Why the West Rules—For Now

It was the most humiliating day in the history of the British Empire. Britain had been conquered before—by Romans, by Anglo-Saxons, by Vikings, by Normans—but nothing like this. Never to a people so strange and foreign.

On April 3, 1848, Queen Victoria, Prince Albert, the Duke of Wellington, and much of the court knelt in the rain on London's East India Docks…waiting. Governor Qiying's armada would be arriving from China at any moment, and Victoria would be expected to pay her respects to His Majesty, the Grand Exemplar, the Cultured Emperor Daoguang, submit to his overlordship and open British ports to Chinese traders.

Victoria would live the rest of her life in shame, going down in history as the queen who lost Britain to heathen infidels.

Of course, none of this actually happened. On that date in 1848, Victoria and Albert went to the East India Docks not as vassals to a new master but as tourists—to view a Chinese junk that British businessmen had brought back from Hong Kong.

Ian Morris starts his recently-published Why the West Rules—For Now

As Morris continues,

East Asian governments have struggled with Western capitalist and Communist theories, but no Western governments have tried to rule on Confucian or Daoist lines. Easterners often communicate across linguistic barriers in English; Europeans rarely do so in Mandarin or Japanese. As a Malaysian lawyer bluntly told the British journalist Martin Jacques, “I am wearing your clothes, I speak your language, I watch your films, and today is whatever date it is because you say so.”

The immediate reason is, of course, that Britain was the home of the Industrial Revolution. The rapid explosion in wealth, living standards, and military power made possible by the Industrial Revolution had no parallel in history.

The question, again, is “why?” Why did the Industrial Revolution happen in Britain and not China? Or even in ancient Rome for that matter? As late as the 1500s, China was the most advanced society in the world and had the best engineering. Why didn't China industrialize first?

Morris spends the next 767 pages offering his answer in an always interesting but sometimes annoyingly flippant telling of the past 12,000 years of world history as two parallel narratives, one Eastern and one Western.

As an aside, Jared Diamond asked a similar question as Morris in Guns, Germs, and Steel. Why was it that European germs exterminated Native American peoples but American germs—with the annoying exception of syphilis—had little effect on Europeans?

Diamond's argument was that European microbes were mutations of animal diseases that Europeans inadvertently created over the millennia by living in close contact with their domesticated animals. The Europeans themselves had also evolved to develop resistance to these killer germs. Native Americans had few domesticated animals because the Americas had few large animals that could be productively domesticated. Hence, Europeans carried the ultimate biological weapon—smallpox—while the Aztecs and Incas did not. Animal domestication also gave the Europeans certain advantages in agriculture and economic development that Native Americans lacked, further explaining why history turned out the way it did and Peruvians speak Spanish rather than Spaniards speaking Quechua.

Diamond's argument would be meaningless for the question of why it was Britain that industrialized ahead of China. After all, Europe and China shared the same microbes—the bubonic plague “Black Death” killed both Caucasian and Asian indiscriminantly in the 14th Century—and animals could easily be transported across the Eurasian landmass.

Other scholars have asked this question. It has been suggested that Britain industrialized first because of the island's long history of liberalism and Protestantism. England had its Magna Carta—and later its Glorious Revolution of 1688—so therefore it was “natural” that it would be the free-thinking English who brought us industrialization.

Really?

If all that was needed was to be free of tyrannical kings and the Catholic Church, then why didn't the Industrial Revolution happen in the Protestant Dutch Republic?

The flaw in this argument is that China, with its high population density, should have had the same selective pressures. And for that matter, so should have ancient Rome (though perhaps Romans simply needed another 2,000 years to evolve). So Clark's argument, while interesting, isn't fully satisfactory either. (Though I might seem somewhat dismissive of Clark's book here, I actually do highly recommend it. Even if its conclusions are not fully convincing, it is a fascinating study certain to make you think.)

Returning to Why the West Rules, Morris divides the competing answers into two broad schools of thought, the “long-term lock-in” and “short-term accident” theories.

As Morris explains it,

The unifying idea behind long-term lock-in theories is that from time immemorial some critical factor made East and West massively and unalterably different, and determined that the industrial revolution would happen in the West. Long-termers disagree—fiercely—on what that factor was and when it began to operate.

Some emphasize material forces, such as climate, topography, or natural resources; others point to less tangible matters, such as culture, politics, or religion… But the one thing long-termers can agree on is that the Britons who shot their way into Shanghai in the 1840s and the Americans who forced Japan's harbors open a decade later were merely the unconscious agents of a chain of events that had been set in motion millennia earlier… It had been locked in for generations beyond count.

