Great Divergence

• 1. Defining The Great Divergence

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  Samuel P. Huntington coined the term "Great Divergence" in 1996 to describe a specific socioeconomic shift where Western Europe and its settler offshoots overcame pre-modern growth constraints. Kenneth Pomeranz later used this phrase in his 2000 book, The Great Divergence: China, Europe, and the Making of the Modern World Economy. This phenomenon marks the period when the West emerged as the most powerful civilization during the 19th century. It eclipsed previously dominant or comparable civilizations from Asia such as Qing China, Mughal India, the Ottoman Empire, Safavid Iran, and Tokugawa Japan. Scholars have proposed a wide variety of theories to explain why this happened, including geography, culture, institutions, and luck. There is disagreement over the nomenclature; while some scholars emphasize slow structural social changes rooted in the medieval period, others point to the 15th or 16th century as the definitive beginning. They cite the Commercial Revolution and the origins of mercantilism and capitalism during the Renaissance and the Age of Discovery. Yet the largest jump in the divergence happened in the late 18th and 19th centuries with the Industrial Revolution and Technological Revolution. For this reason, the "California school" considers only this to be the great divergence. The term European miracle was popularized by Eric Jones in his 1981 book The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia. Broadly, both terms signify a socioeconomic shift in which European countries advanced ahead of others during the modern period.

• 2. Pre-Industrial Economic Cores

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  China has had a larger population than Europe throughout the last two millennia. During the Song dynasty from 960 to 1279, the country experienced a revolution in agriculture, water transport, finance, urbanization, science and technology. This made the Chinese economy the most advanced in the world from about 1100. By 1300, China as a whole had fallen behind Italy in living standards but its wealthiest regions, especially the Yangtze Delta, may have remained on par with those of Europe until the early 18th century. In the late imperial period from 1368 to 1911, taxation was low and the economy grew significantly without substantial increases in productivity. Chinese goods such as silk, tea, and ceramics were in great demand in Europe, leading to an inflow of silver. Until the 18th century, China and India were the two most productive regions. According to a 2020 study, the Great Divergence between northern India from Gujarat to Bengal and Britain began in the late 17th century. It widened after the 1720s and exploded after the 1800s. The study found that it was primarily England's spurt and India's stagnation in the first half of the nineteenth century that brought about most serious differences in the standard of living. Mughal Bengal, the most developed region, was globally prominent in industries such as textile manufacturing and shipbuilding. In the 17th and 18th centuries, India accounted for 95% of British imports from Asia. Amiya Kumar Bagchi estimates 10.3% of Bihar's populace were involved in hand spinning thread in 1809, 1813. Japan experienced average annual GDP per capita growth estimated at between 0.05% and 0.09% from 730 to 1874. Relative to the United Kingdom, GDP per capita was at roughly similar levels until the middle of the 17th century. By 1850, per capita incomes in Japan were approximately a quarter of the British level.

• 3. Geography And Resource Distribution

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  Coal-fired steam engines also operated in the railways and in shipping, revolutionizing transport in the early 19th century. Kenneth Pomeranz drew attention to differences in the availability of coal between West and East. Due to regional climate, European coal mines were wetter, and deep mines did not become practical until the introduction of the Newcomen steam engine to pump out groundwater. In mines in the arid northwest of China, ventilation to prevent explosions was much more difficult. Another difference involved geographic distance; although China and Europe had comparable mining technologies, the distances between the economically developed regions and coal deposits differed vastly. The largest coal deposits in China are located in the northwest, within reach of the Chinese industrial core during the Northern Song from 960 to 1127. During the 11th century China developed sophisticated technologies to extract and use coal for energy, leading to soaring iron production. The southward population shift between the 12th and 14th centuries resulted in new centers of Chinese industry far from the major coal deposits. Some small coal deposits were available locally though their use was sometimes hampered by government regulations. In contrast, Britain contained some of the largest coal deposits in Europe all within a relatively compact island. Jared Diamond and Peter Watson argue that a notable feature of Europe's geography was that it encouraged political balkanization. They point to having several large peninsulas and natural barriers such as mountains and straits that provided defensible borders. By contrast, China's geography encouraged political unity with a much smoother coastline and a heartland dominated by two river valleys. Thanks to the topographical structure with its mountain chains, coasts, and major marches, formed boundaries at which states expanding from the core areas could meet and pause.

