Introduction
“It was a world…transformed by the enormous progress of its industrial sector…striking changes were produced by the spread of industry itself and by urbanisation…”i As Hobsbawm describes in the Age of Capital, after the Industrial Revolution, factories sprang up, and with black smoke billowing from the chimneys, cities developed rapidly. It was common for a British farmer to abandon his job and work in factories for better incomes and more regular schedules.ii
This transformation marked a shift from the intermittent and slow economic development that characterized the world prior to the 18th century. According to Roger Fouquet, “many of these (countries’) economies experienced periods of substantial economic decline.” iii Nevertheless, Western Europe began to experience continuous and explosive economic growth at the close of the 18th century. Why was there scarce sustained economic growth worldwide before the 18th century? Why did Western Europe experience substantial and sustained prosperity after the 18th century? To answer these questions, there must be a standard for evaluating economic growth.
There are many indicators to measure economic development. The Nobel Prize winner Kuznets defined “modern economic growth” as “a long-term rise in capacity to supply increasingly diverse economic goods to its population." iv In the judgement of Gunnar Persson, economic growth is a measurement of technical innovation.v In other words, the capacity to support citizens financially brought about by institutional and technological advancements is known as economic growth. Furthermore, sustained economic growth could be defined as continuous upward growth. European economic researchers Pleijt and Zanden used GDP per capita as a proxy for the measurement of sustained economic growth.vi This paper will adopt their method.
According to Chinese economist Di Liu, ancient China’s GDP per capita only grew slightly from $500 in 1600 to $600 in 1800.vii In contrast, although Britain's GDP per capita was just about $600 in 1600, by the end of the 18th century, it had increased dramatically to $2000. Similarly, other European nations have seen a continuous rise in GDP per capita as well, from less than $1,000 to almost $2,000 or higher.viii It can be claimed that Europe experienced sustained economic growth in the late 18th century, while China did not. Such difference is also known as the Great Divergence.ix
This article will examine two factors that contributed to the Great Divergence: changes in the economic foundation and ideological systems. While agricultural stagnation and conservative thinking were the primary factors leading to the rarity of sustained economic growth prior to the late 1700s, the Industrial Revolution and the implementation of capitalism influenced the transition to sustained economic growth. This article will conduct a comparative study through the analysis of two representative nations, Britain and China.
Pre-1700s Similarities: Impediments to Sustained Growth
China and Britain shared similarities in both their economic foundations and social institutions prior to the 18th century, resulting in their comparable economic development levels. Before the 18th century, agriculture was the economic foundation in both China and Britain. The proportion of men working in agriculture in England between 1540 and 1799 was around 80%.x In China, agriculture accounts for a higher proportion of the economy. Agriculture comprised 90% of the economy during the Ming Dynasty.xi However, agriculture cannot guarantee a long-term, stable economic development. Not only climate change or natural disasters but also disease could all result in harvest reduction, causing the unsustainable development of the economy. In 1583, a flood in the Yangtze River resulted in the collapse of 5,607 hectares of farmland in the county, one-fifth of the total farmland. This event caused a severe food crisis and significantly impacted the economy.xii In Britain, Andrew pointed out there were two “worst harvest failures” during the 16th century, with high prices of all grains.xiii
Another similarity lies in the two nations’ social ideas and institutions, which played a great role in choosing development mode. Confucianism, which had dominated Chinese civilization for thousands of years, was the law of the land. It promoted stability, a unified China, a highly centralized government, and a political theory that gave priority to agriculture above trade.xiv After a few large-scale maritime trades, the government finally prohibited all maritime activities during the Ming Dynasty to prevent pirate harassment.xv This has caused China to miss opportunities for foreign exchange and new forms of economic growth. Though Britain had a certain amount of commerce, it also suffered from constraints from guilds. Britain's early commodity trade was typically conservative and developed slowly due to the restriction of competition and opposition to innovation by these guilds.xvi Thus, the relatively conservative social concepts and institutions that restrict business competition and development were a constraint on both the economic growth of Britain and China.
Post-1700s Divergences: Causes of the Changes
After the 18th century, distinct development decisions resulted in disparities in economic growth between China and Britain. While China maintained its agricultural tradition and adhered to Confucianism, Britain initiated the industrial revolution. The impediments to sustained economic growth were cleared by a combination of scientific advancement and ideological shift.
In the late 17th century, Britain established the Royal Society, a government sponsored scientific institution that conducted basic subject research, especially in mathematics, chemistry, and physics, and built a comprehensive disciplinary structure based on scientific research. Such disciplinary structures enabled the application of science to useful technologies.xvii After the 18th century, the Industrial Revolution began with the successful improvements of steam engines.xviii The number of steam engines increased from 0 in 1700 to 3,000 in 1800.xix With their application, large factories were established, which increased the efficiency of good production. Britain's output of iron surged 76 times and coal roughly 10 times by the end of the 18th century thanks to steam engines. Steamed trains and ships can quickly connect different places, transporting raw materials and goods. The wealth of people increased exponentially.xx
Despite significant inventions since ancient times, China failed to systematize and rationalize these breakthroughs.xxi Chinese scientific research frequently avoided delving into the scientific origins of the inventions. Chinese scientists frequently linked metals to philosophy when it comes to applications, such as connecting mercury to immortality. The discovery of gunpowder happened by accident while creating an immortality elixir.xxii This attitude towards technology cannot produce technological breakthroughs, which requires a rigorous scientific system.
In the ideological and political spheres, Britain has also undergone a huge shift. The Reformation reduced the power of the church and transferred it to the nobility. The nobles then began to use science to explain or verify the accuracy of the Bible. Since the 16th century, the Renaissance and Enlightenment had promoted liberalism and relaxed state control over the economy. The manor system based on agriculture was broken, and cities flourished. xxiii The economic vitality was bolstered by the gradual dissolution of the guilds and the emergence of competing factoriesxxiv. These concepts sparked the establishment of novel institutions and indirectly increased trade in goods.
In contrast, China adhered to relatively conservative ideologies and structures established prior to the 18th century. The Qing Dynasty continued to emphasize agriculture and suppress commerce. China’s commercial and industrial GDP proportion had never exceeded 20%.xxv The Qing Dynasty, under the influence of nationalism, further restricted foreign trade and implemented a seclusion policy, which led to a further reduction in exchanges with the outside world and impeded the introduction of new technologies, products, and ideas.xxvi China’s education system also tended to focus more on Confucianism philosophy, the only path to power, thereby neglecting science education.xxvii Furthermore, the Qing government frequently opposed the introduction of novel concepts and even employed intimidation to control scholars and compel them to conform to the government's wishes.xxviii This further hindered the transformation of the society.
Conclusion
A number of factors, including agricultural uncertainty and ideological conservatism, hindered sustained economic growth before the 18th century. The Great Divergence between China and Britain after the 18th century can be explained by distinct developmental paths shaped by their respective ideologies and attitudes toward scientific advancement.
Nowadays, the societal trend of thought is again beginning to shift, with new technologies and international situations. As the world continues to diverge, we should maintain an open and inclusive mindset to promote cooperation and exchange, which may serve as a means of sustaining economic development in our era.
Endnotes
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