Global industrialization: a multipolar perspective

KAORU SUGIHARA

Why did global industrialization occur over the last two centuries? Beginning in England, the industrial revolution was first transmitted to continental Europe, the United States, and Japan in the long nineteenth century.

Before 1800, most agricultural societies in Asia and Europe developed a system of production and reproduction by accepting local resource con­straints, imposed by nature.¹ Regional or long-distance trade only partially altered the fate of societies, although they were certainly shaped by some ^[70] developments coming from elsewhere, such as epidemics and violence.

In what ways was this Malthusian trap overcome? The traditional narrative has been one of a “European miracle”: technological breakthroughs occurred during the period from the scientific revolution to the industrial revolution, first in Britain and then in other parts of Europe, accompanied by institutional developments, especially the emergence of the nation state and a regime of private property rights, which created essential conditions for industrializa­tion and economic growth.^[71] Once agricultural productivity rose and coal became available in some places, major resource constraints such as a short­age of land and the danger of deforestation began to be significantly eased in some parts of Western Europe. Overseas expansion aided by the develop­ment of navigation and military technologies also helped ease regional resource constraints, through the imports of raw materials and food. Kenneth Pomeranz has called such a resource bonanza, in shorthand, “coal and North America.”^[72]

However, this was a solution specific to Western Europe. The ways in which resource constraints were eased in the subsequent process of global industrialization differed region by region.

This chapter discusses the basic mechanism of global industrialization with reference to how local resource constraints were eased through the intro­duction of modern technology and institutions in core regions of the world. It describes the experiences in the West, East Asia, and South Asia, and incorporates them into a tripolar perspective; in the future, with further research, the discussion could be extended into an even more multipolar one.

The adoption of a multipolar perspective implies a degree of departure from the existing literature. It involves explicitly reciprocal comparisons, rather than assuming the European experience as a yardstick, even though industrialization occurred there first.^[73] Appropriate relationships between industrialization and the environment had to be established in each region, regardless of whether modern technology and institutions developed largely in that region, as in Europe, or came from outside.

Along with comparisons, this chapter develops a connective history, with an explicit recognition of interdependence. Since industrialization began, different paths of economic development in major world regions (such as Western Europe, East Asia, and South Asia) became much more closely connected with one another. Western impact was not a one-way process. Western traders, financiers, and steamships developed long-distance trade routes, but local and regional merchants handled a corresponding growth of local and regional trade.

The chapter begins with a review of early modern European economic development from a reciprocal comparative perspective. It then characterizes the Asian path to industrialization, and suggests that East (and Southeast) Asia and South Asia developed different ways of easing local resource con­straints over a long period of time, which underpinned their respective patterns of industrialization. It argues that Japan, and a little later East Asia, pursued a different, more labor-intensive, route to industrialization from the earlier Western, relatively capital-intensive one, at a time when most non­European countries were integrated into the West-dominated world econ­omy as primary producers. The chapter then describes the process of the diffusion of industrialization and the interweaving of the various paths, and the final section briefly discusses the overall effects of these events on global environmental sustainability.

The European path to industrialization^[74]

According to Eric Jones and others, Europe as a region achieved a series of major technological and institutional innovations, worth calling the “European miracle,” between 1400 and 1800. Major innovations include the invention of large water-driven machines and steam engines that pumped water out of coal mines and then powered machinery and transport vehicles, the emergence of fiscal-military states that came to support industry through tax policies and tariffs, and overseas expansion that provided raw materials; these were accompanied by wars that encouraged new technology and shaped population movements.

A few comparative points may be added to these well-known observations. First, Europe was characterized by mixed farming, while this was less common in the rest of the world.^[75] Mixed farming, a combination of crop production and livestock raising, is inherently more capital-intensive and extensive in its land use than was raising only crops and getting the few large animals one used from elsewhere. By contrast, typical East Asian rice farming was labor- and land­intensive - using little animal power, and getting such high yields per acre that turning land over to pasture was unthinkable - and was thus at the other extreme of this continuum. In its established European form, the mixed farm­ing path was a sophisticated land-based combination of different production schedules, and resulted in a less densely populated landscape, a greater oppor­tunity to deploy cattle for transport, and an economy more familiar with the concept of “fixed capital.”^[76] From the perspective of the majority of the world's population engaged in settled agriculture, the European pattern was biased towards a capital-intensive path.

Europe's institutional development was dependent on this framework. Enclosure - the process through which fields and common lands were fenced off and transformed into pasture - helped make both land and labor available to capitalist agriculture, and accelerated capital accumulation.

was slow. These factors account for the favorable conditions for capital accumulation and the development of labor-saving technology. (Note that this is not a statement about relative rates of technological change, but about types of technological change.)

In some regions of Europe, a capital market did not develop, or labor­absorbing institutions developed better than capital-absorbing ones, which led to a strong element of the labor-intensive path similar to that of East Asia. In particular, proto-industrialization in continental Europe (as well as in some parts of England), which was substantially based in the peasant society, retained this tendency, and helped population growth through labor absorp­tion. Geographical specialization and exchange occurred between fertile grain-producing regions and those that were either mountainous or of poor soil and engaged in pastoral husbandry. Over time, the former raised land productivity, earned a good surplus from grain sales, and tended to lose cottage industry, while the latter combined manufacturing with pastoral agriculture, and eventually began to produce manufactured goods for sale. Access to the sea, abundant natural harbors, large navigable rivers that are ice-free year round and seldom flood, and resources from the surrounding mountainous areas and forests, all helped the growth of trade. This “advanced organic economy,” as E. A. Wrigley has termed it, saw Smithian growth linked to the regional development of urban networks, the growth of consumer demand, and the development of a market economy.^[78] It is impor­tant to remember, however, that this labor-intensive economy developed within the framework of mixed farming, which placed a greater emphasis on capital and the more extensive land use than East Asian agriculture did. Labor-intensive proto-industries in Europe were characteristically embedded in a regional economy more prone to the capital-intensive path than were their much larger counterparts in East Asia.

