By: Aruni Mukherjee
December 14, 2004

No new light has been thrown on the reason why poor countries are poor and rich countries are rich (Paul Samuelson) 

The great enemy of truth is often not the lie- deliberate, contrived and dishonest-but the myth-persistent, persuasive and unrealistic (John F Kennedy)

The debate regarding why Europe won the race to become the first industrialised continent has often been misplaced in the ‘realm of mentality’. It has been a norm among Eurocentrics to list Europe’s successes in promoting technology, inherent to the apparent rationality attributed to its culture, property rights, free market economy and a hands off approach from the state. Thus, Europe possessed conducive socio-political-economic institutions, coupled with its temperate climate and lack of Malthusian pressure on resources, unlike in Asia, which made it the natural candidate for undergoing the Industrial Revolution. No wonder, such arguments are summed up in statements like- ‘As the historical record shows, for the past thousand years, Europe (the west) has been the prime mover of development and modernity’ Strangely enough, no economist of the age including Adam Smith ever foresaw the Industrial Revolution despite these apparent marked achievements of Europe, far surpassing Asia. Further to these rather empirical arguments, western theorists like Max Weber have held the ancient Asian societal norms and culture responsible for Asia’s apparent failure to compete with the more modern belief system present in Europe. Thankfully, these arguments have largely been refuted. Works by Andre Gunder Frank, R. Bin Wong and Kenneth Pomeranz have largely unclothed the myth of inherent superiority of Europe in the pre-industrial era. Even if we argue our point through the Eurocentric fixation that we must focus on what ‘did’ happen instead of what ‘should’ or ‘could’, we can persuasively prove that Europe found itself as the driver of the industrial machine not by its inherent supremacy, but due to certain accidents of geography and its successful exploitation of its colonies.            

It is useful to identify some of the factors that didn’t lead to the Industrial Revolution in Europe and then move on the factors that did. Douglas North and David Landes have argued that China, being a member of the club of ‘Oriental despots’ had no respect for property rights, which in turn stifled investment, so essential for industrial growth. However, recent research by Bode and Morris shows that courts were established in Qing China to address civil cases related to preservation of private property. Indeed, it was Britain that had banished entrepreneurial minorities like the Jews and indulged in confiscation of their properties, along with that of the Catholics.  The ‘hydraulic thesis’ of Karl Wittfogel also goes on to argue that overt elite control of water meant control of economy remaining very centralised, thus undermining local individual efforts.  However, the theory fails to explain the development of unique local economies in various industrial clusters of Asia with different export commodities, for example, spices, ships and precious stones in the Malabar coast of India to textiles in the east coast. The range of commodities for trade was wide and the clusters were by no means homogeneous.           

Indeed, the arguments regarding market functions have been much furthered. The notion of ‘perfect market’ in Europe argued that the laissez faire approach facilitated entrepreneurial zeal and growth of industries and lack of unproductive state intervention meant better operation of the market. However, Asian societies were almost equally, if not more, working with a free market. For example, 50% of the land in England as late as the 19th century was covered under the family settlement law, which prevented sale. Similarly in Spain, as a result of overt restriction, the price of land was so ruinously high that it strangled investment. Compare this with the ‘agricultural individualism’, as argued by Marc Bloch, of India and China, this presents a strikingly different picture.             

Asia’s apparent hostility to trade due to its cultural backwardness has been much highlighted by theorists such as Max Weber. They point to the Confucian influence in China which placed the merchants at the bottom rung of the social ladder to justify their claims. However, it is to be noted that China by no means was a homogeneous society. Interaction through its southern borders with India brought Buddhism to the land, which was by no means hostile to entrepreneurship. Moreover, although Ming China officially banned foreign trade, it could not enforce it, and a highly lucrative trade network existed in the seas of Asia stretching from the ports of Surat and Calicut on the west coast of India to the Chinese east coast, Japan and South East Asia. On the land, a network from west Asian Arabic states stretched into northwest India and through central Asia into China.             

Urbanisation, a classic indication of concentrated industry, has been argued to be striking feature of 19th century Britain. It has been argued that during the early part of the Industrial Revolution, nearly 24% of the British population dwelt in towns or cities.  However, we are concerned with the pre-existing conditions. Whereas in western Europe, urban population formed between 10 to 15 percent of the population through out the 18th century, in imperial Japan the corresponding figure was 22%.             

Labour, then more a value than a commodity, was much more ‘free’ in Europe and apparently more productive due to better diets. However, free labour is only more productive if the opportunity cost incurred by abstaining from bonded work is less than the value of goods produced in the free work. In fact, Arthur Lewis has argued that economies with surplus labour often incur more opportunity cost due to under utilisation of resources.  Moreover, the argument that Europe was unique in enhancing productivity by applying division of labour in its industries, because through out the 17th and 18th century India and China, families were divided on the basis of tasks they were allotted. For example, women were in charge of weaving and men in charge of the farms. Furthermore, the problem of surplus labour in the 18th century was better tackled by Imperial China, which facilitated migration of people to areas of low employment, unlike any mechanism in Europe during the time.  Neither does the argument of longer and better living workforce stand up to scrutiny. Research by Wrigley, Schofield, Lavely, Wong and Yamamura confirm that life expectancy in western Europe was equal or lower than China and Japan in the pre-industrial age. Works of Clark, Huberman and Linder fail to find any significant difference in calorie intake around 1800 with the European figure being 2,500 calories for an adult male compared to 2,386 of a Chinese.            

