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The Great Divergence Debate History Essay
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Published: Mon, 5 Dec 2076
During the last decades, there has been a deep and intense debate on the origins ofthe Great Divergence between the Economies of
Europe and China, This paper aims to retrace the thesis elaborated by different authors over the time. We will start considering classical
‘economists and then mave tothe California School and its main historian, who was Kenneth Pomeranz. To conclude, we will briefly
‘consider some thesis that intend going further Pomeranz.
Classical economists
1.1 Adams Smith: The classical liberalism
‘Adam Smith (1923-90) can be considered the father of economics and classical liberalism. He explored this topic in his book titled “An
Inquiry into the Nature and Causes ofthe Wealth of Nations", written in 1776, According to Smith, the keys to human prosperity were
{ree trade, limited government, competition, and open markets, He suggested that a minimal government (with few policies) led to free
ttade regulated only by the “main invisible", which was a metaphor conceived by Adam Smith to describe the self-regulating behavior of
markets, The openness to trade generated by this model (and a higher division of labor led toa surplus of products making decrease
prices. Thus, anyone could afford more and the total wealth increased (the so-called “universal opulence"). To conclude i is clear that,
according to Smith, wil succeed those nations (or areas) presenting a minimal government that will ed to the openness to trade and
finally toa wealth increase,
1.2 Malthus: Differences in marriage paths
‘Thomas Robert Mathus (1766-1834) suggested another hypothesis about the causes ofthe Great Divergence, Inked tothe cifferent
mariage paths that characterized each area, His work on marriage (written inthe early 1800s) was a kindof milestone because it
suggested the idea that marriage was young and universal in the Westem Europe past and that age at marriage and celibacy had
increased over te time, He thought that the younger was marriage, the more was poplation growth and, consequently, the less were
the possiblities to achieve income growth. Thus, Westem Europe escape from the so-called Malthusian trap thanks to this change in
‘marriage paths over the time At the opposite, China didnot experience this growth because there were not a change in population
behavior. inthis cases Malthus theorized postponement of marriage inorder to reduce ferilly and enhance evolution, To conclude, itis
important to remark that nowadays Malthus i considered the main responsible for the creation ofthe myth about different mariage
paths because successive empitcal evidences (in the 60s) show thatthe Northwest European pattem of late martiage and extensive
celibacy had existed for centuries inthis area
1.3 Marx: Capitalism versus other production models
‘The thesis of karl Marx (1818-1883) i really well known. Capitalism and free trade (proposed by Pomeranz) will concentrate authority
‘ang assets inthe hands of few people leading to social division in two classes: workers and capitalists. Marx highlighted the
differences between the capitalist mode of production and that of other countries as for example the Asiatic mode of production. He
concluded that Westem Europe was the frst area to experience the transit from feudalism to capitalist economy and those European
Countries, the more developed, would have the greatest inequalities. Thus, he explained differences among countries by considering the
production model, which in tus depends on the social structure of each nation,
The California School2.1 Kenneth Pomeranz: Great Divergence started from 1800
Pomeranz (1958) discussed his thesis about the Great Divergence in his book titled "The Great Divergence: China, Europe, and the
“Making of the Modern World Economy”. The central question that he tied to answer concemed the main reasons that led Western
Europe (especially Britain) to have such a unique path of economic development. He used a different research methodology if
‘compared with the past. Infact he focused on regions of comparable size, population, and economic vitality in Eurasia inorder to avoid
distortions of scale when using nation-state as @ unit, Furthermore, he decided to focus on income levels and living standards for
demonstrating his thesis
Kenneth Pomeranz suggest the Great Divergence started after 1750-1800. Empirical evidences that do not show many differences
between the most advanced parties of both Western Europe (Britain) and China (Yanga) reinforce this thes. Thus, since 1800 itis
reasonable to think thatthe two areas were almost equals in terms of income, technology and development.
