Jack Goldstone: Is the Great Divergence Debate really over?

A Guest Post

Below is a guest essay by my GMU colleague and eminent sociologist, demographer and economic historian Jack Goldstone.

Recent Nobel Laureate Joel Mokyr together with Avner Greif and Guido Tabellini have recently published a landmark book, Two Paths to Prosperity. This was reviewed by the equally eminent Jan Luiten van Zanden for EH.net. Van Zanden’s essay is recommended reading for anyone interested in these topics.

Van Zanden opens his essay noting that

“Kenneth Pomeranz’s book The Great Divergence (2000) opened the twenty-first-century debate about the timing and causes of the divergent economic development of China on the one side and Western Europe on the other. In Western Europe after 1780, the Industrial Revolution (IR) got under way, ultimately leading to sustained economic growth, whereas in China — whose economy had been dynamic up to that point — the trend reversed and GDP per capita began to shrink. Before the IR, the dynamic center of the world economy was in China (and in the Middle East).

Explaining this reversal was the central question in the Great Divergence debate . . . Much of the literature, going back even to Max Weber, had claimed that Europe’s institutional divergence dated back to the Middle Ages and that industrialization after 1750 had roots deep in European history. Pomeranz and other representatives of the California School that coalesced around this topic around 2000 pointed to two contingencies that, after 1750, supposedly triggered the IR: (i) the presence of cheap coal in Great Britain and (ii) the colonial powers’ access to cheap raw materials such as cotton. Whether these claims were valid lay at the heart of the Great Divergence debate.

As Two Paths to Prosperity convincingly shows, the central theses of the California School have not withstood critical scrutiny.”

Jack’s post below is a direct response to this claim and a fascinating discussion of the claims made by Greif, Mokyr, and Tabellini about the origins of the Great Divergence itself.

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J.L. van Zanden is one of our leading economic historians in his own right, and his review of Avner Greif, Joel Mokyr, and Guido Tabellini, Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000–2000 is sweeping and bold, stating that this book can “be read as a conclusion to the debate on economic development that has dominated economic history since 2000.”

I would like to assert that this debate is not yet concluded! Van Zanden errs in one major respect: he states that the California school argued not only for a “late” divergence between European and Chinese economic development, c. 1750, but also that this Great Divergence was down to “two contingencies that, after 1750, supposedly triggered the IR: (i) the presence of cheap coal in Great Britain and (ii) the colonial powers’ access to cheap raw materials such as cotton. Whether these claims were valid lay at the heart of the Great Divergence debate.” That is just not true. These claims were never advanced by the California School as a whole, but were argued primarily by Kenneth Pomeranz. Other scholars in the School, including R. Bin Wong, John M. Hobson, James Z. Lee and Wang Feng never accepted that “coal and colonies” drove the Great Divergence, though they agreed with the later, 18^th century, dating of the divergence itself. Moreover, the California School, for the most part, NEVER argued that the causes of the great divergence were not traceable further back in time. Rather what the School as a whole argued was (1) that the rapid economic divergence between Europe and China in income per capita and economic technology that started after 1750 was NOT based on an earlier divergence in income per capita and economic technology many centuries earlier; rather as late as the early 18^th century output per person and most elements of technology were still comparable between Europe and China, with the latter still more advanced in agricultural output per acre, and the production of cotton and silk textiles and ceramics; and that (2) since the Great Divergence was not based simply on earlier economic progress, the explanation must lie in some combination of events and processes in other domains: exploration, culture, political and social organization, that enabled the West to produce and then sustain a burst of history-changing innovations in the 18^th and 19^th centuries that produced unprecedented economic growth.

Far from “the central theses of the California School have not withstood critical scrutiny,” in fact the main theses have stood up quite well.

That is, “coal and colonies” were NEVER the “central theses” of the California School. Rather, to put it more briefly, the central theses were (1) that the quantitative divergence of GDP/cap occurred no earlier than 1700, and that (2) the divergence was primarily due to prior developments that were not simply economic. The first thesis has been repeatedly accepted and documented by the work of Stephen Broadberry and his many partners in reconstructing long-term GDP/cap series for European nations and for the leading regions of China. To quote Broadberry, Guan, and Li:
“GDP per capita in the leading region of China remained around the same level as in the leading region of Europe until the 18th century before declining substantially during the Qing dynasty. The Great Divergence thus began around 1700 [emphasis added], earlier than originally suggested by the California School, but later than implied by earlier writers.” ¹ In addition, studies of particular areas of production, including iron and steel, cotton textiles, and ceramics, have shown that c. 1700 Europeans were still trying to catch up and find substitutes for imports from the Middle East, India and China that were technologically superior to what Europeans could produce.² Now one might say that Pomeranz and other California School authors in the 1990s and early 2000s argued for a divergence date somewhat later, after 1750. But in my view, if 20 years of distinguished cliometric research by Broadberry and all of his associates simply moved the date of the divergence up by 50 years, then that is strong confirmation of the California School thesis denying that a divergence in GDP/cap had put Europe economically ahead of any major region in China many centuries earlier.

