20120125 econ 210a - brad delong's grasping reality · 25/1/2012 ·...
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Economics 210a: The Commercial Revolu7on
January 25, 2012
J. Bradford DeLong and Barry J. Eichengreen
U.C. Berkeley, Spring 2012, Evans 597
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Readings for the Commercial Revolu7on
• Karl Marx (1867), "The So-‐called Primi7ve Capital Accumula7on," Capital, Vol. 1, Part VIII, Chapters 26-‐32. hXp://7nyurl.com/dl20090112k
• Daron Acemoglu, Simon Johnson, and James Robinson (2005), "The Rise of Europe: Atlan7c Trade, Ins7tu7onal Change, and Economic Growth," American Economic Review 95:3, pp. 546-‐79. hXp://www.jstor.org/stable/i387682
• Jan de Vries (2010) "The Limits to Globaliza7on in the Early Modern World," Economic History Review 63:3, pp. 710-‐33. hXp://web.ebscohost.com/ehost/results?sid=2ed5a63b-‐2aff-‐4c71-‐9e08-‐a3ca196c942a%40sessionmgr104&vid=2&hid=125&bquery=(JN+%26amp%3bquot%3bEconomic+History+Review%26amp%3bquot%3b+AND+DT+20100801)&bdata=JmRiPWJ0aCZ0eXBlPTEmc2l0ZT1laG9zdC1saXZl
• Jeffrey Williamson and Kevin O'Rourke (2002), "Aner Columbus: Explaining Europe's Overseas Trade Boom, 1500-‐1800," Journal of Economic History 62, pp. 417-‐56. hXp://www.nber.org/papers/w8186
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Deep History
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Implied Global Growth Rates
Memo: capital share of 0.3, resources share of 0.2
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European PaXerns from Bob Allen (2001)
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European PaXerns from Bob Allen (2001)
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A Cross-‐Eurasia Comparison from Bob Allen
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Why the Commercial Revolu7on?
• Adam Smith had an answer… • The System of Natural Liberty – Private property – Market exchange – Tolerable government
• The end of “feudalism” allows for this “system of natural liberty to emerge”
• The division of labor makes trade desirable, trade produces thrin and capital accumula7on, and capital accumula7on makes the division of labor possible: a virtuous circle
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Marx Has a Cri7que
• Karl Marx (1867), "The So-‐called Primi7ve Capital Accumula7on," Capital, Vol. 1, Part VIII, Chapters 26-‐32. hXp://7nyurl.com/dl20090112k – Smith: government hands off – Marx: government hands-‐on • Marx ignores Malthus…
– “Primi7ve accumula7on” not through thrin: rather the reverse • Proudhon: property is then
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Marx Has a Cri7que
• Thrin is hard; corrup7on easier… • Economies of scale? – PeXy-‐bourgeois utopians…
• Marx’s methodology? – Natural history; history, utopian specula7on – Assump7on that late feudalism was a utopia of small freeholders property that never was • Assump7on needed to jus7fy his evalua7on of the nega7ve effect of capitalism…
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Marx Has a Cri7que
• Marx too focused on primi7ve accumula7on – The upper class was perfectly capable of seizing value without
jumping through the hoops of primi7ve accumula7on… • Brutal origins of the modern bourgeoisie…
– “Free to starve” – Dual meaning of freedom: free to make your choices, but also
“freed” from all your property • About choices, or about how people didn’t have many
choices to make • Extrac7on of a bunch of surplus value from internal and
external proletariats • Note to self: next year, assign the Manifesto for this week
as well…
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Acemoglu et al. Have an Alterna7ve Story
• Daron Acemoglu, Simon Johnson, and James Robinson (2005), "The Rise of Europe: Atlan7c Trade, Ins7tu7onal Change, and Economic Growth," American Economic Review 95:3, pp. 546-‐79. hXp://www.jstor.org/stable/i387682
• What’s their answer? – Trade from the Atlan.c – Produced beXer ins7tu7ons
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Acemoglu et al. Have an Alterna7ve Story
• What’s their answer? – Asian trade: not a huge amount of surplus… – Cui bono from trade?
• Portugal: Portuguese monarchy… • Spain: gold and silver—monarchy benefiXed
– The Wars of the Counterreforma7on
• Merchants of Amsterdam benefiXed • Merchants of Bristol benefiXed
• Merchant power produces good ins7tu7ons – Atlan7c trade produces merchant power in northwest Europe
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Urbaniza7on
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The Scale of Atlan7c Trade
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de Vries
• Jan de Vries (2010) "The Limits to Globaliza7on in the Early Modern World," Economic History Review 63:3, pp. 710-‐33. hXp://web.ebscohost.com/ehost/results?sid=2ed5a63b-‐2aff-‐4c71-‐9e08-‐a3ca196c942a%40sessionmgr104&vid=2&hid=125&bquery=(JN+%26amp%3bquot%3bEconomic+History+Review%26amp%3bquot%3b+AND+DT+20100801)&bdata=JmRiPWJ0aCZ0eXBlPTEmc2l0ZT1laG9zdC1saXZl
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Europe-‐Asian Trade
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O’Rourke and Williamson
• Jeffrey Williamson and Kevin O'Rourke (2002), "Aner Columbus: Explaining Europe's Overseas Trade Boom, 1500-‐1800," Journal of Economic History 62, pp. 417-‐56. hXp://www.nber.org/papers/w8186
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O’Rourke and Williamson’s Thesis
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Asian Spice Trade Markups
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Asian Cloth Trade Markups