Pomeranz, n order to better sustain its thesis, ist criticizes three false common reasons forthe divergence and then suggests its
causes. The first common reason regards accumulation. Since Europe had higher livestock per capita, it means ithad more capital, with
positive implications for agriculture, transportation and nutrition, Surely, this isnot true, because Pomeranz argued that income and
living standards were close until 1800, The second regards technology. However, Pomeranz shows that there is no evidence on higher
productivity gaine in Europe during the pre-Industrial Revolution, Furthermore, several non-European societies were ahead in
technologies such irrigation or the use of energy. The most important European innovation regarded lane-saving techniques and fossil
fuels. The thre concems institutions. Pomeranz minimizes the Importance of institutions in explaining the divergence, because even
China had competitive markets and elaborated legal systems of propery rights. Furthermore, he suggests that China provided a freer
‘marketplace than mercantilst Europe did. The last evidence makes clearer the Pomeranz thesis,
Pomeranz argues for the importance of two factors causing the Great Divergence, essertially exogenous “shocks” outside the price
system that had important effects on the economy: the distriaution of energy-generating resources and the accident that Europe
discovered the New World, whereas China did not. As someone sald, “Geology is destiny’ and in fat the site and the availabilty of coal
deposits determined the viability of industrialization. Coal was the driven factor, the main cause of Industral Revolution. In the
European context, Brltain was the sole to present a large avallabilty of coal and the lowest transportation costs, thanks tothe ready
availabilty of efficient water transpor. Atte opposite Chinese coal miners were situated inthe northwest that was far away from the
‘manufacturing and populated centers of the southeast. I means that mining Was mare expansive than it was in Britain, Thus, Britain
was actually luckier than China. The second cause concems the New World. Again, it was a fortuitous case, for Europe, the discovery of
the Americas and China could not rely on such similar and huge advantage. For instance, this led Europe to access to cheap raw
‘materials, the use of slave workforce and an inflow of precious metals rather than other products such as cotton, sugar, timber, and
tobacco. Briefly, it help to break that lancHabor constraint that China did not do.
To conclude, Pomeranz argues thatthe divergence between development and involution in Europe and China did nat occur until after
1800. This divergence is explainable in terms of both geographical lucky and fortuitous discoveries rather than differences in income,
population, technology or even institutions.
After Pomeranz
3.1 Philip C. C, Huang: A review of Pomeranz
Philip C. C. Huang (1940) weote "Development or Involution in Eighteer-Century Britain and China?” that i a review of "The Great
Divergence: China, Europe, and the Making of the Modern World Economy" of Pomeranz. He argues against the hypothesis explained in
the book by highlighting different problems and new ideas. The review focuses on the differences between England (the Europe's
richest country) and the Vangzi delta (the China's richest area).
Huang highlights @ new factor, not considered by Pomeranz, which isthe English agricultural revolution, According to other scholars
(mainly Wrigley and Allen), there was an increase of labor productivity level in England between 1700 and 1800 revealed by a decrease
of the output per head ratio in agriculture, Ths is partly linked tothe technological changes that happened in England but a relevant part
depends on the different density levels of these areas. n 1800 the Yangzi area had a population of 12 milion and agricultural land of
25 millon acres while, cowersely, England had a population of 8,66 million and 36.6 million acces, It means that the Yangei area had a
high population density. Thus, the continued population pressure without technolagiel change drove out animal husbandry to allow for
‘maximizing output per unit of land but inevitably through less use of capital per unit of labor and hence also of lower productivity pet
Unit of labor. It esults that the Yangzi delta was a crops-only economy while the English agricultural output consisted of equal parts of
crops and livestock (which is meat, milk and cheese)
Huang argued even that Pomeranz did not discuss the differences in labor intensity, farm size, ané agricultural land per capita that tell
Crucially about involution and development not only in farming but also in rural industry rural incomes, and consumption. Huang
highlight three different types of labor intensification that are human consumed grains, animal-feed crops and use of pasture, English
‘agriculture of eighteen century combined the use of pasture with animal-feed crops while the Vangzi deta agriculture cid not use
pasture and made a litle use of animal-feed crops, Furthermore, there were significant differences in degree of labor intensity in
cropping itselfMoving tothe implications of having cifferent agricultural regimes, Pomeranz ignores contrast between small family farms (Yangzi
delta) and enlarged enclosed farms (England). In fact, accorcing to Huang, involution implicates resistance to laborsaving capitalization
‘and the possibilty to achieve economies of scale,
Huang resumes the industrious revolution model of Jan de Viies to explain lower wages and higher total consumption atthe same time
(consumption revolution). Pomeranz stated the model s useful for the Vangzi delta and he confused and perhaps overlapped the Vries
industrious revolution with Huang’s involution. Huang accused Pomeranz to have missed some crucial information, to have overlapped
the two terms and finally he argued the model do not fit with the Vangzi delta,
Pomeranz stated that industrial revolution mainly depended on the availabilty of both coal and steam. However, Huang somehow
reversed the problem arguing thatthe lack of industrial demand explains the nor-development of china's coal industry, so that delayed
Industialzation is not because of non-availability of coal
To conclude, many factors supported industialization in Britain (not only coal) while the Yangzi delta remained characterized by high
land productivity and low capitalization, without many big changes as seen in England. Furthermore, the suggestion of the author is that
‘of being more careful as possible about empirical data,
3.2 Robert Brenner and Christopher Isett: Critiques and alternatives to Pomeranz
Even Brenner (1943) and Isett discussed this topic, through their book titled “England's Divergence from China's Yangri Delta: Property
Relations, Microeconomics, and Patterns of Development”. They started by criticizing the thesis of Pomeranz, especially about the
possible starting point of the Great Divergence. According tothe authors, England began to have such a unique path of economic
development (different from both the rest of Europe and the Yangzi delta) from the early modern period (1500-1750) Finally, this
existing divergence can really explain the Great Divergence. From that point, the Vangzl delta experienced a Malthusian patter while
Britain experienced a sort of ituous cycle of growth the so-called Smithian pattern
Was Pomeranz all wrong? Not ata. The Great Divergence may be didnot stared inthe eighteen century as he supposed, but some
evidences were right. Even if the two causes (the American colonies with theirland:saving staple crops and the coal availabilty) he
pointed out were not essential inthe change of Britain's path, they were surely important in speeding the process of divergence between
the two areas.
