ReORIENT: Global Economy in the Asian Age

Citation

Engelbrecht, H. (1999), "ReORIENT: Global Economy in the Asian Age", International Journal of Social Economics, Vol. 26 No. 12, pp. 1505-1516. https://doi.org/10.1108/ijse.1999.26.12.1505.3

This iconoclastic book is the culmination of one of the most prolific social historian’s life‐long struggle to explain world development. It presents a radical re‐interpretation of the history of the early modern world system (1400 to 1800). A central idea put forward by the author is that in order to understand history one has to place the analysis squarely into a world‐encompassing model of the global economy. Ignoring the consequences of participation of countries or regions in this global economy (i.e. by focussing on only internal factors), as most studies do, results in severely misguided accounts of history and construction of deeply flawed social theory.

Frank’s approach, by contrast, provides a much needed perspective that we are “all in the same boat”, that there is “unity in diversity”, and that ideas such as that of a “clash of civilisations” are nonsense. His global perspective is applied to, among other things, the origins of the industrial “revolution”, arguing that there was little that was special or unique about the rise of Europe.

Frank argues that almost all received social theory is Eurocentric and therefore useless for understanding past and current world developments. His global perspective “pulls the historical rug out from under the anti‐historical/scientific – really ideological – Eurocentrism of Marx, Weber, Toynbee, Polanyi, Braudel, Wallerstein, and most other contemporary social theorists” (p. xv/xvi). He dismisses concepts like “mode of production” and “capitalism” as empty categories and as counter‐productive. Adam Smith, on the other hand, being “pre‐Eurocentric”, largely escapes Frank’s criticism and is often quoted as evidence in favour of his ideas.

Although Frank discusses a wealth of scholarship to support his arguments, the wide‐ranging nature of the subject, and his tendency to be overly polemic in places, leaves the book open to criticism and does not endear him to many social scientists. Neither does his belief that irrespective of which corner of the world and historical episode one analyses, individuals react rationally to economic circumstances. Some readers might be surprised about Frank embracing such basic economic tenets, but the fact is that they liberate analysts from emphasising misplaced cultural attributes that are usually little more than ideology in disguise. Too many writers have pointed to “special” features of successful economies, with “cultural superiority” of one kind or another being at one end of the spectrum. The recent growth crisis in Asia supports Frank’s arguments by highlighting how quickly what is perceived as a “cultural advantage” one‐day can turn into a “cultural disadvantage” almost overnight.

Chapter 1 sets out the broad themes of the book and introduces the following chapters. In the long second chapter Frank documents the structure and flow of trade between major regions of the world economy. He also provides supporting evidence for his thesis that there was a single global world economy with a worldwide division of labour and multilateral trade from 1500 onwards, and that it was dominated by Asia, especially China, at least until about 1800.

Chapter 3 examines the role of money in the world economy and argues that money flows stimulated production more in Asia than in Europe. Further implications of this hypothesis are derived in chapter 4, where Frank debunks several Eurocentric views, i.e. that Europeans created the world economy and capitalism, that Europe was more productive than Asia, that European technology and institutions were superior to Asia’s, that there was an “Asiatic mode of production”, and that Asian institutions hindered development. One of his major theses is that institutions derive from economic processes, instead of being primarily determinants of such processes. Frank admits that the evidence on this point is somewhat weak but argues that “posing the right question is already more than half of getting the right answer” (p. 210). One might criticise this approach. It is a redeeming feature of the book, however, that Frank acknowledges when he is on shaky ground.

Chapter 5 explicitly discusses the temporal dynamic of the global economy and world system. The methodology used to do this is “horizontally integrative macrohistory”, i.e. the analysis of how different parts of the world economy responded to the same global forces. According to Frank, this approach enables us to see that “all sorts of horizontally simultaneous events in world history are not coincidence, but are . . . ‘interrelated historical phenomena”’ (p. 255). The approach has a lot going for it. When not applied carefully, however, it might lend itself to gross overstatements. On occasion Frank’s argumentation echoes chaos theory (to which he explicitly refers in the last chapter), which allows the “clapping of butterfly wings in China to create a storm elsewhere” (and vice versa), resembling an “everything is possible theory of everything”.

Chapter 6 addresses the important question of the “Rise of the West, decline of the East”. Frank argues that “the Europeans had no exceptional, let alone superior, ethnic, rational, organizational, or spirit‐of‐capitalist advantages to offer, diffuse, or do anything else in Asia” (p. 283). The Europeans did have what has been called “advantages of backwardness”. The decline of the East preceded the rise of the West. A central part of Frank’s explanation for the industrial “revolution” is that invention of labour‐saving technologies made economic sense (it was rational) in Europe but not in Asia (or anywhere else for that matter). Europe had low population growth and capital inflows; Asia had high population growth, less capital, and greater polarisation of income.

At the end of chapter 6 Frank briefly speculates about possible implications of his analysis for the future. In particular, he poses the possibility that East and West might again trade places in the world economy. Frank does not comment on the current crisis of development in Asia, i.e. whether he regards it as significant enough to warrant reformulation of his thesis.

The last chapter summarises the book and expands on the implications of Frank’s approach and findings for social theory. Frank strongly focuses on methodological issues (how to do “history”), trying to “sell” horizontally integrative macrohistory, while annoying almost every other social scientist in the process.

This reviewer found it somewhat frustrating that Frank does not draw on the burgeoning economic growth literature to support some of his arguments. He says little explicitly about economic growth theory, especially “new” growth theory which endogenises technological change and knowledge accumulation. There are, however, some interesting parallels. It has been noted that applying such theories to individual countries in isolation is not very helpful for understanding country growth differences (see, e.g., Klenow and Rodriguez‐Clare, 1997; Kremer, 1993). In other words, even mainstream economic theory is coming around to the idea (admittedly in a rather limited way) that in order to explain economic growth one has to adopt a global perspective.

To sum up, ReORIENT’ is a landmark book. It would be too easy to dismiss it as just “politically correct”. In any case, it does not say much about ecological or gender issues, deficits that Frank readily admits. The book should be read by anyone interested in new perspectives on world development. Frank admits that the book is “full of holes”. Some parts read more like a research proposal/agenda, rather than proper analysis. He leaves it to others to fill in the missing pieces and either correct his mistakes or confirm some of his hypotheses and speculations.

I hope that readers will still be able to appreciate the importance of the basic ideas put forward in this book. I would argue that their importance becomes even clearer when one compares ReORIENT to other recent interpretations of world history, e.g. the much heralded and unashamedly Eurocentric book by David Landes (1998).