In time of economic crisis, studying the past can teach us much about the world economy today, says economic historian Emma Rothschild .

What do you think are the key issues shaping the world economy‭?‬

It’s a time of tremendous economic change and,‭ ‬as in previous times of economic change,‭ ‬there is a greatly increased interest in the history of the economy.‭ ‬I am finding this particularly among young historians.‭ ‬There is a sense of both opportunity and insecurity,‭ ‬and for a historian it is a wonderful time to be thinking about how economic history fits together with the history of economic thought and the history of economic life.‭

Read 1 Migration and Diaspora in Modern Asia by Sunil S Amrith Read

Let’s have a look at how your five books reflect that.‭ ‬Your first choice is‭ ‬Migration and Diaspora in Modern Asia‭ ‬by Sunil Amrith,‭ ‬which explores how migration is at the heart of Asian history.‭

‬This book tells an extraordinary story,‭ ‬which has been very little studied.‭ ‬It is about what Sunil Amrith calls‭ “‬Asia’s age of migration‭”‬ in the late‭ ‬19th and early‭ ‬20th century,‭ ‬when‭ ‬27‭ ‬million Indians and almost‭ ‬20‭ ‬million Chinese emigrated to Southeast Asia.‭ ‬These patterns of migration were very different from the much more familiar Atlantic migrations.‭ ‬Many of the migrants were undocumented and literally nameless.‭ ‬Amrith quotes a remark by an earlier demographer:‭ “‬Migration is the result of an idea‭ – ‬an idea of what lies somewhere else.‭”‬ This book really was a revelation to me.‬

In what way?

It shows the scale of migration within Asia over the past‭ ‬150‭ ‬years and the extent to which modern Asia,‭ ‬including the great successes of Asian economies,‭ ‬has been shaped by migration.‭ ‬It is a very different pattern of migration,‭ ‬of circular and short-term migration,‭ ‬of what Amrith calls sojourning,‭ ‬which hasn’t really been studied until now.‭ ‬And also it was a revelation about the possibilities of finding archives of migrants who were nameless and often illiterate but who nonetheless shaped the countries to which they moved.

How do you think that kind of migration in Asia has shaped the world economy?

I think it makes one conceive of both China and India,‭ ‬as well as Southeast Asian countries,‭ ‬as transnational societies in a way that hasn’t really been studied in great detail.‭ ‬And the diasporas of both India and China are hugely important in the world economy.

Read 2 Poor Economics by Abhijit V Banerjee and Esther Duflo Read

Your next choice is‭ ‬Poor Economics‭ ‬by Abhijit Banerjee and Esther Duflo.‭

‬The authors talk about understanding the economic lives of the poor and they argue against large,‭ ‬universal solutions.‭ ‬They are very optimistic about finding empirical evidence,‭ ‬both through experiments in policies that work or don’t work and through actually talking to people who are poor.‭ ‬One of the things that comes across so strongly in this book is the centrality of what Banerjee and Duflo call the sense of security‭ – ‬of how much poverty has to do with insecurity and how tremendously important it is,‭ ‬for the people they are talking to,‭ ‬to have a job that is regular and to have the sort of social security arrangements that are taken for granted across much of Europe.‭

‬And they have spoken to people from all over the world from places like Chile to India,‭ ‬so it is very wide-reaching research.‭

‬Yes,‭ ‬they have and they actually go and talk to people who are really poor,‭ ‬about their lives,‭ ‬their economic lives and their hopes.‭ ‬It did make me think about history as well,‭ ‬because it is called‭ ‬Poor Economics‭ ‬and I wondered why we don’t have more poor history‭ – ‬that is to say history that really is about the economic lives of the poor,‭ ‬rather than about how people have measured poverty or how people have tried to alleviate poverty or policies against poverty.‭ ‬So it was a very inspiring book for me as a historian.‭ ‬As with my first choice,‭ ‬it looks at people who are poor and shows that they also have ideas and shape the economy.‭

