Download An Economic Theory of World History: Military Revolution, Political

An Economic Theory of
World History:
Military Revolution,
Political Competition and
the Course of Civilization
FIRST DRAFT, DO NOT CITE
Teng, J
Institute of Political Science
Academia Sinica
Taipei, Taiwan
1
ABSTRACT
This book uses the formal theoretical framework of neoclassical economics to explain the
general pattern of world history. Building on research of economists, historians, legal scholars,
political scientists and sociologists, the book proposes a theory to explain very long term
economic, political, and social changes in world history. Very long term means a few centuries.
The theory analyzes how the international contest of military prowess, economic capability and
overall national power works as a selection mechanism that prompts the replacement of
nonperforming economies and institutions by the efficient ones. The theory analyzes how
economies of scale in military and fiscal-economic arenas interact with geography to determine
the international political-military environment and how the international environment affects
the preference, behavior and economic performance of the constituent states. Under the anarchic
condition of international politics, states view their military, economic and overall capability and
developmental achievements relatively to that of their rivals or potential rivals. When there are
great economies of scale in military and fiscal-economic arenas and a rough parity of capability
between the international competitors, intense political-military competition drives states to take
their relative military, economic and overall capability seriously. States strive to have good
governance. They undertake reforms and innovations in institutions and other areas, and adopt
policies for achieving a strong military, prospering economy and rich state. There arises the
sustained development of national power and economy.
The book then makes use of the theory to explain the general pattern of world history. It first
explains the outstanding performance of the Mesopotamian civilization in contrast to the
Egyptian one. Then it analyzes how the Middle Eastern leadership in civilization was lost and
studies the splendid achievements of classical Greece, China and Ganges India. The exceptional
energy of the Indian civilization during the time of the Roman, the Panthian and Sassanid
Persian and Han Chinese empires was studied next. The following topic is the cavalry revolution
and the ensuing medieval era. Amidst the political fragmentation were the Abbasid Golden Age
and the Sung Puzzle of high economic performance. The climax is the rise of the West. The
emergence of the gunpowder empires in the early modern era caused the stagnation of the Asian
and Middle Eastern civilizations. The gunpowder revolution made the Europe state system more
competitive. Competition propelled Europe into the economic, military, political and social
transformation that culminated in the European global dominance. The general pattern of world
history and major developmental puzzles are thus all explained within the economic framework.
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Contents
Abstract
Preface and Acknowledgements
Chapter One: Introduction
1. Macro history and World History
2. An Economic Analysis of World History
Chapter Two: The Theory
1. Background Literature
2. An Analogy between Market Competition and Political-Military Competition
3. Key Concepts
4. Determination of International Political-Military Environment
5. International Political-Military Environment and Development
6. APPENDIX I: Anarchic Production and Its Breakdown: An Economic Model of Geopolitics
7. APPENDIX II: Anarchy, Competition, Development: Hume-Kant Hypothesis, Wagner’s Law
and Civilianization Paradox of War Making and State Making
Chapter Three: Ancient Middle Eastern Leadership
1. Mesopotamia
2. Egypt
Chapter Four: Classical Pluralism
1. Middle East
2. Greece
3. India
4. China
Chapter Five: Indian Classical Golden Age
1. The Classical Universal Empires
2. The Indian State System
Chapter Six: Abbasid Golden Age and Sung Puzzle
1. The Collapse of Classical Empires
2. The Islamic World
3. Europe
4. East Asia
Chapter Seven: The Rise of the West
1. The Gunpowder Empires
2. The European Competitive State System
Chapter Five: Conclusions
References
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PREFACE AND ACKNOWLEDGMENT
I have been working on this topic for over a decade. It has been an extremely challenging and
rewarding journey. I am intellectually indebted to too many individuals for this pursuit. Since I
could not thank all of them, I will only mention the most important ones.
My University of Toronto advisors, especially Prof. David Nowlan and Prof. Richard Bird, have
painstakingly guided me through the early exploratory phase of my research. They crafted me into
a researcher and an economist. Prof. Nowlan and Prof. Bird have since then followed the research
till present and have been very generous in their comments. I am extremely grateful to their
patience and effort and the knowledge they imparted to me.
My Duke University advisors, Prof. Joseph Grieco, Prof. Emerson Niou, Prof. Michael Munger
and Prof. Christopher Gelpi helped me to understand the working of power politics at the
international level. This is a critical building bloc in my research. Their advice brought historical
breath to the research. They guided me to become a more all rounded social scientist. I am
extremely thankful for their generosity in sharing their time and knowledge with me.
I thank the professors, classmates, colleagues and friends in the Department of Economics at the
University of Toronto, the Department of Political Science at Duke University, the Sun Yat-Sen
Institute of Social Sciences and Philosophy and Institute of Political Science at Academia Sinica
for their comments and advice at various stages of the research. The advice and comments of Prof.
Prof. Leonid Dudley, Prof. Jack Mintz, Prof. Henk Goemans, Prof. Herbert Kitschelt, Prof.
Chien-Peng Chung, Prof. Pingyen Lai, Prof. Pin-Tsun Chang, Prof. Hsiao-Shih Cheng, Prof. John
Munro, Dr. Samita Sareen and Prof. Peter Feaver are especially helpful.
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CHAPTER ONE. INTRODUCTION
1. MACRO HISTORY AND WORLD HISTORY
World history is the study of the history of the world as a whole to make sense of the past, present
and future of mankind. The basic premise of world history is that only through a study that is
global and very long term in perspective could one make sense of human history and recent events.
World history seeks to record and understand the whole significant and knowable past. It is the
largest and most inclusive framework of human experience. It tries to answer questions such as
how the separate civilizations of Eurasia interacted from the very beginning of their history. The
unity of world history does not rest on its empirical dimension alone. World history is something
more than history everywhere. World history is a big picture to put things in a larger perspective.
A coherent historical view or framework or theory is essential to world history. It is a large-scale
theme that permeates the story of mankind. World history deals with historical complexes, that is,
the large scale, overlapping historical processes. Only slight narrower in scope than world history
but shares the same perspectives and approach to history is macro history. Macro history refers to
the analysis of long-term patterns of political, economic and social change that apply to all
societies-civilizations.
Every religion has its world history or macro history. The Bible is a work on world history. St.
Augustine’s theology gives further theoretical support to the world history of the Bible. After
Renaissance and Reformations, philosophers replaced priests and theologians as speculators of
world history or macro history. Hegel, Marx, Spengler, Toynbee, Weber and Wittfogel were the
more famous of them. Other civilizations have their macro historians or world historians too.
Herodutus of classical Greece, Si-ma Qian of Han Dynasty China and Ibn Kaldun of medieval
Islamic world were the more famous of them.
During much about the same time that world history was divorcing itself from religion and
theology, scientific history as a profession emerged. Ranke was considered to be the founding
father of academic scientific history. The rise of scientific history posed a formidable challenge to
world historians. World historians must now able to stand up to the scrutiny of professional
historians who specialized in the research of smaller topics. For a long time no professional
historian was willing or able to take up the challenge of world history. World history was therefore
left to smart amateurs like Wells (1922). The constant effort of committed amateurs however
pointed to the strong demand for world history.1
Since the emergence of professional history, a community comprising thousands of historians and
social scientists have been working for several centuries. The accumulation of historical and social
science knowledge through the research of professional historians and social scientists has made it
possible to construct macro history and world history that meet the stringent standards of
professional historians. The accumulated archives of historians and social scientists have been
tapped by McNeill (1963), Wallerstein (1974), Mann (1986, 1993), Tilly (1975, 1992), North and
Thomas (1973), Jones (1974, 1981, 1988, 1990), Buzan and Little (2000), Moore (1967),
1 Refer to Costello (1993) and Green and Troup (1999, p. 88).
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Goldstone (1991), Wesson (1967, 1978), Downing (1992) and others in their world history and
macro history works. The French Annale School, for instance, pioneered an approach to a study of
long-term historical structures. They were the avant-garde of macro history. Braudel (1949) was
one of the best known exponents of this school.
McNeill is the first professional historian to undertake the research of world history. His magnum
opus, The Rise of the West (1963), passed the scrutiny of twenty eight professional historians of
different subfields.2 This demonstrated that despite its scale, good world history could meet the
highest standard of rigor, precision and cohesion. McNeill (1963) thereby opened the professional
study of world history with a broad interpretation of politics and civilization. World history as a
subfield has developed fast since then. The establishment of world history as a respectable subfield
is evidenced by the publication of the Journal of World History and the formation of World
History Association and International Society for Comparative Study of Civilizations. In fact, the
period from the mid-1960s onward and continuing into the present is called the Golden Age of
macro-history and world history.3
During this period, in their effort to explain long standing puzzles within their professions, social
scientists and historians have produced many macro historical or world historical works. In
sociology, the search for a better understanding of modernization and social changes has led
historical sociologists such as Tilly (1975, 1992), Skocpol ed. (1985) and Gladstone (1991) to
undertake a macro historical perspective. They are attempting to solve the puzzle of what caused
modernization and to understand the role of the state in social change. Tilly (1975, 1992), Evans,
Rueschemeyer and Skocpol ed. (1985), Van Creveld (1977), Moore (1967) and Mann (1986, 1988,
1993) had made comparative historical studies over several centuries across nations and regions in
their study of the relationship between modernization, war and revolutions and rebellions.
Political science has its share of macro historians too. The world system analysis of Wallerstein
(1974) was merged with the war making and state making literature started by the historical
sociologists. Among the more famous authors of this strand of literature are Rasler and Thompson
(1983, 1985, 1989), Thompson and Modelski (1996), Downing (1992). Earlier on in comparative
politics Wesson (1967, 1978) surveys imperial orders and state systems of the whole world history
to conclude that imperial order brings decline and stagnation while state system promotes
creativity and progress. In international politics, the need to consider structural change in modern
and contemporary international politics has led international politics to world history. The
dominant school of realism came under ferocious attacks from liberalism and constructivism.
Realism explains the functioning of international politics by focusing on the rivalry among the
states, especially the contests among the major powers. Buzan and Little (2000) argue that to settle
the controversy, one has to take a world historical perspective. Realism draws its insight from the
Westphalian state system. However, through studying world history, Buzan and Little (2000)
realize that there are many more types of international system than the Westphalian system. Buzan
2 In the study of world history, Spengler, Tornbee and McNeill (1963) emphasized the role of civilizations.
Wallenstein, in contrast, focuses on the functioning of the world system.
3 Refer to Collins (1999), Dunn (2000), Bentley and Adas eds. (1995), Hughes-Warrington (2005), Burke (1993),
Sanderson ed. (1995), Frank and Gills eds. (1993), Galtung and Inayatullab eds. (1997).
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and Little (2000) further advocates using the concept of international political and economic
systems to enhance our understanding of the evolution of world history.
In geography, Diamond (1997) analyzes the impact of global distribution of fauna and flora and
the orientation of continental axis on the fates of human society. He explains the victory of Eurasia
over America, Africa and Oceania. He concludes by calling for studies to answer why that among
the Eurasian major cultures it was Europe that came to dominate the world. In jurisprudence, Tigar
and Levy (2000) explains the rise of the West by changes in the legal framework from a Marxist
perspective. Berman (1983, 2003) studies how religion affected the evolution of the Western legal
tradition and the process of modernization of Europe. In area studies, social scientists and
historians such as Abu-Lughod (1989), Chaudhuri (1990), Hodgson (1993) and Frank (1998)
produced macro historical works that question the Eurocentric world view.
More often than not, it is the quest to understand the rise of the West and the origin of modernity
that drive the search for a theory of world history. This puzzle of the rise of the West is also
termed the European Miracle, the Great Divergence (among the major Eurasian cultures since the
13th or 14th century), or the industrialization and modernization first achieved and brought about by
Europe.4 The growth rate of European economies has been higher than the world average
continuously for a few centuries from circa 1400 A.D. This momentum and energy of Europe and
the inertia of the rest of the world were maintained for centuries until the gap was so wide that
European supremacy was established. Europe was then the modern world. The other major
cultures remained in the medieval era, or had even regressed. Where did the sudden spurt of
energy of the European economies come from?
The advance of Europe relative to the rest of the world was in all spheres of human endeavors.
Europe forged ahead culturally, economically, politically and militarily. European dominance was
total and global. The industrial revolution of England and Europe was part of this phenomenon.
From A.D. 1400 onwards, Europe underwent those economic, political, social, technological and
geographical upheavals which were to make it the birthplace of the industrial world. This is
miraculous for in medieval times, the Arabian and the Chinese world as well as the Indian
subcontinent were ahead of Europe in terms of economic development. The rise of Europe seemed
even more miraculous for from A.D. 1200 onwards, only Europe operated under a competitive
state system with rivals nearly evenly matched in terms of military and economic might constantly
jockeying for power. Other civilizations were ruled by continental size empires. Europe suffered
from constant interstate wars and differences in languages and administrative practices while the
other civilizations enjoyed peace, uniformity in administrative practices and the convenience of an
official language of a unified empire. Nevertheless, despite these disadvantages, Europe
modernized while the rest of the world stagnated.5
The difficulty in explaining the European miracle is not unique. There are other instances of very
4 Refer to Pomeranz (2000) and Jones (2002).
5 Kennedy (1987) attributes the unique states system of Europe to her geography: there is no single dominant core
area. Refer to Kennedy (1987), Chapter 1. Refer to Abu-Lughod (1989), Jones (1981, 1988) for discussion of
economic performance of different regions of the world before the rise of the West.
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long term political and economic changes that are hard to explain. A good example is the high
economic achievement of China during the Sung dynasty. The high economic achievement of
Sung Dynasty is called the Sung puzzle.6 It is a puzzle for the high economic achievement was
not repeated in the later history of China. The Chinese economy stagnated or even declined in the
following centuries. Other great development puzzles include the disappearance of ancient Middle
Eastern leadership during the classical era and why the classical golden age of India and the
Abbasid Golden Age of the Islamic world were not repeated.
2. AN ECONOMIC ANALYSIS OF WORLD HISTORY
In its attempts to explain the European Miracle, economics has marched toward macro history and
world history too. Among the many attempts to explain the European Miracle, the most prominent
and influential being the North-Thomas Hypothesis put forth by North and Thomas (1973).7 This
thesis is termed neo-institutional for it stresses the role of property rights regime, legal system and
political and economic institutions in affecting economic performance.8 North and Thomas (1973)
argue that an efficient property rights regime was the basis of the European miracle. Fluctuations
in population in Europe and other changes in relative prices produced the efficient property rights
regime and institutions that formed the basis for economic progress and the subsequent industrial
revolution. This is the boldest attempt to endogenize institutional changes along the Coasian lines
and to use the Coasian framework to explain very long term economic changes that led to the rise
of the West.9 The basic theme of North and Thomas (1973) was revised in North (1981, 1990).
Jones (1974, 1981, 1988, 1990) argues that the biggest problem with this thesis is that it is tailor
made for Europe. The same mechanism of changes in relative prices and fluctuations in population
occurred in other parts of the world as well. Yet, this same mechanism produced vicious circles of
poverty and decay in the other parts of the world but virtuous circles of progress and
modernization in Europe. Drawing insights from comparative studies between Europe and Sung
era China, Jones (1981) argues that the unique competitive state system of Europe might be the
cause of the European miracle.10
6 Refer to Elvin (1973) and Jones (1981, 1988, 1990). Jones (1990, p. 7) notes that: AUnder the Sung, at any rate, there
is evidence of:a) structural change (when labour moved from primary production to higher-yielding secondary or
tertiary production; in the modern world this is positively associated with rising per capita GNP); b) the large-scale
purchase of consumer goods; c) and widespread, quite advanced, technical innovation.@
7 Refer to Todaro (1989), Yotopoulos (1976), Martinussen (1997), Barro and Sala-i-Martin (1998), Schumpeter
(1911), Weber (1958), Anderson (1992), Gerschenkron (1962), Baran (1957), Dos Santos (1970), Frank (1975), Olson
(1971, 1982), Wade (1992), Weiss and Hobson (1992),
8 Refer to North and Thomas (1973), North (1979, 1981, 1984, 1987, 1990), Barzel (1989), Eggertsson (1990), Scully
(1988) and Yang and Wills (1990) for the economic theory of property rights and institutions. Refer to North (1981,
1987, 1990) for criticisms of other explanations of development.
9 Refer to Coase (1937, 1960, 1988)
10 Tilly (1992) observes that the number of political units in Europe declined from over a thousand in the eleventh
century to a couple of dozens in the nineteenth century. The risk of being eliminated from the political landscape was
significantly high. Kennedy (1987) observes that strength of the economy was very important in deciding the outcome
of great power rivalry. International political and military competition weeds out inefficient states with weak economy
and non functioning institutions.
8
The debate between North and Thomas (1973) and North (1981), and Jones (1974, 1981, 1988) led
to the formulation of Hume-Kant Hypothesis in Bernholz, Streit and Vaubel ed. (1998) and
Bernholz and Vaubel ed. (2004). David Hume and Immanuel Kant were the earliest advocates of
the argument that the state system was the basis of progress of civilization.11 Put it simply, the
Hume-Kant hypothesis argues that political competition between states and political authorities,
such as that exists within the European competitive state system, leads to innovations and superior
growth performance.
Bernholz (1998, p. 109-110) summarizes the argument as: “…… military and international
political competition among states has forced rulers to grant safe property rights, rule of law and
reasonably low and calculable taxes to their subjects. For states following such policies were, in
the long run, more successful in this international political competition since they could employ
larger resources and were more innovative militarily. But both resources and innovativeness were
dependent on favorable economic development. The economy, however, flourished best in states
which, by chance or design, introduced safe property rights, a reliable legal system, free markets,
stable money, etc. Moreover, citizens well-satisfied with their economic plight and accepting the
political regime were presumably better prepared to fight for the survival or even expansion of
their country.”
In verifying the Hume-Kant Hypothesis, Bernholz, Streit and Vaubel ed. (1998) and Bernholz and
Vaubel ed. (2004) have case studies that covered almost the whole world history: medieval and
modern Europe, classical Greece, ancient Sumer and Phoenicia, the Roman Empire, imperial
China, pre-modern Japan, India and the Islamic world. North (1998) is one of the contributors in
Bernholz, Streit and Vaubel ed. (1998) and agrees with the Hume-Kant Hypothesis.12 Economics
is just a step away from a theory of world history.
Parallel to the burgeoning of macro history and world history is the expansion of neo classical
economic paradigm into the other major disciplines of social sciences: jurisprudence, sociology
and political science.13 The inroads of neo classical economics into the other social sciences are
aided and accompanied by the use of formal mathematical models. In sharp contrast to the mega
perspective of world history and macro history, neo classical economics stresses decision theoretic
or micro foundation of theories. Yet it is only a matter of time that the two torrents of macro
history-world history and neo classical economics converge. World history is the search for a
meaningful general pattern of the global past. Neo classical economic theory is a good tool for
studying the general pattern of history and could enhance the research of world history and macro
11 Refer to Bernholz and Vaubel (2004, p. 1).
12 Refer to Nroth (1998, p. 24): “The ubiquitous competition among the evolving nation states was a deep underlying
source of change and equally a constraint on the options available to rulers within states. Its was the competition that
forces the Crown to trade rights and privileges for revenue, including, most fundamentally, the granting to
“representative” bodies – variously Parliament, Estates General, Cortes – control over tax rates and/or certain
privileges in return for revenue. Equally, competition amongst states offered constituents alternatives – states to which
they might flee or send their moveable wealth, thus constraining the ruler’s options.” North (1995, p. 26) in Davis ed.
(1995) note that: “……Even the relative failures in western Europe played an essential role in European development
and were more successful than China or Islam because of competitive pressures.”
13 Refer to Grossbard-Shechtman and Clague eds. (2002).
9
history.14 Furthermore, we could successfully answer questions such as the rise of the West and
the Sung puzzle only if we could have a convincing economic theory of the general pattern of
world history. This monograph therefore takes the next logical step forward by proposing a
neoclassical economic theory of world history backed up with formal mathematical models.
Our economic theory of world history has two components. One is a formalization of the
Hume-Kant Hypothesis about the developmental effects of international political-military
competition. The formal model is in appendix two. The other component is about the
determination of international political-military environment and the level of political and military
competition between states. This component builds on the works of Hirshleifer (1988, 1989, 1991,
1995, 2000) and extends the Hume-Kant Hypothesis. The formal model is in appendix one.
14 Refer to Hicks (1969).
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CHAPTER TWO. AN ECONOMIC THEORY OF WORLD HISTORY
1. BACKGROUND LITERATURE
In this section we introduce two strands of literature that directly deal with the issue of
international political military competition and their effects on development. One is the war
making and state making literature and the statist theories of development. The other is property
rights, anarchy and conflicts literature in economics. The basic thrust of our economic theory of
world history is that the returns to scale of military technology and public administrative
technology and the relative military and economic efficiency to a very large extent decide the
distribution of resources between contestants and the international political and military
environment. The international political and military environment then determines the preference,
policies and behavior of the constituent states and the type, nature and frequency of war, military
contests and other types of international rivalry. The preference, policies and behavior of the states
and the nature of the interstate rivalry then decide the level of development and economic
performance.
The war making and state making theory argues that it was the expectation and preparation for war,
the actual conduct and experience of war and the post war reconstruction and reorganization that
drove the European state making process. 15 The war making and state making theory
hypothesizes a relationship between the scale of international conflict and the choice of state fiscal
apparatus and military capacity. The initial spark to this chain of events was the series of
innovations in military technology that increased the economies of scale in warfare from the
Sixteenth Century. This was the so-called military revolution.16 The war making and state
making theory attributes the rise of modern European national states to the constant interstate
warfare in Europe. States built up bureaucracies and substituted indirect rule with direct rule. The
scale of international conflict determined the choice of state fiscal apparatus and military capacity.
The rise of large-scale standing armies and large-scale warfare caused the rise of bulky modern
national states.
Tilly (1992), a pioneer in the war making and state making literature, observes that the number of
political units in Europe declined from over a thousand in the eleventh century to a couple of
dozens in the nineteenth century. In the competitive state system of Europe, the risk of being
eliminated from the political landscape was significantly high. Kennedy (1987) observes that
15 The pioneer of the literature, Tilly (1975, p. 42.), put it this way: ``war made the state, and the state made war.''
Tilly (1975, p.73) summarized the European experience in state making and war making as: ``The formation of
standing armies provided the largest single incentive to extraction and the largest single means of state coercion over
the long run of European state-making. Recurrently we find a chain of causation running from (1) change or expansion
in land armies to (2) new efforts to extract resources from the subject population to (3) the development of new
bureaucracy and administrative innovations to (4) resistance from the subject population to (5) renewed coercion to (6)
durable increases in the bulk and extractiveness of the state.'' Refer to Tilly (1975, 1992), Rasler and Thompson (1989),
Blum and Dudley (1989), Cohen, Brown and Organski (1981), Downing (1992), Duffy (1980), Hintze (1975) and
Porter (1994).
16 Refer to Dudley (1991), Duffy (1980), Keegan (1993), McNeill (1982), Parker (1976, 1996) and Tilly (1975,
1992).
11
strength of the economy was very important in deciding the outcome of great power rivalry. The
mechanism to weed out inefficient states with weak economy and non functioning institutions
therefore existed in the European state system.
The statist theory of development emphasizes the role of the state in fostering economic
development. The modern state, with its high fiscal extraction capacity and high level of public
goods provision, is able to penetrate, organize and mobilize the economy more efficiently for its
purposes, militarily or otherwise. 17 The statist theory views state building and economic
development as twin aspects of modernization. Modernization is a deliberate decision by some
states that felt the need for it. That need is frequently geopolitical and military.18 This view is
supported by the observation that concomitant with the rise of modern European states was the
emergence of modern European economies. Porter (1994) and Weiss and Hobson (1995) argued
that the constant interstate wars in Europe caused the superior economic performance and
subsequent industrialization of Europe. Weiss and Hobson (1995) argue that an important cause
behind the conscious effort by the state to build a strong economy is the military contests between
states that exist at times. In such contests, economic might and industrial capacity are the keys to
victory. States with weak militaries and economies suffer defeats and at times are taken over.
Weiss and Hobson (1995) points out that with intense military contests, the state has the incentive
to correct market and institutional failures and promote economic growth.19 This explains the
European Miracle and the recent East Asian economic rise. Kennedy (1987) has similar
observations.
The war making and state making literature analyzes the role of military rivalry in general and war
in particular in driving the state building process.20 The statist theory of development studies the
17 This view is widely held. Refer to Tilly (1975, 1992), Rasler and Thompson (1989), Duffy (1980), Porter (1994),
Weiss and Hobson (1995), Bean (1973), Best (1982), Black (1991), Clarkson and Cochran (1941), Cohen, Brown and
Organski (1981), Downing (1992), Evans, Rueschemeyer, and Skocpol ed. (1985), Hintze (1975) and Lynn (1993).
Refer to Weiss and Hobson (1995) on the statist theory of development and the myriad ways that the state could affect
and foster development. These include cultural, fiscal, institutional and trade policy measures. Cowen (1990) shares a
similar view.
18 This statist view point is bolstered by the observation that the emergence of modern European national states with
their bulky rationalized hierarchical bureaucracies preceded the rise of modern European economies. Scholars such as
Weiss and Hobson (1995) and Porter (1994) argue that state effort and state intervention created the modern European
economies. Weiss and Hobson (1995) presents the statist case for the American and English (among others')
industrialization. The state intervened in the economy due to the expectation of war, the preparation for war, the actual
conducts of war and post war reorganization. Refer to Weiss and Hobson (1995), ch. 3. Weiss and Hobson (1995)
terms this viewpoint 'neo-statism'. Refer to Evans, Rueschemeyer and Skocpol ed. (1985) for the need to bring the state
back in.
19 Tilly (1992) observes that the number of territorial political units in Europe declined from over a thousand in the
eleventh century to a couple of dozens in the nineteenth century. The risk of being eliminated from the political
landscape was significantly high. Kennedy (1987) observes that the strength of the economy was very important in
deciding the outcome of great power rivalry. The selection mechanism therefore operates at two levels. At the level of
international systems, weak states are eliminated by powerful states. At the state level, inefficient institutions are
eliminated through state actions to improve economic performance and the power of the state.
20 This view was also held by authors before modern time. Wesson (1978, p.
250) cited: A......As Francis Bacon
opined, ANo body can be healthy without exercise, neither natural body nor politic; and certainly to a kingdom or estate,
a just and honorable war is the true exercise ... for in a slothful peace, both courages effeminate and manners corrupt@
12
role of security concern in driving state intervention into the economy and state effort in economic
development. Yet, though war and state were ubiquitous, economic development and progress
were rare. Our theory goes further than the war making and state making literature and the statist
theory of development in its investigation on the causes of economic development.
Our theory explains very long term political and economic changes in history by changes in the
international political-military environment. The theory analyzes the macro technological and
geographical foundations of international political-military environment and thereby explains
changes and evolutions of the international politics as well as economic development or decline.
Hirshleifer (1995) studies how macro military technological changes which increase or decrease
the economies of scale in conflict decide the international political-military environment. Dudley
(1991, 1992) studies how the macro changes in military and information technology affect the
external and internal structure of the state. Our theory extends the analysis carried out by
Hirshleifer (1995) and Dudley (1991, 1992) to the study of changes in the international
political-military environment as well as economic development or decline. Our theory argues that
military and administrative technology and geography significantly decide the international
political-military environment, very long term economic performance and the preference of states
for either power or wealth within a particular geopolitical system.21
2. AN ANALOGY BETWEEN MARKET COMPETITION AND POLITICAL-MILITARY
COMPETITION
Neo-institutional economics emphasizes the importance of institutions in shaping the preferences
and behavior of economic agents and therefore deciding economic performance. For instance,
industrial economics highlights the importance of institutions such as anti-trust. The anti-trust laws
affect economic efficiency by determining the market structure and the degree of inter firm
competition or lack of it. In international political arena, factors such as macro technological
parameters and geography determine the political-military environment states operate in. The
international political-military environment in turns decides the intensity of interstate competition
or the lack of it as well as the preferences and behaviors of the states and very long term
developmental performance. Therefore, a way to look at world history is to think of the
international political-military environment as the institutional infrastructure facing states. States
find themselves operating within these political-military environment just like firms find
themselves operating within the industrial institutional framework. Economic analysis then could
be applied to explain the formation and evolution of the international political-military
environment and the behavior of states and their developmental performance within the
international political-military environment.
This analogy between market competition and political-military competition or between the firm
Essays, AOf the True Greatness of Kingdoms@).@
21 In anarchy, since power is relative, state therefore views military and economic capability as well as gains from
international cooperation as relative. On the other hand, the pure pursuit of wealth and other economic objectives lead
state to view military and economic capability as well as gains from international cooperation as absolute. Refer to
Waltz (1959, 1979), Grieco (1988a, 1988b, 1990) and Baldwin (1993) on the relative gains argument.
13
and the state has a long history. Lane (1942, 1958, 1979) studies state as a provider of protection
and an initiator of violence. He analyzes economics of scope between these two roles of the state.
The property rights literature that theorizes about the predatory state makes reference to this
analogy as well. Levy (1981, 1988) and North (1979, 1984) analyzes how the predatory state
affects economic performance. The maximization of revenue by the state is compared to the
maximization of profits by the firm.
Economists are not alone in pursuing this analogy. The structural neo realist literature in
international politics draws its inspiration from micro-economics. The state is compared to the
firm and the international system to the market. The power configuration or type of the
international system is compared to the market structure. Concentration of market power has its
equivalence as the distribution of military capability in international politics. Market competition
is to microeconomics what military-political contest is to international politics. By this analogy,
the counterpart of the competitive (though not necessarily perfectly competitive) market is the
state system and the counterpart of the monopoly market is the imperial order. The economies of
scale in production have their counterparts in the economies of scale in conflicts and the
economies of scale in public administration. The core competency of the firm is equivalent to the
core economic-strategic area of the state. Pushing the analogy further, we see that the
X-inefficiency of monopoly in microeconomics becomes the Hume-Kant Hypothesis about the
efficiency of the state system and inefficiency of the imperial order. The basic theme is that just as
in microeconomics that market competition between leads to efficiency and innovations, military
and political competition between states leads to development and progress. The major difference
between the firm and the state is that the firm operates within the domestic law and order imposed
by the state while the state operates under international anarchy. The result is that the states
therefore views their economic and military capability as relative to that of their rivals, at least to
some extent.
A market has its counterpart in a geopolitical system. A geopolitical system is a geographical
region where there are substantial possibility of conflicts and conquests between the constituent
political units. Not all monopolies are equally secure and entrenched. Similarly, not all imperial
orders are equally secure and complacent. Natural monopoly is secured whereas the monopoly of a
contestable market is not. Monopoly of a contestable market is under the constant threat of
competition from potential new entrants. Imperial orders when there are great economies of scale
in warfare and public administration are secure whereas empires that face diseconomies of scale in
warfare and public administration are fragile. Imperial order that faces diseconomies of scale in
warfare and public administration is under the constant threat of challenger within and beyond the
frontier. When there is a constant threat of new entrants and replacement by new entrants, there is
the need to increase efficiency and lower price for the monopoly and the need to increase state
capacity and power for the imperial order. The firm or state concerned therefore behaves less like
monopoly and more likes competitive firm or behaves less like imperial order and more likes state
within a state system.
The non monopoly market structures have different configurations. Broad categories of non
monopoly market structures include oligopoly with varying number of firms, monopolistic
competition with different degree of product differentiation and perfect competition. These market
14
structures have varying degrees of competitiveness. State systems have different degree of
political-military competitiveness. State systems with fragmented geography, rough terrains and
dispersed resources have great diseconomies of scale in warfare and administration. The level of
political-military competition is low. State systems with more concentration of resources and more
friendly geography have greater economies of scale in warfare and administration.
Political-military competition is more intense then. Just as product differentiation because of taste,
brand loyalty and technological detail reduce the competition between firms, geography, culture,
religion and nationalism make it harder for one state to conquer another and reduce the economies
of scale in state building and competition between states.
3. KEY CONCEPTS
The three key variables that characterize the international political military environment are the
returns to scale in conflict, the returns to scale in public administration and the distribution of
capability between the contesting states. The distribution of capability among the contestants is a
factor emphasized by realist and neo- realist scholars in the field of international relations.22 It
refers to the share of military power, key resources and technological know how controlled by the
major states.23 The distribution of capability is a major factor determining the nature of rivalry
and stability of the international system.24
The returns to scale in conflict, or the mass factor, are well studied by economists such as Dudley
(1990, 1991, 1992) and Hirshleifer (1995). The mass factor measures the relative advantages a
larger contestant has over his smaller rival. A greater mass factor enhances the relative advantage
of the bigger contestant. The mass factor is an aggregate technological parameter and does not
refer to any specific technological improvement in the weaponry or the auxiliary system. Examples
of increases in the mass factor are the emergence of large standing army and navy in the 16th and
17th Century due to the military use of gunpowder and the emergence of the citizen mass army
since the French Revolution due to the political impact of nationalism.25 Technological changes
in transportation that makes the moving of large number of troops easier and faster increase the
economies of scale in conflict. So are technological advances in communication that make
coordination of military operations across huge geographical spheres possible.26
22 Refer to Waltz (1959).
23 The corresponding concept in industrial organization is the concentration indices which measure the concentration
of market share in a subset of larger firms among all firms in the industry. Refer to Tirole (1988, p. 221-223).
24 In the situation of two rivals, distribution of capability becomes the relative military capacity of the two contesting
states.
25 From 1500 onwards, armed forces and military budget grew in size, testifying to increases in the mass factor. For
historical details on the changes in the size of the mass factor, refer to Dudley (1990, 1991), McNeill (1982), Porter
(1994) and Parker (1996).
26 Dudley (1990, 1991, 1992) gives the concept of economies of scale in conflict an extensive treatment and applies it
to explain the changes in the territorial size of the states and the degree of penetration of society by the states.
Hirshleifer (1989, 1991, 1995) formalizes the concept and analyzes how it shapes the anarchic or hierarchical condition.
The other major way of modeling conflict is the offense defense model. Since our goal is to analyze the scale of
warfare and the size of military in an international system, we use the economies of scale approach. Refer to Raaflaub
and Rosenstein (1999, p. 364-368) on theories of expansion and contraction of empires.
15
Dudley (1990, 1991) studies how economies of scale in public administration affect the fate of the
state or empire. According to Dudley (1991), the scale factor in public administration is essentially
determined by the information technology. Public intermediate inputs are essentially public
administration and enforcement of law and order which depend a lot on the technology of
information processing and control. Factors which lead to a high level of economies of scale in
public administration dictate the need for central administration. These factors include the need for
huge hydraulic projects such as the flood control and irrigation project for the Yellow River basin
and cultural, linguistic, religious and racial uniformity which eases centralization of public
administration. China, with its high degree of cultural, linguistic, religious and racial uniformity
and the need for centralized administration of the gigantic Yellow River water project was the
paragon of imperial order due to large economies of scale in public administration.27
The economies of scale in conflict and the economies of scale in public administration jointly
decide the overall economies of scale in state building. The bureaucracy depends on the military to
provide external security. The military depends on the bureaucracy to manage the economy and
extracts resources from the economy to support the military.28 The economies of scale in conflict
and public administration decide how easy it is to conquer other states and administer the
conquered territory. Therefore, if there are economies of scale in state building, we will either
observe a state system that is competitive with a downward trend in the number of constituent
units and an upward trend in the size of the constituent units or, an imperial order that is stable,
secure and well entrenched, as it is difficult for smaller units of challengers within or beyond the
empire to take on the imperial authority. There are other factors that affect the economies of scale
in state building. These include racial distributions, linguistic and religion lines as well as
geographical features.29 For example, India with its many languages and ethnic groups and
mountain ranges that run in East-West direction and separated India into the Northern
Indo-Gangetic Plain and the Southern India Peninsular, was more difficult to be united or held
together than China which has uniformity in written language and religion.
