The industrial revolution
The English industrial revolution :
a radical turn in human history ?
• Industrial revolution termed from the word used for
political revolutions, mostly (then) the French one.
Traditionally : IR is characterized as :
• Rapid, brutal, economic (from malthusian world to
permanent growth) and social change (urbanization
reached 50% in 1851 in England).
• Centered on manufacturing industries
Today’s debate about
• Rupture or continuity ? (rapid or slow change ?)
• Innovation or work intensification ?
Rupture or continuity ?
• Traditional quantitative view (Deane & Cole) was:
– No sustained growth in GDP per capita before 1760 (malthusian
trap)
– IR: a sudden and permanent rise in TFP allows a rise in
population without decrease in income.
– Great divergence with non-european economies
• New view (Crafts).
– The traditional views did as if other industries were as successful
as the cotton and iron ones, the only studied in detail.
– Growth concentrated in cotton and iron and steel. But these
sectors represent only 25% of industrial workers in 1840 (at the
end of the IR). Cotton alone : only 8% (but 50% of steam power).
– In 1851, the majority of industrial workers are in workshops, not
in factories; blacksmith are more numerous than all other
workers in metal industries; shoemakers more numerous than
miners (274000 vs 219000).
– Even in textiles, cotton is the major innovative industry, but wool
remains dominant up to the 1820s. Wool, silk, flax also develop
in the 18th c.
Distribution of textile production (by value of raw materials used,
millions £)
cotton wool
flax
silk
around 1700
1,14
40
6,3
0,5
1772
4,2
85
12,5
0,95
1800
41,8
98
15,2
1,2
New GDP calculations:
– Compared to Feinstein : 1801-1830 growth rate reduced from
2.7% to 1.9% per year; TFP from 1.3 to 0.35.
– Compared to Deane & Cole or Hoffman, 1.81%/an for 1780-1800
instead of 3.43%, but 1.05 for 1760-1780 instead of 0.49 :
smoother growth : no IR.
• Growth accounting
–
–
–
–
Growth = either capital accumulation or efficiency;
Capital deepening much discussed (below);
Human capital as a substitute (complement ?)
Crafts suggests the Solow residual to be a minor problem
(especially with the augmented model). Others find it dominant.
Crafts, 1995
Critiques of growth accounting / new view
(Hoppit, Berg & Hudson)
• Change differs from growth: macro view does not help to
understand what happened. Rapid radical changes :
– In labor organization within and outside factories;
– Women and child labor replaced male labor in growing industries
(textiles, metalware, potteries);
– This led to wide male unemployment, or underemployment in
traditional industries (building, leather);
– Regional specialization strongly affected;
– Variety of industries: mechanized without growth (paper, soap,
candles), or growing without mechanization (coal, construction);
– Interaction among industries: cotton could not develop without
others (industrial system).
– Radical innovations affect growth late, but change society
(electricity, computers, same for cotton and iron).
– Quality changes in products are badly measured.
• Index number problems:
– Weighting of cotton industry difficult. Has major impact because
of the rapid growth in its productivity (graph). Different authors
use weights from 4 to 20% of industrial value added around
1800.
– Neglects many small manufacturing industries and the services;
– Neglects women and child labor which was not measured in
contemporary statistics
– Forgotten hypotheses: the growth models used suppose perfect
mobility, full-employment, perfect competition, neutral
technological progress, constant returns to scale, etc. Structural
change and reallocation of factors can decrease productivity in
the short term (what is short term ?), making major changes
invisible in growth measures.
• Problems with sources:
– Excise and customs records as basic sources.
– Evasion, corruption of officials may vary through time and
industries.
– Non-excised industries. Activities which left no quantitative
traces.
Total factor productivity, England, 1600-1870 (Clark)
Some conclusions on the debate
• The weight of the cotton industry is the major issue in the
calculation of industrial growth, because of its size and
growth.
