The significance of the Industrial Revolution

Historians in the 1990s have tended to belittle the significance of the Industrial Revo­lution as a historical phenomenon, referring to it as the so-called Industrial Revolution, and pointing to the slowness and gradualness of economic change, as well as the many continuities that post 1760 Britain had with earlier times [for a critical survey, see Mokyr (1998b)].

Before I get to the heart of the argument, two points need to be cleared away. The first is the myth that the Industrial Revolution was a purely British affair, and that with­out Britain’s leadership Europe today would still be largely a subsistence economy. The historical reality was that many if not most of the technological elements of the Indus­trial Revolution were the result of a joint international effort in which French, German, Scandinavian, Italian, American and other “western” innovators collaborated, swapped knowledge, corresponded, met one another, and read each others’ work.

It is of course commonplace that in most cases the first successful economic appli­cations of the new technology appeared in Britain. By 1790 Britain had acquired an advantage in the execution of new techniques. Yet an overwhelming British advantage in inventing - especially in generating the crucial macroinventions that opened the doors to a sustained trajectory of continuing technological change - is much more doubtful, and a British advantage in expanding the propositional knowledge that was eventually to widen the epistemic bases of the new techniques is even more questionable. Britain’s technological precociousness in the era of the Industrial Revolution was a function of three factors.

First, by the middle of the eighteenth century Britain had developed an institutional strength and agility that provided it with a considerable if temporary advantage over its Continental competitors: it had a healthier public finance system, weaker guilds, no internal tariff barriers, a superior internal transportation system, fairly well-defined and enforceable property rights on land (enhanced and modified by Parliamentary acts when necessary), and a power structure that favored the rich and the propertied classes.

Second, Britain’s entrepreneurs proved uncannily willing and able to adopt new in­ventions regardless of where they were made, free from the “not made here” mentality of other societies. Some of the most remarkable inventions made on the Continent were first applied on a wide scale in Britain. Among those, the most remarkable were gas­lighting, chlorine bleaching, the Jacquard loom, the Robert continuous paper-making machine, and the Leblanc soda making process. In smaller industries, too, the debt of the British Industrial Revolution to Continental technology demonstrates that in no sense did Britain monopolize the inventive process.^[47] The British advantage in appli­cation must be chalked up largely to its comparative advantage in microinventions and in the supply of the human capital that could carry out the new techniques.^[48] To em­ploy the terminology proposed earlier: Britain may not have had more propositional knowledge available for its invention and innovation process, but if its workers pos­sessed higher levels of competence, then the new techniques that emerged were more likely to find their first applications there. Its successful system of informal technical training, through master-apprentice relationships, created workers of uncommon skill and mechanical ability [Humphries (2003)]. Britain also was lucky to have a number of successful industries that generated significant technical spillovers to other indus- tries.^[49] This system produced, of course, inventors: the most famous of these such as the clockmakers John Harrison and Benjamin Huntsman, the engineer John Smeaton, the instrument maker Jesse Ramsden, the wondrously versatile inventor Richard Roberts, the chemists James Keir and Joseph Black, and of course Watt himself were only the first row of a veritable army of people, who in addition to possessing formal knowledge, were blessed by a technical intuition and dexterity we identify as the very essence of tacit knowledge.

Third, Britain was at peace in a period when the Continent was engulfed in political and military upheaval. Not only that there was no fighting and political chaos on British soil; the French revolution and the Napoleonic era was a massive distraction of talent and initiative that would otherwise have been available to technology and industry.^[50] The attention of both decision makers and inventors was directed elsewhere.^[51] During the stormy years of the Revolution, French machine breakers found an opportunity to mount an effective campaign against British machines, thus delaying their adoption [Horn (2003)].

Compared to Britain, the Continental countries had to make a greater effort to cleanse their economic institutions from medieval debris and the fiscal ravages of absolutism, undo a more complex and pervasive system of rent-seeking and regulation, and while extensive reforms were carried out in France, Germany, and the Low Countries after the French Revolution, by 1815 the work was still far from complete and had already incurred enormous social costs. It took another full generation for the Continent to pull even. All the same, none of the British advantages was particularly deep or permanent. They explain Britain’s position as the lead car in the Occident Express that gathered steam in the nineteenth century and drove away from the rest of the world, but it does not tell us much about the source of power. Was Britain the engine that pulled the other European cars behind it, or was Western Europe like an electric train deriving its motive power from a shared source of energy?

One useful mental experiment is to ask whether there would have been an Industrial Revolution in the absence of Britain. A counterfactual industrial revolution led by Con­tinental economies would have been delayed by a few decades and differed in some important details. It might have relied less on “British” steam and more on “French” water power and “Dutch” wind power technology, less on cotton and more on wool and linen.

