The growth of London, driven by booming trade with the Americas and Asia, the emulation and eclipse of Britain’s Dutch rivals, increases in efficiencies and wages associated with urbanization, and the ready availability of coal offered uniquely favorable conditions for early industrialization. For good measure, all of this was “underpinned by favorable institutions and cultural developments” that raised literacy and numeracy rates and by a strong work ethic that responded to the demands and inducements of commercial development.59
Allen’s approach privileges the role of economic forces acting in concert. Some of these phenomena were facts of nature: bubonic plague and the location of coal deposits. Yet what the British made of them was not. The impact of mass mortality—which made room for sheep that were better fed and grew longer wool fibers—was decisively mediated by political fragmentation. England had long exported raw wool for processing on the continent, but starting in the late thirteenth century it imposed growing export tolls on wool that protected the domestic textile industry.
Meanwhile, the Low Countries pioneered “new draperies,” light worsteds that eclipsed hitherto dominant Italian textile production. As England adopted this innovation, its East Anglian cloth manufacturers benefited from the inflow of Flemish refugees from the conflict with Spain that commenced in the mid-sixteenth century. Production of the “new draperies” was likewise protected by export taxes on raw wool. In fact, complete bans of wool exports (albeit circumvented by smuggling) were introduced in 1614 and 1660 and remained in force until 1824.60
English sovereignty was a crucial precondition. As Allen himself notes, “In the absence of that tax, England’s high wages would have meant that cloth production was uncompetitive and unprocessed wool would have been exported instead of worsted cloth.” The implicit counterfactual is that of a Britain in a position akin to that of the Roman province Britannia, which would not have been able to control its exports. The rivalries immanent to a competitive state system guided the injection of know-how from across the Channel. Jean-Laurent Rosenthal and Bin Wong put it best: “Had England and the Low Countries been in the same polity (as would have been the case in a China-like empire), the rise of the new draperies in England would have been unlikely at the very least.”61
Given the growing role of textile exports in the British economy and the lead-up in the Industrial Revolution, this rise mattered. By the late seventeenth century, 40 percent of Britain’s woolen cloth was sold abroad: it accounted for more than two-thirds of all exports of British manufacturers and three-quarters of London’s exports and reexports. A quarter of the population of that high-wage city was sustained by shipping, port services, and related functions.62
In the eighteenth century, this system expanded further thanks to protectionism, colonies and growing trade with the Americas, Africa, and Asia—in short, “aggressive mercantilism and empire.” As discussed in chapters 10 and 11, both were rooted in European polycentrism. Mercantilism was a response to interstate competition, and intercontinental maritime trade had been made possible by ventures from exploration to the creation of chartered trading companies that were similarly driven by conflict and the balance of power within polities.63
Allen devises a quantitative model that simulates the effects of rising urbanization, growing agricultural productivity, and high real wages in England. It suggests that international trade growth was the most important determinant of development, closely followed by the “new draperies” and coal. In this scenario, more than half the growth of the urban and nonagricultural sectors was caused by expanding trade: between 1500 and 1800, the share of the urban population rose from 7 percent to 29 percent, that of the agricultural population shrank from three-quarters to one-third, and the rural nonagricultural share doubled. The “new draperies” played a key role in increasing agricultural factor productivity and propping up real incomes. And while higher productivity in domestic food production was critical in enabling this urban growth and the expansion of the secondary and tertiary sectors, it materialized in no small measure in response to stronger urban demand.64
Britain could not have been successful in international trade in general and textile exports in particular had it not been an independent country that benefited from the dynamics of an overseas expansion that was itself a product of interstate competition. Moreover, its success was mediated by the intensity of political fragmentation. As Allen points out, France’s much larger population meant that “intercontinental trade would have had to have been larger by the same proportion to have the same per capita effect” there. Thus, more modestly sized polities such as Britain and the Netherlands found it easier to capitalize on these developments than quasi-imperial kingdoms.65
Coal also occupies a central position in Allen’s account. London’s rapid growth encouraged coal mining in Northumbria, which had the potential to produce “unlimited fuel at a reasonable price.” Eventually, coal’s (even) lower cost in northern England led to the expansion of northern industrial cities in which the metal and textile industries took off on a large scale. More specifically, the early steam engine was useful only in coalfields where deep shafts near mines required drainage.66
Coal literally fueled industrialization: as its share in global energy consumption rose from 2 percent in 1700 to 20 percent in 1850, more than 70 percent of this increase was captured by Britain. British coal production per capita increased more than twentyfold between the mid-sixteenth century and 1800, almost reversing the ratio of traditional energy sources such as human and animal muscle and firewood to energy from coal from 9 to 1 to 2 to 4. The significance of poorer access to coal in China as a constraint on an economic takeoff has been much discussed.67
Just as pasturage, coal needed to be locally available to ensure widespread use: the threat of warfare would have disrupted supply chains from abroad. In that sense, Britain had been lucky: its coalfields had existed for 300 million years. Yet their mere presence was not enough. Allen argues that the trade in coal “was only activated by the growth of the international economy,” which made the former “a social artifact as well as a natural fact.” London’s growth raised demand for wood fuel, which in turn created a market for cheap coal.68
