*Global Economy Lecture 5: Pre modern growth - the Great Divergence WHEN Flashcards
• This topic examines “when” the great divergence happened • We link this analysis to previous growth models mentioned in the introductory lectures
State Needham’s quote that covers what the main subject of this topic questions. Also, state the facts known about that time period that begs this question
- “Why did modern science, the mathematics of hypotheses
about Nature, with all of its implications for advanced
technology, take its meteoric rise only in the West at the time
of Galileo [but] had not developed in Chinese civilization or
Indian civilization?” (Needham, 1969) - China:
1. had been richer and more scientific than Europe
2. urbanized and had strong sophisticated government
3. developed inventions - paper, gunpowder, printing, the
compass - Europe underwent an industrial revolution and was then
clearly ahead - Europe opened up an increasing gap that became known as
the “Great Divergence”
⇒ “Needham’s Question”: Why [and when] has China and India
been overtaken by the West in science and technology?
When did the Great Divergence occur and what effect did it have on GDP per capita in relevant countries?
After the Great Divergence in 1500-1550, Italy, Netherlands and Britain all began to sharply increase. Then it fell shortly after in 1700, until 1800 when the Great Divergence occurred again and then they rose again. Japan and China remained the same until as late as 1850 when it finally rose
What facts does everyone agree on regarding the Great Divergence?
- China was the world leader in terms of GDP per capita at the
turn of the first millennium (Song Dynasty) - China remained the largest and most advanced Asian
economy until the Industrial Revolution - China produced much of the world’s manufacturing output
(1/3 of the manufacturing output of the 19C) - By the 19C China was considerably behind North Western
Europe in terms of GDP per capita - Japan began to catch up with China and Europe in the 18C
- Japan eventually overtook China (18C) and Europe (20C) in
GDP per capita reversing the divergence - The American government will certainly be examining this right now, because they’re currently at the cusp of losing their rank as global leader, to China
Describe the historical context of the Song Dynasty
-Not to be confused with Song (state) or Liu Song dynasty, the Song dynasty was an imperial dynasty of China that ruled from 960 to 1279.
- The dynasty was founded by Emperor Taizu of Song, who usurped the throne of the Later Zhou dynasty and went on to conquer the rest of the Ten Kingdoms, ending the Five Dynasties and Ten Kingdoms period.
- The Song often came into conflict with the contemporaneous Liao, Western Xia and Jin dynasties in northern China. After retreating to southern China following attacks by the Jin dynasty, the Song was eventually conquered by the Mongol-led Yuan dynasty.
State Pomeranz’s quote regarding the Late Revisionist View on the Great Divergence
Western Europe was a “non-too-unusual economy: it became
a fortunate freak only when unexpected and significant
discontinuities in the late eighteenth and especially nineteenth
centuries enabled it to break through the fundamental
constraints of energy and resource availability that had
previously limited everyone’s “horizons” (Pomeranz, 2000)
Describe the Late Revisionist View on the Great Divergence
Include citation of main authors of this view
Divergence was a product of 19C increasing returns (Europe
= Asia before 1800)
* This was likely the result of coal, colonial policy and historical
shocks (Opium Wars 1940s, Taiping rebellion 1850-1864 and
the Nian rebellion 1851-1868)
* Emphasis on resources advantages and constraints, negative
colonial rule, European trade network, and inappropriate
national comparisons
* Empirically based on “grain” wage comparisons between
Europe and select Asian regions (Yangzi Delta, Southern
India)
* Main authors include Pomeranz (2000), Frank (1998), Wong
(2000), Goldstone (2002) and Parthasarathi (1998)
What was the Taiping rebellion?
The Taiping Rebellion, also known as the Taiping Civil War or the Taiping Revolution, was a civil war in China between the Manchu-led Qing dynasty and the Hakka-led Taiping Heavenly Kingdom. The conflict lasted for 14 years, from its outbreak in 1850 until the fall of Nanjing—which they had renamed “Tianjing”—in 1864. However, the last rebel forces were not defeated until August 1871. Estimates of the conflict’s death toll range between 20 and 30 million people, representing 5–10% of China’s population.[4] While the Qing ultimately defeated the rebellion, the victory came at a great cost to the state’s economic and political viability.
The uprising was led by Hong Xiuquan, an ethnic Hakka (a Han subgroup) who had proclaimed himself to be the brother of Jesus Christ. Hong sought the religious conversion of the Han people to the Taiping’s syncretic version of Christianity, as well as the political overthrow of the Qing dynasty, and a general transformation of the mechanisms of state.[5][6] Moreover, rather than supplanting China’s ruling class, the Taiping rebels sought to entirely upend the country’s social order.[7] Their Heavenly Kingdom centered in Nanjing ultimately managed to seize control of significant parts of southern China. At its peak, the Heavenly Kingdom ruled over a population of nearly 30 million people.
