George Gunton proposed a demand-centric theory to explain the root cause for the divergence between countries. Effectual demand that arises from social wants becomes the precondition for capital investment and growth in real wages. While social wants in the West and East were almost on par until the thirteenth century, the advent of free towns and in England, set into motion a transformation of social wants. Based on his reading of Francis Buchanan, Gunton argued that without a similar revolution, social wants remained static in the East. This stark observation and the possible reasons for its timelessness have so far received scant attention in the Great Divergence debate, which this article seeks to address.
