
The Great Divergence or European miracle is the
socioeconomic
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and interac ...
shift in which the
Western world
The Western world, also known as the West, primarily refers to various nations and state (polity), states in Western Europe, Northern America, and Australasia; with some debate as to whether those in Eastern Europe and Latin America also const ...
(i.e.
Western Europe
Western Europe is the western region of Europe. The region's extent varies depending on context.
The concept of "the West" appeared in Europe in juxtaposition to "the East" and originally applied to the Western half of the ancient Mediterranean ...
along with its settler offshoots in
Northern America
Northern America is the northernmost subregion of North America, as well as the northernmost region in the Americas. The boundaries may be drawn significantly differently depending on the source of the definition. In one definition, it lies dir ...
and
Australasia
Australasia is a subregion of Oceania, comprising Australia, New Zealand (overlapping with Polynesia), and sometimes including New Guinea and surrounding islands (overlapping with Melanesia). The term is used in a number of different context ...
) overcame
pre-modern
In world history, post-classical history refers to the period from about 500 CE to 1500 CE, roughly corresponding to the European Middle Ages. The period is characterized by the expansion of civilizations geographically and the developm ...
growth constraints and emerged during the 19th century as the most powerful and wealthy world
civilization
A civilization (also spelled civilisation in British English) is any complex society characterized by the development of state (polity), the state, social stratification, urban area, urbanization, and symbolic systems of communication beyon ...
s, eclipsing previously dominant or comparable civilizations from
Asia
Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
such as
Qing China
The Qing dynasty ( ), officially the Great Qing, was a Manchu-led imperial dynasty of China and an early modern empire in East Asia. The last imperial dynasty in Chinese history, the Qing dynasty was preceded by the Ming dynasty ...
,
Mughal India, the
Ottoman Empire
The Ottoman Empire (), also called the Turkish Empire, was an empire, imperial realm that controlled much of Southeast Europe, West Asia, and North Africa from the 14th to early 20th centuries; it also controlled parts of southeastern Centr ...
,
Safavid Iran
The Guarded Domains of Iran, commonly called Safavid Iran, Safavid Persia or the Safavid Empire, was one of the largest and longest-lasting Iranian empires. It was ruled from 1501 to 1736 by the Safavid dynasty. It is often considered the begi ...
, and
Tokugawa Japan, among others.
Scholars have proposed a wide variety of theories to explain why the Great Divergence happened, including
geography
Geography (from Ancient Greek ; combining 'Earth' and 'write', literally 'Earth writing') is the study of the lands, features, inhabitants, and phenomena of Earth. Geography is an all-encompassing discipline that seeks an understanding o ...
,
culture
Culture ( ) is a concept that encompasses the social behavior, institutions, and Social norm, norms found in human societies, as well as the knowledge, beliefs, arts, laws, Social norm, customs, capabilities, Attitude (psychology), attitudes ...
,
institution
An institution is a humanly devised structure of rules and norms that shape and constrain social behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions and ...
s, and
luck
Luck is the phenomenon and belief that defines the experience of improbable events, especially improbably positive or negative ones. The Naturalism (philosophy), naturalistic interpretation is that positive and negative events may happen at a ...
.
There is disagreement over the nomenclature of the "great" divergence, as a clear point of beginning of a divergence is traditionally held to be the 16th or even the 15th century, with the
Commercial Revolution
In European history, the commercial revolution saw the development of a European economy – based on trade – which began in the 11th century AD and operated until the advent of the Industrial Revolution in the mid-18th century. Beginning wit ...
and the origins of
mercantilism
Mercantilism is a economic nationalism, nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. It seeks to maximize the accumulation of resources within the country and use those resources ...
and
capitalism
Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
during the
Renaissance
The Renaissance ( , ) is a Periodization, period of history and a European cultural movement covering the 15th and 16th centuries. It marked the transition from the Middle Ages to modernity and was characterized by an effort to revive and sur ...
and the
Age of Discovery
The Age of Discovery (), also known as the Age of Exploration, was part of the early modern period and overlapped with the Age of Sail. It was a period from approximately the 15th to the 17th century, during which Seamanship, seafarers fro ...
, the rise of the European
colonial empire
A colonial empire is a sovereign state, state engaging in colonization, possibly establishing or maintaining colony, colonies, infused with some form of coloniality and colonialism. Such states can expand contiguous as well as Territory#Overseas ...
s,
proto-globalization
Proto-globalization or early modern globalization is a period of the history of globalization roughly spanning the years between 1500 and 1800, following the period of archaic globalization. First introduced by historians A. G. Hopkins and Christo ...
, the
Scientific Revolution
The Scientific Revolution was a series of events that marked the emergence of History of science, modern science during the early modern period, when developments in History of mathematics#Mathematics during the Scientific Revolution, mathemati ...
, or the
Age of Enlightenment
The Age of Enlightenment (also the Age of Reason and the Enlightenment) was a Europe, European Intellect, intellectual and Philosophy, philosophical movement active from the late 17th to early 19th century. Chiefly valuing knowledge gained th ...
.
Yet the largest jump in the divergence happened in the late 18th and 19th centuries with the
Industrial Revolution
The Industrial Revolution, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a transitional period of the global economy toward more widespread, efficient and stable manufacturing processes, succee ...
and
Technological Revolution. For this reason, the "
California school" considers only this to be the ''great'' divergence.
Technological advances, in areas such as
transportation
Transport (in British English) or transportation (in American English) is the intentional Motion, movement of humans, animals, and cargo, goods from one location to another. Mode of transport, Modes of transport include aviation, air, land tr ...
,
mining
Mining is the Resource extraction, extraction of valuable geological materials and minerals from the surface of the Earth. Mining is required to obtain most materials that cannot be grown through agriculture, agricultural processes, or feasib ...
, and
agriculture
Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...
, were embraced to a higher degree in western
Eurasia
Eurasia ( , ) is a continental area on Earth, comprising all of Europe and Asia. According to some geographers, Physical geography, physiographically, Eurasia is a single supercontinent. The concept of Europe and Asia as distinct continents d ...
than the east during the Great Divergence. Technology led to increased industrialization and economic complexity in the areas of agriculture, trade, fuel, and resources, further separating east and west. Western Europe's use of
coal
Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other Chemical element, elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.
Coal i ...
as an energy substitute for
wood
Wood is a structural tissue/material found as xylem in the stems and roots of trees and other woody plants. It is an organic materiala natural composite of cellulosic fibers that are strong in tension and embedded in a matrix of lignin t ...
in the mid-19th century gave it a major head start in modern energy production. In the twentieth century, the Great Divergence peaked before the
First World War
World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...
and continued until the early 1970s; then, after two decades of indeterminate fluctuations, in the late 1980s it was replaced by the
Great Convergence as the majority of
developing countries
A developing country is a sovereign state with a less-developed Secondary sector of the economy, industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. ...
reached economic growth rates significantly higher than those in most
developed countries
A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
.
Terminology and definition
The term "Great Divergence" was coined by
Samuel P. Huntington in 1996 and used by
Kenneth Pomeranz in his book ''
The Great Divergence: China, Europe, and the Making of the Modern World Economy'' (2000). The same phenomenon was discussed by
Eric Jones, whose 1981 book ''
The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia'' popularized the alternate term "European Miracle". Broadly, both terms signify a
socioeconomic
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and interac ...
shift in which European countries advanced ahead of others during the
modern period
The modern era or the modern period is considered the current historical period of human history. It was originally applied to the history of Europe and Western history for events that came after the Middle Ages, often from around the year 1500 ...
.
The timing of the Great Divergence is in dispute among historians. The traditional dating is as early as the 16th (or even 15th) century, with scholars arguing that Europe had been on a trajectory of higher growth since that date. Pomeranz and others of the California school argue that the period of most rapid divergence was during the 19th century. Citing nutrition data and chronic European trade deficits as evidence, these scholars argue that before that date the most developed parts of
Asia
Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
, in terms of grain wage, had comparable economic development to Europe, especially
Qing China
The Qing dynasty ( ), officially the Great Qing, was a Manchu-led imperial dynasty of China and an early modern empire in East Asia. The last imperial dynasty in Chinese history, the Qing dynasty was preceded by the Ming dynasty ...
in the
Yangzi Delta and
South Asia
South Asia is the southern Subregion#Asia, subregion of Asia that is defined in both geographical and Ethnicity, ethnic-Culture, cultural terms. South Asia, with a population of 2.04 billion, contains a quarter (25%) of the world's populatio ...
in the
Bengal Subah
The Bengal Subah (Bengali language, Bengali: সুবাহ বাংলা, ), also referred to as Mughal Bengal and Bengal State (after 1717), was one of the puppet states and the largest subah, subdivision of The Mughal India, Mughal Emp ...
.
[ Robert C. Allen, Tommy Bengtsson, Martin Dribe (2005)]
''Living Standards in the Past: New Perspectives on Well-Being in Asia and Europe'', page 173-188
Oxford University Press
Oxford University Press (OUP) is the publishing house of the University of Oxford. It is the largest university press in the world. Its first book was printed in Oxford in 1478, with the Press officially granted the legal right to print books ...
Economic historian Prasannan Parthasarathi argued that wages in parts of
South India
South India, also known as Southern India or Peninsular India, is the southern part of the Deccan Peninsula in India encompassing the states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana as well as the union territories of ...
, particularly
Mysore
Mysore ( ), officially Mysuru (), is a city in the southern Indian state of Karnataka. It is the headquarters of Mysore district and Mysore division. As the traditional seat of the Wadiyar dynasty, the city functioned as the capital of the ...
, could have been on par with Britain, but noted his research on the matter was not conclusive.
Some argue that the cultural factors behind the divergence can be traced to earlier periods and institutions such as the
Renaissance
The Renaissance ( , ) is a Periodization, period of history and a European cultural movement covering the 15th and 16th centuries. It marked the transition from the Middle Ages to modernity and was characterized by an effort to revive and sur ...
and the Chinese
imperial examination
The imperial examination was a civil service examination system in History of China#Imperial China, Imperial China administered for the purpose of selecting candidates for the Civil service#China, state bureaucracy. The concept of choosing bureau ...
system.
Broadberry asserts that in terms of silver wages even the richest areas of Asia were behind Western Europe as early as the 16th century. He cites statistics comparing England to the Yangzi Delta (the most developed part of China by a good margin) showing that by 1600 the former had three times the latter's average wages when measured in silver, 15% greater wages when measured in wheat equivalent (the latter being used to approximate buying power for basic subsistence goods and the former to approximate buying power for craft goods, especially traded ones), and higher urbanization. England's silver wages were also five times higher than those of India in the late 16th century. Grain wages started to diverge more sharply from the early 18th century, with English wages being two and a half times higher than India or China's in wheat equivalent while remaining about five times higher in silver at that time. However, this disparity only applied to
Northwest Europe
Northwestern Europe, or Northwest Europe, is a loosely defined subregion of Europe, overlapping Northern Europe, Northern and Western Europe. The term is used in geographic, history, and military contexts.
Geographic definitions
Geography, Geo ...
