The Great Divergence Notes

The Great Divergence: Asia, Europe, & Modern Economics

The Great Divergence

  • After 1500, the world became increasingly interconnected, leading to the development of a global economy with increasing world trade.
  • European countries conquered vast overseas territories, building huge colonial empires and exploiting indigenous peoples and African slave labor.
  • This period is referred to as "Early Modern" (before 1789).
  • India and China were the richest and most powerful regions during this time.

The Ottoman Empire (1299-1922)

  • A rich, powerful, and long-lived empire that expanded significantly after the Black Death.
  • The empire was well-organized and known for its religious tolerance.
  • However, it began to lose central control in the 18th and 19th centuries.

The Mughal Empire (1526-1857)

  • A wealthy and powerful empire, ranking as one of the world’s largest economies.
  • Characterized by religious tolerance.
  • Reached its peak of power in the 1600s.
  • Experienced a decline in central authority after 1707.

Qing Empire in China (1636-1912)

  • The world’s largest economy.
  • The ruling Manchus took control after the fall of the Ming dynasty in 1636.
  • Saw a rise in population, expanded its empire, and experienced an economic boom.
  • The empire was well administered.

Europe, Americas, & Africa

  • Europe was undergoing massive changes that also caused significant changes elsewhere.
  • The slave trade destabilized Africa.
  • European colonies in the Americas generated wealth for Europeans while causing hardship for indigenous peoples.

Modern States

  • A modern state is characterized by:
    • Centralized authority.
    • A professional standing army.
    • A professional bureaucracy that administers the state.
    • A tax system that pays for the state’s functions.
    • A belief in the state as an entity separate from the ruler.
    • A monopoly on the legitimate use of violence.

Shifts

  • European economies were expanding due to overseas colonies, which allowed them access to more advanced Asian economies.
  • Northern European countries began pulling ahead of the Southern ones.
  • Banking and investment evolved.
  • New farming developments meant more food with less labor.

Mercantilism

  • The principal economic ideology of the period.
  • Mercantilists believed:
    • There is a finite amount of wealth in the world.
    • Each nation should aim to accumulate as much of that wealth as possible.
  • They advocated using all means to achieve this, including state power and military force, believing that any wealth gained by another nation reduced their own share.
  • They perceived economics as a zero-sum game.

The “Rise of Europe”?

  • The period between 1500 and 1900 has often been characterized as the “Rise of Europe” or the “Rise of the West”.
  • Simple narratives of this period often assumed it was an inevitable development based on unique aspects of European civilization.

But…

  • Before 1800, Europe was still behind China, which remained the center of the world’s economy.
  • The social, intellectual, and economic aspects that theorists attributed solely to Europe were also present in China and other Asian regions.
  • The question then becomes: How do we explain the divergence of Europe after 1800?

What Happened After 1800?

  • If Europe was not on a special trajectory before 1800, what specific events allowed Europe to attain the dominance it achieved in the 19th century?

Industrialization and North American Colonies

  • Industrialization, coupled with North American colonies, is a crucial piece of the puzzle.
  • Starting with England, European states invested in labor-saving technologies and developed new modes of production.
  • North American colonies supplied raw materials for production, food crops, and markets for European manufactured goods.
  • Even after the US war of independence, the economic situation remained largely the same.