The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

It is by the nature of such a book to be controversial, and Landes doesn't pull his punches; his approach is neoclassicist, although hardly a dogmatic one. He is rough on Postmodernists, Saidian Anti-Orientalists, French and Japanese protectionists, Spanish Roman Catholics, and many others. Among the reviews you'll read here, Landes irritates Catholics, third world enthusiasts, anti-Western intellectuals, extreme right wind Capitalists, anti-Japanese, and so on, and so on.

So, you've got controversy. But what is Landes actually saying? Well, in brief, Landes book focuses on three major reasons for Wealth/Poverty: Geography, Infrastructure, and Culture.

The discussion of Geography, early in the book, is at best half hearted. Some of the points seem valid - but you're always inclined to say 'On the other hand'. Are there really fewer diseases in Europe then in Africa? maybe, but transportation is easier. The black death annihilated a third of the European population in the 13th century. Does Heat makes labour harder and less efficient? I guess the builders of the Pyramids haven't heard Landes's thesis - or maybe hardships can be overcomming with whipping.

The best parts of the book deal with Infrastructure. In these, Landes has three main themes: Freedom, Capitalism and Science (Or, if you wish, Anarchy, Greed and Heresy).

Freedom allows people to do things. Landes portrayal of the centrally planned economies of ancient China, where the Emperor ruled everything, is powerful, and it seems to play a large role in the lack of initiative in China, despite the great achievements.

Capitalism, most noticeably in the form of Greed and Competition, drives people forward. Again, Landes comparison between the Chinese and the European Sea quests are enlightening. Europeans went in small ships, eager to outdo the competition and to come back making a fortune. The Chinese went with huge Ships, symbols of the empire rather than instruments of trade. They were unprofitable, victims of the ruler's whim, and, without a strong faction of interested merchants, had no chance of continuing throughout. Also interesting is that Europeans went looking for India and spices, while China was self-sufficient.

Science - Chinese science was much more sophisticated than European science back in the year 1,000. The Indians have invented the zero. But nowhere except in Europe did science work methodically, nowhere else was it progressive. Newton is famous of saying that he stood on the shoulder of giants - discoveries in China and the rest of the world were rarely followed up - gunpowder was discovered in China much before it was in Europe, but the Chinese never used it for weapons. In Europe, it became part of the war methods almost immediately. Landes discussions of clocks and glasses are particularly telling.

The Third Element - Culture - is the one with which I have the most trouble. Landes repeatedly attacks economists for discounting culture (for example in the last chapter, page 517 in my edition). He claims that they disregard it because it can't be quantified. Wrong. The reason Economists distrust culture is because it is such a 'one size fits all' argument. Japanese responds to the west was everything the Chinese should have done but didn't. ... Culture. Arab nations are stuck well behind everyone else, despite the great advantage they have in the shape of oil. ... Culture. Asians manage to pull themselves along, while most of the third worlders can't. ... Well, culture, again.

I'm not saying that Culture plays no part. Obviously it does. But it becomes an obstacle to understanding, and Landes can support it only with anecdotal evidence (a lovely and touching story of a Japanese woman), and unanswered question (Is Islam a cause for the suppression of women? maybe).

Despite this problem, this is a fascinating book. Yes, it is a little too pro-Western. The problem is really more one of emphasis than one of facts - in my view, Landes is pretty close the mark usually, but he much underestimates the responsibility of the West for African poverty. Something's are left relatively unexplained - the current fast rise of China, which might undertake the point Landes made about the vitality of Freedom

But ultimately, as Landes acknowledges, no one book can solve the question of poverty and wealth. The answer is necessarily multi-faceted. 'The Wealth and Poverty of Nations' (neat name, also) is a well-written and intelligent treatment of the question.


Interesting, even memorable, but probably misleading   January 31, 2001
Peter J. Adams (Pittsburgh, PA United States)
87 out of 102 found this review helpful

The object of this book is to survey and explain the fast or slow economic development of different parts of the world from about 1500 to the present. Landes mainly takes a regional perspective looking at Europe, Asia, Middle East, Latin America, and so on with some refinement to the national scale (e.g. China vs. Japan, Britain vs. Spain).

Landes strongly advocates the point of view that cultural values (work ethic, thriftiness, attitudes toward change, technology, women) are primary determinants of economic success or failure. Although many, including myself, find this thesis lacking and controversial, there is still an abundance of interesting and useful information in this book.

