On reflection, I should have added another caveat: in the absence of a single commodity (or basket of commodities) which are profitable enough to allow a huge increase in national wealth simply through export income.
What happens to the country in question when that commodity boom runs out is another story - having secure institutions (including property rights and the rule of law) will allow for a more flexible transition. Argentina hit that problem when the agricultural commodities boom closed, due both to falling prices and the loss of market access which you've pointed out upthread.
Modern oil-producing states could face similar problems when their oil reserves run out. Australia had problems when one major commodity boom ran out (wool), but was fortunately able to transition better than Argentina.
Absolutely. Which was one of the reasons I was emphasizing, in my previous posts, the necessity for creating an internal market in addition to the necessity for industrialization.
Erm, British GDP per capita took a rather big hit because of the loss of able-bodied manpower and wealth in both world wars (especially WW2), and it had not yet recovered by 1950. Lack of property rights is one reason for lower economic growth, but the physical destruction of a total of ten years of world war will have a hit on economic growth, too.
But the "rather big hit" to British GDP between 1914 and 1945 does not explain, as I have pointed out in my previous post, that "on the eve of WW1 Argentine GDP was about three-quarters of the UK" which you have not addressed.
Note that in the same period 1870-1950, Argentina went from 75% of US per capita GDP to 50%. It had a similar trend in comparison to Australia, another country involved in WW1 and WW2 but which lacked the same physical destruction that Britain suffered (especially in the latter war).
You fail to take into account the increase of US GDP caused by the massive state-directed expansion of the U.S. economy during WW2. In any case, an Argentine per capita GDP of 50% of US per capita GDP is still impressive, and still needs to be explained.
Simple: the direct effects of the physical destruction (and loss of manpower) of the two world wars, which Argentina was spared and Britain wasn't.
Not so simple, I think, since I was comparing Argentine and British/US GDP during the whole period from 1880 to 1950, which you have ignored, focusing only on the years between WW1 and WW2.
Compare Argentina to those nations which didn't receive the same physical destruction of WW2 (USA, Canada, Australia, NZ) and note the difference.
Canada benefited from the massive state-directed expansion of the economy during WW2. Such massive state-directed expansion was, needless to say, absent in Argentina during this period. (I won't comment on Australia and New Zealand because I don't know enough about their economies during this period.)
The political stability of France hasn't been perfect, but it has been a great deal more stable than most of Latin America...
Oh, no question. There's no comparison between France and most of Latin America in terms of political stability.
For the sake of argument, compare France and Argentina.
Alright, for the sake of argument, let's compare France and Argentina from 1830 to 1914. I've never disputed that Argentina suffered political instability after WW1, so I won't discuss it here.
Argentina: Starting from 1853, Buenos Aires seceded from the Confederation, but there was no armed conflict until 1859, which was settled in one battle (Battle of Cepeda) on a single day (October 23). Buenos Aires signs the constitution and there follows a period of 55 years of relative political stability (1859 to 1914).
France: There is the July Revolution of 1830, February Revolution in 1848, and the Paris Commune in 1871. From 1830 to 1848 there is a period of 18 years of relative political stability. From 1848 to 1871 there is a period of 23 years of relative political stability. From 1871 until the beginning of WW1 there is a period of 43 years of relative political stability.
I think it's fair to say that France and Argentina are roughly equivalent in terms of political stability from 1830/1859 to 1914. From 1830 to 1913 France had an annual growth rate of per capita GNP of 1.2, while from 1870 to 1913 Argentina had an annual growth rate of per capita GNP of 1.5, slightly higher than France. The question is this: how do you explain the "lack of secure property rights" in Argentina during the period of 1870 to 1913, when both Argentina and France are roughly equivalent in both political stability and economic growth, and given your previous comments about the "feedback loop" between "secure property rights" and political stability and economic growth.
To me, calling private investment in capital "minimal" is equivalent to stating that there was a relative lack of private investment, or at least that the private investment was not necessary.
No it isn't. To "lack" something is to not have it, whereas "minimal" means the smallest possible amount, quantity or degree.
Regardless, though, I think that you're overestimating the effects of state-driven industrialisation in Germany and Japan, and underestimating the effects of the establishment of private capital markets.
I'll quote E. H. Norman (from Japan's Emergence as a Modern State) on Japanese industrial development, to give you an idea of what I mean when I use the term "state-directed industrialization":
"It was the Meiji policy to bring under government control the arsenals, foundries, shipyards, and mines formerly scattered among [feudal] domains, then to centralize and develop them until they reached a high level of technical efficiency, while at the same time initiating other strategic enterprises such as chemical industries ... and the last step was to sell a large portion of these industries to the handful of trusted financial oligarchs [zaibatsu]. But control over the most vital strategic enterprises, such as arsenals, shipyards, and some sectors of mining, was kept in government hands ..."
I didn't state it explicitly, but that was meant in the context of a market economy. Command economies operate according to different rules ...
... China started out as a command economy, and in some aspects it still is. Market forces (including the effects of property rights) don't work the same way in a command economy as they do in a command economy.
It certainly sounds like we're more in agreement than it would seem from all of the disagreement over details! Particularly given that I was talking in the context of a market economy (a command economy like the USSR or Communist China being separate).
The command economies, whether Soviet or Communist Chinese, are a perfect example of states which lacked "secure property rights" and still experienced massive economic growth. To exclude the USSR and Communist China because they are not market economies is arbitrary, since the fact that they are not market economies is the very reason why I used them as examples of state-directed industrialization, because it undermines the argument about the link between "secure property rights" on the one hand and industrialization and economic growth on the other.
I was asking why you felt the need to say that "In other words, Britain could have industrialized without any need of enclosures" when I'd never argued that it couldn't have industrialised at all without them, just that the enclosures helped. (I pointed out a couple of ways in which they helped).
I don't understand why you're confused. You began by arguing that the enclosures were "triggers" for industrialization, due to "improved property rights" and went on to argue that the enclosures "benefited British industrial growth" by (1) "creating secure property rights in land" which was a "considerable contributor to industrialization" and (2) that the "displaced peasants" who "flock[ed] to the cities where they became workers in the developing factories ... foster[ed] growth in overall industrialization." I responded by writing that the enclosures were not about "secure property rights" so much as the entrenchment of the power of the wealthy landowners. I gave the example of the land redistribution in France as having no impact on the industrialization of that country. I then stated that "the idea that 'secure property rights' " were a "prerequisite for industrialization" ignores the experiences "of Germany, Japan, Russia or China, all of which experienced a state-directed industrialization process". And I then concluded that "Britain could have industrialized without any need of enclosures" as France, Germany, Japan and the US had. I thought that you stated your argument clearly, and I think my response was equally clear.
I do believe that land property rights and use as debt security (triggered in part by the enclosures) were one thing which helped the relatively early industrialisation of Britain, but that doesn't mean that Britain couldn't industrialise without them.
Right. We're in agreement, which is why I gave the examples of France, Germany, Japan and the US, all of whom didn't have enclosures. I was only stating my opinion, based on the arguments I presented, that Britain didn't need the enclosures to industrialize.
I'll try to respond to the rest of your post as some as I have more time. Unfortunately, at the moment, I'm extremely busy with work, so please excuse any delay.