Can the debate on the Great Divergence be located within the Kuznetsian paradigm for an empirical form of global economic history?

Peer Vries has written the most comprehensive and critically penetrative engagement with a virtual library of recent literature from history, economics and other social sciences on the origins of modern economic growth. To do that he has mobilized a wide range of credentials including an impressive range of linguistic skills, a grasp of several academic disciplines and a perlucid style to publish an up-to-the-minute text that can be placed in a tradition of books by John Hicks, Fernand Braudel, Walt Rostow, Simon Kuznets, Eric Jones, Doug North, Immanuel Wallerstein, Andre Gunder Frank, Nathan Rosenberg, Richard Lipsey, Ian Morris, Daron Acemoglu, Robert Allen and others, who have attempted to synthesize our claims to knowledge about ‘mankind’s escape from poverty’. It would be agreeable and appropriate to continue to transform this review into a laudatio and to select for commendation themes in the book that deal, for example, so acutely with connexions between states, institutions and economic growth that have long been mis-specified, underestimated and derogated by an anachronistic liberal tradition in eco-

nomics.３ That would, however, be nothing less than a dereliction of intellectual duty and a failure to engage seriously with one of our tribe's most widely read, cogent and of eloquent polemicists.４  We propose instead to raise the serious doubts that many historians retain about the validity and viability of three separable, but mutually reinforcing sets of data cited in those sections of the book that seek to 'systematically compare Great Britain and China'.That comparison and the protracted debate that it continues to stimulate, has inspired Peer Vries, these reviewers and a virtual brigade of economists and economic historians from western universities to engage with an analytical narrative elaborated in a seminal book by Ken Pomeranz, The Great Divergence.Europe, China and the Making of the Modern World Economy published fifteen years ago.５  The core theses for the Great Divergence Debate have been elaborated and discussed so often that, for present purposes, they can be summarized as two bullet points.The first point is that divergence in standards of living afforded by the economy to populations contained within the political boundaries of the Ming-Qing empire of China did not fall behind the levels of well-being afforded to the populations of the national economies of western Europe until late in the eighteenth century.Furthermore, and given this was the case, there could be no reasons to accept views elaborated by a long line of 'Eurocentric' political philosophers (Bossuet, Weber, Montesquieu, Hume, Hegel, Tocqueville, Herder, Comte), and classical economists (Smith, Malthus, Mill, Marx and Weber).They pointed to political, legal, institutional and cultural frameworks sustaining and conditioning the evolution of production in the Chinese Empire that had for centuries before the first industrial revolution placed and maintained the development of the imperial economy upon a path-dependent trajectory that led inevitably to a condition of relative backwardness compared to the economies of Western Europe.６ The almost instantaneous reaction to these theses from Eurocentred economists and economic historians (with credentials in neo-classical economics and with expertise and reputations derived from scholarship locatable within the Kuznetsian paradigm for empirical economics) was to launch three programmes of scholarly research.７ These programmes were and continue to be designed to subject the novel and ostensibly implausible theses communicated by Pomeranz and supported by the California School and other cosmopolitan radicals to the heavy artillery of statisticalcum-econometric 'tests'.８ Predictably that bombardment has concentrated on two indices or indicators for the representation of relative economic success or retardation among and across the national economies of Europe and the imperial economies of Asia, namely GDP per capita and real wage levels.９ Both indicators have, moreover, dominated theories and vocabularies deployed by economists to specify model and measure convergence among an OECD group of developed economies in the 1980s.１０ But recognizing that the pre-modern Chinese economy was dominated by household units of production engaged with agricultural, combined with domestic industrial production, a third and potentially more promising (but also more research intensive) programme has attempted to investigate sources of evidence that could conceivably be used to construct estimates for the net annual incomes and per capita consumption levels afforded to more representative samples of the Chinese population who experienced levels of material well being effecting a majority of peasant households and their families.１１ All three programmes have generated numbers and presented them as initial and negotiable estimates or conjectures of GDP per capita and real wages available for debate and revision on both conceptual and statistical grounds.These numbers purport to be comparable to the refined and consistently revised estimates available for England, Holland and other European countries for at least two centuries before their transitions to industrial market economies.１２