; Broadberry states that silver wages in
Southern,
Central, and
Eastern Europe
Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
did not surpass advanced parts of Asia until 1800.
Conditions in pre–Great Divergence cores
Although core regions in Eurasia had achieved a relatively high standard of living by the 18th century, shortages of land,
soil degradation
Soil retrogression and degradation are two regressive evolution processes associated with the loss of equilibrium of a soil health, stable soil. Retrogression is primarily due to soil erosion and corresponds to a phenomenon where succession revert ...
, deforestation, lack of dependable energy sources, and other ecological constraints limited growth in per capita incomes. Rapid rates of depreciation on capital meant that a great part of savings in pre-modern economies were spent on replacing depleted capital, hampering
capital accumulation
Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form ...
. Massive windfalls of fuel, land, food and other resources were necessary for continued growth and capital accumulation, leading to
colonialism
Colonialism is the control of another territory, natural resources and people by a foreign group. Colonizers control the political and tribal power of the colonised territory. While frequently an Imperialism, imperialist project, colonialism c ...
. The Industrial Revolution overcame these restraints, allowing rapid, sustained growth in per capita incomes for the first time in human history.
Western Europe
After the
Viking
Vikings were seafaring people originally from Scandinavia (present-day Denmark, Norway, and Sweden),
who from the late 8th to the late 11th centuries raided, pirated, traded, and settled throughout parts of Europe.Roesdahl, pp. 9� ...
,
Muslim
Muslims () are people who adhere to Islam, a Monotheism, monotheistic religion belonging to the Abrahamic religions, Abrahamic tradition. They consider the Quran, the foundational religious text of Islam, to be the verbatim word of the God ...
, and
Magyar invasions waned in the 10th century,
Western Christian Europe entered a period of prosperity, population growth and territorial expansion known as the
High Middle Ages
The High Middle Ages, or High Medieval Period, was the periodization, period of European history between and ; it was preceded by the Early Middle Ages and followed by the Late Middle Ages, which ended according to historiographical convention ...
. Trade and commerce revived, with increased specialization between areas and between the countryside and artisans in towns. By the 13th century, the best land had been occupied and agricultural income began to fall, though trade and commerce continued to expand, especially in
Venice
Venice ( ; ; , formerly ) is a city in northeastern Italy and the capital of the Veneto Regions of Italy, region. It is built on a group of 118 islands that are separated by expanses of open water and by canals; portions of the city are li ...
and other
northern Italian cities. The 14th century, then, brought a
series of calamities: famines, wars, the
Black Death
The Black Death was a bubonic plague pandemic that occurred in Europe from 1346 to 1353. It was one of the list of epidemics, most fatal pandemics in human history; as many as people perished, perhaps 50% of Europe's 14th century population. ...
and other epidemics.
The Historical Origins of Economic Growth suppose that the Black Death had some moments that might have positively affected development. The labor scarcity that resulted from the Black Death led women to enter the workforce and drove active markets for agricultural labor.
The resulting drop in the population led to falling rents and rising wages, undermining the
feudal
Feudalism, also known as the feudal system, was a combination of legal, economic, military, cultural, and political customs that flourished in Middle Ages, medieval Europe from the 9th to 15th centuries. Broadly defined, it was a way of struc ...
and
manorial relationships that had characterized medieval Europe.

According to a 2014 study, "there was a 'little divergence' within Europe between 1300 and 1800: real
wage
A wage is payment made by an employer to an employee for work (human activity), work done in a specific period of time. Some examples of wage payments include wiktionary:compensatory, compensatory payments such as ''minimum wage'', ''prevailin ...
s in the
North Sea Region
The North Sea Region (NSR) of Europe refers to European countries and regions that have access to the North Sea. Cultural and economic co-operation has a strong tradition in the area, dating back to the Vikings[Germany
Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...]
,
Italy
Italy, officially the Italian Republic, is a country in Southern Europe, Southern and Western Europe, Western Europe. It consists of Italian Peninsula, a peninsula that extends into the Mediterranean Sea, with the Alps on its northern land b ...
, and
Spain
Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...
) began to fall after the fifteenth century and returned to some kind of subsistence minimum during the 1500–1800 period. This 'little divergence' in real wages mirrors a similar divergence in
GDP per capita
This is a list of countries by nominal GDP per capita. GDP per capita is the total value of a country's finished goods and services (gross domestic product) divided by its total population (per capita).
Gross domestic product (GDP) per capita is ...
: in the 'periphery' of Europe there was almost no per capita growth (or even a decline) between 1500 and 1800, whereas in
Holland
Holland is a geographical regionG. Geerts & H. Heestermans, 1981, ''Groot Woordenboek der Nederlandse Taal. Deel I'', Van Dale Lexicografie, Utrecht, p 1105 and former provinces of the Netherlands, province on the western coast of the Netherland ...
and
England
England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...
real income continued to rise and more or less doubled in this period".
In the
Age of Discovery
The Age of Discovery (), also known as the Age of Exploration, was part of the early modern period and overlapped with the Age of Sail. It was a period from approximately the 15th to the 17th century, during which Seamanship, seafarers fro ...
, navigators discovered new routes to the
Americas
The Americas, sometimes collectively called America, are a landmass comprising the totality of North America and South America.''Webster's New World College Dictionary'', 2010 by Wiley Publishing, Inc., Cleveland, Ohio. When viewed as a sing ...
and
Asia
Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
.
Commerce
Commerce is the organized Complex system, system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered large-scale exchange (distribution through Financial transaction, transactiona ...
expanded, together with innovations such as
joint stock companies and various financial institutions. New military technologies favored larger units, leading to a concentration of power in states whose finances relied on trade. The
Dutch Republic
The United Provinces of the Netherlands, commonly referred to in historiography as the Dutch Republic, was a confederation that existed from 1579 until the Batavian Revolution in 1795. It was a predecessor state of the present-day Netherlands ...
was controlled by merchants, while
Parliament
In modern politics and history, a parliament is a legislative body of government. Generally, a modern parliament has three functions: Representation (politics), representing the Election#Suffrage, electorate, making laws, and overseeing ...
gained control of the
Kingdom of England
The Kingdom of England was a sovereign state on the island of Great Britain from the late 9th century, when it was unified from various Heptarchy, Anglo-Saxon kingdoms, until 1 May 1707, when it united with Kingdom of Scotland, Scotland to f ...
after a long struggle culminating in the
Glorious Revolution
The Glorious Revolution, also known as the Revolution of 1688, was the deposition of James II and VII, James II and VII in November 1688. He was replaced by his daughter Mary II, Mary II and her Dutch husband, William III of Orange ...
. These arrangements proved more hospitable to economic development. At the end of the 16th century,
London
London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
and
Antwerp
Antwerp (; ; ) is a City status in Belgium, city and a Municipalities of Belgium, municipality in the Flemish Region of Belgium. It is the capital and largest city of Antwerp Province, and the third-largest city in Belgium by area at , after ...
began pulling away from other European cities, as illustrated in the following graph of real wages in several European cities:

According to a 2021 review of existing evidence by
Jack Goldstone, the Great Divergence only arose after 1750 (or even 1800) in northwestern Europe. Prior to that, economic growth rates in northwestern Europe were neither sustained nor remarkable, and income per capita was similar to "peak levels achieved hundreds of years earlier in the most developed regions of Italy and China."
The West had a series of unique advantages compared to Asia, such as the proximity of coal mines; the discovery of the
New World
The term "New World" is used to describe the majority of lands of Earth's Western Hemisphere, particularly the Americas, and sometimes Oceania."America." ''The Oxford Companion to the English Language'' (). McArthur, Tom, ed., 1992. New York: ...
, which alleviated ecological restraints on economic growth (land shortages etc.); and the profits from colonization.
China

China has had a larger population than Europe throughout the last two millennia. Unlike Europe, it was politically united for long periods during that time. During the
Song dynasty
The Song dynasty ( ) was an Dynasties of China, 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 Fiv ...
(960–1279), the country experienced a revolution in agriculture, water transport, finance, urbanization, science and technology, which made the Chinese economy the most advanced in the world from about 1100.
Mastery of
wet-field rice cultivation opened up the hitherto underdeveloped south of the country, while later northern China was devastated by
Jurchen and
Mongol
Mongols are an East Asian ethnic group native to Mongolia, China (Inner Mongolia and other 11 autonomous territories), as well as the republics of Buryatia and Kalmykia in Russia. The Mongols are the principal member of the large family of M ...
invasions, floods and epidemics. The result was a dramatic shift in the center of population and industry from the home of Chinese civilization around the
Yellow River
The Yellow River, also known as Huanghe, is the second-longest river in China and the List of rivers by length, sixth-longest river system on Earth, with an estimated length of and a Drainage basin, watershed of . Beginning in the Bayan H ...
to the south of the country, a trend only partially reversed by the re-population of the north from the 15th century. By 1300, China as a whole had fallen behind Italy in living standards and by 1400, England had also caught up with it but its wealthiest regions, especially the Yangzi Delta, may have remained on par with those of Europe until the early 18th century.
In the
late imperial period (1368–1911), comprising the
Ming and
Qing
The Qing dynasty ( ), officially the Great Qing, was a Manchu-led Dynasties of China, imperial dynasty of China and an early modern empire in East Asia. The last imperial dynasty in Chinese history, the Qing dynasty was preceded by the ...
dynasties,
taxation
A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...
was low, and the economy and population grew significantly, though without substantial increases in productivity. Chinese goods such as
silk
Silk is a natural fiber, natural protein fiber, some forms of which can be weaving, woven into textiles. The protein fiber of silk is composed mainly of fibroin and is most commonly produced by certain insect larvae to form cocoon (silk), c ...
,
tea
Tea is an aromatic beverage prepared by pouring hot or boiling water over cured or fresh leaves of '' Camellia sinensis'', an evergreen shrub native to East Asia which probably originated in the borderlands of south-western China and nor ...
, and
ceramics
A ceramic is any of the various hard, brittle, heat-resistant, and corrosion-resistant materials made by shaping and then firing an inorganic, nonmetallic material, such as clay, at a high temperature. Common examples are earthenware, porce ...
were in great demand in Europe, leading to an inflow of silver, expanding the money supply and facilitating the growth of competitive and stable markets. By the end of the 18th century, population density levels exceeded those in Europe. China had more large cities but far fewer small ones than in contemporary Europe.
Kenneth Pomeranz originally claimed that Great Divergence did not begin until the 19th century. Later he revisited his position and now sees the date between 1700 and 1750.
India

According to a 2020 study and dataset, the Great Divergence between
northern India
North India is a geographical region, loosely defined as a cultural region comprising the northern part of India (or historically, the Indian subcontinent) wherein Indo-Aryans (speaking Indo-Aryan languages) form the prominent majority populati ...
(from
Gujarat
Gujarat () is a States of India, state along the Western India, western coast of India. Its coastline of about is the longest in the country, most of which lies on the Kathiawar peninsula. Gujarat is the List of states and union territories ...
to
Bengal
Bengal ( ) is a Historical geography, historical geographical, ethnolinguistic and cultural term referring to a region in the Eastern South Asia, eastern part of the Indian subcontinent at the apex of the Bay of Bengal. The region of Benga ...
