The Origins of Divergence: China, Europe,and the Future of Development

Max Ajl*

Scholars have asked, why is China poor? Why is Europe rich? Indeed, those questions

launched thousands of research projects looking into the lineages of Chinese destitu-tion and European opulence in the nineteenth and twentieth centuries.I For decades the

standard scholarly explanation was the one Max Weber advanced: only in the West did ratio-nalization, understood as the clear and premeditated pursuit of delineated objectives on thebasis of self-conscious calculation and selection procedures, combine with an ascetic valuesystem to lead to sustained and self-sustaining growth.2 More recent work has undermined theempirical foundations of this claim. There is plenty of evidence of rational thought, defined inWeber's terms, in second millennium China. Furthermore, explaining tremendous processes ofhistorical evolution of political economies through resort to "culture," essentially concludingthat European industrialization was a product of European rationalism and its antecedents inthe philosophy and knowledge of antiquity, hardly suffices to explain the available evidence.

Furthermore, as Chinese industrialization proceeds apace, with a swelling middle classand a burgeoning emissions profile, those age-old assumptions about Chinese backwardness

Student of development sociology at Cornell University. Thanks to Philip McMichael for discussion.See e.g. Perry Anderson, Lineages ofthe Absolutist State (London: Verso, 1979) at 401ff.

2 Max Weber, Economy and Society: An Outline ofInterpretative Sociology, ed by Guenther Roth & ClausWittich (Berkeley: University of California Press, 1978) vol 1 & 2 [Weber, Economy and Society]; MaxWeber, The Protestant Ethic and the Spirit of Capitalism, translated by Talcott Parsons (London: Allen &Unwin, 1930) [Weber, The Protestant Ethic].Mark Elvin, "Why China Failed to Create an Endogenous Industrial Capitalism: A Critique of MaxWeber's Explanation" (1984) 13 Theory and Society 379 at 379-82.

hold even less sway. In Before and Beyond Divergence, Rosenthal and Wong's examination ofthe trajectories and institutions prevalent at the far ends of the Eurasian land mass providescritical information for understanding the Chinese and European pasts, the present, and alsotheir futures.

Of course, as both empirical processes of development as well as knowledge about theChinese past and present has accumulated, the assumptions that condition how research ques-tions get formulated have shifted. It has become increasingly clear that China used to not beso poor relative to Europe, while European affluence is a recent historical phenomenon, or atleast, more recent than earlier Eurocentric accounts had posited. As demographic-statisticalstudies have shown with mounting force, the great divergence in living standards between thetwo ends of Eurasia may be of fairly recent provenance-perhaps, some argue, as late as 1850.6But the precise moment when living standards started to diverge is a secondary issue. Moresignificant is the ongoing process of revising the petrified orthodoxy created by past scholar-ship: China as a despotic Oriental state mired in backwardness, Europe as an industrial, mod-ernizing continent. As the picture has become clearer, it has become evident that the questionof the social origins of industrialization is central to explaining modern Western wealth. It isto the debate about the provenance of European industrialization and China's relative lack ofindustry-the separate trajectories the two ends of Eurasian ended up taking-that Rosenthaland Wong contribute in Before and Beyond Divergence.

Put differently, why was it that modern industrial growth was more likely to take place inthe Occidental end of Eurasia? What was it about the specific socioeconomic configurationin Europe that made it the first region in the world to experience an industrial revolution? Itis to that question that Wong and Rosenthal turn. They do not dispute the quotidian notionthat the Euro-Atlantic world was the first place on the globe to experience modern economicgrowth-that is, to break through Malthusian limitations. What they do dispute are the the-ories that have been used to explain that fact, since revisionist scholarship has increasinglyeroded some of the claims such theories were built upon, especially the foundational notion ofEuropean economic exceptionalism.

Furthermore, as provocations like Andre Gunder Frank's ReOrient and Giovanni Arrighi'sAdam Smith in Beijing have argued, the rise of the Euro-Atlantic world to economic preemi-nence may well prove to be an evanescent phenomenon, as the world's center of economicgravity returns to its traditional equilibrium somewhere between the Indian Ocean tradingsystem traditionally traversed by commodity chains connecting the various coastal entrep6ts,and the vast landed trading system of China, the historical repository of the world's population,

Jean-Laurent Rosenthal & R Bin Wong, Before and Beyond Divergence: The Politics ofEconomic Change inChina and Europe (Cambridge: Harvard University Press, 2011).

