The rise of The Port and the Mo clan coincided with the “Chinese century” in maritime East Asia and the peak of the Qing dynasty’s power. Their story also demonstrates a world whose core areas were not only at rough parity but also converging with both ends of Eurasia meeting, trading, and learning from each other in Southeast Asia. At the same time, this period implanted the seeds for an eventual divergence. European mercantile organizations and, later, states came to dominate the sea-lanes and control the flow of silver and finance. They were able to shape and set the rules for an emerging new order. Chinese merchants and immigrants eventually lost their military and political agency and were absorbed into the expanding European empires. Meanwhile, more firmly bounded states and nativist sentiments emerged in mainland Southeast Asia. Both factors deprived The Port of relatively unhindered access to the maritime trade routes and translocal networks. Nonetheless, the Mo continued to enjoy significant autonomy until the French colonization of the water world in 1867, taking advantage of the hazy and ill-defined borders in the water world.

The chapter begins with the observation that global history has an ambivalent attitude towards explanation. In many cases, the mere presentation of sources and voices from many different parts of the world seems sufficient to justify a global approach. The need for explanation is ignored or even denied. In other cases, global explanation is eagerly pursued, but often at the expense of more complex explanatory models that incorporate factors at different scales. In this perspective, global explanations are claimed to be inherently superior and a privileged way of explaining historical phenomena. After a cursory survey of current positions on causality and explanation in general methodology and ‘formal’ historical theory, the chapter proposes a brief typology of explanatory strategies. It goes on to discuss the peculiarities of explanation within a framework of connections across great distances and cultural boundaries. The much-exclaimed concept of narrative explanation is found to be of limited value, as it underestimates the difficulties of producing coherent narratives on a global scale. Concepts offered in the social science literature, such as the analysis of mechanisms and temporal sequences, could be helpful in refining purely narrative approaches to explanation.

Many global historians do not use quantitative evidence and are sceptical towards the systematic use of numerical data to uncover general patterns in history. Yet as global history concerns itself with questions about the rise and declines of global connectivity and the comparative development of societies across the world, there are clear benefits to quantification. This chapter first reviews the evidence on global trade volumes and commodity prices to suggest that the process of globalisation was already happening during the early modern period. Second, it shows that the most recent evidence and estimates of total economic output and real wages point to an early divergence in comparative incomes between Europe and Asia starting prior to the 1700s. It is shown that historical quantitative data are fraught with difficulties, but that the evidence is constantly being improved upon, leading to an increasingly accurate picture of global connections and comparative incomes in global history. Such quantitative global history complements rather than substitutes qualitative historical research as many historical developments are difficult, if not impossible, to quantify.

Korea existed as an independent country longer than most countries in the world, within the great tradition of East Asia. However, Korea fell behind Europe with the "great divergence" in the modern era, evolving into a state most remote from Europe’s warfare states. The country also lagged behind neighboring China and Japan economically and socially, and the elites did not carry out reform from above in time. Korea thereby failed to adapt to the tectonic changes of the international environment in the nineteenth century and became a colony of Japan. The Japanese colonial rule transformed the Korean economy with a strong state capacity, enabling the Koreans’ per capita GDP as well as their total GDP to increase. However, the living standard stagnated, suggesting that landlords benefited disproportionately from the growth. The growth was eventually unsustainable because of the war. The colonial rule left a negative as well as a positive legacy for the country’s future.

Britain had a substantial Atlantic empire during the era of the Atlantic Revolutions. Only some of their Atlantic colonies joined in the colonial rebellion that led to the creation of the United States. The end of the American Revolution signaled a new period in the history of the British Empire, but it was far from a period in which the Empire’s geographic center moved decisively to the East from the West. The British colonies in the Atlantic World that either remained or were acquired during the Atlantic Revolutions were vital parts of a changing geopolitical and economic order in which Britain solidified its global dominance in the period economic historians have termed the Great Divergence (when the West overtook the East in economic power). The British West Indies and Canada were central to the Atlantic Revolutions from the period of the Seven Years’ War until the end of slavery in the British West Indies in 1834. Expansion in the British Atlantic after 1783 showed how valuable West Indian colonies continued to be to British geopolitical and economic policies and how Canada was rapidly becoming a set of colonies that were developing into vibrant settler societies.