For more than a decade, Taiping armies occupied and fought across much of the mid- and lower Yangtze valley, ultimately devolving into total civil war. It was the largest war in China since the Ming–Qing transition, involving most of Central and Southern China. It ranks as one of the bloodiest wars in human history, the bloodiest civil war, and the largest conflict of the 19th century. In terms of deaths, it is comparable to World War I.[4][8] Thirty million people fled the conquered regions to foreign settlements or other parts of China.[9] The war was characterized by extreme brutality on both sides. Taiping soldiers carried out widespread massacres of Manchus, the ethnic minority of the ruling Imperial House of Aisin-Gioro. Meanwhile, the Qing government also engaged in massacres, most notably against the civilian population of Nanjing.
Weakened severely by internal conflict, an attempted coup, and the failure of the siege of Beijing, the Taiping rebels were defeated by decentralized, provincial armies such as the Xiang Army organized and commanded by Zeng Guofan. After moving down the Yangtze River and recapturing the strategic city of Anqing, Zeng’s forces besieged Nanjing during May, 1862. After two more years, on June 1, 1864, Hong Xiuquan died and Nanjing fell barely a month later. The 14-year civil war, combined with other partially linked internal and external wars, weakened the dynasty but provided incentive for an initially successful period of reform and self-strengthening. It exacerbated ethnic disputes and accelerated the rise of provincial power. Historians debate whether these developments foreshadowed the Warlord Era, the loss of central control after the establishment of Republic of China in 1912.
What was the Nian Rebellion?
The Nian Rebellion was an armed uprising that took place in northern China from 1851 to 1868, contemporaneously with the Taiping Rebellion (1850–1864) in Southern China . Ultimately the rebellion failed to topple the Qing dynasty, but caused immense economic devastation and loss of life that became major long-term factors in the collapse of the Qing regime in the early 20th century.
State Allen’s quote regarding the Early Traditionalist View on the Great Divergence
If we extend the comparisons of living standards to Asia,
English performance looks even more impressive. Low silver
wages in the East were not counterbalanced by even lower
food prices. Welfare ratios for labourers in Canton, Beijing,
and Japan were … as low as those in the backward parts of
Europe.” (Allen, 2011)
Describe the Early Traditionalist View on the Great Divergence
- Classical view - (Europe > Asia 1800) but with a focus on North West Europe
- NW Europe was likely ahead at an early stage due to its institutions
- Emphasis is on commercial expansion (“Commercial
revolution”), urbanisation, agricultural productivity
(“Agricultural revolution”), high wages and cheap energy (“Industrial Revolution”) - Empirically based on “silver” wage comparisons between
Europe and select Asian regions (Yangzi Delta, Southern India) - Main authors include Maddison (1998), Broadberry and
Gupta (2006), Allen (2005, 2007, 2011), Saito (2009) and Li and Van Zanden (2012)
Describe the approach to assessing the opposing views on when the Great Divergence occurred
- How can we assess these opposing views?
- Economic historians consider the quantitative evidence
- There are 2 main types of quantitative evidence
(1) Wages - Revisionists look at relative grain wages
- Traditionalists look at broad measures - welfare baskets, silver
wages
(2) Income - Revisionists reject reliability of income data
- Traditionalists use National Accounting
⇒ What do these comparisons look like?
Critique on whether using ‘wages’ are sensible to use as a quantitative approach
- Does this comparison make sense?
- Traditionalists argue “no”
- We should consider “silver wages” and not “grain wages”
- Less developed countries (LDCs) meet the food needs of the
population with LDC food prices - Developed country food prices are much higher
- Manufactured goods and luxury goods are expensive in LDCs
- The only way to really account for all types of goods is to convert wages into currency (gold or silver) and then adjust for prices
- Then one can look at the purchasing power for various comparable baskets of goods
So what do silver comparisons look like?
Broadberry and Gupta (2006) show a table with dates and different countries compared to England like China and India. The table is data on daily silver wages of uskilled labout (g per day)
Describe the graph of a cross-country comparison of silver wages regarding the Great Divergence
- Line graph titled “Cross-Country Comparison of Silver Wages - Allen (2009)”.
- X-axis is years from 1375 to 1825.
- Y-axis is titled “Grams of silver per day”.
- Different cities are London, Amsterdam, Vienna, Florence, Delhi and Beijing.
- Highlighted data points:
1. Delhi only has data from 1575 and is the lowest by far, fluctuating around 1.25
2. All cities except Delhi are clustered together until 1525 where grams of silver per day decrease from ~3.75 in 1425 to ~3 in 1475 to ~2.5 in 1525. After that, countries begin to diverge
3. London grows the highest by 1825, at ~17.75.
4. Then Florence, which grows to ~9
5. Amsterdam, Vienna and Beijing all stay together and follow the same trend, fluctuating ~3 the whole time
Summarise the evidence regarding the nominal wage difference between countries, helping us find when the Great Divergence occurred
Summary of the evidence
* Real grain wages were low but comparable up to the 17C
* Asian grain wages diverged from Europe in the 18C
* Silver wages show very early divergence around 15C
* South Indian silver wages were one-fifth of the English level in
16C
* Silver wages in Yangzi delta were much lower than England by
the late Ming period (1573-1644)
- Nominal wage evidence supports an early Great Divergence
* Real grain wages do not support an early Great Divergence
Which is a better measure for comparison, real wages or nominal wages?
Real wages
