Sunday, November 13, 2005

The Industrial Revolution: why did it happen in Britain?

Continuing my piece on the Industrial Revolution, (by the way, I visited the legacy of the Industrial Revolution in Lowell, MA last month) Clark’s made a valid point in championing the endogenous growth theory as the best-so-far explanation for the Industrial Revolution. His analysis was parallel to what David Landes (1999) argued about the nature of human civilization in Europe at that period that paved the way to the Industrial Revolution. Landes emphasized three factors that characterized the human progress at that time: 1) the growing autonomy of intellectual inquiry, 2) the development of common method of invention, and 3) the routinization of research and diffusion.

These three considerations what made the distinction between Europe and the Islamic or Chinese world. The other civilizations have produced some progress (for example, gun powder was invented by the Chinese, and the concept of 'zero' was invented by the Arab). Nevertheless, they failed to make the progress continued and uninterrupted.

However, Clark’s analysis did not really touch one important question: why did it happen in England, and not somewhere else in Europe, if not in the other part of the world? In fact, as Landes mentioned, in 14th century Italy there has already a technology of processing silk that flourish the Italian silk industry. This industry has many things in common with the English cotton mills some four centuries later, in terms of technology and factory-like system of production. So why then the Industrial Revolution had to wait, and why when it happened finally, it happened in England?

Landes gave two answers. First, it was a matter of supply and demand. Silk was a luxurious product, costly to make so the price was high. Only the elite segment of the society could absorb the supply. Meanwhile, the cotton-based textile produced in England was met with the demand for the product. Second, England has already had the advantage of being a nation. It was not only a “state or political entity, but a self-conscious, self-aware unit characterized by common identity and loyalty and by equality of civil status.”

If these explanations have to be true, then it may explain why it was not Italy or Germany. But why it was not Spain or Portugal? Is cultural explanation significant, and if it is, how do we put it into the framework of endogenous theory?

The endogenous growth theory, although it is more superior to the other two theories as Clark has shown, still raises more new questions.

1 comment:

  1. I don't think Spain or Portugal had the finacial services of England around that time. Economics after all is a British obession and the creators of the cotton mill probably had access to a greater form of capital from middle class lenders. Also, England's exported cotton while Spain and Portugal were more in the business of making and mining money in the new world.