) and Britain began in the late 17th century. It widened after the 1720s and exploded after the 1800s.
The study found that it was "primarily England's spurt and India's stagnation in the first half of the nineteenth century that brought about most serious differences in the standard of living."
Throughout its history, India, especially the
Bengal Sultanate
The Bengal Sultanate (Middle Bengali: , Classical Persian: ) was a Post-classical history, late medieval sultanate based in the Bengal region in the eastern South Asia between the 14th and 16th century. It was the dominant power of the Ganges- ...
, has been a major trading nation that benefited from extensive external and internal trade. Its agriculture was highly efficient as well as its industry. Unlike China, Japan and western and central Europe, India did not experience extensive
deforestation
Deforestation or forest clearance is the removal and destruction of a forest or stand of trees from land that is then converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban use. Ab ...
until the 19th and 20th centuries. It thus had no pressure to move to coal as a source of energy. From the 17th century,
cotton
Cotton (), first recorded in ancient India, is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure ...
textile
Textile is an Hyponymy and hypernymy, umbrella term that includes various Fiber, fiber-based materials, including fibers, yarns, Staple (textiles)#Filament fiber, filaments, Thread (yarn), threads, and different types of #Fabric, fabric. ...
s from
Mughal India became popular in Europe, with some governments banning them to protect their wool industries.
Mughal Bengal
The Bengal Subah ( Bengali: সুবাহ বাংলা, ), also referred to as Mughal Bengal and Bengal State (after 1717), was one of the puppet states and the largest subdivision of The Mughal Empire encompassing much of the Bengal ...
, the most developed region, in particular, was globally prominent in industries such as
textile manufacturing
Textile manufacturing or textile engineering is a major industry. It is largely based on the conversion of fibre into yarn, then yarn into fabric. These are then dyed or printed, fabricated into cloth which is then converted into useful good ...
and
shipbuilding
Shipbuilding is the construction of ships and other Watercraft, floating vessels. In modern times, it normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation th ...
.
In
early modern Europe
Early modern Europe, also referred to as the post-medieval period, is the period of European history between the end of the Middle Ages and the beginning of the Industrial Revolution, roughly the mid 15th century to the late 18th century. Histori ...
, there was significant demand for products from
Mughal India, particularly in cotton textiles, as well as goods such as
spice
In the culinary arts, a spice is any seed, fruit, root, Bark (botany), bark, or other plant substance in a form primarily used for flavoring or coloring food. Spices are distinguished from herbs, which are the leaves, flowers, or stems of pl ...
s,
peppers,
indigo
InterGlobe Aviation Limited (d/b/a IndiGo), is an India, Indian airline headquartered in Gurgaon, Haryana, India. It is the largest List of airlines of India, airline in India by passengers carried and fleet size, with a 64.1% domestic market ...
,
silk
Silk is a natural fiber, natural protein fiber, some forms of which can be weaving, woven into textiles. The protein fiber of silk is composed mainly of fibroin and is most commonly produced by certain insect larvae to form cocoon (silk), c ...
s, and
saltpeter
Potassium nitrate is a chemical compound with a sharp, salty, bitter taste and the chemical formula . It is a potassium salt of nitric acid. This salt consists of potassium cations and nitrate anions , and is therefore an alkali metal nitrate ...
(for use in
munitions
Ammunition, also known as ammo, is the material fired, scattered, dropped, or detonated from any weapon or weapon system. The term includes both expendable weapons (e.g., bombs, missiles, grenades, land mines), and the component parts of ...
).
European fashion, for example, became increasingly dependent on Indian textiles and silks. In the 17th and 18th centuries, India accounted for 95% of
British imports from
Asia
Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
.
Amiya Kumar Bagchi estimates 10.3% of Bihar's populace were involved in hand spinning thread, 2.3% weaving, and 9% in other manufacturing trades, in 1809–13, to satisfy this demand.
In contrast, there was very little demand for European goods in India, which was largely self-sufficient, thus Europeans had very little to offer, except for some
wool
Wool is the textile fiber obtained from sheep and other mammals, especially goats, rabbits, and camelids. The term may also refer to inorganic materials, such as mineral wool and glass wool, that have some properties similar to animal w ...
en textiles, unprocessed
metal
A metal () is a material that, when polished or fractured, shows a lustrous appearance, and conducts electrical resistivity and conductivity, electricity and thermal conductivity, heat relatively well. These properties are all associated wit ...
s and a few luxury items. The trade imbalance caused Europeans to export large quantities of gold and silver to India in order to pay for Indian imports.
Middle East
The
Middle East
The Middle East (term originally coined in English language) is a geopolitical region encompassing the Arabian Peninsula, the Levant, Turkey, Egypt, Iran, and Iraq.
The term came into widespread usage by the United Kingdom and western Eur ...
was more advanced than Western Europe in 1000, on par by the middle of the 16th century, but by 1750, leading Middle Eastern states had fallen behind Western European states such as Britain and the Netherlands.
An example of a Middle Eastern country that had an advanced economy in the early 19th century was
Ottoman Egypt, which had a highly productive industrial
manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the
secondary sector of the economy. The term may refer ...
sector, and
per-capita income that was comparable to Western European countries such as
France
France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
and higher than that of
Japan
Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
and
Eastern Europe
Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
. In 1819,
Egypt under Muhammad Ali began programs of state-sponsored
industrialization
Industrialisation (British English, UK) American and British English spelling differences, or industrialization (American English, US) is the period of social and economic change that transforms a human group from an agrarian society into an i ...
, which included setting up factories for weapons production, an
iron
Iron is a chemical element; it has symbol Fe () and atomic number 26. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is, by mass, the most common element on Earth, forming much of Earth's o ...
foundry
A foundry is a factory that produces metal castings. Metals are cast into shapes by melting them into a liquid, pouring the metal into a mold, and removing the mold material after the metal has solidified as it cools. The most common metals pr ...
, large-scale cotton cultivation, mills for
ginning,
spinning and
weaving
Weaving is a method of textile production in which two distinct sets of yarns or threads are interlaced at right angles to form a fabric or cloth. Other methods are knitting, crocheting, felting, and braiding or plaiting. The longitudinal ...
of cotton, and enterprises for agricultural processing. By the early 1830s, Egypt had 30
cotton mill
A cotton mill is a building that houses spinning or weaving machinery for the production of yarn or cloth from cotton, an important product during the Industrial Revolution in the development of the factory system.
Although some were driven ...
s, employing about 30,000 workers.
Under
Muhammad Ali of Egypt
Muhammad Ali (4 March 1769 – 2 August 1849) was the Ottoman Empire, Ottoman Albanians, Albanian viceroy and governor who became the ''de facto'' ruler of History of Egypt under the Muhammad Ali dynasty, Egypt from 1805 to 1848, widely consi ...
in the early 19th century,
steam engine
A steam engine is a heat engine that performs Work (physics), mechanical work using steam as its working fluid. The steam engine uses the force produced by steam pressure to push a piston back and forth inside a Cylinder (locomotive), cyl ...
s were introduced to Egyptian industrial manufacturing.
Boiler
A boiler is a closed vessel in which fluid (generally water) is heated. The fluid does not necessarily boil. The heated or vaporized fluid exits the boiler for use in various processes or heating applications, including water heating, centra ...
s were manufactured and installed in Egyptian industries such as
ironworks
An ironworks or iron works is an industrial plant where iron is smelted and where heavy iron and steel products are made. The term is both singular and plural, i.e. the singular of ''ironworks'' is ''ironworks''.
Ironworks succeeded bloome ...
, textile manufacturing,
paper mill
A paper mill is a factory devoted to making paper from vegetable fibres such as wood pulp, old rags, and other ingredients. Prior to the invention and adoption of the Fourdrinier machine and other types of paper machine that use an endless belt ...
s, and
hulling mills. Compared to Western Europe, Egypt also had superior agriculture and an efficient transport network through the
Nile
The Nile (also known as the Nile River or River Nile) is a major north-flowing river in northeastern Africa. It flows into the Mediterranean Sea. The Nile is the longest river in Africa. It has historically been considered the List of river sy ...
. Economic historian Jean Batou argues that the necessary economic conditions for rapid industrialization existed in Egypt during the 1820s–1830s.
After the death of
Muhammad Ali
Muhammad Ali (; born Cassius Marcellus Clay Jr.; January 17, 1942 – June 3, 2016) was an American professional boxer and social activist. A global cultural icon, widely known by the nickname "The Greatest", he is often regarded as the gr ...
in 1849, his industrialization programs fell into decline, after which, according to historian Zachary Lockman, "Egypt was well on its way to full integration into a European-dominated world market as supplier of a single raw material, cotton." Lockman argues that, had Egypt succeeded in its industrialization programs, "it might have shared with Japan
r the United Statesthe distinction of achieving autonomous capitalist development and preserving its independence."
Japan
Japanese society was governed by the
Tokugawa shogunate
The Tokugawa shogunate, also known as the was the military government of Japan during the Edo period from 1603 to 1868.
The Tokugawa shogunate was established by Tokugawa Ieyasu after victory at the Battle of Sekigahara, ending the civil wars ...
, which divided Japanese society into a strict hierarchy and intervened considerably in the economy through state monopolies and
restrictions on foreign trade; however, in practice, the Shogunate's rule was often circumvented. From 725 to 1974, Japan experienced GDP per capita growth at an annual rate of 0.04%, with major periods of positive per capita GDP growth occurring during 1150–1280, 1450–1600 and after 1730.
There were no significant periods of sustained growth reversals.
Relative to the United Kingdom, GDP per capita was at roughly similar levels until the middle of the 17th century.
By 1850, per capita incomes in Japan were approximately a quarter of the British level.
Sub-Saharan Africa
Pre-colonial sub-Saharan Africa was politically fragmented, just as early modern Europe was.
Africa was home to numerous wealthy empires which grew around coastal areas or large rivers that served as part of important trade routes. Africa was however far more sparsely populated than Europe.
According to University of Michigan political scientist Mark Dincecco, "the high land/ labor ratio may have made it less likely that historical institutional centralization at the "national level" would occur in sub-Saharan Africa, thwarting further state development."
The transatlantic slave trade may have further weakened state power in Africa.
A series of states developed in the
Sahel
The Sahel region (; ), or Sahelian acacia savanna, is a Biogeography, biogeographical region in Africa. It is the Ecotone, transition zone between the more humid Sudanian savannas to its south and the drier Sahara to the north. The Sahel has a ...
on the southern edge of the Sahara which made immense profits from trading across the Sahara, trading heavily in gold and slaves for the
trans-Saharan slave trade
The trans-Saharan slave trade, also known as the Arab slave trade, was a Slavery, slave trade in which slaves Trans-Saharan trade, were mainly transported across the Sahara. Most were moved from sub-Saharan Africa to North Africa to be sold to ...
