The Mother of Invention

The Industrial Revolution, the hinge joining our modern world to our agricultural history, began in late-18th-­century England. But why England? Why not France or, for that matter, ­India?

Scholars have long debated the question. One popular theory is that the Glorious Revolution of 1688 led to a secure property-rights system, which encouraged investment, which in turn spurred innovation. Others going back to Max Weber have argued that culture was ­responsible—­specifically, that Calvinist-flavored Protestantism made people “particularly rational and oriented towards economic achievement.” A third possibility is that the gains of the Scientific Revolution a century earlier gave tinkerers the tools to improve ­production.

Robert C. Allen, an economic historian at Oxford University, doesn't dispute these theories. “Good law and good culture may have been necessary conditions for the Industrial Revolution,” he writes, “but they were not sufficient.” These features of British society were the supply that fed innovation. But without demand (on the part of producers), no one would have toiled away at the exhausting process of innovation. In England at the time, wages were relatively high, especially in relation to the cost of capital. That meant that new technologies, even costly ones up to a point, were ­cost-­effective for pro­ducers if they reduced the need for labor. And thus it was England’s high ­wages—­not its legal system or religion or scientific ­knowledge—­that drove inventors to their ­workshops.

The history of the spinning jenny (a machine that allows one person to spin multiple spools of thread at once) illustrates Allen’s point. Invented in the 1760s by James Hargreaves, an illiterate weaver from Lancashire, and improved upon in England and America for several decades thereafter, the spinning jenny was rapidly adopted throughout England, but not in France and India. In those two countries, Allen explains, labor was cheap enough and capital expensive enough that investing in the machine didn't pay. It would be years before it made economic sense for producers in India and France to invest in industrial technologies.

Allen says the same story plays out around the world today: Technologies that are a good investment in wealthy countries often are not adopted in the developing world, where labor is cheap and capital improvements cost many times the average wage. In such places, choosing not to invest in ­new­fangled equipment isn't the result of some sort of cultural deficit or institu­tional failure, but a rational response to economic ­considerations.

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The Source: "The Industrial Revolution in Miniature: The Spinning Jenny in Britain, France, and India" by Robert C. Allen, in The Journal of Economic History, December 2009. 

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