Great divergence

When and why did Europe rise over Asia?

At the time late of the eighteenth century, Europe had far surpassed Asia as an economic power. As European exports flooded the international market with continually increasing prices, paired with tenfold increases to their production of manufactured goods, (e.g cotton, pig iron) it became clear that Europe was amidst an Industrial revolution that showed no signs of stopping. Evidenced by the inability of Asia to prevent European trade domination, (most notably when the UK forced China to engage in Opium trading 1940’s) and having many of their seaports subjugated, there was left little debate as to the fact that Europe had achieved complete economic dominance. Though there is much evidence to support this fact, the question of when exactly and how did Europe achieve its “Great Divergence” over Asia is much harder to pinpoint and has been the subject of heated argument over modern economists.

The general consensus among modern historians is that the great divergence occurred somewhere between 1500 and 1800 AD using many case studies that focused on China and India as a representative of the rest of Asia. Reasons surrounding this choice are largely due to the fact that China and India shared their organized political structure and had a workforce based upon the division of labour. One of the reasons as to why China possessed economic development comparable to Europe(during the age of discoveries), which was already phenomenally ahead of numerous regions of the world (notably Australia and the Caribbean Islands) was largely due to the fact that they shared similar climate and agriculture conditions as Europe. Reasons behind this surround the fact that the Eurasian landmass has a roughly horizontal world axis, indicating that growing conditions for crops and domestication of animals were largely similar. This helps explains the fact that Eurasian peoples were able to select and grow more plants and animals than the rest of the world, being easily able to share their crops and agricultural techniques. Both China and India benefitted more from this due to them being more integrated with Europe. Implications of a sedentary lifestyle are numerous, firstly being able to support a greater population. This higher population density in turn allowed the Eurasian people to build up a greater resistance against diseases which would ultimately proof crucial when conquering the Americas. Additionally, sedentary food production is the cornerstone to having a centralized political organization as famers are now able to produce enough food to support workers that carry out other tasks, thus allowing division of labour. Given that no evidence can be found to proof that the main powers of Asia were significantly behind Europe at the time of the age of discoveries, then just when did the divergence start?

One possible explanation to the great divergence was the due to the fact that medieval Europeans were more inventive than their Asian counterparts. As Gimpel states in his book “Medieval Machine”, the period of the 12th century was filled with important technological discoveries such as the improved mill. The Europeans had discovered much earlier than anywhere else in the world, the technique of building mills that could accommodate various wind directions. Economic implications of this discovery were huge as previously, labour was required to operate mills which heavily decreased the profitability of building them. Described as the “factories of the middle ages” these mills proved quintessential to improving the efficiency of many activities such as grinding corn, tanning leather and making paper. Essentially, the origins of the great divergence may have been caused by this early capital substitution by the medieval Europeans.

The theory that medieval superiority could have been the cause of the great divergence is shared by Eric Jones who argues that the great divergence did not occur at a set point in time and rather was the result of persisting marginal differences and inventions that only showed significant economic impacts in the long term. Describing Europe at the time as “a mutant civilisation in its uninterrupted amassing of knowledge about technology” his key arguments of his include the fact that medieval Europeans possessed better institutions than that of their Asian counterparts. For instance, he praises the European state system which disallowed the creation of a single universal monarchy in Europe. Eventually this would prove effective in promoting a competitive society that attracted various skills and capital so that the balance of power could remain. It may be attributed to this fact that the Spanish king allowed Columbus to sail to India in the pursuit of gold and spices which eventually led to the discovery of the new world. In stark contrast, all of China was ruled by a single emperor. With no immediate threat to his position of power, the emperor was much less inclined to take a competitive stance, most of the time refusing to protect Chinese trade merchants settling in South East Asia where many were slaughtered by rivals. The regimes imposed by the Emperor proved to be exploitive and disorderly, extracting taxes from its citizens whilst failing to uphold basic law enforcement. However, whilst Jones certainly describes the negative institutions China had and how it would be extremely difficult to achieve economic progress, it must be noted that his work attempts to cover a very large scale. Trying to compare the whole of Europe to China would prove nearly impossible due to Europe having many regions with different levels of development. Thus the arguments made by Jones cannot be taken at face value due to the fact it doesnt specify specific locations as compared to other studies comparing the richest regions of Europe ( Netherlands and England) to the richest parts of China (Yangzi Delta).

