• "[Second Thoughts on Capitalism and the State is a] profoundly reflective book shows a pathway forward for academics and activists alike who are stymied by the disconnect between deep critical scholarship and emancipatory social change, yet who will still not give up the good fight."

    - Professor Diane E. Davis, Harvard University

22nd September 2023

Book in Focus
Ancient Urban Globalisation and Economic Development

By David A. Warburton

This book is about how responses to social contact have had a decisive impact on the spread of human civilisation, dealing with some aspects of the last 10,000 years and concentrating on cultural development and exchange but also economic thought, because finance is what pays for civilisation. Somehow, little of this is understood; it is obscured by assumptions about social evolution, leading Westerners to think that people have always lived in independently existing, gradually evolving market societies with social change driven by technological innovation. However, historical evidence suggests that cultural development is social, with markets and technology subordinate to society rather than determining social behaviour.

This sounds strange, but as it happens, I can try to put one aspect of the book into a contemporary context here.

Immediately after CSP had despatched the manuscript of this book to the printers in early March 2023 AD, because the American central bank had mildly raised interest rates, the American government was promptly occupied with saving yet another failed  bank from the market, while – at the same time – the British chancellor was presenting a wisely market-conforming budget that would guarantee that the quality of life in Britain would not improve much (if at all) for the next year (at a minimum). Also at the same time, the West was again upset by China demanding equality with a West that feels threatened. During most of the last 500 years, the West has insisted that others did not have rights to equality and sovereignty. Now, China is saying that history is on its side, which is largely true of more than the last 2000 years – if not the last 500 (and this is more history than, e.g., America has).

Obviously, the Chinese story of the future differs from Fukuyama’s, whose version has hardly been supported in recent decades, which have demonstrated that Western democracies do not always offer leadership: the West might not be the master of history and society. Part of the problem is that northern European Western history is a lot shorter than that of other parts of the world. History is usually understood as that of the rise and victory of Western imperialism and capitalism. Everything else in the last 300,000 years is viewed as the unfortunate and regrettable prelude to the Industrial Revolution. That moment of Western glory becomes the measure of all things, meaning that society, capitalism and technology are often fused together, understood as meaning (a) that the West is the goal of history, (b) that our society should be understood as a market, but (c) that economics is about technology rather than money.

In contrast to others, I have great difficulty understanding why the West celebrates itself and markets but does not seem to master the basic concepts. The West seems surprised at what markets produce, seemingly simultaneously (a) believing that financing their own market failures is essential because markets and technology are economically good, while (b) denying that technology and market outcomes are good when they benefit others who understand the world differently.

In principle, it is believed that technology is good because it alone drives growth, and markets are good because they make people richer. Yet evidently reckless banks generously investing in technology cannot even remain solvent, let alone make profits in the market. Yet, paradoxically, in Western market societies, people involved in technology and capitalism actually get money (and tax-breaks) directly from the state, while the ordinary rate- and tax-payers are juggled as employees and consumers seeking goods and money in the market.

What is not widely known is – despite the clear consensus – that there has never been much success among economists in figuring out how “markets” or “economic growth” work and what role technology theoretically plays in economic growth. However, in the Rise and Fall of American Growth, Gordon has at least realised that, as far as he is concerned, empirically, technology is no longer driving growth. Obviously, it will take time to digest this since the so-called technology firms do dominate the stock markets. Yet, Gordon is right – and perhaps that is more than a mere historiographical challenge.

Gordon started at what I view as the provisional end of economic history, and yet came to the same conclusion that I had reached earlier when starting with the beginning of economic history, some 5000 years ago in the Ancient Near East. It is clear that technological innovation was not pushing that first economic growth. The Mesopotamians imported the advanced technologies of, e.g., metallurgy (tin bronze), transport & carpentry (the wheel) and weaponry (composite bow) from what remained for a long time an economically and socially backward Eurasia, where the technology changed nothing socially.

