So this is what is what originally was a two hour lecture I gave earlier this summer in Singapore.
So I have had to condense into little bits. It's work based on a joint book that I'm writing with two other economist,
Gil Notability, and have no grief and no book will eventually emerge, one hopes.
And so, like many of people, I'm starting here with Pomerantz his book, which is now almost 20 years out.
And you know, you all know you've already got, you know, when it's all about and so on.
And it's been incredibly influential, and it's sort of led to a great deal of work,
which is the definition of influential and much of the work that that you know,
that you're from Landrum, Bishnu and many other people like young Lightnin, Bob Allen and on and on.
You've been trying to sort of look at at and Cairns argument.
My I don't want to in any way detract from it.
Although I, like Patrick, have disagreements with the book, but it's it's mostly about economic divergence.
So it's based on whether it's wages or income per capita that either one of those.
It's basically when do living standards or a GDP per capita or wages in China start to diverge?
And as you all know, the California school of which Ken, when he was living in California,
it was it was a member and basically argued that that the industrial revolution is where all the action was.
And until 1750 or so, Europe and China were moving on fairly similar tracks as far as living standards are concerned.
And it's only then that the two broke apart. Now that's I think, and him reproducing like others before me,
the calculations that's that Steve Robbins team of creative dishes and graphs that I think that I've made it from from from their 2018 J.
H paper. And you know, I mean, it does. You can you can interpret it as a great divergence or a big divergence or a small divergence.
And for me, actually, what this shows more than anything else is perhaps the notion that sort of these grand
fundamentalist Malthusian interpretations that Greg Clark and others below have been
proposing probably don't don't survive the confrontation with this kind of data because
we do see growth and we see very different levels of of of of income per capita.
You know, one striking thing is that Italy, already in the Middle Ages, has is in an income per capita is much higher than almost anybody else,
meaning that there must have been above subsistence now China from this story, at least if you go for it.
And clearly is very early on way above European nations, but eventually falls behind.
My argument is that this is an interesting story, but it may be not the most interesting story.
And if you ever want to get into the reasons why which were raised here, I think so.
You would have to look at other divergences. So I'm going to try to get them a little time I have.
So at least five divergences, I have more if you push me on it.
But the let's let's see if I get get through to these five. And now I won't say that the word divergence actually only borrowed because Ken used it.
Many of these divergences are divergences. They are reversals.
And I think that's something to to keep in mind. So the first one and could it be culture?
So people? David Landers was made a very big deal out of culture and in his wealth and prosperity of nations book and somehow argued
quite with a straight face that Chinese culture was incompatible with economic development and technological progress,
which every sinologist that I know and many other people basically have found unacceptable.
And what's more, a lot of people are reluctant about culture, largely because some version of historical materialism and not just Marxism,
but also people like Ian Morris essentially say, Look, culture is endogenous.
It's the result of a lot of things. Every nation gets the culture that it needs us.
Ian Morris's wealth. And so we shouldn't be wasting our time on culture.
And I think there's a consensus growing that this sort of culture free approach of the California school has been misplaced.
And I'm going to focus first on the Needham puzzle, which Patrick already mentioned.
And of course, as a public headed is a wonderful paper published a decade ago in which he speaks of cosmology.
She doesn't like that culture, but I don't know what the difference is between culture and cosmology. So we can.
We can, we can agree on that. And but the great, but it isn't really the need him puzzle.
Is it more than a diversity? It really is a reversal because in Tang and Song Times, you know it,
China was by any count, a technologically sophisticated, literate, commercialised,
developed economy at a time when buying on an old in Europe with a famished,
violent and ignorant backwater in China was governed by a meritocratic bureaucracy.
It was very heavily invested in human capital and yet and yet the progress of China.
It started to slow down during meantime, and nobody has quite how fast, and it's probably uneven regionally and centrally.
But clearly it's not quite what it was before. And you know, of all the great technological and say.
Advances that are listed in the many need him volumes.
It turns out, and Simon Winchester actually in his book, The Man Who Left China has a little table of those,
and very few of them were made after 100 and known as the 4500.
And that's actually probably as striking a phenomenon as all the GDP statistics than anybody can, can and amass.
And so as a result, it's fair to say that whether you believe in a scientific revolution in Europe or not, China didn't have one.
