Traditions of historical enquiry into the wealth and poverty of nations began with Herodotus but modern paradigms for investigation need be traced no further back than to the towering intellects of two cosmopolitan, but perhaps equally ‘Eurocentric’ Germans: Karl Marx and Max Weber. Both scholars maintained a serious interest (admittedly as a counterpoise to Europe) in the evolution of the Indian, Chinese, American and Russian economies.

In classical Marixan thought, the only mode of production capable of generating sustained material progress, ‘capitalism’, is based upon wage labour and the accumulation of capital. Marx found that the first transition from pre-capitalist to capital modes of production occurred in Western Europe

Weber remained less impressed than Adam Smith and Karl Marx, with the economic significance for European development of the discovery and colonization of the Americas. He was not inclined to rank the gains from trans-Atlantic trade and colonization above endogenous forces, operating over centuries of history to promote economic growth within Europe. Along with Marx, Weber retained an appreciation of how and why the accumulation of capital and the evolution of slave, through feudal to free markets for labour mattered as ‘proximate’ determinants of material progress in Western Europe.

.Weber elaborated upon themes that have exercised a powerful impact on modern stories told about the economic success of the West and the relative failures of the East over the past millennium. Along with Montesquieu and other thinkers of the Enlightenment, Weber (and Weberians) believe that discernible contrasts in the institutional, ideological and legal frameworks within which economic activities (including trade) were embedded in Europe compared to Asia had prevailed for several centuries and that marked differences in religious beliefs, cultural conditioning, family life and political systems promoted divergent paths of economic growth that eventually produced a clear divide within the world economy into affluent and poor nations

Pomeranz represents cultivable land as a relatively fixed factor of production and suggests that additions to the stocks of useful and reliable knowledge allowed only for incremental and limited technological progress. Upswings in population growth led to Malthusian crises, but more commonly both in Western Europe and in the Ming-Qing Empire to constricting shortages of land intensive crops and agr arian raw materials, including: basic foodstuffs, timber utilized for manufacturing and construction, wood converted into fuel and energy for both industrial and domestic purposes and fibres derived from plants and animals for purposes of transformation into textiles.

For Pomeranz, and other scholars (who reject Eurocentric explanations for the great divergence cast in terms of Smithian growth), the problem is to explain how and why European economies did not proceed down the same path as China, but instead avoided diminishing returns to labour engaged in agricultures and proto-industries and gradually diffused mechanized techniques of production across manufacturing and transportation.

The answers offered by Pomeranz are carefully supported with a reflexive reading of modern scholarship, and refer to contrasts between endogeneous and exogeneous potential for the avoidance of diminishing returns to land and other natural resources available to China and to Europe. After millennia of successful land management, Chinese agriculture stood closer to its production possibility boundary than European agriculture. Possibilities for coping with population pressures by extensions to margins of cultivation and cropping, through tenurial reform, investments in the infrastructure for intra-regional trade and specialization, by reallocating pasture to arable, improving the control of water, supplies implementing efficient food stabilization policies, etc., had already been carried further in China than Europe.

Patrick O Brien had shown that Britain was able to bear a system of taxation that was roughly twice as burdensome as that of France in per capita terms, becoming thrice as large during the Napoleonic wars, with economic growth being unable to offset the burden over the same period.7 In this respect modern research has confirmed Smith’s observation that: ‘The French system of taxation seems, in every respect, inferior to the British.’ Despite having a population three times the size of Britain, he estimated that French taxes yielded ‘not the half of what might have been expected, had the people contributed in the same proportion to their numbers as the people of Great Britain.’8 Moreover, because the French system relied so much on tax farming, only half of the revenues were handed over to the state, with more oppressive methods being used to obtain them.9 The exploitation of a widening tax base, especially that furnished by customs duties on an expanding foreign trade and by excise duties on goods moving within an integrated domestic market, rather than a higher rate of overall growth in the economy, seems to have been the crucial enabling factor in British success, together with various intangibles of a political and social character. The mutual dependence of public credit and constitutional stability was built into the foundations of the institution from the outset, and efficiency in tax collection gave security to investors by insuring against public repudiation, a device frequently resorted to by French monarchs. A sophisticated money market was able to develop, matched only by that of Holland, the country that provided the bulk of foreign investors in British public funds. The inability of France to match these institutions became a major source of concern under the ancien regime and during the French revolution.