In his new book, ReORIENT: Global Economy in the Asian Age, economic historian Andre Gunder Frank declares that all Western social theory is wrong. Every theoretical derivative of sociology's holy trinity--Karl Marx, Max Weber, and Emile Durkheim--is tainted by the "original sin" of Western social science, which was to "assemble, combine, and embellish...features of Eurocentrism." The disciplines of economics, history, and political science also now totter on a foundation of sloppy thinking, bad scholarship, and decidedly imperialist ideology.

Not content with merely taking on the contemporary legacy of nineteenth-century thought, Frank also attempts to cover four hundred years of world trade history, discern contemporary global economic structures, and outline a new historical method. While such ambition may seem hubristic, world systems theory, the school of thought Frank helped found in the late 1960s, is notorious for providing grand explanations of global economic history. Frank and his fellow world systems theorists, notably Immanuel Wallerstein and Samir Amin, pride themselves on providing an aerial view of the world economy from its humble beginnings to its global present.

Frank, who now teaches at the University of Toronto, is best known for his 1967 book, Capitalism and Underdevelopment in Latin America, in which he argued that "underdevelopment" occurs in the world economy through a system of unfair trade or unequal exchange between a wealthy "core" of industrialized countries and an exploited "periphery" in the Third World. It was a bracing challenge to the classical liberal or Ricardian view that trade is always beneficial to both trading partners--the fundamental premise of mainstream international trade theory. The poverty and apparent backwardness of Latin America, Frank claimed, were a result of not "feudalism, but capitalism"--the result of economic forces outside of impoverished countries, not of some internal barrier to economic growth. In fact, the secret catalyst of the West's industrialization was the immiseration of its colonies. Not surprisingly, this argument found an especially receptive audience among left-wing nationalists in the Third World seeking an alternative to both Western free-market capitalism and Sino-Soviet communist orthodoxies; and among dependency theorists like Fernando Cardoso, author of Dependency and Development in Latin America and now Brazil's privatizing president.

The irony is that, despite its radical political inspiration, world systems theory goes back to Adam Smith for ideas about the division of labor that Marx himself rejected. (Interestingly, world systems theory has found a new exponent in the global financier George Soros, who recently analyzed the Asian financial crisis in The Wall Street Journal in terms of core/periphery relations.) As the economic historian Robert Brenner noted two decades ago in an influential article in New Left Review, Frank shares Smith's view that trade, not production, establishes the division of labor necessary for the accumulation of capital and, consequently, for the creation of a capitalist system. Marx's "social relations of production"--the relations between workers and owners--barely figure in Frank's work.

In Capitalism and Underdevelopment in Latin America, Frank held that the capitalist world system originated with a "commercial network" that "spread from Italian cities such as Venice until the entire face of the globe had been incorporated into a single organic mercantilist or mercantile capitalist, and later also industrial and financial system." Frank and other world systems theorists were not alone in emphasizing the role of merchant traders in the rise of modern capitalism, but few other historians have argued that a single global economic system emerged from their activities.

By giving trade such explanatory force, Frank and other world systems theorists have had to keep pushing back the origins of capitalism. Since international trade is centuries older than the Industrial Revolution, when most historians date the emergence of modern capitalism, world systems theory starts earlier--much earlier--than every other theory of capitalist development. And though Frank still believes that "the capitalist world-system" emerged in the fifteenth century, he has speculated that its roots may go as far back as 3000 B.C.

With this change in historical perspective has come a shift in scenery. In ReORIENT, Frank literally reorients the birthplace of capitalism to the Far East. In his view, the West did not rise so much as the Asian economies declined for a couple of centuries. Most economic historians would find this argument provocative, to say the least, but Frank makes a compelling case for rethinking the early modern Asian economy. By the time Columbus set sail, he writes, the world was linked by a circumnavigation of goods and money flowing in a single, global capitalist system dominated by Asia. The core was never European but "Sinocentric" until nineteenth-century Europeans literally rewrote themselves into history.

In the Persian silk markets of the sixteenth century, the Portuguese and the Dutch were not exploitative traders with colonial intentions but suckers whose lust for silk and willingness to pay for it in silver helped to finance Persia's trade deficit with the rest of Asia. In the sixteenth century, Venice's wealth so depended on its control of the straits of Malacca separating the Bay of Bengal and the South China Sea that a contemporary quoted by Frank, the Portuguese writer Tome Pires, could observe, "Whoever is lord of Malacca has his hands on the throat of Venice." Faced with a growing trade deficit with Asia, fifteenth- and sixteenth-century Europe rushed to get gold and silver in order to continue buying spices and cheaply produced Asian goods. In this "global economic development scheme of things," concludes Frank, "Asia, and especially East Asia, was already dominant and remained so until--in historical terms--very recently, that is less than two centuries ago. Only then...did Asian economies lose their positions of predominance in the world economy, while that position came to be occupied by the West--apparently only temporarily."

