CHAPTER 5 The Gap

Early XIX century the share of global GDP produced by Europe rises rapidly and
by 1900 there is a reverse situation relative to 1700s one: EU 60% and USA 20%
whereas the other countries (especially China and India what remains).
Why? Because China and India arent industrializing so they become poorer and
poorer.
During the XIX century the gap appears btw the West and the rest of the world
it is going to increase even more!
Historian F. Braudel didnt accept the Eurocentrist explaination of the reason
why this gap appeared also because China had a well-developed market
economy and some innovations and techniques in the XVIII yet.
The gap represents also different groups of people within the same country
who owns the means of production and poor workers.
China is involved in British successful industrialization. Why?
- Chinas huge demand for silver as basis for monetary system and to keep its
economy going
- Opium demand played a major role
After 1 Opium War (1839-42) UK gets big benefits from China and
Hong Kong becomes the British hub for the drug trade
After American independence (1783) Americans begin to trade opium
(Turkish) to China because of dramatic profits
2nd Opium War (1858-60) and UK forces China to legalize opium sale
consequence: others starts to trade in opium and even Chinese
started to grow it import substitution less food cultivated more
danger of famines opium from elites to mass consumption
Also India is involved because Indias decline was planned to benefit UK mid1800s India becomes UK colony, already started de-industrialization and UK had
already removed Indian tariff barriers to British manufactured textiles Indian
unemployed Indians turn to farmers and farmed something they could sell
(raw cotton, sugarcane, indigo and opium) immense fortune for UK
Industrialization had happened in UK because of conjuncture of independent
developments that brought UK to success, but in other countries its effects
could be replicated if they are guided by strong governments other states
start industrialization:
- France: it has no coal, it is slashed by wars and internal fights like the French
Revolution in 1789, revolutionary upheavals, etc
Its background is agricultural but in 1842 the French government decides to
build a national railroad system providing the necessary capital.
- USA: industrialization is centered on the north-east and the capital is
provided mostly by privates. USA starts with textile sector because South
America supplies raw cotton, but raises high tariffs to protect the young
industries. By 1870s railroad spanned the USA. Consider that also military
industry develops because of Civil War in 1860-65.
USA is a pioneer of application of industry to agriculture and it becomes the
major exporter of food in global markets.
- Germany: 1870 Germany finally unified but before (1850s) built railroads
that provided sufficient unity for industrialization in particular in Ruhr River
valley.

It had to choose a different path and emphasize heavy industry (steel and
iron Krupp metallurgy) in order to support the growth of its military.
Germany is the first country to apply science to industrial development, in
fact it do industrial research that leads to new chemical and electrical
industries.
- Russia: deeply rural, peasants enslaved until 1860s (after Crimea War
decided to remove it), for centuries exporter of raw materials for others to
become industrialized, but 1880s decision to build railroads and develop
heavy industry (coal, iron, steel, oil). The government played the major role
and erected high tariffs. The interesting thing is the reason that pushed to
Russian industrialization: they didnt want to be conquered by new
imperialist countries like India and China.
- Japan: it had few natural resources so it had to export to import later. Until
mid-1800s closed economy, but from 1868 new regime that dismantle feudal
system and promote industrialization. Push textile industry with low wages
strategy paid so they could obtain a strong military to defeat China in 1895
and Russia a decade later 1910 removed unequal treaty by which Japan
couldnt control its own tariffs.
Other things change with industrialization:
- Overproduction: as more countries industrialize, the problem of
overproduction arises and could get to the point that supply exceeds
demand, it brings to price fall, low wages to remain competitive, depress
demand, recession and depression.
The 1st recession happened in 1857 (short), then boom again until 1873
recession until 1896 (in UK prices fell of about 40%) and states become to
raise tariffs on imports to protect industries (DE, IT, FR, RU, not Japan
because forbidden) BUT Britain with its huge surpluses kept global economy
floating and the capitalist system too competition is harder and it
contributes to New Imperialism.
- Society: factories, hard work, keep the pace of the machine, no rights for
workers, they demand higher wages and right through strikes, collective
action brings to 1848 revolts all around EU for demand of democratic rights
for working people.
- Families: less children and migration to cities.
- Nations and Nationalism: idea of citizens for ex. with French Revolution 1789,
but only after modern-state and industrialization arises the idea of nation
(communication and transportation make feel next) with governments way
to gain and keep peoples loyalty traditions and history to celebrate
from 1850s shaped the idea of my people is the best and it changes EU
and the world because it pushed toward imperialist expansionism ex.
Crimean War in 1856 Russia VS Britain, France and Turkey.
The scrambles for Africa and China: at the end of XIX century military forces
especially toward China and Africa for two different reasons:
Africa: purpose is to access its stores of raw materials; penetration
impossible for centuries, but with quinine given to troops and innovations
in the repeating fire of guns, after a strong African resistance, EU win.
Africa sliced: only Ethiopia remains independent.
China: purpose is to access its market. China is under constant pressure
by every country.

1894 Japan VS China because Japan wants Korea (tribute right of China),
it wins and among other benefits it obtains concessions. Germany wants
a concession in Shandong peninsula and take it with force, the scramble
for concessions starts.
UK preoccupied because it needs open market (if China becomes colony
not possible) so with help of USA, they articulated a policy called Open
Door Notes in 1900 that everyone accepted with reasons not to colonize
China BUT they exploited anyway.
Catastrophes: massive deforestation, depleted soil, etc provoked dangers to
colonized and poor countries ex. Latin America and Asia. El Nino climatic
phenomenon provoked floods and droughts and famines that killed 50 million
people in Asia, Africa and Latin America; governments were unable or unwilling
to resolve the situation.
Social Darwinism and Eugenics: in XIX century found theory to demonstrate
Western superiority and justify the poor countries treatment Darwin the
origins of species applied to humans the poverty of the incapable in Latin
America Eugenics to lighten Mexican and Brazilian people.
It put the foundations to racist ideas that spread in the XX century.