On the plus side, Landes offers a wealth of fascinating anecdotes, introductory information on the history of technology that was new to me, a clear and definite argument, and above all gives the reader some sense of the importance of culture in the economic realm. Although I personally feel that Landes overstates the importance of culture, the points he makes do have some validity and are generally under appreciated. Moreover, the author is remarkably fair minded for someone advocating a controversial thesis.

Don't be fooled by the reviewers that make fun of the author for suggesting that eating with chopsticks has given Asians manual dexterity that is advantageous to their high-tech manufacturing sector. In fairness to the author, this statement is a single sentence in a 500 page book and he immediately admits that most of his colleagues smirk when they hear it.

On the minus side, the author verges on severe cultural stereotypes a few too many times. The Asians are all thrifty and hard working while the Latins have been brain washed by the Catholic church. Landes more or less ignores several non-cultural challenges that poor countries face: unfair pressure from wealthy countries to open their markets, scarcity of capital & technology, a brain drain that leaves the best and brightest in the developed world. Finally, a remarkable failure is that Landes doesn't examine the idea that cultural values may be largely determined by the material & economic conditions of a country.

The book's writing style is casual and conversational, but sometimes unclear and confusing. Many times I was not sure exactly what the author meant and wished he had written a complete sentence instead of a short and vague phrase.

The bottom line is that the book is a worthy read. While not fully convincing, I found myself having a new appreciation for the importance of cultural values in the economic realm.


academic overspecialization at its worst   September 7, 2000
Kaveh Hemmat (Chicago)
68 out of 88 found this review helpful

I am an economics major at the University of Chicago. I started this book on a reccomendation from an economist friend of mine, and while I was not impressed by his language in the first chapter, I can honestly say that I still seriously expected to find some penetrating economic analysis. What I found was a really bad case of somebody trying to do something he obviously wasn't trained to do. His main point is that culture, or more precisely, values, matter to economic development. This has long been of interest to anthropologists and sociologists and they have done a lot of good, sophisticated writing on the subject, which David Landes obviously hasn't read. The really sad thing about this is that, in addition to being much more subtle and clever, they make a lot of the same points (but without the vulgarity and racism). See, for example, Benedict Anderson's Imagined_Communities, which discusses the rise and role of nationalism.

He supports his arguments with a crude analysis of European and Japanese cultural and industrial developments. But as he says, the questions of why the West industrialized and why the rest of the world didn't are really one and the same. And he singularly fails to give an effective analysis of the other cultures. Here's an example: he says that the armies "Oriental despots" fought poorly because they had no reason to be loyal to a despotic government. He cites as evidence (if it can even be called that) just one case where British troops fought against an Indian ruler, whose troops mostly ran away. He never asks whether they did this in battles against other Indian rulers who didn't have the prestige or technical sophistication of the British. He even goes so far as to say that these "Oriental despotisms," which he does not differentiate, appointed officials by fiat and not by merit. I shouldn't need to mention the Chinese examination system. Even he does't think knowledge of Confucian classics counts as merit, he should have known that during the Tang dynasty the officials were selected by a practical exam rather than Confucian classics. But that's exactly the problem--he's trying to write a history of the world that compares European and non-European cultures starting from the assumption that since Europe invented almost everything, only Europe needs to be seriously researched (if you don't believe me, check the bibliography). And he finds (surprise) that only Europe has made significant contributions to the industrial revolution and that this was contributed to by its culture (was anything any society ever did not influenced by the culture?). The reasoning is highly circular. Anybody that disagrees with him is, he says, just writing feel-good history with no regard to the facts (the irony here is just unbearable). I would say that he should leave history to the historians and sociology to the sociologists, but most of these don't know economics well enough to write an economic history. What we really need is for more economists to throw away their ridiculous pretension that economics is the only "scientific" social science and start taking the other social sciences seriously. This one in particular clearly has a lot to learn from them.


Perpetuates the black legend against Portugal and Spain   August 18, 2001
68 out of 86 found this review helpful

The work of Prof. David S. Landes is totally prejudiced by a strong bias against southern european catholic states, very especially, Portugal and Spain. He intends that the expulsion of the jewish communities from those countries in the last decade of the 15th century, and the predominance of the catholic religion also in those socities, led them to an historical state of underdevelopment, not yet completely surpassed, by opposition to what happened with the northern european societies, mainly the english and the dutch one.

