The British Industrial Revolution in Global Perspe

This book I bought for my husband! His own words.... "Very well written and interesting book. As a non economist I found some parts a bit heavy and the book could be greatly improved by higher quality tables".

Professor Allen has written the first book on the Industrial Revolution to make sense. Few subjects have such a lasting importance. If we knew how and why the Industrial Revolution happened, we could probably repeat it all over the world in those countries now labouring under the age-old burden of poverty. There have been dozens of theories why Britain, an offshore island of Europe with nothing in the way of culture or resources that did not exist in greater abundance on the continent of Europe, should have given birth to the Industrial Revolution. What Allen has done is to make sense of this epoch in business terms. The unique combination of high wages and cheap energy in England and Scotland allowed the clumsy and inefficient machines of the late eighteenth century to make fortunes for their owners. A virtuous spiral ensued. For anyone seeking to understand the world in which they find themselves, this book is essential reading.

Two significant pieces of scholarship about the Industrial Revolution appeared almost simultaneously in 2009: Joel Mokyr’s “The Enlightened Economy” and Robert Allen’s “The British Industrial Revolution in Global Perspective.” They offer completely different perspectives as to why the Industrial Revolution occurred when and where it did. Both agree that technological innovation played the critical role in generating sustained economic growth, but they differ as to what promoted that innovation. Allen’s book focuses on the demand for inventions, and what kind of cost conditions made that demand so acute that it triggered the Industrial Revolution. In his view, the answer as to why the British led the Industrial Revolution can be boiled down to one simple statement: “The British were simply luckier in their geology.” That is, they were blessed with a virtually inexhaustible supply of cheap, high quality, and conveniently located coal. Allen’s core thesis is based on two basic facts about eighteenth century Britain. First, compared to continental Europe, wages in Britain were remarkably high. Second, energy costs were remarkably cheap. The author argues that the Industrial Revolution was invented in Britain in the eighteenth century because “it paid to invent it there, while it would not have been profitable at other times and places.” In short, “The cotton mill and the coke blast furnace were invented in Britain because they saved inputs that were scarce in Britain [i.e. labor] and increased the use of inputs that were abundant and cheap [i.e. coal].” These innovations, Allen says, were tailor-made to Britain’s unique circumstances and virtually useless elsewhere until the technical innovations became so efficient in the early nineteenth century that they finally made economic sense in the prevailing conditions on the Continent and in the fledgling United States. “The British Industrial Revolution in Global Perspective” is broken into two equal parts. Part one is devoted to explaining the pre-industrial economy. There are endless explanations for why the Industrial Revolution got going. Allen says three are more compelling than the others. First is urbanization. Beginning in the sixteenth century, British cities, particularly London, began to grow. This was driven by the enclosure of farmland and the associated agricultural revolution in the countryside. Better farming and urban growth were mutually reinforcing – “bigger cities led to more efficient farms,” Allen writes, “and better farming led to bigger cities – and were also the immediate causes of high wages in Britain. One critical result of this urbanization was a dramatic increase in literacy and numeracy. Second, there was the emergence of consumerism as a motive for work (the so-called “industrious revolution”). Finally, there was the postponement or deferral of economically inconvenient marriages (the so-called “European marriage pattern”) that slowed population growth and made wages in London the highest in the world by the eighteenth century. Allen says that this modern culture (bigger cities, smaller families, more education) was necessary for creating the Industrial Revolution, but not sufficient to bring it about. “The Industrial Revolution was the result of a long process of social and economic evolution running back to the Middle Ages,” Allen writes, but it was Britain’s unique wage and price structure in the eighteenth century that served as the pivot around which the Industrial Revolution turned. London’s growth before the Industrial Revolution was staggering. With a population of barely 50,000 in 1500 (albeit larger than what New York City would be in 1800), London grew at 1.5 percent a year for three centuries and topped one million by 1800. Urban growth had a substantial impact on domestic timber supplies and prices because of the almost insatiable demand for wood for building and fuel. One direct outcome of this energy crisis was the slow and collective perfection of the coal burning home. British coal was “the cheapest energy in the world,” according to Allen, and the British desperately needed cheap energy. Already by 1700 over half of British homes received their thermal energy from coal. By 1800 virtually all British thermal energy was provided by coal. Part Two focuses on explaining the Industrial Revolution. Allen says that it was technological innovation that drove the Industrial Revolution and it was the unique combination of high wages and low energy prices in Britain that drove technological innovation. In other words, British businesses demanded new technology that would substitute cheap energy for expensive labor. He hastens to add that the British possessed no genius for invention; it was their unique factor price imbalance that required it. Some have argued against this thesis by showing that very few eighteenth century British patent applications cited labor savings as a motive. Allen says that is because to do so would have