Why Didn’t China Industrialize First?

By: Lipton Matthews

Historians still ponder why, despite its dominance in prior centuries, China failed to industrialize before Europe. Some contend that the culture of conformity engendered by Confucianism prevented the influx of disruptive ideas able to spark an economic revolution. Meanwhile, there are those who posit that the Chinese preferred employment in the government service, instead of pursuing commercial activities. Although there is a kernel of truth in these arguments such assumptions are insufficient to explain the sluggishness of China, relative to Western Europe.

For example, notwithstanding the perceived conformity of medieval Europe there were pockets of intellectual dissent. Eminent medievalist Edward Grant posits that contrary to the stereotype of medieval Europe being mired in ignorance – the academy was characterized by lively debates. It is also largely unknown that during this era most students studied law and natural philosophy, since theology was a graduate degree requiring mature students. Moreover, Aristotle was the undisputed king of medieval philosophy and his arguments were frequently applied to the study of religion. Medieval scholars were never slaves to the scriptures as some would have us believe. Neither were they unwilling to engage with scientific experimentation. Let us not forget that the monk Theodoric provided scientific explanations of rainbows in the 14th century, using experiments with a water-filled spherical flask designed to imitate a raindrop.

However, compared to contemporary societies medieval Europe may seem conformist, but critics forget that the character of conformity is equally important. Whereas students in China were encouraged to regurgitate classical philosophers, the medieval scholar Bernard of Chartres promoted the view that one ought to enhance learning by refining the ideas of his intellectual ancestors, this outlook is expressed by the metaphor “Standing on the shoulders of Giants.” Hence the substance of conformity can positively impact creative output. By this account both medieval Europe and China were conformist, but they differed in their concept of conformity.

Furthermore, like in China, some scholars in Europe avoided technical professions, yet their ideas nonetheless revolutionized society. For example, the Protestant reformers placed a high value on literacy. Because people were becoming literate, they acquired an interest in books other than the bible, so indirectly the Protestant Reformation resulted in the secularization of society. Essentially the individualistic ethos of the Reformation implored people to seek knowledge on their own. As such, with the diminished importance of religion, men were primed to pursue science, economics, and other non-religious affairs.

Therefore, the Reformation indicates that ideas are crucial to revolutionary changes. Hence the paucity of highly intelligent men working in technical professions is an inept explanation for the failure of China to industrialize, because gifted people do not need to be industrialists for their ideas to promote growth. We have explored theories proffered by academics to describe China’s inability to industrialize before Europe, so we will now discuss possibilities offered by economic studies.

According to economist Mark Elvin, China suffered from a high-level equilibrium trap meaning that the efficiency of production processes limited the demand for innovations. Yet Jan Luiten Van Zanden and Bozhong Li in a 2010 paper note that lower labor costs in China did not stimulate the adoption of machines to minimize labor expenses. Based on these findings and those of Stephen Broadberry, it is apparent that economists exaggerated the productivity of pre-industrial China.

Another intriguing theory is proposed by scholars who argue that the clannish nature of Chinese society obstructed the formation of institutions facilitating large-scale partnerships. Avner Greif and Guido Tabellini write: ‘Clan loyalty and the absence of formal impartial enforcement limited inter-clan cooperation. There were, obviously cities in China. Yet, intra-clan loyalty and interactions limited urbanization, city size and self-governance. Considering large cities, China’s urbanization rate remained between three and four percent from the eleventh to the nineteenth century, while the initially lower urbanization rate in Europe rose to about ten percent. Including small cities, urbanization rates were comparable, but China’s small cities were venues for cooperation among members of local clans rather than their melting polt. While the European cities gained self-governance, this did not happen in China until the modern period.”

Unfortunately, kinship structures in China hindered institutional transfers across cities since they precluded the formation of associations independent of tribal ties. By impeding the creation of widescale trust kinship groups deterred the networks required to create successful innovations and boost growth.

Evidently, examining the failure of China to industrialize is a complicated task. Though it appears that this is due to an intricate interplay of factors ranging from economics to culture. Therefore, it is prudent for economists to adopt a multi-faceted approach by exploring how dynamic interactions between cultural beliefs and institutions aided in delaying the rise of an industrial China.

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