European regional economic development from 1500 to 1800 thus con­tained elements of both the capital-intensive and resource-intensive path and the labor-intensive and resource-saving path. The industrial revolution in England and subsequent European industrialization occurred not as a result of the former path alone, but as a fusion of the two paths.

On a second comparative point, resource endowments in Europe influenced technology choice in both directions as well. Releasing resource constraints

KAORU SUGIHARA

through regional and long-distance trade helped resource-intensive technology develop, but the persistence oflocal resource constraints, especially when the competition from modern industry arrived, also encouraged the development of resource- and energy-saving technology. Wrigley emphasized, for example, that the local availability of coal was largely a matter of chance.^{[79] [80] [81] [82]} In early nineteenth-century England, the price of coal near coal fields was extremely cheap, and the price gap with other areas was significant enough to encourage the rapid development of coal-operated industries. The availability of coal may have been more important than the high wages enjoyed in England as an explanation for the English lead in industrialization.¹¹ As Allen and others have argued, however, early steam engines were so wasteful of energy that they only made economic sense where fuel was very cheap, and overland transport of fuels was difficult in early modern times. Timber was rarely worth shipping very far overland, because of its bulk; charcoal turned quickly to dust on bumpy pre-modern roads; and in China, for instance, the price of coal could quintuple between a pithead and a riverbank 50 kilometers away.1² Thus the lack of coal in many areas led to persistent efforts to overcome this local resource constraint through the production of charcoal, or the use of resource- or energy-saving technologies, which ultimately contributed to the sustain­ability of the “European miracle.”

The resource issue also has the dimension of uncertainty. Once the international system of free trade and security was established in the nine­teenth century, local resource constraints (especially immobile factors of production such as land and relatively immobile factors such as labor) would in theory have been mitigated by trade. However, weather, epi­demics, and the threat of natural disasters remained important in determin­ing the profile oflocal resource endowments. AsJones suggested, Western Europe had fewer natural disasters such as droughts and floods than did South Asia or most of East Asia.1³ This helped the accumulation of social overhead capital, such as buildings and roads, well before the industrial revolution raised labor productivity, while the rest of the world continued

to suffer from the chronic destruction of infrastructure caused by monsoons, earthquakes, and fire. After 1850, Europe also developed better techniques of disaster management than did other regions, increasing this advantage. This might have biased Europe's technology path towards investment in physical rather than human capital. It might also have created an environment favorable to scientific experiments aimed at the use of motive power.

Wrigley's emphasis on contingency in the process of industrialization in England, and Pollard's similar emphasis in his study of industrialization in Europe, were steps toward an appreciation of the role resource endowments played.^[83] Pomeranz's argument that “coal and North America” moved the direction of global technological development towards the capital- and resource-intensive path carried this analysis to the global level. Studies have thus examined local responses to contingencies in the geosphere, such as where coal was deposited. Others have examined the role that contingencies in the biosphere, such as access to forest resources and the threat of animal and human diseases, played in the long-term technological and institutional development path.1^[84] Building on the work of John Hajnal on the distinctive northwestern European marriage pattern - in which most men and women married late and many never married at all - some studies are also increas­ingly examining the role that contingencies in human society, such as age at marriage, family structures, the gender division of labor, and social norms, played in shaping industrialization in Europe, and a few of these are devel­oping global comparisons.^[85] More studies that identified European specificity in this way would allow a better understanding of the extent to which the European path (especially the English path) would have been “sustainable” without a resource bonanza, hence how far it diverged from the local resource-constrained type of Smithian growth. In addition, the inclusion of the labor-intensive, resource- and energy-saving path as an essential element of the European miracle would broaden the research agenda, by making the comparison with the rest of the world easier, and in so doing by making the study of the European miracle more relevant to that of global industrialization.

The Asian path to industrialization^[86]

In describing postwar economic development up to c. 1980, Harry Oshima stressed the common socio-environmental characteristics of monsoon Asia, stretching from East and Southeast Asia to South Asia, in terms of seasonal rainfall patterns induced by monsoon winds and the centrality of the large delta for the growth of rice farming and dense population.^[87] In some crucial respects the character of the Asian path originates from this unique environ­ment, with differences between East Asia and South Asia.

The largest water and heat circulation system on earth is centered on the Himalayas. About 45 million years ago, part of Gondwana, roughly the present Indian subcontinent, moved northward, ultimately colliding with Asia. By about 10 million years ago the Himalayas and the Tibetan Plateau became sufficiently elevated to modify the original patterns of atmospheric and water circulation. In the summer, the southwesterly monsoon flows from the high-pressure area in the Indian Ocean to the low-pressure area on the Asian continent. This wind is partly blocked by the Himalayas, resulting in intense precipitation to the south of the Himalayas. In winter, the north­easterly monsoon, flowing from the high-pressure area on the continent to the low-pressure area in the Indian Ocean, prevails. Again, part of this wind is blocked by the Himalayas, and it brings dry weather to the south. This flow,

Global industrialization: a multipolar perspective with seasonal rainfall patterns, provided large regions surrounding the Himalayas and the Tibetan Plateau with a common environmental feature. Meanwhile, much of East Asia and parts of Southeast Asia are located between the Tibetan Plateau and the Pacific Ocean. Here the air flow and rainfall patterns reinforce the exchange between the high mountain range and the sea, although its geographical coverage and impact are just as spectacular as they are in India. Added to this rainfall was the large amount of water and silt carried by big rivers flowing from the “Great Himalayan Watershed,” and land with rich soil suitable for growing crops emerged across a large part of the Asian land mass, especially at the mouths of rivers.^[88]