courted political and social trouble, so they instead focused on product quality improvements in their official documentation. The author then provides three excellent and extensive case studies of technological innovation that served as the engine of the Industrial Revolution: the steam engine, cotton textile manufacturing, and coke smelting. Interestingly, of the three only steam power demonstrates a direct link between the science of the Enlightenment and the key innovations of the Industrial Revolution. Thomas Savery invented and patented a steam pump in 1698. Thomas Newcomen further refined the original design into a true atmospheric steam engine in 1712. When the Savery-Newcomen patent ran out in 1733 there were one hundred steam engines at work across Britain, almost all of them pumping water from coal mines, the only use case for which they were economically viable. By the end of the century, after innumerable improvements to fuel efficiency, some small, others quite significant, there would be 2,500 steam engines working in all manner of industry. Yet, even then France would have only seventy. Steam engines would only be economical in France (and elsewhere around the world) once fuel efficiency improved enough to make them profitable in areas with high costs of energy. Between 1720 and 1840 the real coal cost per horsepower-hour dropped by 90 percent, and even then water and wind still remained the dominant sources of power across Europe and the United States. Cotton was the wonder industry of the Industrial Revolution. In 1700 the British cotton industry didn’t exist. By 1830 it employed almost half a million people and accounted for nearly ten percent of British GDP. It was driven by a series of technological inventions that mechanized the carding, spinning, and weaving of cotton. Allen says that these innovations all “relentlessly save labor, the scarce and expensive factor of production.” But the labor costs were so different between Britain and France that some inventions, such as the spinning jenny, would prove irresistible in one place (Britain had over 20,000 jennies by 1790) and unattractive in the other (France had less than 1,000). By 1775, Richard Arkwright, inventor of the water frame and carding machine (and also likely the richest entrepreneur of the Industrial Revolution), opened his state-of-the-art water-powered cotton textile factory, Cromford Mill Number 2 in Lancashire, also the home to Britain’s world-leading watch and clock-making industry, critical for manufacturing the precise gears required in the factory. Cromford Mill Number 2 would eventually become the prototype model the world over. According to Allen it delivered a profit margin of forty percent per year, but was still barely profitable in France. Steam engines and textile factories are the two classic case studies on technological innovation during the Industrial Revolution. Next, Allen turns to a less popular, but possibly more strategically influential example: coke smelting. Simply put, coke smelting was essential for the production of cheap iron, and cheap iron was essential for building the core components of the industrialized economy, namely railroads, steamships, and mechanized manufacturing equipment. Abraham Darby is widely credited with developing the coke smelting process, although Allen says it was simple and “required almost thought at all” and Darby never attempted to patent the process. Moreover, Darby probably learned it from Shadrach Fox, from whom he purchased the Coalbrookdale furnace in 1708. Allen says that the growth of coke smelting went through three phases. The first phase (1708 to 1720) was the perfection of Darby’s coke furnace. “Darby’s achievement depended on copying and combining several recent developments in the iron, copper, and brewing industries,” Allen says, “a process of borrowing and amalgamation quite common across the Industrial Revolution. The second phase (1720 to 1755) witnessed a range of improvements that made coke iron more competitive. At the end of this period it was cheaper to build a coke furnace than to make pig iron with an existing charcoal furnace. The final phase (1755 to 1850) is when coke smelting achieved true economies of scale. The first coke smelting furnace at Coalbrookdale made 81 tons of iron in 1709. By 1850 the average blast furnace smelted over 4,600 tons a year, a 5,600 percent increase in output. Allen says this resulted in almost a 50 percent reduction in the real cost of production, which seems rather modest considering the explosion in production. Between 1750 and 1800, the percentage of British iron smelted with coke went from just three furnaces to nearly one hundred percent of the market. However, over on the continent, charcoal iron still predominated in France and Germany even as late as 1850. Over the course of the eighteenth century, Britain and France produced almost exactly the same amount of iron and grew at virtually the same pace (Britain produced 125,000 tons by century’s end, while France produced 140,000), only one did so with coke and the other with charcoal. “With French prices,” Allen writes, “coke iron was probably more expensive than charcoal iron even when everything worked right.” In the 1780s a state-of-the-art coke smelting operation based on British best practices was established at Le Creusot outside of Dijon, France. It quickly went bankrupt. Finally, if Britain’s unique structure of wages and prices led to a demand for techniques that substituted energy and capital for labor, how and why did British inventors come forward to successfully meet the challenge? The most common explanation is some combination of culture and human capital that came together to form what Joel Mokyr has called the Industrial Enlightenment, “the part of the Enlightenment that believed that material progress and economic growth could be achieved through increasing human knowledge of natural phenomena and making this knowledge accessible to those who could make use of it in production.” To determine if this theory has any merit, Allen takes a close look at the leading British inventors of the age, especially the “Vital Few” – the