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Chinese GDP per capita from the Han dynasty to modern times Unfortunately, as we show in detail on a paper locatable on the European Economic History Society's website, the volume, range and quality of the data for China accessible in secondary sources does not provide the required run of estimates either for GDP or (arguably) for total population let alone for a sequence of purchasing power parity rates of exchange required to convert plausible estimates in Chinese currency into a numeraire that simultaneously allows for the construction of bench-marked estimates in constant prices over centuries of time as well as unambiguous comparisons with a range and quality of estimates that are in print for Britain and other European national economies in early modern times.１３ Alas the short cut methods that Maddison resorted to in order to circumvent his very tightly constrained access to anything approximating to acceptable data cannot in our view be condoned by economic historians who wish to engage seriously with trends and long cycles for an early and acceptably quantified explicandum that exposes a historical chronology for divergence between China and the West.Since Maddison has always been commendably transparent about the sources and methods, in the first and second editions he utilized only to construct estimates for GDP for an impressively wide range of countries and continued to be so in the second and revised edition of his economic history of China, there will be no need (or space) to elaborate on the details.For those who have cited and those who will continue to cite these very enticing estimates that purport to measure the growth of GDP per capita from the Han Dynasty to modern times and to compare benchmarked levels with European economies in a common numeraire for pre-modern times, it should be sufficient to simply tabulate the reasons why we, a bevy of experts with reputations in Chinese economic history and, latterly, a platoon of distinguished economists have found them to be conceptually and statistically unacceptable as historical evidence.(c) an implausible assumption that the annual growth rates for GDP (ostensibly generated by a deflator constructed to measure movements in Chinese domestic prices over more than a century of time), were consistent both with growth rates that simultaneously reflect changes in the volumes and prices of goods and services produced in China and with estimates designed for purposes of international comparison in international dollars for 1990.１６ c. Maddison's third assumption has, however, been revealed to be deeply implausible by the reconstituted and improved purchasing power parities utilized by the World Bank to convert the GDPs of 146 and 199 countries into international dollars for 2005 and 2011.１７ Conversions at these recently reconstituted rates of exchange have generated estimates for the GDPs of China, India and many other countries in international dollars that differed in a highly significant degree from those generated by the conversion coefficients calibrated in prices and quantities of 1990.１８ Indeed the variation in GDP that flowed from the utilization of conversion coefficients based upon data for single (if not singular) years, (1990, 2005 and 2011), has prompted two economists closely engaged with the construction of purchasing parities to formulate this general rule: 'comparisons became less reliable the further apart are the structures of GDP (or its components) of the countries being compared'.They added 'that many of these numbers have substantial uncertainty and that extrapolations over long periods can easily lead to results that made no sense'.１９ d. Indeed our own sensitivity test which converted the Maddison estimates of GDP per capita for years 1 to 1850 into kilocalories per day per capita produced numerical outcomes that suggested: (a) that between 1300 and 1850 Chinese per capita income remained at twice the modern level prescribed by the FAO for food security; (b) that level was, moreover, above the levels sustaining the 'labouring poor' of England and over this period, and (c) that Maddison's estimates expressed in kilocalories are in no way congruent with the historical narratives that he and other scholars have written, which represents the economic history of the Chinese Empire (after its famous efflorescence under the Song Dynasty) as one of stasis and decline from 1300-1956 (Maddison 2007); (d) the per capita levels of food security implied by estimates in GDP per capita in constant 1990 international dollars would have allowed for improbable levels of appropriation and expropriation by the state and ruling elites of something approximating to half of national income, ２０ and there is no evidence in the histories of the Chinese Empire that leaves an impression that the people of China experienced exploitation on that scale, even under the alien and oppressive Mongol dynasty.