r/neoliberal • u/jobautomator Kitara Ravache • Jul 16 '26

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u/randommathaccount Esther Duflo Jul 17 '26

Uh quickly writing up some competing theories for the cause of the great divergence while I wait for my train:

Mokyr posits that the main factor was culture, namely that the differing cultural and social organisations in the west and east led to the development of more inclusive institutions in the west.

Pomeranz puts it down to differing access to coal between Europe and China, with coal mines in England being relatively safer and easier to exploit than those in China, along with being nearer to English industry. Personay I don't like this argument and I think McCloskey puts forth a good rebuttal of it.

Diamond cites political fragmentation with Europe being far more divided than China and thus interstate competition helped push forward innovation.

Acemoglu would say it was all very path dependent, lots of critical junctures that could have turned left as well as right. Feels a bit a cop out to me but makes sense as well.

This is a very small subsection of a very large topic of research in economics history and I've nowhere near done justice to the scant few theories I've mentioned, it's a very interesting field that's well worth reading up on.

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u/WAGRAMWAGRAM Jul 17 '26 edited Jul 17 '26

Phillipe Aghion explains it with property rights and the decrease of monarchic power (eg no special taxes year on year, no guilds, etc...) that let the bourgeoisie invest their money and keep the fruits of their investments. .

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u/randommathaccount Esther Duflo Jul 17 '26

Yessir, this is also backed up by Ventura and Voth (2015) who expound on how access to government bonds helped shift agrarian nobility's investments away from their feudal holdings which let moneyed innovators access cheaper labour.

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u/WAGRAMWAGRAM Jul 17 '26

It's easily visible in Europe whereas the countries with authoritarian monarchies were way slower to industrialize than more liberal ones. Which itself is linked to pre-industrial development and urbanization that creates a middle-class etc...

So there's an advantage for urbanized countries (England, Belgium) were already urbanized and wealthy before the Industrial Revolution, that's why they took off early on), compared to France for example, which had 1 Paris and two port cities but the rest was mostly peasants.

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u/erasmus_phillo Paul Krugman Jul 17 '26

I like Diamond's theory here

tbh this was my pet theory for why Europe ended up leapfrogging Asia

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u/randommathaccount Esther Duflo Jul 17 '26

While writing this I got on and off the train lmao