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3.1 Industrial Revolution: Accounting for Growth - Coggle Diagram
3.1 Industrial Revolution: Accounting for Growth
Questioning the Industrial Revolution
Why did it happen? Why was it revolutionary? When did it happen? What were its driving forces? Why then and not earlier or later? Why Britain/Europe?
Historiography has moved away from an abrupt, quick transformation. Usually placed in the century from 1750-1850
Traditional narrative: wave of heroic British inventors unleashing a "
wave of gadgets
"
By 1960s, approach had shifted to a
functionalistic
analysis of socio-economic conditions. Recipe for industrialisation at the right place and right time
According to this view: once these factors were in place, the transition to modernity was inevitable, inexorable, and irreversible.
NW European / British achievement. Non-European countries like China failed to industrialise by lacking these ingredients
Functionalist revolution of revolutions
Consumer revolution
Agricultural revolution
Price revolution
Institutional revolution
Financial revolution
Scientific revolution
Two distinct phases of irreversible human development: feudal and modern
Rostow's stages of growth
Traditional (pre-Newtonian): capped by availabl land, trade opportunties and technological improvement. Malthusian trap mechanism stymies output gains
Pre-conditions for take-off: sufficient accumulation of knowledge, realisation of potentialities flowing from science and technology, availbility of savings for capital supply, disposible income for consumer demand
Then take-off, drive to maturity, mass consumption
British recipe for Industrial Revolution
Availability of
plentiful capital
and ways to direct this to industry (financial networks, imperial profits)
Capitalists.inventors requiring an environment conducive to business (no fear of expropriation, incl. of intellectual property).
Inclusive institutions
Invention required
education, literacy, scientific method, and urbanisation
Consumers posess
disposable income
, resulting from higher wages
High wages necessitated investment in
labour-saving technology
(unlike Asian countries, which kept using cheap labour). Productivity increases with mechanisation
Agricultural revolution putting an end to period famines, allowing consumers to consume without fear
Econometric approach
Beginning in the 1950s/60s, attempts to measure growth begin
Tax returns on imports and exports used to calculate growth and estimates of aggregate economy
Revisions downward begin in the 1980s
Even older figures of growth were underwhelming for an industrial revolution, until later in the 19th century
Objections to revisionist accounting
Data comprises of a few commodities subject to custom and excise, excluding much of agriculture, household work, and non-marketed activity
Data does not capture the effects of smuggling, evasion and corruption. Vary especially during times of war
Unsafe to extrapolate local data for country-wide economic trends, because of regional differentiation
Sector and factor weightings are disputed
Contemporaries convinced of ongoing fundemental transformation
Evident shift away from agriculture in the English occupational structure
1710: 51% in primary industry
1871: 26% in primary industry
In GB, decoupling between plateauing agricultural exports and the take-off in manufacturing exports
British exports dominated by cotton, almost 50% by 1820s
Despite objections, revisionists have largely made their point. Gradual transformation with roots in the early modern period now in favour. Claims of British exceptionalism de-emphasised