This book is a challenging synthesis, interpretation, and critique of scholarship on the development of capitalism, the formation of modern states, and the shift of the global centre of gravity of economic dynamism from the United States to China in the past quarter-century. All of this is framed by an intellectual edifice inspired by a reading of Marx, which is open to the arguments and insights of major thinkers that followed him, as well as to more empirical work by contemporary scholars. Divided into four parts, each with three chapters, the book opens by reviewing recent scholarship comparing patterns of early modern Chinese and European economic change, in which the dynamism of both economies has become broadly accepted. The second and third parts view cycles of economic expansion and contraction internationally between the late nineteenth and late twentieth centuries as evidence of capitalism's recurrent crises of endless capital accumulation, as the centre of capitalist power has shifted from the United Kingdom to the United States. The US loss of hegemony, first in Vietnam and more recently in Iraq, has meant that the American government has become unable to persuade others to see its international political actions as legitimate, and as a result the brute force of domination has become more visible and less acceptable. These conditions have aided China's recent economic rise, the subject of Part IV. This rise is tied to some Chinese economic practices, noted in Part I, which together form a contrast to European patterns of capitalist change. After nearly 400 pages, the reader completes a surprising intellectual journey, which begins and ends in China, and which is acknowledged to lie outside a Marxist reading of the dynamics of capitalist economic development. Recent developments have been made possible by a crisis of capitalism, which Marxists have long predicted would bring down the global system of capitalism.

The book expositionally moves among different kinds of commentary on the work of great past thinkers, such as Adam Smith, Karl Marx, and Joseph Schumpeter, and continues to consider recent scholars of global capitalism, such as Robert Brenner and David Harvey, and of East Asian economic change, including Kenneth Pomeranz and Kaoru Sugihara. The opening chapter of Part III relies heavily on the author's assemblage of newspaper commentaries, while other passages in this part's chapters, and in those of Part II, draw considerably from the author's own earlier work. Finally, the account of China's recent rise is culled from both the press and social science research on key features of the country's economic expansion. With such different sources of evidence and kinds of arguments, it is difficult to make any simple assessment of the book's contributions. The balance of this review will evaluate the arguments of individual parts, before assessing the ways in which the book integrates its propositions across its entire length.

The first chapter of Part I finds Adam Smith in Beijing, as Mario Tronti in Operai e capitale found Marx in Detroit nearly forty years ago. Arrighi attributes his discovery of Smith in China principally to myself, Andre Gunder Frank, and Kenneth Pomeranz. In China Transformed, I suggested that Smithian dynamics of economic expansion were common to China and Europe, and analytically distinct from both European capitalist institutions and the combination of science and technology, which together made possible the nineteenth-century European economic transformation. Gunder Frank, in Re-Orient, subsequently made China the center of a global economy before the advent of European and American economic superiority, which, he argued in 1998, was already being displaced in the late twentieth century by East Asian economic vitality. Pomeranz followed in 2000 with his formulation of the ‘great divergence’, in which the core–periphery relations of European and Chinese economic systems differ crucially in the way that resource endowments are exploited. Arrighi's Chapter Two suggests that Adam Smith was not an analyst of capitalism, but rather an acute observer of economic practices. This analytical framework helps us to understand what Kaoru Sugihara, after Akira Hayami, has called an ‘industrious revolution’ in East Asia, a labour-intensive small-scale form of production that responds flexibly to variations in social and natural environments. But none of the authors upon whom he relies provides Arrighi with an explanation of European capitalist development that he finds useful, and thus he turns in Chapter Three to Marx's ideas about the endless accumulation of capital and Schumpeter's belief in the creative destruction of capitalism: that is, the key capacity of capitalism to change the social bases upon which it is organized, even if it would not survive in the long term. This move allows the author to connect Marx's dynamic of capitalist expansion and crisis to the roles of governments in redefining politically, and more especially militarily, the possibilities for industrial expansion.

Part II considers how the endless accumulation of capital over the long twentieth century created a dominant financial actor. In the late nineteenth century, this was Britain, and in the late twentieth century, the United States. A comparison of the two cases involves a critique of Robert Brenner's The boom and the bubble and The economics of global turbulence. In Part III, Arrighi explains why the fusion of capitalism, military might, and industrial growth through ever-increasing global integration, based on European (and subsequently American) economic and political domination, could not be sustained. There are two key arguments: the first focuses on the polarization between the global North and the global South, creating a crisis of legitimacy for Northern power holders, which follows more or less inexorably from a Marxian understanding of the logic of capitalism. The second concerns the failed attempt by the United States government to prop up its domination in Iraq, the financial consequences of which have opened up opportunities for the Chinese and others in the global South to develop economically.

Part IV looks at China's rise over the past three decades and considers the ways in which the Chinese have taken advantage of the opportunities afforded by American foreign policy failures. Here Arrighi draws again on Sugihara's analysis of an East Asian economic development path, and specifically his observations on the post-Second World War geopolitical environment that allowed the Japanese, South Koreans, and Chinese (first outside and then inside the PRC) to combine elements of the industrious and industrial revolution growth paths. Arrighi adds an argument that the European path, with its origins in commercial capitalism and subsequent development into an industrial capitalism, depends crucially on an intimate relationship between the financial and military abilities of capitalist states. This has become difficult to maintain in a global economy where China specifically, and Asia more generally, assume growing roles, based on their competitive economic capacities. For China, this has meant an affirmation of non-capitalist market expansion (Smith again). The non-capitalist features for Arrighi are the absence, at least to date, of the kind of financial and military complex that he sees as having been basic to first British and then American leadership of the global capitalist system.

Like Gunder Frank, to whom this book is dedicated, Arrighi has many arguments that can be logically separated from each other so that a reader can accept (or reject) particular ones. At the same time, the relationships among some of the arguments are not clear, and indeed seem at times to offer alternatives. For example, there is a tension, at least in this reader's mind, between a kind of Marxist fatality in the endless accumulation and crises of capitalism on the one hand, and the profound blundering of the Bush administration in Iraq on the other, which seems very much the product of particular actors with political agendas not shared by all power holders. What roles human agency generally, and policy making specifically, play in shaping the global economy and international relations is thus unclear. For the Chinese, Arrighi sees several options as to how they will act in the global economy in coming years. How their future behaviours may be shaped by their economic development path is sketched in only a very general way. In my opinion, there is inadequate consideration of both the political economy choices on the domestic agenda (including fiscal issues, urban–rural relations, and regional disparities), and the multiple ways in which the Chinese can integrate into international institutions and practices economically and politically (globally, with specific regions such as Africa, and within Asia). Not surprisingly, such a wide-ranging and ambitious book will not be viewed as equally successful across its many subjects by all readers. But it demands our attention, and readers of this journal especially should appreciate the author's efforts to make history matter to an understanding of the present on a global scale.