The industrial revolution

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The industrial revolution
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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
• Todays debate about
• Rupture or continuity ? (rapid or slow change ?)
• Innovation or work intensification ?

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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.

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• 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.

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Crafts, 1995
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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.

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• 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.

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Total factor productivity, England, 1600-1870
(Clark)
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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 ?

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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-Harleys 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.

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Temin, p. 65
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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.

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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.

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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.

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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.

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• 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 poors
  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.
• Todays 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.

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Feinstein vs Lindert estimates for weekly real
earnings (discrepancies mostly from price index)
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Engels pause (Allen)
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Historical profit rates
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Historical factor shares
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Institutional dimensions of labors 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.

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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
  poors 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 childrens allowances independently
  from the fathers 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.

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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.

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• 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).

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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.

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• 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).

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Clark, industrious revolution
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• Conclusions
• Intensification in terms on number of days worked
  (as early as 17th c ?)
• Intensification in terms of work practices
  (factory)
• Intensification in childrens work, mostly
  resulting from urbanization
• No change in womens work, or decrease in farms.

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measuring time at work

• Voth (2001) uses judiciary records
• Testimonies provide narratives of a days
  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.

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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.

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Voth
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One path to growth ?
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• 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-industrializatio
  n, innovation, urbanization.
• Complementarities with England led to different
  development paths in western Europe
• Divergence with China was late and partly
  accidental.

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Innovation a European process

• Machines
• Up to 18th c., most sophisticated machines are
  consumption goods, not production goods
  (Vaucansons automates, Pascal or Bernoullis
  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
  dAbbans 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.

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• 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.

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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.

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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.

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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
  hand-made 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.

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• 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
  Thimonniers 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.

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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.

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Crafts JIH 1989
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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).

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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, Saint-Etienne for
  ribbons, hardwarecalicoes in Alsace, woolens in
  Roubaix. Also Solingen or Remscheid in Germany
  (edge tools, cutlery, specialty steels),
  Sheffield Philadelphia textiles, Pawtuckets
  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.

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• 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).

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• 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)
  OBrien. 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).

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• 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 (OBrien 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.

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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.

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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.

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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.

61
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).

62
Wages

• Central point if wages much higher in Europe,
  labor-saving investments are only encouraged
  there did Chinas 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 dont 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.

63
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.

64
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