Title: The Great Divergence: China, Europe and the Making of the Modern World
Author: Kenneth Pomeranz
Scope: 4 stars
Readability: 3 stars
My personal rating: 4.5 stars
See more on my book rating system.

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Topic of Book

Pomeranz seeks to explain why Britain industrialized around 1800, while China did not.

If you would like to learn more about why Europe and China diverged, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.

My Comments

This book is one of the most important books on economic history of the last generation. It kicked off an lively debate on the relative living standards and efficiency of markets of Europe versus Asia.

I personally am not convinced by Pomeranz’s arguments. As I argue in my book, Britain and Netherlands were Commercial societies that were fundamentally different from the Agrarian societies of both Asia and the rest of Europe. They had already experienced substantial progress and built the foundation for industrialization long before 1800.

I also am not convinced that the New World empires contributed much to industrialization. Since Portugal and Spain benefitted far more from these empires, they, not Britain, should have been the first to industrialize.

Either way, everyone who studies economic history should be aware of Pomeranz’s argument.

Key Take-aways

Pomeranz argues that:

• In 1750 England and the most economically developed portion of China , the Lower Yangzi river basin, shared far more in common with each other than differences.
• Each region had similar levels of:
  • economic institutions
  • standards-of-living
  • agricultural productivity
  • market integration
  • capital stock
  • technology
  • industrial production
• Both Europe and Asia were running into fundamental resource constraints – particularly timber and soil depletion – which threatened to stop economic growth.
• Therefore the very different economic paths of these two regions after 1750 cannot be found in unique characteristics of Britain or Western Europe.
• Unlike China, Britain saved itself from ecological decline by using coal as an energy source and by conquering slave-based plantations in the New World. This created demand for industrial manufactures.

Important Quotes from Book

Much of modern social science originated in efforts by late nineteenth- and twentieth-century Europeans to understand what made the economic development path of western Europe1 unique; yet those efforts have yielded no consensus. Most of the literature has focused on Europe, seeking to explain its early development of large-scale mechanized industry. Comparisons with other parts of the world have been used to show that “Europe”—or in some formulations, western Europe, Protestant Europe, or even just England—had within its borders some unique homegrown ingredient of industrial success or was uniquely free of some impediment.

Other explanations have highlighted relations between Europe and other parts of the world—particularly various forms of colonial extraction—but they have found less favor with the majority of Western scholars.2 It has not helped matters that these arguments have emphasized what Marx called the “primitive accumulation” of capital through the forcible dispossession of Amerindians and enslaved Africans…  This position has become untenable as scholarship has shown the slow but definite growth of an investible surplus above subsistence through the retained earnings of Europe’s own farms, workshops, and countinghouses.

This book will also emphasize the exploitation of non-Europeans—and access to overseas resources more generally—but not as the sole motor of European development. Instead it acknowledges the vital role of internally driven European growth but emphasizes how similar those processes were to  processes at work elsewhere, especially in east Asia, until almost 1800.

The book thus calls upon the fruits of overseas coercion to help explain the difference between European development and what we see in certain other parts of Eurasia (primarily China and Japan)—not the whole of that development or the differences between Europe and all other parts of the Old World. A few other factors that do not fit firmly into either category, such as the location of coal supplies, also play a role.

I will argue that a series of balanced comparisons show several surprising similarities in agricultural, commercial, and protoindustrial (i.e., handicraft manufacturing for the market rather than home use) development among various parts of Eurasia as late as 1750. Thus the explosion of further growth in western Europe alone during the nineteenth century again becomes a rupture to be explained.

The arguments positing that western Europe’s economy was uniquely capable of generating an industrial transformation generally fall into two clusters. The first, typified by the work of E. L. Jones, argues that beneath a surface of “preindustrial” similarity, sixteenth- through eighteenth-century Europe had already moved far ahead of the rest of its world in the accumulation of both physical and human capital.15 A central tenet of this view is that various customary checks on fertility (late marriage, a celibate clergy, etc.) allowed Europe to escape from the otherwise universal condition of a “pre-modern fertility regime.”

However, these versions of the story are often anachronistic in at least two crucial ways.

First, they tend to read too much of the nineteenth- and twentieth-century ecological disasters that have afflicted much of Asia (and the underlying problem of dense population) back into earlier periods and present eighteenth-century Asian societies as having exhausted all the possibilities available to them.

Second, such stories often “internalize” the extraordinary ecological bounty that Europeans gained from the New World.

In an attempt to move beyond such impressionistic claims, chapter 5 offers a systematic comparison of ecological constraints in selected key areas of China and Europe. This inquiry shows that although some parts of eighteenthcentury Europe had some ecological advantages over their east Asian counterparts, the overall pattern is quite mixed. Indeed, key Chinese regions seem to have been better-off than their European counterparts in some surprising ways, such as available fuel supply per capita. Moreover, Britain, where industrialization in fact began, had few of the underutilized resources that remained in various other parts of Europe. Indeed, it seems to have been no better-off than its rough counterpart in China—the Lower Yangzi Delta—in timber supply, soil depletion, and other crucial ecological measures.

