THE GREAT DIVERGENCE DEBATE

Study The great divergence and what the challenge posed by Kenneth
Pomeranz in the study of Capitalism.
Eurocentric capitalism
Generally Speaking, studies in the evolution and the story of capitalism
have tended to be somewhat Eurocentric in their orientation. Studies in the
history and nature of capitalism began when scholars and observers of
industrialization tried to understand why it came about in Europe rather
than anywhere else and why ever in Britain rather than anywhere in
Europe.
The question why parts of Europe surged ahead economically from the
eighteenth century while much of Asia, Africa, and even the Americas (with
the exception of the United States), lagged behind has been debated for
more than a century. Great thinkers of the nineteenth and twentieth
centuries, ranging from Karl Marx to Max Weber, have addressed this large
and important issue, as have a number of leading historians in our own
times, including Eric Jones, Douglass North, and David Landes. The ‘Great
Divergence’ as it has come to be known is, therefore, a very old question,
but the contours of the present debate were shaped by the publication of
Kenneth Pomeranz’s book.
Scholars have tried variously to explain the exact nature of connection
between Capitalism and industrialisation to figure out why it happened
where and when it did.
Some scholars have tried to argue that Europe was distinctive from the rest
of the world in being uniquely suited to the emergence of the industrial
mode of production. Yet some scholars have argued that Britain was more
suited to the phenomenon than any other European country because of the
more refined form in which capitalism had come to emergence there in
course of the 18th century.
Capitalism beyond Europe
This largely Eurocentric view of capitalism has been challenged by the
works of a series of historians in the last quarter century or so, among
whom the most radical challenge had come from Kenneth Pomeranz which
is the subject of our discussion today.
Pomeranz's argument came in 2parts. He argued that contrary to the
general Belief of scholars of capitalism. Europe as a whole had not
developed into a single integrated capitalist model which was more
sophisticated than anywhere else in the 19th century and that there were
many regions or sub regions in different parts of Asia , especially for
instance the Yangtze Valley in China, Gujarat region of India, Edo area in
Japan that were nearly as developed along the matrices of capitalism as
England had in the 18th century.
The classic writings of Karl Marx and Max Weber argued that the
exceptional path of European economic development emerged from
exceptional European conditions. Europe, in other words, was
fundamentally different in some way from the advanced regions of China
and India, and it was this difference that gave Europeans an economic edge
and put the continent on a different trajectory. Such explanations are often
called ‘structural’ in that they argue for deep social, political, economic, or
cultural differences. Twentieth-century historians approached the problem
of divergence in much the same way as Marx and Weber as they sought to
identify what made Europe different from even the economically advanced
and thriving regions of Asia. Douglass North and Robert Paul Thomas assert
the superiority of the political and economic institutions that emerged in
Western Europe during the seventeenth century. For Eric Jones, Europe
possessed exceptional environmental conditions and a competitive state
system which was not found in Asia. David Landes attributed Europe’s
success to an advantageous culture.
Parthasarathi and Pomeranz, on the other hand, built on arguments for
rough comparability and similarities between the advanced regions of
Europe, China, and India and they argued that there is little evidence for
European exceptionalism. In their view, divergence was the product of
conjunctures between needs and opportunities.
Pomeranz’s book emphasized ecological relief which was provided by coal
and overseas trade. Pomeranz argued that Britain and the Yangzi Delta –
the most advanced regions in Europe and China, respectively – both faced
pressures on the land, which provided the food, fuel, and fibre that were
needed for survival. Britain was able to overcome its land constraint by
substituting wood with coal and by importing foodstuffs and raw cotton
from the Americas. In effect, Britain vastly expanded its land area. The
Yangzi Delta, by contrast, did not have such ecological windfalls. While
China as a whole had plentiful deposits of coal, these were difficult to access
because they were located in Northwest China, at some distance from the
Yangzi region, which was in the south. The external trade of the Yangzi
Delta did not provide the same ecological benefits. (Pomeranz recognizes
that a stream of new machines cannot be explained simply by the
availability of energy to fuel them, and he has no quarrel with scholars who
emphasize the contributions of European science as long as they do not
claim that this is a complete
explanation.)
