While many nations have experienced the 'hockey stick' pattern of economic growth, there are still some countries where this upward turn in living standards has not yet begun. These economies remain in a state of prolonged stagnation, not yet having entered a phase of sustained growth.

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The 'hockey stick' pattern of economic growth is not a uniform phenomenon that appears identically in all nations. Both the existence of the pattern and its specific characteristics, such as the timing and steepness of the upward 'kink', differ significantly between countries. For example, Britain's growth was gradual and began around 1650, whereas Japan's was sharper and occurred around 1870. In contrast, China and India saw their living standards decrease during Western Europe's initial takeoff, with their own growth kinks emerging much later in the latter half of the 20th century.

Variability of the 'Hockey Stick' Growth Pattern Across Countries

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

The 'hockey stick' growth pattern in Britain is distinguished by its timing and shape. Economic growth began relatively early, around 1650, and the upward 'kink' was less abrupt and more gradual compared to the experience of other nations.

Britain's Early and Gradual 'Hockey Stick' Kink

In contrast to Britain's experience, Japan's 'hockey stick' pattern is defined by a significantly sharper and more pronounced upward kink. This rapid acceleration in economic growth is identified as starting around 1870.

Japan's Sharp 'Hockey Stick' Kink around 1870

Delayed or Absent 'Hockey Stick' Growth in Some Countries

Statistician Hans Rosling produced an engaging video that illustrates the concept of divergent national development. The video visually demonstrates that some nations became both wealthier and healthier significantly sooner than others, providing a clear example of uneven progress.

Hans Rosling's Video on Divergent National Progress in Health and Wealth

For some economies, particularly China and India, significant improvements in living standards and economic take-offs were not achieved until after they gained independence from colonial rule or were no longer subject to interference from European nations. Specifically, India's economic take-off began soon after its independence in 1947. China followed a similar trajectory of growth after its period of foreign dominance ended.

Living Standards Improvements Post-Colonial Independence

A comparison of long-term economic growth between 1600 and 1975 reveals differing outcomes for Britain and Japan. While Britain's average income increased 11-fold, Japan's grew 17-fold over the same period. The text suggests that Japan's more rapid growth rate is linked to its success in resisting foreign interventions, unlike other nations in the region.

Impact of Resisting Foreign Intervention on Economic Growth: Japan vs. Britain (1600-1975)

During periods of external interference, the economies of both India and China saw stagnation and a decrease in per capita output. In India's case, this occurred under formal colonial rule. China, while never officially a colony, experienced a similar downturn. From the early 19th century until the mid-20th century, foreign powers like Britain and Portugal controlled key ports such as Hong Kong and Macau, which prevented the Chinese government from exercising independent control over important economic matters. This period of foreign intervention in China, which concluded with a successful revolution, coincided with a decline in its per capita income. For both nations, this long-term decline delayed their 'hockey stick' growth until the latter half of the 20th century.

Economic Stagnation and Decline in India and China During Periods of Foreign Intervention

Not all capitalist nations achieve the high level of economic success seen in the 'hockey stick' growth of countries like Britain and Japan. The results under capitalism can differ significantly, with some nations experiencing sustained growth while others fail. The divergent economic paths of various countries during the 20th century, as visualized in Figure 1.19, provide a clear illustration of this principle.

Variability of Success in Capitalist Economies

The existence of divergent development trajectories among nations implies that a single, universal model is unlikely to successfully explain every instance of 'hockey stick' growth. The varied experiences of countries show the need for context-specific explanations for industrialization.

Insufficiency of a Single Model for Explaining 'Hockey Stick' Growth

As an alternative to competing with Britain's established textile industry, Germany pursued a different industrialization path. Its strategy was heavily influenced by the state and large banks, which actively promoted the development of steel and other heavy industries.

Germany's Industrialization Strategy: Role of Government and Banks

Japan's industrialization followed a unique path, leveraging its geographical isolation from early industrial powers. This distance allowed it to selectively adopt foreign technology and institutions, such as capitalism, while preserving traditional structures like imperial rule. This strategy enabled Japan to successfully compete with and surpass Britain in certain Asian textile markets, a model it maintained until its defeat in World War II.

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