Another important concept is the relativist concern for relative capability by the state. Power is a
key concept in our theory of world history. Our theory views the pursuit of power as the primary
motive behind the behavior of states. This is the case even in economic and trade arenas where the
overt objective seems to be the pursuit of wealth. Our theory views the pursuit of power as the
drive that energizes the pursuit of wealth since wealth is a material basis of power. A key feature
of power is that it is relative. Since power is relative, income and wealth, as well as gains from
trade and other forms of economic cooperation, are to some extent at least, relative.30 A key
27 A good example is the concept of hydraulic-bureaucratic official state by Wittfogel (1957). This explains why
China was the paragon of imperial order. China has highest level of economies of scale of public intermediate goods
provision among major civilizations due to the need to tame the Yellow river. Refer to Dudley (1991) for other
historical studies on the political effects of economies of scale in public administration.
28 Refer to Dudley (1990), North (1981) and Lane (1942, 1958, 1979) for discussions on the interdependency
between the military and the bureaucracy.
29 Refer to Hirshleifer (1995).
30 Refer to Organski and Kugler (1980) on how relative fiscal strength decides the outcome of military conflicts.
Refer also to Kennedy (1987) on the role of relative economic capability on deciding the outcome of great power
rivalry. On how the concern for relative capability affects international cooperation, refer to Baldwin (1993), Grieco
16
explanatory variable of our theory is therefore the distribution of capability, economic and
military.31 Since power is relative, the basis of power, be it economic might or technological
know how, is relative. States therefore care about their relative strength in military, economic,
technological or any other fields of human endeavor so long as there are implications on their
power in international arenas. The concern for relative capability is most powerful between or
among rivals of equal capability. Among rivals of equal capability, greater economies of scale in
conflict and public administration lead to a more intense struggle and therefore a greater concern
for relative capability. The relative capability among two rivals are determined by the economies
of scale in conflicts, economies of scale in administration, the relative distribution of resources
between them and the relative state building efficiency between them.
4. DETERMINATION OF INTERNATIONAL POLITICAL-MILITARY ENVIRONMENT
In the steady state equilibrium of continuing conflict, that is, the condition of unchanging
distribution of resources after rounds of conflicts, the relative distribution of resources between the
rival is decided by the mass factor, the scale factor and the relative state building efficiency.32
Relative state building efficiency refers to relative combined military and economic-fiscal
efficiency between the rivals. Efficiency in one area could be enhanced by efficiency in another
area or offset by inefficiency in another area. A good example was that Sung China enjoyed
overwhelming relative efficiency in economic area. That however was offset by the overwhelming
military efficiency of the semi-nomadic semi-agricultural northern rivals. Changes in the mass
factor, the scale factor and the relative state building efficiency therefore very much determine the
international political-military environment. Our theory traces how changes in these three factors
shape the general pattern of world history.
Asymmetry in relative state building efficiency could be due to difference in economic-fiscal
efficiency. Among the many determinants of economic-fiscal efficiency is geography. State
controlling an agricultural core area for instance will have greater efficiency in taxation than state
controlling a fragmented hinterland. If there are greater economies of scale in warfare or
administration, through continuing conflicts, the state controlling the core area will expand at the
expense of the state with fragmented lands. This was how the process of war making and state
making took place in Europe. A good example was the expansion of the Kingdom of France
against the Dukedom of Burgundy. 33 Another factor is lines of trade, transportation and
communication provided by rivers and seas. States controlling important lines of trade,
transportation and communication will have greater state building efficiency.34 The Nile River
provided important economic benefits as well as served as important line of transportation and
communication in peace or war for ancient Egypt. With greater state building efficiency accorded
by the Nile River, the ancient Egyptian Empire was unchallenged for a long time before the
(1988a, b; 1990) and Grieco, Powell, and Snidal (1993), Liberman (1996), Niou and Ordeshook (1994), Powell (1991,
1993, 1994, 1999) and Snidal (1991).
31 Refers to Waltz (1959) on distribution of capability
32 Refer to appendix two. Refer to Hirshleifer (1995) for the steady state equilibrium of continuing conflicts. Refer to
Gowa (1989, 1994) and Gowa and Mansfield (1993) for relative efficiency.
33 Refer to Bean (1973) and Tilly (1992).
34 Refer to Friedman (1977).
17
invention and use of iron weapons in warfare. The Byzantine Empire was another excellent
example. Her control of the Black Sea-Aegean Sea trade route through the strategic positioning of
her capital, Constantinople, ensured her dominance over the Eastern Mediterranean regions over a
millennium. Byzantium outlasted the Western Roman Empire for close to a thousand years.
Asymmetry in relative state building efficiency could be due to difference in military efficiency as
well. Nomads, for instance, enjoyed far greater war efficiency over settled societies when cavalry
was an important branch of the military. Many of the well known gigantic empires were
established by nomads through conquests of settled societies. Good examples are the Umayyad
Caliphate, the Mongolian Empire and the Timurid Empire. The heavy infantry military revolution
gave the Roman Republic with its abundant and politically committed manpower great asymmetry
in relative state building efficiency over the other Mediterranean powers, including the
Carthaginian maritime trading empire. The result was the establishment of the Roman Empire.
Differences in organizational and technological know-how are of course obvious sources of
asymmetry in relative state building efficiency. The states system of China during the Contending
States Era was submerged under the imperial order of the First Emperor due to the asymmetry in
fiscal and military efficiency brought forth by Lord Shang’s reforms in the Kingdom of Chin.
Philip of Macedonia’s innovation of combined arms warfare centered on the heavy infantry
phalanx led to the conquest of the Persian Empire by his son Alexander the Great. The industrial
revolution greatly enhanced the power of Britain over the rest. Reforms such as the Meiji
Restoration and the westernization program carried out by Peter the Great tilted the balance of
power toward Japan and Russia by improving their relative state building efficiency.
Economies of scale in state building and asymmetry in relative state building efficiency help in the
concentration of resources in the hand of the advantaged contestant. Continuing consolidation of
resources at the hand of a single power leads to the establishment of an empire. On the other hand,
decreasing returns to scale in state building and symmetry in relative state building efficiency
hinder the consolidation of resources at the hand of a single state. Resources are thereby dispersed
among the contestants and the state system is maintained. When there is a significant increase in
the economies of scale in state building, for the state system to maintain, there need to be a
corresponding increase in symmetry in relative state building efficiency. On the other hand, given
a greater asymmetry in relative state building efficiency, the ultimate concentration of resources in
the hand of a single state could be avoided only if the economies of scale in state building are
lowered corresponding.
To facilitate later discussion, we develop a rough classification of the types of international
political-military environment below. The three key factors that characterize the international
political-military environment are the returns to scale in warfare, the returns to scale in public
administration and the relative distribution of resources. There are four rough types of
international political-military environment: the stable imperial order, the competitive state system,
the unstable imperial order and the uncompetitive state system. We will analyze each of them
closely below.
1. The Stable Imperial Order: There are great economies of scale in state building and great
18
asymmetry in relative state building efficiency. As a result, in the steady state equilibrium of
continuing conflicts, the imperial regime has expanded to the limits of its natural boundary. It is a
universal or almost universal empire. Within the geopolitical niche, there is a high concentration of
resources and military capability in the hand of the empire. The other states have too little
capability. The control over resources and large organization is important for military capability.
Size confers great advantage both in warfare and administration. The imperial regime has
monopolized or almost monopolized the control over economic resources and military capability.
It is difficult for the other players to challenge the imperial order.
The stable imperial order is secure and entrenched. Should the core empire suffers defeats and a
decline of relative capability, the concentration of resources under its disposal and the greater
economies of scale in state building ensure an overwhelming odds that the core empire will regain
its eminent position rather quickly. If the imperial regime collapses due to extraordinary
circumstances, the interim or transition period between imperial regimes and dynasties is short.
Greater economies of scale in state building and greater asymmetry in relative state building
efficiency facilitate the swift consolidation of resources and capability in the hand of an early
winner. Empire building gains momentum easily and quickly. Good examples are China during
the Yuan, Ming and Ching dynasties, the Middle East under the Ottoman Empire and India under
the Moghul Empire.
2. The Competitive State System: There are great economies of scale in state building and a high
degree of symmetry in relative state building efficiency. An even distribution of resources among
the contestants is maintained. There is a delicate balance of military capability among the
contesting states. The cause of such symmetry in state building efficiency could be that there are
many core areas of roughly equal size, resources and productivity. Given the greater economies of
scale in state building, each state is too small to fully exploit the scale economies and they are
trying to expand. There are large scale conflicts or contests just short of war constantly going on in
the system. Control over resources and large organization is important for the capability of the
contestants. The expanding states are crowded together and the rivalries among them are very
intensive. There is a tendency for the constituent units to reorganize through wars and other means
to become larger to better exploit the economies of scale in state building. The number of
constituent units is therefore decreasing. If the process of competition keeps going on indefinitely
or if the military capability of one of the contestants is augmented tremendously relative to the rest,
the competitive state system will end up being a stable imperial order.
If a constituent state of the competitive state system gains disproportionate capability relative to
the rest, the momentum of empire building will be set in motion. The delicate balance of power of
the competitive state system is hard to maintain and easily perturb. The best-known example is
Europe since the 15th Century. China during the Spring and Autumn Era and the Era of the
Contending States was also a competitive state system. So was China during the Five Dynasties
and Ten States era and the Northern and Southern Sung dynasties.
3. The Unstable Imperial Order: There are lesser economies of scale in state building and a high
degree of asymmetry in relative state building efficiency. As a result, there is a high concentration
of resources in the hand of the imperial regime or the hegemonic power. However, since there are
19
lesser rather than greater economies of scale in state-building, sheer size does not confer much
strategic advantage. Empire building therefore is not momentous and the consolidation of
resources into the hand of a single power is not easy. The core empire of the unstable imperial
order tends to control less of their known world compared to that of the stable imperial order.
Relative efficiency in military and economic arenas decides the fate of the imperial regime. Should
the imperial regime become inferior in state building efficiency, the regime will be overthrown by
the more efficient challenger. If the contestants are equally matched in state building efficiency,
the system evolves into a state system. Should that happen, the system is then an uncompetitive
state system. An example was Europe after the collapse of the Roman Empire. The cavalry
military revolution reduced the economies of scale in warfare. As a result, the Western Roman
Empire dissolved and Europe became an uncompetitive state system. For regions with a single
dominant core area, the greater state building efficiency of the power controlling the dominant
core area creates a natural dominant player. This dominant player however faces greater difficulty
in empire building and maintenance than the stable imperial order due to the lesser economies of
scale in state building. A good example was China from the collapse of Han Dynasty to the
establishment of Sung Dynasty. A single dominant core area in China results in a significant
asymmetry in relative state building efficiency. Yet the low economies of scale in warfare due to
the cavalry military revolution made empires difficult to build and precarious to hold on to.
4. The Uncompetitive State System: There are lesser economies of scale in state building and
significant symmetry in relative state building efficiency. In the steady state equilibrium of
continuing conflicts, resources are dispersed among the contestants. The constituent units are
separated by severe natural barriers for conquests or unified public administration. Each
constituent unit is like a small stable imperial order. Each has expanded to its natural boundary and
each faces a low level of external threat from the others. Geography rather than capability and
organization determine the boundaries of the constituent units. The constituent units might not be
contiguous. The relative distribution of military capability among the constituent states does not
matter much in this environment.35
The uncompetitive state system is a stable. There is no tendency for the system to be united under
one empire. Wars might be frequent in the system but if so they tend to be of small scale and
inconclusive. Empire building is difficult given the lesser economies of scale in state building. The
size of the state does not confer much strategic advantage. Control over resources and large
organization has no significant effect on the capabilities of the contestants. Good examples are
Sub-Saharan Africa and Southeast Asia before the colonization by the West, Latin America after
independence from Spain and Portugal and Europe after the collapse of the Roman Empire until
the arrival of the Gunpowder Military Revolution.
It is important to note that the returns to scale in state building, the asymmetry in relative state
building efficiency and the degree of concentration or dispersion of resources and capability are all
35 If there are very low economies of scale in conflict and public administration, there will be no state. Refer to Blum
and Dudley (1989), Blum (1991), Dudley (1991), Friedman (1977, 1979), Keegan (1993), Levi (1981, 1988) and
Wittman (1991), Best (1982), Duffy (1980), Oppenheimer (1975), Porter (1994) and Tilly (1975, 1992).
20
continuous variables rather than discrete variables. Therefore, there are uncountable types of
international political-military environment rather the four rough main types that we analyzed. For
simplicity in analysis though we will use the four main types.
The international political-military environment decides the scale and frequency of military
contests. That in turn dictates the degree of mobilization of resources the states will take in their
pursuit of power and security. The level of development is therefore affected by the international
political-military environment. In the next section we analyze how the international politicalmilitary environment affects development
5. INTERNATIONAL POLITICAL-MILITARY ENVIRONMENT AND DEVELOPMENT
This section analyzes how the international political-military environment affects development.
This is a relationship conjectured by many scholars but not yet formalized nor systemically
theorized. By proposition 2 of appendix two, the competitive state system outperforms the stable
imperial order (assuming the economies of scale in state building remains the same) and the
uncompetitive state system outperforms the unstable imperial order (assuming the economies of
scale in state building remains the same). By proposition 3 of appendix two, the competitive state
system outperforms the uncompetitive state system (assuming the distribution of military
capability remains the same) and the unstable imperial order outperforms the stable imperial order
(assuming the distribution of military capability remains the same). The difference in economic
performance between the imperial order and the state system is greater given greater returns to
scale in state building.
So roughly speaking, we have the following developmental ranking of international
political-military environment in descending order:
1. The competitive state system.
2. The uncompetitive state system.
3. The unstable imperial order.
4. The stable imperial order.36
We next analyze the developmental performance of each type in detail:
1. The competitive state system is characterized by two features: a rather equal distribution of
resources and military capability among the major powers and greater economies of scale in state
building. There is an acute awareness about power and relative capability in military and economic
spheres. There are constant intense struggles among them for hegemony or supremacy. Armed
conflicts are large scale and prolonged. It is not known for sure who will be the victor. Weak states
36 Refer to Wesson (1967, 1978) for the failures of empires and the achievements of state systems. Wesson (1967)
studies thoroughly the economic failures of imperial orders, especially in chapter 4, 6 and 7. He cited reasons such as
suppression of commerce and the merchant class, state monopoly, excessive regulations, foreclosure of internal and
external trading activities, personal rule but not the rule of law which led to the insecurity of property rights, few
public services in return for the high level of extraction and probably most importantly of all, state enforced orthodoxy
in thinking which stifled intellectual creativity and scientific inquiry. Wesson (1978, p. 87-90) has a treatment on the
positive effects of interstate contentions on development.
21
are eliminated or reduced to vassal status.37 There is constant pressure for the states to be
powerful. The drive for power and survival makes the states try hard to outdo each other in every
aspect of human endeavor that could affect the power of states in international arenas. Wars and
military contests serve as the ultimate test of state power. Comparisons with other states help to
goad one from complacency and decay. The possibility of defeat in international arena haunts the
governing elite. Defeat in international arenas does not bring just humiliation and losses.
Revolutions, coup d=etat and other forms of unrest are also more likely to follow defeat abroad.
The worst case scenario of being conquered is another driving force to be powerful. Nationalism
or patriotism will be constantly conjured up to aid in this struggle. The prestige of the whole nation
is at stake. There is a strong concern for relative capability in state preference. The concern for
relative capability is a potent developmental force here. States try to be more powerful than the
others militarily and economically. States undertake many measures in order to be powerful
internationally. Entrepreneurial statesmen implement institutional changes to boost the economy
and enhance state capacity.38 The state intervenes extensively in the economies in order to have a
strong economic foundation for supporting their military machine.39 The state provides public
intermediate inputs to boost economic productivity. The share of the state in the economy is high.
We therefore observe great development efforts and achievements in the competitive state system.
2. The uncompetitive state system is characterized by two features: a rather equal distribution of
resources and military capability among the major constituent units and a lesser economies of
scale in state building. The number of constituent units in the uncompetitive state system remains
constant for a very long time. Armed struggles are small scale and inconclusive. Weak states retain
their independence easily since it is difficult for the more powerful states to conquer or administer
them. As a result, the pressure to be powerful militarily or economically is not strong. Therefore,
there is no service state to boost economic advancement for supporting the military machine.
States are small and non-intrusive. Given the lesser economies of scale in state building, the level
of interstate rivalry in an uncompetitive state system is low. It is difficult for the constituent states
to change the boundaries set by nature or to conquer each other. A strong economy is therefore not
needed for the pursuit of power in the international arena. The relativist concern is weak. We
therefore observe weak developmental efforts and achievements.
3. The unstable imperial order is characterized by two features: lesser economies of scale in state
building and a high concentration of resources and military capability in the hand of the imperial
37 11th Century Europe had over a thousand principalities. By the time of World War One, only a dozen of them still
survived. The rest were eliminated. A good example was the partitions of Poland by Austria, Prussia and Russia. A
once major power of Europe was eliminated due to its inability to match the other states in terms of military capability.
Refer to Tilly (1992).
38 Good examples abounded in the competitive state system of Europe. For instance, Peter the Great westernized
Russia in order to make her a great Power. Frederick the Great made Prussia into a centralized military state so as to be
able to compete with other European powers. The Era of Contending States of China (B.C. 475 to B.C. 221) provides
many good examples as well. At times, entrepreneurial statesmen seize power through social upheavals and overhaul
the institutional framework to generate greater state capacity to cope with the pursuit of power in international arena.
The French Revolution, the Russian Bolshevik Revolution and the Japanese Meiji Restoration were good examples.
39 The extension of justice by the central government, the substitution of indirect rule and with direct rule and the
suppression of feudal wars are examples of measures taken.
22
regime. The imperial regime is less powerful and secure than that under the stable imperial order
as there are lesser economies of scale in state building. A smaller state with greater state building
efficiency could significantly challenge the imperial regime. If the gap in state building efficiency
persists, the small state will ultimately replace the imperial regime. The fate of the imperial regime
therefore to a certain extent depends on military and economic-administrative efficiency. Since
size does not confer much advantage and efficiency in state building is important, there is some
pressure for the imperial regime to be militarily powerful and economically prosperous. We
therefore observe greater developmental effort and better economic performance than the stable
imperial order.
4. The stable imperial order is characterized by two features: the concentration of resources and
military capability in one universal or almost universal empire and greater economies of scale in
state building. The imperial order is well entrenched and secure. It is difficult for small groups of
challengers within and beyond the border to challenge the imperial power. The empire reigns
supreme. An attitude of arrogance and complacency is apparent. Since the empire is supreme in its
geopolitical niche, a strong economy is not needed for supporting the pursuit of power in the
international arena. The concern for relative capability in military and economic spheres is almost
absent since the empire is all powerful. The empire therefore feels no need for progress and
development. As a result, the empire extracts resources from the economy for consumption and
offers very few public intermediate inputs in returns. The system therefore displays very little
developmental efforts or achievements.
Commenting on the importance of the sovereign nation states and the competitive state system on
the rise of the West, Wesson (1978, p. 264) notes: AThrough history, the most important vehicle of
competition has been the sovereign state, the supreme organization of society, the great and
enduring culture-creating group with which large numbers can identify. Discovery, innovation,
productivity, social discipline, and political order have flourished when the sovereign units, small
enough to arouse feelings of participation yet adequately large to permit the application of
available techniques, have been in competition sufficiently strong to engage emotions yet not so
desperate as to destroy the rivals. Yet progress is inherently self-limiting because it does away
with the conditions that make it possible. The state systems, by virtue of their inventiveness, have
made themselves obsolete. Only that of the West managed to hold out for a millennium by
expansion and metamorphosis. ......@
The competitive state system is unstable. The high level of economies of scale in warfare and
public administration increases the military competition between states. States try to more efficient
than the others in military and economic-fiscal arenas. If one of the states attains much great
efficiency than the rest, the competitive state system will become an imperial order. To have
sustained development and progress, a high level of economies of scale in warfare and public
administration is needed. Yet, a high level of economies of scale in warfare and public
administration facilitates the emergence of large empires. Therefore, only under the rare
coincidence of high level of economies of scale in warfare and public administration and
fragmented geography will there be sustained high performance of development and progress. And
that momentum of development could be sustained much longer if there is a larger geopolitical
environment with larger constituent political units that will maintain the fragmentation of the
23
original state system after the economies scale in state building have made the political
fragmentation in the original competitive state system unviable.
That was the case for the rise of Europe. The development momentum of Italian city state system
was maintained by the larger European state system after the Italian city states had become too
small to exploit the economies of scale in state building. That was also the case for the rise of
ancient Greek civilization. The momentum of development and discovery of the Greek city state
system was taken over and maintained by the larger state system of the Hellenistic world. In
contrast, the Sung high performance was not sustained and repeated in Ming and Ching dynasty
China. With a closed and isolated geopolitical environment and a dominant core area, the
economies of scale in state building eventually brought forth a stable imperial order to replace the
competitive state system of Sung era and choke off the developmental momentum of the Sung era.
The high achievements of the medieval Arabian and Indian world were not sustained for the same
reason. The contending states of Abbasid Arabian world were ultimately replaced by Ottoman
Empire and Safavid Empire. The Delhi Sultanate and the Mughul Empire similarly ended the state
system of medieval India. Developmental momentum then died out.
In sum, pluralism at the international level produces good developmental performance. The more
competitive it is, the better the development. Monopoly at the international level breeds inertia and
decline. The more secure the monopoly, the more sever the inertia and decline.40
6. APPENDIX 1
ANARCHIC PRODUCTION AND ITS BREAKDOWN: AN ECONOMIC MODEL OF
GEOPOLITICS
Teng, J
Abstract:
Anarchy exists when there is a combination of low economies of scale in conflict, low economies
of scale in production and slight asymmetry in relative combined military-economic efficiency. A
combination of high of economies of scale in conflict, high economies of scale in production and
great asymmetry in relative combined military economic efficiency exhausts the weaker contestant
by committing an increasing proportion of its economy to military expenditures. The model
explains variations of geopolitical structure around the globe and geopolitical impact of waves of
military and informational technological changes in world history.
JEL Classification Numbers: D23, D74, H11, H56, N40, O11, O30
Key Words: economies of scale, hierarchy, conflict, rent seeking, arms race
40 According to Bernholz, Streit and Vaubel et al ed. (1998, p. 80, footnote 100), Toynbee mentioned about the role
of external political competition in generating progress of civilizations too: “For example, he attributes the decline of
Spain and Portugal to a weakening of the Moorish pressure and the decline of Austria to a weakening of the Turkish
pressure (ibid., Vol. II, pp. 177 ff. and 202 ff).”
24
Institute of Political Science at Academia Sinica, 128 Academia Road Section 2, Nankang, Taipei
115, Taiwan ROC
Email: [email protected]
Acknowledgements: I thank D. Nowlan, R. Bird, G. Grieco, E. Niou, M. Munger, J. Mintz, L.
Dudley, S. Smart, C. Gelpi, P. Y. Lai, C. P. Chung and S. Samita for their incisive comments.
1. Introduction.
The world under heaven, after a long period of division, tends to unite; after a long period of
union, tends to divide. This has been so since antiquity.
Guan Zhong, Luo (Chinese Novelist, circa 1300-1400, Romance of Three Kingdoms, Opening
Sentence)
In world history, there were periods of political agglomeration that ushered in gigantic empires
that dominated the geopolitical landscape. The classical era with its universal empires of Rome,
Mauryan India and Chinese Chin-Han Empire was a good example. At other times the process of
political dissolution was at work and brought forth fragmentation of the geopolitical landscape.
The medieval era was typical of the eras of fragmentation. On the other hand, some geographical
regions are conducive to the formation and maintenance of empires whereas some other regions
are prone to political fragmentation. For instance, we have the endurance and prevalence of
imperial order in ancient Egypt and pre modern China and the difficulty of political unity in India
and Europe. How should we explain such variations of geopolitical structure across time and
space?
An obvious cause for the waves of agglomeration and dissolution in geopolitics is changes in
military technology. The classical universal empires, for instance, were made possible by the
heavy infantry revolution associated with the use of iron weapons and armors, as analyzed in
Dudley (1991) and Keegan (1993). The collapse of the classical empires and the ensuing political
dark ages and fragmentation were triggered by the rise of cavalry over infantry, as studied in
Dudley (1990, 1992) and Keegan (1993). The gunpowder military revolution brought forth another
waves of state and empire building, as analyzed in McNeill (1982), Tilly (1992) and Parker (1996).
Besides military technological changes, variations in information, administrative and production
technologies also caused structural differences in geopolitics. The invention of writing, for
instance, facilitated the management of complex society and aided the rise of the city states of the
first civilizations, as documented in Dudley (1992). The printing press made management of large
territorial state and huge bureaucracy easier and reinforced the rise of modern national states in
Europe. The requirement for huge bureaucracy by hydraulic societies aided the rise of imperial
orders in oriental societies centered along the valleys of great rivers, a thesis elaborated in
Wittfogel (1957).
Our model studies how military technology, administrative-production technology and combined
relative military-economic efficiency between the contestants affect the outcome of military
25
contest. Kennedy (1987) observes that victory in great power contests goes to those powers with
greater economic might. He is not alone in recognizing the importance of the strength of the
economy in deciding the outcome of contests. Morgenthau (1954) for instance includes economic
might as one key determinant of a country's power in international arena. The effect of the
economy on the outcome of military contests has also been recognized in economic literature.
Dudley (1990) analyzes a model where the military depends on the bureaucracy and the economy
for expenses and the bureaucracy and the economy depends on the military for security. He
concludes that a technological shock emanating from either sector will have impacts on both
sectors.
Existing formal conflict literature has not yet analyzed how administrative-production technology
and combined relative military-economic efficiency between the contestants affect the outcome of
military contest. Hirshleifer (1995) discusses the impact of conflict technology and production
technology on the outcome of conflicts over resources. He assumes that contestants directly use
resources captured as inputs into conflicts. The residual resources then are used as inputs in
production. The economy contributes nothing to the military effort. Given the conflict and
production technology, the size of the military sector therefore determines the amount of total
resources captured and the amount of resources available for production and consumption. He
finds that conflict technology, especially the mass factor, has an impact on the outcome of the
contest for resources while production technology, including the scale factor, has no impact. In
Hirshleifer (1995), the mass factor in conflict technology measures the relative advantage or
disadvantage that a larger player has over his smaller rival, analogous to the scale factor in
production which measures the relative advantage or disadvantage that a larger firm has over his
smaller rival. Hirshleifer (1995) finds that the mass factor in conflict has to be smaller than one or
there have to be diseconomies of scale in conflict in order for an anarchic system to survive. By
anarchy, Hirshleifer (1995) refers to the case where there is more than one contestant for
resources.
Skaperdas (1992) and Neary (1994) analyze the situation where there are both elements of
cooperation and conflict. They assume however that there are constant returns to scale in
production. Dixit (1987) discusses the impact of conflict technology on the nature of strategic
behavior. He assumes a fixed prize to be contested among the players. There is no production in
his model. Grossman (2001, 2002) and Grossman and Kim (2002) allow societies to specialize
totally in appropriation with no productive activities. The effects of the combined relative
military-economic efficiency between the contestants and the scale factor in production on the
outcome of military contests have therefore not been analyzed. Our model fills in this gap.
The formal conflict literature has analyzed many other different issues. Alesina, Spolaore and
Wacziarg (2000) study how international trade regime affects the number and size of nations.
Grossman and Mendoza (2003) analyze the effects of resource abundance and scarcity on intensity
of competition over resources. Muthoo (2004) studies how the right of an individual or an
organization to the fruits of its labor can emerge in the state of nature. Noh (2002) allows for
transfer of income to pacify the rival, a tactic commonly used among nations, besides the military
means. Our model exempts from such complications.
26
2. The model.
We use the ratio form of conflict technology function proposed by Hirshleifer (1988, 1989, 1991,
1995). In the case of two contestants, the conflict technology function is:
m
q1 F1 )
(
P=
(q1 F1 ) m + (q2 F2 )m
1
P is the share of resources captured and controlled by contestant 1. F1 is the amount of
military expenditures of contestant 1 and F2 is the amount of military expenditures of contestant
2. q1 is the efficiency of State 1 in turning military expenditures into effective military capability
and q 2 is the efficiency of State 2 in turning military expenditures into effective military
capability. Therefore, q1 F1 is the military capability of State 1 and q 2 F2 is the military
capability of State 2. m is the military decisiveness or mass parameter. A larger m means there
are greater economies of scale in conflict and a larger military force can more effectively seize and
control a larger share of world resources.
Production functions take the form:
Y1 = A1 ( PE ) = A1 E1h
h
2
and
Y2 = A2 ((1 − P) E ) = A2 E 2h
h
3
h is the scale factor in production. A1 and A2 measure the production efficiency of contestants
1 and 2.
The odd ratio of victory for State 1 is
m
m
m
m
⎛ q f A Eh ⎞
⎛q F ⎞
⎛q fY ⎞
⎛q f A ⎞ ⎛E ⎞
P
= ⎜ 1 1 ⎟ = ⎜ 1 1 1 ⎟ = ⎜ 1 1 1 1h ⎟ = ⎜ 1 1 1 ⎟ ⎜ 1 ⎟
1 − P ⎝ q 2 F2 ⎠
⎝ q 2 f 2 Y2 ⎠
⎝ q 2 f 2 A2 ⎠ ⎝ E 2 ⎠
⎝ q 2 f 2 A2 E 2 ⎠
mh
4
If there are continuous conflicts between the two contestants, in equilibrium one would expect to
see that contested resources are divided among the contestants according to the respective odd
ratio of victory, as elaborated in Hirshleifer (1995). Therefore, in the steady state equilibrium of
continuing conflicts, we have
E
P
= 1
1 − P E2
5
27
Substituting Equation 5 into Equation 4 we have
m
⎛q f A ⎞ ⎛ P ⎞
P
=⎜ 1 1 1⎟ ⎜
⎟
1 − P ⎝ q 2 f 2 A2 ⎠ ⎝ 1 − P ⎠
mh
which leads to
m
m
⎛ P ⎞ ⎛ q1 A1 ⎞ 1− mh ⎛ f 1 ⎞ 1− mh
⎟
⎜ ⎟
⎜
⎟ =⎜
⎝ 1 − P ⎠ ⎝ q 2 A2 ⎠
⎝ f2 ⎠
6
In above, let
q1 A1
≡r
q 2 A2
7
and
m
≡θ
1 − mh
8
We therefore have
P=
r θ f 1θ
r θ f 1θ + f 2θ
9
Since the economy contributes to military effort, the scale factor affects the outcome of the contest
for resources. The economy is part of the war machine.
For convenience, we refer to r as the combined relative military-economic efficiency and θ as
the composite mass factor. The asymmetry in combined relative military-economic efficiency is a
product of the ratios of production and military efficiency. A country that has slight edge over its
rival in military efficiency but somehow suffers far greater production inefficiency will have a
higher cost of converting raw resources into military capacity than its rival. The former U.S.S.R. is
a good example: its great ability in building a powerful military machine for cold war purposes
was more than counter balanced by its stark inefficiency in economic arena. On the other hand,
some countries might have a greater efficiency in economic aspects that is more than offset by
even greater disadvantages in military aspects and therefore also suffer from greater costs for
converting raw resources into military capacity. Good examples were the agrarian world during
the age of cavalry from ca. A.D. 300---1400: despite their economic superiority versus their
nomadic rivals, lack of horse power rendered the agrarian peoples vulnerable to attacks from the
steppe, as studied by Keegan (1993) and McNeill (1982). Of course, there is also the case where
one contestant is more efficient than the other in both production and military aspects.
28
State 1 solves
max π = (1 − f ) A ( PE )
1
1
h
10
1
f1
The first order condition is
(1 − f 1 ) hθ 1 − P ⎤ A PE h = 0
∂π 1 ⎡
= ⎢ −1 +
(
)⎥ 1 ( )
∂f 1 ⎣
f1
⎦
11
State 2 solves
max π
2
= (1 − f 2 ) A2 ((1 − P) E )
h
12
f2
The first order condition is
(1 − f 2 ) hθP⎤ A 1 − P E h = 0
∂π 2 ⎡
= ⎢ −1 +
) )
⎥ 2 ((
∂f 2 ⎣
f2
⎦
13
The second order conditions are
(1 − f 1 ) hθ ∂P < 0
∂ 2π1
1
= − 2 hθ (1 − P) −
2
∂f 1
f1
f1
∂f 1
14
(1 − f 2 ) hθ ∂P < 0
∂ 2π 2
1
= − 2 hθP +
2
∂f 2
f2
f2
∂f 2
15
(1 − f 1 ) hθ ∂P > 0
∂ 2π1
=−
f1
∂f 1∂f 2
∂f 2
16
∂ 2 π 2 (1 − f 2 ) ∂P
hθ
=
>0
f2
∂f 1∂f 2
∂f 1
17
The equilibrium is strategically stable as
⎞
∂ 2π1 ∂ 2π 2 ∂ 2π1 ∂ 2π 2
∂ 2 π 2 (1 − f 1 ) ∂P ⎛ 1
1
h
P
hθ
θ
1
−
=
−
−
+
(
)
⎜ 2 hθP⎟ > 0
2
2
2
2
f1
∂f 1∂f 2 ∂f 1∂f 2
∂f 1 ⎝ f 1
f1
∂f 1 ∂f 2
∂f 2
⎠
18
The reaction functions are
29
∂ 2π1
∂f 1
∂f 1∂f 2
=−
>0
∂f 2
∂ 2π1
∂f 12
19
∂ 2π1
∂f 1
∂f 1∂f 2
=−
>0
∂f 2
∂ 2π1
∂f 12
20
−
−
The military expenditures (as proportion of the economies) of the two states are strategic
complements. There is arms race in the steady state equilibrium of continuing conflicts.
3. Comparative Statics.
From the steady state equilibrium of continuing conflict and the first order conditions we have:
P
− r θ f 1θ f 2− θ = 0
1− P
21
1 − f1
hθ (1 − P ) − 1 = 0
f1
22
1− f2
hθP − 1 = 0
f2
23
For convenience, we refer to equation 21 as U, equation 22 as V and equation 23 as W. We derive
∂U
1
=
>0
∂P (1 − P) 2
24
1 − f1
∂V
=−
hθ < 0
f1
∂P
25
∂W 1 − f 2
=
hθ > 0
f2
∂P
26
∂U
= −θr θ f 1θ −1 f 2− θ < 0
∂f 1
27
30
∂V
1
= − 2 hθ (1 − P) > 0
∂f 1
f1
28
∂W
=0
∂f 1
29
∂U
= θr θ f 1θ f 2− θ −1 > 0
∂f 2
30
∂V
=0
∂f 2
31
∂W
1
= − 2 hθP < 0
∂f 2
f2
32
∂U
∂P
∂V
J =
∂P
∂W
∂P
33
∂U
∂f 1
∂V
∂f 1
∂W
∂f 1
1
∂U
−θr θ f 1θ −1 f 2− θ θr θ f 1θ f 2− θ −1
2
(1 − P)
∂f 2
1 − f1
∂V
1
0
= −
hθ − 2 hθ (1 − P)
>0
∂f 2
f1
f1
∂W
1− f2
1
0
hθ
− 2 hθP
∂f 1
f2
f2
∂U
= −θr θ −1 f 1θ f 2− θ < 0
∂r
34
∂V
=0
∂r
35
∂W
=0
∂r
36
⎛ f ⎞
∂U
= − r θ f 1θ f 2− θ ln⎜ r 1 ⎟
∂θ
⎝ f2 ⎠
37
∂V 1 − f 1
=
h(1 − P) > 0
f1
∂θ
38
∂W 1 − f 2
=
hP > 0
f2
∂θ
39
31
f1
f
> 1 if r > 1 , r 1 = 1 if r = 1 and
f2
f2
∂U
∂U
∂U
Therefore,
< 0 if r > 1 ,
= 0 if r = 1 and
> 0 if r < 1 .
