The divergence over the Great Divergence is narrowing

Stephen Broadberry, Hanhui Guan, and David Daokui Li have updated their impressive paper compiling estimates of Chinese per-capita GDP over about one thousand years (“China, Europe and the Great Divergence: A Study in Historical National Accounting, 980-1850“), with results that help shed light on one of the great debates in economic history: just when and by how much did incomes in Europe start to overtake those in China?

Our estimates indicate that Northern Song China was richer than Domesday Britain circa 1090, but Britain had caught up by 1400. Also, China as a whole was certainly poorer than Italy by 1300, but at this stage, it is quite possible that the richest parts of China were still on a par with the richest parts of Europe.

By the seventeenth century, however, China as a whole was already substantially behind the leading European economies in the North Sea area, despite still being the richest Asian economy. Even allowing for regional variation within China, it is clear that the Great Divergence between China and Western Europe was already well under way by the first half of the eighteenth century, before the start of the Industrial Revolution.

Although this clearly contradicts the early statements of California School writers such as Pomeranz (2000) and Wong (1997), it is broadly consistent with the later views of Pomeranz (2011), who accepts that his early claim of China on a par with Europe as late as 1800 was exaggerated, and is now willing to settle for an earlier date between 1700 and 1750.

We think this is encouraging, because it shows how engagement between researchers using primarily quantitative methods and those who tend to put more weight on qualitative methods can result in a new consensus that challenges the original position of both sides in a major debate.

The California School were right to claim that, taking account of regional variation, historical differences in economic performance between China and Europe were much less than was once thought. However, the early claims of the California School went a bit too far: China and Europe were already on different trajectories before the Industrial Revolution, as European economic historians have traditionally maintained. The Great Divergence did not begin as late as the nineteenth century.

But you don’t have to take their word for it; Kenneth Pomeranz himself has weighed in with a blogpost reviewing some of this recent research:

A recent paper by Stephen Broadberry, Hanhui Guan and David Daokui Li suggests that Britain must have overtaken the Yangzi Delta in per capita GDP by the first quarter of the 18th century. This is, of course, materially different from my claim in The Great Divergence that the Yangzi Delta had not fallen significantly behind until well into the second half of the 18thcentury, and maybe not until 1800…

I think it is noteworthy that a debate between an early and a late 18th century divergence represents a considerably different intellectual landscape than the one we would have if we relied on Maddison’s GDP numbers, or on the non-quantitative work of David Landes, Deepak Lal, and various others – or for that matter, on an earlier attempt by Guan and Li to estimate comparative GDPs, which had previously claimed that a huge gap already existed in the 15th century. …

Admittedly, that is far from the rough parity I had originally suggested at 1800, and would now be inclined to put at somewhere around 1750 instead; there are some plausible adjustments that I think would narrow the gap further, but that is not really the point for now.  Instead I would emphasize that despite continuing disagreements and continuing data problems – the latter of which will probably never be fully solved – we have made some progress in narrowing the range of plausible answers about when and how much divergence occurred in these terms.

On the whole I see this as an example of the virtues of quantification in social science: when disagreements are about empirically measurable quantities, rather than abstract principles, it should be easier to resolve them. But still, how often does that actually happen in economics?

broadberry-china-table

5 Comments

  1. The “virtues of quantification” might include, among fair-minded people – among whom Pomeranz might be considered paramount – a ‘great convergence” on, well, truth. This is a very encouraging post – thanks for that.

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  2. Dear Andrew Batson, we wish you well but the notion that the debate on divergence might be settled or even illuminated by recourse to data in international dollars is conceptually flawed and statistically impossible because professional economic historians of Chinese history will inform you Chinese archives contain virtually none of the evidence required to measure GDP before 1911. Nothing currently in print approximates to what a historian might recognize as an informed conjecture let alone a hard number. We analyse the data purporting to represent quantitative evidence in a recent paper published in World Economics, Vol 2 no. 18, 2017. There are now, as in the history of art, 3 kinds of economic history in print: representational, abstract and conceptual. We like the first, approve of the second and occasionally pause to consider the third. Patrick O’Brien and Kent Deng

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  3. Numbers – and the hypotheses and methods involved in both producing them and using them – are one way of giving focus to important economic and historical issues. The Deng and O’Brien World Economics article mentioned above by O’Brien is not freely available. But a recent working paper (“How well do facts travel…?”) by the same authors on Deng’s LSE site purports to challenge what they describe as the “any number is better than no number ” attitude.

    I don’t think that anyone denies that all of the long-term, retroactive, per capita GDP series – from all authors and for all countries – are uncertain and contestable. For example, a pseudoerasmus post (“The Little Divergence”, 6/12/2014) explores the enormous differences in the long-term per capita estimates for Britain by Clark and by Broadberry, et al – differences big enough, one would think, to cause anyone to temper claims based upon this data.

    But in the end Deng and O’Brien have a number and they think it is better than no number. Although their numerator is kilo-calories instead of a monetary index, they are producing at a high level the same assumptions-laden artifact as Maddison, Broadberry and others: a contestable output or consumption series divided by a contestable population series. I certainly intend to look what they are doing – but not because it’s obvious beforehand that the Deng/O’Brien approach is more valid than others.

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  4. Dear Andrew Batson, Please send your email and we will send you a copy of our paper in World Economics. Yes we do believe that indices based on nutritutional standards of living bring us closer to plausible conjectures than numbers manufactured to represent GDP per capita in International dollars or real wages in grams of fine silver. Both embody serious conceptual flaws and cannot unfortunately be constructed for imperial China simply because the state collected almost no empire wide data for the macro economic aggregates that would allow for its assembly into the numbers required to represent national incomes per capita or modal real wage levels. At some point in the validation process serious economic historians will have to agree that the sources for early modern empires and perhaps for Western Europe are simply not there or adequate for historical investigations into the questions so eloquently and carefully specified by our friends Ken Pomeranz and Steve Broadberry operating as our tribe wishes to do within the Kuznetian Paradimn for modern economic history. We must alas settle for a much more tentative analysis for the history of long term economic growth. Yours, Patrick. PS please send me the reference to the paper on the Little Divergence. I do hope that has not turned into another exhibition of conceptual art.
    Sorry on reading the above I failed to make our point which is that as it stands the Maddison or any other data recalibrated into international dollars and or kilocalories generates two very different historical narratives and there is no reason to support one or the other ?

    Reply

    1. Dear Prof O’Brien: Thanks for your comments. You are dealing with both a “Batson” and a “Barson” here – and we are (at least) as incommensurate nutritional standards of living and PPP dollars! I (Tom Barson) will send a request for the article to your LSE email account – will that work?

      One thing I will ask is for you to expand a little on the “Kuznetian paradigm”. Searches on this concept (however I spell it) return mainly your and Deng’s criticisms. But from the few other references I find support for two meanings: 1) use of national accounts data for comparative study as if all countries’ data were exogenous to each other and equivalent, and 2) more broadly, use of such (often reconstructed) data to divide countries’ histories into stylized epochs. I’m not sure whether you mean one or both meanings- or yet another.

      Regards, TB

      Reply

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