Tag: Economic History

The Industrial Revolution: capabilities and institutions

qmulcgrLeave a comment
BY DR. RAVSHONBEK (ROSH) OTOJANOV

In my previous post, I summarised a demand-side explanation of the British Industrial Revolution. In this post, I will outline a supply-side explanation put forward by economic historians Margaret Jacob and Joel Mokyr. According to the supporters of the supply-side explanation, Britain had a supply of human capital who were capable of using science and engineering knowledge to solve practical problems. Besides having a comparative advantage in human capital over continental Europe, by the eighteenth century, Britain had the necessary institutional environment that promoted the principles of the market economy. Interaction between the forces of market economy and science made the practical applications of scientific discoveries more successful in Britain. This did not happen in continental Europe, because, for centuries, the political and religious establishment had been restricting the advancement of science if it conflicted with their political agenda and Western Europe was politically fragmented.

Read More »

Industrial Revolution: factor prices and innovations

qmulcgr1 Comment
BY DR. RAVSHONBEK (ROSH) OTOJANOV

A previous post outlined a number of major inventions (or macro-inventions) of the eighteenth century that were the basis for the inventions of the nineteenth century that propelled productivity growth. These innovations, according to Robert Allen, would not have taken place in Britain in the absence of cheap coal deposits. Another unique factor driving the innovations was Britain’s expensive labour. Labour was expensive in Britain, and economic historians have traced the origins of the high wages back to the Black Death plague (in the 14th century) that reduced the working age population significantly. Moreover, Britain’s commercial success in the international economy played a role in the growth of wages.

Rosh01_02
Figure 1. Average nominal wages and the cost of wood and coal, 1600-1914. Panel (a): Average weekly wages. Panel (b): The price of wood (1600-1870) and coal in GBP per Toe. Data sources: Thomas and Dimsdale (2017) and Fouquet (2011)

Read More »