World Economic History�

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Topic 1: Setting the Scene

Altuğ Yalçıntaş, Ankara University, PolEcon

2025/2026 Academic Year

Within and between country inequality

1,000 years ago, the world was “flat”. Today, there are large differences both within and across countries.

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While both types of inequality seemed to have increased, differences in average income between countries are much larger today than they were in the past.

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We can link growing between-country inequality to the hockey-stick diagram.

Setting the Stage

Rapid, sustained growth in average living standards since 1700.

How did this happen?

Timing of growth

Growth take-off occurred at different points in time for different countries:

• Britain was the first country to experience sustained economic growth. It began around 1650.
• In Japan, it occurred around 1870.
• The kink for China and India happened in the second half of the 20th century.

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In some economies, substantial improvements in people’s living standards did not occur until they gained independence from colonial rule or interference by European nations.

The men who travelled (or attempted to travel) around the globe

• Marco Polo (Venetian merchant, 1254-1328)
• travelled along the Silk Road, 1271 and 1295

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Source: By Giovanni Grevembroch - Scanné de Coureurs des mers, Poivre d'Arvor., Public Domain, https://commons.wikimedia.org/w/index.php?curid=3519073

The men who travelled (or attempted to travel) around the globe

Source: By SY - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=65935594

The men who travelled (or attempted to travel) around the globe

• Ibn Battuta (Moroccan scholar, 1304–1368)
• “travelled across north and west Africa, Europe, the Middle East, south and central Asia and China journeying a total of 117,000 km, almost five times the distance covered by the more famous (also fourteenth-century) traveller Marco Polo.” (CoreEcon)

Source: CoreEcon

The men who travelled (or attempted to travel) around the globe

Source: Wikipedia

The men who travelled (or attempted to travel) around the globe

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Christopher Colombus (Italian voyager, 1451-1506)*

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Christopher Colombus, starting an overseas journey from Spain to “India”

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* Spanish or Portuguese origin, according to some sources

Source: Wikipedia.org

1492: An historical contingent event

• “Discovery” of a new continent (later to be called: America)
• Attention: Discovery vs. invention
• Cacao, tobacco, corn, potato
• Epidemic diseases (esp. malaria and dysentery)
• Traveling across continents vs. travelling across oceans

1492: An historical contingent event

• The emergence of colonialism
• Trying to reach out India, but failing to do so.
• First, they reached Bahamas, not Americas
• Gold and precious metals
• The British, the Dutch, and the French were not interested until Amerigo Vespucci, the1500s
• The birth of orientalism
• The indigenous cultures in Americas

Source: http://kids.britannica.com/elementary/art-88703 [October 2019]

1492: An historical contingent event

• Insufficient knowledge and miscalculations about the spherical shape of the globe
• The Copernican Revolution, 1543
• The distances are longer than expected / calculated
• Not the farthest distance at the time
• Harmful effect of the voyages on the Spanish economy, “price inflation”

Source: http://ushistoryimages.com/christopher-columbus-maps.shtm [Accessed October 2019]

1493

• The market system as well as wages, rents, and profits are contingent events and these institutions have historical specificities.
• Markets have existed long before capitalism
• But labour, land, and money were not commodities before capitalism.
• Capitalism is a unique form of markets; it is not “universal.”
• In other words, capitalism was not a necessity of human history; it was a contingent event.

The women who travelled (or attempted to travel) around the globe

Source: https://www.nationalgeographic.com/amp-stories/travel/visionary-female-adventurers-through-history [Accessed October 2025]

The women who travelled (or attempted to travel) around the globe

Calamity Jane (nee, Martha Jane Canary (May 1, 1852 – August 1, 1903)

• “compassion to others, especially to the sick and needy”
• Storyteller, nurse, shooter, resistant activist

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• Read the Wikipedia entry here.
• Read Ona Russell’s article in American Studies (1994) here.

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Source: Wikipedia [Accessed October 2025]

The Context for This Unit

Rapid, sustained growth in average living standards since 1700.

How did this happen?

Mercantile Period

From the 16^th century to the end of the 18^th century

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1492, Columbus’ first overseas voyage

1750, the emergence of physiocracy in France

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1776, the Wealth of Nations, Adam Smith

• 1776: the US Declaration of Independence
• 1789: the French Revolution

Capital, capitalism

Capital, Lexico (Oxford Dictionary) definition

• “Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.”
• Origin: “Middle English (as an adjective in the sense ‘relating to the head or top’, later ‘standing at the head or beginning’): via Old French from Latin capitalis, from caput ‘head’.”
• In Turkish: sermaye 🡪 ser-maya

Ser: baş, kafa (“ser verip sır vermemek”, “keep smt under someone’s hat”)

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Source: https://nordigi.no/index.php/en/blog/24-nordigi-in-industry-4-0 [Accessed May 2019]

Source: Allan Murray. 2016. “CEOs: Revolution is Coming”, Fortune, 8 March. http://fortune.com/2016/03/08/davos-new-industrial-revolution/ [Accessed: March 2019]

The men who travelled (or attempted to travel) around the globe

On the Origin of Species

• First edition: 1859
• Sixth edition, with corrections: 1876

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• OoS was not Darwin’s first book; it wasn’t his last.
• The term “evolution” was not invented or coined first by Darwin.
• The term “evolution” has existed for ages before Darwin and evolved since Darwin.

The World is Flat, 2005 by Thomas L. Friedman

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• A best seller, analysing the impact of technology on the global economy.

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• From the back flap (amazon.com): “…a whole new age of globalization – a ‘flattening’ of the world … The explosion of advanced technologies now means that suddenly knowledge pools and resources have connected all over the planet, levelling the playing field as never before, so that each of us is potentially an equal – and competitor – of the other.”