An Economic History of Britain 1700-1850: Role of British Industrial Revolution

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An Economic History of Britain 1700-1850: Role of British Industrial Revolution

The Industrial Revolution was the emergence of modern economic growth. This created the largest and most prolonged rise in living standards seen at the time. It originated in Britain during the nineteenth century with inventions such as the steam engine and the spinning jenny. There are two main arguments for what caused the Industrial Revolution and why it happened in Britain. The first is the incentives argument from people such as Allen. He argues high real wages in Britain and access to cheap coal incentivised firms to replace labour with capital and coal energy. This led to the invention of labour-saving technologies, such as the spinning jenny, that initially were only cost-effective to create and use in Britain. The second argument for the Industrial Revolution is based on a culture shift leading to innovations and inventions.

Mokyr in his book argues that the European Enlightenment was necessary for the Industrial Revolution firstly because of the increase in technological creativity and secondly by changing the institutions within Britain and the rest of Europe. Mokyr also says without Britain, another Western economy could have led, the industrial revolution and therefore Britain was not necessary because the Enlightenment was a north-western European phenomenon. The second part of Mokyrs book looks at different aspects of the British economy and British society between the Glorious Revolution and the Crystal Palace exhibition. He covers agriculture, industry, transport, services, demography, gender, factories and firms, social norms, institutions, living standards and inequality. Mokyrs main arguments are that the European Enlightenment made the Industrial Revolution possible, through technological change and by reforming institutions. He also explains why the Industrial Revolution happened in Britain first.

Mokyrs first main argument is that social and economic progress was led through the expansion of useful knowledge. The idea of useful knowledge became different at the time as it began to give people power over nature rather than just over other people. Mokyr proposes the term Industrial Enlightenment to define the idea that economic growth was achieved by increasing human knowledge of natural phenomena and making this knowledge accessible. Mokyr acknowledges the necessity of artisans but argues the ideas of intellectuals, scientists, skilled mechanics, inventors and entrepreneurs may have mattered more, than policymakers and were necessary for the Industrial Revolution. He argues inventors did not work solely for financial gain and the ability to share their ideas in societies and across Europe was central. He explains scientific societies in English towns and the universities of Edinburgh and Glasgow were often located near centres of industry and were a source of useful knowledge between philosophers, engineers, and entrepreneurs. Mokyr accepts that the Enlightenment was not the cause in itself of the Industrial Revolution. Mokyr also importantly recognises that the major inventions of the late eighteenth century were the result of the ingenuity of British mechanics and not the Baconian programme. Mokyr, however, argues that lowering access costs to knowledge and growing useful knowledge is why the Industrial Revolution led to modern economic growth and was not, another flash in the technological plan. This would agree with O Grada who suggests scientific knowledge was more important for the second Industrial Revolution.

The second part of Mokyrs argument is the Enlightenment led to modern economic growth through rational reform of institutions as well as the expansion of useful knowledge. He argues that institutions that eliminated piracy, improved enforcement of contracts and property rights, reduced risk and provided credit, insurance information and the reasonable assurance that trading partners would meet their commitments, which was a major factor of Smithian growth. Mokyr goes on to argue this became more important as technological development overtook Smithian growth as the prime driver of economic growth. Enlightenment thinkers rethought the role of the state and created rules for government and law based on ideas such as social contract and civil society. This cultural shift focusing on logic and morality caused a cultural change which encouraged technological creativity. Mokyr also argues the mother of all institutional changes was the move to rely on the free market. This in his eyes was a necessary change for modern economic growth to become possible but Mokyr does not make it clear why this is the case. He also suggests rent seeking in Britain had nearly disappeared but Marx would argue a laissez-faire economy would lead to the exploitation and rent-seeking of workers by factory owners.

Mokyr states institutions needed to be flexible as circumstances change. He discusses the need for meta-institutions that can change institutions and whose decisions will be accepted by everyone including those who stand to lose from them. This in the context of Britain would be its Parliamentary Democracy and shift away from an all-powerful monarch after the Glorious Revolution and the 1689 Bill of Rights. I would say these things made Britain unique at the time and if Mokyr is correct that having flexible institutions was one of the necessary precursors to the Industrial Revolution then his argument that the Industrial Revolution would have happened without Britain seems uncertain.

The final part of Mokyrs argument is that the Industrial Revolution was a European event and merely started in Britain by chance. He goes on to say the Industrial Revolution would have happened without Britain, only later and perhaps in a different form. The advantages Britain had were typically on the supply side of the economy. Britain had an advantage in having a large number of skilled craftsmen who supplied the necessary workmanship and innovation. Mokyr mentions some such as John Wilkinson and Charles Gascoigne. He also claims Britain had this supply of skilled artisans earlier than the continent and was not side-tracked by events such as the French Revolution had side-tracked France. Mokyr goes on to discuss the importance of Britains open economy, partly because of its empire, the importance of transport, Britain having a relatively high urbanisation rate and a low proportion of people in agriculture for the time. All these things helped Britain have the Industrial Revolution as well as others but these advantages according to Mokyr were shared with Europe or were happening in Britain faster than they otherwise would have somewhere else in Western Europe. Mokyr mentions but seems to gloss over some of the other factors that made Britain unique. The fact Britain was an island and had not been invaded by a foreign power since 1066 seems overlooked. Also, Mokyr brushes over the fact Britain had large coal supplies and high labour costs which would have incentivised the substitution of labour for automation fuelled by coal. Even Britains Enlightenment Mokyr admits was unique in that it had a religious revival and the preservation on conservative values compared to the typical idea of the Enlightenment which sought to replace religion with rational thought. Religion did become a matter of moral choice rather than the intellectual foundation, however, Mokyr discusses the importance of informal institutional change which relied on fairness and politeness. It seems these informal institutions depended on the religious revival in Britain and its unique Parliamentary system. It would also seem logical to think Britain was only able to develop these institutions because it was an island separate from the rest of Europe and was able to have a continuous evolving state.

In conclusion, Mokyr convincingly argues that the Enlightenment was necessary for the Industrial Revolution to take place. This was due to the increase of useful knowledge and the falling access costs to it as well as the creation of institutions that incentivised innovation. It seems Mokyr is saying without the Enlightenment there would have been a large boost in growth in the nineteenth century because of the invention of the spinning jenny and possibly the steam engine but growth would have quickly fizzled out just as it did after the discovery of agriculture. However, Mokyr underestimates how unique Britain was not just economically but socially and geographically and it is hard to agree with him that the Industrial Revolution would have happened without Britain unless there had been a large change in Europes circumstances. In the end, it seems the Enlightenment set the stage and made the long-term effects of the Industrial Revolution possible but was not in itself the spark.

Bibliography

Allen, Robert C. The British Industrial Revolution In Global Perspective. Cambridge: Cambridge University Press, 2009.
Mokyr, Joel. The Enlightened Economy: An Economic History Of Britain, 1700-1850. New Haven: Yale University Press, 2009.
Ó Gráda, Cormac. ‘Did Science Cause The Industrial Revolution?’. Journal Of Economic Literature 54, no. 1 (2016): 224-239. doi:10.1257/jel.54.1.224.

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