The Great Divergence: China, Europe, and the Making of the Modern World Economy

The debate over its origins barely provided new insights. Kenneth Pomeranz, the author of The
Great Divergence: China, Europe, and the Making of the Modern World Economy, wrote this book to
discuss about it. The book, which was published by Princeton University Press in 2000, however,
fundamentally shifts the debate and discussion of this contentious question by incorporating it into global
comparative view. It is definitely not an easy reading (the book had 392 pages filled with intense
vocabularies). His argument is supported by extremely meticulous comparison derived from the most up-
to-date and trustworthy studies about China and Europe. His main focuses are on England and the lower
Yangzi delta [Jiangnan, ] from the sixteenth to eighteenth centuries, but sometimes includes all of
Europe, China, Japan, India, and the Americas.

His main thesis is that China and Europe were essentially similar in nearly all significant
economic aspects, including the standard of living, market development, agrarian productivity, and
institutional structures that affected growth. Such fundamental similarities invalidate past arguments that
stressed how the deeply rooted European singularities allowed Europe to attain global supremacy

Building upon regional socioeconomic studies of the imperial China, Pomeranz invalidates five
main arguments that supports the concept of European uniquenss: demography, markets, luxury
consumption, labor, and ecology. In each case, he mentions subtly about the differences that matter. For
example, many credit the European demographic system that features late/low number marriage.
However, it also allowed unrestricted reproduction, while keeping down European populations. On the
other hand, Asians were viewed as having unlimited reproduction due to its early marriage. It should be
noted, however, that fertility control within marriage kept Chinese populations below their maximum, too.
Thus, it ensures them with equal/greater life expectancies than most of Europe, and roughly equal living
standards. As such, the European social structure was not significant from economic viewpoint.

Chinas allocation of capital, labor, and land by competitive markets was equal to Europe.
Imperial China enjoyed more efficient resource use by having free labor, migration of people, land sales,
and property rights. Western Europe, on the other hand, restricted land sales and craftsmen by entailment
and guilds, respectively. In eastern Europe, more severe controls, from apprenticeship to serfdom,
severely limited the investment and kept urban-rural income gaps high. Given these barriers, it could be
said that Chinas income inequalities werent higher than Europe.

Alternatively, others argue that Europe benefited from its limitations rather than benefits. Large
scale monopolistic merchants and luxury consumption by elites (regardless of being aristocratic or urban)
could have been the source of power for industrialism. But China, too, had both merchant dynasties and
demands for fashionable goods. One example not cited by Pomeranz supports this point. Many believe
that Nathan Rothschild, who was worth 5.3 million USD, was the richest man in the world, but his
fortune pales by comparison with that of his contemporary Wu Bingjian, Canton merchant who is known
as Howqua and is worth 56 million USD. In any case, finance was not the limiting factor for early
industry, since the cost of establishing a factory was low. It is no secret that land and materials were far
more important.
 Another arguments focus on the cost of labor. Pomeranz finds textile workers, regardless of
gender, had roughly equal wages, and not noticeably less than Europe's. While Europeans did send more
women to work in factories, Chinese women sold their household products on competitive markets on
fairly high prices. As such, the European difference does not matter.

Finally, both China and Europe were running into severe resource limits by 1800. Pomeranz tries
to compare the degree of scarcity of productive resources like land and forests in Europe and China. He
finds that China was not worse off than Europe at this time, but both were nearing exhaustion. China did
suffer severe environmental deterioration in the nineteenth century, but Europe had a very narrow escape.

I find the evidence for these similarities convincing, and their effects large. The Industrial
Revolution did not grow smoothly out of long term European superiority. England was instead a
"fortunate freak" (Pomeranz 207) that had large coal supplies and is located near abundant water and
accessible ports, which made the steam engine economically feasible. China, whose main coal deposits
were in the northwest, far from its textile manufacturers in Jiangnan, had no use for a steam engine, and
no reason to overcome the huge cost of getting coal to the lower Yangtze. Such very local difference of
geology had a powerful effect on creating the preconditions for the first industrial breakthrough, which
coined the term the great divergence.

