Cities in World History Chapter 21 - Economy PDF

----ECONOMY---INTRODUCTION AND THEORETICAL FRAMEWORK One could say that the more developed and sophisticated the urban functions were and the bigger the non-agrarian sectors, the bigger the towns would be These big towns would also require a highly productive agricultural sector, able to generate th...

----ECONOMY---INTRODUCTION AND THEORETICAL FRAMEWORK One could say that the more developed and sophisticated the urban functions were and the bigger the non-agrarian sectors, the bigger the towns would be These big towns would also require a highly productive agricultural sector, able to generate the surpluses to feed the non-agricultural population Therefore, and in the absence of reliable economic data, it is often assumed that the level of the urbanization rate and the presence of big towns are a proxy for the level of economic development of the society in question or even for the potential for ongoing, future development In a very general sense at least the first probably holds. High levels of urbanization indicate the capability of societies to generate large agricultural surpluses, to transport these surpluses over long distances to the cities, and they— indirectly—indicate the often advanced functions these cities exercised in order to attract the agricultural surpluses. In this way, high levels of urbanization show an advanced development of both agriculture and the transport sector, and perhaps by implication, the urban industrial and services sectors. The preceding is reflected by the fact that in the pre-industrial period the highest levels of urbanization were found in what are considered the focal points of economic development, from the Yangtze area to the land between the Tigris and the Euphrates, and from the Nile delta to the northern shores of the Mediterranean and the North Sea area In the late medieval and early modern period, Japan, parts of China and India, Iraq, Egypt, Spain, and Italy, and the Low Countries and England all had urbanization levels of perhaps 15 per cent or even 20 per cent, and a few regions (Iraq during the 8th to 10th centuries, northern Italy during the Renaissance, the Low Countries in the 15th to 18th centuries) actually exceeded this level. The high levels of urbanization in those areas can indeed be considered indicative of the advanced development of the economy there. But it is unclear whether these high levels also show great potential for further economic growth, as is sometimes assumed This divergence can only be understood if we acknowledge that the underlying mechanisms sustaining these levels of urbanization were not uniform. Understanding and explaining the process of urbanization and the divergence observed thus requires us to look at these underlying mechanisms and to place this process in the wider context of economy and society How did the economy, and especially the main sector of the pre-industrial economy, the agricultural sector, sustain this urbanization? How did the surpluses produced in the agricultural sector flow to the towns? The ways these towns were able to attract surpluses to a large extent determined whether this would stimulate further development, or not This links up with the distinction between consumer and producer cities, already made by Weber. Weber contrasted the industrial or producer cities of medieval Europe with the consumer cities of Antiquity, a distinction which invites further elaboration—for instance, by investigating whether the surpluses of the population of consumer cities were expended on local or extraregional products, or on luxury goods or mass-produced but still has been rather fruitful, for understanding both the economic history of Antiquity and that of the Middle Ages. In order to adapt Weber’s classifications to our analyses we have denoted his producer cities with the term market-oriented and called his consumer cities coercion oriented, since the latter implies some type of coercion channeling the surpluses from the countryside to the town. Moreover, we have added a further distinction, that is, between centralized and decentralized systems. Centralized coercion is found with the classical state-oriented city This is a centre of government and military protection (or occupation), which supplies services —administration, protection—in return for taxes, and its position is intimately linked to the state and the sovereign Moreover, the most efficient location of such a city tends to be in the middle of the territory it controls Closeness to the main transport corridors is not a necessity, as the underlying rationale of such a city is not to exchange goods at relatively low transaction costs Commercial activity will of course take place—for the feeding of the city and the supply of other consumption goods it has to resort to its surroundings—but this function is secondary, derived from its political and military role Decentralized coercion is found in situations where central states are weaker, capitals less important and taxes are not the main way of extracting surpluses from the countryside This kind of city can be labelled urban elite oriented These cities often fulfil roles in administration and particularly in