Robert C. Allen, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan Luiten van Zanden (2005): Wages, Prices, and Living Standards in China, Japan, and Europe, 1738-1925: "'The difference between the money price of labour in China and Europe is still greater than that between the money price of subsistence; because the real recompence of labour is higher in Europe than in China.' –Adam Smith, Wealth of Nations, 1776, p. 189...

...The comparative standard of living of Asians and Europeans on the eve of the Industrial Revolution has become a controversial question in economic history. The classical economists and many modern scholars have claimed that European living standards exceeded those in Asia long before the Industrial Revolution. Recently, this consensus has been questioned by revisionists (e.g. Pomeranz 2000, Parthasarathai 1998, Wong 1997, Lee and Feng 1999, Li 1998, Allen 2002, 2003, 2004, Allen, Bengtsson, and Dribe 2005) who have suggested that Asian living standards were on a par with those of Europe in the eighteenth century and who have disputed the demographic and agrarian assumptions that underpin the traditional view. The revisionists have not convinced everyone, however (e.g. Broadberry and Gupta 2005).

One thing is clear about this debate, however, and that is the fragility of the evidence that has been brought to the issue. While some writers have made real income comparisons between Europe and Asia, the comparisons have been based on scraps of information about wages and prices in Asia. Our knowledge of real incomes in Europe is broad and deep because scholars since the mid-nineteenth century have been compiling data bases of wages and prices for European cities from the late middle ages into the nineteenth century when official statistics begin. Apart from Japan, little comparable work has been done for Asia. We have been trying to fill that gap by constructing data bases of wages and consumer goods prices for China in the eighteenth and nineteenth centuries. These data can, then, be combined with Japanese data and compared to European evidence to assess the relative levels of real income at the two ends of Eurasia. The comparisons paint a less optimistic picture of Asian performance than the revisionists suggest...