The Great Divergence : why Industrial Revolution happened firstly in Europe?

Image

Two main factors explain this : geographic circumstances and ratio of the wage relative to the price of capital.

For Kenneth Pomeranz, author of The Great Divergence (2000), the industrial revolution occured in England because geographic circumstances. Indeed, he explains that the availability of cheap coal in England was a decisive advantage not shared by other countries.

The ratio of the wage relative to the price of capital created an incentive to substitute the capital instead of maintaining the use of labour.

In China, it was the contrary : the important population permitted a lower wage whereas the price of energy was expensive because of the rareness. Thus, the Industrial Revolution was not a necessity.

Thus, as we can see on the graphic, China and India, during the first millenar, where the most important countries in the share of world GDP because of their relative important demography. After the 1800, the revolution industrial improved the productivity of industrialised countries, first of them Great Britain, Germany, France and more later United State. These countries became the most important countries in the share of GDP during the 19s and until today.

Today, as we can see on the next table, the USA represents 5% of the world population but 21% for its GDP whereas Asia (minus Japan) represents 60% of the world population but only 30% of its GDP.

Capture

Publicités

Laisser un commentaire

Entrez vos coordonnées ci-dessous ou cliquez sur une icône pour vous connecter:

Logo WordPress.com

Vous commentez à l'aide de votre compte WordPress.com. Déconnexion / Changer )

Image Twitter

Vous commentez à l'aide de votre compte Twitter. Déconnexion / Changer )

Photo Facebook

Vous commentez à l'aide de votre compte Facebook. Déconnexion / Changer )

Photo Google+

Vous commentez à l'aide de votre compte Google+. Déconnexion / Changer )

Connexion à %s