The Washington Review of Turkish & Eurasian Affairs

David S. Landes, the emeritus professor of economics at Harvard University, writes that during Medieval Ages the Orient, mainly China, had possessed a power-driven spinning machine and industrial techniques centuries before the Industrial Revolution occurred in the Occident. The wealth and economic growth of China during that time made it one of the big commercial centres of the world trade; the Chinese practised coal production for iron

Shamkhal Abilov is a graduate student of Global Studies at University of Vienna, Austria. He previously studied at University of Leipzig, Germany. A native of Azerbaijan, Abilov received his BA in international relations from Qafqaz University, Baku. His research interests are Azerbaijan, conflict studies, Caucasus, Central Asia, and international relations theories and globalization. Other than his native tongues of Azerbaijani and Turkish, he is fluent in English and has a working knowledge of German.

smelting and industrial use, and also “were turning out perhaps as many as 125,000 tons of pig iron by the late eleventh century”.[1] He lists various inventions considered industrial priorities in China during that period and not in Europe, such as: the wheelbarrow, the stirrup, the rigid horse collar, the compass, paper, printing, gunpowder, and porcelain. These, however, were the key components for the Industrial Revolution in Europe later.[2] In comparison to China, though, during the Medieval Ages European societies were living in backwardness, their economic situation was in ruin, and Europe was suffering from a great number of foreign invasions. Regarding this, Landes elucidates:

The Europe of what we call the Middle Ages (say, tenth century) had regressed from the power and pomp of Greece and Rome, had lost much of the science it had once possessed, had seen its economy retreat into generalised autarky[3]... The probability at that point of European global dominance was somewhere around zero... In the tenth century, Europe was just coming out of a long torment of invasion, plunder, and rapine, by enemies from all sides.[4]

 But despite the above-mentioned factors, the nineteenth century was a big challenge by Europe in the world’s economic history, a change considered as the appearance of a “Great Divergence” between the Orient and Occident. Despite the privileges of China and the greater technological development it had possessed for centuries, Europe entered into world history with immense developments in technology, later identified as the Industrial Revolution by world historians. For that reason, we find one of the questions that scholars of the subject greatly discuss today: if China had a priority over the rest of world in terms of technological development and economic-sense for almost a millennium, and was in the same development level with the most-developed parts of Europe around the eighteenth century (England and the Netherlands), why, then, did the Industrial Revolution occur in England, and not in China? Or, as Landes points out, “a thousand years ago, the Chinese were well ahead of anyone else and certainly of Europe. Some would argue that this superiority held for centuries thereafter...and, almost every element usually regarded by historians as a major contributory cause to the Industrial Revolution in north-western Europe was also present in China. Why, then, did China “fail”?”.[5] I think it is erroneous to ask why “China failed”, because the technological development that China possessed during the European Industrial Revolution did not stagnate; rather, it was on the same path in the eighteenth century as it was in medieval age, but it was the case that technological development did not revolutionise the Chinese economy as it did in England. This research paper, therefore, seeks to investigate what historical events and impacts, lacking in China, that caused Europe to gain a technological and economical advantage over the rest of world. This will be done by making a brief journey through economic history, using books and articles of various well-known authors of the Great Divergence - Kenneth Pomeranz, Peer Vries, Andre Gunder Frank, David S. Landes, etc. - in order to address the above-mentioned questions.

World historians propose various explanations for the cause of the Industrial Revolution in the second-half of the eighteenth century in England: richness in raw materials in the centre of the Empire and its peripheries; the amount of the wealth earned from the colonies and worldwide trade; the investments of wealthy men in machinery and technology; the existence of a stable government that supported the efficiency of institutions and encouraged scientific development; and, its geographical location that put England away from the harmful wars of continental Europe.[6] In my research paper, however, I prefer to focus on three factors that impelled England to achieve the Industrial Revolution and gain industrial and technological superiority over the rest of world; and that are also still continuing. The three factors are as below:

 1.     Colonialism or access to Atlantic trade through which England gained immense wealth.

2.     Institutional changes inspired by overseas trade, pushed by merchants in order to get efficient institutions guaranteeing property rights and to provide freedom and trust.