The second point to note is that the pivotal element of the Industrial Revolution took place later than is usually thought. The difference between the Industrial Revolution of the eighteenth century and other episodes of a clustering of macroinventions was not just in the celebrated inventions in the period 1765-1790. While the impact of the technolog­ical breakthroughs of these years of sturm und drang on a number of critical industries stands undiminished, the critical difference between this Industrial Revolution and pre­vious clusters of macroinventions is not that these breakthroughs occurred at all, but that their momentum did not level off and peter out after 1800 or so. In other words, what made the Industrial Revolution into the “great divergence” was the persistence of technological change after the first wave. We might well imagine a counterfactual tech­nological steady state of throstles, wrought iron, and stationary steam engines, in which there was a one-off shift from wool to cotton, from animate power to stationary engines, and from expensive to plentiful wrought iron. It is easy to envisage the economies of the West settling into these techniques without taking them much further, as had happened in the wave of inventions of the fifteenth century.

But this is not what happened. The “first wave” of innovations was followed af­ter 1820 by a secondary ripple of inventions that may have been less spectacular, but included the microinventions that provided the muscle to the downward trend in produc­tion costs. The second stage of the Industrial Revolution adapted ideas and techniques to be applied in new and more industries, improved and refined earlier inventions, ex­tended and deepened their deployment, and eventually these efforts showed up in the productivity statistics. Among the remarkable later advances we may list the perfec­tion of mechanical weaving after 1820; the invention of Roberts’ self-acting mule in spinning (1825); the extension and adaptation of the techniques first used in cotton and worsted to carded wool and linen; the improvement in the iron industry through Neilson’s hot blast (1829) and related inventions; the continuous improvement in cru­cible steelmaking through coordinated crucibles (as practiced for example by Krupp in Essen); the pre-Bessemer improvements in steel thanks to the work of Scottish steel­makers such as David Mushet (father of Robert Mushet, celebrated in one of Samuel Smiles’ Industrial Biographies), and the addition of manganese to crucible steel known as Heath’s process (1839); the continuing improvement in steampower, raising the ef­ficiency and capabilities of the low pressure stationary engines, while perfecting the high pressure engines of Trevithick, Woolf and Stephenson and adapting them to trans­portation; the advances in chemicals before the advent of organic chemistry (such as the breakthroughs in candle-making and soap manufacturing thanks to the work of Eugene- Michel Chevreul on fatty acids); the introduction and perfection of gas-lighting; the breakthroughs in high-precision engineering and the development of better machine­tools by Maudslay, Whitworth, Nasmyth, Rennie, the Brunels, the Stephensons, and the other great engineers of the “second generation”; the growing interest in electrical phenomena leading to electroplating and the work by Hans Oersted and Joseph Henry establishing the connection between electricity and magnetism, leading to the telegraph in the late 1830s.

The second wave of inventions was the critical period in the sense that it shows up clearly in the total income statistics. Income per capita growth after 1830 accelerates to around 1.1 percent, even though recent calculations confirm that only about a third of that growth was due to total factor productivity growth [Antras and Voth (2003, p. 63) and Mokyr (2004)]. Income per capita growth in Britain during the “classical” Industrial Revolution was modest. This fact is less difficult to explain than some scholars make it out to be, and any dismissal of the Industrial Revolution as a historical watershed for that reason seems unwarranted. After all, the disruptions of international commerce during the quarter century of the French Wars coincided with bad harvests and unprecedented population growth. Yet the main reason is simply that in the early decades the segment of the British economy affected by technological progress and that can be regarded as a “modern sector” was simply small, even if its exact dimensions remain in dispute. After 1830 this sector expanded rapidly as the new technology was applied more broadly (especially to transportation), growth accelerates, and by the mid-1840s there is clear­cut evidence that the standard of living in Britain was rising even for the working class. The second wave also serves as a bridge between the first Industrial Revolution and the more intense and equally dramatic changes of the second Industrial Revolution.

The success of the Industrial Revolution in generating sustainable economic growth, then, must be found in the developments in the area of useful knowledge that occurred in Europe before and around 1750. What mattered was not so much scientific knowl­edge itself but rather the method and culture involving the generation and diffusion of propositional knowledge. The Industrial Revolution and its aftermath were based on a set of propositional knowledge that was not only increasing in size, but which was also becoming increasingly accessible, and in which segments that were more effective were becoming tighter. The effectiveness of propositional knowledge was increasingly tested by whether the techniques that were based on it actually worked satisfactorily either by experiment or by virtue of economic efficiency.

To sum up, then, the period 1760-1830 Western Europe witnessed a growing relative importance of improving technology in economic growth. The emergence and continu­ous improvement of new techniques in the long run were to have an enormous impact on productivity and growth. People started to know more about how and why the tech­niques they used worked, and this knowledge was widespread. Without belittling the other elements that made the Industrial Revolution possible, the technological break­throughs of the period prepared the ground for the economic transformation that made the difference between the West and the Rest, between technological modernity and the much slower and often-reversed economic growth episodes of the previous millennia. In order to come up with a reasonable explanation of the technological roots of economic growth in this period, we must turn to the intellectual foundations of the explosion of technical knowledge.

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