Network Origins of the Global Economy: East vs. West in a Complex Systems Perspective

Abstract

Root draws methodological insight from complex systems and network science to study the historical formation of two distinct network topologies. The European small-world model of multiple hubs and lateral connections, formed through intermarried monarchies, allowed rapid diffusion of innovations and exhibited resilience to disruptive perturbations. The hub-and-spoke model of the Chinese centralized bureaucracy, by contrast, gained stability and control at the cost of resilience and was more prone to system-wide breakdown when the central hub was threatened. Network structures are path-dependent and self-reinforcing. Once created, the European and Chinese models came to wield prolonging influences on each region’s economic trajectories, leading to the Great Divergence. The book includes three parts. Part I introduces some concepts and properties of complex systems and discusses their applications in political economics. Part II examines the historical network structures of Europe and China since the medieval period. Part III turns to the present day and contemplates the implications of China’s rise and the decentralization of global networks.Root’s methodological intervention challenges the over-reliance on an equilibrium framework in economic studies and draws much-needed attention to structure and time. A complex-systems approach, informed by natural and mathematical sciences, is a helpful tool for political economists to think about dynamic adaptations and their (often nonlinear) repercussions at and across different levels of social organization. The book’s innovation and ambition are laudable, but it suffers from some inconsistencies between chapters and problematical historical abstractions.For the moment, assume the validity of Root’s historical characterization in Part II—that the decentralized small-world connections in Europe were more resilient and friendly to innovations than was China’s centralized bureaucracy. Part III moves to a higher-level structure, the present global network, which has become less hierarchically centered on the West, as led by the United States, with the proliferation of alternative connections, to which the rise of China is but one contributor among many. Curiously, however, Root does not predict the formation of this denser, decentralized network on the global level to produce the kind of systematic resilience that the historical European network had generated but would exacerbate system vulnerability to “failure at all scales, not only at the top” (250). Network theories seem to teach us different things in Part II and Part III. Notably, Root defines stability and resilience in different ways, and he sprinkles these terms liberally throughout the book (21–22, 80, 87, 94). It is often not clear from the definitions why a certain scenario demonstrates one of these terms instead of the other, although the said scenario’s geographical origin usually gives a good indication.Moreover, some of Root’s depictions of the potential global risks from China’s rise rests on an implicit presumption that a sub-system will seek to replicate its own internal network structure as it takes part in constructing a wider system—a presumption that runs against Root’s own theoretical exposition that “a system’s macro properties are different from those of its components” (25). His historical narrative challenges this presumption as well. The decentralized network of the West sat at the top of the centralized global hierarchy created out of Europe’s “outward expansion” (173), whereas in recent decades, the centralized network of Communist-led China has played a big part in decentralizing the global network. China’s challenge to Western normativity might be manyfold, but it is not demonstrated, either theoretically or empirically, that turning the global network structure into one that resembles China’s internal structure is one of the threats.Notwithstanding our exercise of assessing Root’s use of complex theories by assuming the validity of his premise, that very premise—the abstraction of two distinct network structures out of European and Chinese history—is also problematical. This book lends life to some entrenched normative views of how the world works by advancing an elliptical view of history. European historians will be quick to point out Root’s downplaying of interstate violence and colonialism, his neglect of exceptions to the “dynastic accumulation” mechanism (93), and his oversimplifications, such as the existence of a single “Western legal tradition” (133).The inadequacy of Root’s interpretation of Chinese history is concerning at a different level. The very choice of political networks—European royal households and Chinese imperial bureaucracy—as the subject of study is telling. Economic networks would appear to be just as important (if not more so) to understanding economic change, especially when the mechanisms of emphasis are information flow and innovation diffusion. The fact that Root distinguishes between different kinds of networks (un votes, arms sales, and international trade) when addressing the present global structure makes his exclusive focus on political networks in the historical chapters even more peculiar. It might not make too much of a difference in the characterization of Europe, but the topologies of political and economic networks were drastically different in China. Even if Root’s notion of the imperial political system as hub-and-spoke is an understandable abstraction despite its inaccuracies, the implication that the flow of economic information and innovation followed the same network structure could not be farther from the truth. Root has largely projected an impression of the short-lived planned economy in high-socialist China, when the political and the economic largely overlapped, back onto the much different imperial times.Such a misleading picture is made possible only by an utter innocence of even the English-language historiography of imperial China’s social and economic history. Decades of scholarship since John Fairbank’s The United States and China (Cambridge, Mass., 1948) barely leave a trace in the book’s footnotes. Not even Kenneth Pomeranz’s The Great Divergence (Princeton, 2001) merited a bibliographical entry in a book that explicitly purports to intervene in the scholarly discussion that it inspired. No wonder that Enlightenment-era Orientalist tropes have endured.