Economic Contribution To The Economic Vergence By Jared Diamond Of The Great Divergence

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Up until the 19th and 20th centuries, economic prosperity was still largely based on the idea put forth by Jared Diamond of the Great Divergence. He claimed that some countries were better off simply because of where they were located. However, as the 19th century began to wind down, Jeffery Williamson claims that increasing globalization allowed for more interconnected world markets and that smaller countries saw the greatest relative economic increases of globalization due to the transport revolution and changes in worldwide trade laws. First, Professor Williamson establishes measures by which to determine which countries were made better off. He claims, “Globalization debates can be better understood if we look at what is called the factor-price-dual of GDP, namely wages, land rents, and the user cost of capital goods and the commodity-price-dual of trade volumes” (p. 58). He ultimately decided that by looking at…show more content…
Williamson points to the Shimoda and Harris treaties (America and Japan) in 1858 and a prime example of a country moving from autarky to free trade. He furthers but claiming, “It is hard to imagine a more dramatic switch in trade policy, since Japan’s foreign trade quickly rose from nil to 7 percent of national income” (p. 60). While Japan was just one example, many other countries (China, Siam Korea, etc.) followed suit. The combination of these two events had to happen concurrently in order for globalization to occur. Without the ability to move goods, there would have been no reason to pass trade treaties and without trade treaties there would be no place to trade good to. Williamson summarizes this pairing by saying, “Thus—and in contrast with the atlantic economy—sharply declining transportation costs contributed to commodity-price convergence in Asia without any offsetting rise in tariffs” (p.

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