２１ e. Maddison's estimates for GDP per capita for benchmarked years circa 1, 1000, 1300, 1500, 1600, 1700, 1820 and 1850 are based on forward extrapolations from a figure of 450, 1990 international dollars.２２ He derived this particular base line number from controversial and ongoing attempts by economists employed by the World Bank to construct a metric for a notional and universal poverty line.２３ That concept and its conjoined estimates have come under sustained theoretical and empirical attacks.２４ Apart from the difficulty of imagining survival on an income of $ 1.25 a day in modern America, the number is seriously out of kilter with the then poverty lines constructed by the Chinese government.２５ Furthermore, the deployment of international dollars as a numeraire implies that this line would fluctuate over time, not merely with incomes received and the prices of commodities and services purchased by impoverished groups of the populations residing in the Chinese Empire between the Han Dynasty and late Qing Dynasty, but with the incomes and prices confronted by those living in poverty in all parts of the world outside the Middle Kingdom.２６ f. Finally, the rates of growth used by Maddison to extrapolate his preselected figure of 450 international dollars of GDP per capita for base year 1 forward in time.In order to provide benchmarked estimates for the years 1000, 1300, 1500, 1600, 1700, 1820 and 1850 are based on statistical evidence and pure assertions that do not in our view stand up either to detailed scrutiny or meet several objections raised against these rates by many historians with credentials and claims to expertise in the economic history of imperial China.２７ Maddison offered no citations to support the implicit rates of growth applied to construct estimates for the centuries from year 1 to 1368.Unfortunately, as historians of China have revealed, the imperial state never seriously attempted to measure grain output; to standardize the measures or record the total areas of the empire cropped or cultivated with rice and other grains; to systematically collect estimates for yields per unit of land cropped with grain; to standardize the area for a 'mu' of land; and to provide figures for the wastage rate that flowed from the conversion of unhusked to husked edible rice.３１ Perkins certainly did his best to cope with a range of ambiguous and recalcitrant official data and almost recognized that they could not be calibrated or manipulated to form an index that might be accepted as reliable enough to estimate changes in agricultural output from 1368 to 1911.He reluctantly fell back on the assumption that output per capita of unhusked rice fluctuated within limits around a modal average of 286 kilogrammes of unhusked (transformable into 143 kilogrammes of husked rice per capita) per annum.３２ Thus, Perkins's conjectures for long term trends in grain (and by extension agricultural) output can be represented as a selected constant of 286 kilogrammes of unhusked rice, multiplied by a range of disputed estimates for total population to which he attached rather wide but potential margins of error.３３  Maddison neither verified the evidence behind the Perkins's estimates, nor did he subject their deployment as proxies for the growth of GDP per capita to sensitivity tests in any systematic and transparent way.We will simply observe that any run of statistics for grain output based upon an unverified assumption of constant output per capita is almost certain to be highly correlated with conceptually flawed estimates for GDP per capita expressed in constant 1990 international dollars.This exercise in abstract quantification will leave an impression of long run stasis that is almost impossible to support with references to China's rich historiography.３４ Maddison sought to reinforce his view that 'over the long run in the Ming-Qing dynasties, income per capita was roughly stable by citing data from another eminent American sinologist that little change had occurred in the proportion of the population living in towns between the Tang and Qing dynasties.３５ More recent research into the empire's urbanization ratio has, however, called Gilbert Rozman's statistics, published more than 40 years ago, Illustration 1. Qing Government endorsed private land sale contract, 1903 into question.３６ Furthermore, for both global and Chinese economic history the familiar supposition that an urbanization ratio has been or indeed could be unambiguously measured within acceptable margins of error across space and over time and that this ratio remained closely correlated with trends in GDP per capita is, to say the least, unproven and improbable.３７ While applauding the heuristic value of his endeavours, we conclude that for the economic history of China, they do not provide an index for the measurement for the empire's long run growth, nor a statistically based chronology for divergence or even plausible numerical conjectures that could be used to compare its levels of development with Europe.