‬Why do you think that historically our attitude to tackling poverty often hasn’t worked‭?‬

I think policies‭ ‬have‭ ‬actually worked in many of the countries that are now most developed.‭ ‬In Britain the poverty that was so terrifying to people in the late‭ ‬19th century was to a great extent got rid of by the policies of the early welfare state as well as by economic growth.‭ ‬Europe is a great success story in reducing poverty.‭

‬With so many rich countries falling into a recession,‭ ‬how do you think that will change the way the West deals with poorer countries and how will that alter the world economy‭?‬

In countries that are still relatively poor,‭ ‬namely China and India,‭ ‬one of the really exciting things that has happened in the last‭ ‬20‭ ‬years is that there are many millions of people who are moving out of poverty.‭ ‬I see that in India,‭ ‬and it is a tremendously important change in the world economy.‭ ‬There are parts of Africa where people are moving out of poverty.‭ ‬Things are changing in terms of which countries it is that are‭ “‬dealing with‭” ‬poverty.‭ ‬In terms of financial influence,‭ ‬India,‭ ‬China and Brazil’s role has increased enormously.‭ ‬In some ways European countries aren’t as confident as they should be about the successes of a hundred years of reforms and of reduction in the poverty of their population.

Read 3 River of Smoke by Amitav Ghosh Read

Your next choice is the novel‭ ‬River of Smoke‭ ‬by Amitav Gosh,‭ ‬which,‭ ‬aside from the colourful characters,‭ ‬tells the story of the great power opium had on the world’s economy back in the‭ ‬19th century.‭

‬I love this book.‭ ‬It was a book that,‭ ‬as I was getting towards the end,‭ ‬I wanted to read slower and slower and slower so I wouldn’t finish it.‭ ‬The weekly clothes market on the Singapore River,‭ ‬which is a scene fairly early in the novel,‭ ‬is a brilliant illustration of the kinds of exchanges within Asia that are so interesting to historians.‭ ‬He calls it the‭ “‬Wordy-Market,‭” ‬which is a wonderful phrase.‭ ‬The novel is about friendship,‭ ‬commerce and empire as well as being about the tragic story of opium.‭ ‬It’s a great illustration of one of those novels which are themselves marvellous histories of economic life.‭

‬Which commodities in the‭ ‬21st century do you think are having a similar impact to opium back in the‭ ‬19th century‭?‬

Tobacco is not steering the world economy in the way that opium did,‭ ‬but there have been many comparisons made between opium and tobacco and I think they are very compelling indeed.‭ ‬The expansion of cigarette use across large parts of Southeast Asia is really terrifying.‭

And which commodities do you think are particularly powerful in the world economy at the moment‭?‬

Energy commodities are obviously going to be central to the‭ ‬21st-century world economy,‭ ‬and everything that has to do with processing fossil fuels.‭ ‬The largest issue for the world economy is global climate change and recent studies of permafrost in the Arctic are extraordinarily perturbing.‭ ‬I think that the conflict over energy,‭ ‬which is a conflict with many different dimensions,‭ ‬is bound to be central.

Read 4 The Age of Capital:‭ ‬1848-1975 by Eric Hobsbawm Read

Next up is‭ ‬The Age of Capital:‭ ‬1848-1875,‭ ‬which is the second in Eric Hobsbawm’s trilogy,‭ ‬and it looks at the events and trends which led to the triumph of private enterprise in the‭ ‬19th century.‭

‬He says that in the book he wants to make sense of the third quarter of the‭ ‬19th century and he does that.‭ ‬It is an example of history on a grand scale that is also a history of individual lives.‭ ‬It is very much a book about the mobility of working people in the middle of the‭ ‬19th century.‭ ‬It is also very much a book about resources,‭ ‬including minerals and coal,‭ ‬and about the triumph of capitalism in what came to be its‭ ‬20th-century form.‭

‬For me it is a fascinating book to go back to.‭ ‬I read it when it came out and I have taught with it for years.‭ ‬It is an inspiration because it is history on so many different levels and scales,‭ ‬and I also think it provides an extraordinary insight into the origins of the world economy,‭ ‬which is conceivably now coming to an end.‭

‬What were some of the key moments in the‭ ‬19th century that are the origins for today’s global economy‭?‬

It was the industrial revolution‭; ‬it was the expansion of worldwide communications and information‭; ‬it was the transformation in ideas and the development of new means of exporting capital‭ – ‬and it turned into the expansion of the European empires around the world.

