WAR, CAPITAL, AND WAGES: A NEW ECONOMIC THEORY OF “THE GREAT DIVERGENCE”

Abstract

Jean-Laurent Rosenthal, a distinguished economic historian, and R. Bin Wong, an eminent world historian and specialist on imperial China, have collaborated in this effort to shed light on the causes of the eighteenth-century economic divergence of China and Europe. This book has many of the virtues one would expect from such a collaboration – keen insights into comparative history, explicit models of economic relationships, and novel ideas regarding causation. Yet it also has some defects that reflect this combination: at some points in their argument, the logic of models seems to outweigh historical facts. At other points, details of history that don't fit the models, such as the history of productivity gains in agriculture in imperial China, are neglected. I shall start with the virtues of their arguments, and then discuss some particulars that lead me to question their view.