Econ 0605 - Economic History of China

ECON0605 - Economic History of China

Term Paper

2015972043, Kristofer Berg

Table of Content

Introduction 3

Arguments by Pomeranz 3

The high-level equilibrium trap by Elvin 9

The Needham Puzzle by Needham 10

Concluding Remarks 11

References 13

Introduction

The question of what led to the rise of the European countries, especially England and the failure of the eastern countries have always been disputed between scholars. What were the similarities and differences between China and the west? Different scholars are arguing about different factors. In this paper I am going to analyze what Pomeranz and Elvin think are the underlying explanations as to why an industrial revolution did not occur in China before the 18th century.

I will begin this paper with introducing what Pomeranz and Elvin thinks are the main reasons why an industrial revolution did not occur in China. After that I will introduce other perspectives and solutions to the question and in addition, I will explain what I think about the different solutions the scholars are introducing. Finally, I will comment on which perspective I find is the most convincing.

Arguments by Pomeranz

Compared to other scholars, Pomeranz has a very new perspective on how to analyse the differences between the West and China. He maintains that the similarities between them are greater than other scholars before him have suggested. Many European exceptionalists such as Jones and Webber have come up with many explanations as to why Europe had an industrial revolution during the 18th century and China did not. Pomeranz argues that the other European scholars do not have a valid argument because at this time, China was already more developed in this aspect. For instance, Eric Jones explains in his notary book The European Miracle: Environments, Economies and Geopolitics in the History of Europe and Asia, that one of the reasons why the industrial revolution occurred in Europe instead of China was that there was a higher per capita concentration of livestock in Europe. Pomeranz argues to explain that this disadvantage for China was to establish the fact that over the use of animal-powered transport, China had improved farming techniques and greater use of water. (Pomeranz 2000, p. 35).

One of the main components to the industrial revolution is the usage of coal. This is also one of the reasons why the industrial revolution happened in Europe according to Pomeranz. When we compare England to the Yangzi delta, we can see one major difference; England had easier access to coal. The country of China already had considerable amounts of coal reserves that were mined in the Northern region, indicating that these reserves were located far from the main industrialized regions of the Lower Yangzi. (Pomeranz 2000, p. 62). If we compare this to England, all the coal reserves were close to the industrial areas. The transport of coal from these inaccessible coalmines was very economically unviable, in contrast to England. The coal processes used in England allows pressure to be alleviated on the local wood supply. On the contrary, wood prices in China were inflated due to the fact that coal was not the primary resource for heating. The positioning of Europe's coalmines accounted for the reason as to why they were able obtain an advantage, rather than experiencing economic or cultural advancements. (Pomeranz 2000, p. 68).

One critical distinction between the West and China, is that China was able to fulfil the population's need for luxuries internally or through trade with other Asian countries close by. This was not the case for Europe; instead they looked to the colonies to supply the population's need for luxury goods. This led to an economy that was focused on the colonies. A colonial-focused economy means that European countries had to develop a fully functional military. Pomeranz claims that this colonial-focused economy was not more developed nor productive than the Chinese market but they will have a vital factor to overcome the ecological blockages that both Europe and China faced. One of the reasons why Europe developed faster than China was that these new everyday luxuries were different in a significant way. In Europe, luxury products like sugar, coffee and tea were produced outside of Europe but in China, all products were produced domestically. In China the trade was organized by highly competitive merchants and had relatively low profit margins. In Europe the trade was organized by big monopolistic firms, for instance VOC and British East India Company. There was one significant difference, in China's case, the trade did not produce significant revenues for the state and officials did not encourage higher consumption. It was completely different for Europe, many powerful persons encouraged the people to more consumption because they had invested a lot of money colonial planters and productive capacity and monopoly privileges (Pomeranz, p. 124). They also wanted to protect their investments and used their state military to protect their merchants that went overseas. Europe used their military to protect their commercial representatives abroad. On the other hand, China focused all of their military attention in Central Euroasia where nomadic warriors were the main threat. This was a very important competitive advantage for Europe; they could use a geopolitical strategy to establish outposts for trading. This meant that the European merchants had more power when it came to trading (from lesson).

Europeans tastes changed faster than those in China and Japan, part of the difference seems attributable to a difference in the degree to which exotic goods, especially exotic manufactured goods, became prestigious. Why was Europe so interested in Chinese goods and the Chinese people didn't care about European goods => the Chinese were convinced they belonged to a superior civilization (Pomeranz, 2000, p. 157)

In chapter five Pomeranz is arguing about the increasing scarcity of resources. The author is explaining that the ecological strains of wood and food increased in the 18th century (Pomeranz, 2000 p. 216-223). During the late 18th century in Britain, there was relatively little room left for further extensive growth without new institutional changes, new innovations or an increase in imports of food and wood from

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