The Great Divergence: Global Economic Inequality and the Industrial Revolution
The 'great divergence,' a trend illustrated by historical data visualizations such as Figure 1.1, refers to the significant increase in income inequality between countries. This divergence began around the seventeenth century and accelerated during the eighteenth century with the Industrial Revolution. A key aspect of this divergence was the fundamental alteration of the global geography of production, as the economic and military rise of Britain and Europe shifted the location of where most goods and services were produced. As a result, some nations experienced rapid economic growth and became vastly wealthier, while others lagged behind, establishing the stark global economic disparities seen in later periods.
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Two economic historians are debating the primary cause of the major surge in global income inequality that began to accelerate in the 18th century.
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Historian 1 argues: 'The divergence was primarily caused by long-standing differences in political institutions and legal systems. Some nations simply had systems more conducive to wealth accumulation all along, and this gap naturally widened over time.'
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Historian 2 argues: 'The divergence was triggered by a radical transformation in how and where goods were made, driven by technological breakthroughs. This fundamentally reordered the global economy, concentrating manufacturing and wealth in a handful of nations.'
Which of the following statements provides the best evaluation of these two arguments based on the historical trend known as the 'great divergence'?
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