5 See e.g. Fernand Braudel, The Structures of Everyday Lif: The Limits of the Possible, vol 1 (Berkeley:University of California Press, 1981) at 102, 362.

6 Kenneth Pomeranz, "Political Economy and Ecology on the Eve of Industrialization: Europe, China, andthe Global Conjuncture" (2002) 107 American Historical Review 425 at 428ff.

7 See e.g. Anderson, supra note 1; Weber, The Protestant Ethic, supra note 2; Weber, Economy and Society,supra note 2; Braudel, The Structures ofEveryday Lft, supra note 5.

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and thus unshockingly most of its material wealth. Indeed, it is hardly heterodox anymoreto point out that the European trading system was for a long time relatively peripheral to theworld trading system in terms of net flows.' And as development slowly begins to catch upwith the weight of demographic mass, there are strong possibilities for a partial decentering ofthe economies sitting on either side of the Atlantic.

Of course, later scholarship has toned down initial and overreaching claims.10 China hasalways had a huge chunk of the world's population. In preindustrial economies, most wealthcomes from the land. Since the productivity of land in noncapital intensive agriculture canonly go so high, one would expect a very rough correlation between a countrys wealth and itspopulation in a preindustrial era. Indeed, before industrialization it would have been unrea-sonable to expect sharp divergences in income or productivity in the most fecund and devel-oped regions of the world. And in any case, in many regions of China, towards the latter partof the second millennium income and productivity-per-worker in the agricultural sector werefilly on par with those in Europe-in some places, perhaps exceeding them."

However, many are understandably chary of explanations that go beyond demolishingEurocentric tropes and substitute Sinocentric tropes in their place, or overemphasize the simi-larities between the two ends of Eurasia: Europe and China. As Peer Vries argues, "[t] he more'Eurasian' resemblances and equivalents are brought into prominence, the more miraculous ifnot downright inexplicable becomes the enormous gap that emerged during the nineteenthcentury between Britain and China. How can situations that are surprisingly similar producesuch huge differences?"1 2 The search must be for some factor that made Europe and China dif-ferent from one another-the Industrial Revolution did not come from nowhere.

Part of Wong and Rosenthal's method is intellectual demolition, the better to lay theground of their own theory. Thus, they take aim not merely at what they consider myopicallyEurocentric explanations like Douglas North's institutionalism, which moves briskly from thedescription of European institutions to the theoretical inference that such institutions werethe only ones necessary for modern growth.1 They also take issue with Kenneth Pomeranz'sseminal The Great Divergence, which focused on the propinquity for British development ofcoal seams located close to British industrial centers as well as a colonizing tendency which wasable to overcome the equilibrium trap that would have been entailed by the land squeeze."Rosenthal and Wong do not discard such explanations, suggesting that they may well have

8 Andre Gunder Frank, ReOrient: Global Economy in the Asian Age (Berkeley: University of CaliforniaPress, 1998); Giovanni Arrighi, Adam Smith in Beijing: Lineages of the Twenty-First Century (London:Verso, 2007).

9 Janet L Abu-Lughod, Before European Hegemony: The World System A.D. 1250-1350 (New York: OxfordUniversity Press, 1989).

10 Peer Vries, "Are Coal and Colonies Really Crucial? Kenneth Pomeranz and the Great Divergence" (2005)12 Journal of World History 407.Peer Vries, "The California School and Beyond: How to Study the Great Divergence?" (2010) 8 HistoryCompass 730.

12 Ibid at 736-37.13 Rosenthal and Wong, supra note 4.14 Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy

(Princeton: Princeton University Press, 2000).

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facilitated modern European growth. Indeed, total net primary production necessarily imposesits own limits on growth. Resources matter, and being able to burn wood from elsewhere oruse the stored energy of the past in the form of coal is a boon to development. For example,Rolf Sieferle argues that the British industrial revolution hinged on this bio-energetic boost."

Yet Wong and Rosenthal show that such explanations are not sufficient to account forthe directions chosen by Europe as opposed to those chosen by China. As they write, "dif-ferences in relative factor prices in China and Europe set in motion incentives to save onlabor and invest in capital that figure prominently in Pomeranzs account"."6 They argue thatthe explanation for why the Chinese development path went one way while the Europeanpath wended another was not so much the palette of institutions from which European andChinese merchants and industrialists chose as the larger framework within which they madetheir choices. Their core thesis is that the continental scale of the Chinese polity encouragedsocial peace, thereby sidestepping pressures to place artisans behind the bulwark of city wallsor to use machines to economize on expensive labor, thereby encouraging more labor intensivedevelopment.17 In Europe, fissiparous political tendencies encouraged by-and which in turnfostered-warfare made capital cheaper relative to labor, accelerated its agglomeration in urbanformations, pushed along urban manufacturing, and impelled an elevated rate of capital invest-ment as well as the adoption of machinery in lieu of labor in ever-increasing areas of Europe.