– In most industries, the rise in productivity reduces the
relative price of the product; it affects global TFP only if its
share in production is large, or if the price elasticity of the
demand for its product is high enough for the production to
rise a lot; more so if foreign demand is also high and
elastic.
• Measures of agricultural and service productivity are even
more fragile. Both output and employment are largely based
on population figures.
• Given the limitations in sources (bad in England), Crafts’
calculations are quite good.
• But do they say much about the I.R. ? Or more a necessary
exercise in consistency ?
A solution ? two views of the IR (Temin)
• Simplifies the debate in « technological » and
« macroeconomic » views
– Broad technological and entrepreneurial change in all
activities (Landes, Ashton, Berg, Hudson, etc).
– Vs Crafts-Harley’s view of growth concentrated in a
few industries (coal, iron, and cotton).
• Deducting their (weighted) growth rates from the one for the
total economy leaves nothing (table).
– But : no data available allows an actual measure of
growth in these industries.
Temin, p. 65
Comparative advantage theory
• Rapid productivity growth in agriculture, cotton
and iron, and slow growth in most other
industries should make Britain specialize in the
first group. Actually true around 1750 (exports of
wheat); not afterwards.
• Uses a Ricardian model: only one factor, labor.
Permits ranking all goods as more or less exportable, the
frontier between actual exports and imports being
determined through general equilibrium constraints.
Test of the model using trade data
• Table 2 shows a steady increase in the share of
cotton (not iron) in exports; the absence of
agriculture; the importance (although
decreasing) of other manufactures.
• This is not intra-industry trade, since imports of
manufactures differ from exports, and exports of
most industries grew at similar paces.
• This suggests productivity grew in many
industries; IR was more than a cotton revolution.
• Confirmed by the decline of British terms of
trade.
Some limitations
Other explanations are not much discussed:
• decline in the prices of tropical products (thanks to
transport cost and colonization) makes them natural
foreign specialization, and explains an increase in
« other manufacturing » exports.
• Decreasing returns in British agriculture (finished supply
of land) makes imports more necessary when population
and income increase.
• Productivity growth in manufactures outside Britain is
supposed to be zero. Problem if differs among industries
• Protection.
Part of these limitations are discussed in the answer by
Harley & Crafts, 2000: CGE model of the period: the
apex of sophisticated techniques on fragile data.
The Classical paradox of the IR : gdp/c
growth and wages stagnation
• Increasing output per capita despite growing population
= the great success of the IR.
• But huge contemporary literature insisting on
increasingly intensive work and decreasing wages and
standard of living among the poor (exploitation).
• Ricardo, Marx, J. Hicks... and R. Allen argue that:
– Technology decreases the price of fixed assets;
– So capital was transferred from circulating capital (wages
and raw materials) to fixed assets; this produced a transfer
from wages to profits because of reduced demand for
labor and then increased unemployment.
– This was observed in textiles (in spinning in the18th c., in
weaving in the early 19th).
– And associated with a loss in the human capital of former
skilled workers.
• Testing for this requires measuring real wages among
industries; which is difficult :
– IR = transformation of the definition of wage (long includes
assistants’ wages, tools), of the skills required, of industries, of
people employed (men vs women and children); enormous
differences of wage among workers (gender, age, skills as
determinant);
– Major changes in the price of some goods (eg textiles, heating)
entering in the poor’s consumption.
– Large differences between regions (wages increase in northern
England during IR: where the coal is located).
– Endogenous technology (invention of self acting mule in order to
employ skilled men whose work was done by women using
standard mules (or, earlier, the jenny). Other technologies
developed in order to employ women and children, with much
lower wages.
• Today’s consensus:
– decreasing weekly wages in 18th c., slight increase up to 1850.
– Worse if unemployment taken into account.
– Then do not compensate for urban disamenities (housing,
health)
– Confirmed by declining heights among the poor.
