Amsterdam, London, New York, Shanghai?

Did events in China set of this week’s sell off in global stock markets?  I’m not competent to judge, but I am reminded of a comment by the great French historian Fernand Braudel, which perhaps clarifies what is at stake in the debate.

Braudel’s remarks concern the 1773 financial crisis, which contemporaries believed started in Amsterdam.

I believe that, on the contrary,  Amsterdam  was no longer the centre or epicentre of Europe. This had already shifted to London. Can one suggest that a highly-convenient rule might operate in this context, to wit, that any city which is becoming or has become the centre of a world-economy, is the first place in which the seismic movements of the system show themselves, and subsequently the first to be truly cured of them? If so, it would shed a new light on Black Thursday in Wall Street in 1929, which I am inclined to see as marking the beginning of New York’s leadership of the world. (The Perspective of the World, p272)

Braudel’s highly convenient rule, formulated in the late 1970s, might also shed some interesting light  on the Asian Crisis of 1997, which becomes, on those terms, the best evidence that the centre of the world economy is returning to Asia.






6 responses to “Amsterdam, London, New York, Shanghai?”

  1. Alex avatar

    Superficially attractive, but nix, I think. It’s a well-understood notion in systems analysis that a peripheral but high-leverage node can have disproportionate effects on the network. Stewart Brand talks about buildings as a collection of layers that change at different speeds, a “shearing process”, with the important consequence that sometimes, the fast-moving but lightweight top layer can trigger structural changes. Similarly, John Gallagher and Ronald Robinson’s analysis of British imperial history was based on the notion that a peripheral crisis that hit particular nerves could entrain the centre into acting.
    Arguably, the centre is moving back to London, certainly if you listen to the mayor of New York and the chairman of the NYSE. Now, seeing as this week’s crash was profoundly affected by the Dow Jones index’s crappy IT, that don’t sound so crazy..

  2. Tom Griffin avatar

    It is interesting that part of the reason for the shifting balance between London and New York is apparently because the US is now harder to get into.
    The previous cities in the sequence have all been liberal powers, a pattern which Shanghai obviously doesn’t fit.
    indeed, It’s not really clear where Asia fits in as a whole.
    The succession of financial centres that Braudel identified, including also Genoa, Antwerp and Venice, is really focussed on the European-Atlantic economy.
    Other historians who argue for a single world-economy with Asia at its centre up to as late as 1800 (e.g. Andre Gunder Frank) haven’t identified a similar sequence.

  3. Alex avatar

    Perhaps, in a sense, Shanghai *is* a liberal power, taken in its historic context? At least it is for stockbrokers.
    Anyway, “Andre Gunder Frank” is one of the trigger phrases for my intellectual spam filter.

  4. Tom Griffin avatar

    That seems to be the way the stockbrokers are betting but London, New York and Amsterdam tended to be relatively safe havens for money and ideas. I suppose Shanghai will fall down on that score until China becomes a net importer of refugee intellectuals.
    Gunder Frank’s ideas on the Asian World economy owe a lot to less controversial thinkers like Janet Abu-Lughod.
    There s a good precis of his argument here:

  5. Alexander avatar

    In this connection, this work is highly recommended.

  6. Tom Griffin avatar

    Thanks for the tip, Alexander. I have yet to read any of Arrighi’s work, but i have been meaning to for a while.

Leave a Reply

Your email address will not be published. Required fields are marked *