economic history paper

Economics 463 Economic Development Before 1900 Fall 2015

Prof. Christopher Clague Nasatir 318

Phone 594-5503 Home Phone (858) 412-3251 (not after 9PM, please!)

Office Hours: MWF 10-10:45 and by appointment

Email: [email protected]

Required texts (all are paperback; used books may be available at lower prices)

1. David Landes, The Wealth and Poverty of Nations, 1998, W. W. Norton ($17)

2. Robert C. Allen, The British Industrial Revolution in Global Perspective, 2009, Cambridge University Press ($28)

3. Robert B. Marks, The Origins of the Modern World: Fate and Fortune in the Rise of the West ($27) Roman and Littlefield, 3rd edition, paperback

4. Reader contains exercises, sources for paper topics, and the following articles:

a. Timor Kuran, “Why the Middle East is Economically Underdeveloped,” JEP, 2004

b. Kenneth Sokoloff and Stanley Engerman, “History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World,” (JEP, 2000)

The following articles are posted on Blackboard

c. Elinor Ostrom, “Collective Action and the Evolution of Social Norms,” (JEP, 2000)

d. Eric Chaney, “Separation of powers and the medieval roots of the institutional divergence between the Middle East and Europe.” (2011)

Grading

Test 1 25%

Test 2 25%

Homework and Quizzes 25%

Optional Paper (+) up to 5%

Final exam 25%

Students may add up to 5 percentage points to their overall grade by writing a paper on a topic approved by the instructor. The Course Reader contains a list of reading suggestions for paper topics. You are not limited to these topics. The paper must address a well-defined question and must make use of reasoning related to course material. To write a paper, you must hand in a sheet of paper describing the topic and listing at least a couple of sources. The topic sheet is due by November 20 and the paper itself is due by December 4. Earlier submissions are welcome, and they will increase the opportunity for my comments on your paper. The paper should be about 8 double-spaced pages and must be no longer than 15 pages. The paper should contain a list of sources at the end. The body of the paper should contain specific references to these sources.

Students who have written a paper, have completed all the assignments in the course, and have B+ or better going into the final do not need to take the final exam.

Date	Topics	Reading
Aug 24-28	The Rise of the West; the World in 1400 Game Theory: Assurance Game	Marks, Intro, Chaps 1, 2
Aug 31-Sept 4	Europe and China in pre-modern period	Marks, Chap 3 Landes, Chap 1,2	Ex1 Assurance Ex2 Speciali- zation
Sept 9-11	European Exceptionalism; Technological Change in Middle Ages; Europe, China, and Islamic World Game Theory: PD Game Malthus, Population	Landes, Chap 3-4 *Chaney, Middle East and Europe on BB	Ex3 Empires, States, Trade Ex4 PD game
Sept 14-18	Age of Discovery 1500-1750	Landes, Chap 6	Ex5,5a Malthus
Sept 21-23	Dutch Golden Age European Trade with Asia	Landes, Chs 9.10	Ex6,7 Landes
Sept 28-30	Review
Oct 2 Test 1			Test1 Oct 2
Oct 5-9	Industrial Revolution	Marks, Chap 4 Landes, Chap13
Oct 12-16	Industrial Revolution	Landes, Ch 14,15 Marks, Chap 5	Ex 8 Marks 4,5 Ex 9 Landes
Oct 19-23	Industrial Revolution	Allen, Ch 1
Oct 26-30	Industrial Revolution	Allen, Ch 2 Allen, Chs 6,11	Ex10 Allen
Nov 2-6	Spread of Industrial Revolution French Revolution	Landes, Ch 16
Nov 9, 13 Wed Nov 11 holiday	Latin America	Engerman-Soko-loff in Reader Landes, Ch 20
Nov 16-18	China, Islamic Lands	Landes Ch 21, 24 Kuran in Reader	Paper topic due Nov 18
Nov 20 Test 2			Test2 Nov 20
Nov 23	Japan	Landes, Ch 22, 23
Nov 26 Thanksgiving
Nov 30-Dec 4	Rule Obedience, Social Norms PAPER DUE DEC 4	Ostrom on BB	Ex11 Ostrom Paper Dec4
Dec 7-9	Review
Dec 16 Wed Final exam	DECEMBER 16 WEDNESDAY		Final exam Dec 16 10:30-12:30

Theme of the course

How did the modern world get to be the way it is? In medieval times, the most advanced civilizations were in China, India, and the Islamic world, while Europe was relatively backward. Yet by 1900 European countries had developed the most technologically advanced economies and had conquered much of the rest of the world. By that time a large gap in living standards had emerged between the developed West (including some of the offshoots of Europe) and the Global South, a gap that has become enormous in the last century. Several puzzles will be addressed in this course: Why did the technological breakthroughs occur in Europe rather than elsewhere? Why did they occur in Britain rather than elsewhere in Europe? Why did technological breakthroughs occur at all? What happened in early modern societies that made possible the historically unprecedented phenomenon of continuous economic growth and the accompanying changes in societal organization?

One prominent explanation of the “Rise of the West” lies in the character of the economic, political, and social institutions that emerged in Europe. The rule of law, the institutions of representative government, and individual rights to person and property are claimed, in this interpretation, to be quite different in Western Europe than in other regions of the world, and these differences are alleged to account for the distinctive features of capitalism in the West, which in turn explain the emergence of rapid technological change that we call the industrial revolution. This institutional explanation has recently been challenged by authors who deny that the relevant economic institutions of secure property rights and reliable contract enforcement were very different in non-European societies, and who claim that other factors, notably differences in resource endowments and accidents of history, were important causal factors in the Rise of the West. It seems that there is merit in both sides of this vigorous debate: institutions are an important part of the explanation, and accidents of history and the location of coal deposits and other resources have played important roles in the process. History could well have turned out differently.

In explaining the evolution of the institutions of capitalism and democracy we shall make use of some basic game theory, including the prisoners’ dilemma game and other tools of institutional economics. We’ll start with the world around 1400, then consider the age of exploration, the emergence of modern states in parts of Europe, the industrial revolution, and the spread of modern economic growth around parts of the world in the 19th century. We’ll also describe the emergence and uneven spread of representative government and rule of law.

Topical Outline

1. Introduction: The Puzzle of the Course: Why the West and not the Rest?

2. Specialization and trade. Why these were essential for technological progress. Spread of ideas and technology.

3. Malthus. Population dynamics. Malthusian equilibrium: population growth and diminishing returns bring the standard of living back to “subsistence level.”

4. Game Theory: Assurance Game, Prisoner’s Dilemma Game, Rule Obedience model. Message of institutional economics: Your optimal strategy depends on what you expect others to do. Hence the same fundamental conditions can give rise to multiple equilibria, some of which are much more desirable than others.

5. The Pre-Modern World around 1400: Empires, States, and Trading Patterns. Comparison of China, Europe, and the Islamic Lands

6. The Early Modern World and the Age of European Exploration, 1500-1750. Growth of world trade 1500-1800. Portuguese expansion in Asia, followed by other Europeans. European colonialism. Emergence of modern states in some parts of Europe. Military revolution and gunpowder empires.

7. Industrial Revolution. Technological changes in Britain. Various interpretations of why it occurred in Britain and Europe and not elsewhere. Scientific Revolution of 17th century and its relevance to the industrial revolution.

8. Spread of Industrialization to rest of Europe and to settler colonies of Britain. De-industrialization in the periphery in 19th century. Colonial pattern of trade: manufactures from Europe, primary products from periphery.

9. Evolution of representative government and democracy in Britain, Europe, Latin America, and elsewhere.

10. Why the West and not the Rest? Interpretations

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