WIN SOME, LOSE SOME

ONE HISTORIAN'S THEORY ABOUT WHY IT IS THAT SOME NATIONS GET RICH -- AND OTHERS GET NOWHERE

Author: By Alfred W. Crosby

Date: SUNDAY, March 15, 1998

Page: F1

Section: Books

I find ``The Wealth and Poverty of Nations'' a blessed relief. Landes, el toro, charges through the china shop of the chic left and right, smashing delicate crystal right and left. He is glaringly clear in his opinions, and he is worth agreeing and disagreeing with. The enigma he points to in his subtitle -- ``Why Some Are So Rich and Some So Poor'' -- is important, and he is qualified to comment on it. (He provides more than 100 pages of backnotes and bibliography indicating that.) He begins not with the guilt of the rich and the innocence of the poor, though that would be stylish, but with climate and disease. If you have ever started a day with both visceral and outdoor temperatures of 102 degrees, you will not wonder why the industrial revolution didn't start in Nigeria.

Landes goes on to consider why said revolution, the great wealth producer, started where it did, in the temperate zone. He acknowledges the significance of the wealth the Europeans extracted from their empires and offers no apology for how they did it: He describes at length how Europe made money ``on the backs of Amerindians, African slaves, indentured servants.'' It is not that he ignores injustice but that he is what we have of late called hard-nosed: ``When one group is strong enough to push another around and stands to gain by it, it will do so.''

The Landes Principle of Economic Determinism is this: A people that works very hard, husbands wealth, avoids calcification of the scientific-technological and administrative arteries, keeps both elites and laborers from getting too grabby, invests in what we call research and development, and accommodates to market forces -- such a people will become rich and may, for a few generations, dominate the world. Medieval Western Europeans started down that road. Then the Spanish and Portuguese permitted gold and silver and spices to tempt them from it and fell by the wayside. The Dutch stuck to the straight and narrow and got deservedly rich; then so did the British and got richer; then so did the Americans and got richer than anybody. Landes also includes analyses of the fates of the also-rans like Egypt and Argentina -- that is to say, of how to lose as well as win.

He believes that, at the moment, the East Asians are roaring right down the middle of that same road and picking up speed. His admiration for them, especially for the Japanese, should (but probably won't) deflect the charges of those who will accuse him of racism. He even suggests, possibly with tongue in cheek, that the Japanese were the best of imperialists, at least as judged by the success of their former subjects. The Koreans and Taiwanese will protest (justly, I think) that the credit belongs to them, not to their former masters, but it is true that both have hurtled through industrialization in record time. The Philippines and Indonesia, graduates of more benign empires, lag behind.

I don't always agree with the good professor. He doesn't pay enough attention to the fact that some people get dealt better hands than others. The Egyptians did not forget the wheel because they dozed under Mameluke leadership but because camels were better than wheeled vehicles for carrying bulk loads over sand. If wheels aren't part of your daily life, then you are unlikely to devise this, you'll probably overlook that, and then you won't invent the jet engine.

Landes's message is that economic success is largely the result of hard work, efficiency, clever management, and respect for market forces. I have the heart of a social democrat and I want to fudge my acceptance of his message, but he shores it up with hundreds of pages of facts and reasoned argument. Futhermore, I am writing these lines as a visiting scholar at the University of Helsinki, the capital of a nation that emerged from World War II bombed out, with tens of thousands of casualties, with the burden of enormous reparations to pay the victorious Russians, and with nothing to sell but timber, milk, ingenuity, and a reputation for craftsmanship and dependability. The Finns took Landes's advice (50 years before it was offered) and now enjoy one of the highest standards of living, of medical care, and of education in the world.

If exponential increase in GNP is what you want, Landes points the way. I have, however, two questions.

One, I am sure that a wise appreciation of market forces is essential to increasing productivity, but that is only half of economic success. Somebody has to buy the product. The prime cause of the Great Depression, according to John Kenneth Galbraith, another Cantabridgian, was not lagging productivity but lagging consumption. Substituting a machine for John Henry, ``that steel drivin' man,'' will get you more track faster, but the machine won't consume anything but fuel, lubricants, and occasional replacement parts. Landes might be justified in saying that his book is on production, not consumption, and that he can only write one book at a time. If so, I look forward to his next book. Nonetheless, we must match consumption with production, and I'm not sure we are as good at that as we assume. We may find out shortly as the Asian Tigers, crippled as consumers by the collapse of their currencies, swamp us with floods of TVs, VCRs, and computers, now dirt cheap because of the same collapse.

Two, there is a new problem looming over us: How are we going to maintain our present level of productivity, much less raise it higher, without environmental catastrophe or, at best, a headlong retreat into poverty for all but tiny elites? This is a problem on which Landes spends, by my count, two paragraphs. I look forward to his book on this subject, too, because he is well-informed, tough-minded, and bright as a brand new $20 gold piece.