. Kingdoms in the heavily forested regions of West Africa were also part of trade networks. The growth of trade in this area was driven by the
Yoruba civilization, which was supported by cities surrounded by farmed land and made wealthy by extensive trade development.
For most of the first millennium AD, the
Axumite Kingdom in East Africa had a powerful navy and trading links reaching as far as the Byzantine Empire and India. Between the 14th and 17th centuries, the
Ajuran Sultanate
The Ajuran Sultanate (, ), natively referred to as Ajuuraan, and often simply Ajuran/Ajur, was a Muslims, Muslim empire in the Horn of Africa that thrived from the Late Middle Ages, late medieval and Early modern period, early modern period. F ...
in modern-day Somalia practiced
hydraulic engineering
Hydraulic engineering as a sub-discipline of civil engineering is concerned with the flow and conveyance of fluids, principally water and sewage. One feature of these systems is the extensive use of gravity as the motive force to cause the move ...
and developed new systems for agriculture and taxation, which continued to be used in parts of the Horn of Africa as late as the 19th century.
On the east coast of Africa,
Swahili kingdoms had a prosperous trading empire. Swahili cities were important trading ports along the
Indian Ocean
The Indian Ocean is the third-largest of the world's five oceanic divisions, covering or approximately 20% of the water area of Earth#Surface, Earth's surface. It is bounded by Asia to the north, Africa to the west and Australia (continent), ...
, engaging in trade with the Middle East and Far East. Kingdoms in southeast Africa also developed extensive trade links with other civilizations as far away as China and India. The institutional framework for long-distance trade across political and cultural boundaries had long been strengthened by the adoption of Islam as a cultural and moral foundation for trust among and with traders.
Possible factors
Scholars have proposed numerous theories to explain why the Great Divergence occurred.
Coal

In metallurgy and steam engines the
Industrial Revolution
The Industrial Revolution, sometimes divided into the First Industrial Revolution and Second Industrial Revolution, was a transitional period of the global economy toward more widespread, efficient and stable manufacturing processes, succee ...
made extensive use of coal and
coke – as cheaper, more plentiful and more efficient than wood and
charcoal
Charcoal is a lightweight black carbon residue produced by strongly heating wood (or other animal and plant materials) in minimal oxygen to remove all water and volatile constituents. In the traditional version of this pyrolysis process, ca ...
. Coal-fired steam engines also operated in the railways and in shipping, revolutionizing transport in the early 19th century. Kenneth Pomeranz drew attention to differences in the availability of coal between West and East. Due to regional climate, European coal mines were wetter, and deep mines did not become practical until the introduction of the
Newcomen steam engine
The atmospheric engine was invented by Thomas Newcomen in 1712, and is sometimes referred to as the Newcomen fire engine (see below) or Newcomen engine. The engine was operated by condensing steam being drawn into the cylinder, thereby creating ...
to pump out groundwater. In mines in the arid northwest of China, ventilation to prevent explosions was much more difficult.
Another difference involved geographic distance; although China and Europe had comparable mining technologies, the distances between the economically developed regions and coal deposits differed vastly. The largest coal deposits in China are located in the northwest, within reach of the Chinese industrial core during the
Northern Song
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, endin ...
(960–1127). During the 11th century China developed sophisticated technologies to extract and use coal for energy, leading to soaring iron production. The southward population shift between the 12th and 14th centuries resulted in new centers of Chinese industry far from the major coal deposits. Some small coal deposits were available locally, though their use was sometimes hampered by government regulations. In contrast, Britain contained some of the largest coal deposits in Europe – all within a relatively compact island.
The centrality of coal to Industrial revolution was criticized by Gregory Clark and David Jacks, who show that coal could be substituted without much loss of national income. Similarly Deirdre N. McCloskey says that coal could easily have been imported to Britain from other countries. Moreover, the Chinese could move their industries closer to coal reserves.
New World

A variety of theories posit Europe's unique relationship with the
New World
The term "New World" is used to describe the majority of lands of Earth's Western Hemisphere, particularly the Americas, and sometimes Oceania."America." ''The Oxford Companion to the English Language'' (). McArthur, Tom, ed., 1992. New York: ...
as a major cause of the Great Divergence. The high profits earned from the colonies and the slave trade constituted 7 percent a year, a relatively high rate of return considering the high rate of depreciation on pre–industrial capital stocks, which limited the amount of savings and capital accumulation. Early European colonization was sustained by profits through selling New World goods to Asia, especially silver to China. According to Pomeranz, the most important advantage for Europe was the vast amount of fertile, uncultivated land in the Americas which could be used to grow large quantities of farm products required to sustain European economic growth and allowed labor and land to be freed up in Europe for industrialization. New World exports of wood, cotton, and wool are estimated to have saved England the need for 23 to of cultivated land (by comparison, the total amount of cultivated land in England was just 17 million acres), freeing up immense amounts of resources. The New World also served as a market for European manufactures.
Chen (2012) also suggested that the New World as a necessary factor for industrialization, and trade as a supporting factor causing less developed areas to concentrate on agriculture supporting industrialized regions in Europe.
Political fragmentation
Jared Diamond
Jared Mason Diamond (born September 10, 1937) is an American scientist, historian, and author. In 1985 he received a MacArthur Genius Grant, and he has written hundreds of scientific and popular articles and books. His best known is '' Guns, G ...
and Peter Watson argue that a notable feature of
Europe's geography was that it encouraged political
balkanization
Balkanization or Balkanisation is the process involving the fragmentation of an area, country, or region into multiple smaller and hostile units. It is usually caused by differences in ethnicity, culture, religion, and geopolitical interests.
...
, such as having several large peninsulas
and natural barriers such as mountains and straits that provided defensible borders. By contrast,
China's geography encouraged political unity, with a much smoother
coastline
A coast (coastline, shoreline, seashore) is the land next to the sea or the line that forms the boundary between the land and the ocean or a lake. Coasts are influenced by the topography of the surrounding landscape and by aquatic erosion, su ...
and a heartland dominated by two river valleys (
Yellow
Yellow is the color between green and orange on the spectrum of light. It is evoked by light with a dominant wavelength of roughly 575585 nm. It is a primary color in subtractive color systems, used in painting or color printing. In t ...
and
Yangtze
The Yangtze or Yangzi ( or ) is the longest river in Eurasia and the third-longest in the world. It rises at Jari Hill in the Tanggula Mountains of the Tibetan Plateau and flows including Dam Qu River the longest source of the Yangtze, i ...
).
Thanks to the topographical structure with "its mountain chains, coasts, and major marches , formed boundaries at which states expanding from the core areas could meet and pause…".
Hence, this helps European countries feel "in the same boat". Due to the location of mountain ranges, there were several distinct geographical cores that could provide the nuclei for future states.
Another point in Europe's political fragmentation in comparison to, for example, China is the location of the Eurasian steppe. After horse domestication, steppe nomads (for instance, Genghis Khan and the Mongols) posed a threat to the sedentary population until the 18th century. The reason for the threat is "the fragile ecology of the steppe meant that during periods of drought or cold weather, steppe nomads were more likely to invade neighboring populations". Hence, this stimulated China, which is near the steppe, to build a strong, unified state.
In his book ''
Guns, Germs, and Steel
''Guns, Germs, and Steel: The Fates of Human Societies'' (subtitled ''A Short History of Everybody for the Last 13,000 Years'' in Britain) is a 1997 transdisciplinary nonfiction book by the American author Jared Diamond. The book attempts to ...
'', Diamond argues that advanced cultures outside Europe had developed in areas whose
geography
Geography (from Ancient Greek ; combining 'Earth' and 'write', literally 'Earth writing') is the study of the lands, features, inhabitants, and phenomena of Earth. Geography is an all-encompassing discipline that seeks an understanding o ...
was conducive to large, monolithic, isolated empires. In these conditions policies of technological and social stagnation could persist. He gives the example of China in 1432, when the
Xuande Emperor outlawed the building of ocean-going ships, in which China was the world leader at the time. On the other hand,
Christopher Columbus
Christopher Columbus (; between 25 August and 31 October 1451 – 20 May 1506) was an Italians, Italian explorer and navigator from the Republic of Genoa who completed Voyages of Christopher Columbus, four Spanish-based voyages across the At ...
obtained sponsorship from
Queen Isabella I of
Castile for his expedition even though three other European rulers turned it down. As a result, governments that suppressed economic and technological progress soon corrected their mistakes or were out-competed relatively quickly. He argues that these factors created the conditions for more rapid internal superpower change (Spain succeeded by France and then by the United Kingdom) than was possible elsewhere in Eurasia.
Justin Yifu Lin
Justin Yifu Lin ( zh, c=林毅夫, p=Lín Yìfū; born on October 15, 1952) is a Taiwanese-born Chinese economist and professor of economics at Peking University. He served as the World Bank Chief Economist, Chief Economist and Senior Vice Presid ...
argued that China's large population size proved beneficial in technological advancements prior to the 14th century, but that the large population size was not an important factor in the kind of technological advancements that resulted in the Industrial Revolution. Early technological advancements depended on "learning by doing" (where population size was an important factor, as advances could spread over a large political unit), whereas the Industrial Revolution was the result of experimentation and theory (where population size is less important). Before Europe took some steps towards technology and trade, there was an issue with the importance of education. By 1800, literacy rates were 68% in the Netherlands and 50% in Britain and Belgium, whereas in non-European societies, literacy rates started to rise in the 20th century. At the early stages of the Industrial Revolution, there was no demand for skilled labor. However, during the next phases of the Industrial Revolution, factors that influence worker productivity—education, training, skills, and health—were the primary purpose.
Economic historian
Joel Mokyr has argued that political fragmentation (the presence of a large number of European states) made it possible for heterodox ideas to thrive, as entrepreneurs, innovators, ideologues and heretics could easily flee to a neighboring state in the event that the one state would try to suppress their ideas and activities. This is what set Europe apart from the technologically advanced, large unitary empires such as China. China had both a printing press and movable type, yet the industrial revolution would occur in Europe. In Europe, political fragmentation was coupled with an "integrated market for ideas" where Europe's intellectuals used the lingua franca of Latin, had a shared intellectual basis in Europe's classical heritage and the pan-European institution of the
Republic of Letters
The Republic of Letters (''Res Publica Litterarum'' or ''Res Publica Literaria'') was the long-distance intellectual community in the late 17th and 18th centuries in Europe and the Americas. It fostered communication among the intellectuals of th ...
. The historian
attributes this divergence to the West's development of six "killer apps", which he finds were largely missing elsewhere in the world in 1500 – "competition, the scientific method, the rule of law, modern medicine, consumerism and the work ethic".
Economic historian Tuan-Hwee Sng has argued that the large size of the Chinese state contributed to its relative decline in the 19th century:
The vast size of the Chinese empire created a severe principal–agent problem
The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the " agent") takes actions on behalf of another person or entity (the " principal"). The problem worsens when there is a gr ...
and constrained how the country was governed. In particular, taxes had to be kept low due to the emperor's weak oversight of his agents and the need to keep corruption in check. The Chinese state's fiscal weaknesses were long masked by its huge tax base. However, economic and demographic expansion in the eighteenth century exacerbated the problems of administrative control. This put a further squeeze on the nation's finances and left China ill-prepared for the challenges of the nineteenth century.
