Economic historians and historians of Asia have been deeply involved in a debate with long roots: Why did modern economic development occur first and most consistently in western Europe in the seventeenth century, and why did China not capitalize on its many advantages in the early Qing Dynasty to take the lead? Those advantages included advanced scientific and medical knowledge; extensive population; and an effective central state governing a vast population.
There has been a strong case made by a group of historians led by Ken Pomeranz, Bin Wong, and James Lee that this way of characterizing world history embodies a host of misconceptions, including the idea that there is one best pathway to modern economic development (link). Pomeranz’s The Great Divergence: China, Europe, and the Making of the Modern World Economy. and Wong’s China Transformed: Historical Change and the Limits of European Experience led the way in this line of thought. And this group also challenges the idea that the Chinese economy was backward in 1600; instead, they argue that agriculture was comparably productive and that the standard of living in China was also comparable to the standard of living of working people in western Europe. This group argues that more specific features of the historical setting led to the “great divergence,” including New World metals, the labor power of slaves, and the fortuitous geographical location of deposits of coal in Great Britain.
Bin Wong and Jean-Laurent Rosenthal took up this line of thought in Before and Beyond Divergence: The Politics of Economic Change in China and Europe. They disagree with a number of the positions defended by Pomeranz and Wong, and they argue that Late Imperial China was in fact a conducive business environment for modern economic growth, and that it possessed long-distance credit institutions that would have been comparably effective in supporting the expansion of business activity in China. But if it wasn’t differences in the economic environment that brought about divergent pathways in Europe and China, then what was the cause of divergence? They point to a new factor: the political and military competition that Europe experienced and China did not (link).
Prasannan Parthasarathi brings a new voice and new perspective into this extended debate (Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600-1850). He focuses on India rather than China, and he argues against a number of the historiographic premises that infuse the current debate. In particular, he challenges the idea that there must be some small number of important structural or institutional differences that explain the great divergence — the acceleration of modern growth in Europe and the continuation of pre-modern institutions and slow growth.
Parthasarathi takes the view that there is no single large factor that accounts for differences in economic development among Europe, China, and India. He argues instead for a large number of contextual and contingent factors that were present in the three settings, leading to significant differences in development.
More critical for the arguments of this book, however, are findings that the economic “situation” or context shapes the decisions, choices and actions of individuals. These advances in economic thinking indicate that divergent paths of development need not imply — nor require — deep differences in economic institutions, for context matters.
The approach to divergence taken in this work moves away from seeing economic development in the eighteenth century in binary terms, as either leading to modern industry or its failure. Instead, it points to the existence of plural paths of change, which were the products of the pressures and needs that the dynamic and diverse economies of Europe and Asia faced. (1)
Parthasarathi offers an innovative set of methodological principles for comparative economic history.
First, in the seventeenth and eighteenth centuries there were a variety of economic and political goals which produced plural paths of development. Second, different paths of economic change were the products of human agency and choice, and were shaped by social, political and economic context. … Finally, there is a political dimension to economic life. State actions were critical in determining paths of development in both Europe and Asia from the seventeenth to the nineteenth centuries. (9)
He finds that two pressures in particular account for a lot of the difference in development between Europe and Asia.
The first emanated from the global trading system, in which the position of Europeans was very different from that of both Indians and Chinese. …
The second pressure that differed across Europe and Asia lay in the realm of ecology, specifically in the supply of wood. While Britain and parts of France and central Europe faced shortages of wood, which was essential for fuel, building material and countless other uses, Scandinavia and Russia had plentiful supplies. Similar differences existed in Asia. (10)
Like Pomeranz and Li in the case of China, Parthasarathi finds that the standard of living in Bengal was comparable to that of England in the eighteenth century. He provides estimates of “grain earnings” for weaving labor in Britain, South India, and Bengal in mid-eighteenth century: 40-140, 65-160, and 55-135 lbs. per week (table 2.4). The ranges for both Indian wage estimates are higher, not lower, than Britain. This challenges the “immiseration” thesis that powered the Malthusian and Smithian interpretations of Asian economies. (Parthasarathi concedes that the estimates of real wages across countries are exceptionally difficult for the early modern period, and that Robert Allen’s estimates of Indian real wages are substantially lower.)
Parthasarathi also argues, surprisingly, that more recent price data about finished cottons show that Indian cottons did not enter the English market so strongly because they were cheap, but because they fulfilled specific market needs for higher quality textiles.
In many markets around the world Indian cottons were more expensive than locally made cloth. This was the case in Southeast Asia where low-quality cotton cloths were manufactured in large quantities, but higher-quality Indian cottons, despite being more costly, were in great demand. (34)
In the late seventeenth century consumers in Europe embraced the cotton textiles of India for their beauty, convenience an d fashionability. (89)
But European manufacturers were fast to imitate Indian cottons:
The future was to be with cotton, however. From its home in the Indian subcontinent, the art of turning the cotton boll into cloth of extraordinary beauty, comfort and versatility migrated to Europe.Imitation in the seventeenth century led 150 years later to Western Europe becoming the center of the world’s cotton manufacturing. The migration of this industry marked a great transformation in the global economy. (89)
This transformation involved several processes of great importance, including technology transfer and innovation and expansion of the slave trade.
Parthasarathi’s treatment of the role of scientific and technical knowledge in India is particularly important. Parthasarathi finds that the status of science and technology in India was substantially different than the standard narrative would have it. In Mysore, for example, he finds:
There is extensive evidence for a push towards agricultural improvement, with policies designed to expand irrigation, bring fertile land under cultivation and promote the adoption of valuable cash crops, including sandalwood, sugar and black pepper. A sophisticated system of revenue incentives was designed to meet these aims. In addition, under Tipu Sultan, efforts were made to improve the breeding of cattle, which were critical not only for agricultural operations, but also for the transport of goods and military supplies. The push for improvement in Mysore also extended to manufacturing. The European-style military that Mysore sought to create required the expansion of metal-working facilities, especially iron. In the 1780s, orders were issued for the construction of twenty new iron-smelting furnaces within the kingdom. Mysore also developed a major armaments industry, which cast cannon in both brass and iron. (207)
The stereotype of Indian “backwardness,” like its cousin view of Chinese “stagnation,” is not grounded in the facts.
Parthasarathi’s book is detailed and careful; but more importantly, it pursues economic history through a new lens. The reader is led through parts of the story that are familiar — the importance of coal for Britain, for example — but is then challenged to look at these developments in different ways. Parthasarathi offers a number of surprising but carefully supported claims: India’s cotton industry was substantially more sophisticated than the standard account would have it. The standard of living for Indian workers was comparable to that of English workers. The policies of the states of Britain, France, and the Ottoman Empire had substantial effects on the nature and course of development. Pursuit of scientific and technical knowledge was an explicit priority for the states of India from the seventeenth century forward (186). Better history of science is needed in Indian history.
Almost all of these findings challenge one or another part of the standard narrative of economic development across Eurasia. Parthasarathi’s work is an important contribution to the debate.