The “short-term accident” theorists, however, would retort that:

The East was actually better placed to have an industrial revolution than the West until accidents intervened. Europe…was simply “a distant marginal peninsula” in a “Sinocentric world order.” Desperate to get access to the markets of Asia, where the real wealth was, Europeans a thousand years ago tried to batter their way through the Middle East in the Crusades. When this did not work some, like Columbus, tried sailing west to reach Cathay. That failed too, because America was in the way, but…Columbus's blunder marked the beginning of the change in Europe's place in the world system.

The problem with both of these approaches, as Morris sees it, is that neither takes the full scope of human history into account. Owing to a better selection of domesticable plants and animals, the West (the Fertile Crescent of the modern-day Middle East in this case) had an enormous head start on China and living standards—measured by the social development index—remained higher in the West for over 14,000 years. In the 6th century AD, after the fall of Rome had reduced Western development, the East surged far ahead of the West—where it remained for over 1,000 years.

In the ebb and flow of human history, the East would often be in decline while the West was rising and vice versa. But in both the East and the West, civilization would advance for long periods before it reached certain “hard ceilings” that it couldn't break through. Morris calls this the “paradox of development”: rising social development creates the very forces that undermine it. Gregory Clark referred to this same cyclical relationship as the “Malthusian Death Trap.” Rising living standards cause higher birthrates, which in turn causes overpopulation, social unrest, disease and mass starvation and eventually the breakdown of civilization—until falling populations cause living standards to rise and start the whole process over again.
Of course, when civilization breaks down, not all is lost. Humans learn and adapt and progress does continue. The ebb and flow has an upward bias, if you will. And this is why Britain industrialized first and came to rule the world.

There is sometimes an advantage to being backwards. The Atlantic European states (including Britain) discovered and colonized the Americas precisely because they were backward. The real economic action was in the Mediterranean Sea and Indian Ocean, the trade routes to China. In trying to get a piece of this action by finding a new Atlantic sea route to China, England and the other Atlantic European powers ended up with New World Empires. These empires provided the wealth, food supplies, and raw materials to help propel Europe to the next stage of development.

Why didn't China discover America first? After all, Chinese shipbuilding technology was far superior in the centuries before. This answer is twofold. First is geography. China had a much larger sea to cross in that the Pacific is much bigger than the Atlantic. But second is economics. Why would China have wanted to sail east? As the preeminent economic power of the day, all of the nations of the world came to China to trade. There was no reason to go anywhere.

Returning again to geography, Morris writes,

I have stressed a two-way relationship between geography and social development: the physical environment shapes how social development changes, but changes in social development shape what the physical environment means. Living on top of a coalfield meant very little two thousand years ago, but two hundred years ago it began meaning a lot. Tapping into coal drove social development up faster than ever before—so fast, in fact, that soon after 1900 new fuels began to displace coal. Everything changes, including the meaning of geography.

In other words, timing is a major issue. Britain industrialized first because she had the right materials to do so at a time when technology had risen to the point to make those materials useful. With no coal, Britain would have quickly run out of fuel—and perhaps another nation might have leapt ahead. But had Britain not had the good timing of being socially advanced enough to use that coal, she might have instead followed the fate of Africa in the 19th century or the Persian Gulf today—becoming a place known only for the commodities in its earth.

After 768 pages, Morris's answer is somewhat anticlimactic. The real value of the book is not so much Morris's muddled answer but in the historical journey itself. Read this book if you want a fascinating and original interpretation of world history, even if it fails to really answer the question in its title in a clean and succinct manner.

If there is one real disappointment in the book, it is the author's wild and irritatingly preachy conjectures in the final chapters in which he alternatively postulates that:

1. The East will overtake the West and we will all eventually learn Mandarin or
2. It won't matter in any event because by then technology will have advanced so far that we live in some kind of computerized nirvana that resembles the Matrix or
3. We reach another “hard ceiling” like we have at other stages of human history and either starve to death due to global warming or nuclear war.

To close, I would repeat that Ian Morris's Why the West Rules—For Now is a highly original and thought-provoking book, even if its ending left a little to be desired. If you are a student of history, this is a book that deserves a space on your bookshelf. 

Charles Lewis Sizemore, CFA

This blog is a free service of Sizemore Financial Publishing LLC, publisher of the Sizemore Investment Letter.

If you're not reading the Sizemore Investment Letter, then you are missing out on rock-solid investment recommendations designed to profit from the major macro trends shaping the world today.

 SUBSCRIBE TODAY and get access to information that is simply not available anywhere else.