One reason why Japan was able to modernize and adopt the technologies of the West was due to its much smaller size relative to China.
Stanford political scientist Gary W. Cox argues in a 2017 study,
that Europe's political fragmentation interacted with her institutional innovations to foster substantial areas of "economic liberty", where European merchants could organize production freer of central regulation, faced fewer central restrictions on their shipping and pricing decisions, and paid lower tariffs and tolls than their counterparts elsewhere in Eurasia. When fragmentation afforded merchants multiple politically independent routes on which to ship their goods, European rulers refrained from imposing onerous regulations and levying arbitrary tolls, lest they lose mercantile traffic to competing realms. Fragmented control of trade routes magnified the spillover effects of political reforms. If parliament curbed arbitrary regulations and tolls in one realm, then neighboring rulers might have to respond in kind, even if they themselves remained without a parliament. Greater economic liberty, fostered by the interaction of fragmentation and reform, unleashed faster and more inter-connected urban growth.
Other geographic factors
Fernand Braudel
Fernand Paul Achille Braudel (; 24 August 1902 – 27 November 1985) was a French historian. His scholarship focused on three main projects: ''The Mediterranean'' (1923–49, then 1949–66), ''Civilization and Capitalism'' (1955–79), and the un ...
of the
Annales school
The ''Annales'' school () is a group of historians associated with a style of historiography developed by French historians in the 20th century to stress long-term social history. It is named after its scholarly journal '' Annales. Histoire, S ...
of historians argued that the
Mediterranean Sea
The Mediterranean Sea ( ) is a sea connected to the Atlantic Ocean, surrounded by the Mediterranean basin and almost completely enclosed by land: on the east by the Levant in West Asia, on the north by Anatolia in West Asia and Southern Eur ...
was poor for fishing due to its depth, therefore encouraging long-distance trade.
Furthermore, the
Alps
The Alps () are some of the highest and most extensive mountain ranges in Europe, stretching approximately across eight Alpine countries (from west to east): Monaco, France, Switzerland, Italy, Liechtenstein, Germany, Austria and Slovenia.
...
and other parts of the
Alpide belt supplied the coastal regions with fresh migrants from the uplands.
This helped the spread of ideas, as did the east–west axis of the Mediterranean which lined up with the
prevailing winds
In meteorology, prevailing wind in a region of the Earth's surface is a surface wind that blows predominantly from a particular Wind direction, direction. The dominant winds are the trends in direction of wind with the highest speed over a partic ...
and its many
archipelago
An archipelago ( ), sometimes called an island group or island chain, is a chain, cluster, or collection of islands. An archipelago may be in an ocean, a sea, or a smaller body of water. Example archipelagos include the Aegean Islands (the o ...
s which together aided navigation, as was also done by the great rivers which brought inland access, all of which further increased immigration.
The
peninsula
A peninsula is a landform that extends from a mainland and is only connected to land on one side. Peninsulas exist on each continent. The largest peninsula in the world is the Arabian Peninsula.
Etymology
The word ''peninsula'' derives , . T ...
s of the Mediterranean also promoted political
nationalism
Nationalism is an idea or movement that holds that the nation should be congruent with the state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation, Smith, Anthony. ''Nationalism: Theory, I ...
which brought international competition.
One of the geographical issues that affected the economies of Europe and the Middle East is the discovery of the Americas and the Cape Route around Africa.
The old trade routes became useless, which led to the economic decline of cities both in Central Asia and the Middle East and, moreover, in Italy.
Testing theories related to geographic endowments economists
William Easterly and
Ross Levine find evidence that tropics, germs, and crops affect development through institutions. They find no evidence that tropics, germs, and crops affect country incomes directly other than through institutions, nor did they find any effect of policies on development once controls for institutions were implemented. However, there is the opposite argument to the abovementioned statement. In the 16th century in Ireland, potato cultivation became popular as this crop was perfectly suited to the Irish soil and climate. Hence, it raised farmers' incomes in the short run, and the peasants' quality of life rose with the increase in their calorie consumption. The majority of the population was dependent on potatoes. In the 19th century, a new fungus, late blight, was ravaging potato crops in the U.S. and then Europe. In 1845, half of the potatoes were blighted; in 1845, three-quarters were. The result was the Great Famine (1845–1849).
Innovation
Beginning in the early 19th century, economic prosperity rose greatly in the West due to improvements in technological efficiency, as evidenced by the advent of new conveniences including the
railroad
Rail transport (also known as train transport) is a means of transport using wheeled vehicles running in railway track, tracks, which usually consist of two parallel steel railway track, rails. Rail transport is one of the two primary means of ...
,
steamboat
A steamboat is a boat that is marine propulsion, propelled primarily by marine steam engine, steam power, typically driving propellers or Paddle steamer, paddlewheels. The term ''steamboat'' is used to refer to small steam-powered vessels worki ...
,
steam engine
A steam engine is a heat engine that performs Work (physics), mechanical work using steam as its working fluid. The steam engine uses the force produced by steam pressure to push a piston back and forth inside a Cylinder (locomotive), cyl ...
, and the use of
coal
Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other Chemical element, elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.
Coal i ...
as a fuel source. These innovations contributed to the Great Divergence, elevating
Europe
Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...
and the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
to high economic standing relative to the East.
It has been argued the attitude of the
East
East is one of the four cardinal directions or points of the compass. It is the opposite direction from west and is the direction from which the Sun rises on the Earth.
Etymology
As in other languages, the word is formed from the fact that ea ...
towards innovation is one of the other factors that might have played a big role in the West's advancements over the East. According to
David Landes, after a few centuries of innovations and inventions, it seemed like the East stopped trying to innovate and began to sustain what they had. They kept nurturing their pre-modern inventions and did not move forward with the modern times. China decided to continue a self-sustaining process of scientific and technological advancement on the basis of their indigenous traditions and achievements. The East's attitude towards innovation showed that they focused more on experience, while the West focused on experimentation. The East did not see the need to improve on their inventions, so they focused on their past successes. While they did this, the West was focused more on experimentation and trial by error, which led them to come up with new and different ways to improve on existing innovations and create new ones.
Efficiency of markets and state intervention

A common argument is that Europe had more free and efficient markets than other civilizations, which has been cited as a reason for the Great Divergence. In Europe, market efficiency was disrupted by the prevalence of
feudalism
Feudalism, also known as the feudal system, was a combination of legal, economic, military, cultural, and political customs that flourished in Middle Ages, medieval Europe from the 9th to 15th centuries. Broadly defined, it was a way of struc ...
and
mercantilism
Mercantilism is a economic nationalism, nationalist economic policy that is designed to maximize the exports and minimize the imports of an economy. It seeks to maximize the accumulation of resources within the country and use those resources ...
. Practices such as
entail, which restricted land ownership, hampered the free flow of labor and buying and selling of land. These feudal restrictions on land ownership were especially strong in continental Europe. China had a relatively more liberal land market, hampered only by weak customary traditions. Bound labor, such as
serfdom
Serfdom was the status of many peasants under feudalism, specifically relating to manorialism and similar systems. It was a condition of debt bondage and indentured servitude with similarities to and differences from slavery. It developed du ...
and
slavery
Slavery is the ownership of a person as property, especially in regards to their labour. Slavery typically involves compulsory work, with the slave's location of work and residence dictated by the party that holds them in bondage. Enslavemen ...
were more prevalent in Europe than in China, even during the
Manchu conquest. Urban industry in the West was more restrained by
guild
A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular territory. The earliest types of guild formed as organizations of tradespeople belonging to a professional association. They so ...
s and state-enforced monopolies than in China, where in the 18th century the principal monopolies governed salt and foreign trade through
Guangzhou
Guangzhou, Chinese postal romanization, previously romanized as Canton or Kwangchow, is the Capital city, capital and largest city of Guangdong Provinces of China, province in South China, southern China. Located on the Pearl River about nor ...
. Pomeranz rejects the view that market institutions were the cause of the Great Divergence, and concludes that China was closer to the ideal of a market economy than Europe.
Economic historian
Paul Bairoch
Paul Bairoch (24 July 1930 in Antwerp – 12 February 1999 in Geneva) was a (in 1985 naturalised) Swiss economic historian of Belgian descent who specialized in urban history and historical demography. He published or co-authored more than two d ...
presents a contrary argument, that Western countries such as the United States, Britain and Spain did not initially have
free trade
Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
, but had
protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
policies in the early 19th century, as did China and Japan. In contrast, he cites the
Ottoman Empire
The Ottoman Empire (), also called the Turkish Empire, was an empire, imperial realm that controlled much of Southeast Europe, West Asia, and North Africa from the 14th to early 20th centuries; it also controlled parts of southeastern Centr ...
as an example of a state that did have free trade, which he argues had a negative economic impact and contributed to its
deindustrialization
Deindustrialization is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially of heavy industry or manufacturing industry.
There are different interpr ...
. The Ottoman Empire had a
liberal trade policy, open to foreign imports, which has origins in
capitulations of the Ottoman Empire
Capitulations of the Ottoman Empire were contracts between the Ottoman Empire and several other Christian powers, particularly France. Turkish capitulations, or Ahidnâmes were generally bilateral acts whereby definite arrangements were enter ...
, dating back to the first commercial treaties signed with France in 1536 and taken further with
capitulations in 1673 and 1740, which lowered
duties to only 3% for imports and exports. The liberal Ottoman policies were praised by British economists advocating free trade, such as
J. R. McCulloch in his ''Dictionary of Commerce'' (1834), but later criticized by British politicians opposing free trade, such as
prime minister
A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
Benjamin Disraeli
Benjamin Disraeli, 1st Earl of Beaconsfield (21 December 1804 – 19 April 1881) was a British statesman, Conservative Party (UK), Conservative politician and writer who twice served as Prime Minister of the United Kingdom. He played a ...
, who cited the Ottoman Empire as "an instance of the injury done by unrestrained competition" in the 1846
Corn Laws
The Corn Laws were tariffs and other trade restrictions on imported food and corn enforced in the United Kingdom between 1815 and 1846. The word ''corn'' in British English denotes all cereal grains, including wheat, oats and barley. The la ...
debate:
Wages and living standards
Classical economists, beginning with
Adam Smith
Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...
and
Thomas Malthus
Thomas Robert Malthus (; 13/14 February 1766 – 29 December 1834) was an English economist, cleric, and scholar influential in the fields of political economy and demography.
In his 1798 book ''An Essay on the Principle of Population'', Mal ...
, argued that high wages in the West stimulated labor-saving technological advancements.