most consequential ten entrepreneurs of the eighteenth century: Josiah Wedgwood (pottery), John Smeaton (cast iron and experimentation), Thomas Newcomen (steam engine), James Watt (steam engine), Abraham Darby (coke smelting), Henry Cort (puddling process for making wrought iron), James Hargreaves (spinning jenny), Richard Arkwright (water frame), Samuel Crompton (mule), and Edmund Cartwright (power loom). Allen specifically looked to see if these men hailed from an upper class background, maintained any meaningful connections with Enlightenment science and society, and if they had demonstrated a thoughtful commitment to experimentation. The findings, he says, are industry-dependent. For instance, those that operated with steam engines maintained the closest relationships with science and the Enlightenment; those in textiles the least. In sum, “Only about half of the important inventors had a link to scientists or Enlightenment institutions; however, virtually all of them performed experiments to perfect their inventions.” Therefore, if the Scientific Revolution or Industrial Enlightenment played any role in promoting the inventions of the Industrial Revolution, it was likely by changing the culture at large and not just a handful of critical entrepreneurs. In closing, this is a fantastic book. Allen makes a compelling argument that “The cheap energy economy was a foundation of Britain’s economic success” in the eighteenth and nineteenth centuries. In many cases, I found the counter-examples of France’s excruciatingly slow adoption of steam, coke, and machinery to be the most decisive evidence of all.

Pretty heavy going if you're not well versed in econometrics, but offers some fascinating insights

Finally finished `The British Industrial Revolution in Global Perspective' after what seems to be years of slogging thru it. Reading Amazon reviews it is funny, those who read the book are split on it, not in it's merits but in what and how it is covered. The economists are ok with all of the dry (to me) modeling and formulae that Robert Allen utilizes to bolster his arguments but who are lost with the more historical narrative and technological aspects of the book. I fall under the opposite group. Probably with all of my readings over the last couple of years has left me with a better grasp of the technologies and personalities of the industrial revolution in the late 18th and early 19th Century. His narrative and thesis is that in England you had the Industrial Revolution as a result of two factors. First is that Britain was a high wage labor market at the time and the availability of coal as a fuel source. In this the author takes a slightly differing tact to other books I have read lately such as `The Most Powerful Idea in the World' and `The Industrial Revolutionaries'. These books cover the technology of the steam engine and the individuals behind the ideas as well as the spread of techniques of the revolution. Here the emphasis is more upon the economics behind the movement, as benefit's a book in a series titled `New Approaches to Economic and Social History'. It is a bit dryer and more academic tome than either of the other two volumes I mentioned, and honestly reading those has helped me approach this book more productively The state of the British labour market during this period has been attributed to the aftereffects of the plague and other epidemics over the previous centuries. This is an approach that that I had heard of before, I think I first read it 20 years ago that the Black Death was in some ways responsible for the Industrial Revolution. Here it is proposed that the need to pay higher wages made both the invention of and investment in labor saving machinery attractive to people who ran businesses (manufactories). The other surprising aspect of this is that the people employed in these fields had more money to spend on consumer goods and thus added an additional push to development of the economy. There is data and discussions included to show the costs of an English worker compared to those on the continent as well as in Asia (China and India). The other factor in the birth of the modern economy in Great Britain was the availability and costs of coal as a fuel versus wood and charcoal as well as animal and water power in powering first metal works and then the textile industries. Data is also given that shows the advantages that coal had over charcoal in both costs and technological means. In most cases the cost and availability of coal kept the other economies on the continent lagging behind Britain in utilizing coal and then coke in fueling industry. The second half of the book covers the easier for me to follow examples of technologies being invented and adapted to service the economy. The development of the steam engine is well covered with the Newcomen's simple pumping engine thru Watt's engines and ultimately the compound engine. It was not as detailed as say the narrative in `The Most Powerful Idea...', however it was sufficient, especially after reading the other books. An aspect that I had not seen addressed (or at least recalled) was in how economic forces drive the adoption of technology, that sometimes just the existence of a technology does not mean it is adopted widely. Today the example that leaps to mind is the electric car such as the Chevy Volt. Currently the user cost for a Volt is half again to twice what the cost of a similar sized gasoline powered car is. If the benefits of the Volt more than doubled the benefits of driving a gasoline powered car then people would buy the cars and let simple economics decide the success of the modern electric car on the market. The problem with the Volt is that the improvement in mileage - overall - is not much greater than a gasoline powered economy cars which can reach 35-40 mpg today and the still relative cheapness of gasoline. These factors determine that on simple economics the Volt will never succeed without either a massive infusion of incentives from regulatory agencies - like the tax credit the federal gov't allows for purchasers, a shock to the costs of gasoline, or another massive technological revolution in battery