History is a fascinating, gripping subject that brings to light many facets of our past existence. The same is true of economic history. One of the most fascinating debates in economic history concerns the Industrial Revolution, that monumental event which changed the economic fortunes of countries and mankind forever.
Of all aspects of this remarkable event, perhaps the most intriguing one is that it first happened in England, an island off mainland Europe. This itself begets an enthralling query: why in England and not anywhere else? Recently, this question gained prominence again as an economic historian wondered why the Industrial Revolution did not occur in the Roman Empire? We can extend this interesting probe to include the Byzantium, Muslim, Spanish, Mughal and Ottoman empires, who despite having vast resources never experienced anything similar. As expected, theories abound.
Two major ones revolve around technological prowess and institutional shocks. Robert C. Allen’s work is an apt description of the former. He hypothesises that it was the British lead in technology, a superiority that was based on the unique wage and price structure that existed in Britain since at least the medieval period, a structure borne out of the commercial and imperial expansion of Britain.
This ‘mercantilist’ period started to take shape in 15th century. As it progressed gradually, it gave rise to high wages and prices, while at the same time making capital relatively inexpensive. This, in turn incentivised the substitution of capital for labour. Owing to the expensive labour, there arose great demand for labour-saving innovation. This demand for innovation was supported by a skilled and educated population, with enough savings to finance such inventions. Moreover, Allen states that compared to Europe, energy was cheap in Britain relative to real wages (coal was naturally abundant in Britain). This made it easy to propel economic activity (energy use and economic growth have a positive relationship). Events like the Enlightenment and the Newtonian scientific revolution only sought to buttress the developments set in motion by earlier events.
The institutional view of industrial revolution is led by prominent scholars like the late Douglass North, and it lays emphasis upon institutional developments as primary factors. A recent example of this view is the work of Robinson and Vollmer, suggesting that it was the development of institution of local land market that proved a catalyst towards industrial developments. This institutional development, in turn, owed to a momentous event (Dissolution of Monasteries, 1534). At the time of dissolution, the Church in England owned about one third of all land, besides having the power to tax. With their dissolution, taxes went to the government and the church land was sold. This gave rise to a local land markets all over England, where transactions could be quickly settled and titles were easily transferred.
In time, this gave rise to gentry that ploughed its wealth not in land, but in commerce, industry and innovation (interestingly, the imperial and commercial expansion of Britain was also occurring around that time). Of the 16000 places analysed by authors, the ones with previously the highest concentration of church land experienced the highest degree of industrialisation, leading the authors to conclude that the development of institution of market in lands spurred the gradual move towards industry.
Summarising two prominent theories need not imply that other theories do not merit attention. For example, Gregory Clark’s theory based on irrefutable parish records of English births and deaths suggested social norms and eugenics as playing a crucial role. Since the two are most widely cited (and repeated in one form or another), therefore they were briefly discussed.
I’ll now turn to the intriguing question of why empires never experienced such an event. Most of us like to think of past ages and empires as backward and technologically bereft. Nothing could be farther from the truth. Some of them, in fact, were very advanced for their time. The Antikythera Mechanism, for example, was in use 2000 years ago in Greece. This remarkable device, which has baffled modern scientists, could tell motion of celestial bodies (like moon and sun) with pinpoint accuracy. Joseph Needham has extensively documented how advanced the Chinese empires were in terms of inventions (paper, gunpowder, compass, etc.). The ancient Indian empires gave the world a numeral system, ayurvedic medicines and advanced mathematics. Roman empire’s stunning engineering feats like the aqueducts and amphitheaters are still a sight to behold. Arab empires gave the world inventions like paper maps and surgical instruments.
Yet none of them ever experienced anything close to the industrial revolution. Why? A probable answer, amongst the many, comes through looking at characteristics of the Industrial Revolution. Two prominent ones were the spread and diffusion of knowledge, and the government’s complementing acts, through laws. We find both of these missing in the case of empires. Knowledge diffusion seemed to be limited, with little evidence of official support. Needham’s research concurs by pointing out that despite tremendous advances, knowledge and technology in ancient China was limited to imperial courts. In the Ottoman Empire, the monopoly of religious scholars prevented the printing press (an outstanding medium for knowledge diffusion) from reaching there for three centuries after its invention. These, along with numerous other factors (incessant wars, uneducated populations, non-clarity of geographical boundaries, persistent famines and plagues), prevented anything like the Industrial Revolution from taking place in these empires and other parts of the world.
From the first Industrial Revolution, which began a remarkable transformation of human society, the world is now on the cusp of the fourth Industrial Revolution which is again predicted to transform how humanity has been conducting its affairs. If predictions bear fruit, the 21st century will witness the working of artificial intelligence at par with humans, undertaking even those tasks that were once considered the sole preserve of manual labour. In the context of these developments, this kind of debate about unearthing the origins and understanding of the forces that give rise to industrial revolutions is imperative to policymaking.
The above is but a brief introduction to this debate. The Industrial Revolution in England owed to certain conditions and processes that were not at play elsewhere in the world at that time or before it. More than anything, it was truly transformative in the sense that it allowed for a sustained growth in incomes, something mankind never witnessed before. It finally broke off the shackles that had inhibited growth and life quality till that time.
