Great Divergence
The Great Divergence or European miracle is the socioeconomic shift in which the Western world overcame pre-modern growth constraints and emerged during the 19th century as the most powerful and wealthy world civilization, eclipsing previously dominant or comparable civilizations from Asia such as Qing China, Mughal India, the Ottoman Empire, Safavid Iran, and Tokugawa Japan, among others.
Scholars have proposed a wide variety of theories to explain why the Great Divergence happened, including geography, culture, institutions, and luck. There is disagreement over the nomenclature of the "great" divergence; while some scholars emphasize slow, long-term structural social changes rooted in the medieval period, others traditionally point to the 15th or 16th century as the definitive beginning, citing the Commercial Revolution and the origins of mercantilism and capitalism during the Renaissance and the Age of Discovery, the rise of the European colonial empires, proto-globalization, the Scientific Revolution, or the Age of Enlightenment. Yet the largest jump in the divergence happened in the late 18th and 19th centuries with the Industrial Revolution and Technological Revolution. For this reason, the "California school" considers only this to be the great divergence.
Technological advances, in areas such as transportation, mining, and agriculture, were embraced to a higher degree in western Eurasia 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 as an energy substitute for wood 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 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 reached economic growth rates significantly higher than those in most developed countries.
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. 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 alternative term "European Miracle". Broadly, both terms signify a socioeconomic shift in which European countries advanced ahead of others during the modern period.The timing of the Great Divergence is in dispute among historians. The traditional dating is as early as the 16th 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, in terms of grain wage, had comparable economic development to Europe, especially Qing China in the Yangtze Delta and South Asia in the Bengal Subah. Economic historian Prasannan Parthasarathi argued that wages in parts of South India, particularly Mysore, 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 and the Chinese imperial examination 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 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, 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 Western Europe; Broadberry states that silver wages in Central and Eastern Europe 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, 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. Massive windfalls of fuel, land, food and other resources were necessary for continued growth and capital accumulation, leading to colonialism. 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, Muslim, 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. 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 and other northern Italian cities. The 14th century, then, brought a series of calamities: famines, wars, the Black Death and other epidemics.Koyama and Rubin 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 and manorial relationships that had characterized medieval Europe.
File:Pieter Bruegel The Peasant Dance.jpg|thumb|The Peasant Dance, painting by Pieter Bruegel the Elder, 1568
According to a 2014 study, "there was a 'little divergence' within Europe between 1300 and 1800: real wages in the North Sea Region more or less stabilized at the level attained after the Black Death, and remained relatively high throughout the early modern period, whereas real wages in the 'periphery' 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: in the 'periphery' of Europe there was almost no per capita growth between 1500 and 1800, whereas in Holland and England real income continued to rise and more or less doubled in this period".
In the Age of Discovery, navigators discovered new routes to the Americas and Asia. Commerce 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 was controlled by merchants, while Parliament gained control of the Kingdom of England after a long struggle culminating in the Glorious Revolution. These arrangements proved more hospitable to economic development. At the end of the 16th century, London and Antwerp 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 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, which alleviated ecological restraints on economic growth ; 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 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 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 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 Yangtze Delta, may have remained on par with those of Europe until the early 18th century.In the late imperial period, comprising the Ming and Qing dynasties, taxation was low, and the economy and population grew significantly, though without substantial increases in productivity. Chinese goods such as silk, tea, and ceramics 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.