Unravelling one of the great puzzles of economic history – why did economic development take off three centuries ago in North West Europe, not South East China?
In Beijing’s Forbidden City, one courtyard leads to another in a seemingly endless series. To the north, the Great Wall winds along mountain ridges for 2,500 miles. These wonders of the world are an illustration of the tribute exacted from a poor population by an imperial court concerned only with its own aggrandisement and preservation.
But that is not enough to explain one of the great paradoxes of economic history: China’s relative decline in the five centuries that followed construction of the two monuments to the Ming emperors’ reign.
At that time, the country they ruled was technologically equal to the states of western Europe. Even at the end of the 18th century, the gap between average incomes in China and Europe was not large.
In technology and resources, south-east China and north-west Europe were equally poised for development. But then came what Ken Pomeranz, the economic historian, called the Great Divergence*. Why did rapid economic growth occur in Europe and not in China?
Mr Pomeranz emphasises the easier availability of coal. But this is surely a proximate explanation rather than a fundamental cause. Europeans had readier access to the resources that were central to their particular course of economic development.
China’s resources were different: it exploited its great rivers as Europe had never done, or needed to. The fertile ingenuity of a developing economy makes use of whatever resources are to hand.
But the use of water involved central organisation, unlike the use of coal and steam. This points to the vital issue: Europe was a pluralist society in many ways that China was not. Today’s visitor to China is daunted by the scale of a single country of 1.3bn people, while Europe’s 400m are divided among dozens of states.
Unity is a benefit if you seek to marshal the scale of resources required for the Great Wall. But that same unity works against diversity in intellectual life, political institutions and unity of commercial and technological experiment. And the interaction of these processes of experiment and change is central to economic growth. Pluralism in ideas followed the European Renaissance and spread to science and technology. Unified religious authority broke down with the Reformation. Centralised political power in Europe was only ever exercised in the short-lived successes of conquerors such as Napoleon.
In China, however, the Ming and Qing dynasties were successful for centuries in maintaining a single authority. And with that came the deliberate suppression of independent thought and local experiment.
Imperial China gave the English language the term “mandarin” – an official whose fine intellectual skills, like those of Chinese bureaucrats, are directed not to the advancement of new ideas but to their critical scrutiny.
David Landes reports the poem composed by the Chinese emperor to celebrate the visit of a European mission two centuries ago:
“Now England is paying homage
My Ancestors’ merit and virtue must
have reached their distant shores
Although their tribute is commonplace,
my heart approves sincerely
Curios and the boasted ingenuity of
their devices I prize not!”**
This man exercised a degree of authority with few parallels in the history of the world – a centralism from which China has only recently begun to escape. When Chinese imperial power collapsed at the start of the 20th century, it was replaced not by disciplined pluralism but by chaos. Mao’s regime imposed still more dogmatic uniformity. Only when such uniformity broke down after his death did China begin to recognise the economic benefits of pluralism. And in the bustling streets around the Forbidden City today, you can see the formidable consequences.
*The Great Divergence, Princeton University Press
**The Wealth and Poverty of Nations, Little Brown This column now appears every Wednesday