The writer is an economist
Of all aspects of this remarkable event, perhaps the most intriguing one is that it first happened in England, an island off mainland Europe. This itself begets an enthralling query: why in England and not anywhere else? Recently, this question gained prominence again as an economic historian wondered why the Industrial Revolution did not occur in the Roman Empire? We can extend this interesting probe to include the Byzantium, Muslim, Spanish, Mughal and Ottoman empires, who despite having vast resources never experienced anything similar. As expected, theories abound.
Two major ones revolve around technological prowess and institutional shocks. Robert C. Allen’s work is an apt description of the former. He hypothesises that it was the British lead in technology, a superiority that was based on the unique wage and price structure that existed in Britain since at least the medieval period, a structure borne out of the commercial and imperial expansion of Britain.
This ‘mercantilist’ period started to take shape in 15th century. As it progressed gradually, it gave rise to high wages and prices, while at the same time making capital relatively inexpensive. This, in turn incentivised the substitution of capital for labour. Owing to the expensive labour, there arose great demand for labour-saving innovation. This demand for innovation was supported by a skilled and educated population, with enough savings to finance such inventions. Moreover, Allen states that compared to Europe, energy was cheap in Britain relative to real wages (coal was naturally abundant in Britain). This made it easy to propel economic activity (energy use and economic growth have a positive relationship). Events like the Enlightenment and the Newtonian scientific revolution only sought to buttress the developments set in motion by earlier events.
The institutional view of industrial revolution is led by prominent scholars like the late Douglass North, and it lays emphasis upon institutional developments as primary factors. A recent example of this view is the work of Robinson and Vollmer, suggesting that it was the development of institution of local land market that proved a catalyst towards industrial developments. This institutional development, in turn, owed to a momentous event (Dissolution of Monasteries, 1534). At the time of dissolution, the Church in England owned about one third of all land, besides having the power to tax. With their dissolution, taxes went to the government and the church land was sold. This gave rise to a local land markets all over England, where transactions could be quickly settled and titles were easily transferred.
In time, this gave rise to gentry that ploughed its wealth not in land, but in commerce, industry and innovation (interestingly, the imperial and commercial expansion of Britain was also occurring around that time). Of the 16000 places analysed by authors, the ones with previously the highest concentration of church land experienced the highest degree of industrialisation, leading the authors to conclude that the development of institution of market in lands spurred the gradual move towards industry.
Summarising two prominent theories need not imply that other theories do not merit attention. For example, Gregory Clark’s theory based on irrefutable parish records of English births and deaths suggested social norms and eugenics as playing a crucial role. Since the two are most widely cited (and repeated in one form or another), therefore they were briefly discussed.
I’ll now turn to the intriguing question of why empires never experienced such an event. Most of us like to think of past ages and empires as backward and technologically bereft. Nothing could be farther from the truth. Some of them, in fact, were very advanced for their time. The Antikythera Mechanism, for example, was in use 2000 years ago in Greece. This remarkable device, which has baffled modern scientists, could tell motion of celestial bodies (like moon and sun) with pinpoint accuracy. Joseph Needham has extensively documented how advanced the Chinese empires were in terms of inventions (paper, gunpowder, compass, etc.). The ancient Indian empires gave the world a numeral system, ayurvedic medicines and advanced mathematics. Roman empire’s stunning engineering feats like the aqueducts and amphitheaters are still a sight to behold. Arab empires gave the world inventions like paper maps and surgical instruments.
Yet none of them ever experienced anything close to the industrial revolution. Why? A probable answer, amongst the many, comes through looking at characteristics of the Industrial Revolution. Two prominent ones were the spread and diffusion of knowledge, and the government’s complementing acts, through laws. We find both of these missing in the case of empires. Knowledge diffusion seemed to be limited, with little evidence of official support. Needham’s research concurs by pointing out that despite tremendous advances, knowledge and technology in ancient China was limited to imperial courts. In the Ottoman Empire, the monopoly of religious scholars prevented the printing press (an outstanding medium for knowledge diffusion) from reaching there for three centuries after its invention. These, along with numerous other factors (incessant wars, uneducated populations, non-clarity of geographical boundaries, persistent famines and plagues), prevented anything like the Industrial Revolution from taking place in these empires and other parts of the world.
From the first Industrial Revolution, which began a remarkable transformation of human society, the world is now on the cusp of the fourth Industrial Revolution which is again predicted to transform how humanity has been conducting its affairs. If predictions bear fruit, the 21st century will witness the working of artificial intelligence at par with humans, undertaking even those tasks that were once considered the sole preserve of manual labour. In the context of these developments, this kind of debate about unearthing the origins and understanding of the forces that give rise to industrial revolutions is imperative to policymaking.
The above is but a brief introduction to this debate. The Industrial Revolution in England owed to certain conditions and processes that were not at play elsewhere in the world at that time or before it. More than anything, it was truly transformative in the sense that it allowed for a sustained growth in incomes, something mankind never witnessed before. It finally broke off the shackles that had inhibited growth and life quality till that time.
The writer is an economist