Keynes (1926: 16) writes, ‘[A] study of the history of opinion is a necessary preliminary to the emancipation of the mind.’ In this chapter, I review the evolution of social thought regarding the role of the government in the industrialisation and transition of developing countries.

Before the Industrial Revolution in the eighteenth century, China was more industrialised than the West (Cipolla, 1980; Elvin, 1973; Jones, 1981; Needham, 1969). In the seventeenth century the Indian subcontinent was not significantly less developed than Britain and, before 1800, India was a major supplier of cotton and silk textiles in international markets, including to Europe (Dutt, 1992). After the Industrial Revolution in Britain in the mid-eighteenth century, and in western Europe in the nineteenth century, the West was quickly industrialised and enhanced its economic, military and political power to achieve a dominant position in the world – hence the great divergence between the industrialised North and the agrarian South emerged. India, like many other parts of the world, became a colony.