Revisionist studies in the mid to late 20th century have depicted
living standards
Standard of living is the level of income, comforts and services available to an individual, community or society. A contributing factor to an individual's quality of life, standard of living is generally concerned with objective metrics outside ...
in 18th century China and pre–Industrial Revolution Europe as comparable. According to Pomeranz, life expectancy in China and Japan was comparable to the advanced parts of Europe. Similarly, Chinese consumption per capita in calories intake is comparable to England. According to Pomeranz and others, there was modest per capita growth in both regions, the Chinese economy was not stagnant, and in many areas, especially agriculture, was ahead of Western Europe. Chinese cities were also ahead in public health. Economic historian
Paul Bairoch
Paul Bairoch (24 July 1930 in Antwerp – 12 February 1999 in Geneva) was a (in 1985 naturalised) Swiss economic historian of Belgian descent who specialized in urban history and historical demography. He published or co-authored more than two d ...
estimated that China's GNP per capita in 1800 was $228 in 1960
US dollars
The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...
($ in 1990 dollars), higher than Western Europe's $213 ($ in 1990 dollars) at the time.
Similarly for
Ottoman Egypt, its per-capita income in 1800 was comparable to that of Western European countries such as
France
France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...
, and higher than the overall average income of Eastern Europe and Japan. Economic historian Jean Barou estimated that, in terms of 1960 dollars,
Egypt
Egypt ( , ), officially the Arab Republic of Egypt, is a country spanning the Northeast Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via the Sinai Peninsula. It is bordered by the Mediterranean Sea to northe ...
in 1800 had a per-capita income of $232 ($ in 1990 dollars). In comparison, per-capita income in terms of 1960 dollars for France in 1800 was $240 ($ in 1990 dollars), for
Eastern Europe
Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
in 1800 was $177 ($ in 1990 dollars), and for Japan in 1800 was $180 ($ in 1990 dollars).
According to Paul Bairoch, in the mid-18th century, "the average
standard of living
Standard of living is the level of income, comforts and services available to an individual, community or society. A contributing factor to an individual's quality of life, standard of living is generally concerned with objective metrics outsid ...
in Europe was a little bit lower than that of the rest of the world."
He estimated that, in 1750, the average
GNP per capita in the
Eastern world
The Eastern world, also known as the East or historically the Orient, is an umbrella term for various cultures or social structures, nations and philosophical systems, which vary depending on the context. It most often includes Asia, the ...
(particularly China, India and the Middle East) was $188 in 1960 dollars ($ in 1990 dollars), higher than the West's $182 ($ in 1990 dollars). He argues that it was after 1800 that Western European per-capita income pulled ahead. However, the average incomes of China
and Egypt were still higher than the overall average income of Europe.
According to Jan Luiten van Zanden, the relationship between GDP per capita with wages and standards of living is very complex. He gives
Netherlands economic history as an example. Real wages in Netherlands declined during the early modern period between 1450 and 1800. The decline was fastest between 1450/75 and the middle of the sixteenth century, after which real wages stabilized, meaning that even during the
Dutch Golden Age
The Dutch Golden Age ( ) was a period in the history of the Netherlands which roughly lasted from 1588, when the Dutch Republic was established, to 1672, when the '' Rampjaar'' occurred. During this period, Dutch trade, scientific development ...
purchasing power did not grow. The stability remained until the middle of 18th century, after which wages declined again. Similarly citing studies of the average height of Dutch men, van Zaden shows that it declined from the
Late Middle Ages
The late Middle Ages or late medieval period was the Periodization, period of History of Europe, European history lasting from 1300 to 1500 AD. The late Middle Ages followed the High Middle Ages and preceded the onset of the early modern period ( ...
. During 17th and 18th centuries, at the height of Dutch Golden Age, the average height was 166 centimeters, about 4 centimeters lower than in 14th and early 15th century. This most likely indicates consumption declines during the early modern period, and average height would not equal medieval heights until the 20th century. Meanwhile, GDP per capita increased by 35 to 55% between 1510/1514 and the 1820s. Hence it is possible that standards of living in advanced parts of Asia were comparable with Western Europe in the late 18th century, while Asian GDP per capita was about 70% lower.
Şevket Pamuk and Jan-Luiten van Zanden also show that during the Industrial Revolution, living standards in Western Europe increased little before the 1870s, as the increase in nominal wages was undermined by rising food prices. The substantial rise in living standards only started after 1870, with the arrival of cheap food from the Americas. Western European GDP grew rapidly after 1820, but real wages and the standard of living lagged behind.
According to Robert Allen, at the end of the Middle Ages, real wages were similar across Europe and at a very high level. In the 16th and 17th century wages collapsed everywhere, except in the
Low Countries
The Low Countries (; ), historically also known as the Netherlands (), is a coastal lowland region in Northwestern Europe forming the lower Drainage basin, basin of the Rhine–Meuse–Scheldt delta and consisting today of the three modern "Bene ...
and
London
London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
. These were the most dynamic regions of the early modern economy, and their living standards returned to the high level of the late fifteenth century. The dynamism of London spread to the rest of England in 18th century. Although there was fluctuation in real wages in England between 1500 and 1850, there was no long term rise until the last third of 19th century. And it was only after 1870 that real wages begin to rise in other cities of Europe, and only then they finally surpassed the level of late 15th century. Hence while the Industrial Revolution raised GDP per capita, it was only a century later before a substantial raise in standard of living.
However, responding to the work of Bairoch, Pomeranz, Parthasarathi and others, more subsequent research has found that parts of 18th century Western Europe did have higher wages and levels of per capita income than in much of India, Ottoman Turkey, Japan and China. However, the views of Adam Smith were found to have overgeneralized Chinese poverty.
[ Maddison, Angus (2007), ''Contours of the World Economy, 1–2030 AD. Essays in Macro-Economic History'', ]Oxford University Press
Oxford University Press (OUP) is the publishing house of the University of Oxford. It is the largest university press in the world. Its first book was printed in Oxford in 1478, with the Press officially granted the legal right to print books ...
, Between 1725 and 1825 laborers in Beijing and Delhi were only able to purchase a basket of goods at a subsistence level, while laborers in London and Amsterdam were able to purchase goods at between 4 and 6 times a subsistence level. As early as 1600 Indian GDP per capita was about 60% the British level. A real decline in per capita income did occur in both China and India, but in India began during the
Mughal period, before British colonialism. Outside of Europe much of this decline and stagnation has been attributed to population growth in rural areas outstripping growth in cultivated land as well as
internal political turmoil.
Free colonials in
British North America
British North America comprised the colonial territories of the British Empire in North America from 1783 onwards. English colonisation of North America began in the 16th century in Newfoundland, then further south at Roanoke and Jamestown, ...
were considered by historians and economists in a survey of academics to be amongst the most well off people in the world on the eve of the
American Revolution
The American Revolution (1765–1783) was a colonial rebellion and war of independence in which the Thirteen Colonies broke from British America, British rule to form the United States of America. The revolution culminated in the American ...
. The earliest evidence of a major health transition leading to increased
life expectancy
Human life expectancy is a statistical measure of the estimate of the average remaining years of life at a given age. The most commonly used measure is ''life expectancy at birth'' (LEB, or in demographic notation ''e''0, where '' ...
began in Europe in the 1770s, approximately one century before Asia's.
Robert Allen argues that the relatively high wages in eighteenth century Britain both encouraged the adoption of labour-saving technology and worker training and education, leading to industrialisation.
Luxury consumption
Luxury consumption is regarded by many scholars to have stimulated the development of
capitalism
Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
and thus contributed to the Great Divergence. Proponents of this view argue that workshops, which manufactured luxury articles for the wealthy, gradually amassed capital to expand their production and then emerged as large firms producing for a mass market; they believe that Western Europe's unique tastes for luxury stimulated this development further than other cultures. However, others counter that luxury workshops were not unique to Europe; large cities in China and Japan also possessed many luxury workshops for the wealthy, and that luxury workshops do not necessarily stimulate the development of "capitalistic firms".
Property rights
Differences in
property rights
The right to property, or the right to own property (cf. ownership), is often classified as a human right for natural persons regarding their Possession (law), possessions. A general recognition of a right to private property is found more rarely ...
have been cited as a possible cause of the Great Divergence.
This view states that Asian merchants could not develop and accumulate capital because of the risk of state expropriation and claims from fellow kinsmen, which made property rights very insecure compared to those of Europe. However, others counter that many European merchants were de facto expropriated through defaults on government debt, and that the threat of expropriation by Asian states was not much greater than in Europe, except in Japan.
Government and policies are seen as an integral part of modern societies and have played a major role in how different economies have been formed. The Eastern societies had governments which were controlled by the ruling dynasties and thus, were not a separate entity. Their governments at the time lacked policies that fostered innovation and thus resulted in slow advancements. As explained by Cohen, the east had a restrictive system of trade that went against the free world market theory; there was no political liberty or policies that encouraged the capitalist market (Cohen, 1993). This was in contrast to the western society that developed commercial laws and property rights which allowed for the protection and liberty of the marketplace. Their capitalist ideals and market structures encouraged innovation.
Pomeranz (2000) argues that much of the land market in China was free, with many supposedly hereditary tenants and landlords being frequently removed or forced to sell their land. Although Chinese customary law specified that people within the village were to be offered the land first, Pomeranz states that most of the time the land was offered to more capable outsiders, and argues that China actually had a freer land market than Europe.
However,
Robert Brenner and Chris Isett emphasize differences in land tenancy rights. They argue that in the lower Yangtze, most farmers either owned land or held secure tenancy at fixed rates of rent, so that neither farmers nor landlords were exposed to competition. In 15th century England, lords had lost their serfs, but were able to assert control over almost all of the land, creating a rental market for tenant farmers. This created competitive pressures against subdividing plots, and the fact that plots could not be directly passed on to sons forced them to delay marriage until they had accumulated their own possessions. Thus in England both agricultural productivity and population growth were subject to market pressures throughout the early modern period.
A 2017 study found that the presence of secure property rights in Europe and their absence in large parts of the Middle-East contributed to the increase of expensive labour-saving capital goods, such as water-mills, windmills, and cranes, in medieval Europe and their decrease in the Middle-East.
High-level equilibrium trap
The
high-level equilibrium trap theory argues that China did not undergo an indigenous industrial revolution since its economy was in a stable equilibrium, where supply and demand for labor were equal, disincentivizing the development of labor-saving capital.
European colonialism
A number of economic historians have argued that
European colonialism played a major role in the
deindustrialization
Deindustrialization is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially of heavy industry or manufacturing industry.
There are different interpr ...
of non-Western societies.
Paul Bairoch
Paul Bairoch (24 July 1930 in Antwerp – 12 February 1999 in Geneva) was a (in 1985 naturalised) Swiss economic historian of Belgian descent who specialized in urban history and historical demography. He published or co-authored more than two d ...
, for example, cites
British colonialism
The British Empire comprised the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts establish ...
in India as a primary example, but also argues that European
colonialism
Colonialism is the control of another territory, natural resources and people by a foreign group. Colonizers control the political and tribal power of the colonised territory. While frequently an Imperialism, imperialist project, colonialism c ...
played a major role in the deindustrialization of other countries in Asia, the Middle East, and
Latin America
Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
, and contributed to a sharp economic decline in
Africa
Africa is the world's second-largest and second-most populous continent after Asia. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 20% of Earth's land area and 6% of its total surfac ...
