[Long Ago] Why Europe Pulled Ahead of China

Up until the 14th century, the standard of living of the Chinese was higher than that of the West. *The Travels of Marco Polo*, written by the Venetian merchant Marco Polo, is filled with admiration for Chinese civilization at the time.

As time passed, however, China remained stuck in stagnation while Europeans steadily achieved economic growth. As a result, by the 18th century the standard of living in Europe had far surpassed that of China, and the gap continued to widen until the late 20th century. Eventually, China even came to be colonized by European powers.

The biggest difference between the two regions was whether their rulers protected the freedom and property rights of their citizens. A society that allows individuals to keep the fruits of their own efforts attains a high standard of living, while a society that does not falls into stagnation and poverty. Europe belonged to the former category, China to the latter.

A major reason why citizens’ property rights and freedom were well protected in the West was the competition among states to create a business-friendly environment. City-states such as Venice, Genoa, Pisa, Florence, Antwerp, and Amsterdam were all small countries built by merchants. Because they could not exist without vibrant commerce, they worked zealously to maintain the legal, institutional, and physical infrastructure necessary for trade. What further accelerated this process was the mobility of merchants and capital. Even then, merchants and capital moved easily from place to place, so any city that made commerce difficult had no choice but to lose both. These conditions drove competition among city-states to create favorable environments for enterprise, and that legacy continued into early modern Europe.

By contrast, it was unimaginable for the Chinese to choose a state that suited their preferences. As a result, China’s rulers came to regard regulation and exploitation as a matter of course. For example, in 1500 the Chinese government declared that anyone who built a ship with more than two masts would be put to death. In 1525, it issued another regulation declaring that anyone who built a large ship would be executed. It prohibited trade with foreign countries and completely banned the development of machinery using clocks and water power. Under such circumstances, one could hardly expect an Industrial Revolution like the one in the Netherlands or England. Europe’s decentralized governing structure and competition among cities brought freedom and prosperity to Europeans. By contrast, China’s centralized governing structure brought oppression and poverty to the Chinese.

Original title: [옛날옛적에 ] 유럽이 중국을 앞선 이유

Author: Center for Free Enterprise (CFE)

Date: 2006-06-22

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=21&idx=10670