The Origins of Globalization: World Trade and the Making of the Global Economy, 1500–1800 by Pim de Zwart and Jan Luiten van Zanden (review)

Directed at an audience of students and non-specialists, this book offers a broad introduction to the scholarly debates among economists and historians about a multitude of processes triggered by transoceanic trade across the planet between 1500 and 1800. In that era, northwestern Europe (and northeastern America) attained better living standards than the rest of the world, including the most developed areas of Asia and other parts of Europe. These changes, dubbed the Great (and the Little) Divergence, happened while Europe came to control a large portion of intercontinental trade and maritime transportation and started to colonize a large extent of the globe.

The authors examine these changes comparing three types of indicators across the globe: gdp per capita, real wages, and urbanization ratios. Most data derive from estimates of gdp per capita and long-term economic performance in the Maddison Project.¹ Other figures stem from studies following Allen's methodology in estimating real wages—nominal wages divided by real cost of an essential basket of goods for a representative family.² The book would have strengthened immensely if the methodologies in the cited works were made transparent and compared. The authors often acknowledge limitations in the data, in terms of time, area, groups, and completeness. Yet readers unfamiliar with the cited studies can only wonder about the kind of sources consulted, their biases and gaps, their processing of information, the significance and representativeness of their data, the underlying assumptions and proxies of their estimates, etc.

To explain diverging trends in those indicators, the book resorts mostly to economists' studies of development and institutions, this century's main topics in economic history.³ This preference comes at the expense of the vast body of empirical work that historians have provided. The authors ambiguously privilege a group of economic institutionalists, particularly Acemoglu and his co-authors, whom the authors mention in most chapters of the book, together with some of the considerable criticism that historians and economists alike have leveled at these works for oversimplification and teleology (for instance, 19, 26–28, 61, 66, 103, 111, 114, 135–136, 254–255, 281).⁴

The authors' attempt to summarize so substantial a body of literature inevitably results in some mistakes. For example, when the authors refer to an increasing production of gold in Brazil after 1550 (72), they misread the cited literature, which maintains that Brazilian gold exports started in the last years of the seventeenth century.⁵ Inadvertently biased, the authors also claim that after wresting Brazil from the Portuguese, the "Dutch also modernized the [sugar] production processes" (82). The sources agree, however, that the Dutch had trouble mastering the sugar-production techniques, and either sold out their mills to the Portuguese or hired Portuguese technicians.⁶

Nonetheless, the book makes an important contribution to the recent group of studies that reinstate the importance of long-distance trade in forging global connections and processes before industrialization. It also makes a keen effort to provide a more nuanced picture of globalization beyond the traditional dichotomy between "hard" and "soft." It shows how the world became increasingly dependent on silver currency, the market for silver integrated globally, and its prices converged. It also reveals how the prices of some other commodities converged intercontinentally, although not globally, thanks to the increase of supply and the competition between commercial powers. Although most of the trade tended not to be in necessities, the volume of trade grew faster globally than the world's population and gdp. Nonetheless, in almost all of Asia, where most of the world population lived, long-distance maritime trade had a small share in the economy.

The effects of trade were greater in "soft globalization." The introduction of American maize and potatoes elsewhere spurred population growth. Empires drove intercontinental migration, including indentured labor...