The Great Divergence

The Great Divergence of Kenneth Pomeranz, specialist in modern Chinese history and professor at the University of California (Irvine), provoked debates and controversies amongst economists and historians. In an already very abundant literature on the causes of the industrial revolution, Pomeranz introduced in his book two arguments which had a provocative character. He first establishes a comparison in between the levels of economic and social development of England and the valley of the Yangtze Delta in China. He then explains the economic difference of the two regions with England’s capacity to mine coal from the land of its colonies. 

Why the industrial revolution did first took place in England? In the eighteenth Century, parts of China were as developed as English regions and nothing predicted the “great divergence” between Europe and China. 

We found interesting to analyze Pomeranz’s arguments as he was one of the first to conduct an analytical work devoted to a comparison of economic areas as far away as Asia and Europe.

The similarities

Many historians had found similarities between parts of China and Europe, but none had done a comparison as systematic and detailed. For him, set aside historical determinism, until the mid 18^th century there was no evidence to predict the supremacy and the inevitable advance of the British economy to come. 

At first, the author looks at some data on household consumption. Since the 17^th century, European households turned increasingly toward market activities, they spent less time on leisure activities, on households’ tasks and consumed more. Pomeranz shows that such a process was also at work in the most commercialized regions of China (and probably also in Japan). For consumer goods as for luxury goods, figures are very similar in the two regions at that time. 

In the Great Divergence, Pomeranz therefore draws institutional comparisons to show that the Chinese market was just as free and that property rights were just as defined as in Britain. 

The author challenges the thesis of Philip Huang (also professor at University of California) who argues that geography and institutions favored a much lower Chinese agricultural productivity and yields than in England. He shows both that yield per hectare of rice was equivalent to that of wheat, that agricultural technologies were almost identical and that the English productivity did not improve in the 18^th century. Concerning women, Pomeranz highlights the work of the Chinese spinners who received an income close to that of men in Europe, and thus disagrees with a patriarchal vision of the Chinese family.

Geographical or ecological differences, that is to say soil fertility, supply of wood or fuel, do not reveal factors explaining a handicap for the Yangtze Delta region. In comparison to Europe, Pomeranz also shows that despite a higher population density, the Yangtze Delta region was not subject to higher saturation of natural resources at that time. With institutional and statistical comparisons, he therefore eliminates one by one the factors that are traditionally put forward to explain the industrial boom in England: ecological constraints, institutional differences, market and family structure, differences in levels of life expectancy, technology and agricultural productivity, Increase in consumption.

These factors cannot fully explain the Industrial Revolution in England as the Yangtze River region possessed a comparable level of development and characteristics that were roughly equivalent.

The great divergence: ecological constraints, coal and cotton

Pomeranz attaches great importance to ecological constraints. He argues that the interaction of these constraints with political and social processes had a major impact on the economic divergence of the late 18^th century. In particular, population growth and proto-industrial economic activity has gradually led to excess in demand for wood in relation to local reserves (saturation is observed in particular by the sharp rise in prices in both regions). It is partly the response to this shortage which made the Chinese region diverge from England. His essential argument is that England was able to break free from its constraint by saving land through the use of coal (wood substitute) and also land use of its colonies, while the Yangtze Delta region had to turn to a more intensive exploitation of its land.

Challenging the famous works of Patrick O’Brien (who tended to downplay the role of the colonies in the English industrial development) Pomeranz supports the thesis of Eric Williams that shows the importance of colonies and slavery in the industrial development of England. Pomeranz insists on the fact that the colonies have released much of English agriculture from its constraints. Eric Jones introduces the notion of “ghost acres” which can be understood as the gain brought by the colonies to England by cultivating hectares that the country would have otherwise had to cultivate itself.

Conclusions

His findings are both unexpected and bold: some parts of Asia and Europe had reached in the late 18^th century a comparable level of development. So how do we explain the gap that separated the two regions afterwards and why the Industrial Revolution happened in Britain rather than in China? Pomeranz argues that the availability of coal resources and the exploitation of the colonies are the two main phenomena responsible for this “great divergence”. Pomeranz questions how each region was able to solve economic, ecological and geopolitical problems caused by the development process and the growth of industry. The history of globalization of the economy since 1750 was here subject to reconsideration by the author, challenging conventional views. 

The superiority of the European economy on the Chinese one was long seen as evidence, especially among Western economists and historians. Pomeranz is obviously not the first to question the reasons for Western supremacy, but no analysis has really considered the phenomenon on a global scale: most have postulated economic inferiority of Asia compared to Europe.

Since its publication in 2000, the book provoked among economists and historians worldwide a debate that is far from being closed: the birth of globalized economy. 


POSTED BY: MARGOT VONTHRON