. Other modern
economic historians
Economic history is the study of history using methodological tools from economics or with a special attention to economic phenomena. Research is conducted using a combination of historical methods, statistical methods and the application of ...
have blamed
British colonial rule for India's deindustrialization in particular.
The colonization of India is seen as a major factor behind both India's deindustrialization and Britain's Industrial Revolution.
The historian
Jeffrey G. Williamson has argued that India went through a period of deindustrialization in the latter half of the 18th century as an indirect outcome of the collapse of the
Mughal Empire
The Mughal Empire was an Early modern period, early modern empire in South Asia. At its peak, the empire stretched from the outer fringes of the Indus River Basin in the west, northern Afghanistan in the northwest, and Kashmir in the north, to ...
, with
British rule
The British Raj ( ; from Hindustani , 'reign', 'rule' or 'government') was the colonial rule of the British Crown on the Indian subcontinent,
*
* lasting from 1858 to 1947.
*
* It is also called Crown rule in India,
*
*
*
* or dire ...
later causing further deindustrialization.
According to Williamson, the decline of the Mughal Empire led to a decline in agricultural productivity, which drove up food prices, then
nominal wages, and then textile prices, which led to India losing a share of the world textile market to Britain even before it had superior
factory technology, though Indian textiles still maintained a competitive advantage over British textiles up until the 19th century. Economic historian Prasannan Parthasarathi, however, has argued that there wasn't any such economic decline for several post-Mughal states, notably
Bengal Subah
The Bengal Subah (Bengali language, Bengali: সুবাহ বাংলা, ), also referred to as Mughal Bengal and Bengal State (after 1717), was one of the puppet states and the largest subah, subdivision of The Mughal India, Mughal Emp ...
and the
Kingdom of Mysore
The Kingdom of Mysore was a geopolitical realm in southern India founded in around 1399 in the vicinity of the modern-day city of Mysore and prevailed until 1950. The territorial boundaries and the form of government transmuted substantially ...
, which were comparable to Britain in the late 18th century, until British colonial policies caused deindustrialization.

Up until the 19th century, India was the world's leading cotton textile manufacturer, with
Bengal
Bengal ( ) is a Historical geography, historical geographical, ethnolinguistic and cultural term referring to a region in the Eastern South Asia, eastern part of the Indian subcontinent at the apex of the Bay of Bengal. The region of Benga ...
and
Mysore
Mysore ( ), officially Mysuru (), is a city in the southern Indian state of Karnataka. It is the headquarters of Mysore district and Mysore division. As the traditional seat of the Wadiyar dynasty, the city functioned as the capital of the ...
the centers of cotton production. In order to compete with Indian imports, Britons invested in labour-saving
textile manufacturing technologies during their Industrial Revolution. Following political pressure from the new industrial manufacturers, in 1813, Parliament abolished the two-centuries-old,
protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
East India Company monopoly on trade with Asia and introduced import tariffs on Indian textiles. Until then, the monopoly had restricted exports of British manufactured goods to India. Exposing the Proto-industrial hand spinners and weavers in the territories the British East India Company Company rule in India, administered in India to competition from machine spun threads, and woven fabrics, resulting in Proto-industrialization, De-Proto-Industrialization, with the decline of native manufacturing opening up new markets for British goods. British colonization forced open the large Indian market to British goods while restricting Indian imports to Britain, and raw cotton was imported from India without taxes or tariffs to British factories which manufactured textiles from Indian cotton and sold them back to the Indian market. India thus served as both an important supplier of raw goods such as cotton to British factories and a large captive market for British manufactured goods. In addition, the capital amassed from
Bengal
Bengal ( ) is a Historical geography, historical geographical, ethnolinguistic and cultural term referring to a region in the Eastern South Asia, eastern part of the Indian subcontinent at the apex of the Bay of Bengal. The region of Benga ...
following its conquest after the Battle of Plassey in 1757 was used to invest in British industries such as textile manufacturing and greatly increase British wealth.
Britain eventually surpassed India as the world's leading cotton textile manufacturer in the 19th century. British colonial rule has been blamed for the subsequently dismal state of British India's economy, with investment in Indian industries limited since it was a colony.
Economic decline in India has been traced to before British colonial rule and was largely a result of increased output in other parts of the world and Mughal disintegration. India's share of world output (24.9%) was largely a function of its share of the world population around 1600.
Between 1880 and 1930 total Indian cotton textile production increased from 1200 million yards to 3700 million yards. The introduction of railways into India have been a source of controversy regarding their overall impact, but evidence points to a number of positive outcomes such as higher incomes, economic integration, and famine relief. Per capita GDP decreased from $550 (in 1990 dollars) per person in 1700 under Mughal rule to $533 (in 1990 dollars) in 1820 under British rule, then increased to $618 (in 1990 dollars) in 1947 upon Partition of India, independence. Coal production increased in Bengal, largely to satisfy the demand of the railroads.
Life expectancy increased by about 10 years between 1870 and independence.
Recent research on colonialism has been more favorable regarding its long-term impacts on growth and development. A Colonial origins of comparative development, 2001 paper by Daron Acemoglu, Daren Acemoglu, Simon Johnson, and James A. Robinson (economist), James Robinson found that nations with temperate climates and low levels of mortality were more popular with settlers and were subjected to greater degrees of colonial rule. Those nations benefited from Europeans creating more inclusive institutions that lead to higher rates of long term growth. Subsequent research has confirmed that both how long a nation was a colony or how many Europeans settlers migrated there are positively correlated with economic development and institutional quality, although the relationships becomes stronger after 1700 and vary depending on the colonial power, with British colonies typically faring best. Acemoglu et al. also suggest that colonial profits were too small a percentage of GNP to account for the divergence directly but could account for it indirectly due to the effects it had on institutions by reducing the power of absolutist monarchies and securing property rights.
Culture
Rosenberg and Birdzell claim that the so-called Eastern culture of respect and unquestionable devotion to the ruling dynasty was as a result of a culture where the control of the dynasty led to a silent society that "did not ask questions or experiment without the approval or order from the ruling class". On the other hand, they claimed that the West of the late medieval era did not have a central authority or absolute state, which allowed for a free flow of ideas (Rosenberg, Birdzell, 1986). Moreover, there is another researcher who wrote that Christianity considered to be a critical issue to the emergence of liberal societies. This eastern culture also supposedly showed a dismissal of change due to their "fear of failure" and disregard for the imitation of outside inventions and science; this was different from the "Western culture" which they claimed to be willing to experiment and imitate others to benefit their society. They claimed that this was a culture where change was encouraged, and sense of anxiety and disregard for comfort led them to be more innovative. Max Weber argued in ''The Protestant Ethic and the Spirit of Capitalism'' that capitalism in northern Europe evolved when the Protestant work ethic (particularly Calvinism, Calvinist) influenced large numbers of people to engage in work in the secular world, developing their own enterprises and engaging in trade and the accumulation of wealth for investment. In his book ''The Religion of China: Confucianism and Taoism'' he blames Chinese culture for the non-emergence of capitalism in China. Chen (2012) similarly claims that cultural differences were the most fundamental cause for the divergence, arguing that the humanism of the Renaissance followed by Age of Enlightenment, the Enlightenment (including revolutionary changes in attitude towards religion) enabled a mercantile, innovative, individualistic, and capitalistic spirit. For Ming dynasty, Ming China, he claims there existed repressive measures which stifled dissenting opinions and nonconformity. He claimed that Confucianism taught that disobedience to one's superiors was supposedly tantamount to "sin". In addition Chen claimed that merchants and artificers had less prestige than they did in Western Europe. Wen-yuan Qian pointed out intellectuals passing through the
imperial examination
The imperial examination was a civil service examination system in History of China#Imperial China, Imperial China administered for the purpose of selecting candidates for the Civil service#China, state bureaucracy. The concept of choosing bureau ...
system were limited to neo-Confucian texts well into the Yuan dynasty.
Justin Yifu Lin
Justin Yifu Lin ( zh, c=林毅夫, p=Lín Yìfū; born on October 15, 1952) is a Taiwanese-born Chinese economist and professor of economics at Peking University. He served as the World Bank Chief Economist, Chief Economist and Senior Vice Presid ...
argued for the role of the imperial examination system in removing the incentives for Chinese intellectuals to learn mathematics or to conduct experimentation.
Yasheng Huang argued that the imperial examination system monopolized the most capable intellectuals in service of the state, sustained the propagation of Confucianism, and preempted the emergence of ideas that could challenge it.
However, some scholars who have studied Confucian teachings have criticized the claim that the philosophy promoted unquestionable loyalty to one's superiors and the state. The core of Confucian philosophy itself was already Humanism, humanist and Rationalism, rationalist; it "[does] not share a belief in divine law and [does] not exalt faithfulness to a higher law as a manifestation of divine will."
One of the central teachings of Confucianism is that one should remonstrate with authority. Many Confucians throughout history disputed their superiors in order to not only prevent the superiors and the rulers from wrongdoing, but also to maintain the independent spirits of the Confucians.
Furthermore, the merchant class of China throughout all of Chinese history were usually wealthy and held considerable influence above their supposed social standing.
Historians like Yu Yingshi and Billy So have shown that as Chinese society became increasingly commercialized from the
Song dynasty
The Song dynasty ( ) was an Dynasties of China, 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 Fiv ...
onward, Confucianism had gradually begun to accept and even support business and trade as legitimate and viable professions, as long as merchants stayed away from unethical actions. Merchants in the meantime had also benefited from and utilized Confucian ethics in their business practices. By the Song period, the scholar-officials themselves were using intermediary agents to participate in trading.
[Gernet, Jacques (1962). ''Daily Life in China on the Eve of the Mongol Invasion, 1250–1276''. Translated by H.M. Wright. Stanford: Stanford University Press. pp. 68–69] This is true especially in the Ming and Qing dynasties, when the social status of merchants had risen to such significance that by the late Ming period, many scholar-officials were unabashed to declare publicly in their official family histories that they had family members who were merchants. Consequently, while Confucianism did not actively promote profit seeking, it did not hinder China's commercial development either.
Of the developed cores of the Old World, India was distinguished by its Caste system in India, caste system of bound labor, which hampered economic and population growth and resulted in relative underdevelopment compared to other core regions. Compared with other developed regions, India still possessed large amounts of unused resources. India's caste system gave an incentive to elites to drive their Unfree labour, unfree laborers harder when faced with increased demand, rather than invest in new capital projects and technology. The Indian economy was characterized by vassal-lord relationships, which weakened the motive of financial profit and the development of markets; a talented artisan or merchant could not hope to gain much personal reward. Pomeranz argues that India was not a very likely site for an industrial breakthrough, despite its sophisticated commerce and technologies.