3.  Existence of natural resources (coal) next to the industrial centre of  the British Empire.

Colonialism or Access to Atlantic trade

Peer Vries, one of the outstanding scholars of economic and social history, writes, “...the colonies are not just a windfall. The Americas were not just a tract of land waiting to be exploited. They had to be found, explored, and exploited”.[7] According to him, the exploration of the New World (along with other overseas colonies of European Empires) was specifically the result of British economic policy.[8] Following, this part of the research paper will focus on the reasons that drew the Empires of the Old World to the New World, and will explore the impact of colonialism on the economic and political development of Europe.

Colonialism has been one of the crucial exponents of world history, starting in the fifteenth century with the voyages of Columbus in 1492 to the Americas, who was sailing to west with the hope of reaching India; as well as under the patronage of European Emperors and Portuguese expeditions under the command of Vasco da Gama (who actually reached India via the Cape of Good Hope in 1948). The main aims of the voyages were twofold: to find alternative trade routes to Asia outside of those monopolised by the Ottoman Empire, and colonial expansionism. Various scholars contend that these were the factors that led to the rise of the Old World, mainly Western Europe, beginning from sixteenth century; colonialism, access to the Atlantic Ocean, and immense trade circulation with the New world, Africa, and Asia. One of the reasons argued by scholars for the decision to patronage voyages by the European monarchs was the acute lack of currency in Europe and the desire to get big profits as a result of the extension of European overseas activities and the establishment and exploration of colonies.[9] But how did the Atlantic trade and colonialism affect the shift of Western Europe and the “failure” of China? Or, how was Europe successful in building overseas empires but China failed to create its own colonies?

Candice Goucher and her colleagues in their book, In the Balance: Themes in World History, explain the commercial development of Europe and China in the framework of a shifting world system. According to them, until the end of the thirteenth century China was a key economic actor in the Afro-Asian world trade system, whereas Europe was only in the periphery and connected to that system by the Mediterranean trade route.[10] At the beginning of the fifteenth century, prior to the European voyages, hundred of ships and tens of thousands of men reached the coastlines of East Africa and the Arabian peninsula under seven large maritime expeditions, sponsored directly by the Chinese government. But, in contrast to European states' mercantilist policies, which were backed by the European monarchs and emperors, Chinese expeditions, were largely not government-supported. In fact, the government of the Ming Dynasty in the fifteenth century stopped its support of maritime expeditions. According to Pomeranz’s elucidation, unlike within European mercantilism, Chinese merchants who tried to establish themselves in south-eastern Asia missed state patronage:

Most of south east Asia, like the post-contact New World, was sparsely populated and capable of supplying vast quantities of land-intensive resources that were in demand “back home”. Chinese went there in significant numbers, but south east Asia never became for coastal China what the New World was for western Europe.[11]

Concerning this fact, referring to Zheng He, Peer Vries also points out that there were no systematic state supports for overseas colonies and peripheries backed by the Chinese government, “to put it under one too - blunt a term: there was no Chinese mercantilism”.[12] The reason for the Chinese withdrawal from these expeditions pointed to by scholars was a view within China of its centrality and self-sufficiency; this, however, resulted in the failure of a Chinese maritime power and of its own industrial revolution. Regarding to the self-sufficiency and superiority of the Chinese society, Pomeranz writes:

the people of these countries (especially China) were uninterested in foreign goods because they were so convinced of the superiority of their civilisation...Probably the most famous statement reflecting this attitude came from Chinese Emperor Qianlong, who told English emissaries in 1793 that China produced all that it needed...[13]

Additionally, Pomeranz shows that one of the reasons why Europeans went overseas was due to land constraints in Europe; this resulted in Europe’s gaining superiority over the Atlantic trade, possessing huge colonies, and commanding the world market. On the other hand, China was not able to do in its land peripheries what Europe did in its overseas peripheries.[14] The periphery that the Chinese Empire possessed was different from Europe’s periphery; that is, a land-based intrastate periphery, which does not suit Wallerstein's world system theory. “It was filled up by free peasants who worked for subsistence, therefore exported less food and land-intensive goods to the core than was the case in the New World periphery, and who because of their putting-out activities, still according to Pomeranz, tended not to buy very much from that core”.[15]

