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By Root 509 0

and sugar, let alone regularly, and a tiny proportion of Europe’s GDP came from such trade, none the less it is undeniable that Europe’s reawakening was boosted by contact with the productivity of China, India, Arabia and Byzantium through Italian trade. Regions that participated in Asian trade grew richer than the regions that did not: by 1500 Italy’s GDP per capita was 60 per cent higher than the European average. But historians often put too much emphasis on exotic trade with the Orient. As late as 1600, European trade with Asia, dominated because of transport costs of luxuries such as spices, was only half the value of the inter-regional European trade in cattle alone. Europe could trade with Asia because it traded so much with itself, not vice versa.

Inexorably, gains from trade could be rediscovered – people could become consumers again, which meant that they could also become producers of cash crops to sell to each other. If I grow a bit more wheat and you tan a bit more leather, then I can feed you and you can shoe me ... Eventually in the twelfth century towns started to grow at a rapid rate. By 1200, Europe was once again a place of markets, merchants and craftsmen, though heavily dependent on the 70 per cent who worked the land to produce food, fibre, fuel and housing material. In an unusually warm climate the continent was enjoying an economic boom. Living standards rose all across the continent of Europe, especially in the north, where the Hanseatic merchants from Lübeck and other cities, equipped with new, slow, but capacious sailing ships called cogs, did for the Baltic and the North Sea what the Genoese had done for the Mediterranean. They brought timber, fur, wax, herrings and resin west and south in exchange for cloth and grain. Like the Maghribis they developed their own lex mercatoria, merchant law, with sanctions against those who broke their contracts when abroad, quite independent of national laws. Through the rivers of Russia and the Black Sea, the merchants of Visby on Gotland even reestablished contact with the Orient via Novgorod, bypassing the Arabs who controlled the Strait of Gibraltar.

The Moloch state

China, meanwhile, was heading the other way, into stagnation and poverty. China went from a state of economic and technological exuberance in around AD 1000 to one of dense population, agrarian backwardness and desperate poverty in 1950. According to Angus Maddison’s estimates, it was the only region in the world with a lower GDP per capita in 1950 than in 1000. The blame for this lies squarely with China’s governments.

Pause, first, to admire the exuberance. China’s best moments came when it was fragmented, not united. The economy first truly prospered in the unstable Zhou dynasty of the first millennium BC. Later, after the Han empire fell apart in AD 220, the Three Kingdoms period saw a flourishing of culture and technology. When the Tang empire came to an end in 907, and the ‘Five Dynasties and Ten Kingdoms’ fought each other incessantly, China experienced its most spectacular burst of invention and prosperity yet, which the Song dynasty inherited. Even the rebirth of China in the late twentieth century owes much to the fragmentation of government and to an explosion of local autonomy. The burst of economic activity in China after 1978 was driven by ‘township and village enterprises’, agencies of the government given local freedom to start companies. One of the paradoxical features of modern China is the weakness of a central, would-be authoritarian government.

By the late 1000s, the Chinese were masters of silk, tea, porcelain, paper and printing, not to mention the compass and gunpowder. They used multi-spindle cotton wheels, hydraulic trip hammers, as well as umbrellas, matches, toothbrushes and playing cards. They made coke from coal to smelt high-grade iron: they were making 125,000 tonnes of pig iron a year. They used water power to spin hemp yarn. They had magnificent water clocks. All across the Yangtze delta the Confucian dictum ‘men plough; women weave’ was obeyed with industrious