Undergirding the development of modern Europe between the 1780s and 1849 was an

unprecedented economic transformation that embraced the first stages of the great Industrial
Revolution and a still more general expansion of commercial activity. Articulate Europeans
were initially more impressed by the screaming political news generated by the French
Revolution and ensuing Napoleonic Wars, but in retrospect the economic upheaval, which
related in any event to political and diplomatic trends, has proved more fundamental. The
Industrial Revolution often referred to as the take off period in Rostov’s growth
model,essentially denotes the transformation of medieval cottage based manufacturing to
large scale capitalist industries.This encompasses the replacement of labour intensive
techniques with machine and technology intensive production methods.It not only involved
the shift of the manufacturing methods, technology and tools that were utilized but also a
shift from a rural subsistence based production system to a urban centered consumer
environment led by aggregate demand.

During the last decades, there has been a deep and intense debate on the origins of the Great
Divergence between the Economies of Europe and China. This paper aims to retrace the
thesis elaborated by different authors over the time. We will start considering classical
economists and then move to the California School and its main historian, who was Kenneth
Pomeranz. To conclude, we will briefly consider some thesis that intend going further
Pomeranz.

Adam Smith (1923-90) can be considered the father of economics and classical liberalism.
He explored this topic in his book titled “An Inquiry into the Nature and Causes of the
Wealth of Nations”, written in 1776. According to Smith, the keys to human prosperity were
free trade, limited government, competition, and open markets. He suggested that a minimal
government (with few policies) led to free trade regulated only by the “main invisible”,
which was a metaphor conceived by Adam Smith to describe the self-regulating behavior of
markets. The openness to trade generated by this model (and a higher division of labor) led to
a surplus of products making decrease prices. Thus, anyone could afford more and the total
wealth increased (the so-called “universal opulence”). To conclude it is clear that, according
to Smith, will succeed those nations (or areas) presenting a minimal government that will led
to the openness to trade

The thesis of Karl Marx (1818-1883) is really well known. Capitalism and free trade
(proposed by Pomeranz) will concentrate authority and assets in the hands of few people
leading to social division in two classes: workers and capitalists. Marx highlighted the
differences between the capitalist mode of production and that of other countries as for
example the Asiatic mode of production. He concluded that Western Europe was the first
area to experience the transit from feudalism to capitalist economy and those European
countries, the more developed, would have the greatest inequalities. Thus, he explained
differences among countries by considering the production model, which in turns depends on
the social structure of each nation.
Pomeranz (1958) discussed his thesis about the Great Divergence in his book titled “The
Great Divergence: China, Europe, and the Making of the Modern World Economy”. The
central question that he tried to answer concerned the main reasons that led Western Europe
(especially Britain) to have such a unique path of economic development. He used a different
research methodology if compared with the past. In fact, he focused on regions of comparable
size, population, and economic vitality in Eurasia in order to avoid distortions of scale when
using nation-state as a unit. Furthermore, he decided to focus on income levels and living
standards for demonstrating his thesis.

Kenneth Pomeranz suggest the Great Divergence started after 1750-1800Pomeranz, in order
to better sustain its thesis, first criticizes three false common reasons for the divergence and
then suggests its causes. The first common reason regards accumulation. Since Europe had
higher livestock per capita, it means it had more capital, with positive implications for
agriculture, transportation and nutrition. Surely, this is not true, because Pomeranz argued
that income and living standards were close until 1800. The second regards technology.
However, Pomeranz shows that there is no evidence on higher productivity gains in Europe
during the pre-Industrial Revolution. Furthermore, several non-European societies were
ahead in technologies such irrigation or the use of energy. The most important European
innovation regarded land-saving techniques and fossil fuels. The third concerns institution.
Coal was the driven factor, the main cause of Industrial Revolution. In the European context,
Britain was the sole to present a large availability of coal and the lowest transportation costs,
thanks to the ready availability of efficient water transport. To conclude, Pomeranz argues
that the divergence between development and involution in Europe and China did not occur
until after 1800. This divergence is explainable in terms of both geographical lucky and
fortuitous discoveries rather than differences in income, population, technology or even
institutions.

Further analysing several factors contributing to the Industrial revolution as highlighted

above ,The agricultural revolution in Britain had direct impacts on the industrial revolution
that followed . In fact, it is right to be able to theorise that the consequences of the
agricultural revolution became the reasons for the industrial revolution in Britain.

The agricultural revolution led to the transformation of small scale subsistence peasant
agricultural sector to a capitalist large scale agricultural sector .Some of the reasons for the
agricultural revolution such as the enclosure movement had direct impact upon the industrial
revolution.It freed a lot of excess labour and allowed previous small scale farmers to launch
into the unchartered waters of large scale agricultural production. this helped the farmers of
large lands increase their profits , which they reinvested into the economy leading to
increased investments and technological inventions.

