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The Human Costs of Economic Growth

Immanuel Wallerstein is senior research scholar at Yale University. He is the author, most recently, of European Universalism: The Rhetoric of Power (The New Press, 2006).

Amiya Kumar Bagchi, Perilous Passage: Mankind and the Global Ascendancy of Capital (Lanham, MD: Rowman & Littlefield, 2005), 395 + xxiv pages, hardcover, $76, paper, $34.95.

The great debate of social science for the last two centuries at least has been how to account for the extraordinary economic growth of the modern world. We all know the basic picture. The overwhelming majority of authors have argued that the story is that of the rise of the West. There have been, however, two opposing versions of this narrative. One is the Whig interpretation of history, which argues that it has been a story of steady social, intellectual, and moral progress whose explanation lies in some particular characteristic of the West (often just of England). In this version, the world is reaching its summit of progress today. The second version is Marxism, which has argued that the rise of the West is part of a larger story of steady dialectical and conflictual historical development. In this version, the present West-dominated world order will inevitably be superseded by another phase of historical development, in which capitalism will be replaced by communism.

In the last twenty years or so, there has been an important counter-theorization to the “rise of the West,” which is centered around a discussion of Chinese history. It argues that China had been the center of some kind of world system for a very long time, that it was temporarily eclipsed in the last two centuries by the so-called rise of the West, and that the pendulum is now (inevitably) swinging back to a Chinese-centered world.

Amiya Bagchi does not agree at all with the Whig interpretation of history nor does he really buy the Chinese-centric narrative. Instead, he offers us a seriously modified version of the Marxist model. Or to put it in his own words,

this book brings together the insights of the historians of war, and those of Marxist and world-system theorists to characterize the emergence and operation of actually existing capitalism as a system that engages in unlimited combat, backed when necessary by arms, for the conquest of labor power, nonlabor resources, and markets. (xi)

While Bagchi is surely not the first to argue against the idea that markets and free trade are the key elements of capitalist development, he wants to do more than attack this view as an analytical description of the modern world. He wishes to center his attention on the degree to which economic growth under capitalism is very poorly correlated with human development, even in the West. His book is an attempt to analyze in detail the human suffering that has been at the basis of “the advantages reaped by the European ruling classes” (xiv).

And while he agrees with the Chinese-centric school that the West had no significant economic advantage over the Chinese and the Indians before the nineteenth century, he takes issue with them on two main questions. One is the significance of what happened in the early nineteenth century in the industrializing countries led by Great Britain. He says that

there is a crucial distinction between a state (such as Qing China) that reins in the drive for unlimited accumulation and a social and political order (as in Hanoverian England) that promotes the unchecked centralization of economic power and thus facilitates the growth of factory-based industry. (xv)

The second dissent is a sort of “so-what” argument. Suppose, Bagchi says, that China would have emerged in the nineteenth century as the supreme economic and military power rather than the West. It would have led to the same “marginalization and immiseration of vast numbers of people around the world” (xvi), to the benefit of Chinese rather than of Western elites. To what he considers the undialectical view of Gunder Frank and Kenneth Pomeranz based on neoclassical and monetarist economics, Bagchi asserts that

we cannot regard human history as that of a tournament between different countries vying for the global market nor can we confine our attention to the working of passive market forces. (11)

For Bagchi, capitalism is the culprit, not the West. And the damage it has wreaked has not merely been one of material spoliation. For Bagchi insists on the damage wreaked by the two dominant ideologies that accompanied capitalism—that of racism and the civilizing mission (in unbroken continuity from the Iberian conquistadores to the Bush administration) and that of Malthusianism and social Darwinism, which translated into a view that the world’s resources are limited and therefore should/will only be shared by the “fittest.”

As for the largely Marxist theories of imperialism—he cites specifically Hobson, Hilferding, Luxemburg, Bukharin, and Lenin—Bagchi sums up his disagreements clearly:

I have one major difference from most of the theories I have sketched so briefly. Building partly on the work of Ragnar Nurkse and Matthew Simon, I have shown that the nonwhite colonies were primarily sources of surplus extracted by the capitalist powers and were not destinations of their net investment, except perhaps in certain brief phases. In short, the colonies were not merely objects of conquest; they also provided a significant surplus to their colonizers. (271)

Basically, Bagchi’s whole case is made in a brief preface. The rest of the book gives the supporting evidence for the arguments. Part one lays out his theoretical position and seeks as well to explain the construction of the concept of the European miracle. Part two reconstructs European history between the sixteenth and eighteenth centuries in order to explain the breakthrough of the West. Part three elaborates the kinds of human damage caused in the non-Western world as a result of the triumph of capitalism throughout the world. “Much of the celebration of the European miracle is based on the art of forgetting” (81). Part four addresses the dangers facing humankind at the present time as a result of capitalist growth.

The strengths of this magisterial work are numerous. Bagchi treats the modern world as a capitalist world, one that found its origins in Europe in the sixteenth century. In this he is faithful to the vision of Marx. As he says:

I find the notion of capitalism as a mode of production still useful for distinguishing, say, China or India of the eighteenth century from England or the Netherlands of the same period. This use is fully consistent with my occasional use of the idea of hierarchies in the circuits of exchange that Braudel so fruitfully employed. (177)

Furthermore, Bagchi analyzes this capitalist world not in terms of how much growth it made possible but how much human development it made possible, and in this regard he finds it very wanting. One of his principal services to readers is his pulling together of the demographic literature on life expectancy, the public health literature on disease prevention and cure, data on nutrition, income levels, and the various forms of labor coercion to give us a nuanced picture of human development over time and throughout the world, one that is differentiated by geography, age cohorts, and gender.

He also presents a comprehensive comparative picture of the historical economic development of China, India, and Japan, and their relation to what happened in Europe and North America. It is hard to suggest another work that does this in as small a space, so clearly, and based on such extensive acquaintance with the empirical literature.

My one reservation is that, for someone so devoted to dissecting academic myths, Bagchi has paid no attention to the now quite extensive literature that raises into considerable doubt the “industrial revolution” as something that occurred primarily in England and primarily at a given moment in time (from the end of the eighteenth to the early nineteenth centuries).

Actually, he himself throws some cold water on the idea by talking of two, possibly three “axial ages”—the first being that of the late eighteenth to early nineteenth centuries, the second occurring in the late nineteenth to early twentieth centuries (and in some places he says “only after 1945”), and a possible third one occurring now. He does say that the improvement in the European standard of living occurs only in his second axial age. He doesn’t really spell out what is supposed to be happening in the third.

But Schumpeter already showed in his book on business cycles that similar “axial ages”—Schumpeter does not call them that—could be found at a number of moments in the sixteenth to eighteenth centuries. It is not that machine production is unimportant. It is rather that it has been produced by a series of bursts forward that have been going on continually for four centuries. Just as the West invented the concept of the European miracle because it was ideologically useful, there is good reason to believe that the West (more specifically Arnold Toynbee) invented the concept of the single “industrial revolution” for similar ideological purposes.

But, having laid out my one major reserve, I must say it is refreshing to have Bagchi’s voice added to the rather small list of important works on the origins and development of the modern world. The fact that he is an Indian well grounded in India’s own economic history gives him a vantage point on the overall process that allows him to insert elements into our collective efforts that might otherwise have escaped us. One can only hope that the book will have a wide international reading public.