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Before and Beyond Divergence: The Politics of Economic Change in China and Europe
China has reemerged as a powerhouse in the global economy, reviving a classic question in economic why did sustained economic growth arise in Europe rather than in China?
Many favor cultural and environmental explanations of the nineteenth-century economic divergence between Europe and the rest of the world. This book, the product of over twenty years of research, takes a sharply different tack. It argues that political differences which crystallized well before 1800 were responsible both for China’s early and more recent prosperity and for Europe’s difficulties after the fall of the Roman Empire and during early industrialization.
Rosenthal and Wong show that relative prices matter to how economies evolve; institutions can have a large effect on relative prices; and the spatial scale of polities can affect the choices of institutions in the long run. Their historical perspective on institutional change has surprising implications for understanding modern transformations in China and Europe and for future expectations. It also yields insights in comparative economic history, essential to any larger social science account of modern world history.
Many favor cultural and environmental explanations of the nineteenth-century economic divergence between Europe and the rest of the world. This book, the product of over twenty years of research, takes a sharply different tack. It argues that political differences which crystallized well before 1800 were responsible both for China’s early and more recent prosperity and for Europe’s difficulties after the fall of the Roman Empire and during early industrialization.
Rosenthal and Wong show that relative prices matter to how economies evolve; institutions can have a large effect on relative prices; and the spatial scale of polities can affect the choices of institutions in the long run. Their historical perspective on institutional change has surprising implications for understanding modern transformations in China and Europe and for future expectations. It also yields insights in comparative economic history, essential to any larger social science account of modern world history.
290 pages, Hardcover
First published April 1, 2011
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About the author
Jean-Laurent Rosenthal
15 books4 followersJean-Laurent Rosenthal is an economist and Professor of Business Economics at the California Institute of Technology.
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February 21, 2023I gotta say, the worst thing about econ history is how stupid the titles always are. “I’ve been reading a really interesting book” oh what’s it called “before and beyond divergence” alright.
Still, I quite liked this book. Very clean thesis. Europe was fractured and wracked with war, which pushed people to fortified urban centers. Cost of capital was lower in cities than in rural areas. China did not face these sort of urbanizing pressures and so it stuck with low capital rural handicraft. By the 1500s, the Chinese and European economies were on structurally different paths (even though the cost of war kept Europe poorer for centuries past the 16th century). Not sure how true this is but it’s clean and pretty, and I like it.
Still, I quite liked this book. Very clean thesis. Europe was fractured and wracked with war, which pushed people to fortified urban centers. Cost of capital was lower in cities than in rural areas. China did not face these sort of urbanizing pressures and so it stuck with low capital rural handicraft. By the 1500s, the Chinese and European economies were on structurally different paths (even though the cost of war kept Europe poorer for centuries past the 16th century). Not sure how true this is but it’s clean and pretty, and I like it.
December 5, 2020
This book was another entry in the "Great Divergence" debates. Wong and Rosenthal are straight-up economic historians, but they do the best they can to make it interesting. Were I a specialist in economic history, they might have succeeded. Instead, they produced a well-written but incredibly dry account of why Europe industrialized and China did not.
They try to turn the classic interpretation of European conflict on its head. That interpretation says that the intense competition in Europe made it more innovative at a time when China's relative peace made it stagnant. The authors argue that while that might be true, the stability of China was the reason it was so prosperous before industrialization and why it is reestablishing itself as a global economic power now. The costs that Europe paid for competition held it back for a millennium and are starting to undermine it effectiveness again.
I like the argument for the most part. Wong and Rosenthal get into some nitty-gritty on political economy, showing that the Chinese extended family was not a drag on its economy, nor was its penchant for informal dispute resolution. But those are meant simply to undermine existing theories. The authors' most interesting contribution (in my opinion) was the unintended side-effects of warfare, which was urbanization. Cities were safer than the countryside in war, so Europe's incessant warfare dramatically increased the move to cities, which provided skills and a workforce for when industrialization was spreading. This seems a little strange because they then argue that England was actually more like China in its relative peace and centralization. This is where they lost me. If Europe developed because of wars forcing people to cities, but England didn't have that phenomenon, why did it develop industrialization first?
I will admit most of the economic minutiae was beyond me, so I was mainly looking at their logic and hoping their evidence was strong. I found it to be an interesting argument, but ultimately unconvincing. Because of that, and because of the technical nature of the writing, I don't recommend it to people interested in the Great Divergence Debate.
They try to turn the classic interpretation of European conflict on its head. That interpretation says that the intense competition in Europe made it more innovative at a time when China's relative peace made it stagnant. The authors argue that while that might be true, the stability of China was the reason it was so prosperous before industrialization and why it is reestablishing itself as a global economic power now. The costs that Europe paid for competition held it back for a millennium and are starting to undermine it effectiveness again.
I like the argument for the most part. Wong and Rosenthal get into some nitty-gritty on political economy, showing that the Chinese extended family was not a drag on its economy, nor was its penchant for informal dispute resolution. But those are meant simply to undermine existing theories. The authors' most interesting contribution (in my opinion) was the unintended side-effects of warfare, which was urbanization. Cities were safer than the countryside in war, so Europe's incessant warfare dramatically increased the move to cities, which provided skills and a workforce for when industrialization was spreading. This seems a little strange because they then argue that England was actually more like China in its relative peace and centralization. This is where they lost me. If Europe developed because of wars forcing people to cities, but England didn't have that phenomenon, why did it develop industrialization first?
I will admit most of the economic minutiae was beyond me, so I was mainly looking at their logic and hoping their evidence was strong. I found it to be an interesting argument, but ultimately unconvincing. Because of that, and because of the technical nature of the writing, I don't recommend it to people interested in the Great Divergence Debate.
March 2, 2016
I found Wong's arguments in this book--written in response to Pomeranz's Great Divergence--to be much more convincing and nuanced than those of Pomeranz. Pomeranz's theory of England as a "fortunate freak" seems to me to be too simplistic, deterministic. Wong's analysis grants the actors on both sides of Eurasia greater agency and better explains patterns of political and economic development that have continued into the "modern" age.
November 16, 2025
Some parts of it are more convincing than others. I appreciated the refusal of the Eurocentric bias implicit in arguing that institutions different from European ones are inferior by definition. I wish there was more explanation on why England specifically was the cradle of the Industrial Revolution, since they very much stress the point that its manufacturing allocation was an exception in European standards. This inconsistency quite undermines their point about war being imperative for the transfer of manufacturing in cities.
Displaying 1 - 4 of 4 reviews