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Daily Economic History: Peter Temin's "Two Views of the Industrial Revolution"

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Peter Temin's "Two Views of the Industrial Revolution" is a very good paper.

Crafts, Harley, and by now many others--most recently the scarily-smart Robert Allen--have argued that technological change during the British Industrial Revolution was largely confined to the leading sectors. They are opposed by Ashton, Landes, and many, many others--most recently the truly-scarily-smart Joel Mokyr--arguing that the British Industrial Revolution was a broad-based sea-change in economy and society as a whole. The stakes are rather large.

Temin argues that if, as Crafts, Harley, and by now many others argue, technological change during the British Industrial Revolution had been largely confined to the leading sectors, then British exports over the Industrial Revolution Era would have become increasingly concentrated in those sectors. But that is not true:

The export of most other manufactures, however, was continuing merrily along.... Other manufacturing exports as a whole kept pace with cotton exports... and exports of individual industries did so as well...

There is, however, one potential hole in the argument: Temin writes:

Assume, for example, that advances in the British cotton textile industries caused people to shift demand from other goods to British textiles...

A reasonable assumption--a very reasonable assumption. Given how useful clothes are and how few of them people had in the early nineteenth century, it makes sense that as the price of textiles exported from Britain fell people elsewhere would have devoted a greater proportion of their spending to imports from Britain. And if they did Temin's argument goes through.

But suppose not? If demand for British imports is unit-elastic--if total spending on individual categories is unchanged no matter what the price, quantities moving one-for-one inversely with prices--then Temin's test no longer distinguishes because concentration of progress in leading sectors no longer leads to a concentration of exports in those sectors.

I am reasonably confident that it can be closed--and thus that there was at least somewhat more going on than Allen (and Crafts, and Harley, and company) think. And I think that if it cannot be closed it is due to disturbing factors like those adduced in Greg Clark's "Secret History of the Industrial Revolution": that Britain's population explosion during the Industrial Revolution Era meant that it was not just developing an extraordinary comparative advantage in modern machine manufactures but at the same time developing an extraordinary comparative disadvantage in agriculture, as Malthusian pressures made themselves felt for the last time.

But somebody really should close this hole in Peter Temin's argument.


Peter Temin (1997): Two Views of the British Industrial Revolution1

ABSTRACT: There are two views of the British Industrial Revolution in the literature today.

The more traditional description sees the Industrial Revolution as a broad change in the British economy and society. This broad view of the Industrial Revolution has been challenged by Crafts and Harley who see the Industrial Revolution as the result of technical change in only a few industries.

This article presents a test of these views using the Ricardian model of international trade with many goods. British trade data are used to implement the test and discriminate between the two views of the Industrial Revolution....

The export of most other manufactures, however, was continuing merrily along.... Other manufacturing exports as a whole kept pace with cotton exports... and exports of individual industries did so as well....

It follows, therefore, that the traditional "old-hat" view of the Industrial Revolution is more accurate than the new, restricted image. Other British manufactures were not inefficient and stagnant, or at least, they were not all so backward. The spirit that motivated cotton manufactures extended also to activities as varied as hardware and haberdashery, arms, and apparel....

The test performed here shows that increases in British productivity were not confined to cotton and iron in the first half of the nineteenth century. The "old-hat" view of the Industrial Revolution cannot be banished by calling it names. It lives among us, and it deserves more attention...

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