A somewhat later explanation as to why the great divergence occurred was proposed by Max Weber who believes that its origins occurred in the early 16th century at the time of the protestant reformation (1517 AD). Similar to Jones, his theory revolves around the basis that the protestant reformation promoted institutions essential to the economic development in Europe. At this time numerous new national protestant churches were being erected. Arguments from in his book “The Protestant Ethic and the Spirit of Capitalism” (1905) stress the fact that the protestant ethic was the influence that pushed a large number of people to pursue great affluence. What then resulted was a surge in trade and enterprise which would be the foundation of modern day capitalism. Before the advent of the protestant reformation, previous teachings of the Catholic Church insisted that wealth was an obstacle to faith and the pursuit of affluence was an offense against faith. Consequently, self-inflicted poverty was encouraged in order to achieve a greater faith. Weber’s description of the Catholic as being “more calm; his acquisitive drive is lower” gives a reasonable theory as to why the great divergence may have occurred in the 16th century. Despite this, his theory has fallen out of favour amongst modern economists, partly due to the fact that recent research has disproved his initial theory. In a recent study conducted by Davide Cantoni, no evidence can be found to support the correlation of Protestantism and economic growth after a variety of controls had been implemented. The study looked at close to 300 cities to conclude that Protestantism did not have a significant impact on economic growth in the years of 1300-1900. 

More recent analysis on the origins of the great divergence reveal that the great divergence was a phenomenon of luck rather than culture and occurred in the late 18th century. In the book “The Great Divergence” (possibly the strongest book in this field) Kenneth Pomeranz highlights that both China and England were caught in the Malthusian Trap. He specifically compares the Yangzi Delta with England as they are both the richest areas in Asia and Europe respectively and observes that both of the areas were facing the Malthusian trap in the early 18th century. While both regions faced the same land and energy constraints, the method used to tackle them were vastly different. Europe had the ability to obtain resources from the previously discovered Americas using the vast amounts of land to engage in land intensive farming to produce crops such as sugar, tobacco, cotton and timber. The revenue generated from exporting these products would be vital in fuelling the industrial revolution that would ensure the economic dominance of Europe. While certainly significant, the value of overseas colonies may have been exaggerated by Pomeranz. Evidence shows that external European trade accounted for about just 7 per cent of European produce prior to 1800 which reduces the credibility of this argument.

Perhaps the more important concept than land constraint was the energy constraint faced by England and China. Pomeranz notes that while England was able to overcome the energy constraint while China was unable to. Reasons behind this was due to the fact that England was lucky to have a large supply of accessible coal while Coal supplies in China were north west of the Yangzi. Further hindered by the insurmountable transport costs, there was no viable way for China to obtain coal at the time. So instead of transitioning to a mineral economy as England did, China further reinforced its existence as an organic economy by instead opting to refine their agricultural techniques and heavily relying on photosynthesis to replenish its energy stores in the form of timber. Vastly different to this was England which was churning out up to 20 million tons of coal per year by 1810, an amount that could provide enough energy equivalents to that generated by photosynthesis each year. It is no wonder that England was able to pull so far ahead with the advent of Watt’s steam engine (reliant on coal) which could power a large range of manufacturing machinery. This transition to mechanical work greatly increased the amount outputted per worker to an exorbitant amount relative to the workers in the Yangzi.

The great divergence therefore, may have been caused by numerous factors. However it isn’t until the late 18th century in which a clear domination of Europe over Asia can be seen. Before this time economic growth in both regions can be described as Malthusian, in which population increased without much change in income per capita. After this time period growth in North- Western Europe displayed a clear and sharp increase in GDP per head. Having noted this fact, the time in which the great divergence occurred can be pinpointed to roughly the 18th century however the reasons behind why it occurred then may be not just due to a transition into a mineral economy but instead a collection of several factors.