Aside from writing – the first “IT Revolution”, 5500 years ago –, the great invention enabling Mesopotamian civilisation was an ideology allowing an educated urban elite to mobilise an illiterate rural workforce serving the elite. Art, architecture, literature, philosophy, and science were among the results where civilisation first caught hold. While doing this, they also created money and trade routes, so that they could profit from a textile industry involving tens of thousands of badly paid workers, throwing textiles on the markets at dumping prices, assuring that merchants took on the risks of retailing the goods. With the money earned in the low-tech, low margin, high turnover industry, the earliest bureaucrats created finance, and mercenary craftsmen created art serving the prevailing ideology. The result was the earliest form of urban civilisation in human history: the state based on an ideology of personal government sanctioned by gods, organised by bureaucrats and supported by finance. In this context, the rate of interest was a social issue and technological innovation cultural. The idea spread, but it was difficult to replicate and mostly led to pale imitations unable to make the leap to a stable society, and thus the interminable catalogues of Prehistoric “cultures” offered by the archaeologists (which long antedated the “failed states” of our world).

Where it was impossible to achieve this feat of creating an enduring civilisation by mobilising labour – that is, most of the world for most of human history –, societies (like those of Northern Europe) stagnated in poverty without civilisation. However, in those rare places where the idea of civilisation was reciprocated and prevailed, it developed in different ways (i.e., Egypt, China), but after an initial burst, economic growth remained uniformly slow, with the urban elites invariably getting richer and the rural and urban poor remaining poor. But in most places the Bronze-Age attempts at imitation never took off, or failed (e.g., Greece, the Indus). In Mesopotamia – where it began – that essential concentration of wealth was the key to maintaining a blossoming civilisation since the beginning, but the states provoked their neighbours (who reduced them to dust, only for new states to arise from the ashes). Elsewhere, imitations went on developing for a couple of thousand years; some were successful, and the system gradually spread to most corners of the world – and eventually even all of Europe, which then colonised the world (abruptly increasing social interaction by an order of magnitude).  

Then, another burst of economic growth – in Northern Europe – took place that was incomparable to anything that had or has ever happened in human history. However, after a brief spurt of rapidly growing prosperity (ca. 1870-1980 AD), our societies have now returned to the environment of slow growth and growing inequality, that had been the norm for the last 5000 years. The Post-Modern is like the Pre-Modern born out of the Ancient. That seems to be the long-term trend of economic growth.

Why is market-driven economic growth in our contemporary world slowing in an environment that is overwhelmed with both a constant supply of technological innovations and plenty of mercenary capital? It looks as if understanding the Industrial Revolution might be a bit more complicated than just technology. A number of economic historians have come to point at potentially decisive financial issues related to the Industrial Revolution. This point was underscored recently as interest rates have determined behaviour in recent decades and it might have always been this way. Understanding finance would thus be socially important. These minor details are, however, usually dismissed when simply assuming that technology alone explains all economic development and prosperity.

One advantage of stressing technology is that the Post-War Bretton Woods era (ca. 1955-1973) can easily be overlooked (usually tossed into a single era bound either to [a] the Post-War [e.g., 1945-present], or to [b] the inter-war era [e.g., 1914-1980]. Technologically, these years were not notable, and economists tend to dismiss Bretton Woods as not having been a special era. Yet these years are a large part of Piketty’s Golden Age, les trentes glorieuses of his Capital au xxie siècle, when economic growth was linked to growing prosperity and decreasing inequality (in the West and elsewhere) for the only time in human history. This is a recent historical era, yet seemingly unimaginable to the historian Scheidel, who assumes that what happened is impossible.

Strangely, this exceptional era is assumed to be that characterising  Kuznets’s Modern Economic Growth, typified by meritocracy, innovation, egalitarianism and steady self-sustaining growth and prosperity. However, it was not, for what Kuznets detailed had happened earlier, but had not led to that rapid growth in prosperity characterising the Bretton Woods era. Regardless, this ceased decades ago. Yet economists nevertheless assume that this was the norm, and can be reached again by pushing technology, opening up markets and relaxing regulation. Of course, that did not lead anywhere. Seemingly, markets and technology do not behave as economists assume. However, if you look at technology alone (and disregard the rest), you can point to improvements.