Feinstein vs Lindert estimates for weekly real
earnings (discrepancies mostly from price index)
Engel’s pause (Allen)
Historical profit rates
Historical factor shares
Institutional dimensions of labor’s repression:
the enclosures, Speenhamland, ID
Enclosures
• A huge literature stimulated by K. Marx emphasizes the role of
the enclosure movement in throwing poor peasants from the
countryside in the late 17th and early 18th c. (large proportion
of lands in England affected).
• Actually, enclosure bills enacted by Parliament when
demanded by local elites (landlords + support from farmers).
• Enclosures allowed substantial increase in productivity both
by reallocating land to more productive uses (commons),
changing incentives (improved property rights), increasing
returns per acre (agricultural revolution) and decreasing the
agricultural workforce.
Speenhamland
Poor laws organizing local (parochial) support for the poor have been
much more important and enforced in England (since the late Middle
Ages) than in other countries. The study of their economic and
social impact has been highly controversial.
• System deemed inefficient by Classical economists because of
implicit high marginal taxation of the poor’s marginal income.
• Abolished in the 1834 in favor of workhouses (see Dickens)
• Polanyi (1945): liberalization of the labor market (as opposed to
local communities of earlier periods).
• In fact, even from a purely economic point of view, the poor laws
were not so costly since actual practice allowed for some incentives
to work (paying children’s allowances independently from the
father’s income), restricted or organized migrations when necessary.
• Actually not suppressed by local landholders (who paid for it) but by
manufacturers (who needed migrants towards their factories).
Conclusion : like enclosures a century earlier, accelerated the creation
of a national market for labor, and maybe decreased hourly wages
and intensified labor.
Industrious revolution (de Vries)
• Synthesis proposed in order to integrate in a common
framework various stylized facts:
– Stagnation of real wages
– Increase in consumption (“material life history” : probate
inventories…) of a substantial fraction of the population.
– Stagnation in schooling
– Increase in population
– Increase in women and children work, with negative impact on
urban schooling
– Cultural change on the demand side (« slaves to their own
wants » Steuart; Mandeville on moral values).
• Hypothesis
– All these changes are part of a single, major shift: the industrious
revolution, which lasted from 1700 to 1850.
– They can be understood in a framework of a representative
family optimizing behavior.
Main argument : the increase in the intensity of labor by the
family is voluntary (a labor-supply change) ; decided at
the family level (family as a firm; organization and power
can vary through time, class and space. They are
affected by the integration to the labor market).
• It results from the desired substitution of marketed goods
to family production, itself related to a decrease in their
relative prices (and maybe to changes in preferences).
• Impact on human capital accumulation (through the
mothers) negative until schools develop and their return
becomes high enough compared to child work.
• Later on, the search for increased health, education and
home comfort would lead to a new rupture (and return to
male bread-winner dominated families) after 1850 (until
the 1970s).
Some quantification of the industrious revolution
G. Clark
Starts from a paradox :
- Daily agricultural wage higher in the 15th c. (after the Black
Plague) than in 1850 (graph).
- Following Engels’ law (share of food decreases in income),
share of food in consumption and then in production should
be lower in 1500 (although a substantial share is imported in
1850);
- One solution is for non-agricultural population to be of similar
size at both dates (those producing non-food items)
(discussed last week – remember urban population much
lower in 1500 : 20% vs 50%).
- Other solution : less days of work per year in 1500 (so more
workers needed to feed the population). « paradise lost ».
Method : reconciling various estimates at the family level.
• Comparisons of yearly and daily wages in the same job
(from micro data) provide an estimate of the number of
days worked (table 2).But yearly wages include
payments in kinds which are not always recorded.
Numbers small and maybe not representative.
• Using family budgets allows measuring the contribution
of women and children to overall income. But it depends
of many hypotheses (wage, proportion of those working,
and their changes through time) (table 4).
Clark, industrious revolution
• Conclusions
– Intensification in terms on number of days
worked (as early as 17th c ?)
