money martin vander weyer
From Barter to Barclays More: The 10,000-Year Rise of the World Economy
By Philip Coggan (The Economist/Profile 466pp £25)
Why bother trying to summarise the whole economic history of the world, from the earliest commerce in ancient Mesopotamia to Donald Trump’s trade wars, in a single middleweight volume? The point, I suppose, is to establish, taking the longest possible perspective, what works and what doesn’t: which natural advantages, inventions, political structures and events have nudged nations towards prosperity, which have impoverished them and which mistakes we should strive never to make again.
Philip Coggan, a former Financial Times journalist, has had a pretty good go at this herculean task, producing an accessible book that’s packed with amazing facts, a veritable compendium of answers to questions you might find in an advanced pub quiz for social historians and anthropologists. To pick a random example, who knew that ‘as early as 1700, 13% of [British] domestic servants owned a watch’ but that by the end of the 18th century, ‘40% of those deemed paupers owned either a watch or a clock’?
This is one small illustration of the impact technological innovation can have. Coggan’s other case studies take in everything from horse collars and spectacles to canals, steamships, electrification, refrigeration and, of course, the internet. The most significant new technologies have brought about quantum leaps in productivity and spectacular falls in manufacturing costs, making an everwider choice of goods available to an evergrowing mass of consumers. Coggan canters through this school-textbook aspect of his project, but the reader soon senses that he is more interested in the human and political factors along the way and the economic reality that emerges from them.
He is essentially a free-trader, arguing that the exchange of one set of goods for another in accordance with the vagaries of supply and demand at relatively long distance has been a feature of every successful civilisation since the merchants of Uruk in what is now southern Iraq spread their trading networks as far as the Caucasus and
Afghanistan. He’s also eloquent on the benefits of migration, quoting a study – published by the paper for which he now writes, The Economist – that purports to show that ‘a world with completely free movement of labour’ would be better off on average by ‘$10,000 per head’. And on the last lap of his marathon he dismisses Donald Trump’s crude protectionism, chiefly aimed at China, in a magisterial page and a half, quoting a think-tank report to argue that if the threatened tariffs were applied in full, US GDP, wages and employment would all suffer significant falls.
In a similar vein he has no truck with state socialism, offering a pithy account of its disastrous 21st-century manifestation in Venezuela. Nor (though he provides a sharp critique of British behaviour in India) does he give credence to fashionable left-wing views that attribute Britain’s rise to economic power in the 18th and 19th centuries to slavery and colonial exploitation. And he provides a useful summary of the elements that have driven some postcolonial states, particularly in Africa, towards economic failure: weak government, bad relations with neighbouring countries, endemic conflict, overreliance on natural resources rather than the development of skills and industries, and lack of access to ports for seaborne trade.
On the other hand, he is no advocate of minimal government in the tradition of Milton Friedman: history tells him that mixed economies work best. Markets thrive when governments stop trying to run them, Deng Xiaoping’s relaxation of controls on Chinese farmers offering a prime example. But good governments create economic advantage by providing the high levels of education, infrastructure and support for research that make their countries fertile ground for the private sector. They also avert economic harm by imposing smart regulations, particularly in the financial sector, with its propensity to go haywire when left to set its own rules.
Nor does Coggan favour winner-takes-all ruthlessness, whether in commercial competition or international relations. Harsh reparations imposed by the victorious Allies on Germany after the First World War led to economic ruin and the rise of Nazism; by contrast, the Marshall Plan in Germany and the enlightened US occupation of Japan after the Second World War led to the re-emergence of both defeated nations as industrial powers, to the greater good of the world.
In all these respects, Coggan is an advocate for the positive combination of benign states with industrious workers, innovative entrepreneurs and fair-dealing traders. His style of writing has much in common with the refined prose, judiciously peppered with statistics, of The Economist. Occasional brushstrokes of humour add light touches, but this is not in any way a difficult read; on the contrary, given the immensity of the subject, it is a masterclass in selection and compression.
Has he missed anything? Perhaps he might have said more about the importance of good commercial law and incorruptible judges: we learn about the legal code of the Babylonian king Hammurabi, ‘dating from around 1754bce’, but not so much about the advantages of English law, which today dominates the financial world and draws Russian oligarchs to sue each other in London courts. Likewise, he explains the economic impact of medieval plagues, but says less about modern medical advances and their contributions to productivity, longevity and, in some instances, inequality between those with and those without access to treatment.
But why nitpick? More is an impressive exercise in expanded journalism, and most readers will find much to agree with in its even-handed and eminently reasonable analysis.
Literary Review | february 2020 8