‘Thus, what was the real rigger cause? The authors suggested that China undertook the Malthusian path because there were strong
peasant farmers and weak capitalist farmers. This led tothe decline of agricultural labor productivity and lving standards, as shown by
the dropping long-term trend in real wages. At the opposite, Britain experienced the Smithian path because there were weak peasant
farmers and strong capitalist farmers. This, n turn, led to many enclosure and farming innovations that permit a rapid agricukural
‘growth making increase the total wealth. Finally this increase in wealth led to the Great Divergence.
Robert C. Allen: Challenging the California school
‘Allen (1947) debated about the thesis of Pomeranz, and suggested his own thesis, n his book titled “The Great Divergence in European
Wages and Prices from the Middle Ages tothe First World War’. His aim was to define the trend of prices and wages in Europe from the
fourteenth century tothe First World War. He tried to explain four main points in his paper, which were about the consumer revolution
{the shift to marketable goods), the history of heights, the origin of mid-nineteenth century income gap and the implications ofthe
standard of living debate inthe intemational and long-term context. n other words, origins and causes of the Great Divergence through
empirical analysis.
Allen suggested that this divergence has been originated during the pre-industrial epoch, between 1500 and 1750. However, he found
that English wages did not increase over the time but they remain stables while they fll in most European cities. Infact, real wages
started to rose above medieval levels only after 1870, Tobe brief, we want to focus on a particular interpretation of Allen, which ciffers
{rom other authors. He showed thatthe process of enclosure and the consequent replacement of small-scale farmers by those larger
had quite influence to the English economic success. Infact, enclosures and large farms enriched landowners without positive effects
toward consumers, workers or farmers. Thus, small-scale farmers were largely responsible forthe productivity growth,
[Another point of ciscontinuty from other authors is the thesis fr which income in the Yangzi delta were noticeably higher than England
in 1620. However, Allen suppased that Yangzi delta agricultural labor productivity was static between 1600 and 1800, while English and
Dutch productivity caught up. He estimated that, in early 1800s, agricultural labor productivity in the delta was at 90% of English levels
3.4 Gregory Clark: The survival of the richest
Clark (1957) suggested an interesting thesis for explaining the divergence in his book tiled “A Farewell to Alms”. He studed the
relationship between income and birth rates by analyzing English wils, He found that rch people hada reproductive success if
compared to poorest classes. Since this kind of divergence started from the Middle Ages, the share of rich people obviously inereased
Cover the time leading to the so-called “survival of the richest” instead ofthe fittest, as suggested by Darwin). This abundant of richpeople had then to slide down the social hierarchy to find work, because during the Malthusian period population and wages were:
‘constant over the time, Consequently, Clark suggested that today's population is largely descendent from the economic upper classes
of the Middle Ages,
‘The consequences of this theory are surprising. According to Clark the genes linked with those classes began to spread and population
became better mentally equipped. Consequently, man was genetically adapting to the modern wetld and properly this genetic change
led to the Industrial Revolution. This final thesis can be considered somehow racist, but other authors found even some empirical
evidences against it. However, we will not focus on that.
‘To conclude, Clark explained the origins of the Great Divergence through a change inthe structure of the English population that started
{rom the Midéle Ages. At the opposite, he suggested that Chinese richer classes were infertile and did not experience a reproductive
advantage. For this reason, Chinese economy and living standards remain lower than those of Britain,
Conclusions
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