Revision:Post 1750 Growth Coke-Smelting Sector

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Costs considerations alone explain this costs charcoal rose post 1750 costs coke pig iron fell clear cost advantage

By late 1750s total cost of producing pig iron with coke had fallen well below the variable cost of producing charcoal iron increase costs of charcoal and industrialisation raised demand for iron and derived demand for inputs or increased labour costs of charcoal NOT ABLE TO ECONOMISE USE CHARCOAL rising costs resulted

NO IMPROVEMENTS IN TECHNOLOGY OF PRODUCING PIG IRON QITH CHARCOAL IMPORTANT ENOUFG TO SIGNFICANTLY CHANGE THE INDUSTRY’S EFFICIENCY STAGNANT TECHNOLOGY INCRAESED INPUT PRICES, ESP. CHARCOAL COSTS RPOSE SHARPLY

Cf. Costs of coke melting declined capital costs fell coke smelting clearly superior technique by 1760s half cost reduction due to increased efficiency and half due to lower factor prices decline price fuel accounts for most of decline costs the reduction in coal prices indicates ironmasters probably increased their efficiency in coal mining as well (ran own coal-mining)

Differences in fuel costs account for most of the cost differentials between the new techniques£3 per tonne 1760- large difference in fuel costs continued throughout 1750 1800 substituting coal for charcoal in smelting process brought huge savings TOTAL COST OF PRODUCING WITH THE NEW TECHNIQUE FELL WELL BELOW THE VARIABLE COST OF PRODUCING PIG IRON WITH CHARCOAL

Once coke smelting got superiority ironmasters rapidly adopted the new technique coke pig iron inferior no relevance as highly profitable high profit levels throughout period suggests less than optimal flow of resources into coke-smelting post 1750 - - furnaces located in wilderness near coal mine snot urban centres provide workers with housing, social services recruiting, maintaining labour force far from established markets and popn. Centres special problems maintaining labour force under these conditions kept many investors from entering coke industry.

Progressively larger initial investment needed to enter the coke iron industry required individual investment of over £1,000 lot of money then NUMBER OF INDIVIDUALS ABLE TO INVEST THAT SUM OF MONEY IN WHAT WAS AN INFANT INDUSTRY MUST HAVE BEEN VERY LIMITED

Existence these barriers to entry slowed the flow of resources into the coke-smelting sector increased demand for pig-iron after 1750 kept prices form falling significantly 0 also slowed exit from of charcoal furnaces charcoal ironmasters could continue producing because charcoal pig iron - prices remained higher than variable costs well after coke-smelting widespread costs much higher than coke but still below market price for charcoal pig iron.

Demand for pig iron increasingly rapidly in second half the 18^th century Britain begins to industrialise 80 coke blast furnaces built by 1790 competition'did not bring sharp fall price pig iron demand for pig iron increased sufficiently over these years to keep prices well above total costs allow entrepreneurs with no experience to enter, experiment, learn by mistakes and survive FEW COKE FURNACES FAILED DURING THIS PERIOD'

Increased demand for pig iron encouraged adoption coke smelting also permitted charcoal ironmasters to continue after inferiority in terms of cost established increased demand pig iron prevented costs falling as would have otherwise and limited price competition from cheaper product Resource capital, labour, entrepreneurs used to produce pig iron inferior technology

NFR CRAFTS ‘INDUSTRIAL REVOLUTION IN BRITAIN AND FRANCE: SOME THOUGHTS ON THE QUESTION: WHY AS ENGLAND FIRST?” Three types of answer:

• Single crucial reason Kemp (continued prevalence traditional agrarian structures) Hagen differences personality rather than circumstances
• Industral revolution result previous period of general economic growth Hartwell culmination of a most unspectacular process consequence long period of slow growth or Kranzberg multiplicity of factors technological, social, economic, political cultural came together mid 17^th century stimulus for industrial advance Britain had slight advantage over France.
• Milward and Saul previous centuries of development determined that the industrial revolution happened not in Europe’s wealthiest, most populous, most powerful and most productive country , France, but in an island of its shores

Why was Englanbd first should be distinguished Why did the IR take place in 18^th century?

Economic development in general and technological progress in particular should be regarded as a stochastic process

Section II

Definition Industrial Revolution in terms of decisive innovations is adopted as appropriate to the comparison of 18^th century England and France

Industrial Revolution period accelerated structural change in the economy involving a rapid rise in industrial output, share of manufacturing in national product and in factory based activity based on major technological innovations.

Focus transformation existing industrial sector thus follow Lnades leading sector of cotton machines energy requirements too big for domestic but ad. Sufficient to break down advantages domestic use need big industry wide and elastic demand so mechanisation create strains other forms production and ig enough so improvements felt whole economy.

