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Network Origins of the Global Economy: East vs. West in a Complex Systems Perspective
The upheavals of recent decades show us that traditional models of understanding processes of social and economic change are failing to capture real-world risk and volatility. This has resulted in flawed policy that seeks to capture change in terms of the rise or decline of regimes or regions. In order to comprehend current events, understand future risks and decide how to prepare for them, we need to consider economies and social orders as open, complex networks. This highly original work uses the tools of network analysis to understand great transitions in history, particularly those concerning economic development and globalisation. Hilton L. Root shifts attention away from particular agents – whether individuals, groups, nations or policy interventions – and toward their dynamic interactions. Applying insights from complexity science to often overlooked variables across European and Chinese history, he explores the implications of China's unique trajectory and ascendency, as a competitor and counterexample to the West.
334 pages, Hardcover
Published April 30, 2020
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May 7, 2022
Hilton Root offers a corrective to economics’ current direction. He criticises the modern discipline for largely neglecting how economies form and what forces change their structure. A new approach is required, and Root adds his voice to the pleasing chorus of scholars challenging an incomprehensibly durable doctrinaire orthodoxy. Continuing the work of scholars like W. Brian Arthur, modelling dynamic agent interactions through complex networks is Root’s antidote for the prevailing heuristic disease.
Root believes economic research into the state-market relationship has been neglected. Current analysis also largely confines itself to how resources are allocated. However, contemporary data points and methods used to calculate employment, consumption, production and prices do not adequately describe an economy’s shape. Philosophical underpinning asserting convergence towards equilibrium is also a flawed premise. As we have seen with spectacularly inadequate prudential and inflation measurements, Root’s criticisms are fair ones.
Root identifies three propositions that inform deficient contemporary economic models: consistent agent behaviour, stability, and lack of incentives to change preferences. Unfortunately, methods once central to economics that analysed the integrity of these inputs (as explored by Keynes and Hayek) are perceived as less important than crystal ball prognostications. Root studies European and Chinese development trajectories to reinvigorate the lost mode.
China’s system formed into a hierarchical “hub and spoke” network. In Imperial (and arguably modern) China, the Emperor sat at the apex and centre. This structure accordingly shapes policy transmission. Though it was capable of great periods of stability, Imperial China’s centralised authority also made the Middle Kingdom more fragile to otherwise peripheral shocks compared with a distributed system.
Communication channels are one example that exposes this potential weakness. Palace memorials issuing emperors’ edicts were sent to a scattered officialdom (local governors, Confucian officials, local gentry, or the military). Emperors also relied on the personalised communication as a conduit to collect empire-wide intelligence. The content covered a staggering range of issues. A particularly authoritarian (or paranoid) emperor might request reports on everything from local commodity prices to speculation about secret society collusion. The result? Flourishing could be disproportionately determined by the languid stroke of a world-weary emperor’s vermillion-inked brush. Similarly, a series of scornful determinations from the Son of Heaven over the day’s three-hundredth and forty-second parchment detailing oxen breeding pair numbers in rural Anhui might dictate agricultural policy direction. Personalities and emotions carry inordinate weight in highly centralised systems. Only a small imaginative stretch is needed to picture Core Leader Xi stamping voluminous thought work documents’ individual pages with his own personal chop.
European organisation differed. It was a decentralised though clustered series of royal dynasties and aristocratic houses interconnected through marriage. The region’s “network architecture” granted law an independent status by placing limits on sovereign power. It also bound orderly succession. These factors enabled new nodes to bloom organically, and were foundational for Western economic growth.
In a highly original analysis on the importance of legal independence for development, Root and co-author Cameron Harwick integrate legal systems into European and Chinese network structures. In Western Europe, the fusion between Roman and Germanic law (compared with enduring Chinese Legalism) afforded aristocrats significant autonomy. Their property was protected through both secular and ecclesiastic law. Though not explicitly cited, tenth and eleventh-century Pax et treuga Dei canonised territorial rights while protecting the public sphere. Local autonomy in turn contributed towards Western Europe-wide distributed network resilience.
In addition to law, Root and another co-author (Qing Tian) dedicate a chapter to comparing how differing networks shape innovation capacity. Root rounds out his book by analysing network structures in our globalised era.
Divisions between micro and macro are always artificial, but I find Root’s categorisations convincing. One pitfall, however, is that applying theory to historical events results with attribution to fit that model rather than a contextual analysis where contrary conclusions may be drawn. In analysing China’s history, two examples are centralised authority and dynastic replication. Historian’s scholarship on both of these issues are unsettled.
Degrees of imperial control and replicated governance structure are products of unique historical circumstances. These systems fluctuate depending on multiple complex factors that influence an emperor’s capacity to maintain control or ability/desire to replicate previous modes of administering territory. Chinese historiography feeds the perception of ambered political structures. As historian Philip Kuhn put it, historical convention reinforces notions that the Chinese Empire existed in a state of invariability “the rise and fall of regimes, the clash of cliques in high state affairs, were but surface waves on a deep pool of stability.”
Incentives to emphasise continuity (particularly post 1949) have always existed as a socio-cultural imperative in Chinese history writing. Official imperial Chinese historians in newly-established dynasties would portray their emperor(s) as rightful civilisational inheritors to communicate legitimacy. However, degrees of continuity and replicability are contested points. Historians have long argued over dynastic similarities regarding their administrative structures, hierarchy (and the interrelated relationship with and control over local gentry), fiscal policies, contemporary religious and philosophical influences, to name but a few.