For Parthasarathi, ecological relief in the form of coal is certainly part of the
explanation and is especially critical for understanding the process of
industrial development from the 1820s – ‘the railway age’, to use the
language of an earlier generation – although he notes that the advanced
regions of India did not face the ecological pressure of shortages of wood
which were found in Britain and the Lower Yangzi. Parthasarathi argues
that ecological relief must itself be placed in a larger political and economic
context in which state policies were important in shaping the coal
revolution as well as technological change more broadly. His approach to
science questions its centrality for European economic change in the late
eighteenth and early nineteenth centuries. He also challenges the
differentiation of science along geographical boundaries and views it as a
global enterprise, arguing that in early modern scientific endeavours, India
was an important contributor and participant. For Parthasarathi, ecological
relief marks a later stage in the onset of divergence and becomes of central
importance in the nineteenth century. In the late eighteenth century,
however, a dramatic reshaping of global trade in manufactures began to
take shape as the foundations upon which Britain displaced India as the
chief supplier of cotton textiles to the consumers of the world began to be
laid. The key to this foundation was technical and organizational
innovations, which, he argues, emerged as a response to the competitive
pressures placed on Britain, as well as other regions, from Indian cotton
manufacturers, combined with state policies of protection. The textile
producers of India and China were not subject to these pressures and thus
did not face any need to innovate, which pressed upon Western Europe.
China
One of Pomeranz’s key claims, and confirmed by others, is the strength of
the agricultural order in the Lower Yangzi. Robert Allen’s reconstructions
suggest that, as late as 1820, productivity per labour day in Yangzi Delta
farming was 90 per cent of England’s and that annual net income for a Delta
tenant family was slightly higher than for a similar English household.
Another study puts labour productivity in Yangzi Delta farming c. 1800 as
equivalent to that of Holland, which was 94 per cent of English levels.
Meanwhile, land productivity was far higher in the Delta than anywhere in
the world except parts of Japan and was roughly nine times that of England.
Thus, the Delta’s total factor productivity was also extremely high and much
higher than in various European countries which did industrialize in the
nineteenth century. Agricultural labour productivity in Germany, for
instance, was about 50 per cent of English levels, and its land productivity
was also lower. These and other points challenge ‘agrarian
fundamentalism,’ which argues that readiness for industrialization must be
a direct function of agricultural efficiency as this makes it possible to free
labour and capital for other uses and keeps food prices, and thus wages,
low. The Great Divergence has generally been well received in China, but
there have also been criticisms, many of which have come from scholars
convinced that peasant production (as opposed to large farms largely
worked by wage labour) cannot have yielded either the surpluses above
subsistence or the flexibility necessary to begin sustained per capita
growth.
Originally, Pomeranz suggested that this was probably still true in 1800,
and almost certainly around 1750.
Study of capitalism begins in the mid-19th century with Karl Marx's study
of the famous book ' Das Kapital' which was a milestone in this regard
because it explained how industrialisation was the quintessential form of
the capitalist Mode of production and how industrialisation as a
phenomenon is inextricably connection with the theory of surplus capital in
a deeply materialistic culture and this was referring of course to Europe.
Towards a later part of the century A German Sociologist Max Weber
challenged this essentially materialistic position by connecting the
Protestant Ethics which predominantly characterised the Dutch , German
and the British cultures which Capitalism as a phenomenon and this ie. To
say the Protestant Countries of Europe were more culturally Equipped and
better equipped to move in the direction of capitalist Advanced than the
Catholic countries of Europe And Britain being adrift from the rest of the
continent had even better set of advantages and that needs to be
understood.
At the same time when Max Weber was talking about his thesis Arnold
Toynbeee began the trend of studying the uniqueness of Britain in the 18th
Century as against the rest of Europe, on the strength of its being the first
country to industrialise.A whole generation of historians then followed
toynbee who built along that line studying in meticulous details as to why
England emerged so uniquely suited to be the first country to
industrialise ,they sought answers in such things as the diverse as the
climate of the British Isles location of coal deposits,colonies that she could
exploit etc.