Despite this, it must be recalled that Industrial Revolution was both local and global. The book
brings up the relationships between contingency, coercion, and global conjunctures. Although he stresses
accidents, Pomeranz does not reject large-scale explanations. He invokes three kinds of contingency that
are linked to global processes: windfalls, unintended consequences, and the "Panda's Thumb"
phenomenon, in which resources and organizations are used for entirely different purpose than intended.
Americas silver, timber, sugar, and cotton were unexpected windfalls. The unintended consequences of
New World colonization mobilized them to solve European crisis, and European chartered trade
companies were the Panda's Thumbs that collected these resources. Created not for accumulating capital,
but for conquest, these quasi-private entities were granted freedom to engage in the piracy and commerce
needed to compete with more experienced and efficient Asian traders. Only much later did this
organizational form, transmuted into the corporation, become the most efficient method of mobilizing
capital for large industrial enterprises.

These trading companies projected European tensions to overseas, elevating European system to
global economic dominance. Military competition is universal. However, while Europeans actively
protected their commercial representatives abroad, China did not because of its geopolitical strategies.
Chinese dynasties till Qing focused nearly all their military attention on Central Eurasia due to constant
nomadic threat, and to ensure that they could use their textiles to trade for horses.

Colonization is linked geographical contingencies, coercive capital organizations, and global

conjunctures. The Caribbean and Brazilian plantation complex, and the southern American cotton and
tobacco plantations were indispensable in providing the resources necessary for industrialization.
Pomeranz adds an ecological twist to the older interpretations of the triangular trade. The "ghost acres"
freed up by the ability to use the American lands were considered more important than profit. Sugar,
timber, and cotton, if grown in Europe, would have used two-thirds of England's total arable land. This
very special form of colonial exploitation differentiated the New World peripheries from the old cores.
Because slaves needed large imports for sustenance, North American grain and timber exports allowed
Northerners to have the income to buy British goods. Chinese frontier settlers, on the other hand,
established themselves as independent farmers that enjoyed state support, and soon developed rural
industries to competed with the lower Yangtze, thus reducing its connection to the periphery.

Pomeranz' provocative insights bring the Industrial Revolution debate up to date. The crucial
factors are now ecological, not technological or cultural, and dependent on the "global conjuncture" that
united the peoples of the world, not on their separate culture, based on the fact that interactions, ecology,
and contingency have replaced isolations, civilizational dichotomies, and determinism.

His argument targets two particular groups: those who see Western Europe as the only dynamic
society before the 1800s, and those who see the Industrial Revolution as merely a shift in power within an
integrated global system. Despite bringing a huge blow to the Eurocentric thinkers with the numbers of
evidence that proved them wrong, one can expect to not end. But once again, this may be a distinction
without a difference. The pendulum will keep on swinging, as Europeanists propose other special features
while Asian thinkers discover their equals in Asia. But the more important implication is that England
could just as easily have become Jiangnan, trapped in an ecological downfall but was granted a narrow
escape.

World historians should be more attentive to the implicit challenge ahead of the world system. I
realize that much of the twenty first centurys theorizing looks back from the twentieth century, just as
how Marx looked back from the nineteenth. The rise of Asia in the late twentieth century has led to a new
recognition of the dominance of Asian economies in the past. The system theorists and the Eurocentrists
share a sense of long-term inevitability. They likewise pay more attention to core areas, which influences
changes to the periphery. As such, they view the global economy has returned to its original state that was
interrupted by the nineteenth and twentieth-century imperialists.

Such retrospective prediction is alien to the perspective of this book, which instead looks forward from
the eighteenth century, which shared the modern view on the future. We should be prepared for more
surprises in the future. By further extending exploration to the realms of biochemistry and outer space, we
will find more windfalls, which will be exploited by contingency and coercion with global implications.
Pomeranz' brilliant analysis doesnt serve to end the debate on this subject, but brings it up to the twenty-
first century, an era of globalization with great changes and uncertainties. It is extremely safe to say that
no one interested in economic history, Asian history, and/or world history can ignore his powerful
argument. Only the slackers are the ones who would neglect such analysis.