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I.K. BARBER SCHOOL OF ARTS AND SCIENCES

ECONOMICS, PHILOSOPHY, AND POLITICAL SCIENCE UNIT

Economics 331 The World Economy since 1800

Term 2 2012W

Professor: P. Wylie Office: Arts 309 Telephone: 807-9341 E-mail: peter.wylie@ubc.ca Office Hours: Mon, Wed, Fri 11.30 am -12.30 pm, other times by appointment. Unit Assistant: S. Wolfe Office: Arts 262 Telephone: 807-9124 Course Description This course studies the development of the world economy from around 1800 to the present time and prospects for the future. The companion course is Economics 330: The World Economy to 1800. However, the two courses are independent and are not pre-requisite or co-requisite to one another. In other words, you can take one or the other, or both, in either order. This course deals with the diffusion of the Industrial Revolution from Great Britain to Western Europe, the United States, Japan, and others, the resulting changing patterns of national economic leadership, the rise and fall of Communism, problems of global economic growth such as the Great Depression, international monetary and trade policy, and the question; why isn’t the whole world developed by now? The course provides a long-term historical perspective and an opportunity to apply economic analysis to these issues. The prerequisite courses are ECON 101 and ECON 102 or equivalents. The course draws on economic reasoning to examine the transformation of some economies in the world to ones in which rising per capita income became the expectation and the norm and some where this transformation did not occur. The course will try to explain the apparent uniqueness of the Industrial Revolution in Great Britain, why it was here after 1800 or so where this revolution first happened, why it spread to some economies and not others, and why many countries remain relatively untouched by it (where pressure of population on resources and incomes near subsistence levels and below remain the dominant facts). These questions mark a great watershed or divergence in world economic history, the underlying causes of which are still not yet entirely understood.

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The topics to be covered in the course are:

1. Introduction to World Economic History since 1800 2. The Industrial Revolution: Why in Great Britain First? 3. The Effect of the Industrial Revolution to 1870 4. The Diffusion of the Industrial Revolution to 1914 5. The First Era of Globalization to 1914 6. Global Economic Disintegration 1914-1945 7. Rebuilding, Growth and Stagnation after 1945 8. The Rise, Fall and Reform of Communism after 1945 9. The Resurgence of Asia since1945 10. The Modern Era of Globalization, Growth and Stagnation 11. Prospects for the End of Poverty

Course Objectives

1. To provide you with a basic knowledge of the historical evolution of the world economy since 1800, how this shapes the present, and what this bodes for the future;

2. To develop your ability to apply economic theory and economic ways of thinking to major real world events in history;

3. To improve your ability to express yourself clearly and concisely in writing; 4. To develop your ability to critically evaluate diverse and often conflicting

sources of information. Required Texts available at the Bookstore Robert C. Allen, Global Economic History: A Very Short Introduction Oxford: Oxford University Press, 2011 Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty New York: Crown Publishers, 2012 Niall Ferguson, Civilization: The West and the Rest. London: Penguin Press, 2011 Course Format and Participation There are three 50-minute classes per week, Mondays, Wednesdays and Fridays, 10.30-11.20, January 2 - April 5 inclusive (35 classes in total). There are no classes on Monday February 11 (BC Family Day), Friday March 29 (Good Friday), Monday April 1 (Easter Monday) or during the Midterm break week February 18-22 inclusive. The classes on Monday January 28 and Monday March 11 will be used to write the two midterm tests. The course is designed in a lecture-discussion format in which the learning takes place during discussion of assigned readings, so it is important that you keep up with the readings. Student preparation and participation is essential - you should plan to spend at least two hours reading outside of class for every hour in class. All students will be responsible for the basic readings on each topic for each class – all from the required texts.

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Course Requirements

Each student must write the two midterm exams. These will be 50 minutes each and contain short essay-type questions. The midterm exams will be in the regular class times on Monday January 28 and Monday March 11.