• 4. The Role Of Colonialism

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  A variety of theories posit Europe's unique relationship with the New World as a major cause of the Great Divergence. The high profits earned from the colonies and the slave trade constituted 7 percent a year, a relatively high rate of return considering the high rate of depreciation on pre, industrial capital stocks. Early European colonization was sustained by profits through selling New World goods to Asia, especially silver to China. According to Pomeranz, the most important advantage for Europe was the vast amount of fertile, uncultivated land in the Americas which could be used to grow large quantities of farm products required to sustain European economic growth. New World exports of wood, cotton, and wool are estimated to have saved England the need for 23 to of cultivated land. The total amount of cultivated land in England was just 17 million acres. The New World also served as a market for European manufactures. In his book Capitalism and Slavery published in 1944, Eric Williams argued that the profits from slavery provided one of the main streams of that accumulation of capital in England which financed the industrial revolution. Historian James Walvin argues that slavery was fundamental to the way the West emerged. Paul Bairoch cites British colonialism in India as a primary example but also argues that European colonialism played a major role in the deindustrialization of other countries in Asia, the Middle East, and Latin America. The historian Jeffrey G. Williamson has argued that India went through a period of deindustrialization in the latter half of the 18th century as an indirect outcome of the collapse of the Mughal Empire. Following political pressure from the new industrial manufacturers, in 1813 Parliament abolished the two-centuries-old, protectionist East India Company monopoly on trade with Asia. They introduced import tariffs on Indian textiles. Exposing the Proto-industrial hand spinners and weavers in the territories the British East India Company administered in India to competition from machine spun threads resulted in De-Proto-Industrialization.

• 5. Institutions And Political Fragmentation

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  Jared Diamond and Peter Watson argue that Europe's geography encouraged political balkanization such as having several large peninsulas and natural barriers like mountains and straits. By contrast, China's geography encouraged political unity with a much smoother coastline and a heartland dominated by two river valleys. After horse domestication, steppe nomads for instance Genghis Khan and the Mongols posed a threat to the sedentary population until the 18th century. Hence this stimulated China which is near the steppe to build a strong unified state. In his book Guns Germs and Steel, Diamond argues that advanced cultures outside Europe had developed in areas whose geography was conducive to large monolithic isolated empires. He gives the example of China in 1432 when the Xuande Emperor outlawed the building of ocean-going ships. On the other hand Christopher Columbus obtained sponsorship from Queen Isabella I of Castile for his expedition even though three other European rulers turned it down. As a result governments that suppressed economic and technological progress soon corrected their mistakes or were out-competed relatively quickly. Justin Yifu Lin argued that China's large population size proved beneficial in technological advancements prior to the 14th century but that the large population size was not an important factor in the kind of technological advancements that resulted in the Industrial Revolution. Before Europe took some steps towards technology and trade there was an issue with the importance of education. By 1800 literacy rates were 68% in the Netherlands and 50% in Britain and Belgium whereas in non-European societies literacy rates started to rise in the 20th century.

• 6. Cultural And Religious Factors

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  Max Weber argued in The Protestant Ethic and the Spirit of Capitalism that capitalism in northern Europe evolved when the Protestant work ethic particularly Calvinist influenced large numbers of people to engage in work in the secular world. In his book The Religion of China: Confucianism and Taoism he blames Chinese culture for the non-emergence of capitalism in China. Chen (2012) similarly claims that cultural differences were the most fundamental cause for the divergence arguing that the humanism of the Renaissance followed by the Enlightenment enabled a mercantile innovative individualistic and capitalistic spirit. For Ming China he claims there existed repressive measures which stifled dissenting opinions and nonconformity. He claimed that Confucianism taught that disobedience to one's superiors was supposedly tantamount to sin. Justin Yifu Lin argued for the role of the imperial examination system in removing the incentives for Chinese intellectuals to learn mathematics or to conduct experimentation. Yasheng Huang argued that the imperial examination system monopolized the most capable intellectuals in service of the state sustained the propagation of Confucianism and preempted the emergence of ideas that could challenge it. Of the developed cores of the Old World India was distinguished by its caste system of bound labor which hampered economic and population growth. Compared with other developed regions India still possessed large amounts of unused resources. India's caste system gave an incentive to elites to drive their unfree laborers harder when faced with increased demand rather than invest in new capital projects and technology. Aspects of Islamic law have been proposed as an argument for the divergence for the Muslim world. Economist Timur Kuran argues that Islamic institutions which had at earlier stages promoted development later started preventing more advanced development by hampering formation of corporations.

• 7. Technological Innovation And Productivity

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  The Old World methods of agriculture and production could only sustain certain lifestyles. Industrialization dramatically changed the European and American economy and allowed it to attain much higher levels of wealth and productivity than the other Old World cores. Although Western technology later spread to the East differences in uses preserved the Western lead and accelerated the Great Divergence. TFP analysis has shown that Western countries had higher TFP levels on average in the 19th century than Eastern countries such as India or China showing that Western productivity had surpassed the East. The West's rise to power directly coincides with per capita income in the West surpassing that in the East. This change can be attributed largely to the mass transit technologies such as railroads and steamboats that the West developed in the 19th century. The construction of large ships trains and railroads greatly increased productivity. These modes of transport made moving large quantities of coal corn grain livestock and other goods across countries more efficient greatly reducing transportation costs. These differences allowed Western productivity to exceed that of other regions. Economic historian Paul Bairoch has estimated the GDP per capita of several major countries in 1960 US dollars after the Industrial Revolution in the early 19th century. His estimates show that the GDP per capita of Western European countries rose rapidly after industrialization. For the 18th century and in comparison to non-European regions Bairoch in 1995 stated that in the mid-18th century the average standard of living in Europe was a little bit lower than that of the rest of the world.