– Intensification in terms of work practices
(factory)
– Intensification in children’s work, mostly
resulting from urbanization;
– No change in women’s work, or decrease in
farms.
measuring time at work
• Voth (2001) uses judiciary records;
– Testimonies provide narratives of a day’s
activities: work start and end, meal time;
– They also provide actual activity at a precise
point in time;
– Both methods (used in sociology today)
provide an estimate in hours/day.
– Estimation of probability of work a given day :
table 1. Same with religious or civic days off.
Results
• Changes though time: « saint Monday » disappears;
same for other days off. But hours per day stable.
• Resists various robustness checks…
• But : agricultural labour decreases.
• Conclusion validates industrious revolution (graph).
• But : Results depend on supposing zero hours on days
off, but 30% of normal pay for sundays. Equalling both,
and considering some days off can occur on sundays
(e.g. Christmas) brings back hours per year to 2900.
Some representativity bias also possible.
Voth
One path to growth ?
Questions :
• To what extent were these changes special to England ?
• Did neighboring European countries follow Britain, remain backward
or develop in parallel but different fashion ?
what was specific to England ?
– Innovation ?
– The emergence of factories and mass production ?
– Agriculture.
• In which dimensions was Europe so special ?
– Europe vs China
Answer
• Some changes are common to all of NW Europe (with variable
English advance) : Proto-industrialization, innovation, urbanization.
• Complementarities with England led to different development paths
in western Europe;
• Divergence with China was late and partly accidental.
Innovation : a European process
• Machines
– Up to 18th c., most sophisticated machines are consumption goods, not
production goods (Vaucanson’s automates, Pascal or Bernoulli’s
calculating machines, clocks).
– Even the new production machines industry develops throughout
Europe : Senot screw threading machine (1795) corresponds to those
by Maudslay (1797) or Wilkinson (1798). Paper-producing machines
developed by Robert (1798) in France. Even the hydraulic hammers for
iron are developed independently in 1840 by Bourdon and Nasmyth.
– Steamboats developed by Hulls in the US, Jouffroy d’Abbans in France,
Fulton in Britain; steam-powered coaches by Cugnot (1770) and
Trevithick (1796). Next generation change for boats : propellers
(Sauvage, 1837) replace waterwheels.
• Chemicals
– Artificial soda (Leblanc, 1790), used for soap and glass
production, wool grease-trimming and bleaching
– Chlorine discovered (1774) and applied to bleaching in 1777 by
Berthollet (textiles but also soon paper), and as disinfectant.
• Macroinventions vs microinventions (Mokyr, Crafts)
– Micro up-grades more related to « capabilities » (skilled labour,
cost of labour, etc).
– Macro inventions more to genius and accident; cotton technology
as example. Have more global impact on growth, but only
through micro-ones. Easy to imitate ?
– Crafts (1995) : Britain's advantage in micro-invention comes from
a better integrated market; a population concentrated in urban
areas, more literate and skilled (about 10% of population goes
through apprenticeship in late 18th c England, in principle a 7
years learning much above European norms, see Wallis). Maybe
also from a higher financial development and lower direct taxes.
• Conclusion : invention widely spread, but British advantage in
development.
Forms of industrial development
• Three major types of industrial organizations:
– Village or urban workshops selling the food or consumption
goods they produce to local consumers (nailer, shoemaker,
cobbler, cutler, blacksmith, goldsmith, butcher, baker, etc). No
major innovation.
– Factories (manufactures or usines), requiring locally
concentrated energy, production goods and labour. Mostly used
for glass-work, brewery, tannery before 1800. Develop for
textiles and metallurgy in late 18th c. England (but also France :
Oberkampf in Jouy). Specific to Western Europe' industrial
revolution.
– Rural workshops coordinated through the « putting out system »
(especially important in textiles) or proto-industry.
Proto-industrialization / putting-out system
• Considered by Mendels (1972) and others as the true origin of
western Europe's modernization (early 17th c - late 19th c).
• Urban organization of rural labor : urban merchants
–
provide the raw material and machines, asks for precise
products (= externalization)
–
Distribute the product between stages of production, some
rural, some urban (finishing).