Since the agricultural revolution over ten thousand years ago, monsoon Asia probably played a crucial role in the growth of the world's population. Rice farming was important from the early stages of settled agriculture and, with other water-intensive crops and associated stocks of knowledge, agri­cultural technology was gradually extended northward.^[89] Several civiliza­tions emerged in East, Southeast, and South Asia, with loose cultural and economic commonalities in each region. The availability of water was a primary determinant in the diffusion. It also affected the Malthusian relation­ship between population and food in a particular way. Land with rich soil had to be accompanied by an appropriate supply of water in order to qualify as a main factor of production, while the supply of safe water mattered for sustaining a population. Both of these were major constraints, although the classical political economists in industrializing Britain did not seriously con­sider them when discussing the main factors of production or determinants of population growth.

The ways in which these constraints were dealt with differed region by region. In East Asia, which is largely located in the temperate zone and is land scarce, water determined local stability and the extent of economic develop­ment in areas with fewer resources, including many parts of inland China. In the core regions with a stable water supply, however, keen attention was paid to intensification to raise land productivity. In South Asia, by contrast, located in the tropical or semi-tropical zone and relatively land abundant, greater attention was paid to controlling water, especially its large annual and seasonal variability. Only during the nineteenth century, as population grew

and arable land began to be exhausted, did securing food, water, and energy become especially hard, but water shortages, floods, epidemics, and defor­estation were critical issues in earlier periods as well. The caste system broadly defined social codes and occupational divisions, while a sophisticated system developed for the management of water in agriculture, with various tasks assigned to each section of the village community.^[90]

In 1700, around 27 percent of world population lived in South Asia and 23 percent in East Asia, while Western Europe's share was only 13 percent.^[91] While these are only estimates, it seems reasonable to assume that East and South Asia had quite an unusual capacity to hold a large population by the standards of the early modern period. The populations of both regions grew further, and provided the most important factor endowment characteristic relevant to industrialization in the long nineteenth century.

In East Asia, the peasant family economy developed as a distinctive multi-occupational one, especially in the Lower Yangtze Delta in the seventeenth and the eighteenth centuries but also in Tokugawa Japan. Traditionally, the reason why production by peasants on small plots pre­vailed in this region has been attributed to land scarcity. Labor absorption was easiest and most effective if the family became a production (thus labor allocation) and distribution (thus consumption and saving) unit, as well as a reproduction unit. A small plot of land was worth taking good care of as if it were a garden, as hard and careful work brought the peasant household a steady (if small) reward. A variety of labor-intensive technologies such as double cropping (of rice or rice with cotton, sugar, wheat, or mulberry trees), seed selection (partly to even out labor demand), the use of manure, the control of water, and the development of agricultural tools emerged as a result. As Ester Boserup noted long ago, population growth in Asia led to land intensification.^[92]

Members of the household combined agricultural work with proto­industrial work, such as spinning and weaving, often at home, regardless of whether they belonged to an owner-cultivator household or a tenant one. Thus labor was absorbed, and the number of working days per year per household increased. The main workers were usually family members rather than agricultural laborers, although they did exchange and hire labor in busy

Global industrialization: a multipolar perspective seasons, and, especially in Japan, co-operate for the maintenance and welfare of the village community. On the whole, these features were common in the core regions of China and Japan, in spite of the fact that the structure of the family, the nature of social institutions, taxation, and the degree of the development of the land market were very different. This is the “industrious revolution path,” with an extensive use of family labor and the in-house combination of rice farming and proto-industry, and was an East Asian reply to the Malthusian trap.^[93]

This labor-intensive agriculture shaped the Asian path to industrialization. Although efforts in the mid-nineteenth century tended to attempt a direct transfer of Western technology and institutions, by the 1880s the Japanese government had developed a different industrialization strategy. Recognizing that both land and capital were scarce while labor was abundant and of relatively good quality, the new strategy was to encourage active use of the tradition of labor-intensive technology, along with modernization of tradi­tional industry, and the conscious adaptation of Western technology to different conditions of factor endowment. The path Japan developed can be termed “labor-intensive industrialization,” as it absorbed and utilized labor more fully and depended less on the replacement of labor by machinery and capital than did the West. Some traditional industries not only survived but expanded. For example, the hand-weaving industry sustained large employ­ment through the use of machine-reeled yarn, contributing to the develop­ment of an Asian international market for mass consumer goods by combining the efficiency of machine-spinning with traditional techniques of weaving and clothing patterns.

An important factor in Japan's industrialization in the late nineteenth century was that it had labor of high quality, trained in the peasant household.^[94] Japan was also relatively resource rich with the exception of the amount of arable land. Not only was the available land of good quality, but Japan had plenty of wood (hence paper), precious metals, and sand iron. It also exported coal and timber at the initial stage of industrialization. After the 1920s, however, Japan faced a comprehensive shortage of food and the raw materials needed for the development of modern industries. The development of strategically important heavy industries (steel, chemicals, railroads, shipbuilding) as well as light ones such as cotton textiles and

sundries led to a particularly vicious cycle. Such industries required secure access to resources (oil, for instance) that Japan did not have, but building a military that might be able to gain such access required precisely those resources; it also worsened relations with more powerful nations and empires that did have those resources, increasing the pressure to expand the military. Meanwhile, because Japan's heavy industry was not globally competitive (such capital-intensive industries gained little from Japan's low labor costs) they tended to rely on government contracts, and become advocates for expanding the military, with which they formed close ties.