Each student must write a 5 page or so (approx 1,000-1,500 word) personal review of either;

The Niall Ferguson book and 6-episode documentary series Civilization: The West and the Rest. This documentary series will be shown in class time throughout the course (on available Fridays - see outline below). The book on which the series is based is also a required text in the course.

or; of any of the following books and documentary series, portions of which will also be shown in the course:

Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy New York: Touchstone Books, 2002 PBS Series Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power. New York: Basic Books, 2002 BBC Series Niall Ferguson, The War of the World: A New History of the 20th Century New York: Penguin Books, 2004 PBS Series Niall Ferguson, The Ascent of Money: A Financial History of the World. New York: Basic Books, 2008 PBS Series Jared Diamond, Collapse: How Societies Choose to Succeed or Fail. New York: Viking Press, 2005 National Geographic Series

The objective of the review is to consider the theme of the book and series in the context of the course and to develop your skills in summarizing arguments, evaluating evidence, and drawing your own conclusions. The review should identify what you believe to have been the most important points made in the book and series, identify the major sources of evidence used by the author(s) and commentator(s), and raise any questions that you have after reading the book and watching the series. Reviews are due no later than in class on Monday March 25. The reviews will be graded on the basis of both the accuracy with which they present the arguments of the series and the clarity and style with which the review is presented and the series is evaluated.

Each student must write the final exam. This will be a take-home exam and contain short essay-type questions. The exam will be due at some time to be determined within the official examination period April 9-24, 2013.

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Course Grading Grading will conform to the UBC grading system. Your final grade will be based on your grade on your book and TV series review and your grades on the midterms and final exam. The weight of each of these in your grade will be as follows:

Book and TV Series Review: Due March 25 30% Midterm Test 1: In class, Jan 28 20% Midterm Test 2: In class, Mar 11 20% Take-Home Final Exam 30%

100% No make-up midterm test will be given under any circumstances. If you miss any midterm test for a valid medical or personal reason (with the validity as assessed by the instructor) then the weight of that test will be placed on the final exam (which will then be worth 50% or up to 70% of your grade). Documentary Series: Each Friday Jan 11-Mar 22, excluding Feb 22 Break Either all or portions of the following series will be shown, in an order as appropriate for the course progression: Civilization: The West and the Rest 2011 BBC 282 mins The Commanding Heights: The Battle for the World Economy 2002 PBS 360 mins Empire: The Rise and Demise of the British World Order and the Lessons for Global Power 2002 BBC Series 300 mins The War of the World: A New History of the 20th Century 2007 PBS Series 180 mins The Ascent of Money: A Financial History of the World. 2009 PBS Series 240 mins Collapse: Based on the Book by Jared Diamond. 2010 National Geographic 97 mins Segments of other series may also be shown, as time permits.

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Course Outline and Required Reading List The required text reading (in bold type below) should be read by all students before class treatment. Students should come to class ready to discuss these readings. World Economic History since 1800: An Introduction Wed Jan 2: Allen, Ch 1: The Great Divergence Fri Jan 4: Allen, Ch 2: The Rise of the West Mon Jan 7: Allen, Ch 3: The Industrial Revolution Wed Jan 9: Allen, Ch 4: The Ascent of the Rich Fri Jan 11: Video Mon Jan 14: Allen, Ch 5: The Great Empires Wed Jan 16: Allen, Ch 6: The Americas Fri Jan 18: Video Mon Jan 21: Allen, Ch 7: Africa Wed Jan 23 Allen, Ch 8, 9: Late and Recent Industrialization Fri Jan 25: Video Mon Jan 28: First Midterm World Economic History since 1800: A Political/Economic View Wed Jan 30: Acemoglu and Robinson Chs 1, 2 Fri Feb 1: Video Mon Feb 4: Acemoglu and Robinson Chs 3, 4 Wed Feb 6: Acemoglu and Robinson Chs 5, 6 Fri Feb 8: Video Mon Feb 11: BC Family Day Holiday Wed Feb 13: Acemoglu and Robinson Chs 7, 8 Fri Feb 15: Video Mon-Fri Feb 18-22 Midterm Break Mon Feb 25: Acemoglu and Robinson Chs 9, 10 Wed Feb 27: Acemoglu and Robinson Chs 11, 12 Fri March 1: Video Mon March 4: Acemoglu and Robinson Chs 13, 14 Wed March 6: Acemoglu and Robinson Ch 15 Fri March 8: Video Mon March 11: Second Midterm World Economic History since 1800: A Historical/Economic View Wed March 13: Ferguson Preface, Introduction and Ch 1: Competition Fri March 15: Video Mon March18: Ferguson Ch 2: Science Wed March 20: Ferguson Ch 3: Property Fri March 22: Video Mon March 25: Ferguson Ch 4: Medicine Wed March 27: Ferguson Ch 5: Consumption Fri March 29: Good Friday Holiday Mon April 1: Easter Monday Holiday Wed April 3: Ferguson Ch 6: Work Fri April 5: Review for Take-Home Final Exam

