Hi, welcome back. Make yourself comfortable. You'll remember at the very start of this course, we talked about the great divide, and we posed this as one of the fundamental questions for the whole course. The divide between the traditional and the modern, and some other divides. We're going to circle back to that right now. We're going to talk about a period in which the divergence between East and West really becomes marked. Let's call this The Great Divergence. Actually, it's not my phrase. The phrase is mainly associated with the historian named Kenneth Pomeranz, who talks about the great divergence that shows up between say, the most advanced part of Asia, China and the most advanced of the Western world, which was Western Europe from about 1800 on. Let's try to measure what he means by great divergence. Let's look at these charts, these charts are produced by an economic historian named Angus Madison. Published in a compendium called The World Economy by the Organization of Economic Cooperation and Development. Let's zoom in on per capita GDP. Per capita GDP means the amount of product per person. So this per person measure between fifth, and this is growth of product per person per year. So, per year, for the 320 years between 1500 and 1820, average growth per person product in Western Europe is 0.15% per year. That average in Asia is about flat, with some variance between different parts of Asia. Some difference there, but not huge. But now let's look a little closer at this. Examine the period 1820 to 1870. Notice that western Europe is growing per person on average of about 1% per year, per year for 50 years on average. While in Asia excluding Japan, that will be China, India, South East Asia, on average, it's actually declining slightly per year for 50 years. That's going to be a pretty big divergence. Now we want to look at total product, total GDP. 1500 again, going back to that period. This is 1500 to 1820. This is 1820 to 1870. So, here is Western Europe on average total gross domestic product growing above four-tenths of 1% per year. Asia, excluding Japan, growing about three-tenths of 1% per year. A lot of variations within these regions. China and particularly parts of China is the wealthiest, so actually parts of China will be better than much of western Europe and so on. Now look at this period. The 50 years between 1820 and 1870. A stark change in the rate for Western Europe, growing on average pushing towards 2% per year for 50 years in total gross domestic product. And here is your average for Asia, not including Japan in that same 50-year period. Well, that also is going to amount to a great divergence. Let's look at it yet, one more way. Now i want to zoom in on this idea. Shares of World GDP. So basically, what regions of the world are producing the most stuff during this period? Well, in 1500, Asia, excluding Japan is producing 62% of the world's stuff. Western Europe is producing about 18%. In 1820, Asia is still the main producer of the world's stuff, 56%. Europe, up a little to 24% with western offshoots. The United States of America, Latin America, a couple percent more. Look at what happens between 1820, again, just that 50 years to 1870, quite a change. Western Europe's now producing 34% of the world's stuff. Its offshoots in the western hemisphere or Australia now 10%. Asia's proportion, 36. And actually you can see the momentum now carrying forward if we jump forward another 43 years, 1913. Between Western Europe and United States and South America and Australia and so on. Well, you've got more than 55%. The majority of the world's output has now come from those places, Asia's 22%. So if you see just what's happening between these two periods, you can see in statistics, dry economic statistics, what's meant by the great divergence. And of course, this manifest itself in a host of ways in the material condition of people's lives. So the issue we have is, why did this happen? Well, let's first dispel some common misconceptions. Because actually, the wealthiest parts of these two ends of Eurasia, let's say the Yangtze Valley in China compared to northwest Europe or England, they have a lot of things in common. For one thing, both ends of Eurasia have made a lot of the basic early scientific discoveries. The Chinese, for example, have discovered gun powder. They're working in higher mathematics. A lot of the basic discoveries are common in both parts of the world as of say, 1700, 1750. If you look at manufacturers, their ability to produce manufactured goods. The Chinese manufacturing facilities for ceramics, things like that, are as advanced or more advanced than anything you would find in England. Both ends of Eurasia can produce goods that, for the time, let's say 1700s, are very sophisticated. Both ends of Eurasia are developing some really big population centers. China for example, in the Yangtze Valley, northwest Europe epitomized by places like London and Paris Both ends of Eurasia have pretty strong financial capacity. Different ways, but yes, there are some things in northwest Europe as the Commercial Revolution that I talked about earlier develops. Some other private financial capabilities. But there's a lot of things in common. Both ends can muster a lot of money for major investments. Another thing both ends of Eurasia have in common, their development is both running up against hard constraints. Not enough land, not enough resources to support the way population is growing. Just a classic pattern. I showed you a graph having to do with this in one of the earlier lectures. It's called the Malthusian trap. Population grows, your capacity to support that greater population is pretty fixed. So you may have more people, but they're producing less per person. They're running up against hard limits, bad things happen, famine, population then declines, and you start the cycle again. So, in the 1700s both ends of Eurasia are running up against this. Look at China, they're cutting down all trees. They're running into all kinds of environmental problems in finding the food to put in their mouths and the fiber to wear on their backs. Go to the other end of Eurasia, you could see symptoms of some more problems. Deforestation all over England, for example. So both ends are running into the ecological constraints that should flatten out their ability to develop. Here are those where we get into the differences. Let me split these differences into two parts. Why is the west able to bust the ecological constraints? They have access to two kinds of things that allow them to break the ceiling. They have access to, Extra resources. And they used technology to break the historic barriers. Where did they get the extra resources? How can they have that? Well, for one thing, they have superior trading networks. Remember that Commercial Revolution that I talked about? A lot of these trading networks are near Europe. Say, natural resources brought through the Baltic Sea. Some of that has an analog in East Asia, but another huge advantage that they have in resources, the new world. North and South America, the West Indies. Allow them to start breaking through the historical constraints. That's not all either. There is this point about technology. Frankly, the West starts developing these machines, tapping fossil fuel. That allows you to break the historic constraints. Okay, but how come they have that technology? How did that happen? That's the question we're going to need to explore a little more next time. That's a good one. I look forward to talking to you about it.
