False Economy - Alan Beattie [44]
Medieval England had laws against "forestalling," or buying large amounts of food on the open market while prices were low with the intent of reselling when they had recovered. Adam Smith later likened this prejudice to the fear of witchcraft. The example of the Sicilian grain trade above shows that the single biggest cost was the tratta, or export license, also a requirement for grain traders in early modern England. Much of the barrier to open trade was artificial, not natural. As in ancient Rome, the power of a centralized state may have been instrumental in getting a trade route into existence. But once the natural barriers of transport costs fell, the influence of governments was frequently to retard trade rather than to advance it.
When significant international trade in bulk goods—particularly with economies outside Europe—did open up, it owed much to two things. One, Europe was bumping up against limits to production at home. Two, the dramatic "differentness" of the New World with which it began to trade generated huge efficiency gains. It was one thing to benefit from the relative dampness and empty land of the Baltics versus the Mediterranean. Exploiting the water and vast expanses of terrain of the New World was an advantage of an entirely different magnitude.
By the eighteenth century, population growth had put increasing pressure on the natural and human resources of the advanced countries of Western Europe. The same was true of the richer and more densely populated regions within Japan and China at the same time. At this stage, as the historian Greg Clark has shown in a remarkable study, higher population growth across the world had succeeded only in depressing living standards, as the greater number of people put pressure on the limited amount of productive land and other resources. On average, remarkably, it appears that people were no better off than they had been centuries, or millennia, before.
There has been a long and inconclusive argument about why it was Northern Europe, and notably Britain, rather than Asia that in the nineteenth century managed to break out of this pattern, industrializing first and fastest and seeing sustained increases in per capita income. One intriguing explanation (though not one to which Clark adheres) is that the benefits of trade with the Americas relieved Northern Europe of the constraint of not enough land, allowing it to raise productivity.
By 1800, the core areas of Europe (most of Western Europe, especially England and the Netherlands), the Pearl and Yangtze river deltas in China, and the Kinai and Kanto regions of Japan were facing similar problems. They had experienced a large rise in population and output. In Europe, the population doubled between 1750 and 1850. Increasingly, European, Chinese, and Japanese economies were trading with geographically more peripheral regions for land-intensive commodities, particularly timber for building and firewood. Western Europe bought trees from the Baltic; the Chinese Yangtze delta got its timber from the upstream Yangtze region and from Manchuria. But the environmental stresses they were placing even on the wider trading areas were evident. In China, the production of food and fiber, including extensive cotton farming, kept up with a rising population, but only at the cost of serious deforestation.
In England, one of the most advanced and densely populated parts of Europe, the price of wheat relative to that of other goods increased by 40 percent between 1760 and 1790. And that was before the Napoleonic Wars made food still scarcer and supply even more of a problem. Already importing grains from Germany, Poland, Russia, and elsewhere, England