Giorgio Riello’s account of the history of cotton reveals much about globalisation

July 28, 2013 3:43 pm

A rich picking for the re-emerging powers

Review by James Crabtree

Giorgio Riello’s account of the history of cotton reveals much about globalisation

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Cotton: The Fabric that Made the Modern World, by Giorgio Riello,Cambridge University Press, RRP£25/$35

The skyline of south Mumbai is dominated by imposing neo-gothic buildings, with ornate turrets and grinning gargoyles that might look more at home in Manchester or London than the financial capital of modern India. These incongruous edifices at first seem to be the likely result of simple colonial ambition (some might say of excess). But the impetus behind their construction actually came from a more unlikely commercial source: the global cotton trade.The commencement of America’s civil war in 1861 cut the British empire off from its most important supply of the soft, white fibre, in turn prompting an export surge from the next best supplier: India. An economic boom began, the proceeds of which went on to fund the grand railway terminals and civic buildings of what was then called Bombay.

The best part of two centuries later, and this skyline provides just one small example of the lasting impact brought about by the material, many more of which are revealed in Giorgio Riello’s Cotton: The Fabric that Made the Modern World.

As the author admits, this is not a work overly concerned with winning over the casual reader, unlike a number of other popular history books that have tried to explain the path of globalisation by way of individual commodities, from tea and coffee to cod and salt. An economic historian at Warwick university, Riello’s aim is instead more comprehensive: to provide a detailed account of the textile’s reach, from its role in the development of India and China at the start of the last millennium, to the early days of a worldwide textile industry that is today worth roughly $425bn each year.

Yet the author is making an important argument too, one signalled in the introduction, when he takes a swipe at what he calls the “primary school” textbook view of his subject. “It has become a truism that cotton was the fuel of the industrial revolution,” Riello writes of the period from the start of the 17th century, when the northwest of England, powered by inventions such as Richard Arkwright’s spinning frame, first overtook India to become the world’s pre-eminent producer. “Large scale factories emerged employing (and exploiting) millions of workers. Here was the beginning of what we call a modern industrial society.” It is not that the author disputes the importance of his subject in this process, or in other areas, such as its role in the creation of the system of slavery that developed in the US.

Instead his aim is to add context and depth to that more basic picture, explaining how such events were often contingent upon many centuries of technological and commercial innovation, almost all of which occurred in Asia.

Much of the book is therefore dedicated to explaining how cotton knowhow spread first from India to China, and only then towards Europe, a narrative that drives home the central importance of these two historic superpowers in the eventual industrialisation of Europe. When Arkwright perfected his cotton spinning machines “in the north of England in the 1770s, the Indian cotton industry was still the undisputed world leader”, the author points out, with some satisfaction.

This approach sees Riello shy away from drawing too many contemporary allusions, but there are still instructive parallels with our own period of globalisation that can be drawn from his thoughtful and meticulous research.

One relates to the durable social and political consequences that can follow from sudden shifts in the trade of materials such as cotton – an insight that is as likely to apply to the longer-term effects of the recently completed commodities “super cycle”or China’s search for natural resources in Africa, as it does to the historic mills of Lancashire or the plantations of the antebellum American south.

A second involves the longstanding nature of the interplay between the economies of the global east and west, a relationship that will define the coming century as well. Riello’s case is that cotton’s rise was predicated on techniques that had long fermented in Asia. Today, with the likely return of China and India to their previous positions as the world’s largest economies, this process is arguably happening in reverse.

It is a fact neatly illustrated by cotton itself, where India is now set to become the world’s largest producer once again over the next decade or so, helped along by knowledge imported from the industrialised world. In this sense, the story of cotton offers a relatively simple insight. Globalisation is often thought to be a contemporary phenomenon. It is actually nothing of the sort.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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