OK. And and and the same is true about an industrial revolution now.
It is very important to keep those data different and separate questions. And are often mixed up.
But I've done a lot of it, made a lot of effort to try to keep that to keep them apart.
So why? And so let me give you one solution of a paper that isn't all that well known, but I've always thought was totally brilliant.
That's Justin Lin's 1995 economic development of Cultural Change paper.
And in that paper, Justin Lin points out that the sort of technological change can happen in two ways.
One of them is of experience based in which the radical change happens through trial and error,
killing cumulative learning by doing and experimentation.
And therefore, basically the bigger you are, you know, the more chances you have to make progress.
And that's what China is leading because its population in particular, it's going to advance sectors are so much larger than Europe.
At some point in early modern Europe,
there is a slow transition when invention starts to depend more and more on what I've called useful knowledge that a reliable,
non-partisan washing machine debate.
Later, bridges gather for observation, experimentation and computation, scientific or not scientific by a small minority of specialists.
OK, and that knowledge is then converted through various channels into technology, and that is essentially what we call the upper scale human capital.
Are you THC at hypothesis? And so by Len's logic, as I said, China would remain a leader as long as technological progress is not the first time,
but it starts to lose its advantage in the knowledge based type of innovation driven by UTC.
And that's, I think, is one of the reasons why we see a divergence in knowledge formation,
not just technological knowledge and use of machinery, but all kinds of other things medicine, its navigation and so on and so forth.
But that Lynn's argument is missing a critical component because it doesn't tell you why China did not have
the innovative elite of scientists and so on that eventually drove the industrial revolution in Europe.
And so we need to dig a little bit deeper into what drove the intellectual and technological innovation in the past.
And so was there an intellectual divergence?
And so what I'm submitting to you is an intellectual divergence has institutional roots, which we can identify.
And in Europe and somewhere between Columbus and the deaths of Isaac Newton,
a unique set of circumstances created a set of institutions that encouraged and incentivised intellectual innovations by an educated elite.
And these institutions underlay a highly competitive market for ideas that was much more functional,
creating, amongst other things, technological and scientific progress than elsewhere.
Because many other things that are not technological, scientific, philosophical, mathematical insoles, of course.
And but what emerges in Europe after 1900 is a competitive market for ideas.
And the reason is that in Europe, technological progress always had been and remained for many until deep into the 20th century.
The responsibility of the private sector and the way it works is to engineers and doctors and natural philosophers basically working on their own,
but are seeking patronage from rulers and wealthy patrons, of course.
But they're rarely government bureaucrats, unlike China, where Chinese mandarins were often the drivers of technological progress.
And so these people have far more freedom to think outside the box and contest conventional wisdom.
And as it turned out, to be much more creative and innovative.
This is a competitive market, ladies and gentlemen,
and in a competitive market in ideas ensures intellectual pluralism and eventually, I strongly believe progress in China.
On the other hand, much of the useful knowledge was created when it was created and it was by the state and disseminated by the states.
Here are some examples that can give you more if you wanted, but you all noticed that China has actually the official Bureau of Astronomy.
It's established this early research 13th third century BCE and much of the Great Race Revolution by introducing Campa.
Varieties were introduced by imperial officials and the Great Encyclopaedia on Agriculture Handbook like Rankings and Xiaogang,
she's all written by government bureaucrat now.
S state capacity in China declined, and the imperial government becomes more conserved.
I would say reactionary and inward looking under technological dynamism in China withers away.
And so there's some consequences then, and I move to the next one. One consequence which actually some people in Washington may want to think about a
little bit more is that China just never involved intellectual property rights.
A lovely little book by a man called Alford in 1995 for something called just to steal a book is a gentlemen's act or something along those lines.
But it's very clever, and it makes the point that actually we're all new, which is, Europe developed intellectual property in early modern times,
and China really doesn't have them until the last 20 or 30 years, really, which is something worth thinking about.
Another. Control, which is more obvious, perhaps, is that in Europe,
the attempts by reactionary elements and God knows daywear everywhere, not just in the Catholic world,
just as much in the Protestant world, but reactionary elements with a secular or religious and tight end which try to fight new ideas as heresy.
In the end, failed, and they failed because the absence of a central government and the consequent coordination failures that came with it.
