Towards a Worldwide Index of Human Freedom

Liberty in Comparative Perspective: China, India, and the West • 195
development on growth rates or catch-up opportunities for poor countries,
must have been fairly weak before modern economic growth in the
nineteenth and early twentieth centuries made the West much richer than
the rest of the world. As long as average incomes across the world were
about equally close to the subsistence level, catch-up opportunities could
hardly exist. Catch-up opportunities for the poor presuppose the existence
of rich countries. That is why one may regard the current catch-up
opportunities that Asian societies have exploited so skillfully as an external
benefit of the earlier establishment of limited government, safe property
rights, economic freedom, and the resulting prosperity in the West.
In this account, institutions and incentives drive economic development.
Technological progress is part of economic development. But the technological
progress made possible by free institutions in the West also makes
it possible for emergent economies to benefit from technologies invented
elsewhere, i.e., in the West.
Since the fourteenth century, China was a unified empire for most
of the time, first under the Ming, and then under the Manchu or Qing
dynasties, which lasted for some centuries each. Imperial China succeeded
in monopolizing authority to a much greater degree than did
European states. As Jenner notes, “The success with which the Chinese
state prevented any religion from becoming a rival source of authority
across the empire was one of many factors preventing the emergence of
a doctrine that the monarch’s rights were limited by the rights of groups
and individuals” (1998: 78). There were no autonomous cities in China.
In Weber’s (1922/1964) terms, the traditional Chinese empire was patrimonial.
Under patrimonialism, the state does not need to respect the
rights of its subjects. Chinese merchants suffered from arbitrary, high, and
discriminatory taxation as well as from frequent confiscation. By harassing
merchants, the imperial bureaucracy impeded the development of
markets and commercialization and indirectly the division of labor and
productivity growth (Yang, 1987).8
Whereas China suffered the consequences of political unity, Western
Europe benefited from cultural unity and political fragmentation. Conflict
between European kingdoms or principalities contributed to the limitation
of governmental power over subjects. If political units are small, it is
much easier to run away from arbitrary officialdom and confiscation than
in huge empires. In medieval Europe, even peasants could run away and
find refuge in autonomous cities. Rivalry between small political units
and early trade in mass consumption goods forced European rulers to
8 Although de Bary, Chan, and Watson (1960) do not analyze the actual economic order
in imperial China, they document that Chinese writers recommended promoting agriculture
at the expense of commerce.
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