Great Divergence - Conditions in Pre-Great Divergence Cores

Conditions in Pre-Great Divergence Cores

Unlike modern industrial economies, pre-modern economies were constrained by conditions which greatly limited economic growth. Although core regions in Asia and Europe had achieved a relatively high standard of living by the 18th century, shortages of land, soil degradation, deforestation, lack of a dependable energy sources (wood and charcoal were rapidly depleted), and other ecological constraints limited growth in per capita incomes. Rapid rates of depreciation on capital meant that a great part of savings in pre-modern economies were spent on replacing depleted capital, hampering capital accumulation. Massive windfalls of fuel, land, food and other resources would be necessary for continued growth and capital accumulation. The industrial revolution overcame these restraints, allowing rapid, sustained growth in per capita incomes for the first time in human history.