Chapter 17 The fourth section avoids the "Needham problem"

The dark Middle Ages in Europe lasted for 800 years, and then the Renaissance came, and the scientific revolution rose.Joseph Needham raised a thought-provoking question: Why did modern science originate in Western Europe instead of China?Or why did the first industrial revolution happen in Western Europe instead of China, which once led the world in terms of technology?This problem came to be known as the "Needham Dilemma". Just as the reasons for the fall of the Roman Empire have fascinated historians, the "Needham Dilemma" seems to have fascinated scholars of all stripes.How to solve the "Needham Dilemma"?Needham's own answer is: China's bureaucratic system was originally suitable for the growth of science, but it hindered the formation of mercantile values.So, it lacked the ability to combine the skills of artisans with the mathematical and logical reasoning methods discovered by scholars.Therefore, in the development of modern natural science, China did not successfully realize the transition to modern science, so it fell behind.

Past explanations all have some truth, but since empirical testing is unlikely, it is difficult to say who is right and who is wrong.But the "Needham Dilemma" is somewhat evasive.Why can't China produce an industrial revolution?This problem itself is problematic, because the outbreak of the industrial revolution is full of uncertainty.In other words, the outbreak of the Industrial Revolution in Britain had a great chance.Why do you say this way? Let's answer such a question first, that is why there are two pilots in civil aviation airliners.Part of the reason is that the probability of one driver making a mistake is 1 in 100, but the probability of two drivers making a mistake at the same time is only 1 in 10,000!Although the probability of an event occurring is normal, the probability of two identical events becoming a small probability event through the multiplier effect.

We must know that the characteristic of technology research and development is that the success rate is very low. Generally speaking, only 1 out of 100 new companies can survive in the end.Moreover, to create an industry, a large number of related enterprises are needed.Next, let's do a thought experiment: we write a business plan for the textile industry: (1) Industrial textiles must have a large market. (2) Textile factories must obtain original venture capital. You must know that the saving rate of the agricultural economy is lower than 10%. (3) It must be able to continuously convert savings into investment, that is, to have a banking system. (4) Textile factories must obtain sufficient labor force. (5) Textile factories must have qualified entrepreneurs. (6) Technical feasibility, that is, textile machines can be produced under agricultural economic conditions. (7) Government policies must allow enterprises to survive, such as tax rates that cannot exceed profit margins.These 7 basic conditions must be met in one country at the same time.If the probability of each event is 1/4, then the probability of the textile industry is 4 to the 7th power, which is 1/16384.Therefore, for any country, the industrial revolution is a small probability event, a black swan event.

Britain happens to have these seven basic conditions: (1) Britain's overseas trade is active.Before the industrial revolution, Britain had already expanded its external market. In addition to its 13 colonies in the United States, it also owned colonies such as India, which brought a ready market for industrial cloth and exported cotton products to the European continent and other countries. (2) Original capital accumulation.British mercantilists vigorously developed foreign trade.They believe that in foreign trade, the principles of selling more and buying less, and earning more and spending less must be followed in order to achieve a trade surplus.A trade surplus will inevitably flow precious metals into the country, thereby increasing domestic wealth.In order to absorb and preserve the gold and silver needed in the country, early mercantilism not only advocated absorbing foreign precious metals through foreign trade, but the British Navy also robbed a large amount of gold and silver from overseas to complete the accumulation of original venture capital (another explanation is British frugality promotes saving, which is Weber's Protestant ethics theory). (3) The British banking system already exists, such as the Bank of England was established in 1694. (4) Britain carried out a cruel and ruthless land enclosure movement, and farmers who lost their land had to work in textile factories. (5) The British pay more attention to business and have cultivated a group of entrepreneurs in trade activities. (6) The spinning jenny was invented in 1765.The invention of the textile machine was not due to scientific reasoning, but was invented by skilled craftsmen. The first application of science was navigation, and it was not until very late that it showed its leading role in technology.The spinning jenny is simple to manufacture and can be mass-produced. (7) Britain in the 18th century went through the stage of mercantilism, completely abandoning the mercantilism of protective tariffs and replacing it with free trade.The UK taxes less.Perhaps influenced by Adam Smith's "The Wealth of Nations", the British government is basically laissez-faire to enterprises, and the tax burden does not erode corporate profits too much. The Corn Laws were formally repealed in 1846, and British free trade triumphed.

Stavrianos said in "General History of the World": "The Industrial Revolution cannot be attributed to the genius of a small group of inventors alone. Genius undoubtedly played a role, however, it is more important that the late eighteenth century played a role The combination of various favorable forces.” It was the unknowingly satisfying seven conditions at the same time that the textile industry that ignited the industrial revolution appeared in Britain.If there is one less condition, the textile industry may not appear.In other words, the United Kingdom hit a big luck that it didn't even think of, and it turned out to be an economic revolution in hindsight.Adam Smith has never been to China, but he made an in-depth analysis of the Chinese economy in "The Wealth of Nations", showing his insight as a master of economics.However, Adam Smith did not predict the coming of the Industrial Revolution, even if he was in it.

The reasons for China's modern backwardness can of course be traced from the original, but it should be discussed from the perspective of adapting to the impact of the industrial revolution. The "Needham Dilemma" avoids the most important and ignores the less important. We should not only ask why China did not create an industrial revolution independently, but also ask why all other countries except the United Kingdom did not have an industrial revolution.If China and India did not have the Industrial Revolution because there was no Renaissance, then what caused the Industrial Revolution to happen in Britain instead of other European countries that also experienced the Renaissance?The UK is most similar to France.Eric Hobsbawm, a master of modern history, said in "Whatever the reason for Britain's lead, it is not superior in science and technology. In natural science, France is almost certainly ahead of Britain. The French Revolution is quite This advantage was greatly enhanced, at least in mathematics and physics.” However, the Industrial Revolution did not end up happening first in France.Nobel laureate Simon Kuznets also said in "Modern Economic Growth": "We have reason to believe that because of not participating in ambitious European politics, the accumulation and enjoyment of the long-term experience of other European countries' economic civilization The fruit of great discoveries in the ground, Britain is a unique situation that cannot be compared to other European countries. If the situation at the time was as described above, the industrial revolution could not have happened at the same time in other European countries, let alone the rest of the world. .”