Labor also was expensive for reasons unmentioned by Wong and Rosenthal-in the pre-modern era, without adequate sanitation systems, cities tended to kill their inhabitants. Plaguewas endemic, and cities needed constant migration from the countryside merely to maintaintheir populations." In that sense, urbanization and the industrialization for which it was a cru-cible had a parasitic relationship with the countryside, drawing on its resources and its peoplewhile only much later being able to share the fruits of industrial progress with the populationin the form of "development."

Much of the book is taken up with dispelling common claims that seek to account forthe divergence between Europe and China. For example, they note that it is regularly assertedthat the relative predominance of formal institutions to deal with economic transactions andadjudicate economic infractions in Europe explains Europe's advancement vis-i-vis China."But Wong and Rosenthal attribute this difference to the scale of trade: there was, relativelyspeaking, more long-distance trade in continent-scale China, a consequence of peace that wasin turn the consequence of political consolidation. Local courts were far less effective in adju-dicating such transactions than the security ensured by sprawling trading networks. Thus theChinese preference for informal institutions comes to look less like a matter of mores and moreof a question of simple efficiency. When Europeans engaged in long-distance trade they tooopted for informal networks. Thus Rosenthal and Wong reverse the causal chain: bellicosity led

15 Rolf Peter Sieferle, The Subterranean Forest: Energy Systems and the Industrial Revolution, translated byMichael P Osman (Cambridge: The White Horse Press, 2001).

16 Rosenthal and Wong, supra note 4 at 7.17 Ibid at 33, 101-28.18 Fernand Braudel, The Mediterranean and the Mediterranean World in the Age of Philip II (Berkeley:

University of California Press, 1995) at 332-34.19 Rosenthal and Wong, supra note 4 at 67-98.

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to less long-distance trade, with the ratios of formal and informal institutions being effects ofthe ratios of long- versus short-distance trade. 20 Furthermore, we then see at the fringes of theirarguments hints of why China and Chinese products for so long dominated the long-distancetrading routes which composed the world-system before European dominance.

They also discuss political scale: how China came to be a unified political entity whereasEurope came to be a divided one.21 That was a matter of history. There was nothing endemic tothe Western end of Eurasia that made it inevitable that Europe be made up of a fractured set ofstates. The Roman Empire at its peak covered much of the Occident. In the past, China was apolitical mosaic rather than united. It was the evolution of China into a unified political entitythat encouraged certain institutional choices. Pace Western social theories' rendering of Chinaas developmentally stalled, they argue that China's expanse actually contributed to its develop-ment by enabling peaceful growth within the confines of a large state with secure borders.22

Eventually, gains from the relative lack of violence redounded to the benefit of Chinesedevelopment. Because the social surplus did not need to be diverted to building fortificationsand buying weapons, the costs of maintaining order were relatively low, and the central statemade local rulers shoulder much of the burden of constructing the institutional scaffolding foreconomic growth. This allowed for relatively low tax rates, thereby keeping in check separatisttendencies and allowing a central ruler to work in concert with the population and local poten-tates to maintain social order. With no political need to place manufacturing or population incities, Chinese urbanization rates were extremely low. Cities accounted for no more than fivepercent of Chinas total population in 1850-less than they had in 1250.23

Meanwhile, a politically shattered Europe was developing methods of war that wereincreasingly capital-intense, encouraging the construction of expensive fortifications andinvestments in costly artillery. Like a homeostatic pressure system, the European states, amidstconstant warfare, pushed against each others' borders with only some success. Were one toverge on overweening power a concert of others would soon gather against them. Continental-size political units did not appear. But when shouldering up against less martially orientedpolitical economies, the militarized European states were able to expand and then engorgeothers' commodity circuits.' It was precisely this tendency which led the European empires totake over Asian trading systems in the nineteenth century, using violence to break into theirmarkets and later, forcing them to deindustrialize and then penetrating internal markets withEuropean manufactures, a point Wong and Rosenthal touch on only obliquely when theymention the impossibility of considering the two political units in isolation after 1850. Herethe European legacy of violent state formation would have its effect on the larger world-system,with the colonial legacy as the unpredictable consequence of European political fragmentationand the violence with which it was ineluctably bound.