Interstate competition and ensuing interventionism also affected coal production. Export duties and measures against price-fixing limited consumer prices, and the French Wars launched a push for autarky that favored the substitution of British coal for Baltic wood fuel.69
Conflict, latent or actual, was a crucial prerequisite of concentrated economic innovation. Rosenthal and Wong consider it
doubtful that English entrepreneurs would have deployed their textile devices in high-wage northern England rather than in the cheaper continental settings had that been an option. Even more likely, they would have avoided the costs of developing such devices if they could have relied on the cheaper wages that prevailed on the Continent. Such traitorous outsourcing was precluded by politics.70
It is not necessary for every single component of Allen’s model to have been conditioned by interstate conflict and fragmentation. All that is needed to confirm the paramount significance of European polycentrism is the demonstration that enough of the model’s driving factors were sufficiently contingent on it to make overall outcomes depend on it as well. The way Allen’s argument is configured, it readily clears this threshold. The dynamics he envisions operate only under the right political conditions: what is presented as an economic model with some environmental inputs is therefore derived from specific power structures. Even when—as in Allen’s case—it is not expressly acknowledged, interstate fragmentation takes center stage.71
Complementarity, Mutual Reinforcement, and Independence
Allen belongs to a long line of scholars who have bundled various factors in their quest to explain the transition to modern economic and more generally human development. The thematic layout of my discussion has forced me to treat many of these factors in isolation. It is thus worth sk
etching out some of the most prominent scenarios in toto.
In addition to features that were not mediated by state formation, such as Europe’s environmental diversity and protection from the steppe, Eric Jones invokes several that were: discoveries, ghost acreages, property rights protection, mercantilism, and, expressly, the existence of a state system that provided exit options and fostered an “arms race” that both sustained innovation. Others have also focused on competitive fragmentation, most notably Rosenthal and Wong. In their view, conflict pushed Europe, at great cost, toward urbanization and capital-intensive technologies.72
Others paint on an even bigger canvas. Michael Mitterauer emphasizes a combination of feudal relations and estates that gave rise to parliamentary traditions, the separation of secular and clerical powers, the commercial protocolonialism of the High and Late Middle Ages in the Mediterranean, and the diffusion of printing as crucial preconditions for later development. Jan Luiten van Zanden, who likewise traces the roots of the success of the North Sea region back to the medieval period, cites the influence of relatively democratic institutions that arose at various levels, from households to corporate bodies such as communes, guilds, and universities. In an environment riven by power struggles between secular and clerical constituencies, their ascent “occurred in a political vacuum” of “weak or non-existent states” resulting from failed imperial projects.73
Erik Ringmar’s list of European features that enabled change ranges eclectically from mirrors, printing, and news media to universities, scientific academies, parliaments, and stock companies. Ricardo Duchesne ticks off printing, navigation, the mercantilistic-militaristic state, and the division of power within states as key factors underlying Western exceptionalism. One way or another, almost all of these can be traced back to polycentric arrangements. Similarly, what Robert Marks thinks of as contingencies that permitted Europe’s ascent—Ming China’s retreat from the high seas, New World silver production, and the Habsburgs’ failure to subdue Europe—share the same root: the difference between hegemonic empire and competitive fragmentation.74
Daron Acemoglu and James Robinson invoke improved property rights, aggressive protection of traders and manufacturers, and the expansion of Atlantic trade as key factors in the processes leading up to the Industrial Revolution, all of them rooted in political diversity and interstate rivalries. Chris Bayly considers a wide range of attributes from stable institutions, access to New World resources, a culture of vigorous critique, and a symbiotic relationship between warfare, finance, and commercial innovation born of intense conflict.75
Focusing more narrowly on Britain, Jack Goldstone singles out the survival of common law, parliamentarianism, tolerance amid intolerant societies, and the consequent flourishing of a culture of science and innovation. Hegemonic empire would likely have stifled all of these.76
In his inquiry into the causes of Britain’s success, Peer Vries accepts the relevance of high wages, cheap energy, and low interest rates but insists that without sustained technological and scientific progress, modern development would have been impossible or fizzled out. He also emphasizes the critical role of the mercantilist and fiscal-naval state in enabling imports and exports in sectors that proved critical for industrial takeoff.77
According to Joel Mokyr, increases in the stock of knowledge and its practical application go a long way in accounting for Britain’s success. But he also assigns key roles to the country’s peculiar political economy that helped protect property rights and favored entrepreneurs and innovators, as well as to mercantilism—all of them functions of national sovereignty. And Europe’s fragmentation had been conducive to the earlier spread of the Enlightenment.78
In sum, all these multifactorial accounts rest, to varying but consistently large degrees, on inputs provided by power polycentrism both between and within polities. Without a durable state system that sustained institutional variety, competition for resources and innovation, none of these scenarios would have emerged.