production and services, but add a particular element: the control over agricultural surpluses by way of a coercive hold over rural properties or agricultural output, by way of force or more often by property rights, that is, by economic coercion The economic basis of the market-oriented city, on the other hand, is the production and exchange of goods and commercial/marketed services for and with its immediate hinterland and other (market oriented) cities at a greater distance International trade is an important element in the flourishing of these towns Their links with the ruler or his state are typically less close, and their fate can to some extent be more or less independent of the political entity they are part of because they have an economic basis of their own. There is clearly no reason to be in the spatial center of a state, and in fact a strategic position on important trade routes—profiting from trade flows there—is more likely to be a good location for such a city The ideal ‘market-oriented’ city will therefore be located either near the sea, on a navigable river, or at a hub of overland trade routes Because these cities are based on market exchange with the countryside, such an urban system will be able to generate processes of specialization and commercialization there, which will form the basis for ongoing economic change and ongoing growth of the cities involved, whereas the coercion-based cities will be much more dependent on the life cycle of the state they are part of Ideally, the dominance of the market-oriented type within a society produces a balanced urban system, associated with an open market hierarchy, which may give rise to the dominance of one central city within this hierarchy London’s role in the British economy is a case in point, and Osaka is another As the latter example shows, these categories do not exclude each other, of course, and some cities combine some of the characteristics of each ‘Urban giants ultimately stem from the concentration of power in the hands of a small cadre of agents living in the capital. This power allows the leaders to extract wealth out of the hinterland and distribute it in the capital.’ A high level of urban ‘primacy’, that is, a high share of the largest/capital city in the total urban population, therefore suggests that cities are state-oriented, whereas a system of typical market-oriented cities is relatively balanced, with only a relatively low level of urban primacy ----AN EXAMPLE: URBAN SYSTEMS IN THE AMERICAS---From the beginning, the Spanish Conquistadores used cities—both old and newly established ones—as the centres of control of the acquired territory and its population Typically, the big cities were located inland (Lima is the most notable exception, being a city newly established by the Spanish) Various forms of coerced labour played a large role in the extraction of the surplus, much of which was transformed into silver filling the coffers of the Spanish state. The Spanish occupiers explicitly used cities as an instrument to rule the newly acquired territories, and founded new cities where this was required (and also concentrated the population in the countryside in larger units to facilitate control and taxation) The systems of coerced labour that they used were not entirely new, however—in both the Aztec and the Inca empires, various forms of coerced labour had been usual (for the Incas, who did not use money and market exchange, this had been the principal way of organizing specialization and production of a surplus for the cities) After about a century they slowly switched to more market-oriented forms of control, but without fundamentally changing the political structures of the regime. The cities of the viceroyalties of New Mexico and Peru are therefore among the classic examples of ‘coercion-oriented’ cities within a centralized system of control The North American urban system was completely different In 1800, New York and Philadelphia were the largest cities with about 65,000 inhabitants, still only half the size of Mexico City. The North American cities were, however, located near the sea and formed important transport links between their hinterland and the world market. These were producer cities in their purest form, operating—especially after 1776—within a decentralized system of political control Were we to measure economic success on the basis of the level of urbanization only, then Spanish Latin America would be a ‘success story’, and North America a ‘failure’. In about 1800 still only about 3 per cent of the population of the North lived in cities with more than 10,000 inhabitants, whereas this share was between 7 per cent and 10 per cent for both Mexico and the Andean region. They provide an example of a ‘reversal of fortune’, where the region with initially the highest level of urbanization (and societal complexity), the South, develops only very slowly, whereas the North starts to overtake the South quickly, and in the long run does this in a spectacular way. The fact that in Spanish America silver was found in certain ‘central’ locations facilitated a centralized control over the economy; the resources that were extracted from the North (from beaver skins to timber) were