From equation U, we have r
∂θ
∂θ
r
f1
< 1 if r < 1 ,
f2
∂θ
Proposition 1:
The state with a greater combined relative military-economic efficiency controls a greater share of
contested resources and allocates a smaller proportion of its economy to the military in the steady
state equilibrium of continuing conflicts.
Proof:
θr θ −1 f 1θ f 2− θ
0
0
∂P
=
∂r
=
−θr θ f 1θ −1 f 2− θ θr θ f 1θ f 2− θ −1
1
0
− 2 hθ (1 − P)
f1
1
0
− 2 hθP
f2
40
J
1 2 3 θ −1 θ − θ 1 1
h θ r f1 f 2
P(1 − P) > 0
J
f 12 f 22
1
(1 − P)
1 − f1
hθ
f1
1− f2
hθ
f2
−
∂f 1
=
∂r
=−
2
θr θ −1 f 1θ f 2− θ
θr θ f 1θ f 2− θ −1
0
0
0
−
1
hθP
f 22
41
J
1 2 3 θ −1 θ − θ 1 − f 1 1
h θ r f1 f 2
P<0
J
f 1 f 22
Q. E. D.
Proposition 2:
An increase in the composite mass factor enhances (undermines) the strategic position of the more
(less) efficient contestant and the more (less) efficient contestant thereby controls a greater
(smaller) share of resources in the steady state equilibrium of continuing conflicts.
32
Proof:
∂P
=
∂θ
=
⎛ f ⎞
r θ f 1θ f 2− θ ln⎜ r 1 ⎟
⎝ f2 ⎠
1 − f1
−
h(1 − P)
f1
1− f2
−
hP
f2
−θr θ f 1θ −1 f 2− θ
−
θr θ f 1θ f 2−θ −1
1
hθ (1 − P)
f 12
0
0
−
1
hθP
f 22
42
J
⎛
⎛ f1 ⎞ ⎞
1 2 2 θ θ −θ 1 1
1
ln
−
−
+
h θ r f1 f 2
P
P
f
f
⎜
(
)
⎜r ⎟⎟
2
1
J
f 12 f 22
⎝ f2 ⎠⎠
⎝
So,
∂P
∂P
∂P
> 0 if r > 1 ,
= 0 if r = 1 and
< 0 if r < 1 .
∂θ
∂θ
∂θ
Q. E. D.
A greater composite mass factor makes the stronger nation stronger and the weaker nation weaker.
Proposition 3:
An increase in the composite mass factor has two effects on the share of the military in the
economy: one is the scaling effect and the other is the unbalancing effect. The scaling effect
increases the proportion of the economy devoted to the military. For the stronger (weaker)
contestant, the unbalancing effect reduces (increases) the proportion of the economy devoted to
the military.
Proof:
1
(1 − P)
1 − f1
hθ
f1
1− f2
hθ
f2
−
∂f 1
=
∂θ
=
2
⎛ f ⎞
r θ f 1θ f 2− θ ln⎜ r 1 ⎟ θr θ f 1θ f 2− θ −1
⎝ f2 ⎠
1 − f1
h(1 − P)
0
−
f1
1− f2
1
hP
−
− 2 hθP
f2
f2
J
⎛ f ⎞⎤
1 1 − f 1 2 θ θ −θ 1 ⎡
h θr f 1 f 2
1 + θ (1 − f 2 )) − θP ln⎜ r 1 ⎟ ⎥
2 ⎢(
J f1
f2 ⎣
⎝ f2 ⎠⎦
43
33
The first part in the right hand side bracket is positive. An increase in the composite mass factor
increases f 1 . This is the scaling effect. The second part in the right hand side bracket is the
unbalancing effect. The sign of the second part depends on whether State 1 is the stronger or
weaker contestant. If State 1 is the stronger (weaker) contestant, it is negative (positive) for the
increase in the composite mass factor makes State 1 stronger (weaker) and State 1 therefore puts in
less (more) effort in fighting. The unbalancing effect is zero when both contestants are equally
powerful.
Q. E. D.
Diagram 1.
34
The thick curves in Diagram 1, R1 and R2, are the reaction functions of State 1 and State 2 when
the composite mass factor is small. The thin curves R1’’ and R2’’ are the reaction functions of
State 1 and State 2 when the composite mass factor is large. The thickest curves R1’ and R2’ are
the reaction functions of State 1 and State 2 when we assume that the unbalancing effect is zero
and the shifts in the reaction functions reflect only the scaling effect. Therefore, the shift from
point A to point B is the scaling effect and the shift from point B to point C is the unbalancing
effect.
Corollary 4:
For the weaker contestant, an increase in the composite mass factor increases the proportion of
the economy devoted to fighting.
Continuous increase in the composite mass factor therefore will ultimately exhaust the weaker
contestant.
At symmetrical equilibrium, we have
f =
hθ
mh
=
2 + hθ 2 − mh
44
The share of military in the economy approaches one when the product of the mass factor and the
scale factor approaches one from below (or the composite mass factor approaches positive infinity).
At that point anarchy gives way to hierarchy.
lim f
=1
mh→ 1
In other words, there must be diseconomies of scale in combined military and economic aspects
for anarchy to be maintained. The scale factor in production and the mass factor in conflict jointly
determine the intensity of conflict and the sustainable number of contestants.
Next we analyze the conditions under which hierarchy replaces anarchy given asymmetry in
combined relative military-economic efficiency. We are especially interested in how the share of
the military in the economy is decided at asymmetric equilibrium. That will help us to determine
the combination of asymmetry in relative military-economic efficiency and level of composite
mass factor that will cause a collapse of the anarchic production system. From previous results we
have
df 1 =
∂f 1
dr < 0
∂r
df 1 =
∂f 1
dθ > 0 for r < 1
∂θ
35
We set
∂f 1
∂f
dr = − 1 dθ
∂r
∂θ
45
That is, we ask what the compensating changes in the composite mass factor should be for a
change in the combined relative military-economic efficiency in order to hold the share of the
military in the economy constant. That gives us
∂f ∂ r
∂θ
f1 = − 1
=
∂r
∂f 1 ∂ θ 1 − f 1
f1
=
h 2θ 3 r θ −1 f 1θ f 2− θ
h 2θr θ f 1θ f 2− θ
θ r P
2
−1
⎛
⎛ f ⎞⎞
⎜ 1 + θ (1 − f 2 ) − θP ln⎜ r 1 ⎟ ⎟
⎝ f2 ⎠⎠
⎝
1 − f1 1
P
f 1 f 22
⎛ f ⎞⎞
1 ⎛
⎜ 1 + θ (1 − f 2 ) − θP ln⎜ r 1 ⎟ ⎟
2
f2 ⎝
⎝ f2 ⎠⎠
46
>0
for r < 1
As the combined relative military-economic efficiency approaches one from below, the threshold
level of composite mass factor that will cause a collapse of the anarchic production system
increases. In other words, if there is greater asymmetry in combined relative military-economic
efficiency, then the composite mass factor has to be smaller in order for the anarchic production
system to be maintained.
∂ 2θ
f1 =
∂r 2
⎡
⎛
⎢⎣
⎝
⎛ f1 ⎞ ⎞ ⎤
⎟⎟⎥
⎝ f 2 ⎠ ⎠ ⎥⎦
θ 2 r −2 P ⎢−(1 + θ (1 − f 2 )) + θP⎜ 1 + ln⎜ r
⎡
⎛ f1 ⎞ ⎤
⎢1 + θ (1 − f 2 ) − θP ln⎜ r ⎟ ⎥
⎝ f2 ⎠⎦
⎣
2
47
The value of the above increases as r moves toward one from below. That is, the rate of the
compensating increase of the composite mass factor increases as the combined relative
military-economic efficiency moves toward symmetry.
In Diagram 2, for 0 ≤ r ≤ 1 , the grey shaded area is the region where anarchic production had
given way to hierarchy. The composite mass factor is too high given the asymmetry in relative
military-economic efficiency. The non shaded area is where anarchic production manages to
maintain itself. Asymmetry in relative military-economic efficiency and values of the mass factor
and the scale factor jointly decide the viability of the disadvantaged player. A disadvantaged
contestant who survives under small scale and mass factors might be wiped out under larger scale
and mass factors.
36
DIAGRAM 2
4. Applications and Conclusions.
We first apply the results to explain the effects of geographical factors on pre modern geopolitical
landscape of the Eurasian and non Eurasian world. We then briefly survey the rise and fall of
imperial orders and state systems throughout history among the major Eurasian cultures to further
illustrate the insights generated by the model.
The model sheds light on the impact of geography on the geopolitical landscape. It was easier to
have empires in pre modern China and ancient Egypt due to the far greater combined
military-economic efficiency enjoyed by the power controlling the dominant core area. In the case
of ancient Egypt, the dominant core area was the Nile River valley which contained the
overwhelming share of resources and population and served as the spine of transportation and
37
communication, a point emphasized in Friedman (1977). As a result, the ancient history of Egypt
was a monotonous repetition of dynastic cycles.
For pre modern China, the core area comprised the central plain and the lower stretches of the
Yangtze River linked up by the Grand Canal. The overwhelming combined military-economic
efficiency enjoyed by the power controlling this dominant core made unification almost inevitable.
The need for management over irrigation and other hydraulic projects especially in the central
plain of Northern China increased the economies of scale in administration. As a result, Chinese
history was dominated by imperial orders that were more able to exploit such economies of scale,
as argued by the “hydraulic society” thesis of Wittfogel (1957).
In pre modern South Asia, the Indo-Gangetic Plain had a significant share of resources. That made
possible the imperial regimes of the Mauryan Empire, the Gupta Empire, the Delhi Sultanate and
the Mughal Empire. However, the mountains ranges and rivers which run West to East on the
Decan Highland made military operations and administrative penetration difficult. As a result,
imperial orders were more difficult to be enforced and easier to breakdown in India than in China.
The Eastern Mediterranean coastal region including of the Aegean Sea basin had the dominant
share of resources and the most important trading ports and overland trading routes in pre modern
Middle East. The power that controlled the Eastern Mediterranean coast therefore enjoyed superior
combined military economic efficiency. The city of Constantinople especially was well located to
control the maritime trade between the Black Sea basin and the Mediterranean world as well as the
overland trading routes between Europe and Asia. That explains the prevalence of empires in the
Eastern Mediterranean-Middle East region centered on Constantinople since the classical era, the
most prominent ones being the Byzantine Empire and the Ottoman Empire.
Pre modern Europe with its fragmented geography dissected by mountains, peninsula and rivers
had multiple core areas. None of these core areas was significantly larger than the rest. As a result,
the distribution of combined military-economic efficiency was quite even. Therefore, since the
collapse of the Western Roman Empire, there was no lasting pan European empire despite the
unity of the Christian faith and the nostalgia for the imperial Rome.
The American Continent is the largest of all the non Eurasian regions. The main geographical
orientation of America is North to South. This made travel and conquest difficult during pre
modern times as the travelers or conquerors had to overcome differences in climate. This together
with the lack of large domesticated animals for transportation resulted in lower economies of scale
in warfare and administration. There was no contact between the civilization in Peru and those in
Mesoamerica, as studied in Diamond (1997). Therefore, empire and state building was limited to
Meso America and the Peruvian highland and once the Inca and Aztec empires were established
there was hardly any further process of empire and state building going on.
Africa too has a North to South main geographical orientation. Sub-Saharan Africa is covered by
think forests. There are diseases which only recently neutralized by modern medicine. All these
obstacles resulted in low economies of scale in warfare and administration. Therefore civilization
and state building started very late despite Africa’s proximity with the first civilizations. The pre
38
modern states or empires in Africa were localized and not contiguous with each other. The
political unites interacted sporadically and marginally and there was no large continental size
empire in pre modern Sub Saharan Africa.
Southeast Asia was in close proximity to both India and China. Constant contact with India and
China started very early in around the classical era. Southeast Asia however has a
compartmentalized geography. Geography rather than state capacity dictated political boundaries.
Jungles, mountains, wild rivers, rough seas and oceans and hot, wet, malarial lowlands formed
insurmountable barriers to invaders or settlers. Even the Mongols failed to conquer Southeast Asia.
Before the arrival of the European colonial powers, small mingled tribes and principalities
dominated the landscape of these regions. Nature rather than politics defined the political
landscape, as studied in Fitzgerald (1973, p. 54-5) and Jones (1981, p. 167). There was therefore
no pan Southeast Asian empire.
Oceania (including Australia) was characterized by external and internal isolation in pre modern
eras. In fact, she was the most isolated of all major regions. Sparse population separated by vast
distance resulted in very low economies of scale in state building. Most of the region was still
tribal and subsisted through hunting and gathering when being incorporated into the Europe
centered modern world state system in around 18th Century.
Changes in military technology and administrative-information technology have been shaping and
reshaping the geopolitical landscape since the earliest eras. The invention of writing systems ca.
BC 3500 aided the rise of city states among the first civilizations of Mesopotamia and Egypt. In
the enclosed space of the Nile Valley, Upper Egypt with a single dominant core area connected by
the Nile Valley enjoyed far greater military and administrative efficiency than Lower Egypt in the
fragmented geography of Nile Delta. As a result, the unification of the Egyptian Empire was
achieved rather early under the leadership of Upper Egypt ca 3000 BC. In contrast, the open,
fragmented terrain and multiple core areas of Mesopotamia produced a more symmetric
distribution of state building efficiency among the various states. Consequently, Mesopotamia
maintained her state system for further six centuries longer than Egypt.
The use of bronze weapons since around BC 2900 changed the method of warfare in Mesopotamia.
Phalanxes of heavy infantry wielding bronze weapons and protected by bronze armors and aided
by archers with composite bows and troopers with war chariots resulted in a considerable increase
in the economies of scale in conflicts. Inter city rivalry intensified and there was the rise of
massive defensive walls. The greater economies of scale in conflicts caused territorial expansion
of the political units and as a result, a series of empires were established, as studied in Dudley
(1991, p. 47-76). First was the Akkadian Empire which reigned from 2334-2193 BC. Then the
Empire of Third Dynasty of Ur reigned from 2112-2004 BC. The Babylonian Empire reigned from
ca. 1900-1595 BC. The Old Assyrian Empire ruled from around 1830-1741 BC, as documented in
Haywood (1997, p. 42-43).
The invention of horse drawn war chariots gave military advantage to the people on horseback and
led to waves of nomadic invasions upon the ancient civilizations since around BC 1700. The
39
military use of iron further tilted the combined military-economic efficiency towards the nomads
and against settled societies. Iron utensils and weapons were cheap, compared with those made of
bronze. The nomads therefore could afford them. Iron-wielding Hyksos defeated copper-armed
Egyptians around 1600 BC. The use of war chariot increased the economies of scale in warfare.
There upon came the Pan Near Eastern empires: first it was the Neo-Assyrian Empire, then the
Neo-Babylonian Empire and finally the gigantic Achaemenid Persian Empire. In contrast, in the
fragmented geography of classical Greece, Ganges India and China, first the city state system and
then the state system emerged.
The heavy infantry military revolution of the classical era increased the mass factor. Macedonian
Phalanxes and Roman legions with iron weapons and armors dominated battle fields with their
great mass. As a result, Greek city state system gave way to the Macedonian Empire and the
Hellenistic state system in turned gave way to the Roman Empire. The rise of the Roman Empire
was aided by the naval revolution related to the use of trireme as well. Naval dominance helped
Rome to consolidate her control over the whole Mediterranean basin. Carthage was the first true
thalassocracy though, as studied in Starr (1989). This same process of empire building by heavy
infantry legions happened in China as well. The heavy infantry revolution ushered in the
unification of China under the First Emperor and the classical state system of China during the
Spring and Autumn Era and the Era of the Contending States was swept away, as analyzed in Hui
(2005).
The cavalry revolution tilted the relative military-economic efficiency between settled societies
and nomads toward the latter. As a result, from around AD 300 to the gunpowder military
revolution, waves of nomads, Turks, Tungusics, Mongols and Arabs, invaded the agrarian
civilizations and established states and empires around the world, as documented in Grousset
(1970). The cavalry military revolution led to the more or less simultaneous collapse or retreat of
the classical universal empires around A.D. 300---600. The ascendancy of cavalry relative to
infantry reduced economies of scale in application of force as cavalry relies less on superiority of
number to win battles. The Roman Empire was divided into two and the Western part totally
disappeared under incessant assaults from the nomads, as analyzed in Dudley (1992). The Gupta
Empire of classical India was weakened by nomadic assaults from Central Asia and slowly faded.
The Chin-Han-Jin Empire of China gave up the central plain of North China, which had the
dominant share of resources and population, to the nomads and retreated to South of Yangtze
River where the battle superiority of cavalry was somehow impaired. In place of the massive
classical empires came myriad tiny states or state-like force wielding organizations, as studied in
Dudley (1991, 1990, 1992) and Keegan (1993).
The gunpowder military revolution raised the economies of scale in warfare. In regions including
China, Japan, India, Middle East and Central Asia, there was a dominant core area in each of them.
These regions therefore had great asymmetries in military-economic efficiency among their
contesting powers. The gunpowder empires emerged and dominated the political landscape.
Medieval fragmentation gave way to the Ottoman Empire in Middle East and Eastern
Mediterranean region, the Ikanate-Timurid-Saffavid Empire and Afshar-Zand-Qajar Dynasties in
Persia and Central Asia, the Delhi Sultanate and Mughal Empire in India and the
Yuan-Ming-Ching Empire in China. On the other hand, in Europe, there were multiple core areas
40
of about the same size. The greater economies of scale in warfare led to the dismantling of
feudalism and the rise of national states but failed to create a pan European gunpowder empire.
During the process of European war making and state making, the small and weak states fell out
first, as predicted by our model. For instance, the use of canon wed out city states such as Siena
that could not afford the expensive defense of trace Italian, as studied in Parker (1996) and Tilly
(1992).
Information technological revolution plays a role in deciding the size and number of states too.
The printing press increased the economies of scale in administration and aided the consolidation
of national states since the fifteenth century. The technologies of mass communication increased
the economies of scale in administration in the late 19th century and early 20th century. That led to
a wave of totalitarian regimes and territorial aggrandizement. On the other hand, the
miniaturization of computer technology and the use of the internet reduce the economics of scale
in administration. These technological changes reinforce the trend toward greater fragmentation in
international politics since World War II.
To conclude, the model provides insights that help to understand the influence of military and
administrative-information-production technology on the structure of geopolitics. The ongoing
high technological revolutions and Revolutions in Military Affairs which involve the military
applications of high technologies are restructuring the modern global state system. Military
contests are now waged on land, on and under the sea surface, in the sky and in the final frontier,
the space. The model provides an organized way of thinking about the future of the modern global
state system given these fast and fundamental technological changes.
5. References.
Alesina, A., Spolaore, E. and Wacziarg, R., 2000. Economic Integration and Political Organization,
The American Economic Review 90 (5), 1276-1296.
Diamond, J. M., 1997. Guns, Germs, and Steel: the Fates of Human Societies, New York, W. W.
Norton.
Dixit, A., 1987. Strategic behavior in contests, American Economic Review, December, 77, 891-8.
Dudley, L., 1990. Structural change in interdependent bureaucracies: was Rome's failure economic
or military?, Explorations in Economic History, 27, 232 248.
------------, 1991. The Word and the Sword: How Techniques of Information and Violence Have
Shaped Our World, Basil Blackwell Inc., Cambridge Massachusetts.
------------, 1992. Punishment, reward and the fortunes of states, Public Choice, 74, 293, 1992.
Friedman, D., 1977. A theory of size and shape of nations, Journal of Political Economy, 85(1),
59-77.
Grossman, H. I., 2001. The creation of effective property rights, American Economic Review, 91
(2): 347-52.
------------, 2002. Make Us a King: anarchy, predation, and the state, European Journal of Political
Economy, 18 (1): 31-46.
Grossman, H. I. and Kim, M., 1995. Swords or plowshares? A theory of the security of claims to
property, Journal of Political Economy, 103 (6): 1275-88.
------------, 2002. Predation, Efficiency, and Inequality, Journal of Institutional and Theoretical
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Economics 158, 393-407.
Grossman, H. I. and Mendoza, J., 2003. Scarcity and Appropriative Competition, European
Journal of Political Economy 19, 747-758.
Harrison, J. A., 1972. The Chinese Empire: A Short History of China from Neolithic times to the
end of the Eighteenth Century, New York: Harcourt Brace Jovanovich.
Hirshleifer, J., 1988. The analytics of continuing conflict, Synthese, 76, 201 233.
------------, 1989. Conflict and rent seeking success functions: ratio vs. difference models of
relative success, Public Choice, 63: 101 112.
------------, 1991. The technology of conflicts as an economic activity, Journal of Economic
Perspectives, 81, 2, 130 134.
------------, 1995. Anarchy and its Breakdown, Journal of Political Economy, 103, 1, 26 52.
Hui, V., 2005. War and State Formation in Ancient China and Early Modern Europe, Cambridge
University Press.
Keegan, J., 1993. A History of Warfare, Vintage Books, Canada.
Kennedy, P., 1987. The Rise and Fall of the Great Powers, Random House.
McNeill, H. W., 1982. The Pursuit of Power: Technology, Armed Forces, and Society since A.D.
1000, The University of Chicago Press.
Morgenthau, H. J., 1954. Politics Among Nations: the Struggle for Power and Peace, New York,
Knopf.
Muthoo, A., 2004. A Model of the Origins of Basic Property Rights, Games and Economic
Behavior 49 (2), 288-312.
Neary, H. M., 1997. Equilibrium structure in an economic model of conflict, Economic Inquiry, 35
(3), 480-94.
Noh, S. J., 2002. Production, appropriation, and income transfer, Economic Inquiry, 279-287.
Parker, G., 1996. The Military Revolution: Military innovation and the rise of the West: 15001800, Cambridge University Press, Cambridge.
Porter, B. D., 1994. War and the Rise of the State: the Military Foundations of Modern Politics,
The Free Press, New York.
Skaperdas, S., 1992. Cooperation, conflict, and power in the absence of property rights, American
Economic Review, 82, September, 720 739.
Starr, C. G., 1989. The Influence of Sea Power on Ancient History, Oxford University Press.
Stavrianos, L. S., 1982. The World to 1500: A Global History, 3rd edition, Prentice-Hall, Inc.,
Englewood Cliffs, N.J.
Tilly, C., 1992. Coercion, Capital, and European States, AD 990 1992, Blackwell Publishers,
Cambridge, Massachusetts.
Wittfogel, K. A., 1957. Oriental Despotism: A Comparative Study of Total Power, Yale University
Press, New Haven.
7. APPENDIX 2
ANARCHY, COMPETITION AND DEVELOPMENT: HUME-KANT HYPOTHESIS,
WAGNER’S LAW AND CIVILIANIZATION PARADOX OF WAR MAKING AND
STATE MAKING
Teng, Jimmy
42
ABSTRACT
This paper formalizes the Hume-Kant Hypothesis that state systems generate better developmental
performance than imperial orders. Great economies of scale in warfare and administration and
even distributions of military capability among the contestants generate intense interstate rivalry,
strong concern for relative economic and military capability and superior development. General
pattern of progress, stagnation and decline in world history are explained, including the Glory that
was Greek, the Sung Puzzle and the European Miracle. So are the growth of government and the
civilianization of government driven by the expansion of the scale of warfare and military
establishments.
Key Words: European Miracle, Growth and Composition of Public Sector, Public Intermediate
Inputs, Defense, Technological Revolutions
JEL CODES: D23, D74, H11, H41, H50, H56, N40, O11, O30
Institute of Political Science at Academia Sinica, 128 Academia Road Section 2, Nankang, Taipei
115, Taiwan ROC, Tel: 886-2-2789 9626 ext 216, Fax: 886-2-2783 2610, Email:
[email protected]
ACKNOWLEDGMENT: I thank D. Nowlan, R. Bird, G. Grieco, E. Niou, L. Dudley, J. Mintz, M.
Munger, J. Munro, M. Smart, P. Y. Lai, C. P. Chung and S. Samita for their comments.
1. INTRODUCTION
Immanuel Kant (1784, p. 31): “Now the States are already in the present day involved in such
close relations with each other that none of them can pause or slacken its internal civilization
without losing power and influence in relation to the rest…Civil liberty cannot now be easily
assailed without inflicting such damage as well be felt in all trades and industries, and especially
in commerce; and this would entail a diminution of the powers of the State in external
relations…And thus it is that, notwithstanding the intrusion of many a delusion and caprice, the
spirit of enlightenment gradually arises as a great good which the human race must derive even
from the selfish purposes of aggrandizement on the part of its rulers, if they understand what is for
their own advantage.”
Kant, Immanuel (1784), “Idea of a Universal History from a Cosmopolitan Point of View”.
From circa 1400 A.D, Europe forged ahead culturally, economically, politically and militarily
while the other major cultures stagnated even regressed. This momentum and energy of Europe
and the inertia of the rest of the world were maintained for centuries until the gap was so wide that
European global supremacy was established. The industrial revolution of England and Europe was
part of this phenomenon that we called the rise of the West, or the European miracle. This was
miraculous for in medieval times, the Arabian and the Chinese world as well as the Indian
subcontinent were ahead of Europe in terms of economic development and cultural achievements.
43
Among the many attempts to explain the European miracle is the Hume-Kant Hypothesis which
argues that political competition between states and political authorities, such as that exists within
the European competitive state system, leads to innovations and superior growth performance,
according to Bernholz and Vaubel eds. (2004, p. 1-17). This is the X-inefficiency of
microeconomics at the grandest level. From A.D. 1200 onwards, only Europe operated under a
competitive state system with rivals nearly evenly matched in terms of military and economic
might constantly jockeying for power. Other civilizations were ruled by continental size empires.
Among the many prominent adherents of the Hume-Kant Hypothesis are Smith (1776, Vol. 2, 253),
Gibbon (1787, Vol. VI, Chapter 38: 328), Weber (1923, p. 249), Wesson (1967, 1978), Baechler
(1975), Jones (1974, 1981, 1988, 1990), Kennedy (1987), North (1995, 1998), Weiss and Hobson
(1995), Bernholz, Streit and Vaubel eds. (1998) and Bernholz and Vaubel eds. (2004). North (1995,
p. 26) comments: “……Even the relative failures in western Europe played an essential role in
European development and were more successful than China or Islam because of competitive
pressures.”
In the competitive state system of Europe, the risk of being eliminated from the political landscape
was significantly high. Tilly (1992) observes that the number of political units in Europe declined
from over a thousand in the eleventh century to a couple of dozens in the nineteenth century. The
strength of the economy was very important in deciding the outcome of international rivalry, as
documented in Morgenthau and Kennedy (1987). The mechanism to weed out inefficient states
with weak economy and non functioning institutions therefore operated strongly in the European
state system. With intense international political-military contests, the state has the incentive to
correct market and institutional failures and promote economic growth as studied by North (1995,
p. 13-17; 1998, p. 16-19). There arose the European Miracle.
During the rise of the West the modern service state emerged in Europe. The modern service state
intervenes intensively and extensively in the economy and provides myriad public intermediate
inputs to boost productivity. There was a rising share of the public sector in the economy as per
capita income increased. This is the Wagner’s Law in public finance studied in Bird (1971),
Webber and Wildavsky (1986), Breton (1989) and West (1991). In fact, non military public
expenditures grew faster than military expenditures even though military expenditures were
ballooning and warfare was conducted on a larger and larger scale due to military technological
changes starting with the gunpowder revolution. The result was the civilianization of the European
states despite the intense international political-military competition. This is termed the
civilianization paradox of war making and state making by Tilly (1992, p. 122-124). Tilly (1992, p.
122) puts it this way: “The state-transforming processes we have surveyed produced a surprising
result: civilianization of government. The result is surprising because the expansion of military
force drove the processes of state formation.”
This paper formalizes the Hume-Kant Hypothesis together with the Wagner’s Law and the
civilianization paradox of war making and state making and verifies the insights generated through
examining the general pattern of very long term progress, stagnation and decline in world history.
Very long term means a few centuries. The model builds on the current anarchy and conflicts
literature to analyze the developmental effects of interstate political-military competition. Anarchy
is the fragmented political order where there are at least two contestants to resources and they may
44
use brute force to settle the contest. Power, or brute force, decides the outcome of the contest. In
other words, anarchy is a lack of property rights regime, as argued in Bush (1974), Hirshleifer
(1988, 1989, 1991, 1995), Tullock (1971, 1972, 1974, 1980), Grossman (2001, 2002), Grossman
and Kim (1995) and Alesina and Spolaore (2005).
The model follows the formulation of Hirshleifer (1988, 1989, 1991, 1995) that the ratio of
military capability between the contestants decides the probability of victory between them or their
respective share of contested resources captured and secured. The resources contested could either
be land, maritime territory, population or accessibility to sea lanes. States go to war or military
contest short of war or pursue diplomatic bargaining in the shadow of war for such resources, even
when survival is not at stake. The winner secures a larger share of the contested resources and, in
the extreme case, the winner takes all. The model adds to the current anarchy and conflict
literature by modeling the effect of the size of the economy on the military.
2. THE MODEL.
There are two unitary states. In period zero, nature decides the respective endowment and military
and economic-fiscal efficiency of the states, the utility functions of the states, the conflict
technology and the production technology. In period one, the states allocate the endowment
between direct consumption and input into production. From the output of production, the states
allocate between consumption and military expenditures. In period two, the military spending of
the states decide their probability of winning the military contest between them.
The utility functions of State 1 and State 2 are separable and composed of three parts:
π 1 = αP + β ln C1 + γ ln L1
(1)
π 2 = α (1 − P) + β ln C2 + γ ln L2
(2)
γ ln Li is the direct consumption component of the utility function. It is derived from consuming
the endowed resources directly and Li is the level of the endowed resources directly consumed.
β ln Ci is the indirect consumption component of the utility function for consuming the
production of the economy and Ci is the amount of production consumed. αP and α (1 − P)
are the security component of the utility function. P is the probability of victory by State 1 in a
military conflict or contest short of war between State 1 and 2. α is the stake of the military
contest. The probability of victory by State 1 in a military conflict or contest short of war between
State 1 and 2 is
m
q1 F1 )
(
P=
(q1 F1 ) m + (q 2 F2 )m
(3)
This is the Tullock-Hirshleifer ratio form of conflict technology function or power function. P is
the probability that State 1 will emerge triumphant in a military confrontation with State 2.
45
Alternatively, P means the share of the prize of the conflict that State 1 will capture in a
military contest with State 2. F1 is the level of military expenditures of State 1 and F2 is the
level of military expenditures of State 2. q1 is the efficiency of State 1 in turning military
expenditures into effective military capability and q 2 is the efficiency of State 2 in turning
military expenditures into effective military capability. Therefore, q1 F1 is the military capability
of State 1 and q 2 F2 is the military capability of State 2. m is the mass factor. m measures the
returns to scale in conflicts. A larger mass factor enhances the relative advantage of the bigger
contestant. If a larger force can more easily overwhelm a smaller force, for instance, when there is
offensive advantage, then m is larger.
The budget constraints facing State 1 and 2 are:
Li + I i = E i
(4)
Ci + Fi = Yi ( I i )
(5)
I 1 is the level of production inputs supplied by State 1. Y1 ( I 1 ) is the production level resulted
from such provisions of inputs by the state. State contributes to production through the provisions
of public intermediate inputs. Public intermediate inputs include physical infrastructures such as
roads, light houses, irrigation systems, street lights as well as services and intangible public goods
provided by the state such as enforcement of law and order, property rights delimitation and
enforcement, improvements in institutions that lower transaction costs, the creation and
maintenance of a sound monetary and financial system, the organization and sponsorship of
overseas expeditions for commercial purposes as well as efforts to aid educational, scientific and
technological advances. Public intermediate inputs raise the productivity of the economy.
Production function is:
Yi ( I i ) = Ai I i
h
(6)
h is scale factor. A1 is the economic-fiscal efficiency of State 1 and A2 is the economic-fiscal
efficiency of State 2. We assume 0 < m, h, α , β , γ , q1 , q 2 , A1 , A2 < ∞ .
Substituting the constraints into the objective functions we have:
m
q1 F1 )
(
max π 1 = α
F ,I
(q1 F1 )m + (q2 F2 )m
1
1
(
)
+ β ln A1 I 1h − F1 + γ ln( E1 − I 1 )
(7)
The first order conditions are:
∂π 1
β
= αmP(1 − P) F1−1 −
=0
h
∂F1
A1 I 1 − F1
(8)
46
A βhI h −1
∂π 1
γ
= 1 h 1 −
=0
∂I 1 A1 I 1 − F1 E1 − I 1
(9)
Similarly State 2 solves
m
q 2 F2 )
(
max π 2 = α
+ β ln A2 I 2h − F2 + γ ln( E 2 − I 2 )
m
m
F2 , I 2
(q1 F1 ) + (q2 F2 )
(
)
(10)
The first order conditions are:
∂π 2
β
= αmP(1 − P) F2−1 −
=0
h
∂F2
A2 I 2 − F2
(11)
A βhI h −1
∂π 2
γ
= 2 h 2 −
=0
∂I 2
A2 I 2 − F2 E 2 − I 2
(12)
Using the first order conditions, we have
h
F1 Y1
A ⎛I ⎞
A ⎛E ⎞
=
= 1 ⎜ 1⎟ = 1 ⎜ 1⎟
F2 Y2
A2 ⎝ I 2 ⎠
A2 ⎝ E 2 ⎠
⎛ q A ⎞⎛ E ⎞
R ≡ ⎜ 1 1 ⎟⎜ 1 ⎟
⎝ q 2 A2 ⎠ ⎝ E 2 ⎠
h
(13)
h
(14)
R is the ratio of military capability between the two states. The probability of victory by State 1
in a military contest with State 2 is therefore
m
P=
⎛ q1 A1 ⎞ ⎛ E1 ⎞
⎜
⎟ ⎜ ⎟
⎝ q 2 A2 ⎠ ⎝ E 2 ⎠
mh
Rm
=
R m + 1 ⎛ q A ⎞ m ⎛ E ⎞ mh
⎜ 1 1 ⎟ ⎜ 1 ⎟ +1
⎝ q 2 A2 ⎠ ⎝ E 2 ⎠
(15)
For convenience, we refer to mh as the composite mass factor. It measures the strategic
advantage of controlling a greater share of resources. When mh is greater (smaller) than one,
there are increasing (decreasing) returns to scale in state building. When mh is one, there are
constant returns to scale in state building.
3. COMPARATIVE STATICS.
We focus our analysis on State 1. The results for State 2 could be analogously derived. From
47
previous results, we have
(
)
⎡ hβ R m + 1 2 + hαmR m ⎤
⎥E
I1 = ⎢
⎢ (γ + hβ ) R m + 1 2 + hαmR m ⎥ 1
⎣
⎦
(
(16)
)
(
)
⎤ ⎡ hβ R m + 1 2 + hαmR m ⎤
⎡
αmR m
h⎢
⎥
⎥⎢
F1 = A1 E1
⎢ β R m + 1 2 + αmR m ⎥ ⎢ (γ + hβ ) R m + 1 2 + hαmR m ⎥
⎦
⎦⎣
⎣
(
)
(
h
(17)
)
Proposition 1:
States care about relative economic and military strength and differences in growth rates of
military efficiency, economic efficiency and size of controlled resources.
