The Great Divergence is the divergence in living standards and economic power between Europe and Asia. The date at which it started is also open to interpretation, with authors situating it anywhere from the 16th to the 19th century. Prior to these dates, regions of China and India were more prosperous than Europe.

Scholars do not agree on the underlying  causes behind this phenomenon and it appears to be a multi-factorial causality.

Among these:

  • The colonization of the American continent and the creation of wealth through the labor of slaves that worked on huge tracts of land that grew enormous quantities of food items. Europe manpower was thus able to concentrate on working in industry. Further, the colonies were captive export markets for European producers.
  • The colonization and deindustrialization of India
  • The development of new technologies
  • The use of coal as the major energy source, a more efficient energy source than wood and allowing for major progress in transport. Coal extraction was easier in Europe than in China, which also has extensive deposits. The Chinese coal mines were also substantially more distant from the industrial centers than the European extraction sites
  • Innovation which was encouraged in Europe but not in Asia, perhaps due to cultural factors that valued experience more than experimentation
  • Rapid change in hegemons
  • Europe’s economic environment with high wages, cheap capital and very cheap energy allowed investments in technology
  • Cultural differences with European culture favoring change and progress while Asian, and particularly Chinese, culture emphasized respect for tradition.