Economic history - What was the Great Divergence? | Free exchange | The Economist - 0 views
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Great Divergence divergence boom capitalism industrialization west european history success culture politics geography economics economic
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by the 19th century, things were rather different. Western Europe and parts of North America had become fabulously wealthy. Almost everywhere else was horribly poor. Economic historians refer to this as the “Great Divergence”
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According to James Blaut, an American historian, the year 1492—when Christopher Columbus landed in America and set off centuries of European colonialism—“represents the breakpoint between two fundamentally different evolutionary epochs”. From 1492 onwards, Europe pulled in raw materials, currency and labour, and deliberately held back the rest of the world.
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Thomas Sowell, at Stanford University, points to the British as responsible for no less than the invention of freedom. In Mr Sowell’s view, the British were a shining light of economic development, which other countries gradually learnt to imitate. (Fascinating new research explores a similar theory: that learning best practices from others is essential to growth and becomes harder the greater the cultural distance from economic leaders.)
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Max Weber, a German sociologist, thought he had the question nailed. In his book “The Protestant Ethic and the Spirit of Capitalism”, published in 1905, Weber argued that religious factors were crucial for spurring European economic growth. Weber's view centred on Calvinism—a branch of Protestantism—and argued that it encouraged Europeans to be thrifty, rational, and concerned with material gain. Such values did not exist outside Europe where, according to Weber, material wealth was not revered and entrepreneurship was seen as subversive.
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Jared Diamond, at the University of California, Los Angeles, suggests that environmental factors played a crucial role in the European take-off. Mr Diamond argues that Europe was uniquely endowed with domesticable plants and animals. Its population was also more immune to diseases. These factors led to higher productivity and, crucially, higher population density. The upshot? The development of institutions such as cities, bureaucracies and literate classes, which contributed to economic growth.
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The development of "open science" in the 16th century helped with the spread of economically useful ideas
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Another theory suggests that the Glorious Revolution in Britain of the 1680s, which reduced the power of the monarch, was a crucial stepping-stone in the country’s economic development. After the revolution, people became less worried that their profits would be summarily seized by the Crown, as they had been in the past. And so they became keener to work hard. This theory is at the heart of the book "Why Nations Fail", by economist Daron Acemoglu and professor of government James Robinson.
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the causes of the Great Divergence are “overdetermined”. Many different factors intertwined to create European dominance—and no single factor would have been enough on its own. This conclusion might seem like a typical academic fudge. But the point is that the Great Divergence was not simply caused by European culture. Rather, it emerged because a business-friendly, open and innovative economy was created—mostly by accident.