Proof:
Using the Envelope theorem, the first order conditions, the facts that
∂R
∂R
= − Rq 2−1 ,
= − RA2−1 ,
∂q 2
∂A2
∂R
∂R
Rm
= − RE 2−1 and
= − Rq1−1 , and that in equilibrium, P = m
, we have
∂E 2
∂q1
R +1
⎡⎛ dq1 dq 2 ⎞ ⎛ Y1
⎤
⎞ dA ⎛ dA dA ⎞
−
⎟ + ⎜ − 1⎟ 1 + ⎜ 1 − 2 ⎟
⎢⎜
⎥
q 2 ⎠ ⎝ F1 ⎠ A1 ⎝ A1
A2 ⎠
⎥
∂P F1 I 1 ⎢⎝ q1
dπ 1 = α
⎢
∂R Y1 E1 ⎢ ⎛ ⎛ ⎛ Y1 ⎞ ⎛ E1 ⎞ ⎛ Y1 ⎞ ⎛ E1 ⎞ ⎞ dE1 ⎛ dE1 dE 2 ⎞ ⎞ ⎥⎥
+ h⎜ ⎜ ⎜ − 1⎟ ⎜
− 1⎟ + ⎜ − 1⎟ + ⎜
− 1⎟ ⎟
+⎜
−
⎟⎟
⎢ ⎜⎝ ⎝ ⎝ F1 ⎠ ⎝ I 1
F1 ⎠ ⎝ I 1
E1 ⎝ E1
E 2 ⎠ ⎟⎠ ⎥
⎠
⎝
⎠
⎠
⎣
⎦
(18)
Q.E.D.
International political-military competition is not merely a contest of military valor and equipment.
It is also a test of fiscal strength and economic might. This is especially so for large scale warfare
or contests short of war. To be successful in the international arena, a state must have a large
amount of revenue and a large economy. There arises the concern for relative economic capability
and efficiency. Nations care about relative abundance in resources and relative efficiency in using
resources in both the military and economic arenas.41
41 Refer to Grieco (1988a, 1988b, 1990), Baldwin (1993), Gowa (1989, 1994) and Gowa and Mansfield (1993) for
the concept of relative gains. In international politics, the neo-realists argue that when an opportunity for international
cooperation arises, State 1 will enter into it only if equation 18 is positive. Refer to Salop and Scheffman (1983) and
Marrese and Va=ous (1983) for similar concepts in economics. Adam Smith supported the Navigation Act that aimed to
protect Britain's shipping industry for national security reason. The founding father of classical free trade doctrine
shared the concern for relative economic and military strength in an industry closely related to national security. Refer
48
Proposition 2:
The provision of public intermediate inputs, the size of production, the size of the military, the
share of the military in production and the concern for relative economic and military strength (in
terms of growth rates) are at their maximum when the rivals are equal in military capability.
Proof:
⎛ I1 ⎞
⎟
⎝ E1 ⎠
∂⎜
∂R
⎛ F1 ⎞
⎟
⎝ Y1 ⎠
=
(
((γ + hβ)( R + 1)
hm 2 γαR m−1 1 − R 2 m
m
∂⎜
∂R
=
2
)
+ hαmR
m
)
2
αm2 βR m−1 (1 − R 2 m )
(β ( R
m
⎛ F1 ⎞
⎟
⎝ Y1 ⎠
∂⎜
∂F1
= Y1
∂R
∂R
)
2
+ 1 + αmR
m
)
2
⎛ F ⎞ ∂Y
+⎜ 1⎟ 1
⎝ Y1 ⎠ ∂R
(19)
(20)
(21)
From equation 18 and note that
⎛ Y1
⎞
⎛ F1 ⎞
− 1⎟
⎟
−2 ∂ ⎜
⎝ Y1 ⎠
⎝ F1 ⎠
⎛ F1 ⎞
= −⎜ ⎟
∂R
∂R
⎝ Y1 ⎠
and
⎡
⎛Y E
⎞
⎛F ⎞
⎛ I ⎞⎤
∂ ⎜ 1 1 − 1⎟
∂⎜ 1 ⎟
∂⎜ 1 ⎟ ⎥
−2 ⎢
⎝ F1 I 1
⎠
⎛F I ⎞
I ⎝ Y1 ⎠ F1 ⎝ E1 ⎠ ⎥
= −⎜ 1 1 ⎟ ⎢ 1
+
Y1 ∂R ⎥
∂R
⎝ Y1 E1 ⎠ ⎢ E1 ∂R
⎢
⎥
⎢⎣
⎥⎦
The above are positive for R < 1 , zero for R = 1 , and negative for R > 1 .
∂⎜
(22)
(23)
Q.E.D.
The above results are driven by the fact that the marginal effect of a unit of military capability on
to Gilpin (1981) on how different rates of economic growth result in shifts in the distribution of power among states.
49
1
or R = 1 . Only
2
among equals are there real contests. If the difference in capability is too great, then there will not
be any real contest and anarchy itself might give way to hierarchy, as analyzed in Hirshleifer
(1995). The more closely matched the two rivals are, the larger the concern for relative economic
and military strength. When rivals are equally matched, the incentive to outdo each other is at its
greatest. States in the state system are therefore keenly aware of the strategic importance of the
relative capabilities of the constituent units. For instance, the concept of balance of power
invariably entered the mind of statesmen in the ancient Greek city state system, the medieval
Italian city state system and the modern European state system.42
the outcome of conflict is mP(1 − P) F1−1 . It attains its maximum when P =
R=1
Proposition 3:
An increase in the mass factor results in a higher (lower) level of public intermediate input, a
larger (smaller) military, and better (lower) economic performance & greater (smaller) concern
for relative economic and military strength when rivals are about equal (greatly unequal) in
military capability.
Proof:
⎛ I1 ⎞
⎟
⎝ E1 ⎠
∂⎜
∂m
⎛ F1 ⎞
⎟
⎝ Y1 ⎠
∂⎜
∂m
∂F1
=
∂m
(γαhR )[( R
m
=
m
)
(
2
)
+ 1 + m 1 − R 2 m ln R
((γ + hβ)( R
m
)
2
+ 1 + hαmR
m
)
2
(αβR )[( R + 1) + m(1 − R ) ln R]
=
(β(R + 1) + αmR )
m
2
m
2
m
⎛ F1 ⎞
Y1 ⎟
⎝ Y1 ⎠
∂⎜
∂m
⎛ F1 ⎞
⎟
⎝ Y1 ⎠
]
(24)
2m
2
(25)
m
∂⎜
= Y1
⎛ F ⎞ ∂Y
+ ⎜ 1⎟ 1
∂m
⎝ Y1 ⎠ ∂m
(26)
From equation 18 and note that
42 The Peloponnesian War (B.C. 431 to B.C. 404) was caused by the wary that Greek city states had about the
ascendancy of Athenian power. Refer to Thucydides, Blanco and Roberts (1998). Refer to Organski (1958) for the
power transition theory that war is most likely when two rivals are equally powerful.
50
⎛ Y1
⎞
⎛ F1 ⎞
− 1⎟
⎟
−2 ∂ ⎜
⎝ F1 ⎠
⎝ Y1 ⎠
⎛ F1 ⎞
= −⎜ ⎟
∂m
∂m
⎝ Y1 ⎠
and
⎡
⎛Y E
⎞
∂ ⎜ 1 1 − 1⎟
−2 ⎢
⎝ F1 I 1
⎠
⎛F I ⎞
I
= −⎜ 1 1 ⎟ ⎢ 1
∂m
⎝ Y1 E1 ⎠ ⎢ E1
⎢
⎢⎣
∂⎜
(27)
⎛ F1 ⎞
⎟
⎝ Y1 ⎠
∂⎜
∂m
+
F1
Y1
⎛ I1 ⎞ ⎤
⎟⎥
⎝ E1 ⎠ ⎥
∂m ⎥
⎥
⎥⎦
∂⎜
(28)
The above are negative for R tending toward infinity or zero and positive otherwise.
Q.E.D.
An increase in the economies of scale in conflict has two effects on the marginal effect of relative
military capability on probability of victory. One is the scaling effect and the other is the
unbalancing effect.
mR (1 − R
∂2P
R m− 1
=
+
2
3
∂R∂m ( R m + 1)
( R m + 1)
m− 1
m
) ln R
(29)
In equation 29, the first term on the right-hand side is the scaling effect and the second term is the
unbalancing effect. By the scaling effect, given an increase in mass factor both players try to
increase their fighting forces as size confers greater advantage. By the unbalancing effect, the
bigger player becomes more powerful and the weaker player weaker given the greater economies
of scale in conflict. The unbalancing effect makes both players put in less effort in fighting. The
greater the asymmetry in capability, the greater the unbalancing effect. The unbalancing effect is
zero if the two rivals have equal capability. Therefore, if there is a rough balance (great disparity)
in the relative capability of the contestants, then an increase in economies of scale in conflict
increases (reduces) the marginal effect of relative capability since the scaling effect dominates (is
dominated by) the unbalancing effect. That is, the total effect is negative for R tending toward
infinity or zero and positive otherwise. The interactions of these two effects drive proposition 3.
As a result, when the military capability of the two states are quite equal (unequal), an increase in
economies of scale in conflicts increases (decreases) the military expenditures and production
effort.
The above reasoning is captured in Diagram 1. In Diagram 1, MER means Marginal Effects of
Relative Capability. The thinner line represents the MER under a higher composite mass factor.
The thicker line represents the MER under a smaller mass factor.
Diagram 1
51
Not all state systems exhibit the same level of concern for relative economic and military strength
nor all empires are equally entrenched and complacent. For state systems with very low mass
factor and scale factor such as the pre modern Southeast Asia due to difficult terrains and vast
distance separating states, a lower level of development is expected. For empires facing a low
mass factor and a low scale factor such as the medieval empires of Tang China and Umayyad
Caliphate, there would be better development drives than empires enjoying a high mass factor and
a high scale factor such as the universal empires of the classical era or the continental size
gunpowder empires of the modern era.
Proposition 4:
When the two rivals are about equal in military capability and there are decreasing returns to
scale in the provision of public intermediate inputs, an increase in the mass factor results in the
growth of government.
Proof:
52
⎛ I1 ⎞
⎟
⎝ Y1 ⎠
)[(
−h ⎡
2
⎡ hβ R m + 1 2 + hαmR m ⎤ ⎢ γαhR m R m + 1 + m 1 − R 2 m ln R
⎥ ⎢
= A1−1 E11− h (1 − h)⎢
2
2
⎢ (γ + hβ ) R m + 1 2 + hαmR m ⎥ ⎢
∂m
γ + hβ ) R m + 1 + hαmR m
(
⎣
⎦
⎣
(30)
⎛I ⎞
∂⎜ 1 ⎟
2
⎝ Y1 ⎠
If h < 1 and R m + 1 + m 1 − R 2 m ln R > 0 (<0), then
> 0 (<0).
∂m
∂⎜
(
[(
)
(
)
(
)
(
)
(
)
(
(
)
)
)
]⎤⎥⎥
⎥
⎦
]
Q.E.D.
Greater economies of scale in conflicts lead to larger scale of warfare in a state system and thereby
generate higher demand for revenue to support the military. As a response, the state puts in more
efforts to boost the productivity of the economy. If there are diseconomies of scale in the
provisions of public intermediate inputs, then the increase in income is slower than the increase in
public intermediate inputs. There arises the famous Wagner’s Law in public finance: the rising
share of the public sector in the economy that accompanies the increase in per capita income. On
the other hand, in an imperial order, an increase in the economies of scale in conflicts dampens
military contests between the imperial order and marginal states at the fringe. The empire becomes
more secure and complacent. As a result, the empire puts in less effort in supporting the
functioning of the economy. If there are diseconomies of scale in public intermediate input
provisions, then the retreat of the state from its economic role results in a declining share of the
public sector in the economy. This explains the lethargic gunpowder empires that provided little
services to the economy observed by Jones (1981, 1988, 1990).
In a state system, if the increase in the economies of scale of military contests goes far enough,
then ultimately there will be the civilianization paradox of war making and state making: the
expansions of the scale of warfare and the military produce the surprising result of the
civilianization of government.
Proposition 5:
When the two rivals are about equal in military capability ant there are decreasing returns to
scale in the provision of public intermediate inputs, if the mass factor is sufficiently large then an
increase in the mass factor causes a declining share of the military in the public sector.
Proof:
53
⎛ F1 ⎞
⎟
⎝ I1 ⎠
∂⎜
∂m
(
)
⎡ hβ R m + 1 2 + hαmR m ⎤
h −1 ⎢
⎥
= AE
⎢ (γ + hβ ) R m + 1 2 + hαmR m ⎥
⎦
⎣
(
)
h −1
⎡
⎢
αR m
⎢
2
⎢ β R m + 1 + αmR m
⎣
((
)
⎤
⎡
mh 2γαR m
⎥ R m + 1 2 + m 1 − R 2 m ln R
⎢
× β + (h − 1)
2
⎢
(γ + hβ ) R m + 1 + hαmR m ⎥⎦
⎣
(
For R close to one,
mh γαR
2
(γ + hβ )( R
m
)
[(
)
[(R
m
)
2
(
)
)
+ 1 + hαmR
)
(31)
]
]
+ 1 + m 1 − R 2 m ln R > 0 and an increase in m results in a larger
m
2
(
)
⎤
⎥
2 ⎥
⎥
⎦
.
Given
that
m
(h − 1) < 0
,
if
m
is
large
enough
such
⎛F ⎞
∂⎜ 1 ⎟
⎡
⎤
2
m
I
m(h − 1)h γαR
⎥ < 0 , then ⎝ 1 ⎠ < 0 .
that ⎢β +
2
⎢
∂m
(γ + hβ ) R m + 1 + hαmR m ⎥⎦
⎣
(
)
Q.E.D.
5. THE MANIFESTATIONS OF HUME-KANT HYPOTHESIS, WAGNER’S LAW AND
CIVILIANIZATION PARADOX IN WORLD HISOTRY
We apply the insights generated to explain the general pattern of progress, stagnation and decline
in world history:
I.
Ancient Middle Eastern Leadership.
During the foundation period of the first civilizations of Mesopotamia and Egypt ca 3500-3000 BC,
the invention of writing increased the economies of scale in administration and facilitated the
management of complex society and the rise of cities. The competition among the city states
propelled the progress of early civilizations with explosive speed. In contrast to the open and
fragmented geography of the Greater Mesopotamia, the enclosed, isolated and secure space of the
Nile valley with a single dominant core area connected by the Nile River was conducive to the
consolidation of an empire. As a result, Mesopotamia retained her state system for further six
centuries after the establishment of the Egyptian Empire. Besides, the series of empires in Greater
Mesopotamia from the twenty fourth century BC onwards facilitated by the use of bronze weapons
were never as secure as the Egyptian Empire which was over 1,300 years old before she suffered
her first major invasion. The effects of such differences on innovations and development were
rather obvious: the so-called ancient Middle Eastern leadership in the early phase of human
civilized history, from c. a. B. C. 3500 to c. a. B. C. 1000, as studied in Stavrianos (1982).
The Middle Eastern leadership was manifested in many ways. The region invented the first writing
54
system, the Cuneiform, as well as the alphabetical writing. It produced the earliest law codes and
much literature of high value. The Code of Hammurabi was one of the greatest early juridical
literature. The proliferations and continuous improvements of law codes showed the interests of
the Mesopotamian states in furthering economic development. Other evidence of the advanced
level of Mesopotmaian statecraft included city planning, the first irrigation system in the world to
redirect mountain spring water, size of the militaries which numbered in the hundreds of thousands
and constant improvements in military technology. The military use of bronze and iron started in
Mesopotamia. Cultural and scientific achievements were great as well. Great religious literature
included Enuma Elish and Gilgamesh. A great part mathematical and astronomical science owed
its beginnings to the Mesopotamians. An example was the sexagesimal system which was used for
all types of calculations and is still used for the clock in all around the world. Mesopotamia
invented the wheel. The manufacture of glass was a major technological breakthrough. Other
technological advances included glazed pottery and bricks. Assyrian knowledge of the planets of
our solar system led to accurate predictions of solar and lunar eclipses, as documented by
Haywood (1997, p. 44-45). It developed advanced metallurgy techniques for working with bronze,
lead, silver, gold and iron. The use of iron established Assyria as the most technologically
advanced power in the Near East and thus allowed it to dispatch its enemies with relative ease
because of their use of bronze. It was the Near Eastern system that was expanding geographically,
annexing the surrounding regions, including Egypt.
II.
Classical Pluralism.
The use of horse drawn war chariots and iron weapons led to waves of nomadic invasions upon the
ancient civilizations. Greater economies of warfare forged Egypt and Greater Mesopotamia into a
single geopolitical system. From around 700 to 300 BC, the Neo-Assyrian Empire, the
Neo-Babylonian Empire and the Achaemenid Persian Empire ruled over the whole Middle East.
The weight of the empires stalled the developmental momentum in the old seats of early
civilizations. Economy of the region slowly declined. In sharp contrast to the bursts of innovations
of the earlier era, the Middle East could boast of no major advances during this era.
The use of iron in production allowed the Greek, Indian and Chinese civilizations to extend the
realm of agriculture. Operated in terrain with sparse population separated by forests, marshes,
mountains and rivers, the Chinese and Indian civilization were city state systems. Greece is
dissected into hundreds of islands and peninsulas. The Greek mainland is further cut by rugged
mountains into many small regions with few plains. That made possible the city state system of
ancient Greece. The dynamism of these city state systems produced the splendid classical
achievements of the Chinese, Greek (and Hellenistic) and Indian civilizations. Their
representatives were Confucius, Socrates and Buddha. Consequently, the ancient Near Eastern
leadership ended and world history entered the pluralism of classical period.
The Greek city states initiated the two major military revolutions of the classical era: the heavy
infantry revolution involving the use of phalanx and the naval revolution which allowed the rise of
thalasocracy. The autocratic and agricultural Sparta took the lead in developing the phalanx while
the democratic and commercial Athens pioneered the use of trireme and specialized war fleets.
The polis as a form of political organization signified the maturing of the Greek societies in
55
mobilizing resources for large scale land or sea warfare. Athens was known to us for its
democratic constitution as well as thriving trading network and cultural and scientific
achievements. The achievements of the Greek city state system was continued in the Hellenistic
state system after the conquests of Alexander the Great.
During this era, land warfare of the largest scale was seen in China. The rise of heavy infantry led
to more frequent and larger scale warfare in China from the Spring and Autumn Era to the Era of
Contending States. It was common for warring states to mobilize hundreds of thousands of soldiers
or even close to a million troops and fight over extensive spaces for years. This could not be done
without a very high degree of fiscal strength and economic achievements. The traditional Chinese
statecraft was perfected during this era. There was a growth of government and civilian control of
the military was established: an ancient example of the civilization paradox of war making and
state making, as studied in Hui (2005).
III.
The Indian Classical Golden Age.
The invention and use of iron in economy and military increased competition in the state systems
of the classical world and ultimately transformed them into gigantic universal empires. With the
domination of the heavy infantry in warfare, the Mediterranean world entered into the imperial
order of the Roman Empire. In China, the Chin and Han dynasty reigned supreme. In Persia, it was
the Parthian then the Sasanian Empire. All these imperial orders survived for centuries. These
empires controlled most of the culturally advanced areas in their respective geographical niches.
Only culturally inferior marginal states or barbarian tribes existed beyond the border. Military
efficiency and economic-fiscal efficiency between the empire and the outside groups were of vast
distances. Together with the fact that the bulks of resources were under the imperial control,
military capability was lopsidedly in favor of the imperial regime. Great asymmetry in capability
dampened competition and resulted in stagnation and decline. The vigor and splendors of the
preceding state systems soon disappeared. There was a retrenchment of government too. The Han
Dynasty of China, for instance, practiced the Taoist minimalist approach to government and the
Confucian small government policy.43
The exception was India. Competition within the Indian classical state system produced the
sophisticated level of statecraft as exemplified in the Arthashastra of Chanakya Kautilya. The
advanced level of statecraft aided the unification of India under the Mauryan Empire. Yet, given
the fragmented geography of India, the powerful and gigantic Mauryan Empire lasted only about a
century and a half. Then it was a fragmented and competitive state system in India, from around
BC 200 to AD 300. There were three major powers with compact and centralized structure: the
Kushan Empire in the Northwest, the Shunga Empire in the Northeast and the Andras Empire in
the South. Then the Gupta Empire came. The Gupta Empire, largely confined to Northern India
and more decentralized than the Mauryan Empire, ruled from 320 AD to 720 AD, with effective
rule from 320 AD to around 500 AD. It was constantly challenged by Southern Indian states and
43 Tang Dynasty China which ruled under the disadvantage of diseconomies of scale in warfare adopted a more active
attitude in governance. Ming Dynasty China, a gunpowder empire which enjoyed the economies of scale in warfare,
was also a minimalist government.
56
the nomads from the Northwest, as studied in Stavrianos (1982, p. 134-137).
During this period, the Indian civilization was propelled to the pinnacle of its classical golden age.
The rivaling states courted the Brahman caste for their political support and administrative skill.
As a result, there was a strong resurgence of Hinduism, according to Kulke and Rothermund (1998,
p. 79-81). Sanskrit learning was revived to serve as a lingua franca. Sanskrit literature flourished.
The two great epic poems of India, Mahabharata and Ramayana achieved their final form during
this era. States took strong interests in development. Hindu laws were codified, producing the
authoritative Hindu Law Books (dharmashastra), the foremost of them being the Code of Manu. In
art, after a long period of Hellenistic influence, there emerged an indigenous Indian style. The
decimal place system of numerical notation, one of the great inventions of the human mind,
emerged in India by A.D. 270. Indian culture spread abroad, especially to Southeast Asia. A
greater India emerged. Local states in Burma, Sumatra, Java, Malaya, Siam and Vietnam eagerly
imported as much of Indian civilization as they could. There arose the Hindu empires of Southeast
Asia: the Majapahit of Java and the Khmer of Indochina, according to McNeill (1999, p. 274).
Buddhism, with its accompanying art forms, flowed like a mighty torrent into China, Korea and
Japan and Central Asia. There was a flourishing international trade, to the West, Southeast Asia
and China.
IV.
Abbasid Golden Age and Sung Puzzle.
Around A.D. 200-500, there was a decline in the economies of scale in warfare due to the rise of
cavalry. Advances in military technology such as the invention of the composite bow and the
stirrups and the breeding of bigger and more powerful horses led to the ascendancy of the cavalry
over the infantry. The classical empires that depended on massive infantry legions to hold the
imperial realm together lost their strategic advantage and retreated or dissolved. The nomadic
hordes advanced at the expense of the settled societies, as documented in Dudley (1990, 1991,
1992), Keegan (1993) and McNeill (1982). During the medieval era, political fragmentation was
the norm in Europe, Middle East, India and China. Myriads smaller kingdoms and short-life
empires came and went.
The Arabian tribes united under the banner of Islam conquered Persia and wrested Egypt, Syria
and Levant from the Byzantine Empire. After a brief period under the Omayyad Caliphate, Islamic
unity began to break down. The Islamic world under the succeeding Abbasid Caliphate (A.D. 750
to A.D. 1258) operated under a state system. The greatest Islamic achievements were the products
of this era: the Abbasid Golden Age. Politically, this period saw many outstanding statesmen and
administrators. The career of the Persian statesman Nizam-al-Mulk who was the true custodian of
the Seljuk state for twenty years during the rule of Sultan Malikshah was typical of this era. His
book on statecraft, Siyasat-Namah, was a valuable source for the political thought of the time. In it
he stressed the responsibilities of the ruler to the society. Nizam-al-Mulk patronized education,
science, philosophy. 44 This period experienced the Arab agricultural revolution with the
44 Refer to Wesson (1978, p. 93-95), Armstrong (2000, p. 45-81) and Sonn (2004, chapter 2) on the political
fragmentation and competition and achievements of the Abbasid Golden Age. Refer to Bernholz (2004, p. 184 to 193)
in Bernholze and Vaubel ed. (2004) for the political and military competition, splendid cultural achievements and
economic prosperity of Islamic Spain.
57
widespread diffusion of new crops and the promotion of new or the rehabilitation of old irrigation
systems, as studied in Watson (1974). Trade was thriving and Arabian traders were at the center of
the global trading network, according to Abu-Lughod (1989). Ismalic merchants pioneered many
innovations in business organization and finance, including the double entry book keeping, the
pooling of capital through partnerships and the use of letters of credit and promissory notes that
facilitated long distance trade. There were great literary achievements. The historian Ibn Khaldun
produced his great work Muqadimah. Science and mathematics advanced to a very high level.
There were manufactured astrolabes and building of planetarium. Islamic scientists knew that the
earth is round and orbits around the sun earlier than Copernica or Galileo. In medicine there was
the well known Vesalius and Avicenna. In mathematics there was Muhammad Ibn Musa who
wrote on algebra and the Hindu numeral system that we came to know it as the Arabic numeral
system.
The Indian subcontinent fell into political fragmentation after the collapse of the Gupta Empire. As
a whole, the subcontinent operated under a state system until the arrival of the Delhi Sultanate and
the Moghul Empire. There continued to be considerable progress in the subcontinent. The
establishment of Islamic states in the North put considerable pressure on the Southern Hindu states.
As a response, the Southern Hindu states such as the Chola Empire and the Vijayanagar Empire
achieved a high level of prosperity. They were well known for their busy and extensive external
maritime trade, powerful army and navy.
Medieval Europe was a state system despite the nominal imperial power of the Catholic Church
and the Holy Roman Empire. The most advanced economies of Europe were the city state systems
of Southern France and Italy. Propelled by intense inter city rivalry, the Italian city states achieved
an amazing level of prosperity and cultural splendors. Italy was the richest spot in Europe. The
revenues of Florence in the fourteenth century were surpassed only by those of the king of France.
They bestowed upon the later world the institutional innovations such as the civilian control of the
military and marine premium insurance (which began in Genoa in ca. 1350 AD), according to
Wesson (1978, p. 158). Of course, it is their cultural achievements that are best known to us: the
Renaissance, the revival of learning.
Political fragmentation was the norm in China in the millennium after the collapse of Han Dynasty.
Even the mighty Tang Dynasty managed to effectively unite China for only slightly more than a
century. During this period, the grip of Confucianism on the Chinese mind loosened. There was
more creativity in cultural, technological and institutional arenas. Commerce was freed from
official repression. These developments culminated during the Sung era. Sung era China was a
tri-polar state system. The kingdoms of Xia and Khitan (which was replaced by Jin later) posed
substantial threat to Sung China due to their near monopoly of horses. During Sung era, large scale
warfare was the rule. The scale of the militaries was greater than that in Europe before the
Napoleonic wars. Sung China had many military innovations including the use of gunpowder and
maintained a large military-industry complex to tap technological prowess for the military. Sung
China produced many able statesmen, including the reform minded prime minister Wang Ah Shi
who tried to increase the economic and military efficiency of Sung China. The state intervened
extensively in the economy to boost productivity and raise revenue for supporting the gigantic
military-industry complex. As a result, Sung China manifested the civilianization paradox: the
58
large scale warfare stimulated the growth of the bureaucracy which overshadowed and
overpowered the military.
Under the Sung service state, there was sustained growth in per capita income for four centuries.
The economy prospered with elaborate internal and external trading networks. Sung China was the
industrial center of the global trading system and the most advanced economy. There were many
innovations in production technology including the water-powered hemp-spinning machine, the
movable printing press and the compass, as documented in Graham (1973), Cipolla (1967, 101-2)
and Elvin (1973).45 According to Harrison (1972, p. 290), the total Chinese output of iron at the
close of the eleventh century A.D. was approximately the same as the entire production of Europe
in 1700. The porcelains manufactured during the Sung dynasty were the best in quality and design.
Cultural achievements were equally great. The most important works of Neo-Confucianism were
done in the Sung dynasty. Poetry and other literary works also flourished. Such miraculous
performance was not repeated in the powerful and unified Ming and Ching periods, as studied in
Jones (1981, p. 202). The great achievements on a grand scale of Sung China were in fact followed
by a great regress, according to Hartwell (1966) and Elvin (1973). The achievements were
therefore termed the Sung puzzle.46
V.
The Rise of the West.
The gunpowder military revolution increased the economies of scale in warfare and brought forth
waves of lasting continental size empires. The Mongolian Empire was the very first gun powder
empire though it did not last very long. This process began around A.D. 1200 and gathered
momentum especially around A.D. 1400. China was the first to enter into the era of gun powder
empires. In China, the Mongolian Yuan dynasty which reigned for about a century from A. D.
1279 to A. D. 1368 was succeeded by the Chinese Ming dynasty which reigned close to three
centuries from A. D. 1368 to A. D. 1644. Then the Manchurian Ching dynasty ruled for about
three centuries from A. D. 1644 to A. D. 1911. In India, the gun powder empires were the
Sultanate of Delhi and the Mughul Empire (A. D. 1526 to 1858). The Ottoman Turks established
the gun powder Ottoman Empire in Middle East and Southeastern Europe in A. D. 1350. There
was a series of gunpowder imperial regimes centered on Persia. Their sphere of influence covered
parts of Middle East and Central Asia as well. In chronological order, these were the Ikhanate, the
Timurid Empire, the Saffavid Empire, the Afshar Dynasty, the Zand Dynasty and the Qajar
Dynasty. In Japan, there was the Tokugawa Shogunate.
A similarity between these gunpowder empires was that they were stable and secure regimes that
45 China however actually abandoned the use of the water-powered hemp-spinning machine and regressed in terms of
industrial technology. Refer to Jones (1981, p. 64).
46 Wesson (1967, p. 205) notes: AOf all the great Chinese dynasties, the Sung was least qualified to consider itself a
universal empire. Pacific from the time they achieved power, the Sungs never tried to conquer the whole Chinese
sphere, and were almost always being pressed by peoples of the north. In time half the country was lost to them, and
the latter Sungs were even compelled to pay tribute and accept subordination to the semibarbarous Kin rulers as their
AUncles.@ For them, foreign commerce was especially important. They thus could not well isolate themselves in grand
complacency as stronger dynasties could. In its insecurity and incompleteness, the Sung empire was like tsarist Russia
of the eighteenth and nineteenth centuries, which likewise saw a fair amount of creativity.@
59
controlled an extensive territory or sphere of influence. Within their geopolitical niches, they had
practically nothing to fear. This remained so until they were forcefully incorporated into the
Europe centered modern world state system. They were complacent, lethargic states or revenue
pumps, as noted by Jones (1981, 1988). They offered very few overhead services necessary for the
proper functioning of the economy and society. Despite their territorial size, these empires had a
small state without much capacity to penetrate and mobilize the society for their purposes. Their
governments were simply too inefficient and corrupted. They were in general isolationist and anti
commerce or did not put much emphasis on commerce or economic development. As a result, the
developmental momentum generated by the medieval political fragmentation and decentralization
on these diverse lands died out. In fact, before the arrival of the Europeans, these gunpowder
empires were entering into some kind of a synchronized decline. Asian trade was in general
shrinking, according to Simkin (1968, p. 258-9) and Jones (1981, p. 170).
Of the major civilizations, only the geographically fragmented Europe escaped the fate of the
gunpowder empires. The gunpowder military revolution increased the economies of scale in
warfare. This effect was reinforced by the invention of printing press which increased the
economies of information and administration. Petty feudal estates and principalities were
consolidated into national states which continuously engaged each other in large scale warfare or
other forms of interstate rivalry. The perpetual and intense interstate power struggles produced
positive effects on the development of Europe, economic, political, social and cultural. According
to North (1995, p. 13-17; 1998, p. 16-19), military technological changes since late medieval era
that raised the scale of warfare in Europe led to greater revenue demand on the state and pushed
the state to provide more public intermediate inputs and better institutions including property
rights regime. The absolutist states formulated forward-looking policies. Statesmen and scholars
produced mercantilism for guiding public policy. Private individuals published exhortations to
purposeful development. The English measured themselves by their successful Dutch cousins.
France in turn was driven by her rivalry with England to promote manufacturing. The rivalry with
Prussia led Austria to reform her laws and public administration. Russia under Peter the Great
forcefully westernized and modernized to join the rank of the great powers.
Insecurity and competition constantly jolted European states and societies out of routine and
complacency and prevented the stagnation, decline and decay that plagued the secure and
entrenched gunpowder empires of the other major cultures, according to Gibbon (1932, chap. 38,
II) and Wesson (1978, p. 182). In their effort to outdo each other, the European states goaded each
other into the great cultural, economic, political and social achievements that we called
industrialization and modernization. The interstate rivalry caused the European states to outdo
each other in almost all fields of human endeavors: overseas explorations, manufacturing,
scientific enquiries, technological innovations as well as improvements in laws, public
administrations and the overall institutions of the state. The effort of Cardinal Richelieu to create a
great and powerful central government in France, the mercantilist policies of Colbert, the financial
innovations of England such as the creation of Bank of England all have their origin in the
interstate great power rivalry of Europe.
The two key features of a modern society, the modern service state and the civilian government
with its unchallenged control of the military were the results of this intense interstate rivalry. To
60
support the massive military establishments ushered in by the gunpowder military revolution,
states in Europe greatly expanded their services to the economy to boost productivity and raise
revenue. North (1984) notices that during the economic rise of the West there was a rising share of
public intermediate inputs in the government and economy. This resulted in the well-known
Wagner's law in public finance of a rise share of public sector in the economy as per capita income
increases, a topic studied in Bird (1971). In fact, the expansion of the service state stimulated by
the increasing scale in warfare went so far in Europe that it led to the civilianization paradox of
war making and state making observed by Tilly (1992): the greater scale of warfare actually
resulted in a smaller share of the military in the public sector in terms of both budget size and
number of personnel. The military ultimately played a more minor role in the affairs of the state
due to the larger scale of warfare. The civilian politicians and professional bureaucrats took
unquestionable charge of the government.
6. CONCLUSIONS.
Macro historians such as Jones (1981, 1988), McNeill (1982), Rasler and Thompson (1983, 1985,
1989), Tilly (1992), Porter (1994), Parker (1996) and North (1995, 1998) have well documented
the effects of the international political-military environment on changes in income, defense
spending and public intermediate input provisions. The model generates results that capture these
relationships and adds further insights. The insights generated served as advocates for further
research with richer models on the Hume-Kant hypothesis and the role of the international political
military environment on the growth and composition of the public sector.
The model demonstrates that a high level of economies of scale in warfare and a high level of
economies of scale in public administration increase the intensity of international political-military
competition and lead to better developmental effort by the state. Yet, these conditions also make
the emergence of an imperial order more likely if there is a dominant core area. Therefore, only
under the rare coincidence of high level of economies of scale in warfare and public administration
and fragmented geography will there be sustained high performance of development and progress.
That was the case for the European miracle. That was also the case for the Glory that was Greek as
well as several other instances of sustained cultural and economic progress observed in world
history. Therefore, eras of development and progress are rare in human history.
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64
CHAPTER THREE. ANCIENT MIDDLE EASTERN LEADERSHIP
1. MESOPOTAMIA
Developmental puzzles are not unique to the modern world. There are many development puzzles
in the ancient and classical world as well. First is the suddenness of the crossing of a threshold at
the end of the fourth millennium (that is, 3300-3000 BC). That brought forth the first civilizations
of the Near East and Egypt.47 Then we have the puzzling leadership that Mesopotamia had over
Egypt after the establishment of civilization. Another is the suddenness of the acceleration of
development in China, Ganges River valley Indian and Greece in around 900-700 BC, the
explosive stupefying sudden and advance that created the splendid classical cultures.
