Over the past two centuries the West has led the world in means of techno-logical innovation, trade, and economics. Contrarily to what many think, the West didn’t predominate at the time prior the industrialization. As a matter of fact, up until the 19th century, Asia detained great economic and political power in the international scenario. Then why did the West grow rich while the Asian continent stayed behind? Why did the industrial revo-lution occur in Britain rather than in China, and why did West catch up with the British, while Asia lost to the western world? Many historians, economists and political scientists have attempted to give an answer to the-se questions, often coming up with controversial theories.
Historian Samuel Huntington …show more content…
Allen came up with his own theory on the Great Divergence. Allen’s analysis starts from the 16th century, in which economic differences between countries were negligible. Then the author divides the last five centuries in three periods: the mercantilist era, a period of discoveries for the European countries, that helped to develop an economical integration and ended with the Industrial Revolution. The second period of catch-up, in the 19th century, during which Western Europe and the USA focused on competing and developing with a set of policies: “creation of a unified national market (…); the erection of an external tariff to protect their industries from British competition; the chartering of banks to stabilize the currency and finance industrial investment; and the establishment of mass education to upgrade the labour force” (p.2). The countries that operated with these policies joined Britain to form today’s rich countries, while Asia and Africa were left behind. The gap was widened during the 20th century, as the industrialized countries kept developing new technologies and increasing their productivity by investing more capital. Allen provides data to prove that not only Asian countries that predominated in the world’s scenario lost relatively to the Western world, they actually decreased their level of production in absolute terms. Moreover, Allen provides important information on real wages, which diverged proportionally to the GDP per capita. He argues that, the increase of real wages that occured after the Industrial Revolution contributed to the economic development by increasing standards of living such as healthcare and education. “Bare-bones subsistence is a poverty trap. The Industrial Revolution was the result of high wages – and not just their
Historian Samuel Huntington …show more content…
Allen came up with his own theory on the Great Divergence. Allen’s analysis starts from the 16th century, in which economic differences between countries were negligible. Then the author divides the last five centuries in three periods: the mercantilist era, a period of discoveries for the European countries, that helped to develop an economical integration and ended with the Industrial Revolution. The second period of catch-up, in the 19th century, during which Western Europe and the USA focused on competing and developing with a set of policies: “creation of a unified national market (…); the erection of an external tariff to protect their industries from British competition; the chartering of banks to stabilize the currency and finance industrial investment; and the establishment of mass education to upgrade the labour force” (p.2). The countries that operated with these policies joined Britain to form today’s rich countries, while Asia and Africa were left behind. The gap was widened during the 20th century, as the industrialized countries kept developing new technologies and increasing their productivity by investing more capital. Allen provides data to prove that not only Asian countries that predominated in the world’s scenario lost relatively to the Western world, they actually decreased their level of production in absolute terms. Moreover, Allen provides important information on real wages, which diverged proportionally to the GDP per capita. He argues that, the increase of real wages that occured after the Industrial Revolution contributed to the economic development by increasing standards of living such as healthcare and education. “Bare-bones subsistence is a poverty trap. The Industrial Revolution was the result of high wages – and not just their