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A review of nominal and real wages for major cities in the Orient and Occident Another more realistically conceived programme which retains far greater potential for those purposes is the collective endeavour led by Robert Allen and Jan Luiten van Zanden.３８ To reconstruct and compare estimates for the real income levels sustaining wage dependent unskilled labourers and their families resident in a very small sample of Chinese, Indian, Japanese and Ottoman cities with a very much larger and better validated sample that refers to their fellow workers employed in the towns and cities of Western, Southern and Eastern Europe.Comparable evidence for Europe (particularly Western Europe) is more extensive, abundant and reliable simply because the relative proportions of the workforce in Asian economies, dependent on waged labour to sustain standards of living for their populations, were significantly smaller.３９ As late as the 1890s the Chinese 'proletariat' continued to represent but a tiny proportion (5-10 percent) of the Qing workforcea fact which raises doubts about the relevance of inferences that could be drawn for reciprocal comparisons, based upon wage dependent labour.４０ As several scholars with expertise on the economic history of China have observed, this methodological issue might be more convincingly resolved (not solved) by a comparison between the "labouring poor" employed as waged labour in Europe's urban construction industries and agricultures on the one hand and Chinese peasant households on the other.４１  We deal with that point below.Here we draw attention to the reasons why recently published exercises and statistics calibrated to compare the living standards of waged labour in China (and India, and possibly Japan?) with ostensibly similar groups of workers employed in the major European cities and agricultures are not yet secure.４２ These exercises are potentially promising but those published so far are based upon the incomplete and defective primary and secondary sources for nominal daily wage rates available and accessed for Ming and Qing China.４３ Nominal daily wage rates have long been recognized as an intractable source of evidence for the measurement of productivity and standards of living for European economic history.４４ For China's far less extensive integrated and competitive labour markets the evidence in primary sources required to standardize nominal daily wage rates recorded in governmental, judicial and very rarely in business records into plausible estimates for the annual earnings of wage dependent proletarian unskilled male workers is almost never clarified.For example, the sources provide entirely limited information on such payments in kind as food, clothing, shelter, etc. ４５ Such payments were, however, a feature of all pre-modern wage systems because they alleviate risks associated with fluctuations in food prices and obviated the difficulties of securing currency in the forms and denominations required to remunerate labour.４６ Chinese sources refer to annual, weekly, monthly and daily wage rates, but supply virtually no information on the numbers of days worked.Observations recovered from governmental sources are marked by long term stability over time and across space.４７ Prima facie they look analogous to fixed pay scales, maintained for the remuneration of soldiers or bureaucrats.Most of the evidence recently uncovered consists of records of daily rates that fell below the amounts required to purchase sufficient rice for 'food security'.４８

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Comparisons of the incomes of peasant households of Jiangnan with the incomes of wage dependent unskilled labour employed in English towns China's nominal wage evidence is, moreover, generally recorded in the empire's official unit of account, the taels of silver, which was neither a standardized officially minted coin, for the empire as a whole, nor convertible at any official and stable rate of exchange into copper cash or wenthe currency utilized for local purchases of goods and services.４９ Even copper coins were cast in different ways, denomination and copper content at no less than 10 provincial mints.Thus the virtually unregulated monetary system has added an almost insurmountable layer of complexity to the endeavours of economic historians attempting to convert scant and ambiguous evidence for nominal daily wage rates into annual incomes expressed in a numeraire that might facilitate reciprocal comparisons across Europe.５０ Even if these obstacles could be circumvented the inferences that could be drawn from acceptable estimates for relative levels of real wages would remain too circumscribed to settle the core questions addressed by Peer Vries and other participants who continue to debate the historical origins for the Great Divergence.The Weberian view that the economies of East Asia (and South Asia) were for some centuries prior to the Industrial Revolution on trajectories leading to divergence might, however, derive some far stronger statistical support from exercises in quantification that have generated acceptable estimates for the relative standards of living afflicting the lives of the labouring poor in the West and majorities of the Chinese labour force engaged in household units of production in the East.５１ This particular and potentially most fruitful of all paradigms for quantifiable investigations into the Great Divergence has been explored by innovatory exercises by Philip Huang and Bozhong Li who have reached diametrically opposed conclusions on the standards of living afflicting (pace P. Huang) or enjoyed (pace Li) by peasant households in the Yangtze delta under the Qing Dynasty.５２ That region around Lake Tai (Jiangnan) has long been widely regarded among economic historians of China as the most commercialized and economically advanced of the empire.Ken Pomeranz and Bozhong Li and Jan Luiten van Zanden have selected this province as apposite for comparisons with England and Holland.５３ In a working paper accessible on a LSE website, we have reconfigured and recalibrated recently published data that purported to measure the net incomes of a tiny sample of hopefully 'representative' peasant households for benchmarked years that refer to their conditions in the early seventeenth, mideighteenth and early nineteenth centuries.