Firstly, although the expulsion of the jewish communities was a regretable evenment, it is useful to remember that the major part of their members found refuge in such countries like Morocco, the nowadays Bosnia, Greece and Turkey (the sefardi diaspora), but none of those places became an economical power by this simple fact. It is easily recognizable that they share an almost similar level of development with Portugal and Spain - Greece - or a worse one - Morocco, Bosnia and Turkey.

Secondly, the two following centuries - the 16th and the 17th - were the portuguese and spanish golden age, an era of discoveries and imperial conquests, the highest peak on the power of the iberian nations, and, until the middle of the next century - the 18th -, the gap between northern and southern european countries was not so big as Prof. David S. Landes sustains. Really, he falls in contradiction when he quotes, on the page 232 of his book, a table of the estimated G.N.P. per capita for selected countries relative to the year of 1830 (in 1960 US$). It is possible to conclude that Portugal, even after three hundred years of claimed bigotry and fanaticism, had an income of US$ 250, Holland of US$ 270 and England of US$ 370. The difference is not, obviously, smashing...

So, which are the real causes for the decline of the iberian space. We can sum up them in the following points:

1 ) The financial exhaustion provoked by the ever increasing maintenance costs of the overseas colonial empires;

2 ) The centralized political tradition of the iberian kingdoms and the permanent economical interventionism of the public authorities, suffocating the appearance of a strong private sector of businesses;

3 ) The destruction of the jesuit order's schools net, which provided free education to young boys of all social classes and was replaced by... pure emptiness (a fatal blow to the portuguese population's level of literacy), in the second half of the 18th century, during the Marquis of Pombal's government (the Marquis was an enlighted despot ...);

4 ) The political instability that deeply shaked Portugal and Spain in the first half of the 19th century, (greatly originated by anti-catholic forces), impeaching the sucessful and punctual launch of the industrial revolution.

Concluding, although the book now reviewed posseses serious points of interest and, partially, explains why some countries are richer than others, I profoundly disliked his reading; instead of Prof. David S. Landes' work, I would recommend Paul Kennedy's "Rise and Fall of the Great Powers", Michael Novak's "The Spirit of Democratic Capitalism", Amintore Fanfani's "Catholicism, Protestantism and Capitalism", Edward Peters' "Inquisition" and Guy Sorman's "The New Wealth of Nations".


The Science of Obsoloscence...   March 30, 2005
Faruk Ekmekci
56 out of 82 found this review helpful

