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

Published by EH.NET (October 2000)

Kenneth Pomeranz, The Great Divergence: China, Europe and the Making of the

Modern World Economy. Princeton, NJ: Princeton University Press, 2000. x

+382 pp. $39.95 (cloth); ISBN: 0-691-00543-5.

Reviewed for EH.NET by Deepak Lal, Department of Economics, University of

California, Los Angeles.

Kenneth Pomeranz (Professor of History at the University of California,

Irvine) has written an important and scholarly book. Yet, despite his

scholarship, at the end of the day I was not convinced by his basic thesis.

The question he asks is one that has tantalized scholars for over a century:

Why did Europe alone of the great Eurasian civilizations escape the binding

land constraint and initiate that process of unbounded Promethean intensive

growth which has transformed humankind’s economic prospects, so that, mass

structural poverty need no longer be the universal scourge it has been for

millennia? As a scholar of China he uses the comparative method to see if any

advantages can be discerned which led core areas in Europe to diverge so

markedly from the core areas primarily in southern China, but also in Japan and

India. In this task, he brilliantly deconstructs the various materialist

explanations that have been advanced by economic historians to explain this

great divergence.

He shows quite convincingly that, until the turn of the eighteenth century,

there was no marked divergence in living standards between the Chinese and

European cores. He then painstakingly shows with an impressive command of the

Chinese literature (much of it recent) that various purported differences in

demography, ecology, accumulation and the pervasiveness of markets which have

been claimed to have given the Europeans an inherent advantage do not stand up

to scrutiny. As late as 1750, the similarities between the Yangtze Delta and

England were greater than the differences. So why did England and subsequently

Europe not follow the labor-intensive path of the “industrious revolution” of

their Far Eastern cousins, and instead take the capital-intensive path of the

industrial revolution?

His answer is in two parts. The first is that coal, which fueled the English

industrial revolution, was geographically not as readily available to the

eighteenth-century core in southern China, since it was concentrated in the

Northwest. The spectacular development of the coal and iron complex in the

northwestern China in the eleventh century, documented by Hartwell, was

dismantled and depopulated by the invaders of the twelfth century, and by the

fifteenth century when the region was stabilized China’s economic and

demographic center of gravity had shifted to the South. He notes that,

retrospectively, the returns to linking the Yangtze delta with the northwestern

coal deposits were huge, but that these returns were invisible ex ante, and it

is not clear what could have been done to realize them. But this explanation

surely will not do, for the Chinese state had acted under the Sung to

disseminate the new wet rice technology to southern China. If the coal-steam

technology had been available to China — as it was in principle but not

developed for reasons to be taken up below — could the powerful bureaucratic

authoritarian state that has ruled China not have taken the necessary action to

link these two geographical regions under its sway?

Nor does the relative geographical distribution of coal reserves in the various

Eurasian civilizations bear up as the decisive factor in the European

divergence, if we consider their location in another Eurasian civilization —

India. Its core lay in the eastern Gangetic plain — in modern Bihar — because

it was here that they found the iron deposits they needed for the iron

implements needed to clear the forests and the iron ploughshares for deep

ploughing. We now know that this area also contains India’s coal reserves. But

despite this, no one has claimed that the Indians could have developed the

coal-steam industrial revolution. By contrast, we know China had nearly all the

ingredients of this revolution in place by the eleventh century, and it still

did not take place. It is highly dubious that the geographical distribution of

its coal reserves had anything to with this lapse.

The second part of Pomeranz’s answer about the causes of the great divergence

is Europe’s discovery and exploitation — partly through trade — of the New

World. There can be no doubt that this extended Europe’s land frontier. But how

decisive was it and why could China not do something similar?

Pomeranz, himself in his last chapter in a section called “Comparisons and

Calculations: What Do the Numbers Mean?” admits the increment to the supply of

land- intensive products from the New World to Europe could not have been

large, but then uses various forms of handwaving including an appeal to chaos

theory to justify his thesis that they were the basis of the great divergence!