A second group of arguments—evident in somewhat different ways in the work of Fernand Braudel, Immanuel Wallerstein, and K. N. Chaudhuri, and in a very different way in that of Douglass North—pays less attention to levels of wealth. Instead, these arguments emphasize the emergence of institutions in early modern Europe (or some part of it) said to be more conducive to economic development than those existing elsewhere. The focus of these arguments is generally on the emergence of efficient markets and property-rights regimes that rewarded those who found more productive ways to employ land, labor, and capital. A common, though not universal, companion to these arguments is the claim that economic development was stifled elsewhere (especially in China and India) by a state that was either too strong and hostile to private property or too weak to protect rationalizing entrepreneurs when the latter clashed with local customs, clergy, or strongmen.

This work borrows from these arguments—mostly those of the various “institutionalists”— but ultimately argues for different propositions. First, no matter how far back we may push for the origins of capitalism, industrial capitalism, in which the large-scale use of inanimate energy sources allowed an escape from the common constraints of the preindustrial world, emerges only in the 1800s. There is little to suggest that western Europe’s economy had decisive advantages before then, either in its capital stock or economic institutions, that made industrialization highly probable there and unlikely elsewhere. The market- driven growth of core areas in western Europe during the preceding centuries was real enough and was undoubtedly one crucial precursor of industrialization— but it was probably no more conducive to industrial transformation than the very similar processes of commercialization and “proto-industrial” growth occurring in various core areas in Asia.

Second, European industrialization was still quite limited outside of Britain until at least 1860. Thus, positing a “European miracle” based on features common to western Europe is risky, all the more so since much of what was widely shared across western Europe was at least equally present elsewhere in Eurasia.

Part 1 of this book calls into doubt various contentions that Europe had an internally generated economic edge before 1800. It substitutes a picture of broad similarities among the most densely populated and commercialized parts of the Old World. Chapter 1 draws on evidence from numerous places to show that Europe had not accumulated a crucial advantage in physical capital prior to 1800 and was not freer of Malthusian pressures (and thus more able to invest) than many other large economies.

In sum, core regions in China and Japan circa 1750 seem to resemble the most advanced parts of western Europe, combining sophisticated agriculture, commerce, and non-mechanized industry in similar, arguably even more fully realized, ways. Thus we must look outside these cores to explain their subsequent divergence.

Serious ecological obstacles to further growth in all of the most densely populated, market-driven, and commercially sophisticated areas of Eurasia. These were not so acute as to cause major food crises, but they made themselves felt in shortages of fuel and building materials, to some extent in shortages of fiber, and in threats to the continued fertility of some areas’ soils.

Chapter 6 then considers the dramatic easing of Europe’s land constraint during industrialization. It looks briefly at the shift from wood to coal—an important story, but one well covered elsewhere—and then turns to the ecological relief provided by Europe’s relations with the New World. This relief was predicated not merely on the natural bounty of the New World, but also on ways in which the slave trade and other features of European colonial systems created a new kind of periphery, which enabled Europe to exchange an ever-growing volume of manufactured exports for an ever-growing volume of land-intensive products.

A crucial part of this complementarity, up through the early industrial era, was the result of slavery. [This argument] locates the significance of the Atlantic trade not in terms of financial profits and capital accumulation, nor in terms of demand for manufactures—which Europe could have probably generated enough of at home33—but in terms of how much they relieved the strain on Europe’s supply of what was truly scarce: land and energy. And because it helped ease these fundamental, physical constraints, Europe’s overseas extraction deserves to be compared with England’s turn to coal as crucial factors leading out of a world of Malthusian constraints, rather than with developments in textiles, brewing, or other industries, which, whatever their contributions to the accumulation of financial capital or development of wage labor, tended to intensify, rather than ease, land and energy squeezes in the core areas of western Europe. And, indeed, a preliminary attempt to measure the importance of this ecological windfall suggests that until well into the nineteenth century, the fruits of overseas exploitation were probably roughly as important to at least Britain’s economic transformation as its epochal turn to fossil fuels.

Related Books

• “Why the West Rules-for Now: The Patterns of History” by Ian Morris
• “Escape from Rome: The Failure of Empire and the Road to Prosperity” by Walter Scheidel
• “Enlightened Economy: An Economic History of Britain 1700-1850” by Joel Mokyr
• “The WIERDest People in the World” by Joseph Henrich
• “A Culture of Growth” by Joel Mokyr
• “Bourgeois Dignity: Why Economics Can’t Explain the Modern World” by Deirdre McCloskey
• “The Birth of Plenty: How the Prosperity of the Modern World was Created” by William J. Bernstein
• “Bourgeois Equality: How Ideas, not Capital or Institutions, Enriched the World” by Deirdre McCloskey
• “Why Europe?: The Rise of the West…” by Jack Goldstone
• “Why did Europe Conquer the World?” by Philip Hoffman
• “Inventing Freedom: How the English… Made the Modern World” by Daniel Hannan
• “Rulers, Religion, and Riches” by Jared Rubin
• The Making of Europe… 950-1350” by Robert Bartlett
• “Power over Peoples: Technology, Environments and Western Imperialism…” by Daniel Headrick
• “Why Europe?: The Medieval Origins of Its Special Path” by Michael Mitteraur
• “The Early Modern Great Divergence” by Broadberry and Gupta
• “England’s Divergence from China’s Yangzi Delta” by Brenner and Isett
• “Needham Puzzle: Why the Industrial Revolution Did not Originate in China” by Justin Lin

If you would like to learn more about why Europe and China diverged, read my book From Poverty to Progress: How Humans Invented Progress, and How We Can Keep It Going.