All of these arguments had value to add but nevertheless satisfied the
crucial question as Why Britain against Rest of Europe and why Rest of
Europe against Rest of the World.
By the middle of the 20th century other influential scholars historians
move exactly in this direction by beginning to contend that England's
industrialisation was part of a much broader socio economic development
that was being witnessed all over Europe and that industrialisation was
actually A PAN EUROPEAN PHENOMENON on account of the capitalist
model of development that was evolutionary in nature rather than England
specific phenomenon which was revolutionary in nature.
Among the most persuasive of such arguments was that of Immanuel
Wallerstein who argued that European Capitalism as a phenomenon which
emanated out of Global System of commercial exchange of which Europe
was the Core and all the other continents happened to be peripheries of it.It
followed that the dynamics generated by that World system impelled
Europe towards a mode of production that was geared towards relentess
growth hence allowing Europe to Resort to mechanisation of production.
The problem with this particular line of argument that has dominated the
historiography of capitalism althrough the 19th and 20th century is of
course that it implies that being so uniquely with all sorts of advantages
Europe alone was able to craft the capitalist paradigm meaning the only
possible capitalist paradigm which inevitably moved in the direction of
industrialization ie. To say the European model was a prototype which all
had to follow and once you follow that line you move inevitably in the
direction of Industrialization.
The other implication was that no other part of the world was capable of
evolving in the manner and direction in which Europe evolved.

Most historians sharing the eurocentric disposition that we have spoken of

this seemed a reasonable proposition considering Europe was afterall the
first continent to move as a whole in the direction of Industrialization.
Kenneth Pomeranz take issue precisely at this point questioning whether it
is right to assume first that all European Countries were necessarily on that
path or to assume that only European Countries happened to be on that
path.
If it was indeed the case how does one explain how some countries fared
better than the rest when it came to catching up.
Pomeranz went on to argue that the development of capitalist features in
the 18th century was not a uniquely European Experience that enclaves the
capitalist mode of production developed in parts of Asia that we have
mentioned ie.to say The Yangtze Valley in China, Gujarat,the Edo region in
Japan and this trajectory of European development to us not unique till as
late as 1800.
It was only in the 19th century Pomeranz Argues as large scale
Industrialization came about that divergence began to emerge in Europe
and other parts of the world.
Role of institutions
Since politics as well as markets structured global trade flows, institutions
are also of importance. And institutions, of course, also figure in other
explanations of East–West divergence. Indeed, the variety of institutional
differences that have been invoked by one scholar or another can seem
endless: domestic political arrangements; property rights; contract
enforcement; fiscal and financial systems; institutions for encouraging,
suppressing, and/or protecting inventions; organizations for trading and
building empires overseas; and so on.
Although East Asian property rights and contract enforcement differed
from those taking shape in Northwest Europe, Pomeranz argues that they
were adequate for the efficient product markets that Smithian growth
requires (i.e., growth based on the expansion of the market and the
extension of the division of labour). When it comes to factor markets, the
previous discussion of agriculture makes it hard to deny the effectiveness of
Chinese (and Japanese) systems for allocating access to land.
The biggest differences related to capital markets were in the area of public
finance. European states clearly had much more effective systems for
raising immediately available funds by pledging future revenues. However,
it is not clear that this mattered much to the overall economic growth in
early modern times, due to three crucial conditions:
a) The overwhelming majority of European government spending was
for warfare, and so was not very constructive in the short run,
although long-run linkages were important).
b) China, and especially Japan, faced much lower and more episodic
military costs; these could generally be met by temporary exactions
which were not large or frequent enough to discourage wealth
accumulation.
c) The technologies available did not require either very large-scale
fixed investment that took many years to fully repay initial costs or
really major public investments in physical and human capital.
Role of science
One of the most contentious areas in the divergence debate continues to be
the contribution of science. Three positions may be identified in the
literature. The first argues that science was not relevant, at least in the early
stages of industrialization, and that it was artisanal knowledge that was
important. Allen and Pomeranz are representative of this perspective. The
second argues that by the eighteenth century – if not even earlier–
European science was critical and that what Europeans brought to the
enterprise of production was in global terms a unique approach to
knowledge and its application. Margaret Jacob, Joel Mokyr, and Patrick
O’Brien may be seen as exemplars of this position. A final position may be
seen as a hybrid of the two aforementioned positions and is articulated by
Parthasarathi. On the one hand, it argues that the application of knowledge
to production was found outside Europe, in this case early modern India;
that in important respects early modern science must be seen as
transcending national or continental frames and emerged from contact; and
finally, this approach agrees with Allen that in the early stages of
industrialization artisanal knowledge was more important than scientific
and that the creation of knowledge of the natural world often followed
technical breakthroughs.
There are many instances well into the nineteenth century of major
technological advances emerging in the workshop, of which the science that
lay behind the new technology was understood only afterwards. The steam
engine is the quintessential example. The scientific principles, what we
know as thermodynamics, were fully worked out long after the steam
engine had been put to work for many decades. Finally, the growing
evidence of scientific interest in seventeenth- and eighteenth-century South
Asia and political and economic interest in knowledge production for its
usefulness mean that arguments for the exceptional nature of European
science have to be rethought. In sum, the differing approaches of economic
historians and historians of science will need to be reconciled if the debate
is to advance.