We start our analysis with the first civilization in human history: the Sumerian city states system
of Mesopotamia. There are two definitions of Mesopotamia. The first definition, which is narrower,
refers to the land lying between the rivers Euphrates and Tigris. That is, the present Iraq. The
second definition, a broader one, refers to the land that lies between the Zagros and Anti-Taurus
mountains in the northern end, and the Arabian plateau and Persian Gulf to the south. That is, the
present Iraq, eastern Syria, southeastern Turkey and Southwestern Iran. Compare to the Nile River
valley, the greater Mesopotamia has a more open, complicated and fragmented geography with
multiple core areas.
Around 3500 BC, city states in southern Mesopotamia developed. The period of Sumer and Egypt,
at their beginnings near 3000 BC, was probably the greatest turning point in human history. At this
point the most basic fundamentals civilization came into existence over a substrate of previously
achieved agricultural life with explosive speed. In the case of the Sumerian civilization, it was
three hundred of rapid advance followed by two of stabilizing crystallization after 3000. From
3300 BC to 2800 BC, culture accelerated rapidly. In this brief time villages became cities and
cities grew into city-states.
In Mesopotamia, the need for irrigation stimulated growth of states and bureaucracy.48 In
Mesopotamia, the first cities emerged around 4300-3100 BC. Mesopotamia first invented
agriculture and writing system. The earliest known writing was by Sumerian city of Uruk (in
today=s Iraq), around 3400 BC.49 The invention of writing increased the economies of scale in
administration and facilitated the management of complex society and the rise of cities.50 There
emerged the city states of Mesopotamia, especially around Sumer.
There was a large quantity of bronze weapons produced and used in the period 2900-2334BC.
Phalanxes of heavy infantry wielding bronze weapons and protected by bronze armor and aided by
archers with composite bows and troopers with war chariots resulted in a considerable increase in
the economies of scale in conflicts. Inter city rivalry intensified and there was the rise of massive
47
48
49
50
We left out the Indus civilization which was destroyed early by Aryans invasions.
Refer to Dudley (1991, p. 20-21) and Wittfogel (1957).
Haywood (1997, p. 16-17, 40-41).
Refer to Dudley (1991, p. 36-43).
65
defensive walls. The greater economies of scale in conflicts produced territorial expansion of the
political units. A series of empires were established.51 Among the earliest conquerors is Sargon
the Great of the Akkadian Empire, 2334 BC to 2279 BC. It is the earliest empire in ancient
Mesopotamia, about six hundreds later than the first establishment of the Egyptian Empire.52 The
Akkadian Empire reigned from 2334-2193 BC. The Empire of Third Dynasty of Ur, reigned from
2112-2004 BC. The Babylonian Empire reigned from around ca 1900-1595 BC. The Old Assyrian
Empire ruled from around 1830-1741 BC.53. However, given the open terrain of Mesopotamia,
these empires were never as secure as the Egyptian Empire. Horse drawn war chariots started to be
used in around 1700 BC. The use of horse drawn war chariots gave military advantage to the
nomads. Hittites sacked Babylon in 1595 BC. Then there was a dark age of two centuries. Then the
use of iron weapons which were much cheaper than bronze weapons and therefore widely
available gave further military advantage to the nomads. That started around 1200 BC. Therefore,
before the rise of the Neo-Assyrian Empire, Mesopotamia either lived under a state system or an
imperial order that was less secure than the Egyptian Empire.
The Near Eastern state system was energetic and was expanding geographically. New components
were constantly being added: the New Kingdom of Egypt, the Mycenaean civilization, the Hittites
in Anatolia and of course, the Persians. A competitive state system comprising of the whole
Middle East emerged. Isolated geopolitical systems of the first civilizations of Mesopotamia and
Egypt submerged under this new larger system. This great expansion of the Near Eastern system
was during the era of the Hittite and Middle Assyrian Empire, 1595-1000 BC. The major powers
were the New Kingdom Egypt, the Hurian Kingdom of Mittani which controlled present Syria,
Lebanon, the Hittite Kingdom of Hatti which controlled central Anatolia (Present Turkey), the
Assyrians who were based in present central Iraq, the Babylonians who were based in present
southern Iraq and the Kingdom of Elam which controlled present southwestern Iran. Diplomacy
and statecraft advanced to a very high level of sophistication with good grasp of the concept of
balance of power and good use of alliance formations to check potential rival. As a result of the
intense political-military competition, the speed of development accelerated. Unlike Egypt which
entered into the imperial era soon after the foundation of her civilization, Mesopotamia retained its
city state system (and state system in subsequent periods) and developmental momentum much
longer. That resulted in the ancient Near Eastern leadership.54
The city state system and the succeeding state system generated much developmental
achievements. Mesopotamia developed the first system of writing, the cuneiform script. Writing
allowed scribes to record business transactions, legal documents, query of items, and other
article/items. Writing also allowed for the creation of libraries and gave civilizations to write down
their histories for the sake of posterity for future generations. The region invented alphabetical
writing. The system of writing that developed in the Near East was taken up by other cultures and
51 Refer to Dudley (1991, p. 47-76).
52 Refer to Dudley (1991, p. 66).
53 Haywood (1997, p. 42-43).
54 Refer to Bernholz (1998, p. 114-121) in Bernholz, Streit and Vaubel ed. (1998) and Wesson (1967, 1978) on the
relationship between city state system, political-military competition and the achievements of the Sumerian
civilization.
66
today all alphabets in use in the world are derivations from that alphabet. Other achievements
include the first wheeled vehicles, potter=s wheel, first codes of law, the use of bronze in
production, and of course, the fist city-states.55
It produced much literature of high value. Great religious literature included Enuma Elish and
Gilgamesh. The Code of Hammurabi is one of the greatest early juridical literature.56 Although
Hammurabi's Code is not the first code of laws (the first records date four centuries earlier), it is
the best preserved legal document reflecting the social structure of Babylon during Hammurabi's
rule. The Code has two hundred eighty-two laws concerning a wide variety of abuses. There were
other legal codes that were further perfected as well, showing the interests of the state in furthering
economic and other developments. A lot of mathematical and astronomical science owes its
beginnings to the Mesopotamians. They invented the sexagesimal system, which was used for all
types of calculations and is still used for the clock in all around the world. They invented the wheel.
It first developed advanced metallurgy techniques for working with bronze, lead, silver, gold and
iron. Iron did not supplant bronze as the main metal for tools and weapons until around 900, but its
use was widespread by 1200. That was the date accepted as the start of the Iron Age.
Mesopotamia had a more advanced level of statecraft broadly defined, as exemplified in the
perfection of her legal codes, than that of Egypt. The Assyrians, for example, throughout the
duration of their empire, contributed greatly to mathematics, the military, city planning,
governmental administration and architecture. Besides their military supremacy, Assyrian artistic
talent and religious conviction went unmatched. Other than architectural and artistic works, the
Assyrians contributed heavily to the sciences. The second half of the second millenium
(1500-1000 B.C.) was a time of great prosperity and progress. The manufacture of glass was a
technological breakthrough. The first examples of glass vessels were found in Northern
Mesopotamia and date back to the fifteenth century BC. Glazed bricks have also been found in the
palaces of Middle Assyrian Kings.
The Assyrian Empire was thoroughly mired in military tradition. Every facet of the government,
civilian and military, fit the desired mold. Under the leadership of many powerful kings, the
Assyrian military numbered in the hundreds of thousands and reached its zenith under Tiglat
Pileser III. That was an immense state capacity in the ancient world. Assyrians first use of iron
established Assyria as the most technologically advanced power in the Near East. That invention
allowed it to dispatch its enemies with relative ease because of their use of bronze. The Neo
Assyrian Empire ended the ancient Near Eastern state system.
Assyrians architectural, artistic, scientific and military achievements reached their apex during the
Neo-Assyrian Empire. Sennacherib created the first irrigation system in the world to redirect
mountain spring water and the Khosser River to Ninevah. Assurbanipal was a scholarly individual
who gained the mastery of Sumerian and Akkadian and could compute complex mathematical
equations. Due to his academic interests, Asurbanipal assembled in Nineveh the first
systematically collected and catalogue library in the ancient Middle East. Assyrian knowledge of
55 Urukagina, King of Lagash, promulgated the first surviving law code, 2350 BC.55
56 Hammurabi (ca. 1792 - 1750 BC) united all of Mesopotamia under his forty-three year reign of Babylon.
67
the planets of our solar system led to accurate predictions of solar and lunar eclipses.57
2. EGYPT
Parallel to and greatly influenced by yet relatively independent, Egypt also surges forward, along
with Sumer, in about the period 3300 to 3000 BC. Cities, state formation, and the first intimations
of organized technology suddenly come together in the last centuries before 3000 BC. Many
archaeologists have remarked on the speed of emergence of higher civilization, and in fact the
phenomenon of thresholding obvious from the contrast of scales, before and after especially in the
case of Egypt. From its modest pre-dynastic period the phenomenon of the Egyptian civilization
that we know rises from the desert into its monumental grandeur.
From the beginning of her civilization to 1595 BC, Egypt largely was politically and militarily
isolated from the Near East.58 Protected to the North and East by the seas, to the West by the
great Sahara Desert and to the South by cataracts along the river Nile, Egypt was a single river
valley civilization well isolated from the rest of the world. The Egyptian civilization was over
1,300 years old before she suffered her first major invasion. The Egyptian Nile flood plain was the
most favorable area for agriculture anywhere in the ancient world. Egypt had little need for
irrigation and flood defenses. Nile was also Egypt=s main high way. Chiefdoms, towns and city
states appeared by 3300 BC. In the narrow confines of the Nile Valley, competition was intense.
Pre-dynastic Egyptian city state system was competitive. That propelled the sudden acceleration of
Egyptian civilization during 3300-2800 BC noticed by historians. Material conditions improved
greatly. The hieroglyphic script was developed during this era. The invention of writing increased
the returns to scale in state building. Egypt was united around 3000 BC.59 The isolated and
concentrated geography was best suitable for the creation and maintenance of an imperial order.60
Egyptian history, before the incorporation of Egypt into the Greater Near Eastern State system,
was an early monotonous routine of dynasty after dynasty.
Greater Mesopotamia, in contrast, had multiple core areas and was much more opened to external
influence. As a result, the succeeding civilizations to the Sumerians operated largely under a state
system while the Egyptians were under an imperial regime most of the time.61 The different
political-military environment generated different developmental achievements. That was the
cause of ancient Middle Eastern leadership in early civilizations. This was despite the fact that
Egypt had many natural advantages compared to Mesopotamia. The effects of such differences on
innovations and development were rather obvious. Egyptian development began to slow down
once the First Dynasty united upper and lower Egypt around 2920 BC while the Mesopotamian
civilization retained its momentum much longer. This so-called ancient Middle Eastern leadership
in the early phase of human civilized history was from c. a. B. C. 3500 to c. a. B. C. 1000.
57 Refer to Saggs (1991) and Haywood (1997, p. 44-45).
58 Refer to Dudley (1991, p. 11) and Humber (1980, p. 36-7).
59 The use of the first metal weapons such as the copper cutting axe might have aided the Egyptian unification, refer
to Dudley (1991, p. 55).
60 Refer to Dudley (1991, p. 54-55).
61 Hicks (1969, p. 19-20) refers to ancient Egypt and China as almost perfect imperial orders.
68
With the use of war chariots, nomads gained power over the civilized societies. Nomads with
chariots attacked from around 1700-1500 BC. The invention of war chariots led to the 1640 BC
Hyksos invasion of Egypt. Bronze, bronze weapons, war chariots, composite bow and scale armor
were among the weapons used. In 1531 BC Egypt expelled Hyksos. From here on, there were
more contacts with external influences. Egypt expanded into Nubia and Levant. Though Egypt had
constant contacts with Middle Eastern Mesopotamian powers at this period, neither could conquer
each other. The use of Iron weapons however changed this. Then there was another wave of
attacks by nomads in around 1250-1150 BC. These nomads include the famous “Sea Peoples”.62
Iron weapons were cheaper than bronze weapons and nomads could afford them. That tilted the
overall state building efficiency between civilized settled societies and the nomads in favor of the
latter. The Trojan War immortalized by Homer in The Iliad was one of these raids.63 All ancient
civilization suffered from nomadic invasions and quite a number of them completely collapsed.
From around 1700 BC to 1400 BC, nomadic invasions destroyed Crete and Indus civilizations.
Iron-wielding Hyksos defeated copper-armed Egyptians ca. 1600 BC. In around 1400 BC,
Mycenaen Mycenaen vikings invaded Greece. Then in around 1200 BC, Dorians invaded Greece.
These invasions caused the Greek Dark Age. Nomadic conquests led to Hyksos rule in Egypt and
Kassites rule in Masopotamia.64 In India, Aryan invasions destroyed the Indus civilization which
was never rebuilt.65 In China, nomads chariot warriors conquered the Yellow River valley and
established the Shang dynasty (1525-1028 BC). From around 1000 BC onwards, foreign invasions
were more probable. That began with the Nubian invasion of 712 BC. The Nubians established the
25th dynasty. Then the Assyrians occupied Egypt during 671-651 BC. In 525 BC Achaemenid
Persians conquered Egypt.
The nomads built empires with their war chariots. By the time of the New Kingdom, especially
around the Eighteenth Dynasty, Egypt was submerged into the new Middle Eastern international
system that comprised of Egypt, the Mesopotamia, Persia and Asia Minor. That created the
tri-polar Middle Eastern competitive state system with the Hittites, Assyrians and Egyptians being
the major players. Being incorporated into the Greater Near Eastern state system energized Egypt.
Within this era of competitive states, bureaucracy, law and market prices developed, aiding the
governance of the empires and coordination of effort across hundreds of miles of space.
Infrastructure such as road network, protection for traders and commerce were provided by the
imperial powers. Complex arithmetic calculation appeared for the first time in tablets from this age,
an achievement to be surpassed only a thousand year later.66 This Middle Eastern state system
lasted from 1595 BC to around 700 BC. This competitive state system survived until the arrival of
the Neo-Assyrian Empire, Neo-Babylonian Empire and then the Persian Achaemenid Empire.
62
63
64
65
66
Refer to Sandars (1978).
Refer to Sandars (1978, p. 190-191).
Refer to Stavrianos (1982).
Refer to McNeill (1999, p. 32-35).
Refer to McNeill (1999, p. 35-37, 63-64).
69
CHAPTER FOUR. CLASSICAL PLURALISM
1. MIDDLE EAST
The focus of this chapter is why Middle East Leadership was lost and Greece, India and China
caught up. From the dawn of the first civilization to the establishment of the Achaemenid Persian
Empires, Middle Eastern leadership in human civilization had been unchallenged. That is, from the
dawn of first human civilizations to around 500 BC, Middle East was the most advanced region in
the world. The cultural, economic, political and military superiority produced by the pluralistic
Near East was harnessed first by the Neo-Assyrian Empire, the Neo-Babylonian Empire and then
the Persian Empire to conquer the whole Near East, Egypt and beyond. The neo Assyrian Empire
briefly occupied Egypt, from 671 to 651 BC. So, since around 700 BC, Middle East was under a
universal empire most of the time. First was the Neo-Assyrian Empire. Than came the
Neo-Babylonian Empire.67 In 539 BC, Babylon was conquered by the Persians. The Achaemenid
Persian Empire was the largest of the pan Near Eastern empires. The several old seats of ancient
civilizations in Middle East, the dry arid landscape of Egypt, Mesopotamia, Indus River Valley
were united under the Achaemenid Persian Empire. The empire expanded until reaching its natural
boundaries. Beyond the empire, to the East were the forests of the verdant Ganges river valley of
India, to the West were the Mediterranean Seas and the mountainous maritime geography of
Greece, to the South were the Arabian and Sahara deserts and to the North was the Eurasian
Steppe. The empire reigned from 557 BC to 300 BC.
This era of Pan Middle Eastern empires was from around 700 BC to around 300 BC. The imperial
regimes promoted diffusion and mixing of cultures and ended the isolation of the old civilizations.
Yet, the weight of the empires stalled the developmental momentum of the old seats of first
civilizations. Economy of the region slowly declined. In sharp contrast to the bursts of innovations
of the earlier era of state system, the Greater Near Eastern world could boast of no major advances
during this era of inertia.68 On the other hand, the adjacent areas of mountainous and maritime
Greece, verdant India Ganges valley and South India and far flung and remote China were under
their respective city states and competitive state system. There arose the classical civilizations of
Greece, India and China. Their representative figures were Socrates, Buddha and Confucius.69
These late starter civilizations began to catch up and even surpass the Middle East. The ancient
Middle Eastern Leadership in civilization thereby disappeared. This happened despite the
universal peace and other convenience accorded by the Neo-Assyrian and the Achaemenid Persian
imperial orders.70
2. GREECE
In Greece, city states began to emerge in around 900-800 BC. Around 800 BC also began the main
67 The intervening Neo-Babylonian Empire failed to conquer Egypt but its reign was extremely short, from 604 BC to
562 BC.
68 Refer to Wesson (1967, 1978).
69 Refer to Haywood (1997, p. 22-23).
70 Refer to Stavrianos (1982, Part II).
70
period of Greek expansion overseas. In Greece, the spread of agriculture in harsher terrain was
made possible by the use of iron equipments in production. The use of iron in warfare created the
infantry revolution of around 700-650 BC. That was the rise of phalanx, the heavy infantry legions.
Sparta was the most powerful state in the 6th century. She took the lead in developing the phalanx.
Sparta dominated Peloponesia since around 650 BC. Written law codes were created. The infantry
domination of warfare was from 500 BC to 330 AD, that is, roughly the time when the ancient
Greeks began to unify their city-states and conduct large-scale battles to the dissolution of the
Western Roman Empire. Politics and wars increasingly involved large alliance systems and
empires, testifying to the increase in the economies of scale in warfare. Mounted soldiers played a
relatively minor role in warfare. Tactics at this era took advantage of mass, envelopment and
flanking maneuvers. Large states or empires encompassing huge stretch of settled civilized
societies with their huge population and high level of material wealth were able to field large
number of battle efficient legions. There was therefore a trend towards larger and larger political
organization. Macedonia under King Phillip and Alexander the Great pioneered the use of
combined arms warfare with heavy infantry at the core. They increased the role of the mounted
troops but did not supplant the primacy of the heavy infantry.
There was military revolution in the navy as well. The use of trireme caused the rise of specialized
war fleet. Naval warfare was more expensive and total. The naval revolution also contributed to
the increase in economies of scale in warfare and the consolidation of city states into large
alliances and empires. Athen was the premium Greek naval power.71 These two military
revolutions enabled the Greek city states to defeat the Persian Empire. The Persian chariots were
no match to the densely packed and heavily armored Macedonian phalanxes. These military
revolutions also set in the trend towards larger political organizations. The culmination of this
trend was the Roman Empire.
The polis as a form of political organization signified the maturing of Greek societies for tapping
and mobilizing of resources for increases in scale in warfare, land or sea. Yet, creating a navy,
manning its vessels, and replacing worn-out warships at least every 20 years required the resources
and manpower of much larger communities than Athens, Corinth, or Sparta. Therefore, some form
of pooling of interstate resources was almost essential for any Greek strength on the sea. The
Greek city states had become too small to exploit the greater economies of scale in state building.
The Carthaginian Empire was the first true thalassocracy in ancient times. In 500 BC the
Carthaginians were dominant by sea in the Western Mediterranean and the Persians in Eastern
waters.72
Despite being almost constantly at war, Athens flourished economically in the 5th century. Athens
dominated Eastern Mediterranean and Black Sea trade and owned silver mines. Democracy
continued to be developed. There was an exceptional outburst of cultural confidence and creativity
in Greece as a whole and in Athens especially. Vase-painting, sculpture and drama all reached new
heights. A great public building program, the city, and notably Acropolis were rebuilt and the
71 On the naval revolution and the rise of the monster fleets of the Hellenistic state system, refer to Starr (1989, p.
50-66).
72 Refer to Starr (1989, p. 25-28).
71
classical style of art and architecture matured.73 Then the civil wars among the Greeks came. The
most famous of these was the Peloponnesian War. These series of rivalry among the Greeks and
the completely Hellenized Macedon propelled the Greek achievement in economic, cultural,
political and military arena to new heights.74 Herodotus completed his History in 430 BC. At
around the same time, Pheidias and Polyclitos brought their sculpture arts to new heights,
Democritos developed an atomic theory of matter, Thucydides wrote The History of the
Peloponnesian War, Socrates taught his philosophy, Plato and Aristotle founded their schools, and
so on. Militarily, the Greeks perfected the infantry revolution. The ability of the Greeks to defeat
the Persian Empire testified to the miraculous achievements of the Greek city state system.
Alexander the Great made use of the military supremacy created by the Greek city state system to
conquere the known civilized world.
After the Macedonian conquest of the Persian Empire under Alexander the Great, Greek cultural
influence was spread throughout the classical world. The competitive state system of the
Hellenistic era further propelled the development of the classical era. The Hellenistic Age was
from 336-31 BC. There were great economic and scientific achievements.75 Alexandria, the
capital of Ptolemaic Egypt, became the largest and richest city in the world and even
overshadowed Athens as a cultural center. Around 105 BC, a college of technology was founded at
Alexandria. Science made importance advances. Aristarchos first proposed a heliocentric universe
around 270 BC. Eratosthenes measured the Earth=s circumference around 235 BC. Stavrianos
(1982, p. 184) comments on the relationship between the international political competition and
technological achievements of the classical world: ASignificantly enough, it was only war that
could arouse the classical civilizations from their technological lethargy. The Greeks invented
ingenious ratchet-equipped catapults and wheeled assault towers pulled by block and tackle.
Another first was their so-called AGreek fire@ (8th century A.D.), a petroleum-based incendiary that
set fire to enemy ships and siege machinery.@ These achievements under the Greek city state
system and the Hellenistic state system were known as the Greek Miracle.
The splendid achievements of the classical Greece contrast sharply with the dull performance of
the Carthaginian Empire. The Carthaginian Empire flourished from around 800 BC to 264 BC (the
year of the Firs Punic War). At about 814 BC the Phoenicians established Carthage. From 800-600
BC was the main period of Phoenician and Greek colonization in the Western Mediterranean
region. At around 580 BC the Carthaginian Empire defeated Greek settlers at Lilybaeum (Sicily).
In 539 an Etruscan-Carthaginian force expelled the Greeks from Corsica. The Carthaginian Empire
thereby largely dominated the seas and coastal areas of the Southwestern Mediterranean region
until the Punic wars. Carthaginian Empire comprised of Corsica, Sardinia, Balearic Islands,
Morocco, Algeria, Tunisia, the Western part of Sicily, the Southeastern part of Spain and the
Western part of Libya. Its economic might depended on trade. It established dominance in the
Western Mediterranean in around 600-500 BC.
73 Refer to Haywood (1997, p. 82-83).
74 Refer to Ungern-Sternberg (1998, p. 85-107) and Bernholz (1998, p. 109-114) in Bernholz, Streit and Vaubel ed.
(1998).
75 Refer to Stavrianos (1982, p. 98-102).
72
In the western Mediterranean basin, Carthage reigned supreme. Carthaginian naval mastery in the
western Mediterranean world was unquestioned until the third century B.C.76 The dominant
position enjoyed by Carthage was the cause of its mediocre developmental achievements. Toutain,
in his book The Economic Life of the Ancient World (Economie Antique) (1930) affirms
Carthaginian trading and agricultural achievements but comments that Carthage achieved only
economic success with no political or intellectual or ethical achievements. Given its secure
external environment, the Carthaginian Empire was a loose, superficial network of business and
naval bases, not a centralized territorial maritime state. A comparison between the Carthaginian
Empire and the Athenian Empire reveals that although the Carthaginian Empire ruled much longer
and was more powerful, its achievements paled in front those of the Athenians. Athenians were
driven by the competition from the other Greek city states to excel and achieve. Pericles, in his
famous funeral oration commemorating the Athenian soldiers who had fallen in battle against
Sparta in 431 B.C., exclaimed: Ato sum up: I say that Athens is the school of Hellas......@77 If one
contrasts the geographical sphere of influence of the Greeks and that of the Carthaginians, one
finds that the Carthaginian Empire had about same sphere of influence during Achaemenid Persian
time and the time of first Punic war. Yet, the Greek city states system expanded to almost the
whole classical whole during the Hellenistic Era.
3. INDIA
Ganges and Southern India, unlike the Indus river valley, have high precipitation and were densely
forested. Southern India is mountainous. On a whole, India is more mountainous and more verdant
and forested than China, the Middle East and the Mediterranean regions. The extreme humidity
and heat of the Indian summer deterred conquerors like Alexander the Great, Ghengis Khan and
Timurlane. Pre modern India had many core areas. The largest core areas were in Northern India.
However, given that the mountains in peninsular India runs West to East, even if an imperial
power controlled the Indo-Gangetic Plain, it was still difficult for the regime to control Peninsular
India.78 It was therefore tougher to built an empire in India than in Middle East and China.
However, given the significant share of resources concentrated on the Ganges river valley, empire
building in India was easier than in Europe and Southeast Asia.
Indic civilization emerged circa 1500 BC in the luxuriantly forested Ganges river valley. With the
emergence of city states and state system in Ganges valley and Southern India, came commercial
development, political and cultural reforms, religious reformation and counter-reformation.79
Buddhism emerged. At this time, political and economic center of India has already shifted to the
verdant Ganges River valley from the arid Indus river valley. The first civilization of Indus River
valley was destroyed by Aryans invasions and was never rebuilt.
By 900 BC small tribal kingdoms and aristocratic tribal republics, known collectively as janapadas,
76 Refer to Starr (1989, p. 54).
77 Refer to Jowett (1999, p. 35-46). Buzan and Little (2000, p. 200): “Athens, for example, imposed a single currency
and standardized weights and measures on the other city-states within its empire (Meijer and Van Nijf 1992: 33-51).
78 Refer to Kulke and Rothermund (1998, p. 9-12).
79 Refer to Stavrianos (1982).
73
were developing across the Ganges plain. By 700 BC they had consolidated to form 16
mahajanapadas (Agreat realms@) due to agrarian extension, control of trade routes and a new and
more aggressive type of warfare (partly caused by the use of iron weapons).80. From 540 to 490
BC, Magadha, under its energetic king Bimbisara, had emerged as the most powerful. Hand in
hand with the process of state formation was the growth of cities and great development of
religions. This was the formative period of the Hindu religion, and the late 6th century witnessed
the lives and teachings of Mahavira, the founder of Jainism and of Siddhartha Gautama, the
Buddha. Geographical extension went hand in hand as well. By 500 BC the Gangetic civilization
extended as far south as the River Godavari, covering the whole northern India.81 There was use
of standardized weights and emergence of scholars such as the great linguist, Panini.82
Around BC 500 came the use of war elephants coupled with massive infantry legions. This
development increased the economies of warfare and led to the rise of the Mauryan Empire. Use of
iron in weapons since the 7th century BC and diffusion of knowledge of Persian imperial
administration helped the rise of Magadha. Use of iron increases scale of warfare and led to the
use of large infantry legions and war elephants. Strong fiscal capacity of the state was required. 83
Kulke and Rothermund (1998, p. 56) notes that “Greek and Roman authors report that the Nandas,
who had their capital at Pataliputra when Alexander the Great conquered northwestern India, had a
powerful standing army of 200,000 infantrymen, 20,000 horsemen, 2,000 chariots drawn by four
horses each, and 3,000 elephants. This is the first reference to the large-scale use of elephants in
warfare. Such war elephants remained for a long time the most powerful strategic weapons of
Indian rulers until the Central Asian conquerors of the medieval period introduced the new method
of the large-scale deployment of cavalry.”
The Mauryan universal empire ruled from 322-185 BC. It was a centralized state.84 Ashoka, a
Mauryan Emperor, imposed the Buddhist doctrine of right conduct throughout the empire. That
period also saw the beginning of the Hellenistic Era brought in by the conquest of Alexander.
Mauryan rule however was extremely short, lasted only three generations, from Chandragupta to
son Bindusara to grandson Asoka. The empire collapsed soon after death of Asoka. So, the
developmental drive of pre Mauryan state system was not choked off. The work of Chanakya
Kautilya, the Arthashastra, was the culmination of the art of statecraft of the state system of
Ganges India.
4. CHINA
The recorded history of the Chinese civilization started with the Shang dynasty.85 The Shang
dynasty reigned from around B. C. 1600 to B. C. 1066. It was the first urbanized state culture of
China. The influence of the Shang dynasty was quite limited. It covered only the middle and lower
80 Refer to Kulke and Rothermund (1998, p. 33-49).
81 Refer to Haywood (1997, p. 100-101).
82 Refer to Kulke and Rothermund (1998, p. 50-53).
83 Refer to Kulke and Rothermund (1998, p. 55-57)
84 Refer to Kulke and Rothermund (1998, p. 58-59).
85 The earliest Xia dynasty (B.C. 2100 to B.C. 1600) has not recorded history. What we know about Xia dynasty is
mainly through mythology.
74
stretches of the Yellow River valley. There were many rival states and tribes within its territory
and beyond its border. The Shang dynasty was overthrown by a tribal alliance from the West at
around B. C. 1066. That tribal alliance installed the Zhou dynasty. The territory or sphere of
influence of the Zhou dynasty was only slightly more extensive than that of the Shang dynasty. For
instance, the Kingdom of Chu in the Han River valley did not yield to the authority of the Zhou
dynasty and Zhou was not in a position to do much.86 There were also many independent non
Chinese states or tribes yet to be pacified within the sphere of influence of the Chou dynasty. The
Chinese system was held together more by common culture, blood ties and identity rather than
through political organization or military might. Governance was based on personal, familial or
tribal ties.87 In many parts of China, tribes rather than states were the predominant form of
political organization.
The history of the Zhou dynasty could be divided into two eras: the Western Zhou dynasty (B.C.
1066 to B.C. 771) and the Eastern Zhou dynasty (B.C. 770-B.C. 256). By the time of the Eastern
Zhou dynasty, the growing power of the peripheral vassal states of Zhou has overshadowed the
authority of the central government. The reign of the Eastern Zhou dynasty could be subdivided
into two eras: the Spring and Autumn era and the era of the Contending states. During the Spring
and Autumn Era, military rivalries between the vassal lords became more intense and the authority
of the Chou dynasty dwindled to being close to nothing. This era was also known as the Era of the
Five Hegemons. Warfare became more frequent and of a larger scale. Smaller states were annexed
on a frequent basis. The number of states declined as reorganization occurred to wipe out smaller
and weaker states. At the beginning of the Spring and Autumn era, there were well more than a
hundred principalities. By the Contending States era, there were only about a dozen states. Seven
of them were the major powers. By this time, large scale warfare and centralized states were the
norms. The harmony offered by a common culture and identity of the earlier period had broken
down. Traditional beliefs were questioned. The Hundred Schools of philosophy began to blossom.
During the Era of the Five hegemons and the succeeding Era of the Contending States, China had
her first competitive state system. The era of the first Chinese competitive state system was an era
of great cultural, economic and political achievements. In fact, the foundations of the Chinese
civilization and state were laid down during this era of intensive interstate competition.88
The Era of the Contending States saw a great increase in large scale warfare and the emergence of
larger states and a more centralized form of government with huge professional bureaucracy. The
increase in the economies of scale in warfare was due to the widespread use of iron in warfare and
economy. That led to the rise of massive infantry legions and calvary in place of the chariots of the
early Zhou dynasty. The aristocracy lost their dominance of the military. The military was
professionalized and so was the bureaucracy.89 This period witnessed the further consolidation of
the centralized bureaucratic states which started in the Spring and Autumn Era. Every state
86 The Han River is a tributary of the Yangtze River.
87 That was the ideal that Confucianism referred to.
88 The great achievements of this era confirm the predictions of the theory. Refer to Wesson (1978) for a discussion
of the achievements of this era. We discuss this first competitive state system of Chinese history in some length for it
serves as a good comparison with the European competitive state system. Refer to Hui (2005) for a the comparison.
89 The world famous AThe Art of War@ by Sun Tzu was written during this era. So were myriads other less famous
works on military science. Refer to Sawyer (1993).
75
undertook institutional changes in order to tap and utilize resources they controlled more
efficiently so as to be able to compete in the international arena. The Legalist school of thought
strongly advocated institutional reforms to enhance state capacity. The Legalists taught statecraft
to princes. They strongly supported the centralization of state administration. The basic
institutional structure of the traditional Chinese state was laid down during this era, largely
following the institutional structure of the Kingdom of Chin. The Kingdom of Chin was the
Kingdom of the First Emperor who united China. The Kingdom of Chin rose to supremacy after
Lord Shang, a leading Legalist scholar, overhauled her institutions and made the state of Chin a
powerful, centralized war machine. These institutions include the centralized provincial-county
system which replaced the feudal regime of the early Zhou dynasty, the penal code and the
professional bureaucratic and military organization of the central government.
Intellectual achievements were no less amazing. All the major Chinese philosophic schools of
thought had their origin in this period of great political turmoil and competition. These included
the conservative Confucianism which became official orthodoxy in imperial China, the statist
Legalism teaching of which laid the foundation for the unification of China under the First
Emperor, the pacific Moism and the naturalist Taoism.90 There was such a burgeoning of
intellectual inquiry that Chinese historians refer to the intellectual achievements of this era as the
hundred schools of philosophy. Scholars traveled freely over all China to sell their ideas.91
Another piece of evidence testifying to the vigor of this era was the energetic expansion of the
Chinese sphere of influence geographically. Almost all of the traditional areas occupied by the
Han Chinese were explored and conquered during this era. The Southern part of the Manchurian
plain was conquered by the Kingdom of Yan. The Kingdom of Zhao pushed back the nomadic
Huns and annexed Inner Mongolia. The Kingdom of Chu extended its administration all the way to
the Canton area and the Yun Nan province of present China. The Kingdom of Chin acquired the
Gan Su and Sze Chuan provinces. The boundary of the traditional Chinese state was almost
established by then. Later periods saw only marginal expansions.
Economic achievements were startling. The era saw a huge volume of inter state commerce. The
merchant class achieved a high social status never to be repeated in later history. Urbanization
advanced to a very high degree. There were a dozen cities with populations in the hundreds of
thousands. The merchant class enjoyed high social prestige and many of the merchants turned
statesmen.92 There was mercantilist thinking and economic inquiry. The most famous of these
were the works of Guan Tzu and Lu Bu Wei.93 Intense interstate rivalry during this era prompted
the states to undertake reforms to advance their economy and to strengthen the state capacity.94 A
90 Refer to Bodde and Fung (1983) and Fung (1966).
91 Cultural achievements and exchanges laid the foundation for the unification of the writing system by the Legalist
Prime Minister Li Suu under the first Emperor.
92 Refer to Wesson (1978, p. 44-45) for the social status of merchant class in Chin during the Era of the Contending
States.
93 Guan Tzu, or Guan Zhong was a merchant who entered politics to become the Prime Minister of Duke Huan of the
Dukedom of Chi. This was during the Spring and Autumn Era. Lu was a merchant who entered politics to become the
Prime Minister in the Kingdom of Chin. This was during the Era of the Contending States.
94 Many of the philosophic schools taught measures to enhance state strength. The Legalist school especially has this
76
good indicator of the economic might and state capacity of the era was the length and scale of wars
conducted. It was common for participating states to mobilize hundreds of thousands of soldiers or
even close to a million troops and fight over extensive spaces for months or even years. This could
not have happened without a very high degree of economic achievement and fiscal strength.95
To sum up, during this era, from around 1000 BC to 200 BC, the ancient Middle Eastern
civilizations was under the imperial regimes of Neo Assyrians and Achaemenid Persians most of
the time. That sapped their developmental drives. In contrast, the state system of Greece, India and
China propelled their civilizations ahead and created the splendid classical achievements and
thereby ended the ancient Near Eastern leadership in civilization.
as its professed objective and advocated draconian measures that will increase the economic, fiscal and military
strength of the state. Refer to Bodde and Fung (1983) and Fung (1966).