All right. Now I want to talk about a different, a different divergence, and this is really what the book I'm doing with Avner and Angelo is about.
And so a number of recent scholars has recently pointed to a remarkable gap that's
opened between Europe and the rest of the world at some point in the Middle Ages.
And that is Jack goodies and many other scholars discovering that mediaeval Europe start to organise increasingly
by nuclear families and quantitatively inclined social scientists have recently put a lot of stress on this.
This is a book that is coming out by a friend of mine, Joe Henry at Harvard.
Jose, yeah, a quantitative anthropologist.
And this and of course, this is a very nice catch phrase that if the rise of weird people now we had what's weird mean we we're in western educated,
industrialised,
rich and democratic and basically and the subtitle says it all how westerners became psychologically peculiar and particularly prosperous.
And so that is has many dimensions.
The two of most important one, the first that Europe is abandoning the extended family or the clan and and and part the consequences of
what we see this the final demographic pattern by which Europeans married later and therefore curbed,
at least to some extent, their fertility rates. Now many scholars, including Jack Goody, but also an aggressive Jonathan Schultz,
the young scholar has just finished his degree, and many have pointed to the role of the Latin Church in bringing this about.
And this church worked very hard to promote nuclear families now as an unintended consequence of this.
What do you see happening in Europe is that societies organised by groups of people who are united by a common interest and not by common ancestry.
And so Abner calls these these units at corporations, and they include things we all know and love about mediaeval Europe,
monasteries, guilds, universities, independent cities and commune cities, friendly societies, and so on and on.
Any mention, of course, it leads to business corporations, which is still retains the name.
But mediaeval Europe, really, these are all kind of voluntary organisations of people who are not related.
Now, China, of course, moves in the opposite direction for a variety of reasons some have been having to may have to do
do with the introducing of the quick ripening rice and other reasons may be quite ideological,
and that had new confusion and a resurgence in and ended.
The Song Dynasty emphasised loyalty to the clan, far more than, say, a few centuries before.
So, you know, do cheese and mustard.
Another box is, in fact family rituals book, which is a very good description of how clans should behave toward another.
What is not fully realised until Joe Henry and Jonathan Schultz pointed this out in great detail,
is that a great deal of contemporary evidence that people who grow up in large extended
families and that these groups first are limited as opposed to the general trust,
and that they enhance conformism, suppress original thinking and entrepreneurial behaviour?
Now why that exactly is something we could debate.
But here the data speak and the evidence that Joe Hendrick has amassed to show that in societies based on extended families,
there is a great deal of difference in these many dimensions. There seems to be quite convincing.
All right now, political divergence. Since two thousand seventy nine.
When China was united by the Mongol armies of Kubelik, the it remained the single political entity in Europe as well.
The shuttle has recently reminded us in first coming up, actually advertise to a few people here and and he and another paper,
quite an ingenious paper by Coco Koyama Ensing published as you explain a little bit why
we may think of China remaining unified in Europe splintering and so until about 500 ad.
Walter Shiela points out China and Europe have followed very roughly converging political past and political diversions.
We only start after the fall of Rome. Now, I think a lot of people would stress,
and this goes back all the way to Edward Gibbon and Immanuel Kant and David Chu that you cannot understand
European political and economic history without stressing the fragmentation in which not just nation states,
but autonomous communes, cities, states, religious entities,
all kind of groups constantly compete with one another for power, for resources and prestige.
And this has all kind of important consequences. One of them is growing fiscal capacity of the states and of the cities and of the other units,
and the ability of authorities to coordinate internal economic activity,
enforce contracts and resolve disputes to serve as a third party enforcer of contracts.
It's also and this takes me back to what I said earlier.
It's the absence of any kind of monopolies in the market for ideas actually goes back to the Middle Ages,
but the middle aged still has the Latin, the church as at least one form of monopoly, and that's gone with the Reformation.
So competition is everywhere, and as a result,
heterodox use can flourish and innovation can happen everywhere because intellectual are mobile and footloose, and nobody can tell them what to do.
Never forget that Hobbes Leviathan was written in Paris and John Locke's SFN toleration were written in Amsterdam.
But the Dutch themselves, where this tolerant because the great Dutch who wrote uses every schoolboy knows.
Was smuggled out in a bookcase from prison and spent the rest of his life in Paris, so, you know,
people moved around and everybody knew that they could move around as a result, suppression of new ideas becomes ineffective.
