Great Divergence and Pre-Modern Economic Structures — Comprehensive Study Notes

The Great Divergence: Pre-Modern Economies and the Shift to Market Societies

• GDP per capita (2024 PPP) slide (Page 1)

  • Countries listed: Japan, Iraq, Turkey, Egypt, China, Britain.

  • Scale shown from $0 to about $12,000 in 2024 PPP dollars.

  • Indicates a global variation in living standards and prosperity prior to modern industrialization, setting up the context for the Great Divergence.

Core Concepts from Last Lecture (Context for Today)

• Rise of agriculture creates surplus production, enabling elites to seize control of surplus.

• Surplus allows a division of society into enduring social classes: some laboring, others controlling labor.

• Polanyi’s distinction:

  • Societies with markets

  • Market societies

  • Essential for understanding history before the modern era.

• Commodities defined historically as goods produced for sale on a market to maximize profits.

• Pre-modern production and distribution relied largely on non-market exchanges or minimal commodity production.

Core Concepts from Today’s Lecture

• Systems of reciprocity can be egalitarian or hierarchical/oppressive.

• The so-called “feudal” system was the latter: hierarchical, with power over labor and production.

• Serfdom defined as a process of power over others and its use to organize production/distribution, not just a modern rent relation.

• In serf-based societies there is no unitary private property as we typically define it; instead there are land rights and privileges.

• The feudal/serf system began eroding in Europe (beginning in England) in the 14th–15th centuries, leading to the historical moment called the “Great Divergence.”

• The divergence did not immediately improve living standards; real gains materialized much later, toward the late 19th century.

• Nonetheless, the Great Divergence spurred the expansion of commodity production on an unprecedented scale, concentrating wealth among a small elite.

Societies with Markets vs Market Societies (Page 3)

• Two broad frameworks for organizing economic life:

  • Societies with Markets: markets exist but are not the dominant organizing principle; production/distribution tied to social and reciprocal obligations.

  • Market Societies: widespread market exchange, price signals, and commodification shape most economic activity.

• Implication: The transition between these systems marks a fundamental shift in social structure, property relations, and wealth accumulation.

Reciprocity vs. Exchange (Pages 4–6)

• RecipROCITY (non-market exchange) vs. Exchange (market transactions):

  • Reciprocities are based on social ties, obligations, and mutual aid.

  • Exchanges are governed by prices, competition, and profit motives.

• Reciprocities can produce cooperative, egalitarian relations or hierarchical, obligation-heavy arrangements.

• Page 5 (Examples of Reciprocity in Daily Life):

  • Sam buys Alex a cup of coffee; Alex buys Sam a beer.

  • Sam invites Alex to a party; Alex gives Sam a birthday present.

  • Sam takes Alex to lunch; Alex lets Sam crash in a spare bedroom for a month when between apartments.

• Page 6 (Reciprocity through Labor Bargains):

  • Sam takes on Alex as an apprentice cobbler; Alex cleans up Sam’s shop; Alex runs errands; Sam teaches sandal/shoe making; Sam provides room and board.

  • If Alex disobeys Sam, punishment may occur (beatings) – illustrating how reciprocity can be enforced through coercive means in some non-market arrangements.

• Key takeaway: Even within reciprocity-based systems, power dynamics, enforcement, and informal contracts shape outcomes just as strongly as formal market prices do.

Serfdom and Liberty (Pages 7–11)

• Serfdom: a form of unfree labor where individuals are legally bound to the land and must work for a master.

• Definition of liberty debated:

  • A. The right to do whatever you wish.

  • B. The right to do whatever you wish, as long as you don’t harm others.

  • C. The right to establish and maintain your authority over those subordinate to you, without outside interference.

  • D. The right to live in accordance with God’s rules.

• Page 11: The key idea – serfdom did not arise because people lost their freedom; it arose when some people gained power over others and framed that power as liberty.

• Page 12–13: Medieval geography and governance map: a mosaic of kingdoms, duchies, and empires illustrating a pre-modern order before centralized market economies.

• Page 13: Examples of medieval castellans (e.g., Dinefwr Castle in Wales; Czersk Castle in Poland) as markers of localized power and control within feudal structures.

Pre-Modern Property and Land Tenure (Pages 16–18)

• Page 16: A contrast between property regimes:

  • UNCONDITIONAL AND UNITARY PROPERTY RIGHTS

  • CONDITIONAL AND PLURAL LAND TENURE (NOT LAND OWNERSHIP)

• Page 17: Demesne and socage definitions:

  • demesne (pronounced de-main): land managed directly by the noble; the labor peasants were required to perform on the demesne.

  • socage (pronounced sok-edge): the labor owed by peasants as part of their tenancy.

• Page 18: The Premodern World vs The Modern World

  • Premodern: property rights and who owes what to whom are the organizing concerns.

  • Modern: property ownership and questions of who owns what (or whom) dominate economic life.

Human History Milestones (Pages 19–21)

• Page 19: Hunter-Gatherer Societies (~290,000 years) vs Agrarian Societies (~10,000 years).

• Page 20: Timeline markers around The Great Divergence, spanning from 2000 BCE to 1600 CE with GDP and economic shifts.

• Page 21: GDP per capita around year 1000 by region:

  • Western Europe, South and Central America, Asia, Africa, Middle East (approximate regional comparisons presented on the slide).

Economic Indicators and Cross-Regional Comparisons (Pages 22–27)

• Page 22: Royal Revenue per capita (grams of silver)

  • A comparative chart with values (approximate):

  • France, 1200 AD ~ RRpc ≈ 60 g silver

  • Rome, 1 AD ~ RRpc ≈ 50 g

  • Byzantium, 850 AD ~ RRpc ≈ 30 g

  • England, 1200 AD ~ RRpc ≈ 30 g

  • Persia, 350 BCE ~ RRpc ≈ 40 g

  • China, 850 AD ~ RRpc ≈ 20 g

  • Egypt, 200 BCE ~ RRpc ≈ 20 g

  • Abbasid Caliphate, 850 AD ~ RRpc ≈ 10 g

  • This provides a sense of long-run fiscal extraction and state capacity across civilizations.

