The Great Divergence I: The West

The lasting material prosperity in ancient China has impressed many economic historians. In Maddison’s research, China possessed a leading position in the world economy in ancient times (Maddison, Angus. (1998). Chinese Economic Performance in the Long Run, 960–2030 AD. OECD Publishing). However, its backwardness in the industrial era was equally striking, especially in comparison with the progress made by Western EuropeWestern Europe since the Industrial RevolutionIndustrial Revolution. From the sixteenth century, Western Europe, especially the Netherlandsthe Netherlands and Great BritainGreat Britain, revolutionised its economic and social institutions. While Ming-Qing China was slowing to an economic standstill in terms of qualitative development, Western Europe was changing its commercial organisations, relations between the government and society, status of citizens and lifestyles of individuals. A comprehensive economic revolution was happening between the sixteenth and nineteenth centuries. The result of such a revolution is that Western Europe enjoys its economic leadership until today. How Western Europe rose above ancient China in the early modern time is still relevant and can help us understand the world today (Ferguson, Niall. (2011). Civilization: The West and the Rest. Penguin Books). This chapter will present the trajectories of the first two modern economies, the Netherlands and Great Britain, and the driving forces behind their spectacular economic growtheconomic growth and social changes.