All right. Now state capacity another reversal of China.
Was a despotic state, but to use a phrase I've just bought from the new book by Assemblyman Robinson, it was despotism on the cheap.
And because as you'll see in a minute, the ability of the Chinese state to extract resources from the population is very, very poor.
So, you know, 11th century China was ruled by the most formidable empire in the world.
It had 100 million people. It had probably over a million soldiers.
Nothing remotely like that existed in Europe, which once had been part of Rome.
So this is an. And this is the revenues as a fraction of GDP.
God knows how approximate they are. But look, here are the numbers are just orders of magnitude is China 1986.
This is Iraq and the the Abbasid, and this is England and France in the sort of high middle age.
I mean, this is now these obviously states that are very low fiscal capacity now.
This is a few centuries later. Look at the difference so early, Meiji Japan still expects a lot.
But he has England, France, the US, Ottoman Empire is king China.
I mean, they go from the top of the pyramid to the very bottom.
In 1990 18:00. It's an early beginning for me to witness.
Excuse me. I know you don't need me. They tell you we're on the way it's served to circa 80000.
Hazel. Hey, come on. 1868. Yeah, I'm actually done before before.
So this is really a truly big reversal in which St. Patrick and I disagree exactly on the significance on state capacity.
I go back and forth and, you know, on a good day, I will actually recognise that the state did lots of good things,
including, of course, law and order protected against foreigners, you know, conflict resolution on a bad day.
I think of the European state as a bunch of rent seekers,
competitors and stole everybody's money that you could have young men killed in useless battles.
So you know, this is I'm still not quite sure how to think of the state, but the data speak, you know, for good or for bad.
You know, Larry Epstein thought it was a great thing.
A lot of people think it was not such a great thing, but the old Charles Daley may well have been right.
You know, maybe this is what made the state and maybe the state, after all, but it was not such a bad thing.
Finally, urbanisation. So there too, is a great divergence.
It's very hard to actually measure the degree of urbanisation.
As you know, probably lots of economists have used the proportion of people living in cities as a proxy for GDP or for
other things because there are some rough correlation between urbanisation and economic development.
And so the data really are hard to interpret because in European context, actually cities are fairly well-defined because almost every city is walled.
And so you know who lives in the city and who doesn't?
In China, most of the cities as as as liveable, Zhang is argued, amongst others, and tend to be much more spread out.
And it's not clear what a city exactly ends and where the countryside begins. And so we may have been understating Chinese urbanisation.
That said, here are some numbers for you. This is the percentage of population living in, in and inner city, and this is the left column.
Columnist cities over 10000 people and invites people over 40000 people.
And you can see that in in the year 1000. Basically, urbanisation in Europe is negligible and you can see it's going up over the next decade.
And in China, so it doesn't fall. I mean, I believe that's probably the best you can say about these numbers, but it doesn't rise either.
And so once more, you have a great reversal.
Urbanisation now, urbanisation is a consequence of, to some extent of economic development commercialisation.
And so I'm not sure industrialisation, but commercialisation for sure.
And has consequences, of course, because within cities, it's where the intellectual, the technological, the scientific activity is taking place.
So as more and more Europe live in cities, clearly these cities are producing the kind of useful knowledge that eventually,
you know, erupts into the industrial revolution. So I'm basically done.
And there are many great diversions on many dimensions, and they interacted and affected one another in many ways.
And I think the task for the next generation of scholars is to try to start to disentangle these interactions.
But the most important moral, I think and here I am sort of trying to to take a little bit of a step away from the film, from the details, OK?
And that is that it's very important to remember and this is very much against people like David Landis, my friend and teacher.
But I think about it. And that is that.
There was nothing historically inevitable about everything, which I have shown you,
and we shouldn't really think about the divergences in the reversal.
A sort of deep and inexorable factors baked in European and Chinese geography and location inspired by monotheistic religion,
whatever that exactly means. Harking back to ancient history and the classical legacy of Greece and Rome instead,
I think much more fruitful to think about what happened as an age in which a number of contingents,
if not quite accidental but contingent factors,
came together in European cultural development and launched a unique and unlikely historical dynamic which was peculiar to Europe.
And that didn't do so for anybody else. Thank you.