The Industrial Revolution Flashcards
Crafts and Harley 1992
Argues that the IR was not a rapid or narrow revolution. Growth was found across many industries (not just leaders or even manufacturing), and society by 1760 was richer than generally believed. Industrial output growth peaked at 3.5% in ~1825.
Even pre-IR GB had a unique economy, less agrarian than EU. Industrial innovations disrupted the economic and social structure.
By 19C, the LR equilibrium shifted away from Malthus; population growth no longer supressed wages, and the economy became driven by technological change.
Allen 2009
Argues there were specific reasons for the IR in GB - the relative costs of labour (high) and energy (low, due to coal abundance). This incentivised innovations enabling substitution of energy for labour. GB institutions were more flexible; PR just as secure as in France, but govt could intervene to enforce investments to take place on private land.
Scientific revolution was necessary but not sufficient, and not focused on GB. Relative prices was most important. Science as culture was important, enabling affinity for engineering. Cultural changes: secularisation (focus on creating a good life now) and politicisation. Other necessary factors include restrained fertility, strong HC (literacy), industrious saving and spending patterns.
British trade and commercialism (pre-IR) resulted in high wages, and high cost of labour (lots of demand). Those who succeeded in the IR were those who had already urbanised a lot by 1800. GB satisfied necessary conditions and had unique relative prices.
Clark and Jacks 2007 - coal not important; trade meant other countries could also easily access energy. Furthermore, energy was not a significant issue until the IR was underway. But Allen argues it was the incentive.
O’Rourke and Williamson 2005
Paper argues the key to escaping Malthusian constraints was breaking resource constraints, and achieving favourable relative factor prices. Achieved through openness to trade, and market integration in Europe. This accounts for the shift from Malthus to Ohlin.
After 1840, the IR and trade openness reversed the trend of rising relative food prices. Previously, as populations grow and land is fixed, food becomes relatively more expensive. But trade meant commodity prices were then exogenous. 1500-1840 the Malthusian relation of lower land to labour ratio driving up food prices held.
Agrees with C+H that the IR was a slow process, and that trade openness grew slowly. Trade costs also driven down by the IR (steamships).
Kelly et al 2014
Focus on GB HC as source of the IR. The high relative wages in GB reflected their greater HC and capabilities (protestant?). Evidence with the fact that Englishmen were taller than Frenchmen, reflecting better nutrition and living standards. Emphasis on technical competence rather than the pure science of the continent/FR. GB was endowed with a fat right tail; lots of high skill individuals through the apprenticeship system.
Allen 2008
Engel’s pause - the period of constant wages in the midst of rising output per worker in GB IR. Inequality rose during 1800-1840 - the share of capital at the expense of land and labour.
Suggestions:
- Bad harvests and Napoleonic laws raised GB food prices (as did corn laws), keeping real wages low until repeal.
Model:
- Two stages to development. At first labour growth was so rapid that capital had to re-invest (its profits) in itself to keep up. Eventually savings reached a point where both grew in the steady state. The model of growth relies on inequality.
- Well predicts the relative income shares of industries in the GB economy.
- After 1860, real wages grew in line with productivity.