The fundamental advantage of stressing technology alone is that one can neglect virtually all of human history, without seeming to be overtly Eurocentric, simply because there is so little obvious evidence of technological innovation having an impact, and any mention of e.g., Chinese moveable type antedating Gutenberg can easily be dismissed because China did not have an Industrial Revolution a thousand years ago.

A further positive side-effect of stressing technology and economics is that history and philosophy can be subtly shifted out of the universities, since education is expensive, demanding and only pays off if you study what employers want, i.e., skills they can use to beat the competition: better technology, better management, better investing and accounting (and bizarrely, even better handling of human resources, today at least), etc. Universities are to offer education suitable for the marketplace (conveniently paid for by prospective employees themselves and the states, rather than as tax-deductible training offered by the companies from the profits they gain from their employees).

According to the doctrine, universities should not be wasting money on the humanities where – if people were properly taught – they might learn to ask the wrong questions. If history is marginalised in the universities, no one will talk about Hellenistic steam engines and ancient Chinese blast furnaces that don’t fit into the scheme. One must (a) merely dismiss all the technological innovation before the Industrial Revolution and claim that economic history is just about technology because (b) the Industrial Revolution proves that technology is what drives development (sic).

For someone who does not believe that this is empirically defensible, it means that an historical question can be transformed into a theoretical statement suggesting the hypothesis that technology and markets might not be the key to social development, but rather that social development exploits technology and finance – but does not necessarily lead to self-sustaining progress, because of the distribution of wealth. This means re-writing history following the evidence, to see what might have been important or decisive. Then compare that with prevailing thought – dominated by the rise of the West – distracting us from potentially relevant details. When I started, I had no idea of where to start, nor where I was headed.

I am still struck by the facts that (a) despite innovations, for most of the last 5000 years, markets did not contribute to growing wealth and wide-spread prosperity while (b) economists claimed that technology drives growth and markets make people richer. The 1970s (when I started) were still part of Piketty’s trente glorieuses (the Golden Age of Post-War growth), and thus it was legitimate to assume that Modern markets did raise incomes and spread growth. However, by 2023 it is clear that growth in the West has slowed and prosperity has spread – but not in the West.

Thus, a Western standpoint may not be the best way to understand universal history and culture. However, archaeologists had adopted ideas from Western economists and Western anthropologists, thinking in terms of social evolution being a universal type of linear progress, with variations, but partially determined by economics and technology.

I see problems in the attitudes of the economists who regularly declare that the most recent unexpected crisis has made predicting the future more difficult than it had been two weeks before the unexpected contradicted their predictions. Regardless, the banks must be rescued and try again, although their model is demonstrably wrong, having led to crisis after crisis for centuries. Thus, it was bad timing for me that this book was out of my hands when Silicon Valley Bank and Credit Suisse went under, depriving me of yet more footnotes documenting the peculiar workings of our technology-obsessed market society and the mentality of the economists who filter the information about it.

However, the main point of the book is to stress how civilisation and states spread as a social phenomenon, which dictates how their economies function – and to stress that misunderstanding technology and economics means misunderstanding social history. This and more is offered – but this book is just a hint at what must be done. I can only hope that there are students around who (a) think for themselves, (b) read more, (c) try to understand what they see, (d) accustom themselves to drawing their own conclusions from what they learn and know, and (e) get the funding to figure out what they think was – and is – really going on – and then (f) tell us (wie es eigentlich gewesen).

Having studied Egyptology and Archaeology at the University of Basel, Switzerland, David A. Warburton holds a DPhil and a HDR in Near Eastern Archaeology from the Universities of Berne, Switzerland, and Paris I, France, respectively. He has participated in archaeological fieldwork in Egypt, France, Iraq, Switzerland, Syria, and Yemen, as well as having taught Egyptology, Near Eastern Archaeology, Religion and Ancient Economics at universities in Austria, Belgium, China, Denmark, Egypt, France, Germany, and Switzerland. He is the author of State and Economy in Ancient Egypt (1997) and Egypt and the Near East (2001), as well as editor of The Earliest Economic Growth in World History (2022).

Ancient Urban Globalisation and Economic Development is available now in Hardback at a 25% discount. Enter code PROMO25 at checkout to redeem.

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