Beginning from 1500 onward, a new world system was created as a consequence of European expansionist policy, which pushed China to the periphery of the world trade system. The global control of Europe over the Atlantic trade route and its colonial expansion resulted in the domination of the world system by Europe and guaranteed its economic and political superiority over the rest of the world.[16] Colonialism and control over the world's main commercial routes enabled Europe to exploit vast natural resources from overseas colonies and to import immense wealth. Unlike Chinese emperors, European monarchs were the main supporter of foreign trade and sought to surpass domestic economic stagnation through overseas expansions, thereby catalysing the further development of communications, trade systems, and military industry. The “Triangular Trade” within the Atlantic region enabled England to link its colonies in Africa and the New World: raw materials from the British North American colonies were shipped to England for domestic consumption and industrial production, finished goods went to Africa to be exchanged for slaves, and slaves were taken to North America and the Caribbean.[17]

During the time of the slave trade by the European Empires, the number of the slaves taken to European colonies is estimated to be over nine million people.[18] Nearly three hundred years of slave trading had a gloomy impact not only on African societies, but also North and South America. While talking of the devastating impact of colonialism, Frank indicates that, in less than fifty years, almost all indigenous populations and communities were wiped out in the Caribbean. “On the continent, the germs of disease were carried faster, further, and far more devastatingly than the conquering troops of Cortez and Pizarro, who found that the smallpox they brought on shore preceded them inland”.[19] But these are but a small piece of what European Empires did to reap profits in their colonies.

In August 1999 the African World Reparations and Repatriation Truth Commission issued a demand in for reparations payments from all those Western European nations that participated and benefited from colonialism and the Atlantic slave trade. The estimated sum suggested by the Commission as adequate compensation was based on the estimated lost of human life during the slave trade. The assessment of the worth of mineral resources, such as gold, diamonds, and others, that had been taken from the continent during colonialism was estimated at $777 trillion by the Commission.[20] According to Niall Fergusson, renowned Professor of History at Harvard University,  “given that more than three million of the ten millions or so Africans who crossed the Atlantic as slaves before 1850 were shipped in British vessels, the putative British reparations burden could be in the region of £150 trillion”.[21] Following the issue of demand for reparations by the Commission, in May 2002 the director of the London-based “think tank” Demos reported that, “critics of the British Empire, which at its peak in 1918 covered a quarter of the world's population and area, says its huge wealth was built on oppression and exploitations” and suggested that the Queen should apologize for the mistakes and damages that the Empire committed during its past.[22]

Frankly, I do think that colonialism played a major role in the development of the European countries. Europeans were eager to amass riches and to explore overseas lands in order to satisfy domestic consumption, and industrialized at the expense of their peripheries, namely colonies in Africa, America, and Asia; they did not hesitate to do whatever was needed for this to occur. Growing overseas commerce and trade with colonies stimulated the further flourishing of domestic industry, by which Europe, especially England, became immensely wealthy. According to Marx and Engels, the “discovery” of new lands on other continents resulted in the foundation of modern industry and the development of commerce, communication, and navigation systems that paved the way for the extension of industrialisation. In the Communist Manifesto, they evaluate the “discoveries” of new lands as follows:

The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonization of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development...Meantime the markets kept ever growing, the demand ever rising...steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry...[23]

But, it is not possible to measure the results of overseas “discoveries” just through the development of trade, communication, and industrialisation; these helped to “jump-start” institutional changes that altered the nature of all of Europe, of which I am going to talk about in the following chapter.

 Institutional Changes

 What are institutional changes and how did they alter the nature of Europe? This part of the research paper will focus on the opinion of various scholars in order to find out how institutional changes took place in Europe in comparison to other parts of the Eurasian landmass.

