioning process, it proved impossible to find authors to write on some countries. What this volume can fruitfully do is provide a condensed introductory overview and regionally coordinated analytical account of a significant number of national/regional traditions in economics (28 chapters in total) that will facilitate comparisons across nations and between historical eras, something that has been lacking in the literature, at least within a single easily accessible volume.

This type of national/global world-view approach is especially relevant to the current period of a dramatic increase in the pace of economic globalization, which has been facilitated in part by technological changes such as the birth of the internet and the growth in affordable air travel, and in part by socio-political changes such as increased migration and heightened attempts at democratization in regions previously under autocratic rule. Not everyone agrees that globalization has entirely negated the nation-state as a socio-economic entity. Some have argued that advanced capitalist nations have gained increased power and autonomy from globalization, through the heightened control over their economies that the dissolving of existing nationally rooted relations of accumulation has enabled (Gritsch, 2005).

It is perhaps more accurate to say that globalization has simultaneously heightened and also negated national boundaries, but in various different ways. Together with increased economic and financial globalization, which is undoubtedly a real and a partly positive development, has gone a sense of an emboldened national consciousness in areas previously under forms of political subjugation that have been freed partly by globalizing cultural forces. But parallel with this there has also been a feeling of heightened threats to some national cultures in areas where this globalization has brought the most extensive changes to customs that have been long-lived and deeply embedded. As will be seen, such dramatic change is not only a very recent phenomenon.

However, there is an important difference between firstly the globalization of trading/ technological links and fashion/popular culture, and secondly the globalization of economic ideas, business traditions and fundamental belief systems. The former does not necessarily require or produce the latter, although in some situations it might do so. As an example, the rise of the Chinese economy in international (capitalist) commerce is one of the most important developments in recent times, but it has not been accompanied either by China wholeheartedly adopting a purely free-trade/liberal economic ideology, or of contemporary Chinese-style state-led ideas being successfully propagated elsewhere. It could be argued that the Chinese economy has been so successful on the global stage in the very recent period in part because of the disconnection between its own domestic development ideology, and the ‘liberal’ economic ideas that have held sway in the more ‘advanced’ Western countries. These globalization relativities may change again in the future, but it is precisely these spatial/temporal and national/international relationships that can be more clearly understood by means of a local/regional approach.

This volume is therefore devoted in part to asking the question: how far has economic theory/discourse been globalized alongside the globalization of the world economy? Taking a long-view approach to this question by examining national trends over centuries will enable wider changes/patterns in the development of economic belief-systems to more clearly be discerned. But how did the idea of the nation-state develop in historical terms?

Nation-states and ‘national character'

In his Discourses on Titus Livius of 1532, Niccolò Machiavelli suggested that ‘nations preserve for a long time the same character; ever exhibiting the same disposition to avarice, or bad faith, or to some other special vice or virtue’ (Machiavelli, 1950, 530). For Machiavelli, as men were always ‘animated by the same passions’, they always acted in the same way, although this could be modified by ‘the nature of their education’. Is it so far from Machiavelli’s ‘national character’ to John von Neumann and Oskar Morgenstern’s ‘accepted standards of behavior’ within an ‘established order of society’ (1964, 41)? Game theory does not logically preclude the idea that the rules of a game may vary between different countries, as might the strategies commonly pursued within them. Consequently, one of the tasks of this volume is to investigate whether there are ‘national characters’ vis-à-vis economic understanding and business behaviour, to which no pre-ordained methods or structures have been applied by the editor. Each author was left entirely free to make their own judgments, and some very diverse conclusions have indeed been reached.

A ‘naturalistic’ variant of this topic was considered by Thomas Brown in his myth-busting Enquiries into Received Tenets and Presumed Truths, a mid-seventeenth-century treatise promoting the application of an empiricist scientific methodology to natural history. Brown declared that what he called national ‘productions’ were:

… determined by the principles of place, or qualities of that region which admits them. And this is evident not only in gems, minerals, and metals, but observable in plants and animals; whereof some are common unto many Countries, some peculiar unto one, some not communicable unto another.

(Brown,1672, 356)

One example is the importance of precious metals in Indian culture, where gold and silver jewellery has for a long time had special significance. J.M. Keynes recognized this factor, which had exerted an important effect on the level and direction of international demand for silver (Barnett, 2013, 41), and indirectly on currency issues in India. Keynes was well aware of national financial particularities, explaining in Indian Currency and Finance that ‘the British system’ of currency operation was ‘peculiar and is not suited to other conditions’ (Keynes, 1971, 11). As the chapter on India in this volume shows, some Indian economists disagreed with Keynes on this issue fundamentally.

Consider another example, the Middle East. The Arabian Peninsula is a well-defined geographical entity including (today) the states of Saudi Arabia, Kuwait, Qatar, the UAE, Oman and Yemen, but Arabia as a single regional entity now has only a historical reality. Overlaid on the Arabian Peninsula as a geographical region are cultural forms of expression such as Arabic as a language and Islam as a religion. One contributor to this volume uses the term ‘Arab-Islamic’ to encompass and define a long-standing tradition in socio-economic understanding, which was perhaps most influential in a bygone historical era. Others have implied that this term is too wide-ranging, pointing out that some Persian (or even Azerbaijani) thinkers are sometimes illicitly included within this remit.