dispersed throughout the whole continent and therefore did not allow for such a centralized system of extraction Even more important, however, was that the Spanish colonial state was grafted on pre-existing socio-political structures based on intensive forms of surplus extraction, whereas almost nothing comparable existed in the North, and the British and French colonies that were established there started from scratch—or more accurately adopted European institutions and market systems ----MIXED SYSTEMS: JAPAN AND CHINA---In other parts of the world, we often do not find such ‘ideal types’, but more mixed systems. Japan is a good example, because its large cities represent the two extremes. Under the Tukogawa regime (1603–1868) it experienced an urban boom and the country became one of the most urbanized parts of the world (with more than 10 per cent of the population living in cities with more than 10,000 inhabitants). The urban structure was dominated by three cities: Edo (present-day Tokyo), with perhaps as many as 1 million inhabitants, was probably the largest city in the world in the 18th century Osaka and Kyoto, with between 300,000 and 400,000 inhabitants, were also quite large. This urban boom reflected centralization of political control under the new regime in the first place. After bitter civil wars during the late 15th and 16th centuries, political control was centralized in Tokyo, where the shogun lived and all feudal lords were obliged to have a house and to spend part of the year Tokyo was therefore a classical consumer city, as was Kyoto, where the (politically impotent) emperor was living. At the same time, Osaka emerged as the central marketplace of the country; a large part of the rice crop, which was marketed here, consisted of taxes paid to the state. With the centralization of state power and the increased efficiency of the taxation system, the importance of Osaka as a central market increased, and it began to develop all kinds of supplementary activities: merchant houses emerged and expanded into banking, for example. The efficiency of the markets further improved due to all kinds of innovations (such as futures contracts at the rice market), and the rice markets in other parts of Japan became closely integrated into the marketing networks that developed around the Osaka market. Similar forces were at work in China. As a result of the centralization of political power under the first Ming emperors, a rather imbalanced urban system had emerged, with a very strong ‘capital city effect’: when Nanjing became the capital again, its size immediately increased from fewer than 100,000 in 1300 to about 500,000 in 1400—to fall back to about 150,000 in 1500 after the transfer of the capital to Beijing in 1421 Beijing, conversely, increased its size from 150,000 in 1400 to about 700,000 in 1500 and 1.1 million in 1800—thereby overtaking Tokyo as the largest city in the world Due to the growth of many (relatively small) market towns, in particular in the lower Yangtze delta, where there were also large cities such as Hangzou, Suzhou, Shanghai (which would expand markedly during the 19th century), and of course Nanjing. These were large commercial cities which dominated the economy In Japan in 1800 about one-third of the urban population lived in Tokyo, which is extremely high; in China this share was about 19 per cent (Beijing), which is also very high considering the fact that China was a much larger country This reflected the different political economies of the two states: on a per capita basis, Japan was mobilizing more resources than China. The high level of primacy was similarly linked to the political economy of these states, which were quite centralized by early modern standards This reflected the different political economies of the two states: on a per capita basis, Japan was mobilizing more resources than China. The high level of primacy was similarly linked to the political economy of these states, which were quite centralized by early modern standards ----EUROPE AND THE MIDDLE EAST: DIFFERENT TRAJECTORIES---- This region is of particular interest, as it saw a dramatic ‘reversal of fortune’ in the centuries before 1800. At about 900, the highest levels of urbanization in the world were probably attained by the Middle East, perhaps not accidentally the region where the first cities had emerged (in Mesopotamia and Babylonia), and where, after the Arab conquest of the 7th and 8th centuries, a new urban boom led to the emergence of large cities such as Baghdad, Damascus, and Basra In what is now Iraq, about one-third of the population lived in cities (in 900), and by far the biggest cities were found there. By contrast, Europe in 800 or 900 was a region with almost no (big) cities—Rome and Constantinople excepted (but even Rome had shrunk to about 5–10 per cent of the size it had during the Roman empire). The other large cities in Western Europe (Córdoba, Seville, and Palermo) were part of the Islamic world Between 800 and 1800 this changed dramatically Western Europe moved forward and became the most urbanized part of the world, whereas levels of urbanization in the Middle East stagnated. This obviously reflected the divergent trends of the economies