There is a lot of debate currently about stagnation in
advanced countries. GMU economist Tyler Cowen reaches back to the 18thand 19th century to provide an important historical example:
“For all the talk of
the Great Depression, we might look at a different exemplar for modern times,
18th- and 19th-century economic history in India. That country’s economic
retrogression during that era may help us understand the quandary that some
parts of the world face today.
In 1750, India
accounted for one-quarter of the world’s manufacturing output, but by 1900 that
was down to 2 percent. The West became more productive as a result of the
Industrial Revolution, and India lost much of its leading export sector,
textiles. While the data is fragmentary, the best estimates show that India’s
living standards declined through the middle of the 19th century and that its
economy retrogressed, even as it borrowed some technological improvements from
the West. India just didn’t do enough to move toward production on a larger
scale or with better machines.”
Of course, the impact of British colonization of India (which began in the 18th century) cannot be under emphasized. It was not exactly in the interest of British East India Company or the Crown to promote industrialization of India !!
An interesting book related to the topic is:
Why Europe Grew Rich
and Asia Did Not: Global Economic Divergence, 1600-1850 by Prasannan
Parthasarathi (Sep 30, 2011)
http://www.amazon.com/Why-Europe-Grew-Rich-Asia/dp/0521168244