Industrial Revolution Flashcards
Allen (Industrial Revolution)
Black Death → decimation of population → higher wages and arable fields now producing high-quality wool → commercial expansion and growth of cities and trade → wages in Britain remained high due to commercial success → increased demand for coal and food for cities. Productive agriculture and coal mines were consequences, not causes, of urban growth
British Industrial Revolution was a product of (and all downstream of) technological change, including 1) the steam engine, 2) cotton spinning machinery, and 3) the manufacturing of iron with coal and coke. Results: 1) rapid urbanisation, 2) capital accumulation, 3) increases in agricultural productivity and 4) the growth of income.
Prices were the main factor and ‘the prices were right’. England had cheap energy due to coal mining and high wages, so substituted labour for capital. Science, such as the Enlightenment, was necessary but not sufficient. Science also changed the culture and attitudes of people, increased secularisation and politicisation between 1500 and 1800 - but many other places with the same price structure did not experience the same changes, so perhaps price was necessary but not sufficient
O’Rourke and Williamson
England experienced a break from Malthusian constraints. English commodity prices decoupled from English factor endowments (food prices did not depend on land anymore), instead trading off the world’s endowments
Kelly et al
Human capital led to Industrial Revolution in England. England had higher wages and higher human capital, including the capacity for self-control and perseverance. Evidence through height and productivity through comparison of convicts and recruits in England and France, and also life expectancy. Human capital was high before the Industrial Revolution, explaining why it happened in England and not France. BUT problem with this is it also does not explain why these differences emerged in the first place
Crafts and Harley
Dispute the conventional wisdom that the Industrial Revolution led to an explosion of growth - industry overall grew very slowly, with an average growth rate of 0.33%
O’Rourke and Williamson
Explain the break in living standards and the reversal in long run trends in the ratio of wages to land rent, showing the break between factor prices and factor endowments. Authors argue this was not solely due to industrial revolutionary forces. Instead, Europe became more open to trade, with such global market integration cutting the ties between factor prices and domestic land-labour ratios. Evidence on falling transport costs, rising liberal policy, evaporating inte tional commodity price gaps, rising trade shares, and the relationship bet commodity prices and factor endowments all suggest that the English eco became much more open to trade during the 18th and early 19th century
Mokyr
Stresses the ‘preceding changes in the mental world of the British economic and technical elite’ during the scientific revolution, seeing the ‘macro-inventions’ as the work of a few highly trained, literate men who linked science and production through a culture of experimentation to create an ‘industrial enlightenment’. Coal was not important.
Productivity growth in English coalmining in the Industrial Revolution era was extremely modest even under upper-bound assumptions on productivity gains. The enormous expansion of coal output was due to factors external to the industry: increased demands for coal from greater populations and higher incomes, increased demands following on improvements in iron smelting technology, reduced taxation of coal used for domestic purposes in cities like London, and declining real transport costs.
BUT Allen - the supply of inventors was itself the product of increased wages in Britain, which led to literacy, numeracy, and commercial values
Clark and Jacks
Coal output expanded in the Industrial Revolution mainly as a result of increased demand rather than technological innovations in mining. But that expansion could have occurred at any time before 1760. Further, our coal rents series suggests that English possession of coal reserves made a negligible contribution to Industrial Revolution incomes.
Productivity growth in English coal-mining in the Industrial Revolution era was extremely modest even under upper-bound assumptions on productivity gains. The enormous expansion of coal output was due to factors external to the industry: increased demands for coal from greater populations and higher incomes, increased demands following on improvements in iron smelting technology, reduced taxation of coal used for domestic purposes in cities like London, and declining real transport costs.
Engels’ pause
Describe the period from 1790 to 1840, when British working-class wages stagnated and per-capita gross domestic product expanded rapidly during a technological upheaval
Allen (Engel’s Pause)
There was a stagnation in the real wage at the start of the 19th century. Increased productivity did not go to the workers, but instead to the owners of capital. Britain had a two stage evolution of inequality. In the first half of the 19th century, the real wage stagnated while output per worker expanded. The profit rate doubled and the share of profits in national income expanded at the expense of labour and land. After the middle of the 19th century, real wages began to grow in line with productivity, and the profit rate and factor shares stabilized. Technical progress was the prime mover behind the industrial revolution, and capital accumulation was a necessary complement. The surge in inequality was intrinsic to the growth process: technical change increased the demand for capital and raised the profit rate and capital’s share. The rise in profits, in turn, sustained the industrial revolution by financing the necessary capital accumulation. After the middle of the 19th century, accumulation had caught up with the requirements of technology and wages rose in line with productivity.
Allens supports Engels’ argument - He describes how the industrial revolution led to massive urbanisation and great increases in output. While per capita income was rising, real wages remained constant, however, so the gains from economic development accrued overwhelmingly to capitalists. The period of constant wages in the midst of rising output per worker was ‘Engel’s pause’. The pause had a progressive side, however, for the bourgeoisie saved from its growing income, and the ensuing investment drove the economy forward.
BUT this inequality eventually subsided and created a more equitable process of growth
Clark - average real wage grew faster than Feinstein contended and GDP grew less rapidly than Crafts and Harley calculated. Putting faster wage growth together with slower output growth implies that ‘manual worker’s real incomes in the industrial revolution period rose much more than did real output per capita’. Workers, rather than capitalists, were the winners in the industrial revolution. Allen finds this to be unpersuasive
Lewis
Lewis - The Lewis model explains Allen’s hypothesis. There used to be two sectors, including the peasant agriculture and the industrial sector. Initially there was completely elastic supply of labour at subsistence wage, then workers kept moving into the industrial sector until the marginal worker in the agriculture sector had to be paid more. There wasn’t a ‘big bad capitalist’ - it was just that large profits enabled the industrial sector to grow until it eventually absorbed surplus labour. Wages rose with productivity, creating the two-stage process of rising inequality then more equitable growth.
The Industrial Revolution was less of a discontinuity than previously thought; more so the culmination of a long-run historical process
