Before and beyond Divergence, the Politics of Economic Change in China and Europe (review)

Since Kenneth Pomeranz's path-breaking book The Great Divergence published in 2000, there has been a renewed worldwide debate on the differences in economic growth and development between China and Europe and their root causes in their distinctive pasts. Paradoxically, the term "divergence" has become the combining agent between two long-standing camps: "Sino-exceptionalism" and "Euro-exceptionalism" in world/global history (see Kent Deng, "A Critical Survey of Recent Research in Chinese Economic History," Economic History Review [2000]). But the key concern, still an age-old one, remains: why Western Europe became the first region of modernization instead of China, commonly known as the "Needham's Puzzle."

Overall, the Eurocentric camp has launched two rather successful campaigns. One is the critique of Pomeranz's selections of data/ estimates, questioning their credibility (see Peer Vries, Via Peking Back to Manchester: Britain, the Industrial Revolution, and China [2003]). The other, more subtly, is to channel the debate toward what are called the "real wages," hijacking Pomeranz's approach (which is a comparison of material life between the wealthy part of China and its counterpart in Western Europe) and changing it to a comparison of differences in monetary compensation for labor spent per unit of working time. They have reached the conclusion that real wages in Western Europe were persistently higher than in China (R. C. Allen, "The Great Divergence: Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History [2001]; R. C. Allen, "Real Wages in Europe and Asia: A First Look at the Long-Term Patterns," in R. C. Allen, Tommy Bengtsson, Martin Dribe, eds., Living Standards in the Past: New Perspectives on Well-Being in Asia and Europe [2005]), persuading us to forget about Pomeranz's initial proposal of living standards which have in fact little to do with monetary wages. It seems that the California School faces a real predicament. It is in this context that Jean-Laurent Rosenthal and R. Bin Wong came up with this new monograph in their bid to steer the debate back to its intended course, as the title of the book clearly spells out.

This book contains seven chapters that are followed by a conclusion. Unlike Pomeranz, who wrote about resources' geographic locations (local coal deposits and off-shore colonies in particular), Rosenthal and Wong began with what may be called "the economies of space" with the observations that sovereign spaces for population, resources, and market exchange differed starkly between China and Europe (chapters 1-3). But in a nutshell, these are still the dichotomies of an empire versus nation-states and conformity versus competition (see also E. L. Jones, The European Miracle: Environments: Economies and Geopolitics in the History of Europe and Asia [1983]).

The book then turns to wars in Europe and peace in China (chapter 4), something that we have also taken for granted as in Jones's The European Miracle, John Brewer's The Sinews of Power: War, Money, the English State, 1688-1783 (1990), Jared Diamond's Guns, Germs, and Steel: the Fates of Human Societies (1997), and Patrick O'Brien and Xavier Duran's "Total Factor Productivity for the Royal Navy from Victory at Texal (1653) to Triumph at Trafalgar (1805)," in Richard Unger, ed., Shipping and Economic Growth, 1350-1850 (2011). But the authors have rediscovered the profound meanings of wars and peace in the long-term history of the Old World. According to Rosenthal and Wong, wars and peace ultimately determined the matrices of relative prices for land, capital (credit), labor (wages), and state extractions and services (taxes for revenues) of different times and in different places across Eurasia. The result was the great divergence, not determined by God-given resource endowments but by geopolitics with human choices.

The basic line of argument of the...