There is little to suggest that western Europe’s economy had decisive advantages before [1800], either in its capital stock or economic institutions, that made industrialization highly probable there and unlikely elsewhere. The market-driven growth of core areas in western Europe during the preceding centuries was real enough and was undoubtedly one crucial precursor of industrialization–but it was probably no more conducive to industrial transformation than the very similar processes of commercialization and “proto-industrial” growth occurring in various core areas in Asia. The patterns of scientific and technical development that were taking shape in early modern Europe were more unusual, but we shall see that they still did not, by themselves, guarantee that western Europe would wind up on a fundamentally different path from, for instance, east Asia…

Technological inventiveness was necessary for the Industrial Revolution, but it was not sufficient, or uniquely European. …it is clear that the differences in global context that helped ease European resource constraints–and so made innovations along particular (land-using, energy using, and labor-saving) paths a fruitful, even self-reinforcing, process–were significant.

…western European land, labor, and productive markets, even as late as 1789, were on the whole probably further from perfect competition–that is, less likely to be composed of multiple buyers and sellers with opportunities to choose freely among many trading partners–than those in most of China and thus less united to the growth process envisioned by Adam Smith…

…In sum, core regions in China and Japan circa 1750 seem to resemble the most advanced parts of western Europe, combining sophisticated agriculture, commerce, and nonmechanized industry in similar, arguably even more fully realized, ways. Thus we must look outside these cores to explain their subsequent divergence.

16-17

Although some financial assets may have been better defined and more secure in Europe (or at least in England, Holland, and the Italian city-states), such differences are too small to bear the explanatory weight assigned to them by scholars…and even harder to link to the early Industrial Revolution, which was not very capital intensive. Certainly some of the larger Chinese firms, for instance, regularly assembled sums of capital adequate to implementing the major technical innovations of the pre-railroad era.

…Only in overseas colonization and armed trading did Europe’s financial institutions–nurtured by a system of competing, debt-financed states–give it a crucial edge.

Even more important…is the point that capital was not a particularly scarce factor of production in the eighteenth century. Constraints connected to energy, and ultimately to quantities of land (particularly shrinking forests of core areas throughout Eurasia), were a far more important looming impediment to further growth….

…Thus, even if Europe had an edge in assembling investment capital, this would not by itself have solved the ecological bottlenecks faced by all the most “developed” proto-industrial regions. Certainly there are enough examples of capital-rich but late industrializing areas even with Europe to make any link between greater capital accumulation and a transition to industrialism dubious. Northern Italy and Holland are obvious examples, despite their highly sophisticated commercial economies, and so, in a different way, is Spain, where a huge flood of silver into a less-developed economy may well have retarded growth.

…the [capital focused] family of arguments does direct our attention toward long-distance trade and toward phenomena–the state, colonial ventures, and nonmarket extraction–which… played a greater role in the European breakthrough…[T]he projection of interstate rivalries overseas did matter. Similarly, joint-stock companies and licensed monopolies turned out to have unique advantages for the pursuit of armed long-distance trade and the creation of export-oriented colonies–activities that required what were for the time exceptional amounts of capital willing to wait a relatively long time for returns. When we combine this notion of European capitalism, in which links to the state and the right use force and preempt certain markets loom large, with the idea that advanced market economies everywhere faced growing ecological problems, a new picture emerges of what Europe’s most significant differences were.

18-20

Signs of both serious ecological bottlenecks and spiraling poverty among too-numerous proto-industrial workers and underemployed farm laborers are as evident in many regions of mid-eighteenth century Europe as in comparable parts of China or Japan–indeed, perhaps more so, but then…Europe and east Asia changed places….

[N]orthwestern Europe became able, in the century after 1750, to specialize in manufactures (both proto-industrial and industrial) to an unprecedented degree and to make its spectacular population growth during this period an asset. A big part of this transformation was, of course, a series of impressive technological advances in manufacturing (which made huge amounts of relatively cheap goods available to exchange for land-intensive products) and in transportation…But, these well-known developments are not the whole story. Western Europe could also increase its population, specialization in manufacturing, and per capita consumption levels–even when eighteenth-century level had seemed to many people near the limits of ecological possibility–because the limits imposed by the finite supply of land suddenly became both more flexible and less important…Europe’s transformation also required the peculiar paths by which depopulation, the slave trade, Asian demand for silver, and colonial legislation and mercantilist capitalism shaped the New World into an almost inexhaustible source of land-intensive products and outlet for western Europe’s relatively abundant capital and labor. Thus, a combination of inventiveness, markets, coercion and fortunate global conjunctures produced a breakthrough in the Atlantic world, while the much earlier spread of what were quite likely better functioning markets in east Asia had instead led to an ecological impasse.

…Europe’s overseas extraction deserves to be compared with England’s turn to coal as crucial factors leading out of a world of Malthusian constraints, rather than with developments in textiles, brewing, or other industries, which, whatever their contributions to the accumulation of financial capital or development of wage labor, tended to intensify, rather than ease land and energy squeezes in the core areas of western Europe. And, indeed, a preliminary attempt to measure the importance of this ecological windfall suggests that until well into the nineteenth century, the fruits of overseas exploitation were probably roughly as important to at least Britain’s economic transformation as its epochal turn to fossil fuels.

22-23