Essentially our methodology consists of conversions utilizing price data for the net output/incomes accruing to these households from agricultural production and the manufacture of coarse cotton cloth into edible rice equivalents and transforming their disposable incomes measured in kilograms of rice equivalents into kilocalories per capita per day.５４ These procedures provided us with estimates of levels and changes in the standards of living for peasant households in Jiangnan from circa 1600 to circa 1829.We compared these conjectures with estimates embodying far superior claims to have measured levels and trends in kilocalories potentially available to unskilled labour employed in English agriculture and the construction industries of southern English towns for benchmarked periods 1600-50, 1651-1700, 1701-1750, 1751-1800, 1801-1850.If our recalibrated data derived from recently published secondary sources is regarded as sufficiently secure for a reciprocal comparisons then some tentative and negotiable inferences flow from these imperfect numbers that lend support to the views that Peer Vries has been developing in response to contrary claims made by Ken Pomeranz in his seminal book of 2000.５５  Our clarified and recalibrated estimates suggest that from the early seventeenth century onwards, the state, institutions and foundational culture of the Chinese empire were failing to cope with 'the pressures of numbers and environmental degradation' nearly as well as the states and economies of Western Europe.Joseph Bryant's restatement of a Weberian view that the potential for specialization, trade and technological innovation between and among families, villages, town and regions of the Qing (and let us add the Ottoman and Mughal empires) had diminished over time, has some imperfect statistical evidence to commend it.５６  Our general view is that the numbers currently available for China and India are and may well remain too fragmentary, ambiguous and insecure to sustain a Kuznetsian paradigm for investigation into the historical origins of the Great Divergence.If that emerges as the case, other paradigms and historiographical traditions for the construction of metanarratives of the kind, depth and quality we are now reviewing, could become a second best solution to an intractable problem of uncovering 'facts' that can travel in order to facilitate reciprocal comparisons between Europe and China.５７ As historians long committed to quantification they have reluctantly concluded that the scale and quality of reliable statistical information available for the Ming and Qing empire means that prospects for the application of the Kuznetsian tradition and paradigm to reciprocal comparisons between the economic histories of China and Europe are limited.See: http://www.lse.ac.uk/economicHistory/whosWho/academic_staff/Profiles/pobrien.aspxp.o'brien@lse.ac.uk and http://www.lse.ac.uk/economicHistory/whosWho/academic_staff/Profiles/kgdeng.aspxk.g.deng@lse.ac.uk 7 R. C. Allen, T. Bengtsson and M. Dribe, Living Standards in the Past: New Perspectives on Well-Being in Asia and Europe (Oxford 2005); W. Fogel et al., Political Arithmetic and the Empirical Tradition in Economics (Chicago 2013).8 T. J. Hatton (ed.),The New Comparative Economic History (Cambridge [Mass.]2007).9 S. Broadberry, and S. Hindle, 'Asia in the Great Divergence', Special Issue of Economic History Review S1, 64, 2011, S1-S7.10 W. J. Baumol, et al, Convergence of Productivity: Cross-National Studies and Historical Evidence (Oxford 1994). １４ a. Maddison utilized just two estimates for China's GDP in current prices.One for 1990 and another unofficial estimate for 1933.