 According to Jan Luiten van Zanden, another outstanding scholar of economic history, Western Europe possessed a well-developed set of institutions from as early as the late medieval period. This was a consequence of low transaction costs and a high level of market specialisation; the huge number of households involved in factor markets; and the guarantee of property rights and the promotion of trust by institutions. While talking about the efficiency of European institutions, he indicates that, “the genesis of ‘modern economic growth’ in Western Europe was not an accident but the result of the relatively efficient institutions that were characteristic of the region from at least the fifteenth century onwards”.[24] Regarding the institutional efficiency of Western Europe, Landes argues that the economy of Western Europe was much closer to that of a capitalist free market economy than that of China.[25] Peer Vries, in his turn, elucidates that:

 Firstly, Europe was a system of states, not an empire, as was the rule in the other advanced societies in the world. Secondly, states in Western Europe as political entities were structured and governed differently from empires in the rest of the world, to a large extent because they were part of a system of states.[26]

 I, indeed, think that this is the right institutional differentiation and moulding Vries makes between Western Europe and rest of the world. But, I assume that by saying “system of states” he considers only the state system on the European continent, since institutional conditions in the peripheries or, let’s say, overseas colonies of European Empires were devastated and without efficient usability. He explains that as Europe, a system of states, government was too careful and tried not to intervene in the private initiatives of commerce.[27] There was a division of power between the central authority and local government in European countries; as Landes writes,  “fragmentation gave rise to competition, and competition favoured good care of good subjects”.[28]

 But in contrast to the existence of efficient institution in Western Europe, institutions in South and Southeast Asia were not intended to develop further in order to reach a well-functioning market economy.[29] According to Landes, there did not exist the efficiency of a free market and the institutionalised protection of private property. The Chinese government was always trying to control domestic production and private enterprise by interfering and taking over the most lucrative activities, manipulating prices, inflicting bribing, and so on. One of the main targets of the Chinese government was maritime trade, which was abandoned because it was considered a major source of divisive power and income inequality. There was an absence of freedom and trust.[30] Referring to the Hungarian-German-French sinologist Etienne Balazs, Landes writes in his famous book The Wealth and Poverty of the Nations:

 if one understands by totalitarianism the complete hold of the State and its executive organs and functionaries over all the activities of social life, without exception, Chinese society was highly totalitarian. . . . No private initiative, no expression of public life that can escape official control. There is to begin with a whole array of state monopolies, which comprise the great consumption staples: salt, iron, tea, alcohol, foreign trade. There is a monopoly of education, jealously guarded. There is practically a monopoly of letters (I was about to say, of the press): anything written unofficially, that escapes the censorship, has little hope of reaching the public.[31]

Concerning to the efficiency of institutions in China, Peer Vries follows a rather different path than Landes. He makes a comparison between the modern empires of the Orient and indicates that the Ottoman and Mughal Empires were the result of military conquest, and so therefore never possessed a unified tax system or a system of administration that could be applicable in all territories. But according to Vries, these factors could not be implemented in China. He indicates that there was the appearance of a systematic economic policy in China, identified as a “paternalist” point of view inspired by Confucianism. He gives as examples the “famous system of ever-normal granaries” (by which the government spread around 46 million hl of grain in order to feed its people in centres and peripheries at the end of the eighteenth century), governmental support for agriculture, schooling and so on. “In various aspects it did more than European governments, helped by a gentry that shared its worldview”.[32]

But what was missing? Accordingly, Vries indicates that the imperial government of China was not in favour of changes that could cause social upheaval.[33] To take this idea further, I would like to argue that Chinese society was missing a mercantilist policy or merchant class to act as the driving force behind Chinese governmental institutions and for the furtherance of their development to be like those in Europe. As Vries stresses, “To put it under one too- blunt term: there was no Chinese mercantilism”.[34]

Coming to differences within the political economies of the Chinese and European governments, there was a struggle between European elites over revenue extraction. The governments of European states needed to develop new credit institutions because they were dependent on merchants and needed to borrow money from them. In contrast, the Chine government was not in a position to borrow money from merchants or in any need to find another source of income. Because Confucianism allowed only a “modest level of taxation”, there was no conflict between high authority and local government. To preserve their position, European governments needed to sustain institutional efficiency; this was not so in China.[35]

But how merchants could cause institutional changes in Europe is also questionable. Daron Acemoglu and his colleagues argue that the rise of Western Union, beginning in the sixteenth century, was a result of access to the Atlantic trade. This trade had a great impact on Europe not only in direct benefits, but also indirectly in terms of institutional changes.[36] It was a consequence of the involvement of the monarchy and its allies in conflicts with the merchant group interested in the Atlantic trade.[37] It helped to change the balance of political power, which resulted in the strengthening commercial interests outside the royal circle.