Pomeranz Thesis
The central thesis is that the trajectory of capitalist development in
Europe was not startingly unusual before the breakout phase happened and
that for a long time in the 18th century the eastern sea board of China was
nearly as close to the transition from proto industry to the next stage as
England had been
POMERANZ argues that the divergence experiences of Europe and the rest
of the world was not brought about by the evolution of capitalism
culminating in the emergence of industrial economy rather it was the
gradual emergence of the industrial economy in the 19th century that
caused the Great Divergence between Europe and rest of the world. So it's
not that the trajectory of Europe's development caused the divergence by
allowing Europe to industrialise but it was rather the industrialisation that
sort of pushed Europe in almost a different lane from the rest of the world.

Thus both the issues of uniqueness of the trajectory of Britain's capitalist

development and that of Europe according to Pomeranz needs to be
revisited. Pomeranz contends that in the early 18th century there were a
number of regions in different parts of Asia yet Alibi where the cardinal
features of proto industrial production obtained much the same as in
northwestern Europe. In the densely populated Valley of China as what
Pomeranz knows the best proto industry developed as much as it did in the
north of England or in the Southern regions of the German speaking lands
given the pressure on agricultural land mounted by its ever burgeoning
population peasantry in the Yangtze Valley resorted to producing Artisanal
activity in order to supplement their incomes. This activity was largely at
the behest of the merchants in nearby towns generating demand for Rural
Manufacturers that was meant to cater to a distant market following, if you
follow almost to the last detail developments in their corresponding
corresponding European cases.So exactly what was happening in 18th
century England Pomeranz argue was also happening in 18th entury China.
Pomeranz Argues that there were several such enclaves of Proto industrial
activity in quite a few parts of Qing China some in tokugawa and Meiji
Japan, Korea and India each other which had a level of sophistication
comparable with the European proto type.

Neither did all parts of Europe nor indeed Britain so proto industrial
activities make way readily for industrial activity. So wherever
mechanisation of production happened it happened on the back of the back
of the proto industrial activity for sure but wherever proto industrial
activity happened it did not necessarily lead to mechanisation of
production.
Pomeranz Argues that it was this essential sophistication of proto industrial
activities in different parts of China Japan Korea and India that allowed the
later to catch on the advance that was made in the west in the 19th century
when they tried to play catch-up in the 20. This catch-up was done within a
short period of time without importing in total either the capitalist mode of
production or even the labour-intensive technology necessarily that
characterised the western industrial experience.

