ABSTRACT
Nobel Prize laureate John Hicks proposed three analytical categories – customary, command, and market economies – to explain how a small number of societies succeeded in improving their market economies through new technology and capital accumulation, even though most failed to do so. The market networks of the Mediterranean world had facilitated the rise of city-states and their trading centers and brought different civilizations into contact with each other. By 1800 many Western European states were establishing the factor and product markets that promoted a decline in human mortality, upgraded rural proto-industrial firms into urban factories, and caused migrations of rural people to the cities. A Chinese frontier territory called Taiwan, an island little more than a hundred miles from the southeast coast of the Chinese continental landmass, took different political and economic paths and, in the early 1960s, broke with the past and established China's first productive market economy.
