Agree with that last point. Both necessity and desire were around since the dawn of humanity. They didn’t create an Industrial Revolution by themselves.
(But you could argue that by the same token, producers also always had the desire to lower their costs / increase quality. It’s not just desire, but opportunity.)
Also, wasn’t there some significant demand-side stuff going on? Wasn’t there a general increase in wealth and consumption levels just before the IR, that was maybe significant in helping to create markets for more/better goods produced by the new manufacturing technology?
Yes, producers have always had the incentive to innovate, and yes, they have always tried to do so (even slave economies were “capitalist”). Only in certain institutional, cultural, and geographical contexts can they be successful. I also think base levels of scientific knowledge are critical (but Anton may disagree in some cases).
So, sort of. Everything is endogenous. Desmet and Parente argue that market expansion leads to longer firm production runs in differentiated goods and lower per unit fixed costs (thus process innovation). But why was there market expansion in the first place? Population growth and foreign trade? In the latter case, I’m going to be working on this for a long time yet. But it’s important to note that the UK TOT fell during the IR. Supply was outpacing demand in textiles.
Thanks for the Mokyr ref, had not read that one yet. You are truly an encyclopedia of the econ history literature!
Yes, I’m wondering about the market expansion too. Foreign trade does seem to be a part of it?
Related, see this from Anton Howes which I thought was very interesting (emphasis added):
One possible explanation is that there was some special change in England’s agricultural technology that increased its productivity, requiring fewer and fewer people, and possibly even driving them off the land, so that they were forced to find alternative employment. This thesis comes in various forms, many of which I’m still coming to grips with, but broadly speaking it implies a “push” from the fields, and into industry and the cities. Desperate, and unable to demand high wages, these cheaper workers should have stimulated industry’s growth.
The alternative, however, is that there was nothing very special or innovative about English agriculture, and that instead there was an even larger increase in the demand for workers in industry and services. The thesis implies a “pull” into industry and the cities, causing people to abandon agriculture for more profitable pursuits, and thereby making England’s agriculture de facto more productive — something that may or may not have actually been accompanied by any changes to agricultural technology, depending on how much slack there was in how the labourers or land had been employed.
The push thesis implies agricultural productivity was an original cause of England’s structural transformation; the pull thesis that it was a result. The evidence, I think, is in favour of a pull — specifically one caused by the dramatic growth of London’s trade.
General note: I find it remarkable how many major developments seem to ultimately trace back to either (1) the Age of Discovery or (2) the printing press. And I find it a remarkable coincidence how those basically happened at the same time.
Ha, I wish. Maybe a children’s illustrated encyclopedia.
Market expansion is definitely an interesting area for research here. Foreign trade shares in the economy were small, but in certain key sectors (i.e. textiles) it was pretty significant. But again, it’s important to unravel whether these markets can be considered A) additional demand or B) won by higher-quality / lower-cost production. That’s the story of the “New Draperies” in the 17th c. and cottons from the 18th.
Anton and I have chatted about this a lot, and I agree with most of this. “Labor push” is a thing, but more for 20th-century developing economies than for first-wave industrializers. See Alvarez-Cuadrado, Francisco, and Markus Poschke. 2011. “Structural Change Out of Agriculture: Labor Push versus Labor Pull.” American Economic Journal: Macroeconomics, 3 (3): 127-58.
I think you’ve hit the nail on the head—the fifteenth century is critical in the formation of (early) modernity. David Wootton argues that the Age of Discovery invented the idea of discovery/novelty/invention, and I would love to investigate this idea further. Even beyond the technical challenges of navigation, the notion—which anyone can understand—that there are new things in the world outside the current bounds of human knowledge is critical for getting people to seek out and trust new technologies.
Agree with that last point. Both necessity and desire were around since the dawn of humanity. They didn’t create an Industrial Revolution by themselves.
(But you could argue that by the same token, producers also always had the desire to lower their costs / increase quality. It’s not just desire, but opportunity.)
Also, wasn’t there some significant demand-side stuff going on? Wasn’t there a general increase in wealth and consumption levels just before the IR, that was maybe significant in helping to create markets for more/better goods produced by the new manufacturing technology?
Yes, producers have always had the incentive to innovate, and yes, they have always tried to do so (even slave economies were “capitalist”). Only in certain institutional, cultural, and geographical contexts can they be successful. I also think base levels of scientific knowledge are critical (but Anton may disagree in some cases).
As for demand, I refer you to Mokyr’s classic piece: http://www.jstor.org/stable/2119351.
So, sort of. Everything is endogenous. Desmet and Parente argue that market expansion leads to longer firm production runs in differentiated goods and lower per unit fixed costs (thus process innovation). But why was there market expansion in the first place? Population growth and foreign trade? In the latter case, I’m going to be working on this for a long time yet. But it’s important to note that the UK TOT fell during the IR. Supply was outpacing demand in textiles.
Thanks for the Mokyr ref, had not read that one yet. You are truly an encyclopedia of the econ history literature!
Yes, I’m wondering about the market expansion too. Foreign trade does seem to be a part of it?
Related, see this from Anton Howes which I thought was very interesting (emphasis added):
https://antonhowes.substack.com/p/age-of-invention-capital-grains
General note: I find it remarkable how many major developments seem to ultimately trace back to either (1) the Age of Discovery or (2) the printing press. And I find it a remarkable coincidence how those basically happened at the same time.
Ha, I wish. Maybe a children’s illustrated encyclopedia.
Market expansion is definitely an interesting area for research here. Foreign trade shares in the economy were small, but in certain key sectors (i.e. textiles) it was pretty significant. But again, it’s important to unravel whether these markets can be considered A) additional demand or B) won by higher-quality / lower-cost production. That’s the story of the “New Draperies” in the 17th c. and cottons from the 18th.
Anton and I have chatted about this a lot, and I agree with most of this. “Labor push” is a thing, but more for 20th-century developing economies than for first-wave industrializers. See Alvarez-Cuadrado, Francisco, and Markus Poschke. 2011. “Structural Change Out of Agriculture: Labor Push versus Labor Pull.” American Economic Journal: Macroeconomics, 3 (3): 127-58.
I think you’ve hit the nail on the head—the fifteenth century is critical in the formation of (early) modernity. David Wootton argues that the Age of Discovery invented the idea of discovery/novelty/invention, and I would love to investigate this idea further. Even beyond the technical challenges of navigation, the notion—which anyone can understand—that there are new things in the world outside the current bounds of human knowledge is critical for getting people to seek out and trust new technologies.