95 In contrast, the first war of such scale in the Western world was the American civil war. Refer to McNeill (1982).
77
CHAPTER FIVE. INDIAN CLASSICAL GOLDEN AGE
1. THE CLASSICAL UNIVERSAL EMPIRES
The rise of the heavy infantry during the classical era led to greater economies of scale in warfare.
As a result, the Mediterranean world entered into the imperial order of the Roman Empire. In
China, the Chin and Han dynasty established a lasting and stable imperial order. In Persia, the
imperial regime was first the Parthian then the Sassanid Empire. All these imperial orders survived
for centuries. Stagnation and decline resulted. The Mediterranean, Persian and Chinese imperial
orders survived for four or five centuries or more, but the Indian Mauryan empire, powerful and
gigantic though it was, lasted only about a century and a half. Then political fragmentation
returned to India.
In the Mediterranean world, the rough balance of power between the three Hellenistic states of
Macedonia, Ptolemaic Egypt and Seleucid Syria was maintained for approximately a century.
Roman conquests proceeded fast after 200 BC. Roman navy and infantry dominated the
Mediterranean basin. The agricultural Rome, with its greater pool of manpower and heavy infantry
legions, outlasted the trading power Carthage with its mercenary military. After the conquest of
the Carthaginian Empire, Rome proceeded to conquer the whole Mediterranean world and beyond.
The continuing conquest stopped only by AD 117. The republican form of government ended in 48
BC when Caesar defeated Pompey. The empire=s commercial classes remained small and enjoyed
neither the wealth nor the status of the landowning aristocracy. Most production in the empire was
small scale and under-capitalized. There was a surprising lack of technological innovation in the
empire. There was reduction of trade, regionalization of economic activities, growing number of
deserted lands, decline of towns and cities.96 In late Roman Empire, the expensive navy was
neglected and allowed to decline and as a result, trade suffered.97 The only Roman achievement
above the Greek’s was the refinement of law. Due to massive economic mismanagement,
repression of commerce, decline of trade, the empire disintegrated into autarchic units, ultimately
resulted in political decentralization.
In Middle East and Central Asia which was once part of the Hellenistic state system, a revived
Persia dominated the scene. From BC 250-AD 226 it was the Parthian Empire. Then from the third
to seventh century the Sassanid Empire with its heavy cavalry was the imperial power. In China,
the imperial power was the Chin-Han Empire. As in the Roman Empire, the establishment of these
imperial orders reduced the relativist concern and sapped the developmental drives.
The unifier for the Chinese competitive state system was First Emperor, Yin Zheng, King of Chin.
The year was B. C. 221. Though the Chin dynasty was soon overthrown due to its repressive
policies, China became a stable imperial order for the next four to five centuries and the vigor and
achievements of the pre-Chin competitive state system soon disappeared and were never
96 The Eastern part of the empire which was in constant competition with Sassanid Empire survived due to
institutional competition with Persia. Refer to Leppin (1998, p. 249-262) in Bernholz, Streit and Vaubel ed. (1998).
97 Refer to Starr (1989, p. 72, 117) on the economic decline of the Roman Empire.
78
repeated.98 This stable imperial stable order of China reigned from B. C. 221 to around A. D. 220.
This period mainly saw the reign of the Han dynasty. The Han dynasty was divided into the
Western Han dynasty and the Eastern Han dynasty. The core area of the first stable imperial order
was the Northern Plain centered along the middle and lower stretches of the Yellow river. This
core area had about two thirds of the total population. The agriculture and economy of the
Northern Plain formed the economic foundation of the first stable imperial order of China. The
Chin-Han imperial order relied upon the infantry legions supported by this economy to hold the
empire together and kept at bay the nomads and barbarians at the outer periphery. The unified
writing system facilitated the bureaucratic administration of the empire.
Compared with the vigor of the preceding competitive state system, the Han dynasty was
characterized by stagnation and decline. During Han China, the government deliberately repressed
commerce. Economic growth was sacrificed for the sake of political stability.99 The merchant
class suffered brutal loss in status and professional autonomy due to official policies. The economy
suffered as a result. The military capability of the Han Dynasty also declined from that of the Era
of the Contending States. One of the seven Contending States, the Kingdom of Zhao, effectively
repulsed the encroachment of the Huns and conquered large tracts of territory in Inner Mongolia
from the Huns. Yet, it took the Han Dynasty Chinese Empire seven decades of preparation to
successfully deal with the Huns after suffering much humiliation.100
On the cultural front, the Han Dynasty produced few great literary works to boast off. The poetry
of the Han Dynasty was merely second rated imitations of those produced during the Era of the
Contending States. The policy of Emperor Wu to elevate the position of Confucianism to official
orthodoxy suffocated philosophic and political intellectual development.101 Chinese minds of
this era turned away from philosophic and intellectual explorations to superstition. Confucian
orthodoxy also meant a small and non interventionist government and reliance on moral teachings
instead of law enforcement to ensure smoothing functioning of society and economy.
Confucianism discourages innovation, independent thinking as well as manual work or business
dealings.102
Except during the reign of Emperor Wu Ti, the ambitious sovereign who pursued a policy of
actively pursuing and destroying the Huns, Han Empire had a small and non intrusive government
according the teaching of Taoism in the earliest period and the teaching of Confucianism in later
period. Simple and self sufficient agrarian society was the official ideal. Han Confucian scholars,
for instance, severely accused Lord Shang for the commercialization of land.103 Government
98 A lot of knowledge and cultural heritage was lost in the wars and the internal security effort of Chin and Han
dynasties. We therefore probably have an under appreciation of the vigor of the first Chinese competitive state system.
99 Refer to Wesson (1967, 1978), Huang (1988) and Hui (2000).
100 The Huns threat was mainly border incursions that did not threaten the survival of the Han dynasty.
101 The First Emperor enshrined the orthodox teachings of Legalism by burning books of the other schools of thought
and burying alive the Confucian literati. The Han dynasty resorted to more subtle measures to elevate Confucianism to
orthodoxy.
102 Refer to Wesson (1967, p. 99) for an economic contrast between the Era of the Contending States and the Han
Dynasty. Stavrianos (1982, p. 148) observes that Han dynasty had a small and non-service government.
103 Refer to Raaflaub and Rosentein (1999, p. 39, footnote 83).
79
refrained from intervention in the economy, including the provision of much needed public
intermediate inputs. As a result, commerce declined and the economy deteriorated, especially the
urban economy. Han dynasty cities were smaller than their predecessors of the Contending States
era.104
2. THE INDIAN STATE SYSTEM
India was the exception. Economically the verdant Ganges River Valley and Mountainous South
was more important than the arid Indus valley. The great variations in terrain posed problems for a
heavy infantry empire. The first pan Indian was the Mauryan Empire. Its consolidation was partly
due to the advantage gained from borrowing of political know how by Chandragupta Maurya from
the Macedonian invaders. It however lasted effectively only for three generations. Chandragupta
instituted a strong central administration. The philosophy of the Mauryan Empire is enshrined in
the teaching of Arthashastra by Kautilya. The Mauryan Empire came earlier and ended earlier than
the imperial orders of China and the Mediterranean world. At about the time that the imperial
orders began to establish themselves in China, Mediterranean world and Persia, the Mauryan
Empire broke down into a state system of three major powers with compact and centralized
structure: the Kushan Empire in the Northwest, the Shunga Empire in the Northeast and the
Andras Empire in the South. From around BC 200 to AD 300, there was a competitive state
system in India. The political-military competition generated by the state system propelled the
Indian civilization to the pinnacle of its classical golden age. This period also saw the Indian
colonization of Southeast Asia.
In Southeast Asia, beginning about the Christian era, there was a massive acceptance of Indian
culture.105 Hindu states and empires established in Southeast Asia included the Majapahit of Java
and the Khmer of Indochina. The period from ca BC 184-AD 320 and the subsequent Gupta Era
were times of political fragmentation and economic and cultural enrichment and splendors.
International trade prospered. There was extensive trade to the West, to Southeast Asia, to China
and to Central Asia. Indian cultural influence spread far abroad. Buddhism was established in
Southeast Asia, Central Asia and East Asia. In art, after centuries of Hellenistic influence, there
emerged an indigenous Indian style. There was also the compilation of the authoritative Hindu
Law Books (Manava Dharmashastra), the foremost of them being the Code of Manu. Sanskrit had
a strong resurgence.106
From fall of Mauryan Empire to the establishment of Gupta Empire, waves of nomads entered
India. This was the harbinger of the medieval era. The Gupta Empire was in fact the last of the
classical empires and the first of the medieval empires. The Gupta Empire effectively governed
Northern India from 375-475 AD. The state system however did not come to an end when the
Gupta Empire was established. The Gupta Empire was largely confined to Northern India and was
more decentralized than the Mauryan Empire. It lasted from 320 AD to 720 AD. Established in the
ending phase of the infantry domination era, it relied more on its cavalry. The Gupta Empire was
104 This has been demonstrated by archaeologists. Refer to Raaflaub and Rosenstein (1999, p. 38, footnote 78).
105 Refer to McNeill (1999, p. 274).
106 Refer Kulke and Rothermund (1998, p. 79-81).
80
more the dominant power in a state system rather than an unchallenged imperial order. It is
constantly under threat from the nomads from the Northwest and the rivaling Southern Indian
states. Inertia therefore has a lesser chance to set in. Great developmental achievements
continued.107 During this era, Sanskrit learning was revived to serve as a lingua franca. Sanskrit
literature flourished. The two great epic poems of India, Mahabharata and Ramayana achieved
their final form during this era. The decimal place system of numerical notation, one of the great
inventions of the human mind, emerged in India by A.D. 270. During 200-300 AD, Hindu laws
were codified. India culture spread abroad, especially to Southeast Asia. A greater India emerged.
Local states in Burma, Sumatra, Java, Malaya, Siam and Vietnam eagerly imported as much of
Indian civilization as they could. The imprint of Indian culture upon these societies has lasted until
our own time. To the North East Asia, Buddhism, with its accompanying art forms, flowed like a
mighty torrent into China, Korea and Japan between AD 200 and AD 600.108
There were great advances in science and arts. In the second century, Charaka compiled the oldest
surviving Indian medical textbook, Charaka Samhita. The great linguist, Panini, brilliantly
analyzed the physiology and morphology of the Sanskrit language in his “Eight Chapters”
(Ashtadyayi). Patanjali’s “Great Commentary” (Mahabhashya) on that master book was written in
the second B. C. The Sanskrit was therefore the first language to be scientifically analyzed.
Southern India was on the rise during this period, politically, economically and culturally. The
Southern India power of Chola Empire was a thriving trading state. Its navy was the mightiest in
the Indian Ocean. It conquered the Maldives and defeated the fleet of Sri Vijaya, the great
maritime empire of Southeast Asia that spanned Malaysia and Indonesia.109
Yet, the cavalry revolution changed all these. The rise of cavalry from AD 200 to AD 500 reduced
the economies of scale in warfare. After AD 500, the decrease in the economies of scale in warfare
did two things to the Indian civilization. First was the collapse of the major state of Gupta Empire.
Second was a dampening of the competition between states in the India subcontinent.
Development drive was lowered. This trend towards political fragmentation afflicted all major
civilizations. The medieval era had dawned.
107 Refer to Stavrianos (1982, p. 134-137).
108 Refer to McNeill (1999, p. 180-193).
109 Refer to Wolpert (2004, p. 68-113).
81
CHAPTER SIX. ABBASID GOLDEN AGE AND SUNG PUZZLE
1. THE COLLAPSE OF CLASSICAL EMPIRES
Nomadic invasions led to the collapse or retreat of the classical universal empires around A.D.
300-600. Technological changes that decrease the returns to scale in warfare due to the increase in
the power of the cavalry affected the major civilizations of the old world more or less
simultaneously. The infantry legions which the universal empires of the classical agrarian world
relied upon lost their advantage in battle against the nomads on horseback. The nomadic hordes
advanced at the expense of the settled societies. The aftermath was political fragmentation and
decentralization.110 The decline of the Roman Empire, Sasanid Empire of Persia, Gupta Empire
of India, and Chinese Han Empire happened more or less simultaneously.111 The invasions came
from many sources: Asiatic nomads from the steppe, Arabian tribes from the desert, Germanic
tribes, Normans and Vikings. Massive empires collapsed into smaller kingdoms which in turn
dissolved into smaller principalities.
The changes in military technology were the invention of the composite bow and stir-up and the
breeding of bigger and more powerful horses. These changes led to a decrease in the economies of
scale in conflict and the ascendancy of the cavalry over the infantry. Cavalry warfare was horse
intensive and has less need of manpower. Fiscal capacity of the state became less important.
Pastures were the critical resources that support the military. Centralized states gave way to
feudalism. Classical empires lost their strategic advantage against the nomads and retreated or
dissolved.112 The aftermath was myriads of smaller kingdoms or unstable imperial orders that
came and went as charismatic or extraordinary leaders entered or exited the historical scene.
Replacing the infantry legions, localized heavy cavalry had been the core of the Persian defense
forces since the Sasanid Empire, given the need to meet the threat from the steppe nomads. Persia
therefore had decentralized her public administrative. The Byzantine Empire partly emulated the
Persian defense system. Feudalism developed. Yet, even this could not defend the Sassanid Persia
from onslaught from another group of nomads, the Islamic Empire of the Arabs.113 The decrease
in the economies of scale in warfare led to decentralization and retrench of government of
Byzantium in the 7th century.114
The core area of the Roman Empire was the Mediterranean Sea Basin. The Roman Empire held
110 Refer to Dudley (1990, 1991, 1992), Keegan (1993) and McNeill (1982) for historical details. Refer to Hirshleifer
(1995) for a formal treatment. Note that the ancient empires collapsed for two reasons: a loss in their relative state
building efficiency against the nomads and a decline in the economies of scale in state building. The decline in the
economies of scale in state building acted against the ancient empires for they controlled the bulk of the economic
resources and military capability.
111 Refer to Keegan (1993) and Dudley (1991, 1992) for details.
112 Refer to Dudley (1990, 1991, 1992) and Keegan (1993) for details. Proposition 1 to 4 of the appendix apply here.
The ratio of military capability had turned against the agrarian ancient empires for two reasons. One was the decline in
the mass factor. The ancient agrarian empires had much more resources at their disposal than the steppe people. A
decline in the mass factor reduced their strategic advantage. The other was the greater military efficiency of the steppe
peoples. The classical agrarian empires therefore retreated or dissolved.
113 Refer to McNeill (1999, p.194-209).
114 Refer to Treadgold (2001, ch. 4).
82
together the many coastal regions of the Mediterranean Sea by its navy and infantry legions. With
the rise of the cavalry and the decline of the infantry in warfare, it became impossible or at the
very least very difficult to hold together the European north western coastal regions and the
Asian-African south eastern coastal regions of the Mediterranean world under one empire. The
Roman system dissolved into two parts: the Western Roman Empire and the Eastern Roman
Empire or the Byzantine Empire. The Western Roman Empire collapsed totally under waves of
nomadic assaults. The Byzantine Empire, despite the heroic effort of Emperor Justinian, retreated
under repeated nomadic invasions. The deteriorating military environment prompted increased
efforts on the part of the retreating empires to compensate for their declining strategic superiority
versus the barbarians. In around 600 to 700 AD, Byzantine and Sasanid Persia increased
developmental efforts. Alexandria’s New Aristotelean Academy and Sassanid Persia’s Jundishapur
were famous Hellenistic learning center.115
Under the onslaught from the nomadic tribes, the major settled civilizations retreated to the
mountainous and maritime regions of the classical empires. These included the Southern dynasties
of China from A.D. 420 to A.D. 589 and the Sung Dynasty, the Hindu Southern Indian states that
confronted the Muslim powers of the Indo-Gangetic Plain, the Byzantium Empire and the Italian
city states that controlled much of the Mediterranean trade.116 They retained for a long time the
regions where the military superiority of the cavalry was limited or annulled by geography. These
maritime states under threat strived to acquire security through greater economic might. They
prospered until the arrival of the gunpowder era. For instance, the Greek Christians in the
Byzantine Empire launched a vigorous Hellenic renaissance before succumbing to the Ottoman
Turks.117 The Turkish conquest of 1453 abruptly ended this resurgence but the echoes of the
Hellenic renaissance were felt in Italy. The Byzantine resurgence was a significant stimulant to the
Italian renaissance.118
The medieval era refers to the period from the collapse of the classical universal empires to the
gunpowder military revolution that kicked started the modern era, that is, around A. D. 300 to A.
D. 1300. Given the low level of economies of scale in conflict, state systems rather than imperial
orders were the norms for the major cultures in Eurasia. In Europe, the short reign of limited
unification under the Charlemagne Empire was from A. D. 768 to around A. D. 850. In Middle
East, the new born Islamic Empire was united under the Omayyad Caliphate for a brief period of
about a hundred years, from around A. D. 661 to A. D. 750. In India, after the collapse of the
Gupta Empire in the fifth and sixth century, political unification had not returned until the arrival
of the Delhi Sultanate which briefly unified Northern India in the thirteenth century. In China, the
Tang Dynasty brought a short-lived unification from A. D. 618 to A. D. 755.
115 Refer to Goldschmidt (2002, ch.8, p. 136).
116 In India, the Deccan Highland served as the natural barrier to the power of the nomadic cavalry. As a response to
the supremacy of cavalry warfare, the Byzantine armies increased the use of cavalry and looked very much the same as
the Arab armies. Refer to Raaflaub and Rosenstein (1999, p. 245).
117 Treadgold (2001, p. 239) comments: “Byzantium was a modern state before its time.” This comment agrees with
the observation by Jones (1988) that Sung China had a centralized service state that was not to be recreated in Ming
and Ching dynasties. The same observations hold for the Southern Indian states of Chola and Vijayanaga. Refer to
Treadgold (2001, ch. 5 and 6) for the recovery and renaissance of Byzantium.
118 Refer to McNeill (1999, p. 250-251).
83
The unstable and short lived imperial orders of the medieval age were unlike the stable imperial
orders of the ancient world. Nor were they similar to the stable imperial orders of the gun powder
empires. These medieval unstable imperial orders were insecure and decentralized. Therefore, they
were not as entrenched and complacent as the classical empires or the gunpowder empires. Their
reigns were not long enough to choke off developmental momentum generated by the interstate
rivalry of the state systems. On the other hand, given the low economies of scale in state building,
the international political-military competitions were less intense. All major regions developed and
there were no spectacular regional differences.119
An manifestation of the medieval energy and creativity was the expansions of the various
civilizations. Europe expanded to Northern and Eastern Europe.120 Islam expanded into Sub
Saharan Africa (after 1000 AD) and Eastern Africa, India, Central Asia and Europe. After 1200
AD, Islam spread to Southeast Asia.121 China expanded into Yunnan, Manchuria, Southern
Siberia, Central Asia, Taiwan, Ryukyu Islands and spread its cultural influence into Japan.
Southern India Hindu states expanded into Southeast Asia. Sassanian Persian Empire expanded
into central Asian and conquered Yemen (574 AD).122 We will survey each major culture in turn.
2. THE ISLAMIC WORLD
The conquest of the nomads brought in a new major player in the Eurasian world of civilizations.
This new entrant in this developmental game was the Islamic world. The Arabian conquest wiped
out Sasanid Persia and wrested from Byzantine the wealthy provinces of Egypt, Syria and Levant.
From around A. D. 661 to A. D. 750, the Omayyad Caliphate conquered and unified the Iberian
Peninsular, Northern Africa, Middle East and Central Asia under one faith. The Southern and
Eastern coastal regions of the Mediterranean world were from now on permanently separated from
the Western world. Yet the unified Islamic empire did not hold for long.123 After the Omayyad
Caliphate, Islamic unity began to break down. The Islamic world under the succeeding Abbasid
Caliphate operated under a state system. The greatest Islamic development achievements were the
products of the era of contending states of the Abbasid Caliphate (A.D. 750 to A.D. 1258).124
The Abbasid Caliphate relied on Turkish slave soldiers for its defense and regime maintenance. On
the international scene it still has to contend with the Byzantine Empire. The Abbasid caliphate
failed to unite the whole Islamic world. Egypt was autonomous. So were the Aghlabids of Tunisia
and Algeria. The Umyaad Caliphate of Spain was independent. So were the Persian dynasties of
Tahirids and Saffarids. There was therefore a state system in early and mid medieval era in the
119 Refer to Abu-Lughod (1989) for the economic performance of the major cultures in the late medieval era.
120 Refer to McNeill (1999, ch. 14 and16).
121 McNeill (1999, p. 277) observes AIn East Africa, the effort required to resist Islamic assault actually generated
something of a Agolden age= in Abyssinia=s cultural history ......@
122 Refer to Haywood (1997, p. 32-33).
123 The was a low level of economies of scale in state building throughout the Eurasia during the medieval era.
124 Refer to Ruthven (2004) for the geopolitical landscape of the Islamic world in history.
84
Eastern Mediterranean world and Middle East-Persia region.125 In mid and late medieval era
came the Turkish empires of Ghaznavids and Seljuks. In 909 AD the Fatimids Dynasty was
established in Tunisia and Egypt. Not much later the Ayyubid dynasty was installed in Egypt and
Syria. So was the Egyptian Mamluke dynasty, the Buyid Dnyasty (from AD 945) in Iraq, the
Qarmatians in Bahrain, the Samanids in Eastern Persia and the Hamdanids in Northern Iraq. There
were many small kingdoms in Middle East and Northern Africa. The state system was maintained
until the Mongol invasion and the gunpowder revolution. This was a period of contests and wars,
but also a period of dynamism and energy.126
Politically, culturally and economically, there were many achievements under the Abbasid
Caliphate, including the contending states set up by the Seljuk Turks.127 This period experienced
the Arab agricultural revolution with the widespread diffusion of new crops and the promotion of
new or the rehabilitation of old irrigation systems.128 Trade was thriving. Arabian traders were at
the center of the global trading network. Arabian and Islamic trading communities were
everywhere in Eurasia: Europe, Central Asia, India, Southeast Asia and China. Islamic merchants
pioneered many innovations in business organization and finance. Capital was pooled through
partnerships. Letters of credit and promissory notes facilitated long distance trade.129 Politically,
this period saw many outstanding statesmen and administrators. For instance, the Persian
Nizam-al-Mulk, was one of the greatest statesmen of medieval Islam.130 Besides being a great
administrator, he was an accomplished stylist. His book on statecraft, Siyasat-Namah, was a
valuable source for the political thought of the time. In it he stressed the responsibilities of the
ruler. For example, he argued that if a man is killed because a bridge is in disrepair, it is the fault
of the ruler. The ruler should make it his business to appraise himself of the smallest negligence of
his underlings. Nizam-al-Mulk was a devout and orthodox Muslim. He established a system of
madrasahs or theological seminaries (called nizamiyah after the first element of his name) to
provide students with free education in the religious sciences of Islam as well as in the most
advanced scientific and philosophical thought of the time. Many great scholars thought in these
seminaries. For instance, the famous theologian al-Ghazali whose greatest work, the Revival of the
Sciences of Religion, was a triumph of Sunni theology taught for a time at the nizamiyah schools
at Baghdad and at Nishapur. Nizam-al-Mulk was the patron of the poet and astronomer Umar
al-Khayyam (Omar Khayyam). The verses of Umar al-Khayyam, as translated by Edward
FitzGerald in the nineteenth century, have become as familiar to the English readers as the
125 Refer to Goldschmidt (2002, chapter 6).
126 Refer to Goldschmidt (2002, chapter 7).
127 Although individual Turkish generals had already gained considerable, and at times decisive, power in
Mesopotamia and Egypt during the tenth and eleventh centuries, the coming of the Seljuks signaled the first
large-scale penetration of the Turkish elements into the Middle East. Descended from a tribal chief named Seljuk,
whose homeland laid beyond the Oxus River near the Aral Sea, the Seljuks not only developed a highly effective
fighting force but also, through their close contacts with Persian court life in Khorasan and Transoxania, attracted a
body of able administrators. Extending from Central Asia to the Byzantine marches in Asia Minor, the Seljuk state
under its first three sultans-Tughril Beg, Alp-Arslan, and Malikshah- established a highly cohesive,
well-administered Sunni state under the nominal authority of the Abbasid caliphs at Baghdad.
128 Refer to Watson (1974).
129 Refer to Abu-Lughod (1989) and Cahen (1970, p. 511-38) in Holt, Lambton and Lewis ed. (1970).
130 For twenty years, especially during the rule of Sultan Malikshah, he was the true ustodian of the Seljuk state.
85
Shakespearian sonnets.131
Scientific achievements were also noteworthy.132 In Baghdad, there was Ma Meng Capiphate’s
Bayt.al-Hikmah, a great learning center. There were great Islamic achievements in mathematics
and science, especially in astronomy. The period saw manufactured astrolabes and building of
planetarium. Islamic scientists knew that earth is round and orbits around the sun earlier than
Copernica or Galileo. In history Ibn Khaldun produced his great work Muqadimah. In medicine
there was the well known Vesalius.133 Ibn-Sina (Avicenna, d. 1037) wrote a widely used Canon
of medicine. 134 Important advances were made in mathematics. The greatest Islamic
mathematician was Muhammad ibn Musa (780-850). He wrote on the Hindu numeral system and
popularized it such that we came to know it as the Arabic numeral system. A textbook on algebra
compiled by him was used in both East and West for centuries. Besides, he also formulated the
oldest trigonometrical tables known and collaborated with other scholars in preparing an
encyclopedia of geography. There were also advances in medicine and chemistry. Sophisticated
laboratory techniques for handling drugs, salts and precious metals were developed. 135
Economically, there was intensive growth and a high level of urbanization and trade.136
Collectively these achievements were known as the Abbasid Golden Age.
The Indian subcontinent fell into political fragmentation after the collapse of the Gupta Empire.
Nomads, including the Huns, invaded North India in early 6th century.137 The succeeding Harsha
Empire ruled over only parts of Northern India. As a whole, the subcontinent operated under a
state system until unification under the Delhi Sultanate in around 1200 AD.138 With the decrease
in economies of scale in warfare given the rise of cavalry, the Indian subcontinent state system
became less competitive. Given the multiple core areas of India, interregional warfare was mostly
aimed at the control of intermediate regions or simply at the acquisition of goods. A rough balance
of power was maintained. Rulers were unable to extend their control beyond their respective
regions. Their military equipment, their administrative machinery and their strategic concepts were
about the same. On the whole, developmental achievements were not behind the Arabian or the
Chinese system. The establishment of Islamic states in Northern India put considerable pressure on
the Hindu states in Southern India. Under such competition, there was considerable developmental
effort. The Southern Hindu of Chola Empire and Vijayanagar Empire, for instance, were well
131 Refer to Wesson (1978, p. 93-95), Abu-Lughod (1989), Armstrong (2000, p. 45-81) and Sonn (2004, chapter 2)
on the fragmentation, decentralization and political competition of the Abbasid Caliphate and the achievements of the
Abbasid Golden Age. Refer to Bernholz (2004, p. 184 to 193) in Bernholze and Vaubel ed. (2004) for the relationship
between intense political and military competition, splendid cultural achievements and a high level of economic
prosperity in Islamic Spain.
132 Refer to Huff (1998, p. 204-210) in Benholz and Vaubel ed. (2004). Byzantine also had a renaissance during mid
medieval era due to the political competition with the Islamic world..
133
134
135
136
137
138
Refer to Goldschmidt (2002, ch. 8).
McNeill (1999, p. 246).
Refer to Stavrianos (1982, p. 23-235) and McNeill (1999, p. 219-220).
Refer to Jones (1988).
Refer to Kulke and Rothermund (1998, p. 89-91).
The Delhi Sultanate managed to extend rule over practically all Northern India for a brief period.
86
known for their busy and extensive external maritime trade, powerful army and navy as well as a
high level of prosperity.139 There was also strong Indian influence in Southeast Asia during this
era.140 This period produced Bana, one of the greatest Sanskrit writers.141 The Southern Indian
power of Cholas conquered Sri Lanka and sent troops and fleets to the Ganges and to Indonesia,
Malaya and Maldives. There was economic growth, extensive trade and spread of Indian influence.
Great merchants of South India played a central role in international trade.142
3. EUROPE
With the rise of Islam, Christianity retained only the European north western coastal regions of the
Mediterranean world. The loss of North Africa and Middle East and the addition of Northern
Europe mean that the Christian Europe, unlike the Roman Empire, had no single dominant core
area. Christian Europe therefore has more fragmented geographically then China, India and
Middle East. Having lost the bulk of the Mediterranean world, the old seat of the Western
civilization, to the Islamic world, the West had to play a catch up game with the other major
cultures in the medieval era. The loss of the North African and Middle Eastern land to the Islamic
world caused the core area of the ancient Western world, the Mediterranean basin, to decline in
importance relative to the marginal land of Northern and Western Europe. The population of
Northern Europe overtook that of the Christian Mediterranean world at about AD. 800. The
geopolitical configurations of the Western world changed from that of a single dominant core area
centered on the Mediterranean basin into one with multiple core areas in Northern and Western
Europe. Medieval Europe had two universal imperial powers: that of the Holy Roman Empire and
the Papacy. Yet by the late medieval era, the rise of the power of the national states began to
encroach upon these imperial forces. The reign of the Charlemagne Empire was too short. The rule
of the Holy Roman Empire was too decentralized.143 The Western World thereby developed into
a state system.
The Italian peninsular, which inherited more of the ancient Roman heritage and was also closer to
the Near East, was the forerunner in development in the Western world. Northern Italy was the
most compact part of Europe that was shielded from the imperial power of the Holy Roman
Empire. The geographical barrier imposed by the Alps and the prestige and power of the Papacy
neutralized the imperial power of the Holy Roman Empire in Italy and allowed the existence of an
independent state system. The rivalry between the Holy Roman Empire and the Papacy gave the
city states of Italy much de facto sovereignty. The Holy Roman Empire and the Papacy, as well as
the Alps, in turn shielded Italy from the other great powers. That was the basis of the mini city
139 The Vijayanagar Empire reigned from A. D. 1336 to A. D. 1565 A. D. It had a powerful navy and dispatched
naval expeditions to Southeast Asia. Its predecessor, the maritime South Indian Chola Empire was also a thriving
trading empire and sent naval expeditions to the Southeast Asia too.
140 Refer to (Haywood, p. 30-33).
141 Refer to Kulke and Rothermund (1998, p. 103-107).
142 Refer to Kulke and Rothermund (1998, p. 109, 115-151).
143 Many historians described it as neither holy nor an empire.
87
state system of Italy.144 The compactness of the Northern Italian plain meant that even with
medieval military technology, warfare and military contests between constituent political units
were quite decisive.
The Italian city states engaged in intense rivalry against each other as well as against external
powers. The commercial and naval rivalry between Venice and Genoa was famous. The
Mediterranean Sea was dominated by the navies of Venice and Genoa.145 For instance, in the
fifteenth century, Venice had some three thousand ships. She was one of the great powers of
Europe. The Venetian navy was the chief bulwark of Europe against the Turkish powers in the
Mediterranean. Venice was powerful. For instance, in 1508, she managed to fight fairly
successfully against a league of the pope, the emperor, France, Spain, and some minor powers.
These city states achieved amazing level of prosperity besides being very productive culturally.
Despite constant wars between the city states, Italy was the richest spot in Europe. The revenues of
Florence in the fourteenth century were surpassed only by those of the king of France. It has been
claimed that the cities of northern and central Italy alone possessed more wealth than the rest of
the European continent together. 146 These city states bestowed upon the later world the
institutional innovations such as the civilian control of the military, marine premium insurance
(which began in Genoa in c. 1350 AD) and the double entry accounting system (which they learnt
from the Arabians).147 Of course, it is their cultural achievements that are best known to us. That
was the Renaissance, the revival of learning. Therefore, the European competitive state system as
well as the European Miracle started in Northern Italy.148 Such was the vigor generated by the
competitive rivalry of the city states of Italy.
4. EAST ASIA
The reign of the Han dynasty ended around A. D. 220. It was replaced by the Period of the Three
Kingdoms (A.D. 220 to A.D. 280). The Jin dynasty unified China in A. D. 280. The Jin dynasty
however could not hold Northern China from the nomads for long. Under incessant assaults from
the nomads, it retreated to Southern China in A. D. 317.149 Until around A. D. 581, there was a
series of five dynasties in Southern China: Jin (A.D. 317 to A.D. 420) Sung (A.D. 420 to A.D.
479), Chi (A.D. 479 to A.D. 502), Liang (A.D. 502 to A.D. 557) and Chen (A.D. 557 to A.D. 589).
144 This were also mini city states systems elsewhere, such as in the Southern part of France. These other mini city
states systems were later submerged under the nation states and they did not last as long as the Italian city states system.
Refer to Wesson (1978).
145 Refer to Wesson (1978, p. 159).
146 Refer to Wesson (1978, p. 158).
147 Refer to McNeill (1982) and Haywood (1997, p. 170).
148 The relationship between Renaissance Italy and the European state system was analogous to the relationship
between the city state system of classical Greek and the Hellenistic world. A mini state system ushered in a larger state
system which was its intellectual successor.
149 This had to do with the rise of the cavalry and nomads militarily and the resulting low level of economies of scale
in state building.
88
After the Jin dynasty had retreated to the South, Northern China plunged into complete chaos for
almost a century or more. Nomadic tribes and Chinese regional powers engaged each other in
messy warfare. This period was known as AThe Era of Sixteen Kingdoms by Five Tribes of
Barbarians@ in Chinese history (A.D. 308 to A.D. 439). Only around A. D. 439 did stable
governance return to the Central Plain under the authority of Northern Wei dynasty (A.D. 386 to
A.D. 534). After the Northern Wei dynasty Northern China was divided between the Eastern Wei
dynasty (A.D. 534 to A.D. 550) and its successor the Northern Chi dynasty (A.D. 550 to A.D. 577)
and the Western Wei dynasty (A.D. 535 to A.D. 557) and its successor the Northern Zhou dynasty
(A.D. 557 to A.D. 581). The Sui dynasty finally united Northern China as well as Southern China
in the latter part of the sixth century. The reign of Sui was however very short and it was replaced
by Tang dynasty after a brief period of civil wars. During this period, there were many famous
battles where small forces defeated opponents that were numerically several times their size,
thereby attesting to the decreasing returns to scale in conflict. The more famous of them were the
Battle of Kuandu (A.D. 200) where Cao Cao defeated Yuan Shao, the Battle of Chi Pi (A.D. 208)
where the alliance of Sun Quan and Liu Bei defeated Cao Cao, the Battle of Fei Sui (A.D. 383)
where the Jin dynasty defeated the Qin dynasty. The many battles won by Li Shiming (Emperor
Taizong) of Tang Dynasty were also victories by the numerically inferior force.150
During this period of political fragmentation, decentralization and instability, the grip of
Confucianism on the Chinese mind loosened. A good example was the statesman Cao Cao. Many
of his policies were contradictory to the teaching of Confucianism. Chinese historians classified
him as a Legalist. Naturalist Taoism became popular among the Chinese intellectuals. There was
more individual creativity in the cultural arena as well. Poetry enjoyed a resurgence and literature
showed a liberal tendency. There were innovations in political institutions. These were the
institutions inherited by the Tang dynasty and copied throughout the East Asian world, including
Japan. The dynasties in control of the South did much to advance the economy of Southern China.