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Recommended Books for Further Reading (* = highly recommended) Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy New York: Touchstone Books, 2002* Ian Morris, Why the West Rules – For Now: The Patterns of History and What They Reveal About the Future. Toronto: McClelland and Stewart, 2010* Rondo Cameron and Larry Neal, A Concise Economic History of the World: From Palaeolithic Times to the Present, Fourth Edition. New York: Oxford University Press, 2003* Gregory Clark, A Farewell to Alms: A Brief Economic History of the World. Princeton NJ: Princeton University Press, 2007* Robert Allen, The British Industrial Revolution in Global Perspective: Cambridge UK: Cambridge University Press, 2009* Ronald Findlay and Kevin O’Rourke, Power and Plenty: Trade, War and the World Economy in the Second Millennium. Princeton NJ: Princeton University Press, 2007* Jeffrey Sachs, The End of Poverty: How We Can Make it Happen in Our Lifetime. New York: Penguin Press, 2006* Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power. New York: Basic Books, 2002 Niall Ferguson, Colossus: The Rise and Fall of the American Empire. New York: Penguin Books, 2004 Niall Ferguson, The Ascent of Money: A Financial History of the World. New York: Basic Books, 2008 David Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor. New York: Norton, 1998. Peter Jay, Road to Riches: or The Wealth of Man. London: Weidenfeld and Nicholson, 2000 Charles Mann, 1493: Uncovering the New World Columbus Created. New York: Alfred Knopf, 2011* Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East Princeton NJ: Princeton University Press, 2010 Dierdre McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World Chicago: University of Chicago Press, 2010* Matt Ridley, The Rational Optimist: How Prosperity Evolves New York: Harper-Collins Publishers, 2010 Robert Fogel, The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World Cambridge: Cambridge University Press, 2004

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Prasannan Parthasarathi, Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600-1850 Cambridge: Cambridge University Press, 2011 Kenneth Pomeranz, The Great Divergence: China, Europe and the Making of the Modern World Economy. Princeton NJ: Princeton University Press, 2000* Kenneth Pomeranz and Steven Topik, The World That Trade Created: Society, Culture and the World Economy 1400 to the Present New York: M.E. Sharpe, 2002 Joel Mokyr, The Lever of Riches: Technological Creativity and Economic Progress. New York: Oxford University Press, 1990. Joel Mokyr, The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton, NJ: Princeton University Press, 2002. Joel Mokyr, The Enlightened Economy: An Economic History of Britain 1700-1850 New Haven CT: Yale University Press, 2009* William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge, Mass: MIT Press, 2001* William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, New York: The Penguin Press, 2006* Nathan Rosenberg and L. E. Birdzell, Jr., How the West Grew Rich: The Economic Transformation of the Industrial World. New York: Basic Books, 1986 Peter Temin, Lessons from the Great Depression Cambridge, Mass: MIT Press, 1991 Stanley Engerman and Kenneth Sokoloff, Economic Development in the Americas since 1500: Endowments and Institutions Cambridge: Cambridge University Press, 2012 Eric Jones, The European Miracle: Environments, Economies, and Geopolitics in the History of Europe and Asia, Second Edition. Cambridge: Cambridge University Press, 1987. Eric Jones, Growth Recurring: Economic Change in World History Ann Arbor: University of Michigan Press, Second Edition, 2000. Eric Jones, The Record of Global Economic Development. Northampton, Mass: Edward Elgar Press, 2002 David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery, New York: Norton & Co, 2006 Douglass North and R. P. Thomas, The Rise of the Western World: A New Economic History New York: Cambridge University Press, 1973 Douglass North, Structure and Change in Economic History. New York: Cambridge University Press, 1981. Douglass North, Institutions, Institutional Change, and Economic Performance. New York: Cambridge University Press, 1990.

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Barry Eichengreen, Globalizing Capital: A History of the International Monetary System Princeton NJ: Princeton University Press, 1996 Angus Maddison, The World Economy: A Millennial Perspective Paris: Organization for Economic Cooperation and Development, 2001 Francois Crouzet, A History of the European Economy 1000-2000 Charlottesville: University Press of Virginia, 2001 Paul Collier, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It Oxford: Oxford University Press, 2007 Jared Diamond, Collapse: How Societies Choose to Succeed or Fail. New York: Viking Press, 2005 Jared Diamond, Guns, Germs and Steel: The Fates of Human Societies New York: Norton, 1997 Andre Gunder Frank, ReOrient: Global Economy in the Asian Age. Berkeley and Los Angeles: University of California Press, 1998* Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books 2000 William Bernstein, The Birth of Plenty: How the Prosperity of the Modern World Was Created. New York: McGraw Hill, 2004 William Bernstein, A Splendid Exchange: How Trade Shaped the World. New York: Atlantic Monthly Press, 2008* Clive Ponting, A Green Economic History of the World; The Environment and the Collapse of Great Civilizations. New York; Penguin Books, 1991 Thomas Friedman, The World is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2005. Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation. New York: Plume Books, 2000 Robert Fogel, The Fourth Great Awakening and the Future of Egalitarianism. Chicago: University of Chicago Press, 2000