of the respective regions: Western Europe saw an almost continuous growth of income and population Whereas the economies of the Middle East hardly increased in either respect Table 21.1 presents the basic features of the development of the urban system of the three regions. It shows that the level of urbanization in Western Europe was extremely low in 800 by all international standards, that it increased quite a bit during the Middle Ages, but that it overtook the level of the Middle East only in the 16th century Initially, during the Middle Ages, urban growth in East and Central Europe was also quite promising, although levels remained lower than in Western Europe. But after about 1400 the process of urbanization stagnated there, and the gap with Western Europe widened. In the early modern period, some big cities emerged there, but these were almost solely capital cities, which dwarfed the rest of the urban landscape in their territories When the urban systems of these regions start to expand after 900, the primacy share declines sharply to levels that reflect a balanced, decentralized urban structure. The fall in the primacy share in Western Europe occurred in a period of political fragmentation— the gradual disintegration of the Carolingian empire and the formation of a very fragmented political system consisting of many small ‘feudal’ states. It is one of the indications that the structure of the European urban system is fundamentally different from that of the Middle East In Europe, having direct access to the sea spurred urban development. European trade was very much focused on water transport. In the Islamic world the proportion of cities located on the coast is higher than in Europe, but these cities do not generally fare better than their landlocked counterparts Mediterranean trade in the Islamic world was of only marginal importance compared to Muslim trade across the Sahara and the Indian Ocean. The caravan trade was more efficient in the Muslim world than trade by horse, oxen, and/or wheeled cart. However, this camel-based form of transport did not allow for any further efficiency gains over time in contrast to Europe’s focus on water based, in particular seaborne, trade. Water-based transport proved very beneficial in the long term by allowing large gains in productivity due to (technological) innovations in shipbuilding, sailing techniques, and improved navigation The positive (and large) effect of having capital status and/or an important role within the church hierarchy confirms the consumerist nature of these cities. Being the seat of a ruler and/or (arch)bishop attracts people and capital alike as public expenditure or royal privileges are likely to be biased towards these cities, creating jobs and business opportunities Despite substantial changes in the political map of the Islamic world, the extent of the capital city’s dominance did not significantly change over the period 800 to 1800. In contrast, in Europe, we find a rise of the capital city effect over time, starting without a significant capital city bonus at the beginning of the sample period. From the 13th century onwards we start observing a capital city bonus, and only from the 16th century do capital cities dominate the European urban landscape to the same extent as in the Muslim world, or even more so This does happen in Europe, but never takes hold in cities in the Islamic world that remain ruled by a strong central bureaucracy. The development of these participative institutions in Europe carries very significant direct positive benefits for city development there, for instance by allowing economic actors to develop favourable market institutions. Overall, the findings in Europe regarding the importance of local participative government stand in sharp contrast to the absence of such a process of bottom-up institution building in the Islamic world. Eventually, in both Europe and the Islamic world, the period of political fragmentation was followed by the rise of strong (nation) states. The European cities, by virtue of their influence in local and national policy-making, managed much better to withstand any ‘predatory actions’ undertaken by these new powerful states. ----WESTERN EUROPE: A PATCHWORK OF DIFFERENT TRAJECTORIES---There are real, fundamental elements in this West European diversity. A main one is the political fragmentation, since this area was covered by dozens or even hundreds of political units, of very different types Conspicuously absent there, at least between the Roman era and the early modern period, are large, well organized central states. The empires found there were ephemeral and more formal than real in their power, and the same applies to their capitals. This left more scope for towns, or federations of towns, to acquire political power. In this respect there is a big contrast with other parts of the globe, where the most advanced and urbanized areas—the Nile delta, the lands between the Tigris and the Euphrates or the Yangtze delta—were exactly those most clearly dominated by a sequence of large empires Urbanization was therefore a relatively new phenomenon in many parts of Western Europe. Elites there were to a large extent based in the countryside, in