Despite the above, however, specific minutiae are just that. We need more grand theory amidst the overwhelming trend towards technically adept but wisdom-lite discipline specialisation. Root’s fusion of legal, historical, political and economic is a bold synthesis. His book is a welcomed reorientation to the current scholarly direction where innovative thinking is sorely needed.
Half a star removed for Cambridge University Press sending me a copy with half-pressed ink from the tail end of their print run. Terrible quality control that soils a fine scholar’s hard work.
Root believes economic research into the state-market relationship has been neglected. Current analysis also largely confines itself to how resources are allocated. However, contemporary data points and methods used to calculate employment, consumption, production and prices do not adequately describe an economy’s shape. Philosophical underpinning asserting convergence towards equilibrium is also a flawed premise. As we have seen with spectacularly inadequate prudential and inflation measurements, Root’s criticisms are fair ones.
Root identifies three propositions that inform deficient contemporary economic models: consistent agent behaviour, stability, and lack of incentives to change preferences. Unfortunately, methods once central to economics that analysed the integrity of these inputs (as explored by Keynes and Hayek) are perceived as less important than crystal ball prognostications. Root studies European and Chinese development trajectories to reinvigorate the lost mode.
China’s system formed into a hierarchical “hub and spoke” network. In Imperial (and arguably modern) China, the Emperor sat at the apex and centre. This structure accordingly shapes policy transmission. Though it was capable of great periods of stability, Imperial China’s centralised authority also made the Middle Kingdom more fragile to otherwise peripheral shocks compared with a distributed system.
Communication channels are one example that exposes this potential weakness. Palace memorials issuing emperors’ edicts were sent to a scattered officialdom (local governors, Confucian officials, local gentry, or the military). Emperors also relied on the personalised communication as a conduit to collect empire-wide intelligence. The content covered a staggering range of issues. A particularly authoritarian (or paranoid) emperor might request reports on everything from local commodity prices to speculation about secret society collusion. The result? Flourishing could be disproportionately determined by the languid stroke of a world-weary emperor’s vermillion-inked brush. Similarly, a series of scornful determinations from the Son of Heaven over the day’s three-hundredth and forty-second parchment detailing oxen breeding pair numbers in rural Anhui might dictate agricultural policy direction. Personalities and emotions carry inordinate weight in highly centralised systems. Only a small imaginative stretch is needed to picture Core Leader Xi stamping voluminous thought work documents’ individual pages with his own personal chop.
European organisation differed. It was a decentralised though clustered series of royal dynasties and aristocratic houses interconnected through marriage. The region’s “network architecture” granted law an independent status by placing limits on sovereign power. It also bound orderly succession. These factors enabled new nodes to bloom organically, and were foundational for Western economic growth.
In a highly original analysis on the importance of legal independence for development, Root and co-author Cameron Harwick integrate legal systems into European and Chinese network structures. In Western Europe, the fusion between Roman and Germanic law (compared with enduring Chinese Legalism) afforded aristocrats significant autonomy. Their property was protected through both secular and ecclesiastic law. Though not explicitly cited, tenth and eleventh-century Pax et treuga Dei canonised territorial rights while protecting the public sphere. Local autonomy in turn contributed towards Western Europe-wide distributed network resilience.
In addition to law, Root and another co-author (Qing Tian) dedicate a chapter to comparing how differing networks shape innovation capacity. Root rounds out his book by analysing network structures in our globalised era.
Divisions between micro and macro are always artificial, but I find Root’s categorisations convincing. One pitfall, however, is that applying theory to historical events results with attribution to fit that model rather than a contextual analysis where contrary conclusions may be drawn. In analysing China’s history, two examples are centralised authority and dynastic replication. Historian’s scholarship on both of these issues are unsettled.
Degrees of imperial control and replicated governance structure are products of unique historical circumstances. These systems fluctuate depending on multiple complex factors that influence an emperor’s capacity to maintain control or ability/desire to replicate previous modes of administering territory. Chinese historiography feeds the perception of ambered political structures. As historian Philip Kuhn put it, historical convention reinforces notions that the Chinese Empire existed in a state of invariability “the rise and fall of regimes, the clash of cliques in high state affairs, were but surface waves on a deep pool of stability.”
Incentives to emphasise continuity (particularly post 1949) have always existed as a socio-cultural imperative in Chinese history writing. Official imperial Chinese historians in newly-established dynasties would portray their emperor(s) as rightful civilisational inheritors to communicate legitimacy. However, degrees of continuity and replicability are contested points. Historians have long argued over dynastic similarities regarding their administrative structures, hierarchy (and the interrelated relationship with and control over local gentry), fiscal policies, contemporary religious and philosophical influences, to name but a few.
Despite the above, however, specific minutiae are just that. We need more grand theory amidst the overwhelming trend towards technically adept but wisdom-lite discipline specialisation. Root’s fusion of legal, historical, political and economic is a bold synthesis. His book is a welcomed reorientation to the current scholarly direction where innovative thinking is sorely needed.
Half a star removed for Cambridge University Press sending me a copy with half-pressed ink from the tail end of their print run. Terrible quality control that soils a fine scholar’s hard work.
Displaying 1 of 1 review