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Other Background Reading Introduction to World Economic History since 1800 Cameron, Ch. 1 Sachs, Ch. 2 Easterly Ch. 1 Clark, Chs 1, 15 Bernstein Ch. 1-6 Maddison, Introduction and Summary and Ch. 1 Rosenberg and Birdzell, Chapter 1 Mokyr, 1990, Chs. 1 and 12 Lant Pritchett, Divergence, Big Time Journal of Economic Perspectives 11, No. 3, Summer 1997, p. 3-17 Richard Easterlin, The Worldwide Standard of Living Since 1800 Journal of Economic Perspectives 14, No. 1, Winter 2000, p. 7-26 The Industrial Revolution: Why in Great Britain First? Cameron, Chs 7, 8 Mokyr, 2002, passim Allen 2009, passim Findlay and O’Rourke Ch 6 Morris Ch 10 Clark Chs 11-13 Pomeranz, passim Bernstein Ch. 7 Maddison, Ch. 2, p. 75-97 Crouzet, Ch. 3, p. 99-116 Mokyr, 1990, Chs. 5, 10 Jay, Ch. 6 Rosenberg and Birdzell, Ch. 5 North, Ch. 12 Landes, Chs. 13-15 The Effects of the Industrial Revolution to 1870 Cameron, Chs. 9, 10, 11 Bernstein Ch. 8 Clark Ch 14 Crouzet, Ch. 3, p. 116-155 Mokyr, 1990, Ch. 6 Landes, Chs. 16-18 Rosenberg and Birdzell, Chs. 6-10 Eichengreen, Ch. 2 The Long 19th Century: The Diffusion of the Industrial Revolution to 1914 Cameron, Chs. 9, 10, 11 Bernstein Ch. 8 Crouzet, Ch. 3, p. 116-155 Clark Ch 16 Mokyr, 1990, Ch. 6 Landes, Chs. 16-18 Rosenberg and Birdzell, Chs. 6-10 Eichengreen, Ch. 2

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The Long 19th Century: The First Era of Globalization to 1914 Cameron, Ch. 12, 13 Bernstein Ch. 9 Maddison, Ch. 2 p. 97-118 Findlay and O’Rourke Ch 7 Crouzet, Ch. 3, p. 155-169 Jay, Ch. 7 North, Ch. 13 Landes, Chs. 19-26 Mokyr, 1990, Ch. 10

Gavin Wright, The Origins of American Industrial Success, 1879-1940, American Economic Review 80, 1990, pp.651-668.

Nicholas Crafts, Forging Ahead and Falling Behind: The Rise and Decline of the First Industrial Nation, Journal of Economic Perspectives Spring 1998, 193-211 Paul Romer, Why, Indeed, in America? Theory, History and the Origins of Modern Economic Growth, American Economic Review Vol. 86, No. 2, May 1996, p. 202-206 Kenneth Sokoloff and Stanley Engerman, History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World, Journal of Economic Perspectives, 14 Summer 2000, pp.217-232 The 20th Century War of the World and Economic Disintegration 1914-1945 Cameron, Ch. 14 Crouzet, Ch. 4, p. 171-205 Findlay and O’Rourke Ch 8 Ferguson 2007 Jay, Ch. 8 Landes, Ch. 27 Temin, Chs. 1-3 Eichengreen, Ch. 3 Barry Eichengreen, The Origins and Nature of the Great Slump Revisited Economic History Review, 45 May 1992, pp.213-239 A. Estevadeordal, I. Franz and J. Taylor, The Rise and Fall of World Trade 1870-1939, Quarterly Journal of Economics 118, May 2003, p. 359-407 Barry Eichengreen, Still Fettered After All These Years, National Bureau of Economic Research Working Paper WP9276 October 2002 Peter Temin, Soviet and Nazi Economic Planning in the 1930s, Economic History Review Vol. 44, 1991, p. 573-93 Rebuilding, Restoration, Growth and Stagnation after 1945 Yergin and Stanislaw, Chs. 1-4, 11, 12 Cameron, Ch. 15 Easterly Chs 2-7 Bernstein, Chs 10, 11, 12 Maddison, Ch. 2, p. 125-139 Crouzet, Ch. 4, p. 205-233

