Global Economic History and the Revisionist Challenge: Rethinking the Great Divergence

The emergence of a truly global economic history, committed to studying all world regions, has profoundly transformed scholarly perspectives, especially regarding the early modern period and Asia. This shift, often termed a "reorienting" of history, has generated significant reinterpretations. While earlier studies acknowledged strengths in pre-modern Asian economies, recent decades saw a sharp increase in revisionist scholarship. The central, twofold message is that Europe’s impact on Asia was marginal before the 19th century and that Europe was not inherently more developed. Scholars such as Andre Gunder Frank, Kenneth Pomeranz, R. Bin Wong, and Jack Goldstone—often grouped as the "California School"—argue that the most advanced parts of Qing China, Tokugawa Japan, and Mughal India were "advanced organic economies" with living standards and commercial sophistication comparable to Western Europe.

This re-evaluation is most striking for early modern China. The outdated notion of "oriental despotism" has been discarded. Qing society is now described as relatively open with considerable social mobility, and its domestic economy is recognized as a sophisticated, well-functioning market economy. Previous claims of unchecked population growth and overall technological inferiority to Western Europe are now widely rejected. Similarly, Tokugawa Japan’s economy has been positively reassessed since the 1970s, highlighting its commercial vitality and proto-industrial development.

Despite this parity in the early modern era, a vast economic gap between the West and the rest of the world did emerge. Modern global historians identify the 19th-century Industrial Revolution as the decisive watershed. They view it not for its immediate impact but for setting industrializing economies on a trajectory of unprecedented growth, driven fundamentally by breakthroughs in technology and energy use. Crucially, they do not see industrialization as a logical, inevitable outcome of Western Europe’s specific capitalist institutional setting, separating the phenomenon from its initial geographical occurrence.

Explaining the Great Divergence thus involves answering economist Moses Abramovitz’s three pivotal questions: Why did some countries forge ahead? Why could some catch up? And why did many fall behind? Forging ahead was largely confined to Eurasia. The Americas present a stark contrast: while colonized regions like South America developed extractive institutions harmful to growth, North America evolved more supportive institutions. Africa suffered from geographical challenges, the devastating impacts of the slave trade on demography and property rights, and a complex colonial and post-colonial legacy.

The core puzzle remains why Western Europe initiated sustained growth via industrialization while most of Asia did not, or did so much later. Beyond traditional Eurocentric narratives, new explanations have emerged. Pomeranz emphasizes the fortuitous combination of accessible coal and colonies in Britain, contrasted with their absence in China. Others, like Frank, revive Mark Elvin’s thesis of a "high-level equilibrium trap" in China, where efficient markets, cheap labor, and scarce capital made labor-saving technological investment irrational. Increasingly, scholars also examine the internal political and military crises that weakened large Eastern empires, making them vulnerable to Western overtaking and colonial interference.

The revisionist theses have ignited fierce new debates about the causes of divergence, while the study of catching-up strategies has been revitalized by the dramatic successes in Asia and elsewhere. This makes the persistent poverty and falling behind of other regions—Abramovitz’s unanswered third question—both more unacceptable and analytically urgent, challenging the assumption that globalization alone should eradicate underdevelopment.