>> World GDP History 1-2010

From the economist:

Data compiled by Angus Maddison, an economist who died earlier this year, suggest that China and India were the biggest economies in the world for almost all of the past 2000 years. Why they fell so far behind may be more of a mystery than why they are currently flourishing.

Lets try to address the two comments from the Economist's statement ( The power of the interwebs allowed me to quickly look for a variety of comments on this chart, reproduced below):


1. Comment: "Why they fell so far behind may be more of a mystery ..."

- "The factors that led Europeans to dominate China and India during the late colonial peroiod started before then." and "The early colonial period could have also been a factor. " - pheebel_wimpe

- "Angus Maddison had actually postulated that before the industrial revolution when everybody’s economy was of subsistence living, so the largest economies go with the countries of largest population." - justlistenall

-"This is exactly the question that how England with that small economy was able to colonize India and force China into whatever she wanted. Is the answer technology? Then how come England with its small economy achieved so many technological superiority that India and China couldn't?
This is like New Zealand colonizing the US and get all its economic output and then centuries later somebody asks why the US declined and you saying because it was colonized. Being colonized is the effect not the cause." - An Drew

-"The industrial revolution (as BR stated above) allowed for the Western world to leverage that knowledge and become more efficient with labor & capital. This revolution also allowed for the rapid acceleration in specialization & innovation to occur. " - TDL

- "It wasn’t “just” the industrial revolution, but an industrial revolution empowered by two things: scientific rationalism as a product of the enlightenment, and ever cheaper energy. You needed both.

It’s interesting to look at the above graph and note that Drake’s well was 1859.

The enlightenment allowed the “West” to move beyond the constraint of belief and “knowledge through divination” to a scientific method and a testable model of the world. The resulting descoveries were further enhanced by the commercialisation of ever cheaper energy, first coal and then oil. This enabled this intellectual capital to be channeled into growth, increasing GDP not through human labour but through chemical energy. (Another interesting “fact” is that a barrel of oil contains the same energy as 5-10 years physical human work – it’s not a simple calculation…).

This in turn enabled colonialism. Don’t forget the force multiplying effect of energy. The “West” wouldn’t have stood a chance against the vastly more populous east without this advantage. Regardless of the morals of colonialism, we wouldn’t be discussing it if the “West” wasn’t the first to combine ideas with energy.

And looking forward it is no surprise that China is paying whatever it takes to access secure energy. Whether peak oil is today, tomorrow, or in 50 years China is looking beyond that game. They plan to recover their position in the world." - sakhlalinsk

2. 1. Comment: " than why they are currently flourishing."
- "it was really a 19th century phenomenon for the "west" to leap ahead, capitalizing on the industrial revolution." - Michael Dunne

- "With the value adding by way of industrial revolution, the largest economies go to the countries of advanced science and technology, hence the West. Now when technologies are being proliferated and becoming ubiquitous to ‘every one’, the largest economies go back to the countries of largest population." - justlistenall

- "Why they fell behind is easy to see. When the world turned "industrial", they did not. India is notorious for being very restrictive for transacting commerce and China is still very much a centrally controlled Communist state. " - GreggDS

- "Banks ensure that $100 of deposits metamorphose into $1000 of loans. I would like to argue that because of financial institutions like these, the economy is magnified many times beyond its true value. This has been true of western economies for sometime now. The shrinking of India's and China's economies needs to be attributed to increase in western paper money as much as decline in their real output.
Now that these countries are embracing paper money, their GDP in increasing by leaps and bounds because of the paper money power and the real productive power of their 2 billion citizens. I guess it all boils down to the number of working hands and number of stomachs to be fed. That is the economy at its very basic." - gapp.gando

- " Once the industrial revolution came along, followed by the information revolution, mere size mattered less. First the Europeans, then the Americans leveraged technology to blow out GDP on a per capita basis. Steam engine, internal combustion engine, silicon makes up for size.

Now, India and China are using industrial leverage, and are moving up in the world on a GDP per capita basis. " - BR


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