The Great Divergence: Origin and Causes

Introduction

Popularized by economic historian Kenneth Pomeranz in his 2000 book “The Great Divergence”, the term “Great Divergence” refers to the process by which Western Europe, particularly after the 18th century, began to experience rapid economic growth and development, pulling ahead of other regions like China, India, and the Middle East, which had historically been wealthier or at least on par with Europe in terms of technological, political, and economic development. This divergence resulted in the rise of Western dominance in global politics, economics, and culture, while other regions lagged.

Kenneth Pomeranz’s The Great Divergence marked a significant shift in historiography by arguing that Europe’s divergence occurred because of luck — its access to colonies and fossil fuels — rather than inherent European superiority.

Historical Context

Before the 18th century, the major economies of the world — particularly China, India, and parts of the Middle East — were not vastly different in wealth and productivity compared to Europe. China’s Song Dynasty (10th to 13th centuries) and the Mughal Empire in India (16th to 18th centuries) boasted prosperous economies, advanced technology, and powerful states. Europe was relatively fragmented, war-torn, and less advanced during the medieval period.

However, by the 19th century, the industrialized nations of Europe, especially Britain, became global powers. Meanwhile, regions like China and India saw economic stagnation, colonial subjugation, or internal decline. This historical shift is known as the Great Divergence, and scholars have debated the causes and timing of this transformation. Some of the key features of this Great Divergence were as follows

1. Industrialization: The rise of industrial economies in Europe, especially Britain, which could produce goods more efficiently than agrarian economies in Asia and the Middle East.
2. Global Imbalance: Europe’s ability to exploit resources from its colonies and control global trade routes gave it a significant economic and political advantage.
3. Technological Innovation: Europe’s rapid technological advancements, particularly in transportation, communication, and military technology, allowed it to outpace other civilizations.
4. Institutional Development: The development of legal systems, property rights, financial institutions, and more inclusive political structures in Europe created an environment conducive to sustained economic growth.
5. Colonialism and Imperialism: European powers expanded their political and economic control over large parts of the world, particularly in Africa, Asia, and the Americas, which further accelerated their economic development at the expense of these regions.
6. Shift in Global Power: By the 19th century, European powers dominated global politics and the economy, controlling vast colonial empires and influencing international trade, finance, and diplomacy.

Causes of the Great Divergence

The idea of the Great Divergence has evolved as scholars have debated both the causes and the timing of Europe’s rise. Earlier narratives, particularly those rooted in Eurocentrism, attributed Europe’s success to cultural superiority, technological ingenuity, or political institutions like democracy.

However, more recent scholarship has provided a more nuanced picture, emphasizing contingent factors like geography, the timing of industrialization, and the role of global trade and colonialism in Europe’s rise. Several factors contributed to the Great Divergence, with varying emphasis from scholars:

1. Industrial Revolution: The technological advancements that began in Britain in the late 18th century, including steam power, mechanized factories, and advances in metallurgy, led to unprecedented economic growth. Western Europe’s industrialization allowed it to produce goods on a massive scale, leading to economic expansion and the ability to conquer and exploit resources from other regions.
2. Scientific and Intellectual Advancements: The Scientific Revolution in Europe (16th to 18th centuries) fostered a culture of innovation and inquiry, which facilitated technological progress. The Enlightenment also promoted rationality, leading to developments in governance, economics, and industry.
3. Colonialism and Exploitation: European powers engaged in aggressive colonization, exploiting the resources and labour of Africa, Asia, and the Americas. The profits generated from these colonies helped to fuel European growth and dominance, allowing European nations to finance industrial development and military expansion.
4. Political Fragmentation in Europe: Unlike large centralized empires like China, Europe’s political fragmentation fostered competition among states. This rivalry led to more innovation in technology and governance. Decentralization also allowed for a diversity of economic experiments, giving rise to different commercial practices and more vibrant economies.
5. Global Trade Networks: Europe’s maritime exploration and colonization led to the creation of global trade networks. The triangular trade, including the transatlantic slave trade, brought wealth to Europe and allowed it to control critical resources. Additionally, Europe’s access to silver from the Americas, particularly in Spain, played a key role in financing trade with Asia.
6. Institutional Factors: Scholars like Daron Acemoglu and James A. Robinson argue in Why Nations Fail that Europe developed more inclusive political and economic institutions that fostered growth. These institutions provided better property rights, promoted innovation, and reduced the arbitrary power of the state over the economy, leading to sustained economic growth.
7. Environmental Factors: Kenneth Pomeranz emphasized geographic differences, particularly in access to coal and colonies, as crucial in allowing Europe (especially Britain) to industrialize. The availability of coal allowed Britain to mechanize production and overcome energy limitations that were common in other parts of the world.

The 6 Killer Apps of Prosperity: Niall Ferguson’s Explanation

In one of his TED Talks, Niall Ferguson provided a framework for understanding the reasons behind the “Great Divergence” which resulted in the rise of Western dominance in global politics, economics, and culture, while other regions particularly Asia, lagged. Ferguson argues that this divergence wasn’t due to geography, race, or inherent national characteristics but to six key institutions or “apps” that Europe and the West developed and maintained. These “killer apps” were responsible for the West’s dominance and wealth accumulation after 1500.

