| Abstract : | The purpose of this paper is to provide a compact presentation of the debate on the Great Divergence, a term coined by Samuel Huntington, and to offer some primal thoughts on the special case of Greece. The Great Divergence pertains to the divergence of incomes between the West and the Rest since the beginning of the 19th century, a time that heralded the era of Modern Economic Growth. Before that time there was negligible or zero growth and economic development just kept up with the increase of the population. Hence, asking: “what is the cause of the wealth of nations”, “why did the West rise before the Rest”, or “why did the industrial revolution happen first in Great Britain that broke the Malthusian ceiling”, are different ways of posing the same question. History shows that the ingredients of economic growth are not so mysterious after all and that the obscure quantity of “total factor productivity” of growth theory models is a measure of our historical ignorance. Six are the channels through which the Great Divergence occurred. Geographical factors acted not in a deterministic way but in relation to time and all the rest of the channels of the Great Divergence. The West invented the institutions of modern capitalism. The unique course of the political path of Europe i.e. the transition from arbitrary monarchy to representative parliamentary democracy and its legal institutions, reflect apart from cultural endowments, the alteration of the distribution of political power because of the rise of a new merchant class. Europe’s Christian background freed man from superstitions and the fear of nature and gradually led to modern science. Institutions of education i.e. medieval universities and academies later made possible technological inventions and nurseries of new economic-philosophical thinking. But also the “real Christianity” of Europe, as expressed through gradual mutations gave birth to cognitive frames allowing exploitation and justification of inequalities. Atlantic trade since early modern times apart from direct profits induced institutional changes carried out by the new merchant class, and lies behind the rise of Great Britain and the Netherlands. In the age of industry, specialization in manufactured products or monoculture of primal resources established divergence. Finally, colonialism relaxed the resource constraints of Western Europe and created serious distortions to the colonized. In the second part of the paper, the case of Greece, which is the weakest economy in the EU western core, is examined within the conceptual framework of the literature of the Great Divergence. Greece not only failed to industrialize in the image of the advanced West but also differed from the West in all respects. Aspects like: a vulnerable and crucial geostrategic position, different resource endowments, different pre-revolution institutions before importing the western ones and a different cultural background since at least 800AD suffice to explain the sui genesis characteristics of the Greek capitalism. One of the negative legacies of the Ottoman occupation is the cutting off of the bulk of the population from the scientific and technological developments of the West. The trade pattern of Greece in its process of westernization resembled the colonial pattern with specialization in monoculture, which increased exposure to exogenous shocks and created a chronic trade deficit. Migration is a crucial variable in the Greek case as it acted as a safety valve after economic crises but also as a strategy of pursuing material advancement. Greece did not invent capitalism and thus it had to import institutions and ideologies from the West. In addition, it had to face the geopolitical constraints as a result of its position and the balances created by power politics. This contributed to the fact of diachronically very high military expenditures (since independence), one of the highest in the world as percentage of GDP, which is a serious candidate for Greece’s divergence and weak finances. The conclusion of this paper is that the rise of the West was a combination of intended and unintended consequences, of benign and malign policies. No invisible hand created the divergence of the West, but the visible hands of the governments, either in Europe, the Western offshoots or in Asia. Greece’s relative disappointing performance lies in the fact that the Greek state never adopted a priori a long-term strategy of economic advancement, adjusted to its specific cultural and geographical conditions. Finally, some thoughts on the 21st century divergence, which is a new epoch originated after the collapse of the bipolar world, are offered through the eyes of the historical experience of economic growth. The key behind the rise of new institutions is the balance of economic power created at any time. This sheds light to how particular narrow interests are served and what distributional consequences they have. The main message is that an economic system and an underlying economic ideology empty of the notion of justice and a common moral code contains the seeds of repeating crises if not major conflicts.
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