technology that both lowers the cost and improves the efficiency of an electric automobile. Adoption of the technology of the Industrial Revolution followed a similar path. Any technology has various inputs that determine the success or failure of it to be adopted. In the book the two primary ones that are focused upon are the labor and energy inputs. Others can be the availability of the raw materials, economical access to markets. If an economy has an advantage in any aspect of the equation then it has a competitive advantage in utilizing a new technology. One example that is given in the book is the adoption of coke smelting of iron in France and Belgium. In these areas coke (as well as coal) did not have an advantage over charcoal as a fuel, early in the development of the technology. So Britain led the world in both the development of using coke and the incremental improvements in the efficiency of the technology until a point was reached where it proved economical for the low countries to adopt the coke fueled technology nearly a half century after it's adoption in Britain. All in all the book helped me in my thinking of how technology is adopted in an economy. One thing I wonder about is how productivity improvements that today are mostly electronic or intellectual and therefore much more easily disseminated to competing economies - or even locations - how does one achieve a competitive advantage? America and Europe both have high wage economies and have produced productivity improvements, now as productivity has improved - the technology has become simpler and more transferable to what were a couple of decades ago third world economies - where today have comparable educational standards as we do here. And we lose jobs to lower cost locations, and they themselves will be supplanted in a generation or two as the rising tide of modernity reaches more formerly bypassed locations. Probably the biggest 'a-ha!' moment I had in reading this book was the discussion about the cotton industry and the impact on industrializing that it had in Britain. Reading American history cotton is often relegated to one of two subjects- slavery or the cotton gin. Seldom has there been a satisfactory description of what was done with the cotton to turn it into thread and fabric. The story starts to be hinted at as increasing demand for consumer goods, in the form of draperies drives ways of improving both the quality of cotton thread as well as finished product - like the higher thread count as being a more value added final product. The story is then picked up in the second half of the book with descriptions of the technology of spinning cotton into thread. The development of mechanical carding of raw cotton is touched on and then the story of the machines that were developed to produce thread, the spinning wheel, spinning Jennies and water frames. These are all described both physically as well as the economic performance and finally the development of the cotton mill that incorporated all aspects of spinning cotton into thread (or yarn). One interesting thing is that the weaving of fabric is not really touched on - compared to `The Industrial Revolutionaries'. Perhaps that is a subject that is either outside of the timeframe covered by the book - or more than likely it does not have as good of a subject of improvement that the spinning technology showed. All in all it did lay out a good case for how important of a product cotton was in the development of the Industrial Revolution. Now one tangent my mind did set off on was the impact on the trajectory of American History on how the Southern States could have seen the importance they played in the British economy with the cotton exports, and that it may have helped embolden the secessionists with hope that their cause would be looked upon favorably by the biggest power in the world at the time - The British Empire. Now what they did not take into account was the impact that Egyptian and Indian cotton would have on lessening any potential negative impact on the economy the Southern blockade had. Then you have the strategic misstep that the then independent Egyptian state made in assuming that the cotton trade would finance development and when the war ended and American cotton returned to the global market they would face financial ruin within a generation and de facto absorption into the British Empire for nearly 70 years. A problem that seems common when an economy - local or national - is based upon one item especially so if that product is in its rawest form. In general the book is definitely an economic history book and suffers in readability that books on this subject often do to the non economist. I don't think I'd recommend it as a first book on the subject by any means - however if one has read some of the books I have mentioned in the preceding paragraphs it is easier to slog thru the graphs, models, and formulae. An interesting connection with this book is then reading The Tycoons by Charles Morris. His book covers the growth of corporations in America in the later half of the 19th Century. This is probably the best description of the next step in the evolution of the industrial revolution into an economic revolution that I have read so far. Here are the Amazon links for a few of the other books that I have mentioned here that actually helped me with this book. The Industrial Revolutionaries: The Making of the Modern World 1776-1914 The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy Why the West Rules--for Now: The Patterns of History, and What They Reveal About the Future Not sure if I mentioned this one in the body of my text - however it was the book that I read immediately prior to picking back up this book and may have again eased my way thru some of the denser chunks of it. It also introduced me to the concept where those who lag behind in developing and adopting technology can eventually make a jump to the front of economic growth and surpass the society that developed it, by avoiding the pitfalls inherent in developing technology. It's something simple but god help me I cannot remember the correct combination of words Mr Morris uses!