MARCO POLO, the Venetian merchant who many credit with discovering the east during his travels in the late 13th century, had found ships with as many as 60 cabins in Ch’uan-chou (Guangzhaou), “the greatest mercantile city in East Asia”. The rich wore the finest silks and ate off porcelain dishes, and the markets abounded in oils, sugar, fish, timber and even toilet paper. Nearly everybody indulged in trade and commerce, often across the seas, giving rise to a society far advanced than anything Marco had encountered in Europe.
For centuries, maritime movement fuelled trade among distant nations and drove the global economy. With the help of advances in shipping and port technology, the shipping industries recorded a remarkable growth in cargo volumes and revenues. Maritime trade also helped cement ties among far-flung nations and made resource-rich countries such as China and India prosperous and famous.
The United States, a country that was built by migrants, did not have a maritime history to write home about until the 19th century. Yet, as renowned critic AA Gill, who passed away recently, said, “America didn’t bypass or escape civilisation. It did something far more profound, far cleverer: it simply changed what civilisation could be.” And with that, it changed the way even ties among nations were built! Few nations can afford to not befriend America—it is another matter that what the country has so painstakingly wrought, its new President-elect is threatening to tear asunder.
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Greg Clydesdale, a lecturer from New Zealand who has authored corporate books on entrepreneurship, has ventured into global economic history with his third book, tracing the rise and fall of trading nations through their shipping industries and the roles they have played in global economic shifts. His writing is breezy and lucid, and often reads like a novel.
From China’s phenomenally successful Sung dynasty (c. AD 960-1279) and the Mughal merchants of Gujarat—even in the 17th century, the richest man was a Gujarati trader—to the opening up of the spice routes that led to the empowering of the Atlantic empire of the West, Clydesdale shows how great trading nations rose on a wave of technological and financial innovation, but in that same success lay the causes of their eventual decline. Until the 17th century, a period that saw the rise of Dutch tradesmen, oceans were the regional markets—the Chinese dominated the China Sea (with the largest shipping industry, it continued to dominate world trade until the mid-19th century), the Gujaratis thrived in the Indian Ocean and the Iberians controlled the Atlantic.
The age of the Industrial Revolution brought up the British empire and, on their wings, the Americans. By 1850, Americans had built the second-largest mercantile fleet, but proceeded to become an industrial powerhouse as well on the back of a transportation revolution, mainly railroads. Much of the US merchant marine was destroyed during the Civil War, while Britain leapt ahead with the steam engine and other new technologies. Anyway, the US domestic market provided far better opportunities. At the same time, the Chinese were losing their main competitive edge—the quality of their merchandise—as the economy suffered from a stagnation in technological advances. The legacies of its past successes made the Chinese economy resistant to change and steered it on the path to decline.
Global political shifts also paved the way for American supremacy in the 20th century, overshadowing Britain and the development of post-war Japan. From 1870 through World War I, the US GDP grew five-fold, while Britain’s merely doubled. For Americans, the war provided the long-awaited alignment of maritime and shipping goals. While Britain continued to remain strong, other nations, including the US, got an edge, as they were developing and diffusing innovations faster. Japan had found new ways of creating value and reducing costs, and applied it to industry after industry—shipbuilding, steel, automobiles and consumer electronics.
In the late 20th century, global economic forces started shifting again. Clydesdale argues that the rapid rise of China, as well as of India to a lesser extent, represents an age of excitement and opportunity. As per him, two factors will be important to know if and how the waves may get unleashed: the economies of time that shape the functioning of commerce; and the legacies of historical investments on future productive activity. We are all interdependent now.
However, while Clydesdale may be right in saying that the West need not fear the rise of the east, he concludes rather too soon by doubting China’s ability to become the leading economic power. He says China still lacks the power of innovation that propels the US. But the waves of globalisation are unstoppable, and Brexit has already shown how weaknesses in one national economy can disrupt global forces. With Trump’s rise, such a future can’t be ruled out for the US too.
Despite some over-simplification, this book is a very readable account of thousands of years of global mercantile trade influencing the rise (and fall) of nations. Read it for the sweeping pleasure of economic history.
Paromita Shastri is a former financial journalist