Parthasarathi, Prasannan, Why Europe Grew Rich and Asia did not: Global Economic
Divergence, 1600-1850 (2011), 365p.
The main contribution of this book to the ‘Great Divergence’ debate of why
Europe, which had long been relatively backward compared to the most developed parts
of Asia, became so much richer than Asia is its emphasis on India, since most of the
debate has focused on comparing China with Britain during the period. While
Parthasarathi is also a critic of the Eurocentric interpretation, which argues that there was
something profoundly different about Europe that explains its divergence from Asia-such as the scientific revolution, the Protestant ethic, its system of government, its
economic institutions, or its natural resources—his analysis is less focused on materialist
factors, such as geography and natural resources, which is associated with the California
School’s approach to the topic. Parthasarathi uses his earlier study, The Transition to a
Colonial Economy: Weavers, Merchants and kings in South India, 1720-1800 (2001), to
argue that during the early modern period there was a prosperous and competitive textile
industry in India that exported fine manufactured cotton products to the Ottoman Empire,
China, Africa and Europe until it was destroyed by European mercantilist measures. He
argued that Indian textile workers had a high standard of living and enjoyed better
working conditions than textile workers in Britain. In this study he expands this argument
to other industries. He also devotes a good deal of space to showing that India was not
backward in science and technology during the period, but had a vibrant culture that
valued science, scholarship and technology, was open to ideas from elsewhere, and made
important scientific and technological contributions during the period. A crucial part of
his argument is that there were many similarities between Europe and Asia in terms of
resources and economic institutions. However, Europe and Asia faced different
challenges. One of these was Asia’s very large population and its preoccupation with
dealing with famines. Even when they faced similar challenges, Europe and Asia
responded to these in dissimilar ways and thus their economies diverged. Parthasarathi
spends a great deal of time on Britain and argues that it faced two fundamental challenges
during the period, competition from India in textiles and a shortage of wood. He sees the
response of the British state to these challenges as fundamental.
The author’s assumes that coal, steam power and textiles were fundamental to the
industrial revolution in Britain and has less to say about other industries and Britain’s
long early modern economic development before steam power and textiles became such a
large part of the economy. He argues that the shortage of wood in Britain led it to develop
its easily accessible and abundant coal supplies and this switch from an organic to a
mineral based energy source was not only more efficient, but led to the development of
steam power, which was developed initially primarily to drain mines. He explains that the
British state was crucial in keeping the domestic price of coal relatively low through such
devices as export taxes, encouraging infrastructure for its transportation, and providing
legal and economic incentives for its exploitation. In addition to the fact that Asian coal
was not located as conveniently to population and production centers as in Britain, he
explains why the Chinese and Japanese did not emphasize the development of
underground coalmines to solve their energy problems. Parthasarathi argues that Britain’s
international trade system became heavily dependent upon textiles in the eighteenth
century and had to face the fact that India was the most important ad innovative textile
producer in the world at the time. He suggests that the Britain developed its own textile
industry by learning from India, especially in cotton, and that the state made possible
British dominance in the industry by first protecting it as an infant industry, and then by
aiding the manufacturers to discipline the labor force that worked in the new textile
factories. He goes on to argue that the protection of this industry also led to a diffusion of
skills, technology, and factory organization to other industries, Moreover, the British
state also aided the development of other industries, such as iron, through mercantilist
measures. For Parthasarathi the contrast between the British state’s active role in
promoting industry with the failure of the Mughal Empire to protect its important textile
industry is central to his argument. Parthasarathi concludes that when the British textile
industry became highly competitive during the nineteenth century, Britain adopted free
trade while at the same time it systematically subjugated the Indian econ0my to prevent
its industrialization. The book’s thesis is controversial but it is a well-written contribution
to the Great Divergence debate and it places Indian data at the center of the debate.