That hiccup in Asian economic growth began with the eighteenth-century downturn in a four-hundred-year-long cycle of expansion. Recession in the East meant that Europe could "muscle in on the richest trade in the world," intra-Asian trading, not only on the trade between Asia and Europe. As the Asian recession deepened and Asian labor grew cheaper, European textile producers sought to compete on the world market by developing new laborsaving technologies and by erecting stiff trade barriers. Increasingly, Europe, and Britain in particular, substituted locally manufactured cotton products for Asian imports. The development of modern European capitalism, Frank suggests, had less to do with the rise of the bourgeoisie or a Protestant work ethic--developments internal to European economies--than with the shaping influence of foreign trade. So strong are the forces of the world system that one country's experiences, much less those of social classes or individuals, cease to matter:

My answers in short are that there is class in the world economy, but the class struggles between ruling and ruled classes have never had the motor force that Marx attributed to them . . . . The state and culture, and indeed class struggle itself, require much more analysis as being themselves dependent on the structure and dynamic of the world economy and system.

Such a weighty conclusion requires wholly new social theories in addition to new theories of economic development.

The notions of "development," "modernization," "capitalism," and even "dependence"...are procrustean and empty categories.... All of these allegedly essential exceptionalisms, whatever their name, were derived from the same Eurocentric perspective that, on the evidence reviewed in this book, has absolutely no foundation in historical reality--that is in "universal" history, "as it really was." They were all derived only from European/Western ethnocentrism, which was propagated around the world...as part and parcel of Western colonialism and cultural imperialism.

The same goes for the term "capitalism," which he claims is so dangerously Eurocentric that it's "best just [to] forget about it and get on with our inquiry into the reality of universal history." (Oddly enough, Frank continues to describe the current world system as capitalist.) What Frank means by "universal history," not to mention "horizontally integrative macrohistory," is, however, difficult to comprehend. It has something to do with his attempt to grasp the entire structure of the world economy, in which "simultaneous events and processes...are examined and related on a global level," but it makes for an account that's exceptionally remote from actual experience. As Sucheta Mazumdar points out in her fine new book, Sugar and Society in China: Peasants, Technology, and the World Market, in world systems theory "the local often sits like an abandoned waif at the doorstep of the entrepot, the company warehouse, and the treaty port."

Frank's "universal history," though, isn't without its riches. For the student of economic history, it's an empirical treasure: a synthesis of secondary sources on trade flows, divisions of labor, balances of trade, inflation, technologies, and demographic information for the world between 1400 and 1800. The details are often fascinating. "At Hormuz [in southern Persia], long before the Portuguese arrived there," writes Frank, "A mid-fifteenth-century observer reported the arrival of 'merchants from the seven climates...' [arriving] from Egypt, Syria, Anatolia, Turkestan, Russia, China, Java, Bengal, Siam, Tenasserim, Socotra, Bijapur, the Maldives, Malabar, Abyssinia, Zanzibar, Vijayanagara, Gulbarga, Gujarat, Cambay, Arabia, Aden, Jidda, Yemen, and of course from all over Persia itself."

Still, the evidence of wide-ranging and intricate trading links between East and West doesn't really support Frank's contention that the East led the way in developing the modern world system. An analysis of international trading flows may cast light on a fledgling Eastern form of what we now call globalization. But for all its intricacies, this network of trade was not linked to the type of labor relations that gives capitalism its indispensable dynamic. Nor did it feature the coherent social structures implied by the term "system."

In many ways, the timing for this book couldn't be worse: Readers of ReORIENT who track their global money market accounts may woefully shake their heads at Frank's opinion that we are entering an age of renewed Asian economic dominance, given the current crisis of the East Asian economy. Frank is right to point out that the globalization that pundits now handily blame as the cause of everything--from financial collapse, stock market volatility, the "clash of civilizations," and the end of history, to Leonardo di Caprio's fame--has been with us a lot longer than we thought. But today's globalization is of a wholly different order than that of earlier centuries precisely because of the development of capitalism. And though we might be able to see similarities between the Silk Road and the New York Stock Exchange, the causal thread connecting them is tenuous at best. •