The A.G.Frank of Re-Orient is a great admirer of Smith, not Marx. Except for a minor point, every reference to Marx is highly negative, whereas those to Smith are always positive. As will become evident later, this is a new Frank, a sinocentric (anti-eurocentric) one; the old Frank of "underdevelopment or revolution" is no longer. Let me emphasise that the figure I posted yesterday (Rostow, 1978) to the effect that Europe accounted for 69% of world trade in 1720 appears to be a generally accepted one as it is also cited by Chilsom (1982) and Aldcroft (1994). And Frank, as one would hope, knows about such figures, as he cites Holtfrerich's figure that the European share of all world trade was 69% and 72% in 1720 and 1750. But his reaction is the rather blind one that "this unabashedly Eurocentric claim is disconfirmed by the evidence discussed in the present book" (183). I think those readers of my posts who read Re-Orient will agree I have been as fair as possible to Frank's side of the argument, presenting all his key figures; yet none of these figures constitute an adequate response to that simple fact given by Holtrerich, or the others I cited. Instead Frank digs himself into a deeper hole, adding precisely the point I made yesterday that Asia's exports to Europe were a "very small share of Asia's trade" - which of course simply suggests that Asia had its own world-economy with a hyphen, one that was secondary to Europe's own world-economy. Some may wonder why is he digging himself into such a hole? Well, because he wants to convice us that Europe was an insignificant player in the assumed Asian dominated world market. And that's not all, the hole gets bigger as he adds immediately that Asian exports to Europe "remained higher than Europe's imports from the Americas" (183) - which brings us to the role of the colonial trade, and the relation of the old to the new Frank. I am leaving for now Frank's arguements on the technological-institutional superiority of Asia to concentrate on the question "Why did the West Win (temporarily)? Frank approaches this using the theory of long waves. He speaks of a major "A" phase period of world expansion from AD 1000/1050 to 1250/1300, followed by a contraction from 1250 to 1450, followed by a a new "A" phase expansion after 1450. In both these two "A" phases, he says, China was the center of world expansion. This post 1450 growth lasted into the 18th century, followed by "B" phase contraction after 1800. Now, this long post-1450 expansive cycle, like any other long wave, experienced a Kondratieff "B" phase downturn in the 17th century, one which, however, hit the "weaker" European economy harder than it did Asia. But another Kondratieff "B" cycle that hit after the 1760s gave Europe the chance to overcome its (still) marginal position in the world economy - seemingly using Wallerstein's argument (1979) that, contrary to strict dependency theory, at certain historical junctures opportunities are created for some less developed economies to move up. So, what were the opportunities that Europe had? A favorable factor endowment of natural resources and relative prices of labor and capital. For one, it had cheap sources of capital , from the extraction of gold, the slave trade, the plantations, and the re-export trade. But what about O'Brien's powerful finding that the colonial trade amounted to no more than 2% of Europe's GNP in the late 18th century? On the one hand, Frank appears to take this evidence seriously but thinks there other types of evidence do suggest this trade was highly important to Europe's economy: "we must agree with O'Brien that the evidence will never settle this issue" (42). On the other, he says that O'Brien's figures do not "bear so much on the real dispute between us" (42). What he means, I take it, is that it was the monies extracted from the Americas which allowed Europe to enter the Asian market, and that Europe, without ever dominating the world market, accumulated huge profits "from the carrying trade and from parleying multiple transactions in bullion, money, and commodities in multiple markets (177). In the end, actually, Frank more or less dismisses O'Brien's evidence, as he goes on to say that the colonial trade was the crucial source of capital for Europe, for colonies "supplied not only almost free money, but also servile labor and the cheap sugar, tabacco, timber, cotton, and other goods produced in the Americas for European consumption [which] gave them access to the silk, cotton textles, and spices" of Asia (295). To boot, he even cites such outdated sources as Mandel and Eric Williams, with the additional, if rather lame argument, that the supply of colonial capital brought interest rates down from 12% in the 1690s to 8% in 1694 to 3% in 1752, thus cheapening investment (296). But a simple quesion now needs to be posed: did not the bullion extracted from the Americas, or at least a high proportion of it, ended up in Asia or China as the ultimate "sink"?! Whatever happened to Asia's "massive balance of trade surplus with Europe"?