This raises one final question: Are there any explanations of the (Second) Great Divergence and its consequences that are substantively independent of polycentrism, and how plausible are they? The list is short, in the first instance because even those scholars who adduce factors unrelated to the distribution of social power commonly pair them with those that are linked to it.79
Demography is the most prominent candidate. Gregory Clark positions himself against popular explanations from coal and colonies to institutions and the Enlightenment. Regarding England, he prioritizes long-term cultural and, indeed, genetic diffusion of traits that favored hard work, literacy, numeracy, and delayed reproduction. As the more successful outbred others, society reached a tipping point of breaking free from Malthusian constraints.
It is fair to say that this idiosyncratic approach has not stood up well to peer criticism. In any case, even if we were to accept that such a process took place and that it was pioneered in England, we would also have to ask whether this would have been feasible had Britain been part of a larger imperial entity that might have interfered with regionalized evolution of norms and behaviors.80
More substantive demographic explanations are on offer. The so-called Northwestern European marriage pattern, characterized by late male and female marriage, counts as a positive influence on economic development that reduced inequalities between spouses and opened up access to formal labor markets for both genders. Even households that lacked substantial resources benefited from work opportunities for its younger members.
This shifted power away from parents, boosted the role of wage labor, and led to the proletarianization of the workforce. Households’ growing dependence on market transactions and wages encouraged job training and generally investment in human capital. Moreover, under conditions of neo-local household formation (that is, away from parental households), smaller nuclear families were in greater need of protection that could be provided by larger non–kin-based associations, and the elderly had to save for old age.
Yet once again, state formation mattered. When real wages fell after the abatement of the Black Death, more patriarchal structures were prone to reassert themselves, most notably among Catholics and even continental Protestants. Meanwhile, for reasons closely associated with its sovereignty and success in interstate competition, England managed to sustain elevated levels of real income for workers. Moreover, it was spared the widespread revival of Roman law that gave greater powers to fathers. English common law, by contrast, stressed the contractual and consensual nature of marriage.81
The obvious counterfactual is Britain’s inclusion in a larger polity that imposed a more uniform legal tradition, whether revived Roman law or something else that differed from local norms. Thus, even if the emergence of the Northwestern European marriage pattern cannot be meaningfully linked to the absence of hegemonic empire (unless land abundance after the fall of Rome contributed to its appearance), its persistence depended at least in part on sovereignty and cognate effects. Most important, reference to these practices could at best complement but not replace alternative explanations of the (Second) Great Divergence.
A different demographic argument stresses the role of the Black Death. The scarcity of manpower it created prompted the development of labor-saving devices and raised real wages. Even as these shortages faded, they left behind more yeomen and craftsmen with memories of a more affluent world. More specifically, the great plague may have contributed to the decline of sugar production in Egypt, Palestine, and Syria by disrupting irrigation. This helped Genoa establish plantations at various Mediterranean locations and to revive chattel slavery by extending the slave trade along the African coast and setting up slave estates on Atlantic islands, which served as a template for later New World ventures.82
However, even if this adds to our understanding of the genealogy of colonial development, much of the latter depended on factors that were unrelated to the Black Death as such and rooted instead in the competitive polycent
rism that produced commercial city-states and had rulers vie for novel resources. As Allen has already noted, the dislocations wrought by the plague may very well have been a necessary condition for the most promising forms of economic growth: but no one would claim that they were anywhere near sufficient.
In a series of studies, Nico Voigtländer and Hans-Joachim Voth regard plague-induced shifts in real incomes and the Northwestern European marriage pattern as sources of surplus that funded warfare and drove urbanization. By raising mortality and reducing population pressure, these two phenomena sustained economic growth up to 1700. Whatever the merits of this model, it critically depends on high levels of polycentrism that triggered interstate warfare and religious strife.83
I conclude with Terje Tvedt’s perceptive study of the contrasting ways in which waterways contributed to economic development in England, China, and India. In this respect, England enjoyed unearned advantages. Endowed with reliable small, silt-free rivers and a perennial water supply that could be used to power devices, it was well positioned to employ inventions such as Arkwright’s water frame and Crompton’s mule. Its waterways were especially useful for the cotton industry and the operation of furnaces. Moreover, coal and iron deposits happened to be located within easy reach of the water transport system.
By contrast, Chinese rivers experienced extreme seasonal fluctuations in water levels and high rates of bank erosion and sedimentation. Navigable river outlets into the ocean were scarce, and all major river basins were exposed to catastrophic floods. Silt and flooding would have posed a serious threat to waterwheels and factory equipment. India faced similar challenges in terms of flooding and changes in riverbeds. For all these reasons, it was harder to develop dependable water systems in China and India than in England.
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