Lesson 2 Flashcards
The ‘Great Divergence’
What does the term “Great Divergence” refer to in economic history?
It refers to the process by which Europe became the richest region in the world, surpassing the limits of pre-industrial agrarian economies and leading to modern economic development, including the Industrial Revolution.
What were the “closed worlds” in pre-industrial times?
Until the end of the 13th century, Europe, the Mediterranean, East Asia, and Central America were “closed worlds,” with important internal trade but little economic integration between them.
How did the first “opening” of the world economy occur between 1450 and 1550?
It occurred with European geographical discoveries, new trade routes, and advances in shipbuilding and navigation, which connected previously isolated regions and created a global economic system.
What technological advances in the 15th century aided European exploration and trade?
The development of sturdier ships like caravels, improved navigation tools (quadrant, astrolabe, nautical charts), and the use of cannons enabled European nations to expand their maritime trade and empires.
How did the Portuguese contribute to the age of discovery and global trade?
They were the first to integrate Mediterranean and North Sea trade, then began exploring southward, rounding Cape Bojador and later Africa, reaching India and establishing trade outposts to control lucrative trade in gold, spices, and later slaves.
How did the Spanish Empire expand after 1492?
After Columbus discovered the Americas, the Spanish focused on conquest and colonization, especially under Cortés in the 1520s. They exploited the fragility of local empires to gain control over vast territories, resources like gold, and labor.
What is “proto-globalization,” and when did it begin?
It was the integration of distant markets and the gradual opening of closed worlds, starting between 1435 and 1550. It involved the global trade of goods that could not be locally produced and was driven by mercantilist policies.
What are the three main explanations for the Great Divergence?
Demographic explanations: Higher population density and innovation pressure in Europe.
Institutional explanations: European institutions encouraged economic dynamism, innovation, and free markets.
Geopolitical explanations: Europe’s small competing states fostered innovation, while access to the Americas and colonies provided fresh resources.
How did the Black Death influence the Great Divergence in Europe?
It reduced the population, temporarily overcoming the Malthusian trap. This led to improved living conditions, increased wages, and reduced inequality, setting the stage for Europe’s economic rise.
What role did institutions play in the Great Divergence according to Douglass North?
Institutions, as “the rules of the game,” structured incentives for political, social, and economic interactions. In Europe, institutions like universities and free markets stimulated innovation and economic growth.
What does the “world system” theory by Immanuel Wallerstein explain about global economic development?
The world system theory divides the world into core, semi-periphery, and periphery regions, with the core driving the economy through high-value production, and the periphery providing raw materials and basic goods in an asymmetrical power relationship.
