Wednesday, April 15, 2015

2015-03 Book Review

Book Review: Economic Change in China, c. 1800-1950, by Philip Richardson.

How Europe, as opposed to China, came to dominate modern history is a debate that will not be settled any time soon. Professor Richardson’s book attempts to view this debate from the perspective of economic change.

In a story on economic growth, development, and change, the entrepreneur is the main character. Professor Richardson acknowledges that modern industry requires entrepreneurship to make headway (p. 62). The only other times entrepreneurs are mentioned, though, is to say that the government did not “create the context within which private entrepreneurs were able to respond effectively” (p. 84) and that “industrial modernization was considered too important to be left to private entrepreneurs” (p. 88). It is like Hamlet with scant reference to the prince.

Without a firm grasp on the causes of economic change, Professor Richardson can only tell the story of what happened, but not why it happened. These are two very different stories. The descriptions of economic trends in the book either lack vigorous analysis or contradict each other. One example of this is the typical inflationist viewpoint that falling prices are dreadful. The author cites other work showing that prices fell 40% between 1820 and 1850 (p. 22-23), drawing the conclusion that this was mostly the result of silver outflows due to trade. The author mentions the massive issue of paper currency (p. 19) and overstocking of ‘ever normal’ granaries (p. 22) before that period, but does not directly correlate these issues as possibly being the reason prices rose to an unsustainable level before 1820. This shows the author’s lack of understanding of money’s impact on the economy.

When foreign trade is mentioned, it is either considered favorable or unfavorable. All trade is favorable, the only defining feature of trade is whether it is free or unfree. Despite considerable discussion of interprovincial trade in agricultural goods, the author never draws the conclusion that trade between two provinces (i.e. domestic trade across internal borders) could be favorable or unfavorable.

None of the book’s citations are primary sources. Nor are there any citations of works in Chinese. Although Chinese scholars are cited, all of their works were written and published in English. Would a text written about early American development be taken seriously if no English language citations were used?

The book is a second-rate analysis of second-hand materials. The main body of text is only about 100 pages long, so it could pass as an introduction to issues related to economic change in China if the author had a solid understanding of entrepreneurship, monetary policy, and trade. That is not the case. Pass over this book.