#3036 - Week 6 Reading Growth, Institutions And Knowledge (Ma, 2004) - Chinese Economic History Since 1850

Ma explores the revisionist thesis of economic growth in China during the 18^th and 19^th centuries

“To understand the path of long-term economic growth or stagnation in China, we need to go beyond the study of resource endowments or technologies, to also incorporate an economic analysis of China’s traditional social and political institutions and their associated ideologies”

Debate is centred around the California school revisionist thesis on the 18^th century Chinese economy

Rawski and Li’s Chinese History in Economic Perspective (1992) was the last economic history series

• Since then, the history of China has vanished in economic studies on China

Understanding both institutions and history are important for understanding long-term economic growth in China

California school of thought: Pomeranz, James Lee, Bozhong Li, Bin Wong

• http://eh.net/lists/archives/eh.res/ - ‘Rethinking 18^th Century China’

Needham puzzle: why given scientific and technological leadership up until the 14^th century did the Scientific Revolution forget China?

1970s (Elvin et al.): why given the unmatched superiority of Chinese technology and institutions in the Southern Song (1126-1278), industrial revolution did not take place in Chinese?

Bozhong Li, critically examines the ‘sprouts of capitalism’ literature

• This literature assumed economic development in China should follow that of the European model as the universal standard

• Li challenged the Song or Southern Song economic revolution that was argued by Elvin et al.

  • He argued their thesis was based on biased and selective evidence

  • Champ rice variety, argued by Elvin as being part of the Song economic revolution, appeared in the Song, but Li argues it was diffused during the Ming and Qing

• There was a rise of dynamic, diverse and commercialized printing industry

  • Evidence of mass reading public in the Lower Yangzi

• There was indisputable industrial progress between 1550-1850

  • Scale and technology of production

  • Organisation structure

  • Extent of the division of labour

Urbanisation did occur in China, but was different to the European model

• Didn’t give rise to mega cities

• Instead, formation of clusters of market towns

• Geographic specialization

• Indistinguishable boundaries between urban and rural

• Blends of agricultural, commercial and industrial activities

  • Comparable to modern Cambridgeshire

Li’s evidence for the Lower Yangzi, countered the argument on the long-held Malthusian perception of Chinese demography

Widespread incidence of female infanticide, primitive contraception and abortions, birth-spacing to control marital fertilities, and adoptions

Revisionist view: Replaces the Song economic miracle thesis by an historical process with gradual and cumulative progress until the end of the 19^th century

• Economic expansion was distinctly different from the British or Western European model

• Agricultural efficiency came from gains in using better fertilisers, rationalization of resource use, intensification cash-crop cultivation

• In industry, technology and organization were geared toward the saving of scarce energy and resources

• E.g. Smithian growth

  • Expansion in regional trade and geographic division of labour

  • Emphasized the expansion of trade and market

• In contrast, British economic growth was based on the use of inanimate power

The level of development and the standard of living in China in the 18^th century, at least in the advanced region of Lower Yangzi, were comparable to north-western Europe (Pomeranz)

Lower Yangzi was Boserupian (Ester Boserup)

• Resource constraints were an optimistic stimulus to technical change and intensification

Song economic revolution / high level equilibrium trap thesis (Elvin)

• Later called ‘involution theory’ (Huang)

• Fundamentally Malthusian

  • Pessimistic view on resource constraints and over-population

  • Ignored factor-biased technological progress and factor substitution which partially prevent the fall in MPN

Japanese economic growth was again different to the West

• Labour-using and land-saving as opposed to labour-saving path

The revisionists proposed China’s eventual failure to make a transition from Smithian/Boserupian growth to a Kuznetsian process of growth (systematic application of science and technology and sustained per capital income increase)

• Pomeranz proposes this was down to the absence of coal deposits in the Lower Yangzi (back to resource endowments)

Resource endowments thesis is the starting point and end point of both the involutionist and California school

• Yet their conclusions are very different

Property rights and contract enforcement are essential to inter-regional trade and market integration

Wang and Shiue found a reasonably high degree of market integration and efficiency in 18^th century China

• Rivalling or even exceeding that of contemporary Europe

Increasing acknowledgement of importance of law to economic development

Weber describes substantive justice as individual case maximization of justice and equity based on legal, moral, political and other factors

Legal statutes were strong in China and not open to contest and interpretation

Magistrates also provided ‘didactic conciliation’

• Not legal ‘adjudication’ as in Western legal system

Different ideologies of ‘rationalities’ upon which the institutions of dispute resolutions were constructed can lead to different economic growth paths

Family bylaws, lineage rules and guild regulations overcame the information and commitment problems

• Enabling commercial expansion in Ming and Qing China

Lineage, as distinguished from family, has a distinctive ‘corporate’ character (Faure)

Lineages could expand and contract via lineage union (lianzhong)

• Motivation behind this was economic and political more than anything else

A region’s degree of commercialization seemed to be positively correlated with its strength of lineage organization

Trust among Hui lineages provided credit, capital and business partnerships

“no Hui, no...