The “Great Divergence,” Politics, and Capitalism
In: Journal of Early Modern HistorySearch for other papers by Shami Ghosh in
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Proceeding from a critical assessment of two recent books, Prasannan Parthasarathi’s Why Europe Grew Rich and Asia Did Not, and Jean-Laurent Rosenthal and R. Bin Wong’s Before and Beyond Divergence, this paper takes stock of the present state of the “Great Divergence” debate. It is argued that the discussion needs to be refined to distinguish between levels of economic development, and paths or trends, in the eighteenth century as well as between causes of sustained growth, and of stagnation or decline in the nineteenth century. It is further suggested that the debate needs to be connected to an understanding of the causes of a “Great Convergence” in the early modern world, and how different regions might have reached similar levels of economic complexity, but might nevertheless have been on different paths for future growth. Finally, this paper suggests that the divergence debate also needs to be connected to the debate on the transition to capitalism.
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2
Jack A. Goldstone, “Efflorescences and Economic Growth in World History: Rethinking the ‘Rise of the West,’” Journal of World History (JWH) 13 (2002): 323-89; Joel Mokyr, “The Intellectual Origins of Modern Economic Growth,” Journal of Economic History (JEH) 65 (2005): 285-351; Mokyr, “The Market for Ideas and the Origins of Economic Growth in Eighteenth Century Europe,” Tijdschrift voor Sociale en Economische Geschiedenis 4 (2007): 3-38; see also his synthesis, Enlightened Economy: An Economic History of Britain, 1700-1850 (London, 2009); Jan Luiten van Zanden, The Long Road to the Industrial Revolution: The European Economy in A Global Perspective, 1000-1800 (Leiden, 2009), 69-91, 145-201. See also the recent, wide-ranging discussion in Patrick K. O’Brien, “Historical Foundations for a Global Perspective on the Emergence of a Western European Regime for the Discovery, Development, and Diffusion of Useful and Reliable Knowledge,” JGH 8 (2013): 1-24
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8
David Washbrook, “India in the Early Modern World Economy: Modes of Production, Reproduction and Exchange,” Journal of Global History (JGH) 2 (2007): 108; see also Washbrook, “From Comparative Sociology to Global History: Britain and India in the Pre-History of Modernity,” Journal of the Economic and Social History of the Orient 40 (1997): 410-43.
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16
Parthasarathi, “Rethinking Wages and Competitiveness in the Eighteenth Century: Britain and South India,” P&P 158 (1998): 79-109; Parthasarathi, The Transition to a Colonial Economy: Weavers, Merchants, and Kings in South India, 1720-1800 (Cambridge, 2001), 14-18, 22-39.
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19
Ibid., 98-109, 114.
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20
Ibid., 109.
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23
Ibid., 126.
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29
Ibid., 115-24.
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30
Ibid., 152, 167.
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31
Ibid., 180-2.
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34
Ibid., 189.
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35
Ibid., 210.
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38
Goldstone, “Efflorescences,” 367-75; similarly, if less convincingly, Berg, “Useful Knowledge.”
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39
In this context, see also Vries, “Challenges,” 661-3; and in addition, H. Floris Cohen, “The Rise of Modern Science as a Fundamental Pre-Condition for the Industrial Revolution,” Österreichische Zeitschrift für Geschichtswissenschaften 20 (2009): 107-32; Margaret Jacob, Scientific Culture and the Making of the Industrial West (New York, 1997).
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41
Ibid., 253-4, where many other examples are also provided.
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42
Ibid., 257-8; similarly Eric Hobsbawm, Industry and Empire, 2nd ed. (London, 1999), 126-7. India was “the only part of the British Empire to which laissez-faire never applied.” Findlay and O’Rourke stress that “openness” was forced on India (and other colonial economies) by Britain, but do not mention the restrictive constraints—which go against the doctrine of the “free” market—that Parthasarathi mentions. See Findlay and O’Rourke, Power and Plenty, 421-3; and for a more general discussion of the effects of imperialism on trade policies, 395-402, 414-23.
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53
Ibid., 79.
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55
Rosenthal and Wong, Before and Beyond, 82, 83, 93-5. Cf. Debin Ma, “Growth, Institutions and Knowledge: A Review and Reflection on the Historiography of 18th-20th-Century China,” Australian Economic History Review 44 (2004): 259-77; Ma, “Law and Commerce in Traditional China: An Institutional Perspective on the ‘Great Divergence,’” Keizai-Shirin 74 (2006): 69-96; Ma, “Law and Economy in Traditional China: A ‘Legal Origin’ Perspective on the ‘Great Divergence,’” in Law and Long-Term Economic Change, ed. Debin Ma and Jan Luiten van Zanden (Stanford, 2011), 46-67. Ma argues that, from the perspective of law and legal institutions, China was far more “informal,” with less well-developed private property rights and, importantly, no independent legal profession. He also believes that the source of the differences even in legal institutions has to do with “culture.”