While Japan developed heavy industries, its agricultural labor productivity remained low. Nevertheless, Japanese rice technology made progress in the 1920s, especially in the development of new seed varieties. The nature of technology was intensive, technically driven, and directed towards standard­ization; small irrigation pumps came to be widely used. In the 1960s this Japanese technology made an important contribution to the “Green Revolution” in Asia, an example of the way that sharing common responses to the environment of monsoon Asia helped Asia's rapid economic growth. Under the Cold War regime, the United States began to engage in rice research in an attempt to raise crop output in Southeast Asia as part of its Asia policy, and adopted Japanese technology through international organi­zations such as the International Rice Research Institute (in Manila). This had a significant impact on the nature and quality of current Asian rice agricul­ture, and the direction of its technological development.^[95]

The net result was that the East Asian agricultural path was directed towards releasing the constraint of the shortage of land, not only through labor absorption and the improvement of the quality of labor, but also through the intensification of land use through the development of agricul­tural technology without a heavy use of other resources. Nevertheless, with a full absorption of industrialization underpinned by Western technology and institutions, the region entered into a fundamentally new resource regime in the second half of the twentieth century. Regional resource use is now largely determined by global market forces, under which local and regional resource regimes operate. The burden of ensuring that resource transfers are compatible with environmental sustainability at local and regional levels falls into the hands oflocal, national, and regional initiatives.

Turning to South Asia, the main issue was the scarcity of land of good quality, especially land with a stable water supply. Land may have been abundant, but under the monsoon climate where there was a very short period of heavy rain, the number of days farmers could work in a year was limited. This may have induced the development of labor-intensive tech­nology as labor was available in off-peak seasons for an even longer period than for temperate zone farmers, whose off-peak labor was instrumental for proto-industrialization in Europe and East Asia. Labor absorption of this kind does not appear to have taken place on as large a scale as expected, however, partly due to occupational divisions resulting in part from the caste system, but also because there was a rather large employment in the tertiary sector. In addition, obtaining water and biomass energy for cooking, heating, and lighting purposes were extremely time and energy consuming activities, especially for women, leaving them little time for other work.^[96]

Even so, labor-intensive technology took root in colonial India in the form of both land intensification and the development of labor-intensive industries. In the rice crop regions of south India, labor-intensive technol­ogy similar to East Asia's, such as double cropping and the use of manure, was employed by the late nineteenth century (though not, as in East Asia, far earlier than that), although overall land productivity remained low.^[97] (It remained low by international comparison throughout the twentieth century.) Labor-intensive handicrafts and work by skilled artisans probably declined in relative importance in the economy in the nineteenth century as a result of competition from European products, but experienced a revival and improved productivity in the early twentieth century. Modern, mechanized factories also grew in this period, though they employed relatively more labor per unit of capital than did their foreign counterparts, and faced competition, especially from Japan. Other traditional industries such as the production of gold thread, brassware, leather, and shawls also survived and expanded. Under the impact of steamships, railways, and construction of ports and paved roads, the domestic market expanded, and a range of other modern industries for domestic consumption emerged, including food processing such as rice milling and the production of sundries such as matches. Cultural, geographical, and environmental diversities offered domestic merchants and producers special business opportunities. Exposed to international competition, labor-intensive industrialization occurred with scale and depth in colonial India.^[98]

After independence, India opted for political and economic autonomy and import-substitution industrialization. While it allowed for the development of capital- and resource-intensive industries, labor-intensive industries were largely isolated from international competition, which resulted in a “dualis­tic” economy with a modern sector that did little to promote development in the rest of the economy. After 1991, tariff protection and labor laws began to be removed, and India entered into international competition again. The Green Revolution and the improvement of rural-urban communication networks (especially transport and information) lifted local resource con­straints to some extent. At the same time, control of resources became a more complex issue, as greater use of electricity affected the level of ground­water tables, and operations of multinational companies created conflicts with local society over pollution.

To sum up, the rural capacity to hold a vast population for a long time has been a common feature of East and South Asia, but the timing and pace of industrialization were different, reflecting differences in resource endowment and policy reinforcement. Elsewhere I have argued that if the European miracle was a miracle of production, the East Asian miracle was a miracle of distribution, as the rise in income of Asian peoples (mainly through labor-intensive industrialization) halted the worsening gap in global income distribution, which had been set in the nineteenth century and continued in the first half of the twentieth century.^[99] In order to extend the framework for investigating mechanisms of global industrialization further, however, the social capacity to maintain a large population within the context of local resource constraints must be considered. In South Asia, famines were overcome by the end of the colonial period and infant mortality is falling, though slowly. Although most people still have a low standard of living by comparison with fully industrialized countries, ordin­ary people, including Dalits, are participating not only in industrialization, but also in democratic politics, and their upward mobility is visible. The last few centuries of South Asian history thus represent a miracle of reproduction.

All three miracles - production, distribution, and reproduction - have been responsible for altering the Malthusian relationship between popula­tion and food at the time of industrialization, or, if I can diverge from the framework of the classical political economist, the relationship between industrialization and the environment. I will return to the implications of this relationship in the final section of this chapter, but now wish to examine ways in which the different paths of economic development became connected and interdependent.