The Industrial Revolution broke out in Great Britain and then spread to other countries.The real challenge is not producing modern science, but adapting to the Industrial Revolution.It is true that modern science was only produced in Britain, but this does not prevent it from spreading in many other scientifically backward or backward areas.Modern science then spread beyond Britain and across the European continent, and in the 19th century to North America.The United States, once widely accused of "stealing technology" from Europe, actually represents the spread of industrial technology in the United States.France introduced Watt's universal steam engine in 1778. After 1815, it began to produce its own steam engine. In 1840, the French railway boom rose, and the ironmaking industry also developed rapidly.As shown in Figure 2-4, the per capita incomes of Britain and France were stalemate from 1000 AD to 1820 AD, but there was a significant gap after 1820.By 1900, Britain's per capita national income was significantly higher than that of France.

Why did China fail to adapt to the Industrial Revolution?In Fairbank's view, when a large number of Westerners came to the coast of China in modern times to seek trade opportunities, the ancient Chinese Empire showed amazing inertia to the outside world. It closed itself and rejected foreign forces.Until the middle of the 20th century, China did not respond adequately to the challenge of the West, mainly because of the awareness, mentality and education system formed under the bureaucratic system, which led to a kind of national egocentrism, which was not conducive to development outside China. indifferent.I think Fairbank's explanation misses the point.Culture often goes hand in hand with the degree of economic development.In ancient and modern times, at home and abroad, nothing like this.China has been in a "high-level dynamic equilibrium" for more than 1,800 years. The per capita income has reached the high-end level that the agricultural economy can create.The most fundamental reason for China's modern decline is that it missed the productivity revolution. In the early stage of the industrial revolution, it failed to increase the level of human capital on a large scale. After the industrial revolution broke out, it was unable to quickly adapt to the industrial revolution and get out of the trap of "high-level dynamic equilibrium". , to achieve growth in per capita income.

The productivity revolution must come from outside the existing economy, and may have nothing to do with the current leading industries. It is an "imaginative economy".However, at that time, China's imagination was severely weakened, and it made the "Quesnay mistake", thinking that only agriculture could create wealth, and it was impossible to imagine that industry could also create wealth, let alone understand the new business model of the industrial economy in a timely manner. The entrepreneurial spirit of the millennium "Chinese Dream" lacks sensitivity to changes in the outside world.Due to lack of imagination, the biggest strategic mistake in China's history is to ban the sea.From the unification of China by the Qin State to the Ming Dynasty, they all thought that threats could only come from land, so they built the Great Wall in northern China to protect it from external shocks. They never thought that threats greater than land shocks could also come from the sea.Sixty years after Zheng He's last voyage, Columbus discovered the American continent in 1492, and the Industrial Revolution broke out in Britain in 1820.

The "Middle Kingdom" did not expect that the world discovered by Zheng He would not be "flat" forever, and there would be an industrial tsunami.Due to such changes and the long-term seclusion that followed, China lost its favorable opportunity to become a major industrial and economic power at that time, and was "boiled frogs". In 1874, Li Hongzhang made a judgment on the maritime threats facing China and the effects of the Industrial Revolution in his famous "Revisiting Coastal Defense": "In the past dynasties, most of the frontiers were located in the northwest. The shape of the master is suitable for each other, and there is still a boundary between China and the outside world. Today, there are more than ten thousand miles in the southeast sea area, and all countries are doing business and preaching, and they can come and go freely. Things are happening in the country, and the countries are instigating, which is a change that has not been seen in thousands of years! The speed of ships and telegraphs is thousands of miles; A powerful enemy that has never been seen in a thousand years!"

How can we break the trap of "high-level dynamic equilibrium"?Economic reform is the first step, followed by economic growth, making the "cake" bigger and bigger, all parties in society may benefit, and no one suffers, so as to achieve Pareto improvement.Only such reforms will be widely supported and promote the transformation of economic and social thinking.Economic reform and economic growth are two mutually reinforcing processes.The "positive feedback" cycle of economic growth and change in economic thinking in India is a classic example.The best-selling book "In Disregard for the Gods: The Strange Rise of Modern India" describes India's economy as divided, with medieval poverty on one side and 21st-century high-tech on the other.The author's description of the "strange rise" is a bit confusing. But the pursuit of a better life is an inherent impulse in human beings. Once the opportunity comes, we will try our best to seize it. In 1991, India was generally skeptical of economic reforms. If India had not encountered a current account crisis at that time, the bold reforms of Finance Minister Manmohan Singh would not have been implemented at all. In 1996, when the Rao government stepped down, the Indian economy had begun to grow rapidly, and all walks of life in India began to recognize Singh's contribution. He himself was gradually hailed as "the father of India's economic reform." During my short stay in Mumbai in 2003, I found that all walks of life in India highly recognized the reforms, and felt that it was only a matter of time before poverty was overcome. On May 19, 2004, eight years after the ouster of Manmohan Singh, he was appointed prime minister of the government, a further sign of broad consensus on India's economic reforms of 1991.Deng Xiaoping said that "development is the last word" is a truth that transcends time, space and national boundaries.

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