Citing the Malthusian pressure on resources and constraints on accumulation that stifled investment, David Landes has argued that due to the relatively early marriages in Asia, more children were produced.  In contrast, Europeans married late and thus produced fewer children and also practised celibacy widely along with other forms of birth control. Thus, this generated a room for surplus household income to be put to industrial purposes. However, such a feature was not unique to Europe. In Japan, young women were sent to work far away to prevent early marriages. Through out Ming and Qing China, early marriages were indeed the norm, but reproduction occurred much later.  Indeed, Chinese women stopped reproducing earlier than European women and there were conscious efforts to curb numbers in the household by postnatal abortion and spacing out between births.  Thus, much of the Eurocentric claims can be rendered futile, as there is no concrete evidence presented to back the case up- it rests on age-old assumptions and prejudices regarding Asian societies.            

The Scientific Revolution has often been cited as the primary, if not the only, reason for undoubted European suitability to Industrial Revolution in the 17th and 18th century. Shipbuilding was a major industry and the British merchant fleet was thus famous. However, Andre Gunder Frank has argued that Asia was already far ahead in this field referring not only to Zhang He’s famous fleet of the 15th century in China, but also the ship builders of the Malabar coast of India. The latter made its ships with fibre ties and caulking instead of iron nails, thus making the ships much more durable at sea. Indeed, much of the European merchant fleet was formed by buying ships from India.  However, there is no denying of the fact that European industry was boosted by a steam based economy, which facilitated further technological innovation compared to a largely timber based economy of Asia. Nevertheless, they key issue here is not so much about the supply side of the market, but the demand. Technologies and the money to invest in them did not arise in a vacuum. The Industrious Revolution was experienced in Asia many centuries before it was in Europe. To transform that into the Industrial Revolution required specific market needs and appropriate state action.           

An alleviation of duties on Indian muslin and calicoes or giving encouragement to them by laying a heavier tax upon the good cotton goods of this country…must depress and discourage the industry and ingenuity of our manufacturers at home  (A pamphleteer in Manchester)                       

So what did lead to the Industrial Revolution in Europe? It seems strange that if European manufacturing techniques were so far ahead of Asia in the 18th century, then why did the balance of payments remained in the red for Europe until the Age of Empire. For example, in 1750 figures for proportion of national manufacturing output to global output for China, India and Europe were 32.8%, 24.5% and 23.2% respectively. However, in 1860 the corresponding figures are 19.7%, 8.6% and 53.2%. Not only did the New World provide cheap cotton produced by slave labour to the factories of Manchester, but a main strand of colonial policy was aimed at systematic de-industrialisation of the erstwhile great manufacturing economies of Asia, thus to forcibly remove all forms of indigenous competition and open the market for European goods. For example, the Indian cotton textile, riding on cheap labour and much finer works was far more competitive than the traditional textile artisans of Britain until Indian manufactured goods were slapped with tariffs, weavers forcibly uprooted and made to harvest raw cotton for exporting to the metropolis and then Lancashire exports flooded in the Indian market.  A more blatant ‘drain of wealth’ was carried out in the form of ruinously high taxes and imperial wars , the bulk of which was transferred to the shareholders of particular companies in Britain. Thus, the colonial experience created the surplus that was needed to invest in technology and the market that the goods produced as a result of the new technology were destined for.            

Two other factors need to be mentioned. Firstly, as Wigley correctly emphasises, coal was a crucial element in sustaining the steam economy that took Europe ahead technologically when the need for en masse production arose for the new markets. It was purely due to accident that coal was far better accessible to Britain than the most industrially developed part of China, the Yangzi valley.  Secondly, although nature created natural calamities were fairly comparable between Europe and Asia, the man created ‘natural’ disasters in 18th century Asia unmistakably dealt a mortal blow to industry. For example, the Bengal Famine of the late 18th century in India was a consequence of ruinously high taxes coupled with a bad harvest, imposed by the new masters of the region, the East India Company, eager to transfer profits back to its shareholders.  

Adopting R Bin Wong’s ‘reciprocal comparison’ method,  it is perhaps safe to deduce that Asia and Europe nurtured very similar types of capitalism through out the 17th and 18th centuries, with perhaps the only difference being in the role of the state. Indeed, ‘Asia was far more important, if not hegemonic, in the world economy’. What led to the great transformative growth that consequently led to the Industrial Revolution in Europe had very little do with advantages in the factors of production or societal environment. Put bluntly, it boiled down primarily to the failure of Asian states to protect their flourishing economies from the marauding armies of Europe.

Aruni Mukherjee