Diffusions and interconnections of industrialization^[100]

Between 1750 and 1840 an overwhelming proportion of world non- agricultural production was unmechanized, and was located in Asia, espe­cially in China and India (Fig. 4.1). Even in 1840 the impact of mechanized industries was limited; in industrializing Europe half of textile production was still unmechanized. By 1910, however, the world market of textiles was dominated by the modern English cotton textile industry. The decline of traditional industries, especially cotton textile industry in India (and to a lesser extent in China), was a serious global event that involved a loss of employment on an unprecedented scale.^[101] Asia's share of world GDP declined from 60 percent in 1820 to 25 percent in 1913, while that of Western Europe rose from 20 percent to 31 percent, and North America from 2 percent to 20 percent.^[102] This mainly reflected the widening gap in real wages between Asia and the West, although the growth of GDP in North America reflected the rapid growth in the immigrant population as well. Asia became an importer of English textiles and an exporter of tea,

Figure 4.1 Geographical composition of world industrial production, 1750-1913

rice, sugar, tin, rubber, raw cotton, raw silk, raw jute, and wheat. Thus an international division of labor emerged between industrialized Western countries as exporters of manufactured goods, and Asian countries (though, for the most part, not East Asian ones) as exporters of primary products. The environmental implication of this division of labor was the transfer of (mainly land-derived) natural resources from the latter to the former, in exchange for the improvement of transport, urbanization, and mass- produced consumer goods. Industrialization in this context has typically been portrayed as an agent of both resource exploitation and the diffusion of modern science and technology.

However, Asia's response to Western impact also contained another feature, namely labor-intensive industrialization, as discussed above. Asia was not just de-industrialized, but was also reorganized into a new form of industrialization. Thus there were two different routes of the diffusion of industrialization, the capital-intensive route originating in the West, and the labor-intensive one originating in East Asia. The latter also tended to be less resource-intensive than the former. Thus what actually emerged in the period from the nineteenth century to the 1930s was a three-tier international division of labor - capital-intensive manufactured goods, labor-intensive

Global industrialization: a multipolar perspective manufactured goods, and primary products - and an increasingly uneven global resource allocation in favor of Europe and regions of recent European settlement.

The growth of the Atlantic economy represents the main global route to industrialization in terms of leading technological and institutional devel­opments. Countries in continental Europe, especially Germany, Belgium, and France, and some regions of recent European settlement outside Europe, achieved industrialization by learning (or stealing) new technology and/or by importing capital, labor, and machinery with their export earn­ings. In the New World, the integration of vast natural resources into the international economy served as the engine of economic growth. Labor was scarce and land was abundant, and the difference in factor endowments between the Old and the New World induced a growth of trade, migration, and investment. In the nineteenth and early twentieth centuries, the growth of the Atlantic economy was prominent in long-distance trade. An implication of this development was that the regions of recent European settlement had a better incentive than did Britain to raise labor productivity, using abundant natural resources and employing imported capital. The movement towards the development of labor-saving, capital­intensive, and resource-intensive technology was most clearly observed in the United States.^[103] In Latin America and the Caribbean, political leaders and ambitious entrepreneurs also sought to promote industry, but with less success. They could not compete with cheaper European or US imports, and the governments were rarely powerful enough to enforce high tariffs like those that had protected US industries as these were getting started. European and US governments acted to impose a free-trade regime in order to keep markets open for their own industrial products and ensure a steady inflow of raw materials and agricultural commodities from other nations. Entrepreneurs and officials in Russia, Egypt, Persia, and the Ottoman Empire similarly advocated industrial development, but this remained modest in scale.

The American land frontier was exhausted around 1890, and by the early 1920s migration from Europe ceased to be encouraged. But American forest and mineral resources continued to be plentiful, and American technology, designed for a resource-abundant, labor-scarce society, continued to lead

the world. The need to save skilled labor led to the standardization of industrial production, such as the usage of transferable parts, which in turn facilitated the transfer of technology across industries and the development of mass production, as well as a “de-skilling” of labor. Industrialization became associated with the exploitation of economies of scale. Labor productivity was also raised through automation, the introduction of more systematic labor management, and mass marketing. Looking back from the twenty-first century, the British industrial revolution only began to show the explosive power of labor-saving technology through the use of coal and steam engines, and merely paved the way for a fuller replacement of skilled labor by capital and technology. Therefore, although the condi­tions for the industrial revolution may have been laid in Europe, the “Western path,” with emphasis on capital-intensive and resource-intensive technology, arguably only became fully established as a result of the growth of the Atlantic economy.

As far as the direction of technology and institutions is concerned, the Soviet model of a “big push” resembled the American one, in so far as it was capital- and resource-intensive. In this model, an emphasis on heavy and chemical industries, and on high-technology sectors backed by the state, was quite explicit. Heavy industries were particularly important for war­fare, which was an additional reason for states (whether capitalist or socialist) with large military ambitions or anxieties to emphasize it. Although some of these industrialization strategies were successful, many socialist economies eventually failed to foster internationally competitive industries.^[104]

Just as resource-intensive industrialization spread, so did labor-intensive industrialization. While this was not exclusive to Asia by any means - rural French women making lace that was added to factory-produced cloth is just one of many examples within Europe of capital- and labor-intensive indus­tries developing in tandem - East Asia was particularly marked by the expansion of labor-intensive kinds of manufacturing within a world shaped by mechanization. The comparative advantage of labor-intensive industries in Asia was reinforced by the growth of a gap in real wages between the Atlantic high-wage economy and the non-European low-wage economies. Restrictive migration laws in the United States and other regions of recent European settlement helped this gap persist. As a largely unintended consequence, it progressively became easier for Japan, the first industrial nation in Asia, to compete with Western manufacturers in the international market of labor-intensive manufactured goods where wage differences mat­tered. The difference between the structure of consumption in Asia and the West was another important factor that made it possible for Asia to indus­trialize itself. Thus industries of Asia and Europe developed, each with their separate niches.

