This paper adopts a systemic perspective to reexamine a topic that has already received considerable attention in economic history: Economic growth and rising inequalities of the 19th century. According to systems theory, internal structure is the main cause of dynamic behavior, and here it refers to economic and social organization. First we discuss economic growth theories and the "convergence" hypothesis of neoclassical economic theory and compare it to institutional theory, which employs an approach that is similar to system dynamics. The institutional theory of socioeconomic development is based on a principle of "circular and cumulative causation". Accordingly, the play of forces in the market work towards increasing inequalities between regions and people. We then try to explain economic growth, dependence and emerging inequalities of the 19th Century Ottoman Empire from the perspective described in the first part. Trade, capital movements and migration will be examined as sources of regional and social inequality. Finally we compare experiences of Turkey and Egypt to emphasize the relationship between external forces and internal structure. We demonstrate that the mainsprings of growth and inequality should be sought in internal factors; in the land and the people, and in the system of social and economic organization.
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