Great Divergence

• 1. Introduction

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  The Great Divergence is the name historians give to one of the most consequential shifts in human history: the moment when the Western world broke free from the economic constraints that had governed every civilization for millennia and vaulted ahead of civilizations that had been its equal or superior for centuries. For most of recorded history, the most advanced economies were not in Europe. Qing China, Mughal India, the Ottoman Empire, Safavid Iran, and Tokugawa Japan were formidable powers with sophisticated agriculture, trade, and industry. Then something changed. By the 19th century, Western Europe and its settler colonies had pulled so far ahead that the gap seemed almost impossible to close. How did that happen? Was it coal, luck, geography, culture, the Protestant work ethic, slavery, or something no single factor can explain? Scholars have argued over every piece of the puzzle for decades, and the disagreements run deep, from the timing of the divergence to whether it was inevitable at all. The debate over what the term even means began at the very beginning: the phrase "Great Divergence" was coined by Samuel P. Huntington in 1996 and taken up by Kenneth Pomeranz in his landmark 2000 book, while the rival label "European Miracle" was popularized by Eric Jones back in 1981. Two names, one phenomenon, and hundreds of competing explanations.

• 2. When Did It Begin?

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  Economic historian Stephen Broadberry looked at silver wages and found that by 1600, England already paid roughly three times the wages of the Yangzi Delta, the most developed part of China. At the same grain-equivalent measure of basic buying power, England was still about 15% ahead, and English silver wages were five times higher than those of India in the late 16th century. To Broadberry, the divergence was already underway in the early modern period, long before any steam engine turned a wheel.

  Pomeranz and the California school push back hard. They point to nutrition data and chronic European trade deficits and argue that the most developed parts of Asia, especially the Yangtze Delta in Qing China and the Bengal Subah in South Asia, had economic development comparable to Europe before the 19th century. Prasannan Parthasarathi raised the possibility that wages in parts of South India, particularly Mysore, may have been on par with Britain, though he noted his own research was not conclusive on that point.

  A 2021 review by Jack Goldstone concluded that even England and the Netherlands showed no marked divergence from the rest of the world in output per capita until after 1780. A 2020 study on northern India, stretching from Gujarat to Bengal, found that the divergence with Britain began in the late 17th century, widened after the 1720s, and then exploded after the 1800s. The study's most striking finding was that it was primarily England's rapid growth and India's stagnation in the first half of the 19th century that drove the most serious gap in living standards. The question of when, in other words, depends partly on which part of the world you are measuring, and which yardstick you use.

• 3. The World Before the Gap

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  During the Song dynasty, which ran from 960 to 1279, China experienced a revolution touching agriculture, water transport, finance, urbanization, science, and technology. By around 1100, the Chinese economy was the most advanced in the world. Mastery of wet-field rice cultivation opened the previously underdeveloped south of the country. Yet northern China was devastated by Jurchen and Mongol invasions, floods, and epidemics, which shifted the center of population and industry southward in ways only partially reversed by the 15th century.

  Mughal India was a global force in cotton textiles and shipbuilding. In the 17th and 18th centuries, India accounted for 95% of British imports from Asia. Amiya Kumar Bagchi estimated that in Bihar alone, between 1809 and 1813, more than 10% of the population were involved in hand spinning thread and close to 10% more in weaving and other manufacturing. European fashion grew dependent on Indian textiles and silks, and governments in Europe actually banned some Indian cotton imports to protect their own wool industries.

  Ottoman Egypt in the early 19th century had a per-capita income comparable to France's and higher than Japan's and Eastern Europe's. In 1819, Egypt under Muhammad Ali began state-sponsored industrialization programs, building an iron foundry, setting up cotton mills, and introducing steam engines. By the early 1830s, Egypt had 30 cotton mills employing about 30,000 workers. Economic historian Jean Batou argued that the necessary conditions for rapid industrialization existed in Egypt during the 1820s and 1830s. Sub-Saharan Africa also contained highly productive agricultural and industrial regions; historian John Thornton found that the population density of the Lower Guinea Coast in the 18th century was higher than the European average and comparable to the European heartland of the Rhine and northern Italy.