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56
Rosenthal and Wong, Before and Beyond, 92-3, 96, 198. Note that in India as well, there was a great deal of long-distance trade in basic commodities, and as in Europe, often across political boundaries. See e.g. Brennig, “Textile Producers”; Subrahmanyam, “Rural Industry”; Washbrook, “Progress and Problems” and “Modes of Production.”
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57
Rosenthal and Wong, Before and Beyond, 99, 205; similarly Vries, “Governing Growth,” 122; and on the Indian Ocean trading system, Findlay and O’Rourke, Power and Plenty, 357.
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59
Ibid., 118. There is a certain level of chronological fuzziness here that is potentially important: a lot of the growth also took place after peace “broke out.”
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60
Ibid., 119.
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63
Ibid., 145, 176.
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64
Ibid., 148. It might be worth considering also the significance of private savings when assessing the growth effects of public debt, as has recently been suggested by Oscar Gelderblom and Joost Jonker, “Public Finance and Economic Growth: The Case of Holland in the Seventeenth Century,” JEH 71 (2011): 1-39.
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67
See, however, Ma, “Growth,” 270-2. He points out that while the Huizhou merchants operated with informal networks under a state bureaucracy that was famously “formal,” with entry determined by merit in passing examinations based on the Confucian classics, Hui merchants were exceptionally capable in penetrating the bureaucracy because of the Huizhou school of Confucian studies. There may therefore have been a far closer link between mercantile and state interests than it might appear on the surface.
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68
Rosenthal and Wong, Before and Beyond, 198. In this context see also the important discussion of the links between states and commerce in Epstein, Freedom.
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71
Ibid., 175-7, 214. For detailed figures comparing the Netherlands with Britain and France, see also Jan de Vries and Ad van der Woude, The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500-1815 (Cambridge, 1997), 110-11.
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73
Ibid., 178.
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74
De Vries and van der Woude, First Modern Economy, 112-13, 654-64; quote from 660. For Britain, see Daunton, Progress and Poverty, 447-71; Keith Wrightson, Earthly Necessities: Economic Lives in Early Modern Britain, 1470-1750 (London, 2002), 215-21, 323-5. See also the most recent discussions in Wantje Fritschy, Marjolein ’t Hart, and Edwin Horlings, “Long-Term Trends in the Fiscal History of the Netherlands, 1515-1913,” and Daunton, “The Politics of British Taxation, from the Glorious Revolution to the Great War,” both in The Rise of Fiscal States: A Global History 1500-1914, ed. Bartolomé Yun-Casalilla, Patrick K. O’Brien, and Franciso Comín Comín (Cambridge, 2012), 39-66, and 111-42.
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81
Ibid., 156, 160, 203, 221-2; cf. Kenneth Pomeranz, “Re-Thinking the Late Imperial Chinese Economy: Development, Disaggregation and Decline, circa 1730-1930,” Itinerario 24 (2000): 29-74.
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82
Rosenthal and Wong, Before and Beyond, 209, 217. As Parthasarathi points out, however, there were many protectionist measures taken in Europe that, if we follow his argument, led to growth (at least in England), so one might suggest that state measures were indeed taken in Europe for the sake of growth, just that they were different from what was done in China.
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86
Ibid., 229. Note that while “Europe” as a whole might still have been poor, England and (especially) the Netherlands were already quite prosperous by 1700, even compared to China (relative to total population size).
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89
Hobsbawm, Industry and Empire, 36, 124-8. See also Daunton, Progress and Poverty, 374. Where in 1804-6 exports to Europe, the West Indies and North America comprised over 80 percent of the British total, already by 1854-6 North American exports were at 28.1 percent (note that this includes both Canada and the West Indies, not just the independent usa), and 43 percent of the exports were directed to Australia, the Near East, Africa, and Asia. Harley concludes that in the second half of the nineteenth century, in place of Europe and the usa, British exports were increasingly directed to “Empire markets.” C. Knick Harley, “Trade, 1870-1939: From Globalisation to Fragmentation,” in The Cambridge Economic History of Modern Europe, vol. 2: 1870 to the Present, eds. Stephen Broadberry and Kevin H. O’Rourke (Cambridge, 2010), 171.
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96
Li and van Zanden, “Before the Great Divergence?,” 962. Here it is worth recalling Rosenthal and Wong’s views regarding the high levels of investment in public goods in China when compared to most of Europe, in particular relative to levels of taxation.
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97
Allen, “India,” 13. One fruitful avenue for further research might be to examine differences between urban and rural real wages and standards of living in Europe and Asia, and bring these into relation with urbanization rates, the locations of industry and technology, and levels of market dependence in town and countryside.