Under the free trade regime imposed on East Asia by Western Europe and the United States from the mid-nineteenth century until the Second World War, labor-intensive industrialization constituted the core of Asia's develop­ment path, and the expansion of its trade served as an engine of regional industrialization. The rate of growth of intra-Asian trade between 1880 and 1938 was faster than that of Asia's trade with the West or world trade, as the division of labor between agriculture and industry grew at local and regional levels, and merchant networks exploited slight differences in the price and quality of commodities, including manufactured goods. Thus, like the Japanese hand-weavers mentioned above, Chinese hand-weavers used Indian, and later Japanese, machine-made yarn before the modern Chinese spinning industry provided this to them. A substantial proportion of Japanese yarn by this time was made from Indian raw cotton. Thus there developed a competitive international commodity chain within Asia.^[105] Since labor was abundant in most of Asia, industrializers had to have a competitive labor, that is, cheap labor relative to efficiency. The effort to improve the quality of labor was an important feature of Japan's industrialization, while intra-Asian trade, organized by Chinese and Indian merchant networks, was a main mechanism through which massive employment was maintained and the quality of labor was tested. Yet intra-regional trade was also crucially dependent on the purchasing power generated by Asia's primary product exports to the West, such as rubber, tin, and tea, and on communications technology such as telegraphs and steamships, commercial institutions such as new kinds of banking and insurance, and relatively open markets contributed to and/or imposed by the West.

Thus one of the most significant (and largely unintended) contributions of the growth of world trade was labor absorption in Asia through both long­distance and intra-regional trade. Figure 4.2 shows that long-distance trade in

KAQRU SUGIHARA

Figure 4.2 Structure of world trade, 1840

1840 was centered on Western Europe, while there were very large regional trade blocs in both Europe and Asia. One of the reasons why the figures here for intra-Asian trade (especially rough figures) are so large, is that they include all intra-Asian trade, regardless of whether these are indigenous commodities or imported foreign goods. Thus, if English textiles were brought to Bombay or Singapore, and then were redistributed by Indian or Chinese merchants within India or Southeast Asia, they would count as intra­Asian trade. Unless English textiles were consumed within Bombay or Singapore, therefore, most imported goods are counted again as part of regional trade. This is appropriate, in my view, as most of the time English or European traders were unable to penetrate into the interior or smaller markets of Asia, and were dependent on the initiatives of Asian merchants for the maintenance of their long-distance trade. The same points can be made with regard to much of Asia's exports to the West: peasant producers in the hinterland were most likely to deal with local or Asian merchants, who would in turn sell their produce to Western merchants at large ports. Behind the strength of Asian merchants were their extensive local and regional networks, which were contextualized in their languages, under the influence of their cultures and social institutions.

Figure 4.3 Structure of world trade, 1910

By 1910 the structure of world trade became much more multilateral (Fig. 4.3). The United States became an important participant in world trade, while many primary producers in Latin America, parts of Asia (such as the Middle East), and Africa were integrated into the trade structure as satellites of the metropolitan economy. Nevertheless the growth of intra­Asian trade continued, largely fueled by labor-intensive industrialization in India, Japan, and China. The world economy of the nineteenth century was thus not being pulled entirely by the dynamics of the Atlantic economy, as some have argued.

Other models of economic development may also not have been as common as once thought. One of these was the development of the “enclave economies”: that is, poles of intense local development which were (often deliberately) isolated from the larger society surrounding them, and so had no stimulatory effect on them. Certain colonial mines and plantations, in which foreign owners imported capital equipment, slaves, or fixed-term contract labor from elsewhere, provided walled-off living quarters for man­agers who consumed mostly imports, exported their output, and reinvested most of the profits back home, provide the classic model of such “enclave economies.” These resulted in “dualistic” economies with a very small modern sector that might even obstruct development in the rest of the economy by keeping desirable resources off limits to the rest of the society, and providing financial support to powerholders who thus lacked incentives to do much for the rest of society. How often colonial or post-colonial investments have resulted in a situation approximating this model remains controversial, however. Clearly it did happen in some cases, but probably less often than radical and nationalist critics have claimed. The long nineteenth century is best characterized as a period when Western powers (and the newly developed regions) and Asia (and the tropical regions to which Asian workers emigrated) simultaneously developed high-wage and low-wage economies.^[106] The former used more resources, while the latter fed more people. Uneven allocation of resources underpinned two different paths to industrialization. Together, they fueled and sustained the expansion of the world economy.

An important consequence of the emergence of the three-tier international division of labor was that both capital-intensive industrialization and labor­intensive industrialization needed the suppliers of primary products. There was a transfer of natural resources from primary producers to industrial countries, especially to those pursuing capital- and resource-intensive indus­trialization. But those pursuing labor-intensive industrialization also exploited natural resources from other parts of Asia and beyond, and could not have proceeded without taking advantage of (largely colonial) exploitation.

Labor-intensive industrialization continued to spread during the twentieth century. During the interwar period it was more systematically extended to China and Korea, largely through Japanese imperialism.^[107] By 1938, intra-Asian trade, by then dominated by the Yen bloc, was the second largest area of intra-regional trade, next to the intra-European one, consisting of 9 percent of world trade. After 1945, in spite of the disruptions caused by the war, the growth of the international competitiveness of East Asia's labor-intensive industries continued. By the early 1950s, Japan regained its position as the world's largest exporter of cotton textiles, and was replaced by China in the early 1970s. The chain of development of labor-intensive industries across other Asian countries was impressive, becoming what Japanese economic historians have called the “flying geese pattern of economic development,” a phrase which comes from the characteristic V-shaped formation of flocks of flying geese. Japan, in this metaphor, was the lead goose, passing on more labor-intensive, less lucrative industries to other places; when the wages then rose in these places, they in turn passed on the industries to places where wages were still low. This pattern started with the NIEs (Newly Industrializing Economies of South Korea, Taiwan, Hong Kong and Singapore), spread on to ASEAN (the initial four were Thailand, Malaysia, Indonesia, and the Philippines), China, and India, and by now has reached many other countries, including those with the lowest levels of per capita income. China, which after the communist revolution of 1949 withdrew from international trade, came to be fully integrated into the Asia-Pacific economy by the 1980s, and became the most competitive exporter of labor-intensive manufacture in the world, as well as the growth core of Asian economies. By the 1990s, India also changed its economic policy towards a more open regime. While the effects of this chain of diffusion cannot be seen as comparable to those of the West in a number of other respects (such as technological and financial leadership with powerful impacts on the interna­tional political and military order), it was significant in terms of the creation of global manufacturing employment. In fact, the majority of the world's industrial population today is employed in those sectors primarily influenced by this kind of development.

