european economic development: the contribution of the periphery, o'brien (1982)

(2): not, here, discussing the impact on peripheral countries of trade; here the concern is with contribution of core to W. European development. covering period 1400-1750

(3): thesis--commerce proceeded on small scale, was not uniquely profitable, and not decisive. in sum, commerce between W. Europe and periphery forms insignificant part of explanation for accelerated rate of economic growth.

(4): as % of trade, by end of 1700s some 20% of exports and 25% of imports (but this is biased, since uptick in trade with periphery only occured in 1650

(4): as % of GNP, trade with periphery only about 1% (late 1700s).

(5): of course, these are insufficient--we want some sense of how the gains for trade were re-invested, and what impact that had. using Bairoch's data for 1800, contribution of profits from trade is 1% of GDP, or roughly 10% of total investment. so not very significant.

(5-7): but did it have a more conjunctural impact? looking at 1760-1850, only provided about 15% of gross investment expenditures undertaken in Britain. moreover, capital formation was only one of many factors--technical progress, organizational efficiency were just as important.

(8): in trade, after 1650 prices were forced down significantly (once trade in tropical products ceased to be domain of the very rich), and profits could not have been supernormal. very competitive.

(9): after supernormal profits for Portugese in its early days, by the late 1600s slave trade was no longer supernormal profits [i.e., so this would matter out of proportion to its size. but it didn't]

(9): running the c-factual through, w/o slave trade--not much difference

(10): imp--did the commercial trade free up resources for industrial specialization? no, it can't matter out of proportion to its size.

(10-11): some stimulus to shipbuilding, some to commerce. but larger story holds

(11): maize and potato were important (Americas crops), but their contribution to caloric counts came later, after industrial take-off

(11-12): textiles--seem important, here, and linked crucially to international trade. but amount to some 7% of economy [and O'Brien is opposed to a leading sector view of industrialization more generally, so] counterfacutal w/o textiles/Lancashire, all still well

(13): bullion only adds about 25% to money supply. plus you had some incipient moves to paper money and credit, already.

(13): it wasn't the only path out of the money constraint.

(14): bullion helped in the trade deficit with Asia. but (a) services were involved; (b) trade was still small.

(14): helped in the Baltic trade. but here only about 1/3 was bullion.

(15): the price levels argument has many holes. mechanism is supposed to be that inflation creates space for investment, because wages are sticky. but many reasons that this story wouldn't work out, this way.

(16): setting all the smallness of the numbers aside, note also that they were at their peak only in the late 1700s, when Britain's advantage was already underway, before the 1800s.

(17): moreover, Britain was exceptionally involved. so if the argument doesn't work, in Britain's case, it certainly doesn't apply to the other cases.

(18): nice Braudel quote--to paraphrase the world of the trading posts in the Mediterranean was the sexy world to which everyone gives attention, but 'superstructural.' the real action was in the world of peasants/tenant farmers/landowners, and the patterns there determined "destiny of the age."