• 4. Coal, Geography, and Political Fragmentation

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  Britain was burning more coal than wood even before the Industrial Revolution began, a head start with enormous consequences. Kenneth Pomeranz drew attention to a geographic difference: the largest coal deposits in China were in the northwest, near the industrial core of the Northern Song period from 960 to 1127. But the southward population shift between the 12th and 14th centuries moved Chinese industry far from those deposits. In Britain, the coal was close at hand. In Chinese mines in the arid northwest, ventilation to prevent explosions posed problems that wet European mines, paradoxically, did not face in the same way, since the European challenge of pumping out groundwater drove the development of the Newcomen steam engine.

  Jared Diamond and Peter Watson pointed to Europe's fragmented geography, its large peninsulas, mountain barriers, and defensible borders, as something that rewarded political competition rather than unity. China's smoother coastline and heartland dominated by the Yellow and Yangtze river valleys encouraged political unity instead. Joel Mokyr argued that European political fragmentation created what he called an integrated market for ideas: heterodox thinkers, innovators, and heretics could flee to a neighboring state rather than be suppressed. Latin as a shared language and the pan-European Republic of Letters meant that knowledge crossed borders even when people could not.

  A 2017 study by Stanford political scientist Gary W. Cox found that Europe's fragmentation interacted with its institutional innovations to create wide areas of economic liberty, where merchants faced fewer restrictions, lower tariffs, and less arbitrary regulation than their counterparts in Asia. When trade routes crossed multiple independent realms, any ruler who imposed onerous tolls risked losing traffic to a rival. When parliament in one realm curbed arbitrary regulation, neighboring rulers faced pressure to respond in kind. A 2017 study in The American Economic Review found that globalization was the major driver of economic divergence between rich and poor parts of the world in the years 1850 to 1900, and the states that benefited were those with strong constraints on executive power.

• 5. The New World and the Slave Trade

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  Pomeranz argued that the most decisive European advantage was not coal but land: the vast fertile territory of the Americas that could grow the farm products needed to sustain European economic expansion. New World exports of wood, cotton, and wool are estimated to have saved England the need for between 23 and 25 million acres of cultivated land. By comparison, the total cultivated land in England at the time was just 17 million acres. That invisible land freed up enormous resources for industrialization.

  Early colonization was also sustained by profits from selling New World silver to China, which had a structural appetite for the metal. The high returns from colonial ventures and the slave trade constituted roughly 7% per year, a relatively high rate of return given how much pre-industrial capital depreciated. Eric Williams argued in his 1944 book Capitalism and Slavery that the profits from slavery provided one of the main streams of capital accumulation that financed the Industrial Revolution in England. Most economic historians did not take up that argument in subsequent decades, but historians including James Walvin have argued in the 21st century that slavery was fundamental to the way the West emerged.

  The Battle of Plassey in 1757 brought Bengal under British East India Company control, and the capital extracted afterward was invested directly into British industries including textile manufacturing. In 1813, Parliament abolished the two-century-old East India Company monopoly on trade with Asia and introduced import tariffs on Indian textiles, exposing Indian hand spinners and weavers to competition from machine-spun threads. British colonization simultaneously forced open the large Indian market to British goods while restricting Indian imports to Britain, making India both a supplier of raw cotton and a captive market for British manufactured goods.

• 6. Living Standards and the Wages Debate

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  Paul Bairoch estimated that in the mid-18th century, the average standard of living in Europe was actually a little lower than in the rest of the world. He calculated China's GNP per capita in 1800 at in 1960 US dollars, higher than Western Europe's . Egypt's per-capita income in 1800 was comparable to France's and higher than Eastern Europe's and Japan's . These figures paint a picture very different from the triumphalist version of the story.

  Yet the wage comparison between cities tells a sharper tale. Between 1725 and 1825, laborers in Beijing and Delhi could purchase only a basket of goods at a subsistence level, while laborers in London and Amsterdam could purchase goods at between four and six times a subsistence level. Jan Luiten van Zanden's study of Dutch economic history complicated the picture further: real wages in the Netherlands declined during the early modern period between 1450 and 1800, and average male height, at 166 centimeters during the 17th and 18th centuries, was about 4 centimeters lower than in the 14th and early 15th century. GDP per capita rose by 35 to 55% between 1510-1514 and the 1820s, but living standards lagged behind, suggesting that national income and personal welfare can move in very different directions.

