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The Great Divergence between Europe and Asia

The Great Divergence between Europe and Asia. Topics: The issues: questions and hypotheses Dimensions of measurement Evidence for divergence: wages Wage comparisons within Europe, India and China Wage comparisons between Europe and India Wage comparisons between Europe and China

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The Great Divergence between Europe and Asia

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  1. The Great Divergence between Europe and Asia Topics: • The issues: questions and hypotheses • Dimensions of measurement • Evidence for divergence: wages • Wage comparisons within Europe, India and China • Wage comparisons between Europe and India • Wage comparisons between Europe and China • Explaining the discrepancies • Globalisation before the 1820s? • Views of the evidence • The Great Divergence: Asia compared with Europe

  2. The Issues: Questions & Hypotheses • When did the `Great Divergence’ begin? • What is the evidence for economic `globalisation’ ? Two hypotheses: • Great Divergence became evident c1820 • Globalisation became evident soon after c1820 Contrary views: • Great Divergence & globalisation began much earlier

  3. Dimensions of measurement Indices of economic `well-being’: • GDP per capita • Real wage rates • Various indirect and/or qualitative measures Indices of `globalisation’ • Volume of traffic in outputs or inputs • Market integration: “commodity price convergence”

  4. Evidence for divergence: wages • Broadberry and Gupta (BG) compare wages in Europe with those in Asia (India and China) • Time period: c1500 to mid-1800s • Take account of: • Location differences: within Europe, India and China • Wages in units of grain or silver

  5. Wages within Europe, India and China • Comparisons within Europe • Comparisons within India • Comparisons within China (very limited data)

  6. Comparisons between Europe and India • England and India, unskilled labour, (BG table 6): • Silver wages higher in Europe compared with India throughout • Grain wages roughly comparable in 1600 but lower in India by 1800s.

  7. Comparisons between Europe and China • England and China, unskilled labour, (BG, table 8): • Wages in silver: lower in China and falling relative to Europe • Wages in grain: smaller discrepancy than for silver wages • Urbanization: • Increasing in Europe relative to China

  8. Explaining the discrepancies • Grain is just one component of consumption. • Tradable goods also included in consumption • Wages similar across sectors in any one country • Higher silver wages in Europe • Tradable goods’ prices in Europe compared with Asia?

  9. Globalisation before 1820s? • BG claim that tradable goods’ prices were globally similar • Evidence is mixed • Silver was traded internationally throughout but prices in silver may not reflect cost-of-living differences • What evidence for `globalisation’ in 16th century?

  10. Views of the evidence • Why do opinions differ? • Even if data were `perfect’ there still is scope for debate • `Great divergence’ probably emerged much earlier than 1800/1820 • But `globalisation’ appears to have been limited before 1800/1820

  11. The Great Divergence: Summing up • Physical environment: Europe fairly stable; access to sea • Culture and religion: Asia favoured obedience • Political and social institutions: Asia more authoritarian; Europe: rival states, rule of law, property rights • Markets: well developed in both Asia and Europe • Technology: Asia’s early advantage not maintained

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