The global environment: Europe, the Islamic world, and China

Modern economic development – the rise of industrial capitalism – was a European phenomenon, but it was not coded in the “genes” of Europe. In the previous millennium, Europe was not the center of the world. In productive agriculture, science, and international trade, the Islamic world and China were actually ahead of Europe. The Islamic world, however, began to decline between the sixteenth and seventeenth centuries, and it reached the stage of ultimate decline at the turn of the eighteenth century. Three “gunpowder empires” – the Ottoman, Safavid, and Mughal empires – emerged from the mid-sixteenth century on, and they ruled the vast region from India to North Africa and the Balkans. After their early “golden ages,” these empires became agricultural military-patronage states that no longer availed themselves of markets and declined as prominent mercantile states.

Recent studies have rejected the traditional view on Asian stagnation and argued that there were basic similarities with Europe until 1800. Bin R. Wong maintains that “China and Europe shared important similarities of preindustrial economic expansion based on Smithian dynamics” (Wong, 1998, 278). Kenneth Pomeranz's highly debated work, The Great Divergence: China, Europe, and the Making of the Modern World Economy (2000), states that genuine differences between the Eurasian West and East were not significant. The Chinese Lower Yangzi Delta could potentially have generated a development trend of modern industrialization similar to that in Europe. Agriculture was more developed, and more labor- and land-intensive than it was in Northwestern Europe. Transportation was compatible because of coastal shipping and the efficient inland canal and waterway system. In addition to intensive rice and cash crop cultivation, proto-industry was advanced and widespread, especially the cotton, silk, pottery, and tobacco industries. China had less restricted trade and a stronger market economy than did the more mercantilist Europe before the British Industrial Revolution. China and Europe thus exhibited surprising similarities between 1500 and 1800. At the turn of the nineteenth century, however, Asia encountered ecological limitations, such as deforestation, and declining marginal labor productivity. China was unable to compete with Britain's advantage of “coal and colonies.” At that point Asian and European development decisively diverted from each other.