The Industrial Revolution in the 18th century
is generally considered to have heralded the modern age on Planet Earth. But
why did this happen on a small island in North Western Europe and not
elsewhere? And why at a particular juncture in history? And what brought it
about and who? The questions are intriguing and the answers offered by economic
historian, Robert C Allen, make for a fascinating read.
The story, the author asserts, begins with the Black
Death in the mid-14th century. The logic and sequence of events is
as under:
Black Death --drastic
drop in population --farms
abandoned and much cultivated land reverts to pasture --sheep begin to eat better and the quality of
their wool improves slowly, but very significantly, over time-- Britain,
with better wool, produces better fabrics which find a big market in Europe --trade
increases and along with it economic growth sets in with growing
proto-industrialization (handicrafts produced in homes) urbanization, starting
with London, and high wages. The labour shortage, of course, is primary in
creating a high wage economy. A ban on export of raw wool encourages fabric
export instead of raw wool export. State intervention is, therefore, very
important here!
Centuries go
by.
Population
catches up, but trade driven growth backed by growing agricultural productivity
and urbanization keep Britain a high wage economy. Innovations in printing reduce
the cost of books and growing commercialization of the economy leads to
increasing literacy and numeracy. The British economy is transformed over a
couple of centuries.
The Scientific Revolution occurs in the 17th
century—people learn to control and manipulate nature instead of praying to it
-- and this lays the foundation for the Industrial Revolution to come.
The Portuguese discover the sea route to the Indies
via the Cape and the Spanish Crown funds the voyage of one Christopher Columbus.
The first great Globalization begins and intra-European trade is replaced by
inter-continental trade, helped along by the power of Brit arms, as the driver
of growth in Britain.
So, we have a growing and high wage economy with an
increasingly literate and numerate population and extensive proto-industrialization.
The scientific revolution and globalization have occurred, Asian textiles and
other exotic consumer goods have triggered some sort of consumerism and the 18th
century dawns.
The technological revolution that began in the 18th
century was primarily in cotton spinning, iron smelting with coke instead of
charcoal and, of course, the use of steam for power -- the steam engine. And
they all happened in Britain while the scientific revolution in the previous
century happened to a great extent in Europe -- remember Galileo was Italian!
The question the author addresses is why the
mechanization of cotton cleaning, carding and spinning, the use of steam for
power and the change in the process of smelting iron evolved in Britain.
The answer in short is, for reasons economic. The
pursuit of profit is what drove the effort that led to tech innovations in
these areas. Many factors were necessary -- nature’s bounty (coal and iron ore
in close proximity), consumerism, the scientific revolution and an increasingly scientific outlook in society,
but economic motivations, provided the tipping point.
Wages were high and coal was cheap and abundant. Wood was getting scarce
and expensive and increasing coal use, initially for heating, was a logical
step. This led to increasing demand for coal and for increasing coal production
more effective means of draining the mines were essential. The Newcomen steam
engine, which took Mr Newcomen ten years to build, did just that. The engine
ran on coal, which at the mines was free, and despite its inefficiency, served
a crucial commercial purpose -- enabling increased coal production. This was
what the author calls a ‘macro invention’ which ‘set in
train long trajectories of advance that resulted in great increases in
productivity……. they also radically changed factor proportions, substituting
energy and capital for labour.’
But these big inventions needed time and money and
effort to create technologies that would exploit the full potential of the
original macro invention. In the case of the steam engine, for example, a
century plus was needed for steam engines to progress from only draining mines
to powering machinery and later ships and, of course, the iron horse, the
railways. This process of actualizing the potential of macro inventions by
progressive improvements the author calls micro inventions. The forerunners to
modern venture capitalists are to be found here, too, incidentally.
The author’s analysis of the three critical inventions
that drove the industrial revolution, in terms of macro and micro inventions,
is fascinating. The search for profit in the context of a high wage, urbanized,
coal rich economy was a primary driver, but the particular stories in each case
are extremely interesting. Who were the inventors? Upper class, rich university
men or working-class weavers apprenticed to the trade as children? Who financed
the invention processes? Did the patent system help innovation and did all innovators
benefit from it? And what about industrial espionage? The questions go on and
on…
For students of
economics, some curious issues surface: state intervention in general and trade
restrictions and protection in particular have helped growth and neoclassical free
markets are not the panacea that we were taught they were. Comparative advantage,
the legitimate basis of trade, is a dynamic thing and can change dramatically
over time when circumstances – technology, in particular -- change. Real life
confounds a great deal of theory is the take away here.
Allen writes clearly, argues very convincingly and the
book is, therefore, an easy read. For anyone interested in questions like Why Britain
or Why the West and not the Rest, this is a must read.
Happy reading.
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