Merchants, who gained immense wealth from the Atlantic trade, were interested in institutional changes by which they could protect their property rights.[38] They were for a strong and centralised government that could maintain internal peace and provide protection from foreign threats. The government, on the other hand, was interested in getting money from merchants in order to finance war affairs. Therefore, there was a mutual interdependence between the merchant class and the monarchy. Most of the monarchies’ revenues were coming from economic activities between the sixteenth and seventeenth century. Because of this interdependence, monarchies established efficient institutions for the protection of the property rights of the merchants and provided them freedom and trust.[39] Between the sixteenth and seventeenth centuries, European monarchs adopted a policy of mercantilism that served to strength the national economy of their respective European states. They created several basic tenants to support their interests:

1. A nation's wealth is measured by the gold and silver (bullion) it possesses.
2. A nation must export more goods than it imports. In other words, these must be a favourable balance of trade in order for a nation to build up its supply of gold and silver.
3. Colonies exist for the benefit of the mother country. Colonies supply raw materials not available in Europe for manufacture and trade, and also serve as a market for the mother country's manufactured goods.
4. Strict laws must regulate trade with the colonies. The regulation of trade strengthened the nation's economy because, in addition to providing gold and silver, the colonies could not set up industries to manufacture goods nor buy goods from foreign countries. This strict regulation ensured that all revenue went to the government.
5. The government must promote and protect local industries by taxing imported goods.
6. Government can increase revenue by imposing a single national currency and selling monopolies to large producers in certain industries as well as big overseas trading companies.
7. Self-sufficiency must be promoted. A country had to use everything it needed within its own borders and not depend on other countries for goods.[40]
   
   

The English Civil War of 1642-1649 and the Revolution of 1688-1689 played a major role in the alteration of political and economic life within the state. The significant development in institutional changes resulted in European mercantile expansion to overseas colonies where they extracted great amounts of wealth. The foundation of joint-stock companies, such as the East Indian Company (1600) in England, was considered to a great development in capitalist-mercantilism. In order to secure overseas trade, European monarchs used the wealth of the church for creating a powerful maritime navy. This also stimulated the development of a shipping industry that needed a great amount of coal and steel for the possibility of mass production. Additionally, it paved the way for the industrial use of iron and coal.[41] Concerning the institutional changes in the seventeenth century, Lawrence Stone elucidates:

 other important merchant elements can now be identified, men interested especially in the American trades, in New England colonisation, and in breaking the monopoly of the East India and Levant Companies. They were new men in new fields of entrepreneurial endeavour who chafed at the political and economic stranglehold of the older established monopolistic oligarchies. These men were important members of the group of radicals who seized control of London at a critical moment in 1641, and so swung the power and influence of the city decisively on the side of Parliament.[42]

As a result of institutional changes there was a transformation of economic life in Europe, from a self-sufficient feudal-manorial system to an urban economy under the control of merchant-manufacturers. The basic needs of merchants - freedom from the intervention of a feudal, self-sufficient government and the protection of trade and private property - were provided for by the government in the late seventeenth century. This transformation led to the growing influence of merchants in state politics, which paved the way to the Industrial Revolution.[43]

Existence of Natural Resources (Coal)

No one can claim coal as the only determinant factor of the British Industrial Revolution. As Peer Vries says, “coal is just a fossil fuel lying under the ground. It had to be mined, transported, used in all kinds of production processes, transformed into cokes or steam, and so forth, before it could become the crucial economic asset it indeed became in Britain”.[44] On the other hand, it is impossible to deny the role of coal in the outbreak of technological development in England; “coal does not explain the innovations it was used in, but without it no innovations could have made so much difference”.[45]

