A World Divided: Industrial Leaders and Deindustrialization

By 1900 industrialization had reshaped the global economy into industrial cores and largely agricultural peripheries. According to estimates by economic historian Paul Bairoch, Britain's share of world manufacturing rose from about 2 percent in 1750 to over 20 percent by 1880, while China's and India's combined share fell from over half to a small fraction. Cheap machine-made goods undercut handicraft industries in Asia, Latin America and the Middle East, a process sometimes called deindustrialization.

Many regions became exporters of raw materials such as cotton, rubber, wheat and minerals to industrial nations. Historians debate the causes: some stress the competitive power of new technology, others the role of colonial policies, unequal treaties and tariffs that favored European goods. Bairoch's figures are estimates and are themselves debated, but the overall pattern of a widening gap is widely accepted.