So to come to the point of Great Divergence what was it that caused the
capitalist model as it emerged in North Western Europe to heave ahead of
the rest of the world make the European Experience completely divergent
from the rest of the world, relegating the rest of the world to relative
backwardness
Pomeranz Argues that the divergence didn't come readily into place in the
18th century when mechanisation of production began primarily in the
textile manufacturing sector of britain. It rather took place in the 19th
century when productive capacity of the European Manufacturing sector
Crossed a major hurdle that of the limited nature of land resources..
Collating data from a broad range of sources Pomeranz contended that
historically there has been quite a few growth spurts in the realm of
Economic activity of which the proto industrial era in Europe was just
another example. China had a similar growth spurt in the middle of 18th
century as well as late as the middle of 18th century. But historically most
of the growth spurts have tended to be hobbled by restrictive limits posed
by the use of land resources ie. To say as economy expands population
expands with it till a point where land resources can no longer sustain
that'll level of growth and then the spirt dies out.
The opportunities that unfolded in the 18th century China and other parts
of Asia on account of proto industrial activity were eventually hobbled by
restrictive practices of land use in place in these societies and limits of
expanding productivity of the limited land resources within the given
technogical regime the growth could not become self sustained.
Pomeranz Argues however that as the old world Europe fast approached
the limits of it own growth potential it's access to the land resources of the
New World through Migration in the mid 19th century primarily both
reduced the pressure on land in the old world and unlocked the productive
potential of the new.
British textile industries of Manchester and Lancashire became engine of
relentless growth not on the strength of cotton rather in account of supplies
it received from USA.
markets of the new world were also no less imp than sustaining the drive
for relentless growth.
It was this opening out of Europe into the new World in the 19th century as
large number of Europeans simply packed up their bags and left for
Americas, Pomeranz asserts that constituted the Great Divergence which
propelled the West ahead of the rest. An era of relentless growth was not
the product of new technology alone but also overcoming of limitations of
existing land use allowing growth to become totally relentless for the first
time.
End end end
The classic writings of Karl Marx and Max Weber argued that the
exceptional path of European economic development emerged from
exceptional European conditions. Europe, in other words, was
fundamentally different in some way from the advanced regions of China
and India, and it was this difference that gave Europeans an economic edge
and put the continent on a different trajectory. Such explanations are often
called ‘structural’ in that they argue for deep social, political, economic, or
cultural differences. Twentieth-century historians approached the problem
of divergence in much the same way as Marx and Weber as they sought to
identify what made Europe different from even the economically advanced
and thriving regions of Asia. Douglass North and Robert Paul Thomas assert
the superiority of the political and economic institutions that emerged in
Western Europe during the seventeenth century. For Eric Jones, Europe
possessed exceptional environmental conditions and a competitive state
system which was not found in Asia. David Landes attributed Europe’s
success to an advantageous culture.
Parthasarathi and Pomeranz, on the other hand, built on arguments for
rough comparability and similarities between the advanced regions of
Europe, China, and India and they argued that there is little evidence for
European exceptionalism. In their view, divergence was the product of
conjunctures between needs and opportunities.

For Parthasarathi, ecological relief in the form of coal is certainly part of the
explanation and is especially critical for understanding the process of
industrial development from the 1820s – ‘the railway age’, to use the
language of an earlier generation – although he notes that the advanced
regions of India did not face the ecological pressure of shortages of wood
which were found in Britain and the Lower Yangzi. Parthasarathi argues
that ecological relief must itself be placed in a larger political and economic
context in which state policies were important in shaping the coal
revolution as well as technological change more broadly. His approach to
science questions its centrality for European economic change in the late
eighteenth and early nineteenth centuries. He also challenges the
differentiation of science along geographical boundaries and views it as a
global enterprise, arguing that in early modern scientific endeavours, India
was an important contributor and participant. For Parthasarathi, ecological
relief marks a later stage in the onset of divergence and becomes of central
importance in the nineteenth century. In the late eighteenth century,
however, a dramatic reshaping of global trade in manufactures began to
take shape as the foundations upon which Britain displaced India as the
chief supplier of cotton textiles to the consumers of the world began to be
laid. The key to this foundation was technical and organizational
innovations, which, he argues, emerged as a response to the competitive
pressures placed on Britain, as well as other regions, from Indian cotton
manufacturers, combined with state policies of protection. The textile
producers of India and China were not subject to these pressures and thus
did not face any need to innovate, which pressed upon Western Europe.