One of the prerequisites for the “Asian miracle” in the second half of the twentieth century was the regime of free trade, which underpinned a rapid growth of both Asia's trade with the United States (and other developed countries) and intra-Asian trade. Resource trade was an important compo­nent of this growth, that is, Asian countries traded their resources in exchange for manufactured goods they could not produce, and vice versa. This became possible in part because of political change: as Japan became an ally rather than a geopolitical competitor of the United States, it could count on US guarantees of access to key resources and markets abroad without needing to build up its own military. Thus, in spite of economic nationalism, Asia's growth economies participated in regional and global resource dynamics.

It is important to note that the spread of labor-absorbing forms of industry, though impressive, has not come close to absorbing all the people who are available for non-agricultural labor around the world. Over the course of the twentieth century, the average productivity of manufacturing workers has converged to a significant degree - that is, the productivity of people employed in manufacturing in poor countries is closer to the productivity of their counterparts in rich countries than it was a century ago. But with the admittedly huge exception of East Asia, per capita incomes have not con­verged significantly - in large part because labor productivity in agriculture and services in rich and poor countries have not converged, and large numbers of people in poorer countries lack productive full-time employ­ment. How many of these people can ultimately be made better off by the processes described here remains an open question.

Moreover, both types of industrialization - capital-intensive and labor­intensive - needed, and continue to need, primary producers who provide them with more and more resources. Thus the three-tier structure, outlined above, became the main pattern of the international division of labor, in which resource transfers act as a central mechanism for easing local resource constraints for all industrializations, and modern infrastructure and transport sustain competitiveness. But the more manufacturing industries of all types spread throughout the world, the greater the demand for resources, with greater consequences for the environment.

Implications for global environmental sustainability

As was suggested at the beginning, population growth up to around 1800 did not cause major problems of environmental sustainability, if this is defined in terms of nature being governed by the forces of the geosphere (in which energy and material flows are determined by natural processes) or the biosphere (in which the ecosystem and food chains function by incorporating human interventions rather than vice versa). Humans depended for their food on their own labor on arable land, and Malthusian or Boserupean dynamics were at work. Meanwhile, they depended for their energy on (mainly forest-derived) biomass, as well as on human and animal muscle, water, and wind. Burning biomass was the basic technology for heating and lighting, as well as for clearing the land. But energy consumption per capita increased very slowly, while population growth was yet to reach the point of exhausting the land frontier in most parts of the world.

A massive increase of the use of fossil fuels (especially coal and oil) since the industrial revolution fundamentally altered the relative importance of the geosphere and biosphere, as the balance between geosphere-derived

Sources and notes: Paul Lamartine Yates. Forty Years of Foreign Trade: A Statistical Handbookwith Special Reference to Primary Products and Under-developed Countries (London: Allen & Unwin. 1959). pp.63. 104. 123. 149; UN International TradeStatistics Yearbook, 1974. 1994. 2006. Figures are from SpecialTables. SlTccodeschangedfromoriginal (1913 and 1953 attempt to approximate it) to revised (1974) to R2 (1980 and 1990) to R3 (2000 and 2006). but a rough trend at this level of categorization can be discerned.

Figure 4.4 Commodity composition of world trade, 1913-2006

and biosphere-derived energy sources changed dramatically. Today, the commercial value of land- and forest-derived products in world trade is much less important than that of fossil fuels. Figure. 4.4 shows that their proportions declined during the second half of the twentieth century. The value of manufactured goods increased most rapidly, but they too are increasingly made from fossil fuels. Biomass remains an important source of fuel in developing countries, where it is often vital to the livelihood of the local community, but in global terms is much less valued today than it was two centuries ago. In this respect the world economy has become much less organic. It has also become much more urbanized and globally connected through man-made materials, transport, and infrastructure. The main agent of this change was global industrialization. The land frontier was exhausted, and population growth became increasingly dependent on modern industry and services. The long-standing relationship between humans and the biosphere, which had been the basic mechanism of sustaining the local population, was broken, and was replaced by an invisible web of contacts through trade and technological and institutional transfers without a recognized method of evaluating their environmental consequences.

KAORU SUGIHARA

Thus the course of human society diverged significantly from the previous pattern of human-nature interface. The impact of fossil fuels on the structure of the world economy was so great that the direct interactions between human society and the biosphere have become rather peripheral to global resource and energy security issues as we see them today.

This divergence has not been a linear, inevitable course of human history, however. When Japan, China, and other parts of East (and Southeast) Asia industrialized a century or more later than Western Europe did, the region created a labor-intensive path to industrialization on a regional scale. By and large the region depended for its energy on biomass much more than Western Europe did during industrialization. It also had a tendency to choose relatively less energy-intensive industries and energy-saving technology. For example, despite industrialization, the overall energy intensity (measured by total primary energy supply divided by GDP) of the Japanese economy remained low. In addition, the development of energy-saving technology began in the 1920s and was actively pursued, especially in the 1950s.^[108] The energy intensity of other Asian countries (except for socialist ones) was also low. Thus the East Asian path retained distinct ways of employing resources, and accompanying technological and institutional characteristics. In the postwar period, however, East Asia has also become (like Europe before it) a major importer of food, fuel, timber, and other primary products from other parts of the globe, and a major driver of climate change. Its per capita contribution to the latter process remains much smaller than that of the West, but China in particular is now the world's largest single emitter of greenhouse gases.