The acceptance of the second thesis is shown by the numerous economic historians who have now located the reasons for the great divergence not in prior economic progress, but in cultural divergence, including most notably Deirdre McCloskey’s focus on the development of “bourgeois virtues,” and Mokyr’s own Nobel-winning works emphasizing the crucial emergence of a “culture of innovation” as the fount of later economic breakthroughs.³ That the California School was on this same track much earlier should be evident from my own 1987 paper “Cultural Orthodoxy, Risk, and Innovation: The Divergence of East and West in the Early Modern World.” ⁴

Now, the reasons for that cultural divergence are still much debated, even if van Zanden thinks that Greif, Mokyr and Tabellini have now found “the answer” in the role of the Catholic Church in western political development. In fact, even this answer is much more limited and complex than van Zanden allows.

Let me acknowledge that of course the Catholic Church played a critical role in the preservation and promulgation of Roman Law, in Western state formation, and in developing the balance between secular political and divine authorities that helped promote political pluralism and independent city-states in the West, albeit that was also down to the manner of collapse of the Western Roman Empire and the reconstitution of political authority by Germanic leaders. These processes have been well described by Anna Grzymala-Busse and Walter Scheidel.⁵

But while the political fragmentation of Europe into diverse states was clearly necessary for the sustained innovations leading to the rise of the West, it was also clearly not sufficient, as shown by the experience of the Warring States era in China, or the history of southeast Asia, in which centuries of competing warring states in a dynamic cultural system gave birth to sophisticated state structures but not to economic breakthroughs.

More importantly, we need to understand the paradoxical role of the Catholic Church in what van Zanden rightfully recognizes as the crucial element in the Great Divergence, namely “long-term changes in the knowledge economy.” Mokyr helpfully broke these down into a two-fold change in theoretical knowledge (the scientific breakthroughs of the Scientific Revolution and Enlightenment), and practical knowledge (embodied in highly skilled craftsmen). While craft skills were essential, what really separated the West from the rest was the West’s ability to break through what E.A. Wrigley identified as the energy barrier, by shifting from solely organic sources of energy (including wind and water) to inorganic energy, which only became available for motive force when Europeans learned to build and harness reliable steam engines. While skillfully made machines, such as the spinning jenny and water-driven spinning and weaving machines, helped Europeans to catch up to Indian and Chinese producers in cost, it was only with the application of steam power to such machinery that Europeans surpassed the rest of the world in volume production while drastically undercutting them in prices, and at the same time became capable of producing much cheaper iron and steel in volume, leading to railways and steamships and other miracles of the 19^th century.

Breaking the energy barrier required the insights of modern science, including the existence of air pressure and the ability to quantify and measure work and heat. This work, which included both Protestant and Catholic scientists (Boyle, Black, Watt, Torricelli, Pascal, Lavoisier, Thompson), set scientists and craftsmen on the road to building machines to convert heat into work, from Savery to Newcomen to Watt. Yet the Catholic Church, even though it had long supported academic inquiry and even trained the Jesuits to be their scholarly warriors, set itself firmly against the modern science of Isaac Newton, which seemed to posit a “clockwork universe” with no need for an active, intervening God, and defended Aristotelian and Biblical ideals such as the absence of a vacuum in nature and the centrality of Earth in the universe (even the Jesuits, in adapting to modern astronomy, adopted Tycho Brahe’s alternative to the Copernican system, retaining Earth as the center of solar, lunar, and planetary motions.)