20 Aid at 95-96.21 Iid at 12-34.22 Iid at 182, 189, 205.23 Iid at 111.24 Giovanni Arrighi et al, "Historical Capitalism, East and West" in Giovanni Arrighi, Takeshi Hamashita

& Mark Selden, eds, The Resurgence ofEast Asia: 500, 150 and 50 Year Perspectives (London: Routledge,2003) 259.

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But no one could have predicted such connections between industrialization and violence.For China, the lack of war meant manufacturing could remain in cheap locations in the coun-tryside, thereby giving it cost advantages, as the ready availability of labor drove down its costs.Manufacturers made the sensible and rational choice of locating their workshops in the lowerYangtzi valley, close to river transport routes. In Europe manufacturing had to cluster behindthe protective carapace of city walls, where labor was scarcer and dearer. The European warfaresystem was certainly not intended to create a menu of choices from which European indus-trialists would choose to locate their factories and workshops behind city walls. However, thiswas the dynamic it unintentionally facilitated, eventually setting in motion modern economicgrowth, the consequence of ruinous warfare which diverted the social surplus into the produc-tion of waste as well as the wasting of other societies. The unintended consequence was whatwe have come to call "development," although this term only came to denote enhanced livingstandards for the working classes in the Euro-Atlantic world after sustained social struggle fromEurope's popular classes, who had to make demands on industrialists and merchants in orderto receive a larger share of their countries' wealth.25 Wong and Rosenthal's emphasis that thiswas wholly unintended provides a brisk tonic to too many Eurocentric exceptionalist narra-tives, which posit European industrialism as reflecting some kind of autochthonous industri-ousness or idiosyncratic cultural intelligence.

The authors could have dwelled more on how these war-making tendencies have beeninstitutionalized in the Atlantic economic units, especially as the center of Western industrialand financial power has passed from England on to the United States. 26 This question is centralto understanding the last sixty years of economic history. The accidental synergies betweenindustrialization and war-making have taken on a markedly different form in the modernage, with much industrial production, especially of arms, essentially severed from productivedevelopmental processes. In the Chinese model, despite its many flaws, there is no counterpartto the Western diversion of massive productive resources from social uses to warfare-in somesenses an "advantage" of Chinese "backwardness."

Other questions, too, remain unsettled, not least those raised by the issue of industrializa-tion. The authors surmise that by 2050 it is likely that China will strongly resemble Europe.Putting aside the probably insuperable ecological difficulties entailed by a Chinese reprise ofthe carbon-fueled European takeoff, lurking behind this observation is what seems like a nor-mative preference for a heavily industrialized society. But it is unclear how and why it wouldbenefit the Chinese people to separate peasants from their land to the same extent as occurredin Europe. Similar policies in the Soviet Union did next to nothing to enhance overall socialwelfare, although heavy industrialization-as opposed to light industrialization-could nothave proceeded apace without the sundering of links between peasants and the land.2 Thatprocess's premise should be questioned: do people in fact benefit from heavy industrialization?There is little evidence in favor of that proposition.

25 Sandra Halperin, "Re-envisioning Global Development: Conceptual and Methodological Issues" (2007)4 Globalizations 543.

26 Giovanni Arrighi, The Long Twentieth Century: Money Power, and the Origins of our Time (New York:Verso, 2010).

27 Colin A.M. Duncan, "On Rapid Industrialization and Collectivization: An Essay in HistoriographicRetrieval and Criticism" (1986) 21 Studies in Political Economy 137.

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AJL Volume 8: Issue 1 149Furthermore, there is no question that if China proceeds on its current trajectory, it will

more closely resemble Europe than it does now. But for those interested in questions of humandevelopment, this sidesteps the normative question of whether China should seek to emulatethe European development path or whether it might seek to improve upon it. Even within theframework of heavy industrialization, there are choices to be made: Japan uses far less energyper unit of gross domestic product than does Europe, let alone the United States. But thequestion of whether capital should be invested in heavy as opposed to light industrializationremains unasked. This is odd because at least one of the conclusions to be drawn from theirbook is that warfare was one of the core processes setting in motion the process of heavy indus-trialization. Human progress was an incidental rather than integral outcome.

Still, Rosenthal and Wong leave us much to think with, through, and about. The authors'social science theory building is meticulous, and they are very circumspect in describing whattheir model does and does not do. Many will bridle at some of the details, but there seems littlequestion that the book is one of the more stimulating and ambitious attempts to rethink theprovenances of Eurasian political economies in some time. This book is a major achievement,and it deserves the widest audience.