New tools and techniques were introduced resulting in increased productivity, geographical
specialization of crops was also done.

Moreover, inter-village trade did not exist over long distances since roads were often poorly
built or at times non existent .Hence travelling was risky and inconvenient.As a
result,products were produced on a small scale to satisfy the needs of the village or shire.The
need for large scale production of goods arose due to te population increase as a result of the
agricultural revolution as well as foreign colonies that served as a resource –acquiring
markets for the sale of fnished products as well.

Several factors contribute to the Industrial Revolution in Britain.Firstly looking at availability

of resources in Britain , essential and indispensible resources were abundant in Britain and
these resources were utilized for the Industrial revolution . Some of these were coal,iron
ore,lead,copper , tin,limestone and water power.Traditional source like firewood were also
utilised during this period. The availability of such resources greatly helped in reducing costs
involved in the purchasing of resources and transporting them from foreign countries, thus
enabling mass production at low costs . Coal was abundant and cheap availability made
production easy.Before long coal and iron ore became the lifeblood of the Industrial
Revolution. The metallurgy industries facilitated the production of large scale iron and steel
and aided in industries such as ship building.The availability of such resources also facilitated
the creation of new inventions which required existence of natural resources . The availability
of resources ensured the sustenance of the initial boost of industrial production. This helped
in the production of a surplus output that was exported to earn higher profits.

The Agricultural Revolution led to many groundbreaking methods of farming .Together with
the enclosure movement – which required less people using more capital intensive
production, agricultural production became even more efficient and made more profit for the
property owner.Inventions related to agricultural productivity such as the seed drill and
Townshend’s method of crop rotation kept all the soil nutrients rich. All these factors led to
the productivity with lesser use of labour inputs ,freeing a lot of labour from agricultural
sector.Many farmers were put ut of work and had to go to cites to find employment. There
was also a population growth in Britain and consequently the excess of labour force was
absorbed by factories that were newly created .Thus factories continued to grow and expand
their production base.

Innovations were among the key drivers for the industrial revolution.Such historians denote
the emergence of innovations from the time of the renaissance but the economists consider
new and improved innovations to have started from agricultural revolution and moved on to
the industrial sector with the advent of time.

For example the cotton industry ,which was the first industry to have been modernized during
this time,saw new inventions being introduced . In the course of the 18 th century,James
Hargreaves’ Spinning Jenny , Richard Arkwright’s Water Frame and Samuel Cromptons
Mule played an important role in speeding up the production process and increasing net
output and productivity levels.Many of the inventions related to transportation were powered
by James Mill’s Steam Engines. Thus each invention spawned new technological
developments in related fields.

Innovations and research activities to enhance levels became the sole focus of many inventors
during this time .As more and more capital came to be used in the production process, the
production process itself became capital intensive .Labour began to be more specialized in
performing specific and fixed tasks in a production line instead of performing multiple tasks
in the production of a good .Thus innovations saved time, were more efficient and produced
higher quality products resulting in greater profits for the owners of factories. Innovations
related to transport such as steam boat and steam engine spurred internal trade .Better and
improved ship building ,with the use of iron and other metals , enabled better access to
colonies. As each of the varied industries began to improve on existing inventions and create
new inventions the process of industrialization received a great boost.

Mercantilism created a rich middle class that was ready to spend money on creating large
factories . Mercantilism had created a rich middle class that was set on the desire to expand
their profits .As population grew , the middle class saw an opportunity to increase their
profits ,due to the rapid rise in demands for goods . thus , they increased the use of capital
goods to enhance the levels of production. The rich middle class emerged on the onset of
mercantilism spent their profits on large scale factories which produced goods in large
quantities.Indeed ,if it was not for these investments , the industrialization process may not
have taken place. This also led to the altering of the domestic sphere , including both genders
in the production of goods.

During the 17th and 18th century the political conditions in Britain were stable and relatively
peaceful . There wasn’t any political upheaval as in France or Italy and people in Britain
enjoyed a peaceful administration. The stable political conditions made Britain a safe haven
for investments in the production and manufacturing field .Labour laws were not that hard
and wages were relatively a minor burden. Moreover the concept of “Laissez – Faire”
introduced by Adam Smith encouraged less interference by the government and allowed
private investors and factory owners to carry out their production activities relatively
unhindered . The system helped the economy of the country grow but harmed the workers

To conclude we see a plethora of factors that contributed to the Industrial Revolution and no
one model can alone be held as the absolute explanation of the origins of Industrial
Revolution, but it is correct to uphold the fact that Britain led the way in terms of the
Industrial Revolution.