But it is the larger question — why did China not seek to exploit areas where

free land was available overseas to overcome its growing land constraint —

which points to the basic flaw in Pomeranz’s and other purely materialist

explanations for the great divergence. As Pomeranz shows, there were empty

lands in South East Asia which “like the post-contact New World, was sparsely

populated and capable of supplying vast quantities of land-intensive resources

that were in demand ‘back home.’ Chinese went there in significant numbers, but

South East Asia never became for coastal China what the New World was for

western Europe” (p. 200). Why? Because unlike Europe’s New World empires, “the

Chinese merchants . . . established themselves in South East Asia without state

backing” (p.200). This is the crucial point. To see why, it is important to

note two important points not even taken into account by Pomeranz.

First, under Kublai Khan the Chinese had created a powerful navy. The famous

admiral Cheng Ho took his “treasure ships” on expeditions to the India Ocean in

the fifteenth century, and William McNeill (The Pursuit of Power:

Technology, Armed Force, and Society since A.D. 1000, University of Chicago

Press, 1982) notes that these expeditions eclipsed anything that the later

Portuguese explorers could muster. Nor did Cheng Ho desist from coercion. He

sealed Chinese suzerainty everywhere he went if necessary by force. McNeill

argues that if the Chinese had continued to expand their overseas empire “a

Chinese Columbus might well have discovered the west coast of America half a

century before the real Columbus blundered into Hispaniola in his vain search

for Cathay. Assuredly Chinese ships were seaworthy enough to sail across the

Pacific and back. Indeed, if the like of Cheng Ho’s expeditions had been

renewed, Chinese navigators might well have rounded Africa and discovered

Europe before Prince Henry the Navigator died (1460)” (p.45).

But instead — the second point — after 1433 the Chinese abandoned their navy

and began to restrict foreign trade and contacts. The shipbuilding and

sea-going skills thereafter degenerated, and China continued in relative

isolation until the “new barbarians” came knocking at its doors in the

nineteenth century.

To understand this shift in policy and the accompanying closing of the Chinese

mind — and the comparable one in Japan following its adoption of the policy

sakoku under the Tokugawa — one has to look at what I have elsewhere (in

Unintended Consequences) called the “cosmological beliefs” of the

various Eurasian civilizations. As these cosmological beliefs are also related

to the different polities, they also help to explain the divergences in state

policy. It would take me too far afield to outline this story here. But without

bringing the mind back in, there is no way to explain China’s failure to

generate the coal-steam industrial revolution and the overseas empire, which

Pomeranz with so many other economic historians rightly see as the proximate

causes of the European miracle.

The great historian of Chinese science, Joseph Needham, used to maintain that

the rise of the West could not be explained in terms of a single or a few

factors but was due to a “package.” Pomeranz’s greatest service is to show that

the material differences in this “package” cannot account for the great

divergence — particularly once one discounts his own materialist differences

as being unconvincing. So as both Weber, and more recently Landes have

maintained, we are back to culture. Both, however, in my judgment got the date

of this cultural divergence wrong. I have argued in Unintended

Consequences that it goes back to at least the sixth century. But that is

another story.

One indication of this cultural divergence is provided by a visit to the great

archeological museum in Xian. The first few rooms of the collection show the

great cultural and scientific efflorescence in China from neolithic times to

the middle ages, and then in room after room there are the same shapes, the

same forms continuing in unending repetition — at least to this untrained eye.

It is to see a civilization that seemed to have seen itself as reaching

perfection and then being frozen in aspic from about the sixteenth century. By

contrast in England this was to be the age of Shakespeare, followed by those of

Locke, Newton, Hume and Smith. The sheer intellectual curiosity and

creativeness of these centuries preceding the industrial revolution are in

stark contrast to what was happening in the other great Eurasian civilizations.

If we are to understand the modern world it is this great divergence which

needs to be explained, and which Pomeranz’s book does not even touch upon.

Deepak Lal is James S. Coleman Professor of International Development Studies,

University of California, Los Angeles, and the author of Unintended

Consequences: The Impact of Factor-Endowments, Culture and Politics on Long Run

Economic Performance (MIT Press, 1998). A third collection of his essays

entitled Unfinished Business, was published by Oxford University Press

in 1999.