China
One of Pomeranz’s key claims, and confirmed by others, is the strength of
the agricultural order in the Lower Yangzi. Robert Allen’s reconstructions
suggest that, as late as 1820, productivity per labour day in Yangzi Delta
farming was 90 per cent of England’s and that annual net income for a Delta
tenant family was slightly higher than for a similar English household.
Another study puts labour productivity in Yangzi Delta farming c. 1800 as
equivalent to that of Holland, which was 94 per cent of English levels.
Meanwhile, land productivity was far higher in the Delta than anywhere in
the world except parts of Japan and was roughly nine times that of England.
Thus, the Delta’s total factor productivity was also extremely high and much
higher than in various European countries which did industrialize in the
nineteenth century. Agricultural labour productivity in Germany, for
instance, was about 50 per cent of English levels, and its land productivity
was also lower. These and other points challenge ‘agrarian
fundamentalism,’ which argues that readiness for industrialization must be
a direct function of agricultural efficiency as this makes it possible to free
labour and capital for other uses and keeps food prices, and thus wages,
low. The Great Divergence has generally been well received in China, but
there have also been criticisms, many of which have come from scholars
convinced that peasant production (as opposed to large farms largely
worked by wage labour) cannot have yielded either the surpluses above
subsistence or the flexibility necessary to begin sustained per capita
growth.
Originally, Pomeranz suggested that this was probably still true in 1800,
and almost certainly around 1750.

Role of institutions
Since politics as well as markets structured global trade flows, institutions
are also of importance. And institutions, of course, also figure in other
explanations of East–West divergence. Indeed, the variety of institutional
differences that have been invoked by one scholar or another can seem
endless: domestic political arrangements; property rights; contract
enforcement; fiscal and financial systems; institutions for encouraging,
suppressing, and/or protecting inventions; organizations for trading and
building empires overseas; and so on.
Although East Asian property rights and contract enforcement differed
from those taking shape in Northwest Europe, Pomeranz argues that they
were adequate for the efficient product markets that Smithian growth
requires (i.e., growth based on the expansion of the market and the
extension of the division of labour). When it comes to factor markets, the
previous discussion of agriculture makes it hard to deny the effectiveness of
Chinese (and Japanese) systems for allocating access to land.
The biggest differences related to capital markets were in the area of public
finance. European states clearly had much more effective systems for
raising immediately available funds by pledging future revenues. However,
it is not clear that this mattered much to the overall economic growth in
early modern times, due to three crucial conditions:
d) The overwhelming majority of European government spending was
for warfare, and so was not very constructive in the short run,
although long-run linkages were important).
e) China, and especially Japan, faced much lower and more episodic
military costs; these could generally be met by temporary exactions
which were not large or frequent enough to discourage wealth
accumulation.
f) The technologies available did not require either very large-scale
fixed investment that took many years to fully repay initial costs or
really major public investments in physical and human capital.
Role of science
One of the most contentious areas in the divergence debate continues to
be the contribution of science. Three positions may be identified in the
literature. The first argues that science was not relevant, at least in the
early stages of industrialization, and that it was artisanal knowledge that
was important. Allen and Pomeranz are representative of this
perspective. The second argues that by the eighteenth century – if not
even earlier– European science was critical and that what Europeans
brought to the enterprise of production was in global terms a unique
approach to knowledge and its application. Margaret Jacob, Joel Mokyr,
and Patrick O’Brien may be seen as exemplars of this position. A final
position may be seen as a hybrid of the two aforementioned positions
and is articulated by Parthasarathi. On the one hand, it argues that the
application of knowledge to production was found outside Europe, in
this case early modern India; that in important respects early modern
science must be seen as transcending national or continental frames and
emerged from contact; and finally, this approach agrees with Allen that
in the early stages of industrialization artisanal knowledge was more
important than scientific and that the creation of knowledge of the
natural world often followed technical breakthroughs.
There are many instances well into the nineteenth century of major
technological advances emerging in the workshop, of which the science
that lay behind the new technology was understood only afterwards.
The steam engine is the quintessential example. The scientific principles,
what we know as thermodynamics, were fully worked out long after the
steam engine had been put to work for many decades. Finally, the
growing evidence of scientific interest in seventeenth- and eighteenth-
century South Asia and political and economic interest in knowledge
production for its usefulness mean that arguments for the exceptional
nature of European science have to be rethought. In sum, the differing
approaches of economic historians and historians of science will need to
be reconciled if the debate is to advance.
Robert Brenner
The burden of our critique is that, from the dawn of the early modern
period, the institutional framework or system of social-property
relations that structured the English economy was radically different
from that of its medieval period (1100-1400) and, more to the point, -
from that of the Yangzi delta during the Qing (1644-1912). As a
consequence, the main economic agents in England and the Yangzi delta
faced sharply differing constraints and opportunities and therefore
found that it made sense to adopt very different economic strategies, or
rules for reproduction. It was this already existing decisive divergence,
not England's capacity to gain access to the American colonies and their
land-saving staple crops, that explains why the two economies distanced
themselves ever increasingly from the middle of the eighteenth century,
during the period of the classical industrial revolution (1750-1850).

