Over the last 20 years, Jeffrey Williamson has been a leading voice in the study of nineteenth-century globalization. This book offers a recapitulation of the work he has produced, alone and with colleagues and many students. By my count of the bibliographical references, there are more than 30 publications that he has written singularly or jointly with them. These range across the continents and provide new data as well as new insights into the process of globalization occurring in the nineteenth and early twentieth centuries. The focus is upon the Third World periphery, rather than on the central roles of the United Kingdom and, later, the United States. The principal issue is the reason why the bulk of humanity fell so far behind as the Industrial Revolution provoked sustained growth in the center at the end of the eighteenth century.

An early table on page 5, using Angus Maddison's estimates, provides the starting point: Western Europe's per capita income, and that of the English-speaking offshoots, increased by more than 1% between 1820 and 1913; that of the periphery went up about two-fifths as fast. Were the latter weighted by population, thereby giving China and India greater importance, the difference would be more dramatic still. Note as well the much larger divergence occurring between 1820 and 1870, when the center grew at a rate five times that of the periphery.

Williamson's story may be very briefly summarized as follows: “Up to 1870, terms of trade volatility and secular boom served to lower growth rates in the third world relative to the European core, enough to explain perhaps three-quarters of the growth rate gap between core and periphery…. Between 1870 and 1939 … perhaps half of the growth rate gap was still explained by trade forces” (p. 198). And this: “But if the goal was industrialization and growth, and if the major tool available to achieve it in the poor periphery was tariffs, then they should have offered high effective rates of protection to industries that were skill-intensive and generated positive externalities to other industries. They did not do so” (p. 228).

De-industrialization within the periphery is thus a central theme. Prices of industrial goods fell continuously in Britain by reason of greater productivity. Additionally, as lower transportation costs, external and internal, occurred throughout the world, imports of manufactured products increased within the periphery. Accordingly, their domestic industrial production was much reduced, giving rise to a conversion to exports of primary products to the center as inputs (cotton, minerals) and foodstuffs as substitutes (wheat, corn, meat), as well as tropical products as additions (coffee, bananas). This transformation led to increased income in these countries, but much less than would have been possible had local industry been modernized instead. Hence, the favorable terms of trade exacted a high price.

This view is not entirely novel. It had been broached in early discussions surrounding the Industrial Revolution and its spread. Vast potential markets for exports of manufactured goods—textiles early on, but iron, steel, and capital goods later on—are always there to justify increasing investment within the center. And, of course, colonial possessions counted, as competition mounted at the end of the nineteenth century and imperialism—and its critics—came to the fore.

The spotlight here is on expanding nineteenth-century international trade as the key mechanism inhibiting Third World adaptation to the innovative technological advances beginning in the latter part of the eighteenth century. Much cheaper industrial imports replace the output of the prior primitive technology employed in the periphery. Absent tariffs, there is an internal reallocation of production and exchange that increases the weight of the primary sector. There are obvious differences in response among countries and regions, and Williamson explores many of these in detail. But sometimes, when the subject is not enriched by his prior research—as in the case of China—his brief observations do not fully satisfy or provide a full sense of continuing divergence in writings on the subject.

Three geographic areas are centers of attention. India, the Ottoman Empire, and Latin America each have chapters dedicated to their de-industrialization experiences.

In the Indian case, there is significant de-industrialization, but without much influence from better terms of trade. This experience thus deviated from the general rule. Williamson provides an answer to this puzzle, finding it partially in domestic supply-side conditions, associated with productivity changes in the agricultural sector.

In the Ottoman case, the major export commodities are foodstuffs, wheat, and barley, and hence the possibility of rising nominal wages with adverse effects upon industrial competitiveness. Relying greatly upon the earlier research of Sevket Pamuk, Williamson offers another variation on the theme: “[D]e-industrialization forces lost their power much earlier in the region than in Latin America and other parts of the poor periphery where their terms of trade continued to rise during the late 19^th century” (p. 118).

Latin America is crucial to the case being made. After political independence in the early nineteenth century, it became more integrated into world trade and financial markets than was the case in other regions. But here, too, at least for Mexico, the story is sufficiently different that Williamson emphasizes “Mexican exceptionalism,” owing to the local textile production that flourished—despite limited per capita growth—even prior to the rule of Porfirio Díaz. Terms of trade effects were again found to be limited, and thus agricultural productivity, owing to land abundance, had to be introduced. Wage competitiveness against the core was stronger; internal disadvantage to industry was thereby correspondingly offset. Brazil, too, managed to begin a domestic industry and is cited for its success.

In other words, the more carefully one disaggregates the general circumstance of de-industrialization, the more one seems to be forced back to a mix of circumstances not only involving the external terms of trade but also extending to domestic conditions and response. The story widens. Williamson expands his focus to income distribution and its consequences, but the data are limited; samples are small, and where larger, exclude much of the receipts of the really rich.

Chapters 10 and 11 are the basis for Williamson's major conclusion, that variability of the net terms of trade explains such a large percentage of recorded peripheral income growth over the period before 1870, as well as between 1870 and 1939. This last period is where regression analysis provides the concrete results; for the earlier era, the conclusion is inferred indirectly.

This is likely to be the beginning, not the end, of the matter. Over time, others will introduce new data, use other statistical techniques, and separate the years somewhat differently, taking advantage of long swings in order to test the validity of these important results. Institutions will enter, and even the implications of colonial heritage, not to mention the traditional rate of capital formation, physical and human, will be considered. Remarkably enough, these issues are not ignored within the book. At one place or another, they surface in the midst of his careful and extensive arguments on behalf of the primacy of the net terms of trade.

At the same time, politics gets too little attention as a factor affecting incipient industrialization. In Latin America, there were unsettled conditions throughout the 1820–70 period, and even thereafter, involving a multitude of temporary leaders, the constant dominance of the military, battles between church and state, and even warfare among the new states. There was French intervention and rule in Mexico. India, despite its colonial status, was a combination of different regions with substantial local differentiation. The Ottoman Empire was a battleground for different European countries. From the Crimean War forward, international politics counted as a major factor within the continuing debt crises that recurred.

So, too, the flow of foreign investment is not as central to the case being made as it ought to be. After all, if one is interested in internal costs of transportation in stimulating exports, railway investment is the place to look, not only in the periphery but throughout the world. Those undertakings were not regular but, rather, cyclical in character, and had great implications for successive waves of export. There is a regular nineteenth-century cycle of primary prices in areas of new settlement, and of consequent immigration flow, as was emphasized by Brinley Thomas.

Its flaws aside, Trade and Poverty provides a wonderful summary of an impressive academic career. Others will now have to carry on the debate. What happened in the centuries following the Industrial Revolution has remained a central subject for all of the social sciences within all nations. This volume will take its place among the other classic works.