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«by Robert C. Allen Professor of Economic History Department of Economics and Nuffield College Oxford University Email: ...»

-- [ Page 7 ] --

These questions are closely related to another important question asked by Mokyr:

Why didn’t the industrial revolution peter out after 1815? He is right that there were previous occasions when important inventions were made. The result, however, was a one-shot rise in productivity that did not translate into sustained economic growth. The nineteenth century percentage.

The total is very poorly established and is surmised from an estimate of 200 engines installed in France (then including Belgium) in 1810 made by Perrier, the first important French steam engine manufacturer (Harris 1978-9, p. 178).

was different–the First Industrial Revolution turned into Modern Economic Growth. Why?

Mokyr’s answer is that scientific knowledge increased enough to allow continuous invention.

Technological improvement was certainly at the heart of the matter, but it was not due to discoveries in science–at least not before 1900. The reason that incomes continued to grow in the hundred years after Waterloo was because Britain’s pre-1815 inventions were particularly transformative, much more so than continental inventions. That is a second reason that the Industrial Revolution was British and also the reason that growth continued throughout the nineteenth century.

Cotton was the wonder industry of the industrial revolution–so much so that Gerschenkron (1962), for instance, claimed that economic growth in advanced countries was based on the growth of consumer goods industries, while growth in backward countries was based on producer goods. This is an unfortunate conclusion, however, for the great achievement of the British industrial revolution was, in fact, the creation of the first large engineering industry that could mass produce productivity-raising machinery. Machinery production was the basis of three developments that were the immediate explanations of the continuation of economic growth until the First World War. Those developments were: (1) the general mechanization of industry, (2) the railroad, (3) steam powered, iron ships (Crafts 2004). The first raised productivity in the British economy itself; the second and third created the global economy and the international division of labour that were responsible for significant rises in living standards across Europe (O’Rourke and Williamson 1999).

The nineteenth century engineering industry was a spin-off of the coal industry. All three of the developments that raised productivity in the nineteenth century depended on two things–the steam engine and cheap iron. Both of these, as we have seen, were closely related to coal. The steam engine was invented to drain coal mines, and it burnt coal. Cheap iron required the substitution of coke for charcoal and was prompted by cheap coal. (A further tiein with coal was geological–Britain’s iron deposits were often found in proximity to coal deposits.) There were more connections: The railroad, in particular, was a spin-off of the coal industry. Railways were invented in the seventeenth century to haul coal in mines and from mines to canals or rivers. Once established, railways invited continuous experimentation to improve road beds and rails. Iron rails were developed in the eighteenth century as a result, and alternative dimensions and profiles were explored. Furthermore, the need for traction provided the first market for locomotives. There was no market for steam-powered land vehicles because roads were unpaved and too uneven to support a steam vehicle (as Cugnot and Trevithick discovered). Railways, however, provided a controlled surface on which steam vehicles could function, and colliery railways were the first purchasers of steam locomotives. When George Stephenson developed the Rocket for the Rainhill trials, he tested his design ideas by incorporating them in locomotives he was building for coal railways. In this way, the commercial operation of primitive versions of technology promoted further development as R&D expenses were absorbed as normal business costs.

Cotton played a supporting role in the growth of the engineering industry for two reasons. The first is that it grew to immense size. This was a consequence of global competition. In the early eighteenth century, Britain produced only a tiny fraction of the world’s cotton. The main producers were in Asia. As a result, the price elasticity of demand for English cotton was extremely large. If Britain could become competitive, it could expand production enormously by replacing Indian and Chinese producers. Mechanization led to that outcome. The result was a huge industry, widespread urbanization (with such external benefits as that conveyed), and a boost to the high wage economy. Mechanization in other activities did not have the same potential. The Jacquard loom, a renowned French invention of the period, cut production costs in lace and knitwear and, thereby, induced some increase in output. But knitting was not a global industry, and the price elasticity of demand was only modest, so output expansion was limited. One reason that British cotton technology was so transformative was that cotton was a global industry with more price-responsive demand than other textiles.

The growth and size of the cotton industry in conjunction with its dependence on machinery sustained the engineering industry by providing it with a large and growing market for machinery. The history of the cotton industry was one of relentlessly improving machine design–first with carding and spinning and later with weaving. Improved machines translated into high investment and demand for equipment. By the 1840s, the initial dependence of cotton manufacturers on water power gave way to steam-powered mills (von Tunzelman 1978, pp. 175-225). By the middle of the nineteenth century, Britain had a lopsided industrial structure. Cotton was produced in highly mechanized factories, while much of the rest of manufacturing was relatively untransformed. In the mid-nineteenth century, machines spread across the whole of British manufacturing (one of the causes of the continuing rise in income). Until then, cotton was important as a major market for the engineering industry.





The reason that the British inventions of the eighteenth century–cheap iron and the steam engine, in particular–were so transformative was because of the possibilities they created for the further development of technology. Technologies invented in France–in paper production, glass, knitting–did not lead to general mechanization or globalization. One of the social benefits of an invention is the door it opens to further improvements. British technology in the eighteenth century had much greater possibilities in this regard than French inventions. The British were not more rational or prescient than the French in developing coal-based technologies: The British were simply luckier in their geology. The knock-on effect was large, however: There is no reason to believe that French technology would have led to the engineering industry, the general mechanization of industrial processes, the railway, the steam ship, or the global economy. In other words, there was only one route to the twentieth century–and it went through northern Britain.

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