１５ b.All other benchmarked estimates for GDP contained in his book are based upon: (a) backward extrapolations (1990-1870), deploying published estimates for GDP growth published by economists for 1913-1933; (b) a guess that this same growth rate prevailed from 1870-1912; Brien and Kent Deng are respectively economic historians of Europe and China based at the London School of Economics.As their publications listed on the School's web site exposes, in recent years they have both been actively involved with academic debates and research concerned with the Great Divergence.For the past year they have collaborated in a forensic examination of the statistical sources, concepts and methods mobilized for purposes of a major and ongoing debate that has led to a revival of global history.Their most recent attempts include: Deng, K. and P. O'Brien, 'Clarifying Data for Reciprocal Comparisons of Nutritional Standards of Living in England and the Yangtze Delta (Jiangnan), c.1644c.1840',Economic History Working Paper, No. 207, LSE, 2014; Deng, K. and P. O'Brien, 'Creative Destruction: Chinese GDP per Capita from the Han to Modern Times' ‚ European Historical Economics Society Working Paper No. 63, September 2014.(http://ehes.org/working_papers.html) 2014; and Deng, K., and P. O'Brien, 'Comparison of Incomes in the Yangtze Delta and England, circa 1600 to circa 1850', www.lse.ac.uk/economichistory/research/urkew/incomecomparison.aspx(Department of Economic History, LSE, 2014).Deng, K., and P. O'Brien, 'China's GDP per capita from the Han Dynasty to Modern Times: Confronting the Problems of Measurement in 1990 International Dollars', forthcoming, 2015.
２８His evidence for rates of growth for the subsequent Ming-Qing period, 1368-1911, were, however, derived from a classic study of Chinese grain output by the Harvard economist and sinologist, Dwight Perkins: Agricultural Development in China 1368-1968.２９ Perkins's book (which we have also scrutinized line by line) is another laudable and heuristic endeavour to provide an acceptable proxy for a key macro-economic index that could serve to measure long-run trends in grain output measured in unhusked rice equivalents.３０ 30 Zeyi Peng, Zhongguo Jindai Shougongyeshi Ziliao (Historical Materials of Handicraft Industry in Early Modern China) (Beijing 1957); Zhongguo Peng, Jindai Shougongyeshi Ziliao, 1840-1949 (Materials for Early Modern Chinese Handicraft History 1840-1949) (Beijing 1984); Hui Wu, Zhongguo Jingjishi Ruogan Wentide Jiliang Yanjiu (Quantitative Issues of Chinese Economic History) (Fuzhou 2009); Aimin Guo, ''Rural Households' Production Capacity and Social Changes: A Comparison between England during Industrialization and the Yangzi Delta in Modern Times', The Pacific Economic Review, 17, 1, 2012, 86-103.31 Zhihong Shi, 'Shijiu Shiji Shangbanqide Zhongguo Liangshi Muchanliang Jiqi Zongchanliang Zai Guji', (Re-Estimation of Yields per Mu and the Aggregate Food Output in Early Nineteenth Century China), Zhongguo Jingjishi Yanjiu (Research into Chinese Economic History), 3, 2012, 52-66.32 Perkins, Agricultural Development in China.33 Hui Wu, Zhongguo Jingjishi Ruogan Wentide Jiliang Yanjiu (Quantitative Issues of Chinese Economic History); Shi (Re-Estimation of Yields per Mu and the Aggregate Food Output in Early Nineteenth Century China).