China was the largest economy for centuries because everyone...

China was the largest economy for centuries because everyone had the same type of economy-subsistence-and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs. a. Why was China the world's largest economy until $1890 ?$ b. Why did the United States surpass China in 1890 to become the world's largest economy?

China was the largest economy for centuries because everyone had the same type of economy-subsistence-and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.
a. Why was China the world's largest economy until $1890 ?$
b. Why did the United States surpass China in 1890 to become the world's largest economy?

Key Concepts

Industrial Revolution

The Industrial Revolution refers to a period of rapid technological change that transformed production methods from manual labor and simple tools to mechanized and more efficient systems. In the context of the question, the Industrial Revolution allowed Western countries, notably the United States, to dramatically increase per capita productivity through innovations in manufacturing, energy, and transportation, outstripping older agrarian economies like China.

Subsistence Economy

A subsistence economy is one in which most people produce primarily to meet their own basic needs rather than for trade or profit. In such an economy, production methods are similar across regions, and the aggregate economic output largely reflects the number of people producing, meaning that a larger population directly translates to a larger overall economy even if individual productivity is low.

Population and Economic Scale

This concept emphasizes that in economic systems where per capita productivity is relatively uniform, the total economic output is largely a function of the population size. Historically, China’s vast population allowed it to have the largest aggregate economy despite lower per capita income compared to emerging industrial economies.

Technological and Information-Based Economy

This concept describes the modern shift from traditional, labor-intensive production methods to economies driven by technology and information. In such systems, advancements in digital technologies and information processing can significantly enhance productivity and economic performance, potentially enabling nations with technological edge, even if smaller in population, to achieve higher economic standing.

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