Now that Japan has overtaken and surpassed in arts of manufacture, it is perhaps possible to look at familiar old problem of the rise of West in a more sober and less exclusively Eurocentric way. No longer is it possible to imagine some unique set of individual and social characteristics that gave Western society an inherent superiority over others in realm of economic organization and its associated scientific and technological base. The Protestant ethic or the spirit of rational inquiry can no longer be regarded as unique to this one civilization, not only in light of recent economic performance of East Asia but because of what is now known about its past achievements in these fields as a result of research of Joseph Needham and others. Yet fact remains that indeed dominated world since at least time of European voyages of discovery around turn of 15th century, with English Industrial Revolution of 18th century consolidating its dominance and raising it to a higher level. Recognizing early achievements of other civilizations only makes it harder to account in any satisfactory way for phenomenon. It is convenient to begin with voyages of discovery themselves. It is easy to imagine them as manifesting qualities and achievements of Renaissance, bold new ideas about nature of world and their application to nautical technology and navigation. Yet all basic inventions that they utilized were transmitted to either from China (the compass and stern-post rudder, as well as gunpowder and cannon used in their predatory engagements) or from Arabs (the form of lateen sail and knowledge of winds and currents of Indian Ocean). Can one not say, however, that only could have put it all together in mounting of such long-distance ocean voyages in 15th century? The answer of course is that Chinese did precisely mount an amazing sequence of seven great voyages, over period 1405-1433, when they sent fleets of hundreds of great junks with crews of over 30,000 at a time, to Java, Sumatra, Cambodia, Ceylon, India, Persian Gulf, Red Sea, Kenya, Somalia, Madagascar, and Mozambique. Several of Chinese ships were in excess of 1,500 tons, while largest of Vasco da Gama's ships did not exceed 300 tons. Thus, there is no question that Chinese had capability to do what Portuguese did, in opposite direction. Why didn't they? In this connection, it is necessary to consider incentives in addition to capabilities. When asked what he was looking for in India, Vasco da Gama was reputed to have answered, Christians and spices, though perhaps order should have been reversed. The spice trade, based on intense need for pepper and other spices to preserve meat in Europe, had been a lucrative one for centuries. Brought from India and islands of Indonesian archipelago by Arab and Indian ships to Red Sea and Persian Gulf, spices reached Europe through intermediaries of Egyptian Mamelukes at Cairo and Venice. It was basis for centuries of unparalleled wealth (in Europe) of great maritime republic, jealously guarded against encroachments of rival Genoa. The motives for prolonged exploration for a passage around Cape of Good Hope, instigated by Prince Henry Navigator, * Department of Economics, Columbia University, 420 W. 118th St., New York, NY 10027.

Recently the major issue in the international aspects of economic development has been the so-called dialogue in connection with the UN resolutions calling for a New International Economic Order. The intellectual basis for the proposed reforms, in so far as one exists, appears to lie in the well-known writings of Raul Prebisch and Hans Singer. Both of them argue that there is a fundamental asymmetry in the workings of the global economic system which biases the resulting income distribution in favor of the industrial North and against the predominantly primary producing South. Neither writer has been successful in putting forward convincing arguments for such asymmetry. The standard trade theory of the HeckscherOhlin variety is usually presented in such a way that countries A and B are identical in all respects except for a difference in factor proportions that leads to pretrade product and factor-price differentials that are removed by free trade. There is no room for any asymmetry here. It would therefore seem to be both relevant and interesting to construct and investigate models that exhibit the PrebischSinger asymmetry at the level of rigor that generally prevails in pure trade theory. The rest of this paper will present two examples of such models from current research. The first consists of a simple diagrammatic exposition of an interesting but heavily mathematical paper by Murray Kemp and M. Ohyama and the second outlines the essential features of an approach to the analysis of North-South economic relations found in my earlier paper. 1. The Kemp-Ohyama Model

Stanley Engerman has been a presence in the Department of Economics at the University of Rochester for over 37 years. He was an early and eminent participant in the Cliometric Revolution that swept throughout the economichistory profession in the 1960’s and 1970’s. We doubt that anyone could have anticipated the “gathering storm” that greeted the publication of Time on the Cross, co-authored with Robert Fogel in 1974. Since that time Stan has become the world’s leading authority on slavery in the Americas and the Caribbean, as well as an important contributor to a set of issues ranging from the 19th century American iron industry to the economics of British imperialism. His own human capital, as extensive as we know it to be, is complemented by capital of the physical variety: an enormous library of research material spilling over into bookshelves and floors in several offices in Rochester and attracting a yearly stream of itinerant scholars anxious to pick his books as well as his brains. In this short note, we intend to honor Stan by applying the tools of international trade theory to illustrate several episodes in the development of industries, both in the United States and in world markets. A colleague of Stan’s at Rochester, Lionel McKenzie, once commented that, in 19th century Britain, Lancashire would have been unlikely to produce cotton cloth if the cotton had to be grown in England (McKenzie, 1954). This remark expresses in utter brevity the importance to production and trading patterns of the domain of tradability of raw materials or intermediate products. For example, it is difficult to envisage the patterns of production (and trade) in modern-day Japan should it be denied access to world supplies of oil, coal, and iron ore, local production of each of these items being negligible. Transport costs as well as man-made impediments to trade are mainly responsible for variations in the degree of access countries possess to the inputs available in the markets of other countries. Simple competitive generalequilibrium models of production, of the type intensively utilized in the theory of international trade, can usefully be harnessed to shed light on several episodes in 19th century American economic history in which the nature of trading possibilities for raw materials heavily influenced the extent to which local American production of final commodities could withstand the pressures in world markets without the aid of protective devices. The simplest model setting in which to investigate the importance of trade in raw materials is a Ricardian model, augmented by the necessity of using a produced input in addition to labor in at least one commodity. Denote the pair of final commodities by X and Y, where in order to produce Y a certain quantity of intermediate good, Z, is required. The competitive profit conditions for the two final commodities are shown in equation (1):