By the time the Sui and Tang dynasty united China, the economic might of Southern China had
already caught up with that of Northern China. The Sui dynasty thereby constructed the Grand
Canal to tap the resources of the South for the maintenance of the imperial regime in the North.151
The early Tang Dynasty enjoyed about a century of stability and prosperity due to a succession of
three capable emperors: the emperor Tai Zong who was the de facto founder of the dynasty, the
empress Wu who was the only female emperor of China and, the emperor Xuanzong.152
Although the unified empires of Sui and T’ang had some counterproductive policies of
confiscation and government control and an underutilization of technology, on the whole there
150 Li Shiming once cautioned AThe water could either float or capsize a boat, the people could either support or
topple a government.@ This probably had to do with the relative easiness in which imperial orders were replaced during
this era.
151 Since ancient time, China has one core region and that was the Northern China Plain along the banks of the
Yellow region. Due to the development of the South, by Sui and Tang Dynasty, the economic strength of the South
was considerable. That led to two core regions in China, connected by the Grand Canal to be a single dominant core
area.
152 Emperor Taizong reigned from A.D. 627 to A.D. 649. Empress Wu reigned from A.D. 684 to A.D. 705. Emperor
Xuanzong reigned from A.D. 712 to A.D. 756.
89
were considerable economic and cultural achievements during this era.153 Tang China and the
Islamic Arabian world were the most advanced regions of the world. The Tang Dynasty produced
a significant portion of China=s greatest poets. Internal commerce and external trade thrived. The
merchant class enjoyed the freedom and high status that the Chin-Han-Jin imperial order and the
Yuan-Ming-Ching imperial order deprived them of.154 The culture and political institutions of
Tang spread to the surrounding countries, including Japan.
Japan entered the civilized world around this time. By the end of the 4th century the rulers of the
Yamato plain in Honshu had created an extensive kingdom. At the end of the 6th century, Prince
Shotoku transformed the Yamato kingdom by strengthening the authority of the court over the
provincial nobles and building an administration based on the Chinese model.155 The influence
of Tang China was extensive: Japan had a Chinese-style military, created a central government
based on the Tang model and borrowed the Chinese writing system and cultures.156 However, the
centralized state in Japan was never able to consolidate its authority. Due to the fragmented
geography, central taxation of the agricultural sector was not effective. Public administration
devolved into decentralized local units. There arose the large estates which formed the economic
foundation of feudalism.157
The introduction of horses and cavalry warfare from Eurasia main land reduced the economies of
scale in warfare. Feudalism and warlord politics replaced centralized government. Shogunate
replaced the imperial court as de facto ruler. Yet, by high and late medieval time, that is, from
around 1150 to 1200 AD, even the shogunate and feudal lords found it hard to control the society,
especially the peasantry. During the age of daimyo, that is, from 1333 AD onwards before the
unification of the country under Tokugawa Shogunate, there were several hundreds feudal units. It
was a period of rapid economic growth, important technological advances in agriculture and
handicrafts. There was a shift from a barter economy to a money economy. Foreign trade increased.
Japanese traders were active throughout Southeast Asia by the late fourteenth century.158 The
period from 1467 to 1573 was one of intense military contests for power. It was called the Era of
Warring States. That was due to the effects of gunpowder military revolution. The result was the
unification of Japan under the Tokugawa Shogunate. During the era of Warring States there was
rapid development. There were irrigation works, mining, trade, highway constructions, fiscal
capacity development and rapid urbanization.
Centralized state was hard to maintain in medieval China as well. The reign of the central
153 Refer to Bernholz and Vaubel (2004, p. 5) and Mo (1995).
154 The imperial order during this period was not as entrenched and secure as those during periods with great
economies of scale in warfare. For instance, Tibet, a state with a very small population and resources, sacked the
capital of Tang dynasty three times. Refer to Grousset (1970, p. 80-114). Nothing liked that happened to the Han,
Yuan, Ming or Ching dynasties. There therefore exists a considerable level of relativist concern and development effort
during Tang Dynasty. The Tibetan Empire ruled part of Northeastern India as well but collapsed in around AD 850.
155 Refer to Haywood (1997, p. 112-113).
156 Refer to Raaflaub and Rosenstein (1999, p. 52-56).
157 Refer to Haywood (1997, p. 228-229).
158 Refer Stavrianos (1982, p. 292-293).
90
government of the Tang Dynasty lasted only about a century.159 The Rebellion of An Lu Shan
and Shi Si Ming in A. D. 755 to A.D. 761 ended the de facto control of the central government and
returned China to the state system.160 From the end of the Rebellion of An Lu Shan until the
formal collapse of the Tang dynasty, the economic and the military powers lied with regional
commanders. These regional powers were practically kingdoms of their own. By the late ninth
century and the tenth century, wars and annexations resulted in about ten of these kingdoms in
China. There arose the second competitive state system in Chinese history: the Era of the Five
Dynasties and Ten Kingdoms and the Northern and Southern Sung Dynasties. This was the period
that produced the high economic achievements that were not repeated in Ming and Manchurian era
China, that is, the Sung Puzzle.
By A. D. 979, the Sung dynasty had conquered most of Southern China.161 Northern China,
however, was in the hands of three major powers: the Sung dynasty, which controlled the middle
and lower stretches of the Yellow river plain (in addition to most of Southern China), Liao (A.D.
907 to A.D. 1125) which controlled the Manchurian plain, inner Mongolia and parts of the
Northern China plain and Xia (A.D. 1032 to A.D. 1227) which controlled the upper stretch of the
Yellow River valley.162 Sung has the dominant share of population and economic and industrial
might. Liao and Xia, both highly sinicized semi nomadic semi settled societies, together almost
monopolized a very important strategic item: horses.163 So though Sung China has greater
economic might, the distribution of military capability was quite even.164 Xia and Liao were
unlike the threat of the nomads before. These were states with strong military power due to the
control of horses and horsemen, the control of great agrarian resources, commercial network and
industrial complexes, as well as the bulky and strong state machinery. The three states therefore
159 The imperial order of Tang was also not long enough to wear out the momentum of growth and creativity
accumulated during the earlier era of state system. Imperial order during era of small economies of scale in warfare
generally have very short reign. The reign of these imperial orders was not long enough to choke of developmental
momentum. Refer to McNeill (1999, p. 224-227).
160 Refer to Wesson (1967, p. 377-378) on the achievements of China between the collapse of the Han Dynasty and
the establishment of the Mongolian Yuan Dynasty and Chinese Ming Dynasty.
161 The Yunan province was in the hands of the Tali Kingdom, a tribal confederation of Thai peoples. Vietnam
achieved her independence from China during the Era of Five Dynasties and Ten Kingdoms (A.D. 907 to A.D. 960).
Refer to Lee (1988).
162 The economic power house of Sung China was in the south, especially the lower Yangtze River Basin. The Grand
Canal linked the following regions into one dominant core area: the central plain along the middle and lower stretches
of the Yellow river, the plain along the Huai River and the plains along the middle and lower stretches of the Yangtze
River. Southern Sung dynasty had lost the central plain to the Jin dynasty. That however was not a significant blow
economically.
163 The control over large tracts of settled territory means that these semi nomadic semi agrarian states were more
akin to the Northern Dynasties of A. D. 386 to A. D. 581 than to the nomadic tribes that harassed imperial China. The
nomadic tribes lacked the resources to really conquer China, the cultural sophistication to administer China, or the
economic and fiscal efficiency to engage China in prolonged, large scale military struggle. The Northern Dynasties
were established by sinicized nomadic tribes and controlled the Northern half of China. Their political achievement
laid the foundation for the short lived unification under Sui and Tang dynasties.
164 If we ignore the fact that the semi nomadic states in the North made up for their lack of resources with superior
military efficiency, we would classify Sung China as another example of imperial order. Sung China was therefore
more akin to the bipolar Northern and Southern dynasties than to the stable imperial order of the Han dynasty or, the
Yuan, Ming and Ching dynasties that came after.
91
treated each other as equals and worthy rivals.165 Of the three major states, Northern Sung and
Liao were the most powerful players.166 After A. D. 1127, the Sung dynasty which retreated to
the Southern part of China and Jin dynasty (A.D. 1115 to A.D. 1234) which replaced Liao were
about equally matched as well. The Sung era China was therefore a tripolar state system.
There were many military and non military innovations developed under pressure from the
Northern rival states. The invention of the unmovable printing press during the reign of the late
Tang dynasty and the invention of the movable printing press during the Southern Sung Dynasty
resulted in increases in the economies of scale and efficiency in public administration. The
innovations in military technology which involved more use of mechanical missile devices to
increase the power of the infantry since the time of the Northern Sung dynasty and the use of
gunpowder weaponry during the Southern Sung dynasty increased the economies of scale in
conflict. Sung China constantly improved the use of gunpowder in the military. During the Sung
era, large scale warfare was the rule. Sung China and her rivals maintained large scale standing
armies and navies. The scale of the militaries in this second competitive state system of China was
greater than that in Europe before the Napoleonic wars.167
Unlike the decentralized Tang dynasty, Sung China was a very centralized state.168 The state
intervened extensively to help advance the economy. Sung China produced many capable
statesmen, of which the famous reformer Wang An Shih (A. D. 1021 to A.D. 1086) was one.
Wang=s reform programs aimed to create a service state for greater economic might and military
prowess to meet the challenge posed by the Northern rival states.169 Wang however was not
Sung=s first reform minded prime minister nor the last. Keenly aware of its strategic disadvantage,
Sung China strived to make it up in economic and administrative efficiency. An extensive network
of industrial-military complex was maintained to tap technological prowess for the military.
Under the Sung service state, there was intensive economic growth. The economy prospered with
elaborate internal and external trading networks.170 The members of this global trading network
of this period included the Southeast Asian system, the Indian system, the Islamic system and the
European system. External trade brought in close to half of the state revenue. The economy was so
commercialized that soon after 1000 AD the Sung government found it more convenient to collect
taxes in cash instead of in kind. There was sustained growth in per capita income during this era.
165 Liao=s territorial size was two times that of Northern Sung. Jin eliminated Liao in A. D. 1125. Jin occupied the
territory of Liao plus the middle and lower stretches of the Yellow River region annexed from Sung dynasty. Militarily
Liao and Jin were on the offensive and Sung was on the defensive most of the times. Other powers included Tibet and
Tali. Sung spent quite a lot of effort on researching the use of fire powder in warfare as well as other military
innovations to help coping with the external threats.
166 Tibet was also a member of this system. Refer to Lee (1988).
167 Refer to Keegan (1993) and McNeill (1982).
168 The use of printing press and gunpowder contributed to the greater economies of scale in state building. There
were also other innovations that helped. These included better transportation technology, especially maritime
transportation.
169 Wang tried to trim down the oversize state as well. State civil employees numbered in the millions during Sung
era. So were the military personnel. Wang=s reform effort was during A.D. 1069 to A.D. 1085 when he was the prime
minister.
170 Refer to Abu-Lughod (1989) for the global trading network at this period.
92
China was the industrial center of that global trading system. Sung China was then the most
advanced economy. It had the most advanced ship building technology on earth. The compass was
invented. The adjustable centerboard keel was used. Cotton sails replaced bamboo slats.171 These
maritime technologies and know how were used in naval warfare between the Southern Sung
Dynasty and, the Jin Dynasty and the Mongolian regime. These were large scale engagements with
hundreds and at times thousands of sea going ships involved. Sung China explored parts of
maritime Southeast Asia, including Taiwan and Philippines. The maritime technology of Sung laid
the foundation for the overseas expeditions of the early Ming Dynasty.
There were many innovations in production technology as well. By the Fourteenth Century, China
had experienced a burst in technological and economic progresses.172 For instance, Sung China
invented and disseminated a water-powered hemp-spinning machine. Similar devices did not
surface in Europe until 1700.173 The total Chinese output of iron at the close of the eleventh
century A.D. was impressive too. The peak was 150,000 tons. That was approximately the same as
the entire production of Europe in 1700.174 This means that the Chinese iron output per capita at
the close of the Eleventh Century was higher than the European iron output per capita in 1700 by
twenty per cent. 97. Three out of the four greatest inventions of China were made during Sung
dynasty: gunpowder, printing, compass.175 The porcelains manufactured during the Sung dynasty
were the best in quality and design. Cultural achievements were equally great. The most important
works of Neo-Confucianism were done during the Sung Dynasty. Poetry and other literary works
also flourished.176 The comprehensive historical works of Chi Zhi Tong Jian by Shi Ma Guang
was done during this era as well.177 Such miraculous performance was not repeated in the
powerful and unified Ming and Ching periods.178
Commenting on the intensive growth of Sung era China, Stavrianos (1982, p. 282-283) notes: AIn
addition to its cultural attainments, the Sung period is noteworthy for a commercial revolution with
much significance for all Eurasia. The roots are to be found in a marked increase in the
productivity of China=s economy. Steady technological improvements raised the output of the
traditional industries. Agriculture likewise was stimulated by the introduction of a quickly
maturing strain of rice that allowed two crops to be grown each season where only one had been
possible before. Also new water-control projects undertaken by the Sung greatly expanded the
acreage of irrigated paddy fields. Thus it is estimated that the rice crop doubled between the
171 Refer to Stavrianos (1982, p. 283).
172 Refer to Graham (1973) and Cipolla (1967, 101-2).
173 Refer to Elvin (1973). China however actually abandoned the use of this machine and regressed in terms of
industrial technology. This is part of the Sung puzzle. Refer to Jones (1981, p. 64).
174 Refer to Harrison (1972, 290).
175 The other one was paper which was invented during the Eastern Han Dynasty.
176 Refer to McNeill (1982). McNeill (1982) refers to the period from B. C. 200 to A. D. 1200 as the millennium of
Chinese leadership in military technology.
177 Refer to McNeill (1999, p. 253).
178 Refer to Jones (1981, p. 202). The superior economic performance of Sung China was also testified by the fact
that Sung Dynasty was the only major Chinese dynasty that had no large scale peasant rebellion. Refer also to McNeill
(1999, p. 253). There were also major changes in land ownership and educational reorganization. Refer to Bernholz
and Vaubel (2004, p. 6).
93
eleventh and twelfth centuries. Increasing productivity made possible a corresponding increase in
population, which in turn further stimulated production in circular fashion. The volume of trade
also rose with the quickening tempo of economic activity. For the first time there appeared in
China large cities that were primarily commercial rather than administrative centers.@
Stavrainos (1982, p. 283-4) further observes that Sung China was the first government to
introduced paper money which facilitated commerce and Sung China exported mostly
manufactured goods, including silk, porcelain, books and paintings, and imported mostly raw
materials such as spices, minerals and horses. The trade pattern testified to the Chinese economic
leadership.179
Bernholz and Vaubel (2004, p. 5) comments that: “Under the Sung dynasty (960-1275), which
faced severe international competition and had to pay tribute to neighbouring ‘barbarians’ for most
of its reign, China advanced to the threshold of a systematic experimental investigation of nature
and created the world’s earliest mechanized industry. Private printing was popular, and
water-powered machines for spinning hemp thread appeared. The government promoted education,
irrigation and trade, including maritime and foreign trade. Military technology was at a high level.
The Sung period was both the climax and the end of scientific technological progress.”
China was also the leader in military technology.180 Around A.D. 900, in China, military
technology began to undergo major changes. The use of advanced mechanical devices in military
and the early use of gunpowder-based weapons led to a rise in the economies of scale in warfare
and a partial reversal of strategic advantage back to the infantry. These inventions ultimately
spread to the other major cultures of the old world including Europe through the Mongolian
empire. There began the Gun Powder Military Revolution. The gunpowder military revolution and
the other concomitant innovations began to change the medieval world. 181 The other
technological innovations included the printing press and the compass. These innovations brought
an end to the politically fragmented medieval era and ushered in a new wave of stable imperial
orders. With these innovations, the Chinese system, being the paragon of imperial order, was the
first to emerge from the medieval political fragmentation to enter into the gunpowder empires of
modern era. The departure of the medieval era brought along with it Sung=s startling
achievements.182 The imperial power to end the Sung China competitive state system was the
Mongolian empire. 183
179 Refer to Deng (2000) for a survey of works on Chinese economic history.
180 Refer to McNeill (1982) and McNeill (1999, chapter 14).
181 Refer to Needham, Ho, Lu and Wang (1987) for details.
182 Refer to Wesson (1967, p. 204-205) for the developmental achievements of Sung China.
183 The Mongolian empire combined tribal unity and nomadic mobility with the military efficiency generated by the
second competitive state system of China to conquer a large part of the Eurasian land mass. The empire then used the
resources so controlled to invade the Southern Sung dynasty. With greater resources and greater state building
efficiency at the disposal of the Mongolian empire than the earlier rivals of Sung China, the system was perturbed from
its state system equilibrium and was compelled towards the imperial order.
94
CHAPTER SEVEN. THE RISE OF THE WEST
1. THE GUN POWDER EMPIRES
The Gun Powder Military Revolution as well as the other innovations that increased the economies
of scale in state building ended the Sung China state system. It was the Mongolians who first
exploited the power of the gun powder in imperial pursuit on a grand scale. Combining with tribal
coherence and the mobility of the steppe people, the Mongolians created an empire larger than all
before. The major states in the Chinese system, Xia, Jin and Sung China, were conquered one by
one.184 Through contacts with the Mongolian empire, these technological advances were then
spread to the other major civilizations in the old world. There came the gunpowder empires.185
With the economies of scale in conflict created by the gunpowder military revolution, stable
imperial orders returned to the old world after the collapse of the Roman, Gupta and Han
empires.186 This process began around A.D. 1200 and it gathered momentum especially around
A.D. 1400.
China was the first among the major cultures to enter into the era of gun powder stable imperial
orders. In China, the Mongolian Yuan Dynasty which reigned for about a century from A. D. 1279
to A. D. 1368 was succeeded by the Chinese Ming Dynasty which reigned close to three centuries
from A. D. 1368 to A. D. 1644. Then the Manchurian Ching Dynasty replaced the Ming Dynasty
and ruled for about three centuries from A. D. 1644 to A. D. 1911. China was incorporated into the
Europe centered modern world state system in around A. D. 1850.
The Mongolians combined the technological achievements of the military revolution of the Sung
China competitive state system with the mobility of the nomadic people to conquer a world empire
larger than all before. The economies of scale in the military aspect however were not matched up
by the economies of scale in public administration. The Mongolian empire therefore was separated
into five parts and ruled separately. The Chinese part was known as the Yuan Dynasty. China
entered into her second stable imperial order with the establishment of the Yuan dynasty. The
second stable imperial order of China was a gunpowder empire. The second stable imperial order
of China reigned from around A. D. 1279 to A. D. 1839.187 It comprised three dynasties: the
Mongolian Yuan Dynasty, which ruled from A. D. 1279 to A. D. 1368, the Chinese Ming Dynasty,
184 Korea, Tibet and Tali were conquered as well. The Mongolians failed in their attempt to conquer Vietnam. The
Mongolian naval expeditions to Japan and Java failed disastrously as well.
185 The Mongolian Empire was the very first gun powder empire or proto gun powder empire, though it did not last
very long. Refer to Stavrianos (1982, p. 247, 254). For the early use of gunpowder in Europe and the Islamic world,
refer to Goldschmidt (2002, ch. 9).
186 In Europe, Middle East, South Asia and East Asia, there were downward trends in the number of states and
upward trends in the size of the polity, testified to the greater economies of scale in state building brought forth by the
gunpowder military revolution. Refer to Parker (1996).
187 The First Opium War of A.D. 1839 to A.D. 1842 signified the induction of China into the modern world state
system. Her geopolitical isolation ended and from there on China had to reckon with the military threat of other states
seriously.
95
which reigned from A. D. 1368 to A. D. 1644 and the Manchurian Ching Dynasty which governed
from A. D. 1644 to A. D. 1911.
During the Mongolian Yuan Dynasty, the effects of imperial stagnation had not yet come into full
play. The economic and cultural momentum of the previous era under the competitive state system
had not completely run out. China was still a place of prosperity and cultural creativity.188 By the
time the Ming Dynasty was established, that momentum had practically worn out. The overseas
expeditions of the Eunuch Admiral Cheng Ho were the last manifestation of the Chinese vigor.
After that, the Chinese empire retreated into isolation and economic and cultural stagnation or
regression.189 This downward trend was slowed down but not reversed under the Manchurian
rulers who were more on the alert and hard working but nevertheless inherited the Ming policies
and mind-set.
The interim Mongolian Yuan Dynasty used only coercion to maintain rule. No mind control
regime was installed. The merchant class still enjoyed high status and freedom. Confucian literati
were designated a very low social standing. That helped to free the Chinese minds. Cultural and
economic vigor maintained its momentum. This vigor died out under the more perfected imperial
order of the indigenous Chinese Ming Dynasty and the heavily sinicized Manchurian Dynasty. The
Ming and Ching Dynasties effectively used the imperial examination system to control the Chinese
minds. The scholars were induced to self indoctrinate in Confucianism. The imperial examinations
prescribed the use of the eight legged essays. It emphasized formality and memorizing instead of
independent critical and creative thinking. The imperial regime also prescribed official
interpretation of Confucian texts in imperial examinations. During the Ming and Ching dynasties,
the imperial regime sponsored monumental works of publishing encyclopedias. This helped to
channel the intellectual energy of the Chinese literati to uncreative works that posed no threat to
the imperial regime. The officialdom also made use of such opportunities to scan the vast amount
literature and erased and edited any documents that the imperial regime did not find friendly. As if
the above measures were not enough, the use of brutal political reprisal in response to the
publication of material even remotely unfriendly to the regime practically repressed any
intellectual curiosity or creativity that was left in the Chinese mind.190
The second imperial order banned or severely restricted overseas contacts and external trade. After
initially expanding their navy, the Ming court even allowed that to decay, retreated from the sea
and became inward-looking.191 After the brief ambitious overseas expeditions of Admiral Cheng
188 Jones (1981, p. 160): AChina came within a hair=s breadth of industrializing in the fourteenth century.@ Marco Polo
visited China during the Mongolian Yuan Dynasty. His stay was from A.D. 1275 to A.D. 1292. The Southern Sung
Dynasty still had a remnant regime in the very Southern end of China. For China as a whole, the developmental
momentum of the Sung era still lingered on. The second stable imperial order had not had enough time to have its
impact felt on the economy yet. Had Marco Polo came a century later, he would have received a completely different
picture.
189 Refer to Filesi (1972, 69) and Jones (1981, p. 205).
190 Refer to Huang (1974, 1981) for an in depth study of the stagnation and decline of Ming Dynasty. Wesson (1978,
p. 198) comments: A......Commerce brings hand and brain together, as noted by Needham (1953), who saw the
weakness of the merchant class in imperial China as the chief cause of the inhibition of science......@
191 Refer to Eberhard (1960, p. 342, note for 250), Filesi (1972, p. 32-3, p. 69, p. 71) and Jones (1990, p. 10-11).
96
Ho, the Ming court decided in 1480 not to have the Chinese maritime exploration reopened. The
Confucian literati who were against overseas expeditions and foreign trade defeated the eunuchs
who were in favor of it. Internally, the merchant class lost much of its social status as well as
professional autonomy. The second imperial order re-instituted the official orthodoxy of the
Confucianism as well as the ideal economy of the Confucianism: self-sufficient villages with
minimum commercial net works and specialization of labor. The Confucian Ming Dynasty was
hostile to mechanical contrivances. The Ming court demolished the astronomical clock that had
been built in 1090. The Jesuit Matteo Ricci found little in 1600 to show that there had ever been
mechanical clocks in China.192 The Chinese turned their mind away from technology and
industry. The Ming Dynasty shifted the Chinese energies back to agrarianism for reasons of the
state. These policies transformed the Chinese empire from the highly advanced economy
developed during the second competitive state system to a conglomeration of myriads of
self-sufficient villages.
The government of the second imperial order was minimal government, as advocated by the
Confucian literati. The service state was dismantled. In place of it was a central government that
performs mostly religious or ceremonial functions and moral leadership. The state officials were
more hierophants than administrators. In fact, the Ming and Ching Dynasty governments bore
more resemblance to the Catholic Church than the governments of European national states.193 It
was in fact an astonishing achievement that a continental size empire could be governed mainly by
the force of culture.194 The state practically existed solely to serve itself and keep itself in power.
Economic productivity as well as scientific and technological knowledge suffered greatly.195
Apart from the need to serve as a defense against inner Asia, the emperor kept an army primarily
to protect his own interests. This included defending the Grand Canal which was his by monopoly
right. Through the Grand Canal his assigned tribute grain reached the court of Beijing. He had less
need for a military budget than the European monarchs. As a result, he did not need the merchant
class to finance his ambitions and therefore did not need to make concessions to them. The total
budget of the central government was not large. At the end of the nineteenth century, it was only
one or two per cent of the national income.196 The investment on infrastructures was trivial. It
was around 0.03 per cent to 0.06 per cent of the national income.197 In sum, the Ming and Ching
Chinese state performed very little productive services for society. The Chinese paid 24 per cent of
their national income to the central and local elite who made up about two per cent of their number
in return for defense and the coordination of irrigation and flood control. No other important
services were provided. For instance, there was no civil policing. The empire was essentially an
Asian revenue pump and nothing more.198 There was no incentive to run a service state. The
bureaucratic infrastructure of the state was kept small and cheap.199 The small and weak state
192 Refer to Gimpel (1977, p. 152).
193 Refer to Stover and Stover (1976, p. 135 and p. 186).
194 Refer to Huang (1974, 1981, 1988) and Jones (1981, p. 206).
195 Refer to Huang (1974, 1981), Wesson (1967, 1978) and Jones (1981, 1988, 1990) for the lethargy state of the
second imperial order of China.
196 Refer to Perkins (1967, p. 487).
197 Refer to Stover and Stover (1976, p. 113).
198 Refer to Jones (1981, p. 206 to p. 209).
199 Jones (1990, p. 17 to 21) notes that: AThe survival of a lethargic government was probably assured by the relative
97
apparatus was not capable of controlling the everyday life of the peasants or town dwellers. The
peasants and town dwellers were exploited and neglected but not systemically repressed.200
Bernholz and Vaubel (2004, p. 5) comments that: “After the rule of the Mongols from 1276 to
1367, the Chinese Ming dynasty was characterized by the complete centralization of all power in
the hands of the emperor and a powerful secret police. It adopted policies of reducing contacts
between Chinese and foreigners and of stopping private ventures overseas because this would lead
to centrifugal coastal centres of power. As the dominant recruitment subject, the Ming introduced
a special type of essay which was rigid in form and elegant in style, but indoctrinating in substance
and hostile to innovation in effect.”
In India, the Delhi Sultanate used gunpowder in the later part of its military campaigns.201 That
allowed the sultanate to unite the North Indian Indus-Gengetic plain as well as to extend its rule to
the Deccan highland for a brief period.202 The Mughul Empire was established on the military
might of gunpowder and cannons. It reigned from A. D. 1526 to 1858. Effectively as a universal
empire of South Asia it ruled from 1572 to 1707 AD. The Moghul empire had the same core area
same as the Gupta empire: the Indo-Gangetic Plain.203 The Mughal had a much higher degree of
administrative penetration compared to the Sultanate of Delhi.204 The Mughal Empire reached its
peak in the 17th century. Although its frontiers were pushed back occasionally, its wealth and
splendor were among the most dazzling of all the courts in the oriental world. Too confident in the
stability of the structures of state that Akbar had set in place, his successor did not perceive the
need for reforms and as a result the empire declined.205 During its long rein, the Mughal Empire
performed no major services that could help the economy.206 Most revenue extracted was for the
absence of outside pressure...... Notoriously, government
did not provide much in the way of infrastructure or
services......Government did not standardize weights and measures. Government did not provide commercial law or
police.......Government seems actually to have been withdrawing from participation in the economy in Qing times,
preferring (for example) to let guilds carry out what we would consider, even what had once been considered in China,
bureaucratic or legal functions. Certainly government did not mint enough money: token moneys had to
substitute.......Plenty of trade went on but there was a tendency for the market to work within the confines of personal
acquaintance or the guarantees of native-place associations.......We may find that the Qing economy, impressively
expansible though it proved, failed to move from extensive to intensive growth because its political structure did not
establish a legal basis for sufficient new economy activity outside agriculture.......After the Song, China may not have
recaptured, indeed may have moved further from, the successful organization of a compact, centralized state.@ A good
comparison is the failure of the Ming and Ching government to standardize weights and measures and the
standardization of weights and measures under Lord Shang of Kingdom Chin during the Contending States Era of
China and Napoleon of France during early Nineteenth century.
200 Refer to Moore (1967, p. 173), Jones (1981, p. 207) and Stavrianos (1982, p. 287-289) for the repression of the
merchant class, decline of commerce, and restrictions on oversees enterprises and emigration.
201 Refer to Khan (2004).
202 Refer to Kulke and Rothermund (1998, p. 158-169).
203 Geography favors an imperial order in India since a lion=s share of population and resources was centered on the
Indo-Gangetic Plains. However, in India, all that unites China - language, race, common civilization, tradition of
political unity - was absent. The Mughul Empire therefore was not as secure as the imperial order in Ming and
Manchurian era China.
204 Refer to Kulke and Rothermund (1998, p. 169, 184-223).
205 Refer to Berinstain (1998, p. 73).
206 Refer to Wesson (1967, p. 296) and Rothermund (2004, p. 142 to 146) in Bernholz and Vaubel ed. (2004) on the
98
consumption of the ruling elite. Almost nothing was spent on the provisions of infrastructures.
Taxes were collected whatever the state of the harvest. That left the peasants in destitution. The
peasants received no real help from the state in the face of natural disasters which were quite
frequent.207 The empire had no written legal code. Neither was there institutional design to
harmonize orders which might be issued by the ruler one day and countermanded the next. The
efficiency of the empire depended mainly on the character and ability of the Mughul emperor.
More often than not power slid into the hands of the officials. There were no constitutional checks
on the rapaciousness of the officials. The Mughul Empire was therefore a typical predatory state or
revenue pump.208 India was colonized by Britain in the early eighteenth century and incorporated
into the Europe centered modern world state system.209
The Ottoman Empire lasted from 1280 to 1922 AD. The Ottoman Turks established the gun
powder Ottoman Empire in Middle East and Balkan Europe in A. D. 1350. The core area of the
Ottoman Empire was much the same as the core area of the ancient Persian Empire or the Empire
of Alexander the Great, or the Byzantium Empire. It was also a lethargic state that failed to
achieve economic prosperity or cultural advances.210 Unlike the European sovereigns who
secured their positions by offering the service of justice, very few overhead services necessary for
the proper functioning of the economy and society were offered by the Ottoman state. Despite its
territorial size, the Ottoman Empire had a small state without much capacity to penetrate and
mobilize the society for its purposes.211 For instance, embargoes on the export of strategic goods
to Europe were not enforced. The officialdom was simply too inefficient and corrupted. As a result,
the Ottoman regime failed to procure the necessary war material and food needed for its own
armies. There were no mercantilist policies which might have led them to try to halt the
penetration by European producers. Even if there were such policies, the thoroughly corrupted
officialdom would not be able to implement them.212 This weak performance of the state and
economy under the Ottoman Empire was a far cry from the economic achievements and political
vigor of the previous era of contending states of the Abbasid Caliphate and Seljuk Turks. The
Ottoman Empire was incorporated into the Europe centered modern world state system in the
eighteenth century with the incessant assaults on it from the European great powers such as France,
medieval fragmentation, competition and development and the stagnation under the imperial order of Delhi Sultanate
and Mughal Empire.
207 For example, there was for example a great run of famines between 1540 and 1670 when the empire was at peace.
Refer to Jones (1981, p. 187).
208 The total tax revenue of the state was from fifteen to eighteen per cent of national income, largely collected as a
land tax. Refer to Maddison (1971) and Jones (1981, p. 198).
209 Nadarajah (1992) and Subrahmanyam (1989) argue that the post Muhgul Indian states system were on the verge
of creating a modern high fiscal capacity state in the case of Mysore at the dawn of European colonial expansion. The
establishment of the British Indian Empire disrupted this process of war making and state making before it could give
rise to indigenous modern states in India.
210 Refer to Jones (1981, p. 189) and Kuran (2004, p. 153 to 156) in Bernholz and Vaubel ed. (2004) on the economic
failures of the Ottoman Empire.
211 Refer to Jones (1981, p. 180) and Goldschmidt (2002, Ch. 9).
212 The Ottoman Empire was referred to as the ASick man of Europe@.
99
England, Russia and Austria.213
In Persia and Central Asia, there was a succession of gunpowder empires. First it was the Ikhanate,
the Mongolian Khanate set up by Prince Hulegu. Then came the Khanate of Timerlane, then the
Indigenous Safavid Empire which reigned from 1501 AD to 1722 and was succeeded by the
Afshar Dynasty (1729-1747), the Zand Dynasty (1750-1794) and the Qajar Dynasty (1795-1925).
The victory of Shal Ismail of Safavid Persia over Muhammad Shaybani of Shaybanid Khanate of
Uzbek in December 2, 1510 at Merv was considered a turning point in the struggle between the
sedentary civilized societies against the nomads. The sedentary was beginning to get even with the
nomad and cultivation was winning against the steppe. Gunpowder began to overshadow the
horse.214 Iranian power reached its peak under Nadir Shah’s Afshar Dynasty.215 Under Nadir
Shar, Iran controlled Afghanistan, Western and Southern Pakistan, Iraq, Southern coast of Persian
Gulf, Georgia, Caucasus, and Southern part of Central Asia to the shore of the Aral Sea. At the end
of the Safavid reign Russia under Peter the Great probed the Caucasus area but was repulsed by
Nadir Shah. Iran was in co-opted into the modern global state system centered in Europe at the end
of the Zand Dynasty. Russia under Catherine the Great renewed the expansion to Caucasus,
Georgia and central Asia. This time Russia was too powerful to be repulsed as the Western powers
had progressed too far ahead.
Among the three major Islamic powers, the Ottoman Empire was a Mediterranean maritime power,
very much like the Byzantine Empire. Its famous slave elite troops the Janissaries, was infantry. In
Contrast, the Ikhanate, the Timurid Empire, the Safavid Empire and its successors, were
steppe-highland-desert-oasis powers. Cavalry still played quite a significant role here. On the other
hand, the Sultanate of Delhi and the Mughal Empire reigned over tropical and subtropical forests
and monsoon river plains. Their specialty in warfare therefore differed and that mitigated the
intensity of conflict between them and lowered the economies of scale in warfare. The Shiite and
Sunny animosity caused the Ottoman Empire and the Safavid Empire to have clashes during the
sixteenth century. The Safavid Empire battled the Ottoman empire over Mesopotamia. However,
the core areas of both empires were not threatened. It was almost a repeated pattern of the story
between the Roman Empire and the Parthian Empire and the Byzantine Empire and the Sasanian
Empire. With the subsiding of religious ferment of the Safavid Empire, the treaty of Qasr-i Shirin
established a permanent peace between the Ottoman and the Safavid Empires. Furthermore, in the
sixteenth century, extensive clashes with the Uzbeks and other powers in central Asia caused the
Safavid Empire to look North more often. Like the Ottoman, there were some efforts of reform or
modernization to support a modern army. But the efforts evaporated when threat was not as severe
or external environment became peaceful. Since the mid seventeenth century, Persia was in
constant decline. With the advancement of the European powers, the Ottoman Empire was most of
the time looking west and the Safavid Empire looking north. The Safavid Empire fought a war
with the Russians in the 1720s. Ottoman warred incessantly with the Russians and Austrians and
other European powers. The competition between the Ottoman Empire of the Middle East and the
213 Refer to Armstrong (2000, p. 97-117) on the rise and decline of Ottoman, Safavid and Mughal empires.
214 Refer to Grousset, R. (1970).
215 Refer to Haywood (1997, p. 214-215).
100
Safavid Empire of the Central Asia was therefore nothing close to that existed among the
European competitive states. Competition in the European competitive states system concerned
survival.