–
Sell the products in a wide area, leading to international and
regional specialization.
• Important as soon as the late middle ages in textiles, iron, cutlery,
etc. Allows to escape the strict rules of urban craft guilds.
• Economic advantages : less risk and investment (no factory to
build, no fixed wages) for the merchants; welcome off-season
work for peasants or their family.
• Costs : transportation and coordination costs; competition with
agricultural work (delays). Little control of the workforce (so
piecework). Quality problems. No control of innovation.
• Develops skills.
Change towards factories
• With time and the development of markets, the costs increase
relative to the advantages;
–
–
–
rural labor little responsive to wages (income effect vs
price effect) ;
increasing price of machines makes sparse use costly;
and increases principal-agent problems (use for other
merchants, destruction).
The increase in machine use imposes some
standardization (gears, screws, etc) (previously handmade by each craftsman).
• Entrepreneurs develop urban factories if urban wages not too
high. They gain more independence towards merchants if
they can produce on a large enough scale. This specialization
leads to innovation.
• But that change is not necessary for all industries:
– Standardization possible without factories (standard sizes for
shoes and gloves invented around 1835 in Grenoble and
Chateaurenaud, extended to all clothes by the founder of « La
belle jardinière » and a success thanks to Thimonnier’s 1845
sewing machine) and the resulting development of ready to wear
clothes produced in a decentralized way.
– Technology not the leading cause : many inventions adaptable to
both factory and decentralized organization.
– Various historians consider factories were used in order to
intensify work rather than use new technologies.
• Early historians of proto-industrialization suggested that
increase in rural living standards led to an increase in the
rural population, then to migration towards cities and
proletarization, so the transition to factories.
– In fact that sequence was not systematic at all; urban wages
were attractive but disamenities of large cities were also huge;
mid-size towns had their chance.
Two industrial paths ?
• “British style” industrialization dominates in cotton and
iron productions;
• Big urban factories.
• Unskilled labor added to skilled labor in manufacturing;
• Huge productivity gains; mostly passed to consumers and
profits;
• Huge increases in quantities produced.
• Higher share of industry in the workforce
• Higher urban share
NB : That “modern” path includes Belgium, northern France, small
parts of Germany. See map of early railroads.
Crafts JIH 1989
An alternative industrialization path:
flexible technologies and clusters
• Sabel & Zeitlin or Piore suggest that “flexible specialization” (use of
multi-purpose technologies thanks to skilled labour) may be an
alternative to mass production (single purpose machines + unskilled
labour to produce standard goods).
• They argue that the smithian “ever-increasing specialization” can
dominate the marxian “capital accumulation and substitution to labour”
as the best way to productivity growth, at least in some industries.
• They emphasize that Smith recognized the extent of the market as a
major limitation to specialization and growth (so efforts against
protection and transportation costs, and even in favor of redistributive
policies); but neglected technical rigidity as an obstacle to long term
growth, and the importance of human capital.
• Then the question is whether flexible specialization can avoid
technological lock-in and corporatist restrictions to innovation without
destroying human capital (as the factories did).
Industrial districts
• Some consider that the development of “industrial districts” (A.
Marshall) was a continental alternative to the English IR. And not an
inferior one (e.g. Carnevali 2009).
• Industrial districts inherited from proto-industry: Lyon for silk, SaintEtienne for ribbons, hardware;calicoes in Alsace, woolens in
Roubaix. Also Solingen or Remscheid in Germany (edge tools,
cutlery, specialty steels), Sheffield; Philadelphia textiles, Pawtucket’s
cotton.
• Three defining elements:
– Variety of highly differenciated products constantly changing with
tastes (and changing them); see french exports.
– Flexible use of the most modern technologies
– Creation of regional institutions for « co-opetition » and
innovation.
• Jacquard looms (1800) as example of innovations substituting
skilled for unskilled labour (allows to brocate complex patterns of silk
thanks to instructions on perforated cards that allow to switch easily
to another pattern). Adapted to Saint Etienne ribbons, Roubaix
carpets and woolens, Philadelphia cottons.
