In the course of economic history, various civilisations have risen and fallen and the gravity of mankind's socio-economic development has shifted from one region to another. In the modern era, up until the 19th century, China was the largest economy in the world and Adam Smith would see it more appropriate to compare the Chinese economy with that of the whole of Europe, rather than separate European states. Maddison (2007) claimed that China owed its position to the intensive economic growth between the seventh and the 13th centuries, and that this was attributable to the development of an intensive and sophisticated agrarian production sector, to the creation of an internal market to trade goods, and to the well-organised and effective state1 supported by a highly qualified state bureaucracy. At least until the end of the 15th century, China's civilisation was considered to be more advanced than that of Europe. Smith pointed out in 1776 that ‘no other country has yet arrived at this degree of opulence [and that] China had probably long ago acquired that full complement of riches’ (Smith, 2003 [1776], p 132).

Nevertheless, the overall progress of mankind in terms of socioeconomic development in the first 18 centuries AD was relatively slow as compared with the subsequent time periods. It is estimated that the aggregated output of the world's economy between year 1 and 1000 did not increase at all, and between 1000 and 1800 increased by a meagre 50%, with an average annual economic growth of 0.05% (Kolodko, 2008, pp 68, 70).

The consequences of the Industrial Revolution of the late 18th and early 19th centuries, preceded by 300 years of pre-capitalist development that had commenced with the Renaissance epoch in Europe, allowed for a significant acceleration of socio-economic development and subsequently firmly established the representatives of the so-called Western world as the leaders of developmental advancements, first, the UK, then the US, Germany and other European countries. The Industrial Revolution marks perhaps the establishment of the first effective developmental model of the modern era. This model was characterised by capital-driven economic expansion. The capital was generated through an increase in production, enabled by technological advancements. At the same time, economic expansion was facilitated by military means.