This book is a nineteenth-century sequel to my ReOrient: Global Economy in the Asian Age
(1998), which stopped in 1800. I now join Kenneth Pomeranz (2003) when he writes, “I would emphasize an effort to re-think the 19th century,” which, as he observes, “has been abandoned by a whole generation of scholars.” Also, Edmund Burke (2000: 1) notes, “Why the nineteenth century? Because it seems to me to be the piece that has thus far been left out of the rethinking of modern world history. . .. We’re still far from being able to devise a truly world-centered historical framework for the nineteenth century.” A sad comment on the state of the art on what Ken Pomeranz (2000a) has called The Great Divergence
in the nineteenth century are the 130 pages of “Conference Proceedings” that reproduce word by word the “Discussions at the Conference” in search of explanations particularly of “World Economic Primacy in the 19th Century” (Crouzet and Clesse 2003). This major international conference was sponsored by the Luxembourg Institute for European and International Studies in 2002. The speakers at the conference included such luminaries of “world” economic and other history as Moses Abramovitz, Martin Bronfenbrenner, Rondo Cameron, Charles Kindleberger, Angus Maddison, Peter Mathias, William McNeill, Joel Mokyr, Patrick O’Brien, W. W. Rostow, and Jan de Vries, as well as the editors and others. Yet every one of them referred exclusively to characteristics of Britain and other countries in what one of the editors called “a standard discussion” (Crouzet and Clesse 2003: 370) and in which a participant still insisted on and alleged that “At the mid-19th century
. .. primacy [of Britain] is important and I think unprecedented in its degree” in a half dozen respects and its “structural change is very rapid, idiosyncratic” (351–352). Yet throughout the discussion, not one reference was made to the structure, operation, and transformation of the GLOBAL WORLD political economy within which Britain rose from being a relatively marginal player to momentary “primacy” (but not yet at mid-century) and within a couple of generations declined again. This is truly a case of looking for one’s watch not where it was lost, but only where the all too dim and narrowly focused Euro-American street light is.
John F. Kennedy told us that “the great enemy of truth is very often not the lie—deliberate, contrived, and dishonest—but the myth—persistent, persuasive and unrealistic” (Frank 1998: x). If that is true then the myth has certainly been persistently and persuasively so, to meld the titles of two books, about The Nature and Causes of the Wealth and Poverty of Nations (Smith 1937  and Landes 1998), for the received and still persistent mythological “explanations” of how The Great Divergence emerged out of the structure, function, and transformation of the world economy in the nineteenth century are altogether wide of the mark. It was this global economy that really gave rise to a “single world-wide system which also provided the transfer, along round-about routes . .. [of wealth, income, and entropy] to particularly the United Kingdom . .. by the much less adequately understood system of multilateral settlements of all classes of international accounts” (Hilgerdt 1942: 9).
They seem to be even less understood today after six additional decades of mythology than when Folke Hilgerdt analyzed them for the League of Nations. However, it is even more important to understand this global system and process today, after its breakdown during the two World Wars, the intervening “Great Depression,” and the postwar “American Century,” because of efforts to revive and reconstruct it at the turn of the twenty-first century.
Therefore as in the previous book, we may suitably begin by challenging and debunking a whole series of myths about The Nature and Causes of the Wealth and Poverty of Nations in the nineteenth century. Unfortunately, many of these myths about the nineteenth century still have wide currency. Of course, in this brief chapter it is possible to confront these myths only with a limited amount of evidence. The bulk of the evidence to bury these myths, as well as to support an alternative explanation, is presented in the chapters that follow. However, even the limited evidence marshaled in this chapter can serve to introduce an alternative explanatory scheme.
The tired old mythology about the “European miracle” (Jones 1981), recently resurrected and popularized by Landes (1998), has already been laid to
rest. Among others, Blaut (1993), Goody (1996), Wong (1997), Frank (1998), and Pomeranz (2000a) have challenged and overturned first its historical veracity and then the therefrom-derived “scientific” basis of Western historical political and economic social theory. The authors thereof range from Marx to Weber and their followers to even Wallerstein (1974) and Frank (1978). Regarding the period before 1800, the debunking is already substantially done and is not worthy of further attention. However, the nineteenth century remains to be rethought, researched, and rewritten.
Our (mis)understanding of the nineteenth century is replete with dozens of myths and encased in a whole mythology about The Rise of the West that centers on an alleged early “industrial revolution” in Britain spurred by mechanizing the cotton textile industry already in the late eighteenth century, and then carried by coal and steam in the first half of the nineteenth century. By that time, it is alleged that Pax Britannica “ruled the waves,” was “the workshop of the world,” and had its highest income. So for the past century and a half and still in the above-cited conference, the almost exclusive question has been “how Britain did it.” But as long as we ask the wrong question, we are certain to get the wrong answer.