• Institutions : 3 kind of institutions (outside urban guilds, which
survive in some countries).
– Local coordination : dominant when units are small and coordinated by
merchants (who sometimes assembled the final product); constantly
rearranged subcontracting. Municipalities help develop skills and
knowledge and police competition (punish abuse of trademarks, provide
social protection to keep workers there, as in Lyon or Saint Etienne)
– Paternalist big firm working as groups of artisans’ shops. (Mulhouse
calico as example: leading firms create technical education (e.g. in 1822
chemistry courses), welfare institutions: housing, savings schemes,
public baths, maternity care…).
– Federated family firms (the Motte system in Roubaix): independent but
connected medium-sized firms, insuring each other against extreme
fluctuations (common financial reserves, but also marketing,
purchasing, etc).
Force of these clusters: automatic collective acquisition of skills on the job,
makes workers attached to the place. Idem for code of competition among
employers. Social mobility possible through innovation (mostly by workers).
• New view emphasizes the persisting existence of small firms and
industrial districts as proofs of the limits of mass production /
increasing returns story.
• Rediscovers visionary exponents of this « republic of independent
craftsmen » linked by the dependence on one another skills
(Proudhon in France, Powderly in the US, leader of the Knights of
Labor; Schulze-Delitzsche in Germany, creator of cooperative
banks).
• These contemporaries emphasized complementarity of competition
and cooperation, of human skills and machines (so they were
considered then as utopian by both marxists and classical
economists).
• Then maybe the English way was made possible / imposed by
available labour, but its national impact (total GDP growth) had its
price in terms of individual welfare.
• Then the major reason for English leadership was agricultural revolution
(productivity much above continental levels from the 18th c at least):
O’Brien. Why : a mix of market integration through low transaction costs
(canals and rivers), institutional reasons (enclosures and canals not
delayed by political institutions), innovations diffusion (from the
Netherlands), large tenants (from the Black Death).
Conclusion
• Rates of growth of per capita income in both 18th and 19th c are
similar in France and Britain : no rupture with the IR (O’Brien 1987)
• Higher productivity in agriculture in England (compared to industry
and to France);
• Higher (relative and absolute) manufacturing productivity in France
(with smaller industrial workforce).
• France industry built progressively on a proto-industry of skilled
workers.
• England industry built a new model of factories massively
employing poor unskilled workers;
• Comparative advantages = complementarities within Europe:
specializations in different industries and industrial organizations :
« variety of capitalisms »
• Maybe differences in social cost of industrialization (Toynbee).
• Increasing British population (a result of industrial development, or a
cause ?) and high agricultural productivity as the main reasons for
British-style industrial revolution.
• British “Revolution” termed so because of the British success in the
Napoleonic wars and the British international military (navy)
dominance in the 19thc.
Europe vs China
• Pomeranz's question : what is the source of the “Great
Divergence” between Europe and the rest of the world ?
• is Europe's development internal or driven by its access (and
domination) to the world ?
• Test : comparison with China (+ Japan and parts of
South-East Asia, eventually India).
• Major question is : when does the difference in income per capita
originates ? If late, only a result of the IR.
• Thesis: China as rich as Europe until 1800; South-West
China (Yang-Tse delta) as rich as England.
Similarities between Europe and China
• Escape to malthusian trap: restriction of fertility in Europe; infanticide
and abortion in China.
• Allows an increase in standard of living in spite of the growth of
population. Life expectancy similar (nutrition maybe poorer in Asia,
but hygiene much superior: use of soap and boiled water, early
antivariolic vaccination, water distribution networks).
• Commerce is well developed in both regions thanks to maritime
transport. European merchants in Asia don't dominate technically
Asian ones.
• High agricultural productivity (less livestock in Asia, but less
necessary (e.g. for rice); specialization higher (transport of
food/capita much more important than in Europe); if ecological
pressure had persisted, Europe would have suffered from inferior
agricultural technologies (allowing smaller yields).