The Conclusion briefly identifies avenues for future research. In particular, it returns to the question of Sino-Western economic divergence mentioned at the beginning of this Introduction, and explores the possible connections between Qing fiscal undercapacity and China’s relative economic decline in the eighteenth, nineteenth, and early twentieth centuries. The most promising of these appears to be that government taxation can be an effective - albeit not exclusively so - way to concentrate capital and acquire the economies of scale often necessary for industrial takeoff, and therefore that the Qing’s fiscal weakness deprived it of a capital accumulation tool that some of its main competitors, notably Japan, used to great effect. The Conclusion also discusses the various connections between fiscal capacity and the broader concept of state capacity, and whether the ideological narrative presented here offers more general insights into the sociopolitical decline of Confucianism in the later nineteenth and twentieth centuries.

At least two decades before the arrival of the first European colonists at the southern tip of Africa, Autshumao, the chief of the Gorinhaikonas, settled in Table Bay. Although Europeans had sailed past the Cape in 1488, the volume of ships only increased after the establishment of the VOC in 1602 and the expansion of the spice trade between Europe and the East Indies. For many a ship’s captain Table Bay offered a place of refuge and replenishment, where they could find fresh water, wood for fuel, and meat purchased from the Gorinhaikonas, the Khoesan clan who lived in and around the bay. But communication for the purpose of trade proved difficult and so, in 1630, Autshumao was taken aboard a Dutch ship to Bantam in present-day Indonesia, where he learned Dutch and English. Two years later he opened a trading post on Robben Island, delivering letters for European ships, before moving back to the mainland in 1640.

This chapter discusses the consequences of industrialization and growth for the standard of living of the world’s population. The estimates concerning GDP growth, life expectancy, and educational attainment are discussed and an inequality-adjusted human development index is constructed and presented. At the onset of the process of modern economic growth in 1800 there were already large differences in well-being between the advanced economies in Europe and North America and the rest of the world, which further widened during the ninteenth century. This widening was the result of faster growth of the core economies; only rarely did countries show a substantial decline. The decrease of GDP per capita in China between 1700 and 1900 is a rare exception to this rule.

This chapter considers to what extent ‘geography’, broadly conceived, mattered for economic growth across the globe. First, it sets out the pattern of comparative aggregate growth between 1700 and 1870 and documents the east to west shift in the global distribution of economic activity. The next section surveys the comparative evidence on key first nature (or physical) geography characteristics that are potentially critical for long run economic development. This is followed by a discussion of second nature geography (the ’geography of interactions between economic agents’) and a quantitative assessment of the extent to which first nature characteristics, second nature geographical forces and institutional quality can account for income differentials across a sample of major economies in America, Asia, and Europe. Finally, a case study on shifting comparative advantage in the textile industry illustrates the outcomes of technical change within a changing global economic geography. The chapter concludes that changes in trade costs, agglomeration economies and differential access to markets with associated productivity gains probably played a major role in moving the economic centre of gravity. The West became absolutely and relatively richer than the East, not only because of better institutions but also because of more favourable geographies.

Economic growth in China prior to 1870 was kept in check by the performance of its agricultural sector, where diminishing returns to labour reduced effective demand, discouraged investment in manufacturing, and kept the urban share of population from growing. Economic recovery from the Wars of Transition (1644–1681) ended in 1740, when the rate of growth of total output – especially of food – fell below the rate of population growth. For the next century and a half, the economy shrank on a per capita basis. The resulting higher cost of capital relative to labour discouraged the adoption of labour-enhancing tools, even as the decline in the average size of farms raised demand for basic goods. Symptomatically, labour remained stuck in farming and a preponderance of manufacturing activity remained attached to the peasant household. For a period, the expansion of the frontiers coupled with labour intensification elsewhere were sufficient to feed the population, support trade, and fund the state. After 1800, however, environmental degradation took its toll and markets disaggregated. A period of rising social insecurity and political instability set in at the moment when China faced rising external threats from industrialized and industrializing nations.