  Shevket Pamuk and Jan-Luiten van Zanden showed that during the Industrial Revolution, living standards in Western Europe increased little before the 1870s, as rising food prices undermined nominal wage gains. The substantial rise in living standards only came after 1870, when cheap food from the Americas arrived in volume. The earliest evidence of a major health transition leading to increased life expectancy began in Europe in the 1770s, approximately a century before Asia's comparable shift.

• 7. Institutions, Culture, and Contested Explanations

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  Niall Ferguson attributed the divergence to six institutional advantages he called "killer apps": competition, the scientific method, the rule of law, modern medicine, consumerism, and the work ethic. Max Weber had argued earlier, in The Protestant Ethic and the Spirit of Capitalism, that Calvinist Protestant culture shaped northern Europe's relationship to labor and capital accumulation in ways that drove economic development. Chen argued in 2012 that cultural differences were the most fundamental cause, tracing the divergence to the humanism of the Renaissance followed by the Enlightenment.

  The Catholic Church's prohibition of cousin marriage has drawn a striking line of argument from anthropologist Joseph Henrich in his book The WEIRDest People in the World. Henrich argues that the Church's increasingly strict prohibition, up until the Fourth Council of the Lateran in 1215 began to loosen its rules, forced Western Europeans to travel widely to find mates, dissolving kinship networks and fostering new voluntary associations. Charter towns, professional guilds, and universities grew up to replace blood-based social ties, creating what Henrich sees as the cultural scaffolding for the Scientific Revolution. A 2017 study in the Quarterly Journal of Economics found that medieval guilds and the institution of journeymanship, which required craftsmen to travel and train across regions, were superior for disseminating technical knowledge compared with closed kinship systems in other parts of the world.

  Economist Timur Kuran argued that Islamic institutions that had once promoted development later hampered more advanced growth by limiting corporate formation, capital accumulation, and impersonal transactions. Paul Bairoch countered that Ottoman trade policy, which was more free-trade oriented than Britain's early 19th century protectionism, actually hurt the Ottoman economy by exposing it to competition it could not yet match. Benjamin Disraeli made that case directly in the 1846 Corn Laws debate, citing the Ottoman Empire as an instance of injury from unrestrained competition. The imperial examination system in China has been cited as channeling the most capable intellectuals into state service and limiting incentives to learn mathematics or conduct experiments, though historians Yu Yingshi and Billy So have shown that Chinese merchants and even scholar-officials embraced commercial activity openly from the Song dynasty onward, particularly through the Ming and Qing periods.

• 8. The Black Death and the Long Setup

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  Historian James Belich argued that the Black Death, the bubonic plague that swept Afro-Eurasia from 1346 to 1353, set the conditions that eventually made the Great Divergence possible. Mass death doubled the per capita endowment of everything. A labor scarcity expanded the use of waterpower, wind power, and gunpowder, and fast-tracked innovations in water-powered blast furnaces, heavily gunned galleons, and musketry. The fall in population drove down rents, raised wages, and undermined the feudal and manorial relationships that had defined medieval Europe.

  Historian Lewis Mumford pushed the origins even further back, writing that while popular historians date modern industry from James Watt's steam engine, the machine had been developing steadily in Western Europe for at least seven centuries before the changes associated with the Industrial Revolution. European population had tripled between the years 1000 and 1348, reaching a peak estimated between 73.5 million and 100 million, substantially higher than the Roman Empire at its peak. The University of Bologna appeared in the 11th century, the University of Paris in the 12th, and Oxford also in the 12th. From a single print shop in Mainz around 1440, the movable type printing press had spread to around 270 cities across Central, Western, and Eastern Europe and had produced more than 20 million volumes by the end of the 15th century. By 1800, literacy rates stood at 68% in the Netherlands and 50% in Britain and Belgium. Medieval historian C. Warren Hollister argued that by 1500, two centuries before the Industrial Revolution, Europe's technology and advanced political and economic organization had already given it a decisive edge over all other civilizations. Whether that edge was a product of geography, plague, religion, or sheer institutional accident remains, as it has always been, an open question that the evidence alone has not yet closed.