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Jay, Ch. 9 Eichengreen, Ch. 4 Nicholas Crafts, The Golden Age of Economic Growth in Western Europe 1950-1975 Economic History Review 48, No. 3, 1995 429-47 Gianni Toniolio, Europe’s Golden Age 1950-1973: Speculations From a Long Run Perspective Economic History Review 41, No. 2, 1988, 252-67 Richard Nelson and Gavin Wright, The Rise and Fall of American Technological Leadership, Journal of Economic Literature, 30 December 1992, The Rise, Fall and Reform of Communism after 1945 Yergin and Stanislaw, Chs 5, 9, 10 Sachs Chs. 6, 7 Crouzet, Ch. 4, p. 233-259 Maddison Ch. 2, p. 151-167 Landes, Ch. 28 Rosenberg and Birdzell, Ch. 10 Robert Allen, The Rise and Decline of the Soviet Economy, Canadian Journal of Economics Vol. 34, Nov. 2001, p. 859-881 Robert Allen, A Reassessment of the Soviet Industrial Revolution, mimeo, 2003 Richard E. Ericson, The Classical Soviet-Type Economy: Nature of the System and Implications for Reform, Journal of Economic Perspectives, 5 Fall 1991, pp.11-27 The Resurgence of Asia since 1945 Yergin and Stanislaw, Chs 6, 7, 8 Sachs Chs. 8, 9 Maddison Ch. 2, p. 139-151 Landes, Ch. 27 Eichengreen, Chs. 5, 6 Gary R. Saxonhouse, Structural Change and Japanese Economic History: Will the 21st Century be Different? American Economic Review, 88 May 1998, pp.408-411 The Modern Era of Globalization, Growth and Stagnation Yergin and Stanislaw, Chs 13, 14 Cameron, Ch. 16 Easterly Chs 8-14 Findlay and O’Rourke Chs 9, 10 Morris Chs 11, 12 Sachs Chs. 3-5, 10 Bernstein Chs 13, 14 Jay, Ch. 10 Landes, Ch. 29 North, Ch 15 Prospects for the End of Poverty Sachs Chs. 11-18 Collier, passim Clark Ch 18

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Academic Integrity The academic enterprise is founded on honesty, civility, and integrity. As members of this enterprise, all students are expected to know, understand, and follow the codes of conduct regarding academic integrity. At the most basic level, this means submitting only original work done by you and acknowledging all sources of information or ideas and attributing them to others as required. This also means you should not cheat, copy, or mislead others about what is your work. Violations of academic integrity (i.e., misconduct) lead to the breakdown of the academic enterprise, and therefore serious consequences arise and harsh sanctions are imposed. For example, incidences of plagiarism or cheating may result in a mark of zero on the assignment or exam and more serious consequences may apply if the matter is referred to the President’s Advisory Committee on Student Discipline. Careful records are kept in order to monitor and prevent recurrences. A more detailed description of academic integrity, including the policies and procedures, may be found at http://www.calendar.ubc.ca/okanagan/index.cfm?tree=3,54,111,959 If you have any questions about how academic integrity applies to this course, please consult with your professor. Disability If you require disability-related accommodations to meet the course objectives, please contact the Coordinator of Disability Resources located in the Student Development and Advising area of the student services building. For more information about Disability Resources or academic accommodations, please visit the website at: http://web.ubc.ca/okanagan/students/disres/welcome.html Equity, Human Rights, Discrimination and Harassment UBC Okanagan is a place where every student, staff and faculty member should be able to study and work in an environment that is free from human rights-based discrimination and harassment. Under UBC’s Policy 3 on Discrimination and Harassment, UBC prohibits discrimination and harassment on the basis of the following grounds: age, ancestry, colour, family status, marital status, physical or mental disability, place of origin, political belief, race, religion, sex, sexual orientation or unrelated criminal conviction. If you require assistance related to an issue of equity, discrimination or harassment, please contact the Equity Office, your administrative head of unit, and/or your unit’s equity representative. UBC Okanagan Equity Advisor: ph. 250-807-9291; email equity.ubco@ubc.ca Web: www.ubc.ca/okanagan/equity Unit Equity Representatives: http://www.ubc.ca/okanagan/equity/programs/equityreps/unitcontacts.html

© Dr. P.Wylie. Not to be copied, used, or revised without express written permission from the copyright owner.