Fortunately, some of the myths emerging from and underlying this question have been questioned themselves, and a few have even been laid to rest. But even these have a habit of cropping up again, even by writers who momentarily see the light but then inconsistently revert to darkness because they seem unable to kick the habit. And excepting the newly formed and baptized “California School,” and a very few colleagues elsewhere (whom we will meet below), no one has yet turned the question around to ask either why the West did not remain like the rest, nor even less when and what happened and how and why the world political economy turned upside-down to make East and West change places during the nineteenth century. That is the question posed and the answers sought in this book.
The most widespread and in many cases still firmly held myths are the following:
The Myth of "The Gap": When and How Much Did the Divergence Really Take Place?
The previously existing world economic landscape, if not already after 1500 as many claim, including Wallerstein (1974) and Frank (1978), was qualitatively transformed in the period 1750–1800, and certainly soon after 1800, as asserted among many others including Wolf (1982) and Frank (1998). NOT SO:
There is virtual unanimity on the thesis that around 1800 average economic productivity, output, and income per capita were substantially the same around the world. The disputes are only about whether the West-East ratio was 2:1, 1:1, or 1:1.2–3, and especially about whether China was ahead of Europe. A century later, GDP had grown sixfold, and GDP per capita threefold in Western Europe, while they remained almost stable and even declined in Asia (see Table 1.1
). So when did this Gap
(Marks 2002) or Great Divergence
develop? The received wisdom had it that this gap began already before 1800, around 1800, and certainly by 1850. But further examination of the evidence in the first half of the nineteenth century finds less of a difference in the extent of wealth or in established relationships, with the notable and important exception of the place and role of India. The East Asian and Chinese–centered trade-tribute commercial system analyzed by Hamashita (1988) and examined in ReOrient
(1998) survived into the nineteenth century. Pritchard (1997: 9) summarizes the growth of the absolute gap in incomes from US$1,286 to $12,662 between the few rich and the many poor from 1870 to 1890, or from a gap of 8.7 to 45.2. The 1890s saw an accelerated return to global relations and expanding income differentials analogous to those before 1913. By 1895, one hour of labor in the United States was being exchanged on the world market for eighty hours of labor in India, or already double that of 1880 (Historical Marxism
A historically correct answer to when the divergence, or the replacement of Asia and especially China by Europe and particularly Britain, took place is of cardinal importance not only to know the past, but also to understand the present and foreseeable future. But the answer remains beclouded by widespread historical amnesia. ReOrient (1998) documented and rejected opinions that put particularly China into the historical doghouse, as by Maddison in his book The World Economy: A Millennial Perspective (2001). General MacArthur, as head of an occupation force in Japan, suggested in 1951 that “the gradual rotation of the epicenter of world trade was headed back to the Far East whence it started many centuries ago” (Arrighi et al. 1996: 97). Even latter-day new China hands and sinophiles like Arrighi and his coauthors still write, “After several centuries of Western hegemony, leadership in the global economy is reverting from Western to non-Western hands” (Arrighi et al. 1996: 99). But the evidence examined in this book suggests that this shift from East to West really started only one century and a half ago and the intervening interregnum mostly lasted only one century.
The new place in the world of (part of) Europe and North America was not foreordained nor easily achieved. Geyer and Bright (2000: 61) correctly note that
European initiatives collided, overlapped, and interacted with dynamics of parallel crises in other regions and with strategies of competitive self-improvement that were devised to shore up regional power and to fend off or contain external pressures. Historiographic attention [if any!] focuses on East Asia, but elements of these struggles can be observed in the Indian, Persian, Arab, African and Latin American worlds as well.
This book generally, and specifically the remainder of this chapter and the region-by-region reviews in Chapter 3
(1750 to the 1810s) and Chapter 6
(1810s to the 1870s), brings ample evidence to support this statement. It shows that resistance to European political economic initiatives was largely successful in all these areas until at least the mid-nineteenth century and even later until 1870. For now, only a brief summary will have to suffice.
Cohen is among the revisionists and yet he writes,
Clearly the mid-nineteenth century was a watershed in the history of international relations. The East Asian international order over which China had been at least nominally dominant for thousands of years had been shattered. Western power had proved itself superior to that of Asia and had enabled a relative handful of Europeans and Americans to overcome the resistance of hundreds of millions of Asians. Advanced military technology, improvements in military discipline and supply, the coopting of native forces, especially from the Indian subcontinent, contributed mightily to Western success. (Cohen 2000: 271)
But it is by no means clear that even the watershed Cohen observed was in the mid-nineteenth century. Many of the changes Cohen names occurred later. Indeed, the transformation of the structure and operation of the world economy, including within it the absolute and relative places of the “North” and the “South,” really only began around 1850, and it has not been as extensive and as profound as we have been led to believe. More careful examination belies the now popular beliefs and “scientific” opinion about the supposed Western penetration of the Asian economy in most of the nineteenth century. Imperialism and colonialism, along with their consequences, cannot be supported or excused, but must nonetheless be reviewed to see if we face a myth regarding Western triumphalism over some alleged “traditionalism.” On the evidence simultaneously, we may need also to reconsider much of the nationalist appeal to and “defenses” of “traditional” values and its exaggeration of the deformation of “third world” economies.
