Thursday, September 10, 2009

Janet Abu-Lughod's Before European Hegemony

Janet Abu-Lughod's book, Before European Hegemony, describes a reinterpretation of the global economic evolution which led to the rise of the banking system, money chargers, and using credit. This book puts together information from many different regions about the economic system. Abu-Lughod argued that the modern world economy had its roots not in the sixteenth century economy, but in the thirteenth century economy. This thirteenth century economy greatly differed from the European world system, however the thirteenth century economy is responsible for sculpting the European world system today. Before European Hegemony gives an understanding of how the world systems came about and traces back to the rise of these systems. The book covers from northwest Europe all the way to China (Pax Mongolica). Abu-Lughod also provides reasons for the decline of the systems. Europe, the Middle East, and China were starting to come together during the thirteenth century into a world system by means of trade. These areas were beginning to explore the banking system as well as a developed economic system. Abu-Lughod traces the ride of this world system back to its roots (starting in the thirteenth century, not the sixteenth century as it seems to be thought of as that), and provides examples of how these systems developed into the world system carried out now.

I found the second part of the reading extremely interesting, as Abu-Lughod explores deeper into how the economic system really got started. In less populated areas, merchants brought the goods to the customers at 'regular intervals' and followed a circuit to many other places. These merchants set up small stands that the people could go to and shop. Because of the success, this led to larger markets opening with greater variety of goods. When larger merchants began to come with their goods, the need for currency shot up and the need for a money charger became present. This could have given rise to the start of an early banking system and an institution of credit began. For example, if a merchant did not have a good that a buyer wanted, the merchant promised to bring it next time, and the buyer would give credit for the item in advance, or the buyer received credit from the merchant in advance. This led to what is now called, a down payment and even further, mortgage (borrowing against). With the banking system under way, the need for an enforcement system that guaranteed easy, secure transactions surfaced. This all led to the systems we use today. Cloth, 'the heart of the economy' was the main item exchanged by foreign merchants, and the presence of bankers and money chargers was essential in making sure everything was done fairly and properly.

--Gabby Szlachta-McGinn

No comments:

Post a Comment