Our thesis, stated in the most schematic manner possible, is thus two-
fold. In the Yangzi delta, the main economic agents possessed direct non-
market access to the means of their reproduction. They were therefore
shielded from the requirement to allocate their resources in the most
productive manner in response to competition. As a result, they were
enabled to allocate their resources in ways that, while individually
sensible, ran counter to the aggregate requirements of economic
development, with the consequence that the region experienced a
Malthusian pattern of economic evolution that ultimately issued, in the
eighteenth and nineteenth centuries, in demographic-cum-ecological
crisis. In England, in contrast to the Yangzi delta, the main economic
agents had lost the capacity to secure their economic reproduction
either through extra-economic coercion of the direct producers or their
possession of the full means of subsistence. They were therefore both
free and compelled by competition to allocate their resources so as to
maximize their rate of return (the gains from trade). The region
experienced, as a result, a Smithian pattern of economic evolution, or
self-sustaining growth, that brought it, in the eighteenth and nineteenth
centuries, to the edge neither of demographic nor ecological crisis, but to
the industrial revolution.
Pomeranz sees no reason to view either the institutional framework that
obtained in the Yangzi delta or that which prevailed in Britain as more
propitious for economic development, because both provided for well
specified and secure property rights, as well as processes of family
formation that Pomeranz believes were compatible with the
requirements of capital accumulation.
In the Yangzi delta, by virtue of the reigning system of social-property
relations, both of the main economic agents-peasants and landlords-
possessed direct, non- market access to the means of their economic
 reproduction. As a result, they were under no compulsion to buy
necessary inputs on the market, could therefore avoid dependence upon
the market, and were thus freed from the necessity to enter into
competitive production to survive. (which is in no way to imply that they
wished to avoid involvement in the market). Thus, shielded from the
pressure of competition, they were enabled to allocate their resources so
as to pursue certain goals that were in their own interest but that were
nonetheless non-economic in the strict sense of maximizing the gains
from trade.
The question why parts of Europe surged ahead economically from the
eighteenth century while much of Asia, Africa, and even the Americas (with
the exception of the United States), lagged behind has been debated for
more than a century. Great thinkers of the nineteenth and twentieth
centuries, ranging from Karl Marx to Max Weber, have addressed this large
and important issue, as have a number of leading historians in our own
times, including Eric Jones, Douglass North, and David Landes. The ‘Great
Divergence’ as it has come to be known is, therefore, a very old question,
but the contours of the present debate were shaped by the publication of
Kenneth Pomeranz’s book of that title in 2000.