Even Cohen offers a revisionist all-Asia summary that stresses both increasing weaknesses but also continuing strengths:
Obviously, the erosion of central power in China and Japan also facilitated Western inroads. By 1870, most of East Asia had been opened to Western goods and the influence of Western ideas. Some of the peoples of the region, most obviously those of Southeast Asia, had lost control of their territory, even of their lives. On the other hand, resistance to the Western-organized international system remained strong. Korea, into which Western influence dribbled indirectly from China, had repelled all efforts to force open its doors to trade with the Europeans and Americans. Japanese central authorities had concluded that a conciliatory—and dilatory—policy was the wisest response to evidence of Western might, but powerful provincial forces were determined to fight, to “expel the barbarians.” China, crippled by internal strife, the Qing dynasty arguably dependent on Western support for its survival, retained its territorial integrity. Chinese students of statecraft and many Chinese officials were already laying the groundwork for a movement to strengthen the country and enable it to stand up to its foreign tormentors. For Siam, appeasement had worked, and skillful leadership gave its people reason to hope for their continued independence. The Vietnamese continued to resist French imperialism vigorously. (Cohen 2000: 271)
Note, however, that Cohen designates the crucial date of changeover as not earlier than 1870, and even after that resistance remained and there was a renewal of economic growth and even of industry in Asia.
The continued expansion of production and often of income in the regions of Asia reviewed above (and examined in detail in Chapters 3
to 5) for the century from 1750 to 1850 was accompanied by the continued growth of intra-Asian trade. Moreover, that trade also continued to be primarily in Asian, and not European, hands. We have already noted above that Southeast Asian trade grew within the region and to China, the latter in mostly Chinese ships. European shipping actually declined between India and Southeast Asia (Frank 1998: 92–97), but Asian trade may have increased both relatively and absolutely (Reid 2001: 50). Trade in the North China Sea also continued.
Particularly in East Asia, which had been organized by and into the China-centered trade-tribute system (see my ReOrient and Hamashita cited therein), the intrusion of the West has never really been more than marginally at its margins. Except for the Philippines and Indonesia,
all the region’s most important nations . .. from Japan, Korea, and China to Vietnam, Laos, Kampuchea and Thailand had all been nations linked to one another long before the European arrival . .. [both] directly or through the Chinese center, by diplomatic and trade relations and held together by shared understanding of the principles, norms, and rules that regulated their mutual interactions as a world among worlds. (Arrighi and Silver 1999: 287)
Moreover, the ever-growing overseas Chinese, first laborer then overwhelmingly merchant, diaspora, although also in conflict with the local peoples as manifested by recurrent pogroms against them, nonetheless has also acted as a cement among these regions and of course especially within China itself.
Evidence emerging from recent revisionist history and reviewed in the chapters that follow testifies to continued and even enhanced economic activity and social stability also in the regions of Southeast Asia, Central Asia, and West Asia, including much of the Ottoman Empire and Persia until at least the mid-nineteenth century and later. The decline of India, without whitewashing British colonial rule, now also appears less severe in the eyes of new Indian revisionist history. In much of Africa, production, trade, and income grew as the Atlantic slave trade was replaced by more intra-African slavery applied to production for local and regional markets, as well as of vegetable oils and other products for export. Also in many newly independent countries of Latin America, nationalist governments and movements resisted the incursions of the “imperialism of free trade” until the 1860s.
On the other side of the equation, we will see that European growth before 1850 and even 1870 was nothing like we have been led to believe. Indeed, viewed also from Europe outward around the world, revisionist history has been pushing the effective beginning of British and European suzerainty further and further back. For instance, Cain and Hopkins’s review of British Imperialism 1688–2000 (2001) stresses on several occasions that the naval, trade, and financial instruments of British imperial power did not come into effective being until the second half of the nineteenth century and often later, so they note about trade and finance in general, invisibles, commodities, sterling, the gold standard, and foreign investment (Cain and Hopkins 2001: 137, 151, 159, 178, 200–201, 272, 319, 401).
The date of inflection, if there be any single one, between Asia and Europe is cropping up more and more as 1870 or even 1880. Cemil Aydin (2005) places it in 1880 for relations with the Ottoman Empire. Paradoxically, that
is also the time at which industrialization began to take hold in the major economies of Asia and specifically in Japan, China, and India. But however that may be, it bears repeating that Western domination interrupted the Asian one and itself lasted only less than one century, since by 1945 already economic growth in the East exceeded that in the West, and in the half century since then has been at double the rate in the West (Sugihara 2003: 78–79).
The Myth of Western Economic Growth
The industrial revolution was a revolution in industrial growth that took off first in Britain and then elsewhere in Europe mostly on the basis of new industrial technology and productivi...