Variability of Success in Capitalist Economies
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.
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Britain's Early and Gradual 'Hockey Stick' Kink
Japan's Sharp 'Hockey Stick' Kink around 1870
Delayed or Absent 'Hockey Stick' Growth in Some Countries
Hans Rosling's Video on Divergent National Progress in Health and Wealth
Impact of Resisting Foreign Intervention on Economic Growth: Japan vs. Britain (1600-1975)
Variability of Success in Capitalist Economies
Insufficiency of a Single Model for Explaining 'Hockey Stick' Growth
Germany's Industrialization Strategy: Role of Government and Banks
Japan's Industrial Revolution
Decline in Living Standards in China and India During Europe's Industrialization
Delayed Economic Growth in China and India Until Post-Colonial Independence
An economic historian compares two countries. Country A began a period of rapid, sustained improvement in average living standards around 1870. Country B experienced a similar pattern of rapid growth, but its takeoff did not begin until 1990. Based on these different starting points for sustained growth, what is the most direct and significant consequence for the world today?
Match each country or region to the historical period that best describes when its economy began a sustained, rapid increase in living standards (its economic 'takeoff').
Interpreting Historical Growth Trajectories
Evaluating the 'Great Divergence'
Explaining the Great Divergence
The historical pattern of a long period of economic stagnation followed by rapid, sustained growth in living standards occurred at approximately the same time for all countries.
The graph below shows three stylized long-run economic growth paths for three different countries, labeled A, B, and C. Each path shows a long period of stagnation followed by a sharp upturn in living standards.
[Image of a graph with 'Time' on the x-axis and 'Living Standards' on the y-axis.
- Path A shows a slow, gradual upturn starting relatively early.
- Path B shows a sharp upturn starting later than A.
- Path C shows a very sharp upturn starting much later than A and B.]
Based on historical patterns, which option correctly identifies the countries represented by these paths?
Critique of a Statement on Global Economic Growth
An economic historian is studying two regions. From 1700 to 1900, Region A experienced a significant and sustained increase in average living standards. During this same period, Region B, once a major economic power, saw its average living standards stagnate and even decline. What is the most likely relationship between these two phenomena?
An economic advisor argues that for a developing country to achieve rapid growth, it must precisely replicate the economic model of Britain during its initial takeoff period. Based on the historical record of long-run growth, which statement provides the most direct refutation of this 'one-size-fits-all' approach?
Evaluating the 'Great Divergence'
Learn After
Insufficiency of Capitalist Institutions for Economic Dynamism
Evaluating Economic System Outcomes
An economic analyst argues, 'The adoption of private property, markets, and firms is a sufficient condition for a country to experience sustained, rapid economic growth.' Based on the economic history of the 20th century, which of the following statements provides the strongest counter-argument to this claim?
Explaining Divergent Economic Paths
Match each country or region with the description that best characterizes its economic growth trajectory during the 20th century, illustrating the varied outcomes possible within market-based economies.
Historical evidence from the 20th century demonstrates that once a country establishes the core institutions of a market-based economy (private property, markets, and firms), it will inevitably follow a similar path of rapid, sustained economic growth to that of early industrial nations like Britain.
Conditions for Economic Growth
Imagine two countries, Country X and Country Y. Both countries established economic systems based on private property, markets, and firms in the early 20th century. By the year 2000, Country X had experienced a dramatic and sustained increase in average living standards, while Country Y's average living standards had stagnated. Which of the following conclusions is best supported by this comparison?
Evaluating an Economic Development Proposal
Critiquing a 'One-Size-Fits-All' Economic Policy
An economic historian observes that in the mid-20th century, two developing nations, Nation P and Nation Q, both implemented economic systems centered on private property, markets, and firms. Over the next 50 years, Nation P experienced unprecedented, sustained growth in living standards, while Nation Q's economy stagnated. Which of the following statements provides the most accurate analysis of this historical divergence?
Role of Institutional Quality in Economic Development
Figure 1.19 Divergence of GDP per capita among latecomers to the capitalist revolution (1928–2018)