The gunpowder military revolution was first introduced into Japan by Oda Nobunaga. Oda
Nobunaga first invented the use of volley fire, predating the Dutch by two to three decades.216
Under Hideyoshi, a short lived unification was achieved. After Hideyoshi, unification was
reestablished by his associate, Tokugawa. Under the Tokugawa Shogunate, which reigned from A.
D. 1603 to A. D. 1868, social and economic stability were maintained by strict segregation of
farming and trade. There was a ban on private investment. The officialdom discouraged any
contact between different parts of the country that did not use the closely controlled Five
Highways. Foreign trade and contacts were discouraged.217 Under Tokugawa rule, the expanding
overseas trade of Japan during the previous era of political fragmentation was banned. Like the
Ming and Manchurian era China, Japan had chosen isolation. This changed when Japan was
incorporated into the Europe centered modern world state system in A. D. 1853 with Commodore
Perry=s naval expedition to open her doors by force.
Among the major influences of the Tokugawa government was international isolation, active
discouragement of commercial investment and restrictions on communications and trade between
domains which inhibited the development of domestic markets. The regime adopted anti
merchants policy and fixed the social status of groups. Merchants, who were considered to be
parasites living off the labors of others, found themselves at the bottom of this hierarchy. The
Shogunate repeatedly tried to stem the tide of urban expansion and merchant success by
repatriating peasants, confiscating property, and exiling wealthy merchants. Trying to make the
townspeople (of Edo especially) conform to Confucian standards of modestly befitting their lowly
status, the Shogunate diligently issued legal proscriptions against townspeople acquiring obvious
signs of wealth. However, the Tokugawa government was highly decentralized. Regional feudal
lords retained much autonomy. There was therefore a certain level of political competition
between the different regions.218 As a result, the extended peace, the improvements in farming
technology and practice, the diffusion of cash throughout the economy and the development of
specialized crops contributed to considerable growth of the domestic economy.219
A similarity between these gunpowder empires was that they were stable and secure regimes that
controlled an extensive territory or sphere of influence. Within their geopolitical niche, they had
practically nothing to fear. This remained so until they were forcefully incorporated into the
Europe centered modern world state system. They were complacent, lethargic states or revenue
216 Refer to Parker (1996).
217 Refer to Haywood (1997, p. 230-231).
218 On the decentralized nature of the Tokugawa government, the fiscal and economic autonomous or independence
of the regions and their mercantilist competition, refer to Distelrath (2004, p. 107-108) in Bernholz and Vaubel ed.
(2004).
219 Refer to Jansen (2002).
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pumps.220 As a result, the development momentum of these diverse lands gathered under the
medieval fragmented and decentralized political environment died out.221 In fact, before the
arrival of the Europeans, these gunpowder empires were entering into some kind of a synchronized
decline. Asian trade was in general shrinking.222
These large empires are largely non-competitive towards each other, that is, they do not threaten
the survival of each other though there might be contacts or military contests. It seemed that the
equilibrium will persist. Yet, concomitant with the gunpowder military revolution were advances
in maritime technology including the use of compass and ocean going sailing ships.223 The
geopolitically separated worlds of different major cultures were coming to an end. The only major
culture that escaped the fate of the gunpowder imperial orders was Europe. Europe has a
competitive state system and the energy generated from that system was going to transform that
equilibrium. Europe was destined to knit the geopolitically isolated worlds of different major
cultures together into one global international system.224
2. THE EUROPEAN COMPETITIVE STATE SYSTEM
The use of gunpowder and the printing press affected the world since around AD 1100. It led to
systemic political and economic changes throughout the old world, and the rise of continental size
empires in the Near East, South Asia and China and the rise of national states and a competitive
state system in Europe. The Gun Powder Military Revolution started to affect Europe in the
Fourteenth Century.225 The military revolution increased the economies of scale of warfare in
Europe. 226 The European state system became more competitive. 227 Large centralized
sovereign nation states began to emerge around the thirteenth century. Gunpowder was beginning
220 Refer to Wesson (1967, 1978) and Jones (1981, 1988). Jones (1988) refers to these economically non performing
empires as Athe lethargic state@. Also refer to Parker (1996) who argues that China and Japan failed to modernize due to
their peaceful external environment.
221 Parker (1996) attributes the failure of China and Japan to produce modern states to long period of peace in their
international environment.
222 Refer to Simkin (1968, 258-9) and Jones (1981, p. 170). The Persian Empire was another of these gunpowder
empires that followed the general pattern outline here. We do not include it in our analysis for brevity sake.
223 Refer to Cipolla (1966).
224 Refer to Buzan and Little (2000), Part IV for the emergence of the modern global international system.
225 The gunpowder weapons were first effectively used in the early fifteenth century during the battles of the Hussite
Wars (1419-34). In 1326, canon was first used in Europe by Florentine army. Refer to Haywood (1997, p. 168.)
226 In Europe, since the Sixteenth Century, there were series of innovations in military technology that increased the
scale of warfare. Refer to Black (1991), Dudley (1991), Duffy (1980), McNeill (1982), Parker (1996), Roberts (1956),
Tilly (1992). These were parts of the changes brought by the gunpowder military revolutions. The relative rise of
infantry was caused by other development as well, especially that of the low bow and cross bow. The success of
English archers over French armored cavalry at Crey in 1346 showed the increasing importance of infantry in late
medieval warfare. Refer to Haywood (1997, p. 168.)
227 As predicted by the theory, the effects of the gunpowder military revolution on the state system and the imperial
order were opposite. The gunpowder military revolution increased competition in the European state system while it
dampened competition in the stable imperial orders of the gunpowder empires of Middle East, South Asia and East
Asia.
102
to be used against castles in the fourteenth century. The number of principalities declined as the
gunpowder military revolution proceeded. The size of political units grew. Feudal order was in
retreat. The smaller princely states and the city states were too small to exploit the greater
economies of scale afforded by the Gunpowder military revolution. By the late fifteenth century
and early sixteenth century, with invasions of Italy by France and Spain, the mini state system of
Italy ceased to exist independently and was submerged into the European state system.228
The use of printing press increased the economies of scale in public administration. In around
1455 Johannes Gutenberg developed movable type leading to the first printed books.229 This
reinforced the effects of the gunpowder military revolution on the European state system toward
larger political units of national states and more intense interstate competition.230 Vernacular
languages replaced Latin and aided the rise of sovereign nation states. The revival of Roman law
helped as well. The nation states in Europe therefore developed the characteristics of being
well-organized, having strong governments and possessing distinctive languages and strong
national identity. In contrast, the gunpowder empires of Middle East, India, China and Japan were
more like the medieval empires in government organization, economic and social conditions
except that they were more entrenched and secure, thanks to the gunpowder military technology
and the increased bureaucratic power due to the printing press.
These European sovereign nation states were locked in perpetual intense interstate rivalry,
militarily or otherwise.231 The interstate power struggles produced positive effects on the
economic development of Europe.232 The absolutist states formulated forward-looking policies.
Statesmen and scholars produced mercantilism for guiding public policy. Private citizens
published exhortations to purposeful development. These include Agrowth programmes= or some
kind of virtual national plans. An example was Phillip von Hornick=s Autria Over all, If She Only
Will (1684). 233 The English measured themselves by their successful Dutch cousins. A
seventeenth-century tract on economic improvement was entitled, ``How to Beat the Dutch
without Fighting''.234 The ideal model of mercantilist policies was France under Colbert. Yet,
even the liberal and market oriented Britain laissez-faire undertook enough state interventions of
the economy for them to be labeled >Parliamentary Colbertism=.235 A good example was the
Navigation Acts which protected British shipping industry. In fact, given the greater efficiency and
228 The increase in mass factor reversed the trend towards political fragmentation in Europe. With a greater mass
factor and the resultant economies of scale in state building, the European state system became competitive. Refer to
Dudley (1992), Keegan (1993), McNeill (1982), Tilly (1992) and Parker (1996).
229 Refer to Haywood (1997, p. 145).
230 Note the difference in response between a state system from an imperial order to an increase in the economies of
scale in public administration.
231 This was in sharp contrast to the lethargic states elsewhere, especially the well entrenched and complacent
gunpowder empires. Refer also to the works of Friedrich List who advocated the protection of infant industries to
facilitate the industrialization of Germany against the economic dominance of England.
232 Refer to Jones (1981, p. 113-119).
233 Refer to Wesson (1978, p. 181-185), Jones (1981, p. 134) and Weiss and Hobson (1995).
234 Refer to Coleman (1961, p. 45) and Wesson (1978, p. 182).
235 Refer to Weiss and Hobson (1995) for details.
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fiscal capacity of the British state, Britain practiced mercantilism to far better perfection than any
other European states with the possible exception of France under Colbert.236 After all, the
London merchants who had mercantilist interests held political power in the English parliament. In
England, the commercial interests were able to press for the formation of courts to try blacksliding
officials. In contrast, corruption ran rampant on the European continent and greatly compromised
state capacity. Britain became decidedly more protectionist in the era of William III. Mercantilist
policies protected her home and colonial markets, especially for the infant industries of linen and
silk manufacturing.237
In their effort to outdo each other, the European states goaded each other into the great cultural,
economic, political and social achievements that we called industrialization and modernization.238
The interstate rivalry caused the European states to try to outdo each other in almost all fields of
human endeavors: overseas explorations, manufacturing, scientific enquiries, technological
innovations as well as improvements in laws, public administrations and the overall institutions of
the state.239 For instance, France was driven by her rivalry with England during the Napoleonic
wars to promote manufacturing. Besides the powerful stimulus of demand for industrial goods due
to the war, Napoleon himself undertook, in an effort to meet the British challenge, many policies
for encouraging inventions including the rewards of tempting prizes. Similarly, the rivalry with
Frederick the Great led Maria Theresa of Austria to undertake many measures to improve the
power of Austria relative to Prussia. These measures included the reform of the Austrian state and
the modernization of her laws and public administration. The best known story was Peter the Great,
who went to Western Europe, especially the Netherlands, to learn Western secrets for
strengthening Russia. He forcefully westernized and modernized Russia and made Russia a
European great power.
This interstate rivalry spilt over to cultural and educational arenas as well.240 The European
states were quick to realize the importance of scientific and technological prowess and the
236 Refer to van Klaveren (1969), Brewer (1989) and Weiss and Hobson (1995). Refer to Tigar and Levy (2000) on
how the centralized state of England aided the development of capitalist economy through its sponsorship of a legal
framework friendly to the functioning of the market economy. Tigar and Levy (2000) attribute the hampered
development of capitalism in France and Italy due to the lack of such a powerful centralized state.
237 Refer to Davis (1965) and Weiss and Hobson (1995).
238 For the relationship between political competition and industrialization of Britain and other European nations,
refer to Pollard (1998, p. 223-237) and Hartwell (1998, p. 239-241) in Bernholz, Streit and Vaubel (1998) as well as
Weiss and Hobson (1995). Mokyr (1990, p. 302) remarks: “……Western technological creativity rested on two
foundations: a materialistic pragmatism based on the belief that the manipulation of nature in the service of economic
welfare was acceptable, indeed commendable behavior, and the continuous competition between political units for
political and economic hegemony……”
239 The effort of Cardinal Richelieu to create a great and powerful central government in France, the mercantilist
policies of Colbert, the financial innovations of England such as the creation of Bank of England all have their origin
in the interstate great power rivalry of Europe. Refer to Kennedy (1987). Rostow (1974) holds a similar view. For how
the competitive state system prompted European governments to provide better institutions, refer to North (1998, p.
13-28) and de Vries (1998, p. 209-221) in Bernholz, Streit and Vaubel et al ed. (1998).
240 Refer to Roach (1969), Stomberg (1931), Hale (1971) and Wesson (1978, p. 182).
104
educational quality of the population in determining the power of nations. National education
policy had become a political necessity since the eighteenth century.241 Education also became
more practical and science oriented. The Swedish Academy of Sciences was founded in 1739. It
was an emulation of English, French, and German models with the explicit objective of promoting
national power, especially economic power.242 States patronized science for national strength.
Prussia (and Germany) and France (especially since Napoleon) were big players in this scientific
arms race.243 After the defeat of Franco-Prussian War which ended French hegemony in
continental Europe and resulted in the creation of a unified Germany, France reformed her
education.244 Germany responded by spending more on science and education.
This concern for the fiscal strength of the state and the economic might of the country led to the
rise of mercantilism as well as other intellectual schools such as cameralism, physiocracy and
ultimately the classical economics. Mercantilism proposed the subjection of all economic interests
to the needs of the state or kingly power.245 It was especially concerned about the need to fill up
the war chest with gold to finance the military.246 France under Louis XIV applied mercantilism
most thoroughly. The mercantilist policies helped the national economies to modernize. Many of
the policies were explicitly designed to lay down an industrial base. The mercantilist spirit
caused the rise of the service state.247 Rulers, whose pursuit of power and glory drove them to
prepare for war, began to do so by actively improving the economic base since economic might
was critical for power and war. Mercantilist-absolutist regimes introduced new crops, notably the
potato. They encouraged the settlement of new land. They took measures to codify the law and
they established standard weights and measures and unified the coinage. These measures reduced
transaction costs and boosted the economy. The mercantilist-absolutist states also intervened to
help societies coping with natural disaster, epidemics and the supply of public goods such as fire
fighting and the management of light houses.248
The same great power rivalry prompted the European states to undertake geographical
explorations. Through their colonial activities and overseas trade, the European state system was
241 Refer to Roach (1969) and Wesson (1978).
242 Refer to Stomberg (1931) and Wesson (1978).
243 In sharp contrast, the invention of the printing press, which made the spread of knowledge easier, led to a greater
effort of censorship and not scientific or educational renaissance in the gunpowder empires of the Middle East, South
and East Asia. Refer to Wesson (1978, p. 119, p. 141-152). Only until 1720 was the printing press used in the Arabian
world. Differences in the international environment elicited different responses to new technology.
244 Refer to Wesson (1978).
245 When relative gain is the sole concern and concern for absolute gains disappeared totally, trade is a zero sum
game, as claimed by some mercantilists. Refer to Grieco (1988a, 1988b).
246 Refer to Heckscher (1955), Wesson (1978, p. 136) and Webber and Wildavsky (1986).
247 Refer to Anderson (1975), Landes (1969), Rostow (1975), Tilly (1975, p. 73), van Klaveren (1969),
Bronfenbrenner (1964, p. 363) and Jones (1981, p. 134-9).
248 This concern for wealth and revenue was conspicuously absent among leaders of the gunpowder empires or the
ruling elite of states of noncompetitive state systems. Wesson (1978, p. 195) observes: A......While Asiatic emperors
have been quick to despoil riches as soon as they become tempting, European kings have been able to do so only under
some restraint and at considerable ultimate cost to their power.......@
105
expanded to every corner of the globe to become the modern world state system.249 This
expansionist energy was in sharp contrast with the lethargy and isolationist orientation of the
gunpowder empires in the Middle East, India, China and Japan. The Ming court of China had
forbidden further overseas expedition after the maritime undertakings of Admiral Cheng Ho.
Taiwan was not colonized under Ming even though she was just off the shore of China. In contrast,
Henry the Navigator of Portugal sponsored overseas exploration and he was not alone among the
European ruling elite to do so.250
The never slackening contention among European states for power and position, for status, glory,
and security in an insecure competitive state system generated an atmosphere propitious to
improvement. The statesmen and public leaders were continually spurred by the need to improve
at the price of their comfort. Every advance of a rival was a threat and a powerful goad. The
intimate and competitive international system of Europe provided forceful prodding. Insecurity
and competition constantly jolted European states and societies out of routine and complacency
and prevented the stagnation, decline and decay that plagued the secure and entrenched gunpowder
empires of the other major rival cultures.251
The expansions of European states overseas created vast colonial empires. In Europe itself, small
principalities were annexed or coalesced into larger national states which grew in size over times.
The delicate balance of power mechanism saved Europe from slipping into an imperial order
several times. These chains of events testified to the increased in economies of scale in state
building brought by the technological innovations started with the gunpowder revolution. In
Europe, independent states in the multi-sided contests could disregard the fact of intense interstate
competition only at their peril. They were constantly under pressure towards rationality. This was
a goad the large bureaucratic-hierarchical state critically needed. In the contentious European
community, there were always blows to pride or interests that demanded new responses. Foreign
complications were often the triggers for major changes. Failure or mismanagement of
involvements abroad set in motion the English, French and Russian revolutions.252
Interstate rivalry energized the European nations. In the European competitive state system, no
success in the striving of powers was complete. Pride of standing, competition for the leadership of
the world, and the sense of power over destiny spurred European nations to achievements.
Shattering the pretensions of Spain in the sixteenth century inspired Elizabethan poetry and
249 W. W. Rostow (1960, p. 6, 32) argues that industrialization was “given dynamism by the lateral expansion of
world markets, (i.e. the new overseas territories) and the international competition for them” and that “the meaning and
impact of this lateral innovation was heightened and given a peculiar turn because it occurred in a system of inherently
competitive nation states.” Refer to Bernholz, Streit and Vaubel ed. (1998, p. 10).
250 Among one of the aims of Henry the Navigator was to outflank the world of Islam. Still, inter European states
rivalry played a major role.
251 Refer to Gibbon (1932, chap. 38, II) and Wesson (1978, p. 182).
252 Refer to Weiss and Hobson (1995) and Wesson (1978, p. 183-4). For this reason, the Chinese and Japanese
empires fearful of foreign complications turned isolationist.
106
drama.253 Defeat called for greater effort and self examination and reforms. The debacle of 1871
ushered in an efflorescence of art in France.254
The Gunpowder military revolution profoundly changed the form of warfare and interstate state
rivalry in Europe. The intense great power rivalry in turned fundamentally altered the structure of
the European states and economies. The military revolution and great power rivalry provided the
impetus for the European states to outgrow each other economically. The series of military
technological shocks especially since the 16th Century that increased the economies of scale of
warfare (or mass factor) in Europe is referred to as the military revolution.255 From 1500
onwards, the armed forces and military budget grew in size, testifying the increases in the
economies of scale in warfare.256 With greater economies of scale in warfare, European states
strove to field larger and larger armies and navies to outdo each other in military contests. The
evidence for the increase in the scale of warfare was the emergence of large standing armies and
navies in the 16th and 17th Centuries due to the use of fire powder and large and expensive
fortification (trace Italian). From 1500 onwards, armed forces and military budgets grew in size
drastically.257 Military rivalry was intensified in Europe. European states competed with each
other to field larger and larger armies and navies, limited only by the resource extraction ability of
the state and the size of the economy. Increased intensity in warfare increased the financial burden
of the state. To meet the requirement of fielding larger armies and navies and extracting more
resources for military purposes, the European states resorted to many measures to outperform each
other economically and financially.
The increase in the economies of scale in application of violence and coercion reduced the cost for
the state to suppressing feudal local resistance. It facilitated property rights enforcement of the
centralized nation states.258 As a result of the race for larger economy and revenue to support
larger military as well as through the economies of scope between military and bureaucracy and
economy, the intense interstate rivalry led to a larger state and a larger economy. The destination
of this metamorphosis was the modern warfare, modern state and modern economy. Ultimately,
253 Baron (1955) observes that the Greeks were uplifted by victory over Persia and the Florentines were uplifted by
their successful defense of liberties at the beginning of the Fifteenth century. Both the Athenians and Florentines
associated intellectual leadership with military valor.
254 Refer to Kavolis (1972). The above arguments are shared by scholars such as Jones (1981, 1888), Kennedy
(1987), Weiss and Hobson (1995), Porter (1994) and Parker (1996). They argue that the unique competitive state
system of Europe caused her superior economic performance and subsequent industrialization. The argument is that the
constant interstate warfare of the competitive state system provided the impetus for European states to outgrow each
other economically. It was the expectation and preparation for war, the actual conduct and experience of war and post
war reconstruction and reorganization that drove the process of state making and economic development. Refer also to
Tilly (1975, 1992), Rasler and Thompson (1989) and Duffy (1980).
255 Refer to Black (1991), Dudley (1991, 1992), Duffy (1980), Keegan (1993), McNeill (1982), Parker (1976, 1996),
Roberts (1956) and Tilly (1992).
256 Parker (1976): 'Between 1530 and 1710 there was a ten-fold increase both in the total numbers of armed forces
paid by the major European states and in the total numbers involved in the major European battles.'
257 Refer to Black (1991), Dudley (1991), McNeill (1982), Porter (1994), Parker (1976, 1996) and Roberts (1956).
258 Refer to Anderson (1992), Best (1982), Black (1991), Cohen, Brown, and Organski (1981), Downing (1992),
Duffy (1980), Hechter (1980), Parker (1996), Porter (1994) and Tilly (1975, 1992).
107
Europe became host to mass participation states governing industrialized economies with great
industrial and technological power. These mass participation states organized and maintained mass
citizens armed forces facing each other in long periods of militarized peace punctuated by large
scale conflicts.259 In other words, the increases in the scale of warfare prompted the rise of huge
bureaucratic states with an increased fiscal extraction capacity and an increased intervention in the
economy. State intervention in turn led to a modernization of the economy.260
The need to field greater and greater armies to outdo each other finally resulted in the mass citizen
army fueled by nationalism. With the rise of nationalism after the French Revolution, European
states switched to the mass citizens= army from the mercenary army composed of a large
proportion of foreigners. From this time onwards, every able-bodied citizen was a soldier and the
whole nation was turned into a war machine.261 AThis figure (the size of the French army at July
1793) was more than twice that Louis XIV had ever been able to put into uniform. Doubling of the
army's size (on the basis of a population only about 30 percent greater in 1789 than in 1700) offers
rough measure of the intensification of mobilization for war that the revolution wrought in
France.@262 Other European great powers at war with France evinced a similar increase in army
size soon after.263 War became total.
The use of conscripts in the mass citizen army did not only reduce the pay roll. There were greater
economies of scope between the economy and the military as well.264 The soldiers, when on
reserve, were workers, farmers or other professionals. They contributed to the economy in peace
times and to the military in war times.265 Even the portion of the population not involved directly
in combat was important to the military effort as well. They sustained the war time economies and
contributed to the logistic effort. As the masses were mobilized and organized for war and the
industrial economy, their welfare became a major concern. European states therefore expanded
their welfare programs to take care of the masses now deeply involved in the war effort and the
industrial economy. A population well-taken care of and well-trained better supported the military
259 These changes affected naval warfare as well, which was more expensive, more
technology intense and has
greater logistical and financial demand on the state and economy. Refer to Parker (1996).
260 Porter (1994) argues that it was essentially the expectation, preparation and experience of wars that led states to
enlarge their role in the economy in general and their role in welfare provision in particular. Total warfare for instance
not only requires a healthy population and contented workers for war effort, it also needs a population that reproduces
abundantly to replenish the immense human losses the war generates. That produced the welfare state of Bismarkian
social imperialism.
261 Refer to Best (1982). The scale of warfare could hardly increase anymore. Black (1991), p. 62-5, 'By the autumn
of 1794 its 1,169,000, its real size probably 730,000, the largest army France had ever fielded.' This wave of increase
in the scale of warfare should be more relevant than the 1560-1760 wave of increase in the scale of warfare for the post
1850s data and the civilianization paradox pointed out by Tilly (1992).
262 Refer to McNeill (1982, p. 197).
263 Refer to McNeill (1982, ch. 6) and Cohen (1985), ch. 2 and 3.
264 Economies of scope refer to the cost savings result from the undertaking of several different activities together
rather than each being undertaken separately. Economies of scope arise due to the common infrastructure, resources,
technology and know how used in different activities. Economies of scope also arise due to the spillover of knowledge
and other benefits between different activities. Refer to Panzar (1989).
265 Refer to Cohen (1985).
108
effort and the industrial economy. Such a population was also less likely to cause civil or industrial
unrest and be attracted to radical ideologies and political actions. They were also more willing to
make sacrifices towards the war effort.266
If one contrasts the military forces of Europe to those of states and peoples of the rest of the world
in the late nineteenth century, a great discrepancy leaps to one=s eyes. Larger and larger mass
armies made up primarily of conscripts and reserves, came to dominate the military scene of
Europe. Such mass citizen mass armies, however, were not for export to the other parts of the
world. Asian and African rulers could not create such a structure. The weak states there could not
create or maintain armed forces of such a scale. Most important, the state could not trust the
citizenry not to attack its rulers if it had the chance.267
From 1840 onwards, war was industrialized to meet the demands of increases in the scale of
warfare. Logistics was industrialized to meet the increased demand of mass armed forces.268 The
use of steam engines, steel haul ships and the railway increased transportation capacity. Machines
replaced artisans in the productions of arms. Mass production of arms achieved speedy and larger
quantity production and supply of weaponry for the mass armed forces. Changes in weapon
designs were accelerated.269 ''A global, industrialized armaments business thus emerged in the
1860s.''270 The increased scale of warfare and industrialization of war in turn caused the rise of
command technology. Innovation was directed and planned with an eye on its military
implications. States began to pour in resources into education, research and development. From
1850 onwards, technological progress accelerated. As a result, there were greater technological
spillovers between the military and civilian sectors.271 This led to the industrialization of the
military, as well as militarization of the industry and society, and the rise of command technology.
The state also assumed a greater role in the industry.272 The rise of the totalitarian states of
Stalinist Soviet Union, Nazi Germany and Fascist Italy was the logical outcome of the increasing
militarization of society and state.
Industries and scientific and technological communities related to the military became the pioneers
of one new technology after another. These new technologies included steel metallurgy, industrial
chemistries, electrical machinery, radio communications, turbines, diesels, optics, calculators (for
fire control) and hydraulic machinery. The military-industrial complex evolved quickly into vast
bureaucratic structures of a quasi-public character. Decisions of the big arms firms, whether
technical or financial, began to assume public importance. The actual quality of weapons produced
266 Refer to Porter (1994, p. 158-161, 179-192, 236-239).
267 Nations in the European competitive state systems devoted far more resources to the military compared with
nations elsewhere in the other types of international systems. Refer to McNeill (1982, p. 256-7).
268 Refer to Lynn (1993) on how the infrastructure of a modern economy and fiscal regime facilitates logistic and
military effort. Refer also to Nef (1950), Weiss and Hobson (1995, chapter 4) and McNeill (1982).
269 Refer to McNeill (1982, p. 235-6).
270 Refer to McNeill (1982, p. 241) and Kennedy (1987).
271 Refer to McNeill (1982, p. 237-8, 292-4).
272 Refer to Gerschenkron (1962) and Porter (1994).
109
by these firms mattered vitally to the rival states and armed services of Europe. After the wars of
German unification, everyone recognized that technical superiority might bring decisive advantage
in war. Each technical option in arms design carried a heavy freight of political and military
implications. Scientific and industrial decisions of the firm concerned both the national interest
and the financial future of the arms firm.273 Greater military-industrial interactions and the rise of
the gigantic military-industrial complex after the 1880s occurred as a natural result. There were,
therefore, greater economies of scope between the military, the economy and the fiscal
bureaucracy from 1840 onwards.274 ''War, in short, became well and truly industrialized as
industry became no less well and truly militarized.''275
Both industrialization and total war mobilization called for a great administrative capacity of the
state to be carried out. This was especially apparent in the area of policing. Internal security and
stability were very important for both war mobilization efforts and industrialization. Organization
and mobilization of the homeland and occupied territory for war effort and industrial production
required a great policing capacity. The rise of radical ideologies and unconventional warfare
accentuated the needs for police works. The police force undertook new functions to facilitate the
war effort and industrial production. These works included intelligence and counter intelligence,
subversion and anti-subversion, surveillance, monitoring and manipulation of the political thinking
and inclinations of the population, on homeland, occupied territory and other countries. As a
response, the European states established professional, salaried and bureaucratic police forces,
specialized in the control of the civilian population, thus freeing their armies to concentrate on
external conquests and international wars.276 In sum, to achieve greater national power, the state
industrialized the military, militarized the economy and politicized the society.277
The great power rivalry forced European nations to be powerful. They advanced in great strides
with the intention of overtaking each other. The transformation they brought upon themselves
made them much ahead of the other cultures in all fields of human achievements. One of the
spheres of great powers rivalry of the European nations was in the possession of overseas colonies
and trading opportunities.278 Given their immense superiority militarily and otherwise, every
corner of the globe was turned into a stage for their power play.279 Through their quest for power
273 Refer to McNeill (1982, p. 292) and Weiss and Hobson (1995).
274 Refer to McNeill (1982, Chapter 7, 8, 9 and 10).
275 Refer to McNeill (1982, p. 358-9) and Keegan (1993).
276 Initially, the army did most of the works for internal control. Refer to Chapman (1970), Liang (1992) and Tilly
(1992).
277 McNeill (1982, ch. 7-10), Ardant (1975) in Tilly ed. (1975, p. 164-242,), Porter (1994), Tilly (1992), Rasler and
Thompson (1989), Weiss and Hobson (1995) present the history of war driven modernization of European states.
Weiss and Hobson (1995) present the stories of Britain, France and Prussia in detail.
278 Refer to Bhagwati, Panagariya and Srinivasan (1998), Clarida and Findlay (1991), Durkin (1997), Ishizawa
(1988), Manning and McMillan (1979) and Wong (1995). Refer to Thompson and Modelski (1996) for the relationship
between great power rivalry, economic changes and colonial pursuits.
279 McNeill (1999, p. 480) observes that in Great Britain in the latter part of the nineteenth century there was A...... a
new Ahard boiled@ school of thought which considered the survival of the fittest to be the key to all history and human
life, and believed that the future of the Anglo-Saxon race depended on how much of the earth they could seize and
settle with British colonists.@
110
and wealth, European nations expanded the state system of Europe to include the whole world.
This process was completed in the late nineteenth century. Throughout the nineteenth century, a
series of colonial wars almost unnoticed by the public in Europe resulted in the expansion of the
European colonial empires of Britain, France and Russia in Africa and Asia. Comparisons between
European powers and non European powers give us a good picture of how economic, political and
technological advances permitted the Western states to war with greater efficiency and on a larger
scale. Enemies hereto undefeated and unsubdued could be rendered so easily and swiftly, the most
prominent of which were the two East Asian great powers which had not yet been challenged by
the Western powers even in the early nineteenth century, China and Japan.280 Finally, the
economic might and logistical capacity the industrial revolution had conferred upon the Western
nations made it possible for them to challenge the two great East Asian powers that had gone
through the gunpowder military revolution in their own niche. The First Opium War between
Britain and China ended the geopolitical isolation of China. A small British detachment swiftly
crushed the forces available to the emperor of China. This was the most important demonstration
of the superiority of the European nations.281 The gunboat diplomacy of Perry ended the
isolation of Japan. There was from then on, only one international system on earth and it was
centered in Europe.
Why did the competitive state system endure in Europe for so many centuries? Geographical
fragmentation seems to be the primary cause. Water and mountains divide Europe into many easily
defendable regions. There was no single dominant core area where an overwhelming share of
resources was concentrated. Concentration of a predominant share of resources in one core area
makes war more decisive. The power controls that dominant core attains a far greater state
building efficiency than other players. These conditions facilitate the rise of empires. Cultural
similarity meant that the major European states were quite equal in state building efficiency. Equal
state building efficiency among the major powers and an even dispersion of resources among them
therefore put the European competitive state system at the delicate equilibrium. That made
possible the permanence of the national-states and the state system.282 As a result, there are no
dominant linguistic or ethnic groups. Linguistic and ethnic fragmentation further contributed to
political fragmentation. That led to a state system and as the mass factor increased due to
technological changes, larger scale international conflicts emerged. Thus arose the competitive
state system with its superior economic performance. The existence of an offshore England as well
as external powers such as Ottoman Empire, Russia and America helped too. Offshore England
and the external powers repeatedly ensured that all attempts to put Europe under one imperial
280 Refer to Parker (1996, p. 153-154) and McNeill (1999, Part III).
281 This greater European war capacity rested with the fiscal regime and economic might and not merely with
military technology. A Ching China that modernized her military but not her fiscal regime and economy was therefore
defeated continuously by Japan and the Western powers. On the other hand, Japan modernized her economy and
political and fiscal regime, besides her military. Japan achieved parity in war efficiency with the Western powers soon
after. Refer to Porter (1994, p. 146-7). Japanese reforms started in 1870s. Japan defeated China in 1894 and Russia in
1905.
282 Analogously, the city state system of ancient Greece was made possible by the fragmented geography of Greece.
Greece is dissected into hundreds of islands and peninsulas. The Greek mainland is further cut by rugged mountains
into many small regions with few plains.
111
design would be thwarted.283
283 Refer to Niou, Ordeshook and Rose (1989) and Powell (1999) on alignment and stability of international system.
Refer to Kennedy (1987, chapter one), Wesson (1978, p. 111) and Hui (2005) for a comparative study of how the early
modern Europe state system survived while the ancient Chinese state system failed to. Montesquieu (1989, book 17,
chap. 6) has the same observation: AIn Asia they have always had great empires; in Europe these could never subsist.
Asia has larger plains; it is cut into much more extensive divisions by mountains and seas ... In Europe, the natural
division forms many nations of a moderate extent, in which the ruling by laws is not incompatible with the
maintenance of the state ... It is this which has formed a genius for liberty; that renders every part extremely difficult to
the subdued and subjected by a foreign power ... there reigns in Asia a servile spirit.@
112
CHAPTER EIGHT. CONCLUSIONS
We conclude by supplementing Diamond (1997)’s argument on the non-development of the
non-Eurasian world. This will further testify to the value added of an economic theory of world
history based on insights from all the social sciences over the argument of Diamond (1997) which
is based mainly on ecology, biology and natural geography.
The American Continent is the largest of all the non Eurasian regions. The main geographical
orientation America was North to South. This made travel and conquest difficult during pre
modern times as the travelers or conquerors have to overcome differences in climate. This together
with the lack of large domesticated animals for transportation resulted in lower economies of scale
in warfare and administration. There was no contact between the civilization in Peru and those in
Mesoamerica.284 Therefore, once the Inca and Aztec empires were established in Meso America
and the Peruvian highland, there was hardly any international political-military competition going
on in America. Therefore, there was no drive for further progress.
Africa too has a North to South main geographical orientation. Sub-Saharan Africa is covered by
think forests. There are diseases which only recently conquered by modern medicine. All these
obstacles resulted in low economies of scale in warfare and administration. Therefore civilization
and state building started very late despite Africa’s proximity with the first civilizations. The pre
modern states or empires in Africa were localized and not contiguous with each other. The
political unites interacted sporadically and marginally. Therefore there was very little
political-military competition to propel the progress of civilization.
Southeast Asia was in close proximity to both India and China. Constant contact with India and
China started very early in around the classical era. Yet, of all the major Eurasian cultures,
Southeast Asia was the only one to be always at the receiving end of culture influences. This was
due to the fact that Southeast Asia has a compartmentalized geography. Geography rather than
state capacity dictated political boundaries. Jungles, mountains, wild rivers, rough seas and oceans
and hot, wet, malarial lowlands formed insurmountable barriers to invaders or settlers. Even the
Mongols failed to conquer Southeast Asia. Before the arrival of the European colonial powers,
small mingled tribes and principalities dominated the landscape of these regions. Nature rather
than politics defined the political landscape.285 There was scanty international political-military
competition. As a result Southeast lacked the drive to create high civilization of her own.
Australia and Oceania was characterized by external and internal isolation in pre modern eras. In
fact, she was the most isolated of all major regions. Sparse population separated by vast distance
resulted in very low economies of scale in state building. Political-military competition was almost
nonexistent. Most of the region was still at hunter-gatherer stage when being incorporated into the
284 Refer to Diamond (1997).
285 Refer to Fitzgerald (1973, 54-5) and Jones (1981, 167).
113
Europe centered modern world state system in around 18th Century.
114
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