The Great Divergence Debate

Introduction

The question of why Europe surged ahead economically from the 18th century while Asia, Africa, and the Americas lagged behind has been debated for over a century.
Key figures like Karl Marx, Max Weber, Eric Jones, Douglass North, and David Landes have addressed this issue.
The term 'Great Divergence' gained prominence with Kenneth Pomeranz's book in 2000, focusing on China but also including Japan, India, and Southeast Asia.
Prasannan Parthasarathi's book in 2011 brought India more fully into the debate.
Explanations for divergence vary between the two books, with Pomeranz focusing on environmental history and Parthasarathi on technology and the state.
The debate has largely focused on China due to the earlier publication of Pomeranz's work and a greater number of historians of China.
Economic history is flourishing in East Asia but declining in South Asia.
Focus on comparisons between advanced regions of Europe, China, and India.
Four key issues will be explored:
- Methodological questions related to explaining divergence.
- Comparability between advanced regions of Europe, China, and India before divergence.
- The problem of establishing the 'truth' in economic history.
- The reception and influence of the global and comparative debate in India and China.

Structure Versus Conjuncture

Classic writings, such as those by Karl Marx and Max Weber, posited that European economic development stemmed from exceptional European conditions.
This 'structural' approach emphasizes deep social, political, economic, or cultural differences.
Marx attributed Europe's divergence to the rise of capitalism, characterized by private property, wage labor, and constant innovation.
Marx argued that China and India remained static, trapped in an Asiatic mode of production.
Weber highlighted the affinity between Protestantism and the spirit of capitalism in Europe, fostering a systematic, calculating, and rational approach to economic activity.
Weber believed this transformative impulse was absent in China and India.
Twentieth-century historians like Douglass North, Robert Paul Thomas, Eric Jones, David Landes, and Joel Mokyr sought to identify factors differentiating Europe from Asia.
- North and Thomas emphasized political and economic institutions.
- Jones pointed to environmental conditions and a competitive state system.
- Landes attributed success to European culture.
- Mokyr highlighted European scientific culture.
Parthasarathi and Pomeranz argued for comparability and similarities between advanced regions of Europe, China, and India.
They attributed divergence to conjunctures between needs and opportunities.
Pomeranz stressed ecological relief from coal and overseas trade, allowing Britain to overcome land constraints by substituting wood with coal and importing resources from the Americas.
The Yangzi Delta lacked similar ecological windfalls due to the location of coal deposits and limited ecological benefits from external trade.
Parthasarathi acknowledged ecological relief but emphasized the political and economic context, including state policies and technological change.
He questions the centrality of European science in the late 18th and early 19th centuries.
Parthasarathi views science as a global enterprise with Indian contributions.
Ecological relief became central in the 19th century.
In the late 18th century, Britain displaced India as the main cotton textile supplier through technical and organizational innovations driven by competitive pressures and state protection policies.
Indian and Chinese textile producers did not face the same pressures to innovate.
Both scholars build on existing lines of thinking in British economic history, such as the works of E.A. Wrigley, A.P. Wadsworth, and Julia de Lacy Mann.

How Much Divergence, and When?

Pomeranz and Parthasarathi argue for the comparability of living standards until the late 18th or early 19th century.
This view has been contested, leading to debates about the timing and location of divergence based on living standards and wages.

China

Pomeranz and others highlight the strength of the agricultural order in the Lower Yangzi.
Robert Allen's research suggests that in 1820, productivity per labor day in Yangzi Delta farming was 90% of England's, with comparable net income for tenant families.
Another study estimates Yangzi Delta farming productivity around 1800 as equivalent to Holland, which was 94% of English levels.
Land productivity was much higher in the Delta than in most of the world, about nine times that of England.
Total factor productivity was also extremely high in the Delta, higher than in some European countries that industrialized in the 19th century.
Agricultural labor productivity in Germany, for instance, was about 50% of English levels, and its land productivity was also lower.
These findings challenge 'agrarian fundamentalism', which posits that industrialization readiness depends on agricultural efficiency.
Agrarian fundamentalism has also been challenged from the Indian perspective.
Traditional Chinese historiography also held a version of agrarian fundamentalism, arguing that peasant production could not have yielded the surpluses or flexibility needed for sustained per capita growth.
This view clashes with labor and total factor productivity figures and the economic performances of Japan, Taiwan, and Eastern China.
The claim that living standards and per capita incomes were comparable between Europe and China requires some revision.
While Pomeranz initially suggested this was true in 1800 and almost certainly around 1750, the 1750 claim remains plausible but the former is less so.
A recent paper suggests a divergence in per capita GDP closer to 1700 than 1750.
Still more recently, Patrick O’Brien and Kent Deng have questioned the feasibility of any GDP or wage comparisons and argued for a focus on consumption.

India

The debate on living standards in India is more spatially scattered and at an earlier stage than that on China.
The debate was launched in 1998 and has been challenged by economic historians.
Broadberry and Gupta argue that silver wages were substantially lower in India than in England in the 17th and 18th centuries.
While Parthasarathi argued that grain wages were comparable in the mid-18th century, Broadberry and Gupta conclude that there was a sharp decline in the 18th century.
Sashi Sivramkrishna disputes Broadberry and Gupta’s findings, citing Francis Buchanan’s account of a journey through South India and showing a rough comparability of real wages based on a broader basket of consumption goods.
Parthasarathi questions Broadberry and Gupta’s conclusions, citing the exclusion of earnings estimates for outcaste laborers and the derivation of earnings for skilled weavers that fall in the same range as those of degraded labourers.
There is no allowance for non-monetary perquisites, and there is no information on how many days per week laborers worked in England and India.
Low-estimate earnings that Broadberry and Gupta provide for the 18th century raise the question of how laborers survived in that period.
Anthropometric data indicate that South Indian workers shrank in size over the course of the 19th century.