• Pages 23–27: GDP per capita by historical year/place maps (recurrent theme across generations):

  • 1500: GDP per capita by region; Western Europe leads, with other regions trailing.

  • 1700: Similar patterns with ongoing regional disparities.

  • 1900: Marked increases in Western Europe and parts of North America; other regions show slower growth.

  • 2011 PPP: Contemporary regional breakdowns show stark contrasts across regions (United States, Western Europe, Eastern Europe, Middle East, East Asia, Latin America, Sub-Saharan Africa, etc.).

• Page 23–24: Cross-regional GDP per capita maps labeled in multiple languages; emphasize long-run divergence and historical affluence centers.

• Page 25: GDP Per Capita, c. 1900 map with focus on Western Europe, the British Isles, North Africa, the Mediterranean, and surrounding regions.

• Page 26: 2011 PPP GDP per capita by major world regions:

  • United States and Canada

  • Western Europe

  • Eastern Europe

  • Middle East

  • East Asia

  • Latin America

  • South and Southeast Asia

  • Sub-Saharan Africa

  • Scale from $0 to about $80,000 (2011 PPP)

• Page 28: Life expectancy vs income (c. 1750):

  • Chart showing England (commoners) vs England (nobility) vs France vs Prussia vs Japan (commoners) vs Manchuria vs Southeast China.

  • Relationship between income levels and life expectancy as a proxy for living standards.

Case Studies, People, and Primary References (Pages 29–33)

• Page 29: Peter H. Lindert and Jeffrey G. Williamson, English Workers’ Living Standards During the Industrial Revolution: A New Look (Economic History Review, 1983)

  • Graph: Average Real Income of a British Worker (1850 = 100) across years 1755–1851, showing growth in real incomes during the Industrial Revolution.

• Page 30: John Komlos, The Secular Trend in the Biological Standard of Living in the United Kingdom

  • Data on human height over time as a proxy for living standards; example figure shows heights by birth decade (1660s–1850s) around 5'5"–5'8" range, illustrating gradual improvements in nutrition and health.

• Page 31: 40-hour work week; Average Yearly Working Hours for English Laborer (historical labor input measure) – illustrates changes in labor productivity and work intensity.

• Page 32–33: Global exchange and consumer goods around 1700:

  • Indian Textiles, circa 1700

  • Chinese Porcelain, circa 1700

  • Dutch Porcelain, circa 1700

  • These items symbolize global trade networks and the transfer of luxury goods between Asia and Europe, foreshadowing later globalization and industrialization.

Notable Observations and Thematic Takeaways

• The Great Divergence represents a long-run widening of economic disparities between Western Europe (and later North America) and many other regions, driven by a shift from feudal/serf-based systems to more market-oriented production, along with the rise of commodity production and accumulation of wealth at the top.

• The transition was gradual: early centuries saw structural changes (eroding serfdom in parts of Europe, expanding commodity production), but immediate living standards did not uniformly rise until the late 19th century.

• Property rights and land tenure frameworks (demesne, socage, and broader land tenure) were central to how wealth was produced, controlled, and transferred, setting the stage for later capitalist property relations.

• Reciprocities and non-market exchanges shaped social bonds and obligations, yet market exchanges with defined prices and property rights eventually became dominant in many regions, contributing to growth and wealth concentration.

• The historical data evoke a contrast between high long-run prosperity in some regions and persistent constraints in others, including differences in state capacity (royal revenue), living standards, and health indicators (height, life expectancy).

• The maps and data across centuries highlight how geography, institutions, and culture interacted to produce divergent paths of development.

Key Formulas and Notations (summarized for quick reference)

• Great Divergence concept:

  • ext{GDPpc}{ ext{West Europe}} ot gtr ext{GDPpc}{ ext{Other Regions}}

  • Over long horizons, ext{GDPpc}{ ext{West Europe}} ext{ grows faster than } ext{GDPpc}{ ext{Other Regions}} leading to sustained divergence.

• Royal Revenue per capita (definition):

  • ext{RRpc} = ext{grams of silver per person per year (royal revenue)}

• Demesne and socage definitions (no formal equations, but clear terms):

  • Demesne: land managed directly by a noble; labor performed by peasants on the demesne.

  • Socage: peasant labor obligations as part of tenancy.

• Living standards indicators referenced:

  • Real income level index: e.g., 1850 = 100 in British 18th–19th century data.

  • Height as a proxy for nutrition and health (e.g., rank-and-file soldiers in England, 20–23 years old).

Quick Reference Index (by Topic)

• Great Divergence and market transition: Pages 1–2, 10–12, 19–21, 23–27.

• Societies with Markets vs Market Societies; reciprocity vs exchange: Pages 3–6.

• Serfdom, liberty, and property relations: Pages 7–12.

• Property regimes and land tenure (demesne, socage): Pages 16–18.

• Human history milestones (hunter-gatherers to agrarian): Pages 19–21.

• Historical GDP per capita maps and cross-regional comparisons: Pages 21–27, 23–25.

• Life expectancy, income, and labor statistics (historical data sources): Pages 28–31.

• Cultural exchange goods (porcelain/textiles) as indicators of globalization: Pages 32–33.

If you’d like, I can reformat these notes into a printable handout or tailor them to a specific exam format (e.g., flashcards, outlines, or practice questions). I can also extract specific figures and re-create small tables or graphs from the data described above.