“Chinese Economic Performance in the Long Run,” A. Maddison (2007)

Many economists know the rough contours of Western economic history well. Real income of unskilled laborer and farmer households was at no time and in no place more than, at best, three times subsistence income (see Scheidel for a nice summary of this evidence). Peaks in per capita GDP were reached in the heyday of ancient Rome and the early Arab caliphate. Regional regression was nothing strange – Europe in 1000 was using less advanced technology in many cases than the Romans had, credit markets were essentially nonexistent, long-distance or even regional trade had dried up, and no city in Europe existed with a population of even 10,000 people at the turn of the millennium. Living standards begin to rise slowly after the Black Death, first in Renaissance Italy, and then in the Netherlands and England. The Industrial Revolution finally severs the Malthusian noose by the mid-1800s, when living standards for most members of society begin to rise from their historical norm.

But what of China? Before he died, one of Angus Maddison’s final projects was compiling data on historic China. In Chinese culture, the classic periods in history are the Tang and Song dynasties, roughly from the 7th to the 12th centuries, with brief interludes, and perhaps the late Yuan and early Ming, from the late 13 to the late 1400s. Did China escape the Malthusian curse? They also did not. It seems likely that incomes were roughly at subsistence until the Tang dynasty in the 9th century, when income per capita rose perhaps 30 percent. That peak would not be seen again until around 1970!

Now, in a Malthusian world, you can still grow, or be more advanced economically, but that growth is eaten up by population growth. The main pattern in China seems to be a massive shift in population density in the south, meaning south of the Yangtse, after the beginning of the Song dynasty. Woodblock printing, allowing for the dissemination of guides to more productive agriculture, appeared in this era. Chinese agriculture appears to have been much more advanced that that of Europe or India; indeed, more of China’s farmland was irrigated in 1400 than America’s today, and not until the 20th century did Europe reach grain yields seen in China in 1400. If you know your Joseph Needham, you know much of this is driven by Chinese agricultural inventions like the curved mouldboard and the use of crop rotation (not seen in Europe until the eighteenth century!). Population rose ten-fold from 1400 to 1950 despite little change in per capita income. A nontrivial increase in caloric yield per acre of farmland came from the introduction of new world crops like maize and the sweet potato, which appear in China during the Ming dynasty. Nonagricultural rural work also appears to have been much more developed than in medieval Europe, with William Skinner’s “hexagonal trade” existent during nearly all of the post-Tang dynasties. Such trade allowed cities to develop – around 1000, China had almost 100 cities with population above 10,000, as compared to none in Europe!

More recently, industrialization gets a late start. The 1800s are a giant disaster for China, with wars against Europeans, Russians and Japanese (China lost essentially all of these), the Taiping rebellion that kills tens of millions in the nation’s heartland, Muslim rebellions in the Northwest, and a near complete lack of institutional modernization of the type seen in Japan. By 1890, only 10 miles of rail are found in the whole country, and modern industry makes up only one-half percent of the economy. Despite some fits and starts during the Republican era (especially in Shanghai and Japanese-controlled Manchuria), by the end of World War 2 and the Chinese Civil War, per capita income is no higher than it was during the Tang dynasty. Perhaps the non-vilification of Mao in today’s China has to do with the fact that, even with near-complete autarky, the Great Leap Forward and the Cultural Revolution, per capita income still nearly doubled during the Maoist era, and the industrial share of GDP rose up to match the agricultural share. That is, despite all of the human rights disasters, the Maoist economic performance was simply unheard of in Chinese history. Nearly all of this growth came from capital deepening and (especially) increases in labor supply and the human capital embodied in that labor supply; literacy rose from 20 percent to about 80 percent. And, of course, the economic history since 1976 is well-known – in only three years of the past 37 has GDP per capita grown slower than six percent, an unprecedented streak in the history of the globe.

http://browse.oecdbookshop.org/oecd/pdfs/product/4107091e.pdf (Full PDF version of the published book – big thumbs up to the OECD for making these public. If you are a Chinese speaker, prepare to be annoyed by Maddison’s habit of using Wade-Giles transliteration, i.e., Cheng Ho instead of Zheng He, Yung-lo Emperor instead of the Yangle Emperor, Kwangtung for Guangdong, Tseng Kuo-fan for Zeng Guofan. Speaking of Maddison, his historic income tables (.XLS) are a great way to while away a rainy afternoon. Who knew Australia was once the world’s richest place, or that Sri Lanka was historically a particularly wealthy part of Asia, or that Venezuela was wealthier per capita than all of Western Europe in the middle of the 20th century?)

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