High-level Equilibrium Trap

The high-level equilibrium trap is a concept developed by Mark Elvin to explain why China never underwent an indigenous Industrial Revolution, despite its wealth, stability, and high level of scientific achievement. Essentially, he claims that the Chinese pre-industrial economy was efficient enough as it was that there was no profit motive for the capital expense of technical improvements. Late imperial production methods and trade networks were so efficient and labor was so cheap that the economy reached an equilibrium point where supply and demand were well balanced, and there was thus no economic pressure to improve efficiency.

At the same time, an intellectual paradigm shift from Taoism to Confucianism among the intelligentsia moved the focus of academic inquiry from natural science and mathematics, which were conceived of under Taoism as investigations into the mystical nature of the universe, to studies of social philosophy and morality under Confucianism. According to Elvin, this produced an intellectual climate that was not conducive to technical innovation.

By comparison, the economy of Great Britain at the time of the Industrial Revolution was vastly smaller and less efficient than the late imperial Chinese economy. Labor was comparatively more expensive, and internal trade far less efficient than in China. This produced large imbalances in the forces of supply and demand, leading to economic problems which provided a large financial incentive for the creation of scientific and engineering advances designed to address them. At the same time, the Enlightenment had shifted the focus of academic inquiry towards natural sciences, providing the basis for many technical innovations.