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98
Pamuk and van Zanden, “Standards of Living”; Voth, “Living Standards.” For the very long run trends, in addition to Allen, “The Great Divergence in European Wages and Prices from the Middle Ages to the First World War,” Explorations in Economic History ( EEH) 38 (2001): 411-47 (for urban wages and the comparison with non-British cities), the work of Gregory Clark is fundamental (for rural and urban wages in England): “Farm Wages and Living Standards in the Industrial Revolution: England, 1670-1869,” EHR 54 (2001): 477-505; Clark, “Shelter from the Storm: Housing and the Industrial Revolution, 1550-1909,” JEH 62 (2002): 489-511; Clark, “The Condition of the Working Class in England, 1209-2004,” Journal of Political Economy 113 (2005): 1307-40; Clark, “The Long March of History: Farm Wages, Population, and Economic Growth, England 1209-1869,” EHR 60 (2007): 97-135. While Allen believes that living standards did not improve until after the 1850s, Clark sees an improvement by the 1820s—but even he does not find significant gains compared to the fourteenth and fifteenth centuries occurring until the second half of the nineteenth century! On the causes for the late rise in living standards, see also Allen, “Engels’ Pause: Technical Change, Capital Accumulation, and Inequality in the British Industrial Revolution,” EEH 46 (2009): 418-35. While the economic causes of the eventual rise in living standards he suggests are plausible (increasing accumulation of capital), Allen ignores the social and political changes (including the extension of franchise to all male householders in 1867) in the second half of the nineteenth century that allowed for (some of) this capital to be redistributed in higher wages and other forms of benefits for the working class: see Hobsbawm, Industry and Empire, 102-5.
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99
Allen, “Economic Structure and Agricultural Productivity in Europe, 1300-1800,” European Review of Economic History 3 (2000): 1-25.
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111
See Vries, “Governing Growth,” 117-22. Hamilton and Chang have recently reiterated that there was indeed a huge mass market in China by the sixteenth century:latter Gary G. Hamilton and Wei-An Chang, “The Importance of Commerce in the Organization of China’s Late Imperial Economy,” in The Resurgence of East Asia: 500, 150, and 50 Year Perspectives, ed. Giovanni Arrighi, Takashi Hamashita, and Amark Selden (London, 2003), 173-213. However, how this relates to levels of market dependence is unclear, as is the extent to which there was a change between the sixteenth and the nineteenth centuries. The size of the population in itself could create a very high level of market exchange without necessarily implying the rise of complete market dependence on the part of most people (a process that even in north-western Europe was only largely complete by c.1800). Note, nevertheless, that according to Bozhong Li, in the Hua-Lou region c.1820, 80 percent of output and 67 percent of consumption took place over the market, which suggests by this time a level of market dependence comparable to that in the Netherlands. See Li, Zhongguo de zaogi jindai jingi: 1820 niandai huanting-Louxian diqu GDP yanjiu (Beijing, 2010), 423, cited in Li and van Zanden, “Before the Great Divergence?,” 960 with n. 17. It does not seem possible at this point to know how similar this situation was to what had obtained c.1750.
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112
Kaoru Sugihara, “The East Asian Path of Economic Development: A Long-Term Perspective,” in The Resurgence of East Asia, ed. Arrighi, Hamashita, and Selden, 87-90. The term “industrious revolution” was initially coined by Akira Hayami for Japan, “A Great Transformation: Social and Economic Change in Sixteenth and Seventeenth Century Japan,” Bonner Zeitschrift für Japanologie 8 (1986): 3-13. For an overview of “industrious revolutions” in Africa and Asia, see Bayly, Modern World, 55-9. De Vries suggests, not entirely convincingly, that there was a qualitative difference between Asian and European “industrious revolutions” because of the greater role of specialization and the market in the latter: Industrious Revolution, 80-2. Pomeranz argued that there was indeed an “industrious revolution” in China: Great Divergence, 91-106, 111-65. But one should note that even an equivalent increase in consumption of the same items—sugar, tea, cotton, silk, porcelain—would almost certainly have a different structural effect in China, given that all these items needed to be imported into Europe from Asia, but were native to China or relatively nearby regions, and there would thus have been no incentive for the growth of import substitution industries. A focus on these kinds of goods also says nothing about proletarianization and market dependence for subsistence. These latter factors are also not considered in the argument of Penelope Francks that Japan also experienced (albeit somewhat later) a revolution in consumption habits of the sort advocated for Europe by Berg, de Vries, and McCants. Francks, “Simple Pleasures: Food Consumption in Japan and the Global Comparison of Living Standards,” JGH 8 (2013): 95-116.
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The “Great Divergence,” Politics, and Capitalism
In: Journal of Early Modern HistorySearch for other papers by Shami Ghosh in
Current site
Google Scholar
PubMed
Proceeding from a critical assessment of two recent books, Prasannan Parthasarathi’s Why Europe Grew Rich and Asia Did Not, and Jean-Laurent Rosenthal and R. Bin Wong’s Before and Beyond Divergence, this paper takes stock of the present state of the “Great Divergence” debate. It is argued that the discussion needs to be refined to distinguish between levels of economic development, and paths or trends, in the eighteenth century as well as between causes of sustained growth, and of stagnation or decline in the nineteenth century. It is further suggested that the debate needs to be connected to an understanding of the causes of a “Great Convergence” in the early modern world, and how different regions might have reached similar levels of economic complexity, but might nevertheless have been on different paths for future growth. Finally, this paper suggests that the divergence debate also needs to be connected to the debate on the transition to capitalism.
| All Time | Past Year | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 1727 | 466 | 37 |
| Full Text Views | 858 | 54 | 15 |
| PDF Views & Downloads | 875 | 126 | 29 |