The British Industrial Revolution marked the beginning of modern economic growth. This breakthrough built upon earlier episodes of GDP per head growth with the economy remaining on a plateau between these episodes. Growth was accompanied by structural change, with the declining share of agriculture matched by the rise of services as well as industry. As a result, Britain improved its position relative to the rest of Europe (the Little Divergence) and also improved its position relative to the leading Asian economies (the Great Divergence). The chapter examines the proximate sources behind economic growth in Britain during 1700–1870, including investment, growth in the number of workers, and accumulation of human capital. Together, these factors accounted for about two-thirds of the increase in output growth, leaving the other third to be explained by total factor productivity growth. However, the ultimate sources of Britain’s growth lay deeper in geography and institutions. The chapter also examines the effects of the Industrial Revolution on living standards and the impact of trade and empire.

Chapter 11 is the first of two that explains why Britain industrialized and why China and India did not. They provide a non-Eurocentric answer to the famous ‘Needham problem’, which boils down to asking ‘why China (and to an extent India), which had been a pioneer of technological development for over two millennia failed to industrialize whereas Britain, which had been a laggard for several millennia, succeeded? To answer this I bring out surprising resemblances and differences in the ‘developmental architectures’ of the three aforementioned countries, which factors in state-society relations and the modes of: production, empire, warfare, taxation and epistemic construction. In this chapter, I argue that differing global and domestic contexts can account for the ‘second great divergence’ in cotton-textile production. In essence, my solution to the ‘Needham problem’ is two-fold: first, neither China nor India were on a trajectory into a cotton-based industrial capitalism owing to the nature of their developmental architectures, especially the nature of their systems of production and class relations. Second, there was neither a desire nor a need to industrialize partly because there was an absence of imperial- and global-economic pressures and partly because these societies were ‘historical capitalist satisficers’.

Chapter 12 follows on from chapter 11, focussing on the ‘second great divergence’ in iron/steel production. The first comparison focuses on the key differences between Britain and China, the first of which, following Pomeranz, is that Britain had access to cheap coal and invented the steam engine that enabled the mass production of iron and steel. Second, Britain benefited significantly from the economic exploitation of its Atlantic colonies whereas China’s land-based empire yielded no economic benefits. Third, although both Britain and China were embedded in multi-state systems, nevertheless the East/Southeast Asian was largely cooperative thereby keeping China’s military spending to super-low levels. The competitive European state system, by contrast, led to frequent and highly expensive wars between imperial great power rivals. Britain’s super-high military spending, paradoxically, had major economic benefits for industrialization. Finally, the nature of Chinese warfare did not require the industrialization of her iron/steel sectors whereas Britain’s did. The second half compares Mysore in India (South Asia) with Britain, arguing that the former spent much lower amounts on warfare, that Mysore was unable to use coal, that Mysorean state intervention undermined the prospects for industrialization and that, overall, unlike Britain’s, Mysore’s developmental architecture was primed for historical capitalism.

"Theories of niche construction and near-decomposability, which correspond to competition and decentralization in economic parlance, illuminate how respective networks of authority served parochial purposes, with motivations related to specific challenges: in China, to rule a large territory, and in Europe, to enhance the competitive power of small states in a fragmented landscape. A shift toward outward expansion made European elites less parochial and resulted in an explosive wave of innovation. China’s centralized network enabled periods of unmatched stability and prosperity; but the merit-based bureaucracy stifled innovation, preventing the rise of a merchant class, an independent private sector, and outward expansion, all of which were associated with Europe’s industrialization. China’s inward gaze ensured the paramount political power of bureaucratic elites, resulting in systemic corruption that grew extensively over time, impoverishing the peasantry and causing rebellions, chaos, and conflict – a process that repeated itself throughout China’s history.

To understand the economic nature and impact of apprenticeship, we have to be alert to its features as an economic institution. Skills are often tacit or ‘implicit’ knowledge. Moreover, the apprenticeship contract is an unequal and non-repeated exchange between two parties, where the master teaches in the expectation that the apprentice will repay him through his work. The informational asymmetry led to contractual issues that required institutions that each had their own agendas and challenges. Guilds might want to limit entry, but their members also needed skilled workers; private contracts might be difficult and expensive to enforce and for outsiders to observe. Still, these institutions together allowed large numbers of youngsters to be apprenticed outside their family circle, with potentially large human capital effects. After 1500, the institutional forms of apprenticeship contracts in Europe were decisive in determining the rate at which innovations could spread across the larger environment and across communities.