Persian scholars have certainly been influential in Arabic-speaking regions, in part because their works were translated into (or issued in) Arabic, but this does not make them more Arabic than Persian. Also some Muslim thinkers were neither Arabs nor Persians, writing in Turkish or even some Asian languages. In reality Persian culture is different from Arabic culture which can be distinct from Islamic culture, even though there is often a significant degree of overlap between these traditions.

It has been suggested that there is a ‘clear distinction between Arabic and Moslem science’ (Taton, 1963, 385): the problem is clearly defining this distinction. Is it more than simply Arabic is a language whereas Islam is a religion? Although classical Arabic is the language of the Qur’an, it had emerged as the dominant language in the Arabian peninsular long before the birth of Islam. Hence Arabic culture preceded the birth of the Muslim religion by a significant period, during which the Arabian economy (and Arabic science) developed without any influence from Islam. For example Mecca was an urban trading settlement in pre-Islamic Arabia. Thus, the link between the nation-state, regional geography and national culture/thought is a complex and evolving one.

‘National traditions'

The idea of ‘national traditions’ in economic understanding has a notable if controversial history. Werner Sombart argued that the capitalist spirit was indeed universal, at least in Western civilization, but allowed that the national expression of this spirit would vary over time and place. These variations could involve the precise manner and intensiveness of expression, and also how different components of it were formulated. Each nation had within it the individuals with the personal qualities required for expressing the capitalist spirit, but in varying degrees. Thus the USA had this spirit to the utmost, whereas in France it was relatively under-developed (Sombart, 1915, 130, 217). Sombart located the birth of the modern capitalist spirit in the Europe of the early Middle Ages, but he allowed that it might have operated in the Ancient world also.

Perhaps the most well-known single work on ‘national economy’ in the history of economics corpus is Friedrich List’s The National System of Political Economy of 1841. Given that mainstream economics has banished the protectionism rationale to a few special instances, List’s approach to policy cannot be the model for this volume, but his distinction between national political economy and cosmopolitical or world-wide economy could conceivably be relevant (List, 1904, 98). If there are national against international interests, then might there also be national against international expressions of these interests in economic ideas? Wilhelm Roscher went even further than List, by defining economics as inherently national: ‘By the science of national, or Political Economy, we understand the science … [of] the laws of the development of the economy of a nation’ (Whittaker, 1943, 734). Perhaps the older term ‘political economy’ lends itself more readily to a national interpretation than does the modern term ‘economics’, which is (allegedly) national-politics-free.

There is more recent research on this topic that is worth considering. One well-known example is that by Geert Hofstede on how to measure ‘national culture’ using four dimensions of cultural expression: an individualism/collectivism scale, a power distance acceptance measure, an uncertainty avoidance measure, and a masculinity/femininity scale. The first refers to how far individuals look after themselves against their wider communities; the second refers to how far subordinates can express dissent to those higher up in a hierarchy; the third refers to how far ambiguity/uncertainty are tolerated; and the fourth refers to the degree to which assertiveness/aggression are valued over cooperation/friendliness. Hofstede’s controversial results have been summarized as follows:

Cultures tend to form around regions that also share common economic systems, history, or environmental characteristics. For example, free-market capitalist societies (e.g. the U.S., Western Europe) tend to have individualist, low power-distance oriented cultures. In contrast, developing nations, in particular those with the Confucian legacy (e.g. China, South Korea), tend to be collectivist and high power distance-oriented. In regions where harsh climates or other factors limit food supply, as in Scandinavian countries, feminine values of equality, harmony, and cooperation prevail. In contrast, societies where competition among people, rather than natural conditions, was the greater challenge, such as Southern Europe, developed masculine values of achievement. Finally, uncertainty avoidance is higher in societies characterized by political and economic volatility and oppression (e.g. Guatemala, Venezuela), while stability and personal safety increases tolerance for uncertainty. In summary … national and regional cultures are significantly and predictably different from one another.

(Taras et al., 2011, 191)

The provider of this summary went on to argue that although these cultural differences were now being eroded by recent globalization trends, they still had some relevance to explaining regional economic characteristics and developments.

It would be easy to suggest that (for example) the masculinity/femininity axis employed by Hofstede illicitly draws upon gender stereotypes, which themselves are the products of particular patriarchal cultures rather than constituting their basic essences, but this volume is not the place to have this debate about fundamentals. What will be tested here is whether contributors see these types of national cultural features reflected in the national economic/business discourses that they are documenting. It has been suggested that ‘Hofstede’s framework of culture has helped generate an immense body of evidence that has been successfully utilized in business’ (Taras et al., 2011, 190). If economists are found to disagree entirely with the notion of national culture, instead favouring universal laws and general mechanisms of market activity, then how can this incongruity be squared with the apparent fact that Hofstede’s framework has been ‘successfully utilized in business’? Can both approaches be true simultaneously?

Others problems identified with Hofstede’s approach include that it appears to assume homogeneity within a nation, and is applied equally to very large and very small nations (e.g. Russia as against Slovakia). Might not the Western region of Russia differ from the Far East of Russia by just as much as Germany differs from Austria? Also, what about nation-states that have...