The existence of accessible coal is considered by historians to be one of the crucial factors of England’s Industrial Revolution and technological development. Taylor elucidates, “coal is unique among nineteenth century industries. Not only was it a major industry in its own right, by 1875 directly employing over half a million men and boys, but throughout the century it was virtually the sole supplier of energy to British's expanding economy”.[46] Pomeranz, in turn, also determines coal as a central factor of the Industrial Revolution in England. Easy access to large sources of coal is, according to his argumentation, considered one of the vital factors for England’s revolution. He argues that, unlike China, much of the coal was relatively close to the major population and industrial regions of England, and England had accessible deposits of coal near manufacturing centres, which “provided both a rich and needy market and a pool of craftsmen who made crucial improvements in pumps, steam engines, and so on”.[47] Regarding China, its coal deposits were far from the centre, located in Shaanxi, several hundred landlocked miles from the industrialised  Yangzi Delta. Pomeranz compares it as “a bit like if Europe's coal had mostly been under the Carpathian Mountains”.[48] Frank also sees the great distance of China’s coal deposits as a major reason for the “failure” of Chinese technology. He writes,

China's natural deposits of coal were distant from its possible utilisation for the generation and industrial use of power, so that progressive deforestation still did not make it economical to switch fuel from wood to coal. Moreover, transport via inland canals and coastal shipping, as well as by road, remained efficient and cheap (but not from outlying coal deposits).[49]

I think, in this perspective, Peer Vries' argumentation regarding the distance of coal deposits as a logical factor of Chinese “failure” is noteworthy; as he writes, “when it comes to transportation, like Pomeranz I do not see any reason why China would be at a disadvantage as compared to north western Europe during most of the pre-industrial period”.[50] Even though it is undeniable historical fact that, unlike Europe, the coal deposits were located far from the industrial centre of China, it was a lack of governmental enthusiasm or, as I mentioned above, the absence of mercantilism as a driving force of development – this would have forced the Chinese government to provide sufficient energy resources regardless of distance. When England converted its energy resources from coal to oil prior to the Second World War, for example, it itself did not possess oil deposits, but rather imported them from a great distance. But despite all of this, I share the view of Pomeranz that coal played a key role in the development of England. Thus, he argues that except for cotton, the development of the other determinants of the Industrial Revolution - iron, steel, and railway - were dependant on coal, moving it beyond merely cooking and heating uses.[51] Regarding this, Gerard Turnbull writes:

the early Victorian economy was truly "coal based". The major use for coal, especially before I800, was as a domestic fuel or as a substitute heat-raising agent in a host of traditional and predominantly urban industries-which is why the formal opening of canals to inland towns, marking the end of fuel crises, was greeted with such enthusiasm.[52]

Prior to 1815, the greatest portion of coal production in Britain was used mainly for domestic consumption. But later, the advancement of industrialisation led to the relative decline of this proportion. The domestic consumption of coal around 1870 was around 18 percent. But, the use of coal for industrialisation increased. Its main uses after 1815 were in the iron, steel, and manufacturing industries. It is estimated that the annual growth of England’s coal industry between 1815 and 1875 was 3.5 to 4 percent.[53]

Comparing the consumption of biomass energy and coal between 1700 and 1850, Jack A. Goldstone indicates that the use of biomass energy for fuel was estimated at 250 million tons of oil (Mtoe) equivalent around 1700 and this amount increased perhaps 20 percent to 300 Mtoe by 1850. On the other hand, energy from coal around 1700 estimated approximately 5 Mtoe, but by 1850 this  proportion increased 1400 percent to 70 Mtoe. The most surprising factor is that more than 70 percent of that coal was extracted by Britain to power its engines.[54]

Conclusion

Coming to my concluding remarks, in my brief paper I do not claim to answer the above-mentioned questions asked by historians, but rather try to put together my opinion that was inspired from the thinking of the prominent scholars on the “Great Divergence”. I think the three factors, which I tried to analyse throughout this research paper referring to various authors, were the major, although not all, reasons that technological development and the subsequent Industrial Revolution took place in England. Together, these three factors complete each other, and I believe that these historical developments - colonialism and access to the Atlantic trade, institutional changes and later coal – if combined, were the determinants of the Industrial Revolution. It was not an “exceptionalist” European culture or, as Abu Talib, an Indian Muslim visitor to Britain in late eighteenth century writes, any particular endowment of “The British” with a natural passion for technical innovation.[55]

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