Book Review: Before and Beyond Divergence: The Politics of Economic Change in China and Europe. By Jean-Laurent Rosenthal & R. Bin Wong

In this “modest” but “ambitious” monograph (Page 2), Jean-Laurent Rosenthal, a scholar of Europe, and R. Bin Wong, an scholar of China, collaborated to offer a novel approach to exploring the heatedly debated realm of questions on the “Great Divergence” of Europe and China in the late eighteenth and early nineteenth century. In 2000, Kenneth Pomeranz published his groundbreaking work The Great Divergence, which initially highlights on evaluating “living standard,” rather than merely monetary aspects of the economic change, and at the same time puts emphasis on Europe’s geographic advantages that China did not possess. Rosenthal and Wong, from Pomeranz’s relatively humanitarian starting point, stress on the significance of political scale and institutions in the centuries-long transformation process that preceded Industrial Revolution.

The California School faced a wave of criticism after The Great Divergence was published, from scholars like Peer Vries, (Via Peking Back to Manchester: Britain, the Industrial Revolution, and China [2003]) and R. C. Allen (“The Great Divergence: Wages and Prices from the Middle Ages to the First World War,” Explorations in Economic History [2001]). In general, Rosenthal and Wong did a fine job to lead the discourse back to Pomeranz’s initial theories on “living standard” from the discussions over monetary wages. In addition to their emphasis on the long-term process of economic change rather than moment of critical invention, the authors also promote the idea of a set of social factors that once favored China but then later favored Europe, so as to explain the taking-over of Europe from China in terms of economic leading position in the world.

This book contains an introduction, seven chapters, and one conclusion. The main arguments provided in this book are as following: In Chapter 1, the authors propose that despite somehow evident, the differences between China and Europe as two comparing world regions should not be taken as given; they are rather the key elements, which influence economic changes, for rulers of the different polities would set different priorities and policies, which would further lead to respecting economic changes. Chapter two and three argue that demography, resources, and formality of institutions in these two world regions are different from their counterpart to various degrees. However, they are not sufficient to cause the divergence that took place in the late eighteenth century. Chapter four provides an important argument about warfare and its role in economic change: Europe had been suffering from continuous warfare, so that rulers built up city walls and protected their people and manufactures from harm caused by wars and social conflicts – Europe’s urbanization was increasing. Whereas in China, relatively peaceful situation provided the people with little incentive to technological innovation, therefore they did not have reason to move to the cities; and the manufactures remained in the countryside, where relative price was low – China’s urbanization was stagnated. Chapter five and six illustrate that European rulers (representative governments), frequently confronting wars and competitions, collected taxes and used them for warring purposes; whereas Chinese rulers (authoritarian government) imposed moderate taxation, and used them mainly for promoting public goods. Because the rulers believed this was the way to achieve longevity of their regime. In Chapter seven, Rosenthal and Wong suggest the politics of economic change in China and Europe has diverged as early as 1000 A.D., after which they have entered self-reinforcing pattern. Europe had been halfway to industrialization already by 1500. An ultimate step of total transformation would be made when there is a large market available. China, on the other hand, still enjoyed its stable and large market, which was lack of incentives for innovation.

Before and Beyond Divergence: The Politics of Economic Change in China and Europe.

The authors argue that although war brought instabilities and fragmentation to European polities, it also had unintended positive consequences (rise of capital-intensive production as character of modern economy), which benefited economic development. It is crucial to understand the close links between political factors and economical changes. The arguments are presented on two levels. On the first level, besides technological breakthrough, some other economic or cultural factors (e.g., demography, informality of certain institutions, capital markets) have roots in political reasons or are lacking of supporting evidence. The second level is that implications of differences in international relations in terms of technological change, credit markets, and government spending have been made. These implications manifest the unanticipated consequences of war and their further impact on China and Europe.

Rosenthal and Wong successfully pointed out the conventional methods of comparing economies between European model and non-European ones: scholars find traits associated with Europe’s success, and then classify features of other societies, to see how close they are to the European model, and then they evaluate the model of the compared society. Instead of doing so, Rosenthal and Wong attempt to propose an alternative research method from the very beginning of the research, namely by asking questions, which are not already based on European-exceptionalism. The authors believe the best way to explain Europe’s success in the late eighteenth century is to compare the politics of economic change within and between Europe and China across a time period that is beyond the divergence becoming visible. And the significant factors that took effect long before rise of Europe and decline of China lie in the politics. The factors enabled China to reach a Smithian “industrious revolution,” although without further breakthrough; similarly, they favored Europe, when the fragmentation of polities increased possibilities of technological and organizational innovation. This book is the effort of the two authors to view the world history in a way that the rise and fall of historical regions is norm. In contrast to the conventional stories of global/world history, the two authors write, “ours is a tale without heroes or villains, in which the unintended consequences of political conflict are what matter most.” (Page 127)

Despite the evident merits of the arguments, there are some insufficiencies. For instance, when discussing a prosperous economic growth, the authors solely considered long-distance trade. Even though as one of the most suitable types of economic activity in discussions on comparative economies between Europe and China, long-distance trade in a region alone can barely indicate its economic performance as a whole. Furthermore, as the authors point out by themselves in the monograph, the world regions are interconnected. Therefore the total absence of other world parts except for China and Europe caused a rather isolated image of the two regions, and fragmented the story.

It is pointed out quite evidently that China enjoyed much more unity during its thousands of years of existence, while Europe suffered from political fragmentation for most of its time. Yet the general representations of China being a unified and peaceful polity, and Europe, to contrast, being an ever-conflicting warring zone, seem to be a manifestation of the authors falling into a problem of generalization. It might be closer to reality to demonstrate Europe in such a “chaotic” way than to present China as a mostly harmonious empire. The authors imply that it is inevitably that China, considering its peace, low taxes, and public goods provision, was a better place to live (in accordance with Pomeranz’s “living standard” discussion). However, the simplistic way of illustrating China’s political performance over centuries could lead to questions about whether the authors have a thorough understanding of Chinese political history.

As claimed in the beginning of the book, Rosenthal and Wong see their enterprise as “modest and ambitious.” “Modest” is in terms of their research focus, which is mainly on specific institutions and establishing a framework for comparisons across societies over time; “ambitious” is their anticipation for the book, that it could provide a keen understanding of the connections between politics and economy in China and Europe. They envision the book would still be valuable by 2050, when China gains its equal statues as Europe economically. The author write: “[Indeed,] effective explanations of what has happened in the past can help us anticipate future possibilities because many of the social processes at work today have historical roots and antecedents.” However, their analysis reaches as far as 1850; what beyond that, when the divergence starting to be visible, and the grand historical change took place, are not in the analysis. In the future, along with the more breakthroughs of technologies that would further lead to social and political changes, the structures of, and the links between economy and politics in different world regions might also change. In this case, could this approach to explain the unintended success of Europe in the eighteenth century still be used to anticipate future possibilities? That is to say, the authors’ modest approach and framework based on simplistic modeling of complex world regions could hardly accomplish their ambition of continuously being consultable in fifty years. Nonetheless, their incentives to stress on political scale, and putting institutions into spatial and temporal contexts are still inspiring to us, and encouraging to alternative understandings of history.