Semi-Daily Journal

Very nice indeed, but it is unfair not to go on and to leave the reader frustrated.

Would like to read the paper....

Why don't your students blog their notes? I would be good experience for them, forcing them to compile concise notes, while also creating an asset that the rest of humanity could draw and learn from.

For those interested, David Landes' book, "Bankers and Pashas," is an excellent financial history of Egypt from the 1850's to the late 1860's. The American Civil War caused a great rise in cotton prices, and this created a boom in Egypt and large profits on government loans for many European bankers .

The boom was followed by a bust, partly because prices fell, partly because Egypt's ruler, the Viceroy Ismail, was incredibly profligate.

The paper sounds very interesting. Is it available somewhere online?

I can just see how the anti-globalists of the day would have decried the destruction of the millenia-old lifestyle of Egyptian fellaheen as subsistence crops gave way to a cash crop. And how multinational businessman were exploiting the country and appropriating its wealth. And how these exploitative practices were unfair competition for the labour of the working class in the developed countries.

Joan Robinson (a distinctly left-wing economist) once noted that the only thing worse than living in a poor Thirld world country being ruthlessly exploited by greedy multinationals is living in a Thirld World country too poor and unstable to be ruthlessly exploited.

I can just see how the anti-globalists of the day would have decried the destruction of the millenia-old lifestyle of Egyptian fellaheen as subsistence crops gave way to a cash crop. And how multinational businessman were exploiting the country and appropriating its wealth. And how these exploitative practices were unfair competition for the labour of the working class in the developed countries.

Joan Robinson (a distinctly left-wing economist) once noted that the only thing worse than living in a poor Thirld world country being ruthlessly exploited by greedy multinationals is living in a Thirld World country too poor and unstable to be ruthlessly exploited.

"I can just see how the anti-globalists of the day would have decried the destruction of the millenia-old lifestyle of Egyptian fellaheen as subsistence crops gave way to a cash crop. And how multinational businessman were exploiting the country and appropriating its wealth. And how these exploitative practices were unfair competition for the labour of the working class in the developed countries."

Your point? You aren't suggesting that they ended up any better off, are you? It was an early example of "peaceful penetration" as practised by colonialists, after all. (You can start chasing up references to that term with Keynes' "the Economic Consequences of the Peace", if you like.) Nassau Senior had already explained how absentee landlords hurt primary producers worse than industrial countries, and there was no compensating capital influx as the situation developed (from the intermediation of the local kleptocracy).

The "classic" case of globalisation being bad for the locals is probably the "secod serfdom" in Poland.

Briefly, early modern Poland was brought into the world economy via large exports of grain up the Vistula, to Holland and fruther west.

Now, prior to this, it hadnt really been worth oppressing the Polish peasantry - you can eat the first ton of grain, turn the second into vodka, feed the third to your horses ... and then what are you going to do with it ?

However, once you could sell it to the grain agents in Danzig, then it was worthwhile collectivising your peasantry, in order to maximise the marketable grain surplus.

Readers are reminded that Poland is good cavalry country, and rebel peasant armies go badly in good cavalry country (NB Afghanistan is probably the worst cavalry country I can think of).

Witold Kula is probably the guy to look at regarding this.

Ian Whitchurch

Another case of a country that seem poised to go to larger things, but then failed spectacularly to modernize is Argentina. In the late 19th century, after 50 years of civil war following its independence, Argentina came to the world market as one of the main exporters of cereals and meat. That allowed Argentina to have one of the world's largest standard of living from 1880 to 1940. What happened?. A number of things went really wrong. Argentina has been close to the British Empire, selling it primary products and receiving in exchange industrial goods. When the United States, which was a competitor in agricultural products, replace Britain as the world's preeminent power, that didn't help Argentina's chances. Being neutral during World War II didn't help a lot either. After World War II, Argentina tried to industrialize, but it did so closing its economy and trying to do substitution of imports. Adding to that a generally statist outlook from the part of the government, and the result, as in many developing countries, was an inefficient (and often state-owned)industrial sector, unable to compete with the rest of the world. Argentina remained a big agricultural exporter, but falling prices of primary products meant that its people have became progressively poorer for the last 60 years.

With Argentina, I believe there was something of an externalities issue with other primary producers like Australia in the 1960s and '70s. When Argentina (and to some extent Uruguay) tried to modernise using local resources and doing import substitution etc., the short term export opportunities were all handed to the rest of the primary producing countries.

This LOOKED like evidence that focussing on primary exports was a good thing, but it actually didn't answer that question. It actually showed that either that was the way to go, or that you shouldn't modernise while being undercut - but it didn't outright show that you should only ever stay a primary producer. It's entirely possible that that focus guarantees long run problems (which we now seem to have, oddly enough).

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