Thus, for all the value of the Catholic Church in promoting an organizational structure that was conducive to growth, it was only the failure of the Catholic Church to retain its hold on orthodoxy of thought and monopoly of power, as manifested in the rise of Reformation states and Protestant thinkers who fought the Counter-Reformation to a standstill and eventually triumphed, that enabled a radical modern science to triumph. By contrast, in the Middle East, India, and China, from 1400 a series of repressively orthodox dynasties (the Ottomans, the Mughals, and the late Ming and Qing) progressively contained and stifled innovation, such that the rate of innovation in the East slowed down, while the way for innovation was cleared in the West, enabling the latter to surpass the East and all prior civilizations after 1700.⁶

To be sure, there is still much more to debate about the cultural foundations for European science and Eastern stagnation, and broader questions about the Rise of the West. How important was the Ming decision to curtail their program of maritime exploration and trade, while the Europeans happened, in contingent fashion, to discover a heavily peopled new continent that challenged all their prevailing ideas about geography, botany, and humanity? How important was European military technology to its ability to exploit its new productive powers? How crucial was European imperialism to provide new ideas, raw materials, and subjugated manpower to underwrite European growth?⁷

Even on the matter of family structure, which van Zanden cites as another way the Catholic Church shaped the West for dominance, there is ample disagreement. James Lee and Wang Feng demonstrated that Chinese families were no larger than European families, and the idea that the European Marriage Pattern was a decisive difference for economic growth has been largely debunked.⁸ And while Greif, Mokyr and Tabellini praise western corporations while denigrating China’s vast regional merchant associations, which operated national and international networks and promoted economic development, calling them mere “clans,” it should be noted that the British and Dutch East Indian Companies – the “model” corporations – both failed when trying to run their colonial domains and had to be rescued by state takeovers, and that in Britain from 1720 to 1824, precisely when modern economic technology and growth emerged, joint-stock corporations were mostly banned due to the spectacular failure of the South Sea Bubble. During this period, it was partnerships that fueled the rise of modern banks and manufacturing companies, including the firm of Boulton and Watt that revolutionized mechanical power.

Finally, it is important to remain aware of the full context of the Great Divergence. The Enlightenment was more than an Encyclopedia of technical innovations and knowledge. It was also a full-fledged assault on Biblical infallibility, hereditary royal and aristocratic superiority and privilege, and many of the certainties of antiquity. It is striking that the Industrial Revolution was just one of THREE divergences that characterized the 18^th century: there was also the advent of the first large-scale constitutional democratic republics in America and France to replace absolute monarchies, and the displacement of classical/theological theories of nature by modern experimental science. Economic, political, and scientific revolutions went together to create the modern world, and each needs to be framed in the context of the others if we are to fully understand any of them.

In sum, the reasons for the Great Divergence are likely to remain debated, and are almost certainly more complex than a straight line running from the medieval Catholic Church to the Industrial Revolution. I am a great admirer of the works of Greif, Mokyr, Tabellini and van Zanden, but at this point to understand the rise of the West will require less simplification or reduction, and a more willing embrace of non-linear, multi-causal complexity.

Notes

1. Broadberry, S., H. Guan and D.D. Li, “China, Europe and the Great Divergence: A Restatement,” Journal of Economic History 81:3 (2021), p. 958.

2. Riello, G. and R. Tirthankar, Global Economic History 1500-2000, 2^nd ed., London: Bloomsbury Academic, 2024.

3. McCloskey, D. The Bourgeois Virtues: Ethics for an Age of Commerce, University of Chicago Press, 2006; Mokyr, J. A Culture of Growth: The Origins of the Modern Economy, Princeton University Press, 2018.

4. Goldstone, J. A. “Cultural Orthodoxy, Risk, and Innovation: The Divergence of East and West in the Early Modern World,” Sociological Theory 5 (1987), pp. 119-135.

5. Grzymala-Busse, A., Sacred Foundations: The Religious and Medieval Roots of the European State, Princeton University Press, 2023; Scheidel, W., Escape from Rome: The Failure of Empire and the Road to Prosperity, Princeton University Press, 2019.

6. Goldstone, J.A. “Political Trajectories Compared, “ Chapter 18 in The Cambridge World History, vol. 6: The Construction of a Global World, 1400-1800 C.E. (Part 1), eds. J. Bentley, S. Subrahmanyam, and M.D. Weisner-Hanks, Cambridge: Cambridge University Press, 2015, pp. 447-489; Goldstone, J.A., “Divergence in Cultural Trajectories: The Power of the Traditional within the Early Modern,” in Comparative Early Modernities 1100-1800, ed. D. Porter, New York: Palgrave-Macmillan, 2012, pp. 165-192.

7. Goldstone, J.A., “Either/or – why ideas, science, imperialism and institutions all matter in the ‘rise of the West,’” Erasmus Journal for Philosophy and Economics, 9 (2016), pp. 14-24.

8. Lee, J. and F. Wang, One Quarter of Humanity: Malthusian Myths and Chinese Realities, 1700-2000, Cambridge, MA: Harvard University Press, 2001; Tracy Dennison and Sheilagh Ogilvie, “Does the European Marriage Pattern Explain Economic Growth?” Journal of Economic History 74:3 (2014), pp. 651-693.