Discussion

Even accepting pessimistic estimates, the revision of previously dominant views is significant.
Angus Maddison's GNP estimates suggested that China and India fell behind Europe centuries earlier, while others claimed a fundamental divergence by 1500, 1000, or even earlier.
A rough dating is needed to determine the plausible explanations for divergence.
If there was rough parity in 1700, explanations like David Landes' difference between freedom and despotism would be difficult to explain.
A significant gap appears to have emerged by 1800 between the advanced regions of Europe and China, and perhaps between those of Europe and India as well.
Non-agricultural workers were generally more productive than farmers in Europe and England than in China and Japan, and the number of non-farmers was growing at both ends of Eurasia.
Divergence seems to have come earlier to unskilled wages, both urban and rural, than to living standards.
Wage laborers were a small percentage of rural adults, even in the commercialized Lower Yangzi.
Tenant farmers earned much more than unskilled laborers, so a comparison of unskilled real wages is a comparison of the bottom of the income scale in Jiangnan with something close to the middle in Northwest Europe.

The Role of Institutions

Institutions, including domestic political arrangements, property rights, and fiscal systems, are important in explaining East-West divergence.
East Asian property rights and contract enforcement differed from those in Northwest Europe but were adequate for efficient product markets.
Chinese and Japanese systems for allocating access to land were effective.
Capital was more expensive in Japan and China than in Europe, but higher costs did not inhibit typical 18th-century economic activities.
East Asian manufacturing techniques tended to be less capital intensive than those in Europe but not necessarily less efficient.
European states had more effective systems for raising funds by pledging future revenues, but this may not have mattered much to overall economic growth in early modern times.
European government spending was mainly for warfare.
China and Japan faced lower military costs.
Available technologies did not require large-scale fixed investment or major public investments.
Europe reaped delayed rewards from overseas colonization after 1800.
Institutions functional under one set of conditions could be less facilitative of growth later on.

The Role of Science

The contribution of science to the divergence debate is contentious.
Three positions exist:
- Science was not relevant, and artisanal knowledge was more important.
- European science was critical by the 18th century, with a unique approach to knowledge and its application.
- The application of knowledge to production was found outside Europe, early modern science transcended national frames, and artisanal knowledge was more important in early industrialization.
Economic historians and historians of science address these issues differently.
Historians of science have moved away from the laboratory as the main site of scientific activity.
Historians of science have uncovered contributions from scientific-minded individuals outside Europe.
Historians of science have found it difficult to connect scientific knowledge and technological change at the micro level.
Evidence suggests scientific interest in 17th- and 18th-century South Asia.

Telling What’s Right

The Great Divergence builds upon scholarship on the British Industrial Revolution.
Lines of debate and disagreement revolve around levels of economic development, the industrialization process, the contribution of institutions, and the contribution of science and knowledge.
Adjudicating between different positions relies on the interpretation of qualitative data.
The interpretation of these factors is made difficult by the lack of research on them in the Asian context.
Focusing on quantifiable factors is not a solution, as quantitative also has problems.
Eric Hobsbawm pointed out the difficulties of calculating money wages and turning them into real wages, even for British workers in the 19th century.
Even if we accurately represent economic reality with data, data would still have to be interpreted.
A plausible explanation must acknowledge facts about China, India, and the global economy between 1600 and 1900:
- For 200 years, the advanced regions of China and India maintained export surpluses.
- Military encounters between Europeans and Asians were evenly matched until the early 19th century.
- The economies of the advanced regions of India and China regressed in the 19th century.

The Divergence Debate in China and India

The divergence debate has been dominated by scholars in the United States and Western Europe.
A surprising degree of discussion has taken place in East Asia, while South Asia has witnessed limited interest.
Two pre-existing debates in Chinese historiography have been connected to that on divergence.
- Whether the late imperial Chinese economy had 'sprouts of capitalism'.
- To what extent rural China could have experienced any sustained per capita growth.
The Marxist debate has analogues in Indian history.
Since then, South Asian history has moved away from the applicability of totalizing frameworks derived from the European historical experience.
In Chinese economic history, one of the central debates in the People's Republic of China concerned the 'sprouts of capitalism'.
Li Bozhong pushed Chinese economic history towards an emphasis on output, rather than labor relations.
Sinologists who have been most skeptical about The Great Divergence have combined some influences from the 'sprouts of capitalism' literature with an emphasis on the negative consequences of late imperial population growth.
Pomeranz's views have largely prevailed.
Increased interest has been paid to long-run, slowly developing trends in Chinese society.

Conclusion

The debate on divergence is remarkably broad, touching upon prices, incomes, science, rationality, the environment, politics, and the state.
It has raised difficult empirical questions and brought to the fore challenging problems of method.
Its scope and complexity make the question an enduring one for historians and social scientists.