After reading Frank's Reorient and Pomeranz's The Great Divergence, David Landes' arguments in The Wealth and Poverty of Nations leaves one with a sense of obsolescence. Almost all of Landes' assertions are the Eurocentric cliches that have been discarded by Frank, Pomeranz and some other contemporary scholars with sound data, logic, and argumentation. As such, except for its speculations on intra-European discrepancies, The Wealth and Poverty of Nations is more ideology than science. At best, it is a good Devil's Advocate for those who want to sharpen their contrary positions.
The central conviction of Landes is that "for the last thousand years," the Europeans have been "the prime mover of development and modernity" (p. xxi). The Europeans were healthier, had better diet, and thus lived longer (pp. 20-21). They were also less oppressed and repressed by their rulers than their Asian counterparts were (p. 27). Consequently, in the long run, "Europeans" won over others in global competition (p. 20). And "this was the reality," (p. 28).
Or this was the myth! None of Landes' assertions have any historical support whatsoever. First of all, there were no significant differences between Europe, China, and Japan in terms of average standards of living in early middle ages. Average life expectancy as well as calorie intake was at comparable levels in all three countries until the 19th century (Pomeranz, p. 44-6). Not only the health of the Chinese was comparable to that of the European, but the knowledge of the former about maternal and infant health was superior to that of the latter as well (ibid, p. 46). Talk of an overall "European" victory over others is also problematic for another reason. As Pomeranz's analysis of consumption trends in Europe suggests, there was no "European" miracle in early modern ages. If anything, it was a British, and to lesser extent Dutch, revolution and not a European one until 1850 (Pomeranz, p. 119).
Landes' adoption of the notorious hydraulic thesis, the argument that the management of water in Asia promoted imperial authority and hence "Oriental despotism", makes his approach even less attractive. Pomeranz shows that differences in terms of labor and land markets in Europe and China in 16th through 18th centuries were insignificant and did not always favor Europe. Indeed, overall China was closer to market economy than was most of Europe, including most of "western" Europe. Much of Western Europe's farmland was harder to buy and sell than that of China. In Yangzi Valley, for example, close to half of land was rented (Pomeranz, pp. 72-3). This was also similar in labor market. Labor was not less free in China than in Europe (ibid, pp. 80-1). Thus, as Pomeranz concludes, Europe's factor markets for land and labor "seem no closer to Smithian ideas of freedom and efficiency than do those of China, and perhaps a good deal less so," (p. 107). Water might have made the life in Asia more central/authoritarian than it would be without its central place, but this water-effect was not so big to make the political and economic life in China significantly less free than life in Europe.
Therefore, Landes' assertion that the probability of European global dominance in 1500 A.D. was "close to one" (p. 29) is simply a European conviction with no empirical base. To start with, since Abu-Lughod (1991) we know that Europe was only a minor player in the thirteen- and fourteen-century world-system who "imported" most of its technology and luxury. Second, using comparisons of the effects of the influx of New World silver in the 16th century and average production per head in the 18th century, Frank also concluded that "Asians must have been significantly more productive than Europeans" in 16th through 18th centuries (Frank, p. 173). Finally, Pomeranz demonstrated that Europe was not exceptionally different from China or Japan in terms of production, market regulation, or the consumption of luxury goods. Thus, it would be a risky gamble for a sixteen-century European to bet on a European hegemony three centuries later.
Culture and the Problem of Variance:
Culturally speaking, neither the Confucian nor the Islamic world experienced a significant transformation until the 20th century. As such associating the culture of these nations with the periodical rise and fall of these nations in the global arena causes logical problems. Islamic or Confucian culture cannot be the fundamental cause of the later "fall" of Islamic and Confucian nations, because these cultures were also present when these nations enjoyed prosperity and superiority in middle and early modern ages. Simply put, a constant independent variable cannot be the cause of a varying dependent variable.
Culture can be an explanatory factor for developments in Europe, however. Some European nations experienced a religious transformation in the 15th and 16th centuries. The economic and political break of these countries from their past can therefore be associated with this cultural transformation. What should be noted, however, is that this cultural transformation did not necessarily put the Europeans over non-Europeans; it simply made them on a par with others by eliminating some of the barriers that halted their economic and political development. Therefore, elimination of cultural barriers in Europe cannot be the fundamental cause of the later divergence between Europe and Asia, because the major Asian nations did not have such barriers to begin with. Indeed Landes' assertion that the Chinese were "reluctant improvers and bad learners" (p. 336) simply attests to the existence of higher levels of economic and technological standards in China. The Chinese were reluctant improvers because they felt themselves sufficiently prosperous, and they were.
Into the Dustbin of History?

If a book is to be assessed according to its overall quality and originality, then given the obsolescence of the majority of assertions in Landes' book, I see little harm in ripping 90 percent of The Wealth and Poverty of Nations and throwing those pages into the dustbin of history. The rest 10 percent includes Landes' speculations on intra-European discrepancies and how they differentiated the later fates of European nations. It is only this section where Landes' arguments stand firmer against empirics and achieve higher persuasiveness.
Landes puts forward two reasons why the Spanish and the Portuguese could not maintain their hegemony in the 16th century afterwards: abundance of silver and Catholicism. Spain became poor, "because it had too much money," (p. 173). With so much silver at their disposal, the Spaniards had little incentives to invest their money in productive ways. Catholicism combined with the still-present reconquista spirit also induced the Iberian people to spend relatively more of their money on castles, churches, and holy wars, than on technology or trade. As to Britain, Landes argues that a combination of technological and cultural factors facilitated Britain's lead in the industrial revolution. On the one side, by the early 18th century Britain was ahead of other European countries in textiles, iron, and energy, which constituted the core elements of upcoming revolution (p. 213). On the other side, Britain was more liberal towards the non-Britons and this caused an influx of skilled minorities who were not welcomed in other European territories (p. 223).
A combination of Landes' arguments on intra-European differences and Frank and Pomeranz's emphasis on external factors might weaken the rigidity of the internal/external dichotomy. External factors which Frank and Pomeranz emphasize could explain the divergence between Europe and Asia which were comparable in technological and economic standards until the 19th century. Cultural and other internal factors which Landes underscores could help explain why certain countries within Europe rose earlier and fared better than others.
A Final Note on Colonialism:

Landes belittles the gains that accrued to the Europeans from colonialism and slave labor. He argues that the colonizers did not always get what they expected and the colonized did not necessarily lose in every occasion (pp. 434-5). To me, a short observation of the almost-perfect fit between the colonizer/colonized and developed/underdeveloped dichotomies at the global level will suffice to refute Landes' arguments on colonialism. Capitalist world-economy needed colonialism (or more broadly control over foreign lands) and slavery (or more broadly cheap labor) to survive. To understand that, we need to revisit the dynamics of capitalist economic development.
Any capitalist economic development has to overcome two impediments: capital accumulation and market creation. The former is needed to start up a development project; the latter is required to sustain and further it. Yet within the boundaries of a national economy, simultaneous achievement of the two becomes a dilemma. On the one side, capital accumulation within a national economy results in increased inequalities and thus deprives the country of a viable domestic market. On the other side, attempts to create a viable national market through egalitarian policies eventually lead to capital shortages and financial crisis. Colonialism and slavery played a key role in the contemporary developed countries' overcoming this dilemma. On the one hand, Western states created resources to accumulate capital by means of unequal trade with, exploitation of labor of, and profit extraction from the foreign lands; on the other hand, control over foreign people provided the Europeans the markets to sell their agricultural and industrial products (Knox and Agnew 1998, 59-61). Thus, Western development was made possible thorough "externalization" of the negative consequences of capital accumulation and market creation. This "external" link to development has not been unique to the Western case, though. Japan's colonial rule on East Asia as well as South Korea and Taiwan's privileged access to the American market played a key role in these countries' achieving global competitiveness through cheap labor/resources and/or scale economies. "Endogenous" growth is at best an historical rarity, at worst a neoclassical myth.
The absence or existence of an "external link" has also been a crucial determiner of social and political developments in developed countries. A comparison of the Japanese and German cases with the Russian and Chinese cases, all of which were late-industrializing countries, might be illuminating. In the Russian and Chinese cases, the exigencies of a capitalist economic development without external exploitation necessitated the `exploitation' of internal actors - in particular the peasants- and thus exacerbated the dissatisfaction of the lower strata with the governing body. In Russia, for example, the peasantry was made to pay the "bill of modernization" through "forced exports, monopoly prices, and repressive taxation," (Skocpol 1979, p. 92). Thus, the `external dissatisfaction' of Russia and China as to their position in the global political economy was supplemented with the `internal dissatisfaction' of the Russian and Chinese people, which eventually paved the way to social revolutions. By contrast, in the Japanese and German cases, the availability of `external exploitation' rendered possible the avoidance of dependence on foreign borrowing and the achievement of the maintenance of a relative `internal satisfaction' through some welfare policies (that was also the case for other West European countries). And this relative `internal satisfaction' of German and Japanese people played an important role in the failure of social revolutions in those countries, although their `external dissatisfaction' eventually resulted in the adoption of non-democratic forms of governments in Germany and Japan. As such, not only the economic development but also the democratic systems of Western countries owe a lot to colonialism and slavery. The modern world would be unrecognizably different if it were not for colonialism.

References:
Abu-Lughod Janet (1988). Before European Hegemony: The World-System A.D. 1250-1350. Oxford: Oxford University Press.

Frank, Andre Gunder (1998). ReOrient: Global Economy in the Asian Age. Berkeley: University of California Press.

Hansis, Randal (1997). The Latin Americans: Understanding Their Legacy. New York: Mc Graw Hill.

Knox, Paul, and John Agnew (1998). The Geography of the World Economy. 3rd ed. New York: Oxford University Press.

Pomeranz, Kenneth (2000). The Great Divergence: China, Europe, and the Making of the Modern World Economy. Princeton: Princeton University Press.

Skocpol, Theda (1979). States and Social Revolutions. New York: Cambridge Press.

Waldner, David (1999). State Building and Late Development. Ithaca: Cornell University Press.