Arnold Kling  

Matt Ridley vs. My Most Wrong Belief

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I have temporary custody of a draft manuscript of a new book by Matt Ridley. The title of the book is tentative, but the subtitle is "Economic progress and the evolution of the future." Once the book comes out, it will be a must-read.

The manuscript devastates my most wrong belief, which is that trade is a modern phenomenon, and that previous economic activity consisted mostly of plunder. Although the Ridley manuscript takes this view of Rome, it argues that in that case as well as others trade came first and empire came later.

Findlay and O'Rourke, in Power and Plenty, suggest that hegemony is a precondition for widespread trade. Their example of the Mongols is wrong, according to the Ridley manuscript The Mongols may have helped European trade, but they did not help China.

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COMMENTS (10 to date)
Max writes:

It depends, fragemented and isolated is sure spoiling any trade, but with the rise of technology and the so-to-speak shrinking of the world, ever smaller and fragemented units could be self-sufficient and trade thus creating even more trade than before.

I mean, just compare city-states like Venetia to huge empires. I think there you see a lot of trade. The other thing stiffling trade is protectionism on the fragmented level, just look at the Holy Roman Empire (Heilige Römische Reich Deutscher Nationen). You have a pretty fragemented country and no central authority (despite the existence of an Holy Emperor). Each country was ruled by a Monarch and thus they were more interested in their own well-being (especially in poorer quarters of Germany) than in letting their people trade. So, there was a lot of fragementation, some trade and high barriers for trade. Beside pure fragementation, I think the state of law and its application dictates how much saturation in trade between theory and reality you get.

Mitch Oliver writes:

I think a key component missing during the Dark Ages were secure institutions. Trade throughout the empire didn't collapse because the government disintegrated, it collapsed because the necessary institutions for trade were no longer secure.

As an example, one could transport goods in the Empire long distances with little fear of being waylaid because Rome protected the roads. In the absence of that, merchants either couldn't trade or had to hire private protection at increased cost. I believe Orson Scott Card has used this very example.

I suspect the reason that trade failed to flourish under the fragmented governments was because these institutions were lost.

Gary writes:

It hurts to admit it, but governments that can suppress violence are necessary for successful economies. That means strong governments.

Governments weak in all aspects save violence suppression would be optimal, but, at the very least, we all prefer a strong government that can solve the problem of violence to any other kind of government.

Older but no wiser writes:

So, it was just another instance of a Ponzi scheme.

[Text edited: an unauthorized re-quote has been edited out. We apologize for the inconvenience.--Econlib Ed.]

Mr. Econotarian writes:

I think a key component missing during the Dark Ages were secure institutions.

This indeed is what the cross-country research shows. Institutions that assure property rights (property registration, police, justic systems) are needed for economic growth.

Economies are damaged though by institutions that destroy property rights (over-regulation, over-high taxes, nationalization of property, poor macroeconomic policy, and corruption of the institutions that defend property rights).

David Friedman writes:

"if fragmented government is so great, why were the Dark Ages so dark?"

What makes you think they were?

My favorite response to the conventional view that the medieval period represented a decline from the high point of classical civilization is the evidence on European population. Given a poor society, population growth ought to be evidence that things are going (relatively) well. My source is the _Atlas of World Population History_.

European population peaks about 300 A.D. and then declines through the late Roman period. About 600 A.D., with the empire barely cold in its grave, it starts back up. By 800 it has gotten back to the classical peak and keeps growing, faster and faster, until the 14th century, when the black death, and possibly other factors, temporarily push population down.

Which may be one part of the reason that historians, some time back, replaced "dark ages" with "early medieval."

Alex J. writes:

The dark ages are dark to us, because not much written material survives. They were too poor to leave much that lasted. The late Roman demographic collapse left Europe too sparsely populated to support much specialization.

rsj writes:

just as interesting is the doc. "end of suburbia".

Troy Camplin writes:

I look forward to reading it -- and not jsut because it proves I was right. :-)

Bob Smith - Fort Worth writes:

I just finished "Lords of the Sea", a new book about the history of the Athenian Navy. It talks at length about the growth of trade, and supporting institutions such as finance and insurance, that results. This was in the 5th Century B.C. Also, wikipedia discusses it as well at:
The Akkadians and the Babylonians conducted trade with India, southwest Africa and will into the Caucus mountains.
The reality is that trade over long distances has occurred world wide for more than 4,000 years.

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