1. Competition

Europe was politically fragmented into multiple sovereign entities (over 100 in 1500), unlike the monolithic state in China. This political and economic competition between nations and within countries (e.g., corporations and institutions like the City of London) spurred innovation and efficiency.

Competition not only drove technological and economic advancement but also created a marketplace for ideas. The constant state of rivalry pushed European nations to innovate faster, militarily and economically. While China, with its unified bureaucracy, could efficiently govern a large area, it lacked the competitive dynamism seen in Europe.

2. Scientific Revolution

Europe’s scientific revolution in the 17th century was driven by a systematic application of the experimental method. This was absent in the Ottoman Empire and China, where scientific inquiry was often seen as conflicting with religious or traditional beliefs.

The West’s embrace of scientific rationalism allowed for technological advancements that were scalable, particularly in military and medical fields. While other civilizations had advanced science, their methods lacked the formalized experimental approach, which led to stagnation. Europe’s scientific institutions collaborated with industries, propelling industrialization.

3. Property Rights

Secure property rights and legal protection in Europe — especially in North America — enabled economic development and social stability. In contrast, South America was ruled by elites with concentrated land ownership, limiting widespread wealth generation.

Property rights create an environment where individuals feel safe to invest, innovate, and accumulate wealth. North America, for example, became an attractive place for settlers because land ownership was democratized. This contrasted sharply with Latin America, where colonial elites controlled the land and power, which stifled economic mobility.

4. Modern Medicine

Western medicine’s advances, such as vaccines and improved surgery in the 19th century, significantly reduced mortality rates and improved the overall health of populations. These breakthroughs were essential for sustaining population growth and supporting industrial economies.

Public health improvements had a compounding effect on the West’s development. A healthier population meant a more productive workforce, fewer disruptions due to plagues or diseases, and an increased life expectancy, all of which supported industrialization and urbanization. This was an area where the West genuinely outpaced other regions that lacked the scientific infrastructure.

5. Consumer Society

The consumer revolution in the West encouraged people to want more goods, and the ability to buy them led to increased demand, which, in turn, fuelled the Industrial Revolution. This cycle of production and consumption drove economic growth.

Consumerism is often criticized, but it played a crucial role in the West’s economic growth. The rise of a middle class that had disposable income transformed the economy from subsistence to one focused on growth. This was a sharp contrast to regions like India, where Gandhi promoted self-sufficiency and poverty as virtues, which didn’t align with industrialization.

6. Work Ethic

While originally attributed to the Protestant work ethic in the West, Ferguson argues that any society can adopt a strong work ethic if it has the right institutions. Countries like Japan, Korea, and China have now surpassed the West in this regard, as seen in their high levels of productivity and economic success.

The work ethic is indeed transferable and not exclusively Western. Today, East Asian countries are known for their intense work cultures, which have led to their rapid economic growth. The erosion of work ethic in the West, combined with social welfare systems that can sometimes disincentivize productivity, has shifted this dynamic. Societies that incentivize hard work, innovation, and education will likely maintain or even surpass Western economies.

Sequence of Adoption Matters

Ferguson touches on this briefly, but it’s crucial to emphasize that adopting these “apps” in the right sequence is vital for success. For example, a country must secure property rights before democratization to ensure stability. Trying to reverse this order can lead to chaos, as seen in some African nations where premature democratization has led to political instability without the necessary institutional foundations.

Globalization and the Great Re-Convergence

While Ferguson frames these apps as historical drivers of the Great Divergence, the world is now witnessing what he calls the “Great Re-Convergence.” Countries like China and India, which were left behind in the 19th and early 20th centuries, are catching up by adopting these same institutions. The decline in the West’s work ethic, as well as the outsourcing of manufacturing and technological leadership to East Asia, signals that Western dominance may not last.

Can the West Decline?

Ferguson warns that Western civilization’s decline is not inevitable but possible if these apps are “deleted” or weakened. Growing political polarization, attacks on property rights, rejection of scientific evidence (e.g., climate change denial), and consumerism without productivity could erode the foundations that made the West so prosperous.

Conclusion
The Great Divergence is a key concept in understanding modern global history, explaining how Western Europe rose to dominate the world economically, politically, and technologically while other regions, particularly China and India, which were historically wealthy and powerful, fell behind. Its causes are complex, involving a combination of technological innovation, political fragmentation, colonial exploitation, and environmental factors. The ongoing debate around the Great Divergence continues to shed light on how different regions developed and how global inequalities emerged.

Ferguson’s six killer apps — competition, scientific revolution, property rights, modern medicine, consumer society, and work ethic — provide a compelling explanation for why the West dominated the world economically for several centuries. However, as other nations adopt these same institutions, we are witnessing a shift in global power dynamics. The future will depend on which societies can adapt these apps effectively while avoiding the pitfalls of complacency.