Prior to the two oil crises of the 1970s, heavy and chemical industrializa­tion, with military industry leading the energy-intensive technology, made the level of energy intensity of leading powers (the United States and the Soviet Union) very high, while many countries under the labor-intensive path kept the level steady. However, there was a remarkable convergence after the 1970s, through the reduction of intensity of the United States and Western Europe, as well as of China, and eventually of the (former) Soviet Union.^[109] The traditional distinction between capital-intensive industrialization and

Figure 4.5 World energy intensity, 1925-2030

labor-intensive industrialization became skewed to some extent, as the focus on energy-saving technology began to dictate the direction of global techno­logical innovation.

It is therefore possible to suggest that the global industrialization path has begun to shift from the energy-intensive to the energy-saving one (Fig. 4.5). Looking back from some time in the future, the last two centuries of the energy-intensive industrialization path might eventually be seen as a great divergence from the more balanced, environmentally sustainable path. I wish to suggest that not only the former, but also the latter path began in the European miracle, survived the Great Divergence largely because it was countered by the East Asian path, and is eventually becoming a global path. If we wish to see a further continuation of global industrialization, perhaps we need to learn from all of the three miracles - the European miracle of production, the East Asian miracle of distribution, and the South Asian miracle of reproduction.

The story of energy intensity is only part of a larger narrative of the establishment of a global environmentally sustainable path, however. By now, resource transfers have become the main vehicle of global industrial­ization. Resource policies at local and regional levels, as well as at a global level, must include efforts to change in the relative importance between geosphere-derived and biosphere-derived (and “clean”) energy sources; a fuller respect for the logics of geosphere and biosphere in which the development of science and technology are directed more clearly towards sustainability concerns, including water management; and the reorganiza­tion of human society in accordance with sustainability needs demanded by nature. When such a perspective is established and its implementation is in sight, industrialization might come to be accepted as a truly positive agent of global history.

Further reading

Akamatsu, Kaname. “A historical pattern of economic growth in developing countries.” DevelopingEconomies 1:1 (1962), 3-25.

Allen, Robert C. The British Industrial Revolution in Global Perspective. Cambridge University Press, 2009.

Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution. Princeton University Press, 2003.

Austin, Gareth. “The developmental state and labour-intensive industrialization: ‘late development' reconsidered.” Economic History of the Developing Regions 25:1 (2010), 51-74.

Austin, Gareth, and Kaoru Sugihara, eds. Labour-intensive Industrialization in Global History. London: Routledge, 2013.

Bagchi, A. K. “De-industrialization in India in the nineteenth century: some theoretical implications.” Journal of Development Studies 12:2 (1976), 135-164.

Bairoch, Paul. “International industrialization levels from 1750 to 1980.” Journal of European Economic History 11:2 (1982), 269-333.

Boserup, Ester. The Conditions of Agricultural Growth: The Economics of Agrarian Change under Population Pressure. London: George Allen & Unwin, 1965.

de Vries, Jan. European Urbanization, 1500-1800. London: Routledge, 1984.

The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present. Cambridge University Press, 2008.

Engerman, Stanley, and Kenneth SokolofT. Economic Development in the Americas since 1500: Endowments and Institutions. Cambridge University Press, 2011.

Jones, Eric Lionel. The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia. Cambridge University Press, 1981.

Lewis, W. Arthur. Growth and Fluctuations, 1870-1913. London: George Allen & Unwin, 1978.

Maddison, Angus. “Statistics on world population, GDP and per capita GDP, 1-2008 ad,” 2011. www.ggdc.net/maddison/, accessed May 27, 2011.

Mendels, Franklin. “Proto-industrialization: the first phase of the industrialization process.” Journal of Economic History 32:1 (1972), 241-261.

Mokyr, Joel. The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton University Press, 2004.

The Lever of Riches: Technological Creativity and Economic Progress. Oxford University Press, 1992.

O'Rourke, Kevin, and Jeffrey Williamson. Globalization and History: The Evolution of a Nineteenth-century Atlantic Economy. Cambridge, ma: MIT Press, 2001.

Pollard, Sidney. Peaceful Conquest: The Industrialization of Europe, 1760-1970. Oxford University Press, 1981.

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

Rosenthal, Jean-Laurent, and R. Bin Wong. Before and Beyond Divergence: The Politics of Economic Change in China and Europe. Cambridge, ma: Harvard University Press, 2011.

Roy, Tirthankar. India in the World Economy: From Antiquity to the Present. Cambridge University Press, 2012.

Slicher van Bath, B. H. The Agrarian History of Western Europe, a.d. 500-1850. London: Edward Arnold, 1963.

Sugihara, Kaoru. “The East Asian path of economic development: a long-term perspective.” In Giovanni Arrighi, Takeshi Hamashita, and Mark Selden, eds., The Resurgence of East Asia: 500, 150 and 50 Year Perspectives. London: Routledge, 2003, pp. 78-123.

“The European miracle in global history: an East Asian perspective.” In Maxine Berg, ed., Writing the History of the Global: Challengesfor the Twenty-first Century. Oxford University Press, 2013, pp. 129-144.

Sugihara, Kaoru, ed. Japan, China, and the Growth of the Asian International Economy, 1850-1949. Oxford University Press, 2005.