Read 5 Adam Smith:‭ ‬An Enlightened Life by Nicholas Phillipson Read

Lastly,‭ ‬you have chosen a book about the founder of modern economics,‭ ‬Adam Smith:‭ ‬An Enlightened Life‭ ‬by Nicholas Phillipson.‭

‬Nicholas Phillipson’s book gives a wonderful sense of the life of Adam Smith and of a life lived amidst ideas. ‭‬He talks about Smith in relation to exchange in two different ways.‭ ‬First of all the exchange of conversation in Smith’s own setting of‭ ‬18th-century Scotland,‭ ‬where people were talking passionately about ideas of human nature and about the ways that economic and philosophical ideas fitted together.‭ ‬But there is also exchange in the sense of long-distance exchanges and I think the book conveys brilliantly the extent to which Adam Smith was himself thinking about very long-distance communications,‭ ‬information and exchange,‭ ‬both in Glasgow where he lived for many years,‭ ‬and also in relation to his own friends and acquaintances who were involved in the East India Company.‭

These are two things that you are very interested in.‭ ‬You have also written about‭ ‬18th-century Scotland and migration as well as Adam Smith.‭ ‬So how do you think he shaped the history of our world economy‭?‬

I think Smith is the greatest economist who has ever written.‭ ‬There is a fascinating story to be told about the ways in which his ideas have been used and transformed and misused and themselves exchanged.‭ ‬His system of sentiments is also of extraordinary importance.‭ ‬In my own book,‭ ‬The Inner Life of Empires,‭ ‬I was very interested in Smith’s circle of friends and the extraordinary adventures that some of them had,‭ ‬travelling literally around the world,‭ ‬discussing Smith’s ideas and trying to put them together with the scenes that they saw and with their own choices about their lives.‭ ‬That world of‭ ‬18th-century Scotland and its connectedness to a much larger outside world comes across extraordinarily well in Phillipson’s book.‭

‬And in your own,‭ ‬because you plot one family and all their travels around the world.‭

‬Yes,‭ ‬but they were a family who lived in a world of ideas wherever they went.‭ ‬The centre of the story really is the two slaves whom the family brought back with them to Scotland,‭ ‬one of whom came from India and wasn’t able to read or write,‭ ‬but nonetheless is a major figure in the history of slavery and the history of empire.‭ ‬So this comes back to the large questions of people on the move.‭ ‬In the case of the slaves it was forced movement.‭ ‬But over the next‭ ‬200‭ ‬years there were hundreds of millions of people on the move,‭ ‬many of them following their ideas of somewhere else.‭

‬One final thought.‭ ‬Many of us in America and Europe seem to be very gloomy about the financial situation,‭ ‬whereas things in the East look a lot more buoyant.‭ ‬You are married to the eminent economist Amartya Sen and are very much connected with the East and India.‭ ‬So do you think countries in the East are likely to make the same mistakes as America and Europe have,‭ ‬or do you think countries like India and China are going in a very different direction‭?‬

I am basically optimistic.‭ ‬I think one of the exciting things that is happening in India is that there’s both extraordinary economic growth and a really serious public discussion going on right now,‭ ‬about how to make even more extraordinary progress in reducing poverty.‭ ‬So I think there is reason for economic optimism about India and also reason to be really interested in the conversations that are going on now about education and health and opportunity‭ – ‬and even about the global environment,‭ ‬which is something that will eventually have to unite many different countries.