• Urbanization similar (higher in Japan... as in England);
• Accumulation of capital in transportation networks in both regions (+
large scale irrigation in China.
Institutions : markets and entrepreneurship
• Standard explanation by China as a proto communist country under
the authoritarian rule of the Emperor; no freedom, no competition, no
markets, no entrepreneurs.
• In fact allocation of capital, labor, and land by competitive markets in
China was if anything freer than in Europe. Imperial China, by and
large, had free labor, substantial migration (more than within Europe
where access to free lands in the East was difficult), frequent land
sales, and enforceable property rights, which allowed efficient
resource use, while even in the most modern parts of Europe,
entailment restricted land sales, and urban guilds restricted
craftsmen.
• Entrepreneurs were active in all markets. In 1830, the wealth of
Europe's richest businessman, Nathan Rothschild, was one tenth of
that of Wu Bingjian, a Canton merchant who made business as far
as the U.S.
Industry
• Europeans cannot export manufactures to China until the 19th c:
lower quality and higher prices for almost everything.
• European technology not dominant in 1750; China dominant in
porcelain, silk, dye industry ; English innovations in cotton become
important thanks to the access to foreign land (for cotton production)
; Chinese technologies progress and adapt to different challenges
(energy saving, land saving).
• Proto-industry permitted by free access to craft industry: guilds are
not important in textiles, no urban monopoly. Home production by
women starts as early as 1600 as a massive practice. May allow
better market integration than separation between factories and the
agricultural labor market as in England (China more similar to
continental Europe).
Wages
Central point : if wages much higher in Europe, labor-saving
investments are only encouraged there : did China’s low-wage,
dense populations discourage labor-saving innovation?
Textile workers wages were roughly equal, and not noticeably less
than in Europe. Still hotly debated. May be truer in 1750 than 1850.
Alternative solution can be servile labour on the side of high-wage
labour : were Chinese women forced to spin and weave in their
households for wages below subsistence?
In textiles, male and female wages were similar. Britain did send
more women to factories than China, but Chinese women sold their
household products on competitive markets for fairly high prices.
Similar to European proto-industry.
Lower wages don’t seem an explanation of the great divergence.
Then as in Europe : less development of factories may have resulted
from less separation between agriculture and industry.
Major differences
• From the mid-18th c., the Chinese development diffuses from the
costs to the centre (where population increases, industry develops,
increasing the price of raw materials for richer coastal regions);
pressure on land increases, so land saving technologies are
stimulated. Very high land productivity. Increasing malthusian
constraint.
• In Western Europe, access to overseas resources permits rich
regions to develop, and Eastern Europe remains backward. This
decreases the relative cost of land vs labor (land being now foreign
to a large extent) and stimulates labor-saving technologies.
• That access was organized by powerful European States which
were able and willing to raise capital for that purpose. Rivalry
between them helped (compared to the imperial power in China).
Those having to maintain armies controlled each other on the
mainland. England controlled overseas market because having only
a Navy to pay for.
• Trading manufactures for land-intensive food or raw material was
attempted by China but didn't succeed on a large scale because of
lack of political control.
Ecological constraint as major difference
• Not higher in China, but high there too.
• Massive deforestation (% of forests actually even lower in Europe);
leads to soil erosion and dust storms (emergence of a « European
monsoon » : alternation of violent rains and drought).
- Stopped by early reforestation in Britain, France, Belgium after 1800,
when pressure diminishes thanks to access to overseas land.
Constraint maintained in China throughout the 19th c.
• Coal : without coal, the rise in iron production in England would have
been impossible; same for much of home heating (coal consumed
until 1815 superior in caloric power to all remaining forests at that
date in Britain). Not to speak of railways.
- In China, coal abundant in the North only; transportation expensive.
Blocks energy-intensive innovation. Develops energy saving
technology (quite a paradox today !)
• Conclusion: solution in Europe, not in China: coal and overseas land