their rural abbeys, castles, and manor houses. This is in contrast to the south of Western Europe, where urban continuity was weak but still existed, and towns had retained some of their administrative functions and elite groups were more urban-based, as in many other parts of the globe Economic functions, in trade and industrial production, generally play a bigger part in the rise of these towns than in many other parts of the world. The acquisition of political or coercive power by the towns or the urban elites is mainly a secondary development here, following their economic rise After about 1000, three core regions of European urbanization appeared, which showed certain similarities. In NORTHERN ITALY, the RHINELAND, and the LOW COUNTRIES, central power was relatively weak, also in part due to the rising powers of the cities themselves. The development of these towns was driven by the flourishing of trade and export industries, within more or less decentralized systems of market exchange. These areas were also the ones where, in a secondary development, the towns and urban elites themselves started to acquire coercive power, mainly exercised over the surrounding countryside by way of: Privileges Monopolies Staple force Jurisdiction Fiscal levies and ownership rights Starting to build city-states, especially from the 13th century onwards On the one hand urban elites and urban markets helped to break the power of manorial lords and contributed to increasing freedom, and the rise of wage Labour, but on the other hand urban elites dominated the land and lease markets, and also coerced rural labour. Towns and urban elites in the central and northern parts of Italy were most successful in this, resulting in a system of decentralized coercion. In the 14th and 15th centuries, the large towns also succeeded in eliminating smaller urban rivals, often by military force, and in building larger political entities In the southern parts of the Low Countries and the northernmost parts of France, but later also in Lombardy, processes like these were halted halfway by the rise of princely power Although some instruments of coercive power were acquired by the towns, the patriciates, and the urban guilds, as most clearly present in the city of Ghent, the Flemish towns did not succeed in building true city-states. London stands out ever more clearly as urban centre, building on its role in (international) trade, helped by its strategic location on the River Thames and benefiting from its role as capital in an ever more centralized kingdom, resulting in a long urban growth spurt from the 11th century to the 13th Still, within England its position was unrivalled, the nearest city being only half as large and the nearest big towns being 100 km or more away. The rest of the urban population was scattered in many provincial towns and hundreds of small market towns. More than most other parts of Western Europe, England was characterized by dispersed urban populations. The late medieval period in England was one of stagnating or even declining urban population numbers. This also applied to London, although the city easily retained its prominent position within England and its relative wealth, built on international trade, internal trade, manufacturing, and services London ever more clearly became the hub of English international trade and saw its role as political capital of England strengthened London in the early modern period did not build or strengthen its position by force or coercion, but rather by the same elements which pushed it forward in the medieval period: its central position in international trade, in distribution, in services and industries, combined with its position as capital of an ever more powerful nation. From the late 17th century, however, this nation and its elites started to use force overseas, as a colonial power, most clearly in the use of slave labour on British plantations and the application of forms of indentured labour The rise of towns and acceleration of urbanization in pre-industrial Western Europe mostly took place in forms of intensive market exchange and decentralized political power, within a balanced urban system with low urban primacy. This applies to all areas which at a certain point took the lead in the urbanization process. All of these areas subsequently saw an increase in centralization, mostly linked to a growing role of coercion; often led by the urban elites, as most clearly in the case of Italy The presence of big cities is not necessarily an indicator of economic growth, let alone one of future growth. Towns certainly need agricultural surpluses, and therefore a productive agriculture, and they need an advanced physical and institutional infrastructure to bring these surpluses to town. This can be done, however, within different systems: Within a market system Within systems of tribute or taxation Within centralized Decentralized systems. It is the exact arrangement of these systems which promotes or obstructs further growth. The relationship between economic development and urbanization is thus mediated through institutional and socio-political arrangements, as is illuminated by looking at the experiences of different parts of the globe