Aspects of Islamic law have been proposed as an argument for the divergence for the Muslim world. Economist Timur Kuran argues that Islamic institutions which had at earlier stages promoted development later started preventing more advanced development by hampering formation of corporations, capital accumulation, mass production, and impersonal transactions. Other similar arguments proposed include the gradual prohibition of independent religious judgements (Ijtihad) and a strong communalism which limited contacts with outside groups and the development of institutions dealing with more temporary interactions of various kinds, according to Kuran. Economic historian Paul Bairoch noted, however, that Ottoman law promoted Economic liberalism, liberal
free trade
Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
earlier than Britain and the United States, arguing that free trade had a negative economic impact on the Ottoman Empire and contributed to its deindustrialization, in contrast to the more
protectionist
Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations. ...
policies of Britain and the United States in the early 19th century.
Representative government
A number of economists have argued that representative government was a factor in the Great Divergence.
They argue that absolutist governments, where rulers are not broadly accountable, are prone to corruption and rent-seeking while hurting property rights and innovation.
Representative governments however were accountable to broader segments of the population and thus had to protect property rights and not rule in arbitrary ways, which caused economic prosperity.
Discussed effects between Democracy and economic growth, democratization and economic growth during Great Divergence include increasing elite competition incentivizing economic growth.
Globalization
A 2017 study in the ''The American Economic Review, American Economic Review'' found that "globalization was the major driver of the economic divergence between the rich and the poor portions of the world in the years 1850–1900."
The states that benefited from globalization were "characterised by strong constraints on executive power, a distinct feature of the institutional environment that has been demonstrated to favour private investment."
One of other advantages was transformation in technological power in U.S. and Europe. As an illustration, in 1839 Chinese rulers decided to ban the trade with British merchants who flooded China with opium. However, "China's creaking imperial navy was no match for a small fleet of British gunboats, driven by steam engines and shielded with steel armour".
Chance
A number of economic historians have posited that the Industrial Revolution may have partly occurred where and when it did due to luck and chance.
The Black Death
Historian James Belich (historian), James Belich has argued that the
Black Death
The Black Death was a bubonic plague pandemic that occurred in Europe from 1346 to 1353. It was one of the list of epidemics, most fatal pandemics in human history; as many as people perished, perhaps 50% of Europe's 14th century population. ...
, a bubonic plague pandemic occurring in Afro-Eurasia from 1346 to 1353, set the conditions that made the Great Divergence possible. He argues that the pandemic, which caused mass death in Europe, doubled the per capita endowment of everything. A labor scarcity led to expanded use of waterpower, wind power, and gunpowder, as well as fast-tracked innovations in water-powered blast furnaces, heavily gunned galleons, and musketry.
Economic effects

The Old World methods of agriculture and production could only sustain certain lifestyles. Industrialization dramatically changed the European and American economy and allowed it to attain much higher levels of wealth and productivity than the other Old World cores. Although Western technology later spread to the East, differences in uses preserved the Western lead and accelerated the Great Divergence.
Productivity
When analyzing comparative use-efficiency, the economic concept of total factor productivity (TFP) is applied to quantify differences between countries. TFP analysis controls for differences in energy and raw material inputs across countries and is then used to calculate productivity. The difference in productivity levels, therefore, reflects efficiency of energy and raw materials use rather than the raw materials themselves. TFP analysis has shown that Western countries had higher TFP levels on average in the 19th century than Eastern countries such as India or China, showing that Western productivity had surpassed the East.
Per capita income
Some of the most striking evidence for the Great Divergence comes from data on per capita income. The West's rise to power directly coincides with per capita income in the West surpassing that in the East. This change can be attributed largely to the mass transit technologies, such as railroads and steamboats, that the West developed in the 19th century. The construction of large ships, trains, and railroads greatly increased productivity. These modes of transport made moving large quantities of coal, corn, grain, livestock and other goods across countries more efficient, greatly reducing transportation costs. These differences allowed Western productivity to exceed that of other regions.
Economic historian
Paul Bairoch
Paul Bairoch (24 July 1930 in Antwerp – 12 February 1999 in Geneva) was a (in 1985 naturalised) Swiss economic historian of Belgian descent who specialized in urban history and historical demography. He published or co-authored more than two d ...
has estimated the GDP per capita of several major countries in 1960 US dollars after the Industrial Revolution in the early 19th century, as shown below. His estimates show that the GDP per capita of Western European countries rose rapidly after industrialization.

For the 18th century, and in comparison to non-European regions, Bairoch in 1995 stated that, in the mid-18th century, "the average
standard of living
Standard of living is the level of income, comforts and services available to an individual, community or society. A contributing factor to an individual's quality of life, standard of living is generally concerned with objective metrics outsid ...
in Europe was a little bit lower than that of the rest of the world."
[Chris Jochnick, Fraser A. Preston (2006)]
''Sovereign Debt at the Crossroads: Challenges and Proposals for Resolving the Third World Debt Crisis'', pages 86–87
Oxford University Press
Oxford University Press (OUP) is the publishing house of the University of Oxford. It is the largest university press in the world. Its first book was printed in Oxford in 1478, with the Press officially granted the legal right to print books ...
Agriculture

Before and during the early 19th century, much of continental European agriculture was underdeveloped compared to Asian Cores and England. This left Europe with abundant idle natural resources.
England
England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...
, on the other hand, had reached the limit of its agricultural productivity well before the beginning of the 19th century. Rather than taking the costly route of improving soil fertility, the English increased labor productivity by industrializing agriculture. From 1750 to 1850, European nations experienced population booms; however, European agriculture was barely able to keep pace with the dietary needs. Imports from the Americas, and the reduced caloric intake required by proletariat, industrial workers compared to farmers allowed England to cope with the food shortages. By the turn of the 19th century, much European farmland had been eroded and depleted of nutrients. Fortunately, through improved farming techniques, the import of fertilizers, and reforestation, Europeans were able to recondition their soil and prevent food shortages from hampering industrialization. Meanwhile, many other formerly hegemonic areas of the world were struggling to feed themselves – notably China.
Fuel and resources
The global demand for wood, a major resource required for industrial growth and development, was increasing in the first half of the 19th century. A lack of interest of silviculture in Western Europe, and a lack of forested land, caused wood shortages. By the mid-19th century, forests accounted for less than 15% of land use in most Western European countries. Fuel costs rose sharply in these countries throughout the 18th century and many households and factories were forced to ration their usage, and eventually adopt forest conservation policies. It was not until the 19th century that
coal
Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other Chemical element, elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.
Coal i ...
began providing much needed relief to the European energy shortage. China had not begun to use coal on a large scale until around 1900, giving Europe a huge lead on modern energy production.
Through the 19th century, Europe had vast amounts of unused arable land with adequate water sources. However, this was not the case in China; most idle lands suffered from a lack of water supply, so forests had to be cultivated. Since the mid-19th century, Northern and southern China, northern China's water supplies have been declining, reducing its agricultural output. By growing
cotton
Cotton (), first recorded in ancient India, is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure ...
for textiles, rather than importing, China exacerbated its water shortage.
During the 19th century, supplies of wood and land decreased considerably, greatly slowing growth of Chinese per capita incomes.
Trade

During the era of European imperialism, periphery countries were often set up as specialized producers of specific resources. Although these specializations brought the periphery countries temporary economic benefit, the overall effect inhibited the industrial development of periphery territories. Cheaper resources for core countries through trade deals with specialized periphery countries allowed the core countries to advance at a much greater pace, both economically and industrially, than the rest of the world.
Europe's access to a larger quantity of raw materials and a larger market to sell its manufactured goods gave it a distinct advantage through the 19th century. In order to further industrialize, it was imperative for the developing core areas to acquire resources from less densely populated areas, since they lacked the lands required to supply these resources themselves. Europe was able to trade manufactured goods to their colonies, including the Americas, for raw materials. The same sort of trading could be seen throughout regions in China and Asia, but colonization brought a distinct advantage to the West. As these sources of raw materials began to proto-industrialization, proto-industrialize, they would turn to import substitution, depriving the hegemonic nations of a market for their manufactured goods. Since European nations had control over their colonies, they were able to prevent this from happening. Britain was able to use import substitution to its benefit when dealing with textiles from India. Through industrialization, Britain was able to increase cotton productivity enough to make it lucrative for domestic production, and overtake India as the world's leading cotton supplier. Although Britain had limited cotton imports to protect its own industries, they allowed cheap British products into colonial India from the early 19th century. The colonial administration failed to promote Indian industry, preferring to export raw materials.
Western Europe was also able to establish profitable trade with Eastern Europe. Countries such as Prussia, Bohemia and Poland had very little freedom in comparison to the West; forced labor left much of Eastern Europe with little time to work towards proto-industrialization and ample manpower to generate raw materials.
Guilds and journeymanship
A 2017 study in the ''Quarterly Journal of Economics'' argued, "medieval European institutions such as guilds, and specific features such as journeymanship, can explain the rise of Europe relative to regions that relied on the transmission of knowledge within closed kinship systems (extended families or clans)".
Guilds and journeymanship were superior for creating and disseminating knowledge, which contributed to the occurrence of the Industrial Revolution in Europe.
See also
* Colonial empire
* Deindustrialisation in India, Deindustrialisation in 19th century India
* Economic history of China before 1912
* Eurocentrism
* History of Western civilization
* Mass production
* Modern history
* Criticism of Qing dynasty's economic performance
* Textile manufacture during the British Industrial Revolution
* Western empires
Books
* ''Roy Bin Wong#Before and Beyond Divergence, Before and Beyond Divergence''
* ''Niall Ferguson#Civilization, Civilization: The West and the Rest''
* ''The Civilizing Process''
* ''The Clash of Civilizations''
* ''The Eastern Origins of Western Civilisation''
* ''The European Miracle''
* ''A Farewell to Alms''
* ''Rodney Stark#Selected works, How the West Won: The Neglected Story of the Triumph of Modernity''
* ''Leonid Grinin#Great Divergence and Great Convergence, Great Divergence and Great Convergence''
* ''Kenneth Pomeranz#The Great divergence: China, Europe, and the making of the modern world economy, The Great Divergence: China, Europe, and the Making of the Modern World Economy''
* ''
Guns, Germs, and Steel
''Guns, Germs, and Steel: The Fates of Human Societies'' (subtitled ''A Short History of Everybody for the Last 13,000 Years'' in Britain) is a 1997 transdisciplinary nonfiction book by the American author Jared Diamond. The book attempts to ...
''
* ''The Rise and Fall of the Great Powers''
* ''The Rise of the West''
* ''The Wealth and Poverty of Nations''
* ''Why the West Rules—For Now''
* ''The WEIRDest People in the World''
* ''Walter Scheidel#Works, The Great Escape: A Review Essay on Escape from Rome: The Failure of Empire and the Road to Prosperity''
References
Citations
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Further reading
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* Court, V. (2019).
A reassessment of the Great Divergence debate: towards a reconciliation of apparently distinct determinants. ''European Review of Economic History''. .
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* Diego Olstein, Olstein, Diego. (2017) “Latin America in Global History: An Historiographic Overview”. Estudos Historicos, 30:60, pp. 253–272
summary* Root, Hilton L. (2020). ''Network Origins of the Global Economy: East vs. West in a Complex Systems Perspective''. Cambridge University Press.
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External links
– Estimates of economic growth between 1 and 2010
(course materials). Columbia University
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