Industrial revolution had its immediate beginning in the cotton industry two main discoveriers (Hargreaves spinning jenny Arkwright’s water frame) if inventions in France would there be IR? Note IR and modern economic growth NOT synonymous.

Section III

Whether deterministic or stochastic (random probabilities) view taken question Why was England first unanswerable?

1str method Rostow law-like theory A needed before B could take place solving problem impossible due to only one experiment!

2^nd Method What changes in France would have sufficed to give France the first industrial revolution insuperable problems of interpretation, multicollinearity, and sufficient degrees of freedom.

Favourability of certain conditions in England has been inferred from the result with the likelihood of post hoc ergo propter hoc fallacies

Davis: Hargreaves, Arkwright these two isolated events may have been fortuitous; the chance of personalities and their good fortune in seeking along the right lines”

No covering laws which explain England’s primacy best we can do is to formulate explanatory generalisations with a error term event unique fairly claimed that the question is unanswerable

Observed result of England being first WRONGLY ipliues superiority of antecedent conditions BUT Why begin in the 18^th century may still be usefil in the stochastic contect probability decisive innovations before 1800 virtually one

Section IV

Suggest French economy 18^th century unfairly and prematurely written off s inferior to the English.

Consensus in favour of viewing innovation as a stochastic process has developed in the literature although Britain had decisive innovations first it may have been wither more or less likely than France to do so.

Explanations for inventive activity:

• Great Man or heroic approach genius Merton and others see as wrong, inventions too simple
• Social determinist inevitable result of necessity individual merely an instrument or expression of cosmic forces
• Innovation or invention induced by economic environment Rostow scale of inventive effort that went into the breaking of crucial technological bottlenecks”
• Importance economic stimuli stresses importance of factors which affect ability of economies to react to incentives sociological influences and quality of entrepreneurship McCelland stresses sociological factors

Musson and Robinson stress the role of science

Musson if inevitable and economically pre determined why didn’t they come into widespread use immediately?

Difficult to predict rate of change by looking at ebeficial effect of shortage early 18^th century

Consensus: vision of innovations emerging from search rpcoess highly uncertain in its nature at timing conditioned as to its intensity and direction by social, economic vars to its chances of making particular discoveries by scientific knowledge and existing technology.

Musson contradictory importance incentives, economic situation and then talks about inevitability as ludicrous. Merton sociological school inventions inevitable with cultural heritage and social developments directed attention of investigators to particular problems DOES NOT IMPLY INEVITABILTY

Response school many shortages demand desire for change not all come off though.

Economic model builders Nelson and Winter: there wa sno production function only a set of physically possible actvieis .. The exploration of the set was treated as an historical incremental process”

Stochastic world in a race just run once the country with lower likelihood ex ante of achieving decisive innovations” may be observed the winner! Being lucky initially evolve into a position with a higher chance of success

Strong case for decisive innovations seen as evolutionary outcome of a stochastic process

• Fact Britain was more advanced 1790 does not imply that in 1740 Britain had greater probability of achieving IR first should not feel obliged to seek reasons for primacy

It is then inappropriate to try to account for the one observable result of history drawn from an unobservable distribution of possible outcome with a general theory.

Section V

Mid 18^th century British economy clearly superior NO Nef rate of industrial change from about 1735 to 1785 was no more rapid in Great Britain than in France Mathias The French record of scientific growth and invention in the 18^th century was a formidable one”

How has the superiority inference been justified? Britain’s ultimate primacy used to justify presumption that some thing or other of preceding conditions were superior. Davis: French society offered a less congenial climate to innovation than did English” Crouzet agrees argues for a critical mass of factors in Britain and not France.

O’Brien and Keyder reject Habakkuk’s claim for faster growth of demand, Davis rejects Crouzet’s diagnosis of labour shortages and Kemp dismisses Landes’ claim of greater technical skill and ingenuity.

French slow to diffuse new technology? innovations in England consequence of decisive innovations, hard to blame France, - French development under cloud of war and British ead determinants of diffusion not necessarily those of initial development 0 particularly where intl. Diffusion is concerned.

Retreat from cataclysmic /exogenous view of the Industria Revolution economic historians correctly perceive the need to examine the long-run build up of economic conditions in the economy mistaken view that previous experience prior to IR must have been favourable also assumed course of development must have been different led to presumptions of English superiority and French inferiority - then attempt with examination of the economies to find favourable features of English economy Habakkuk inferiority of French economy established by virtue of England’s primacy and non-English features of the French economy asserted to be retardative - followed by Kemp

MUST REJECT THIS VIEW IF TAKE STOCHASTIC APPROACH TO TECHNOLOGICAL PROGRESS more appropriate question is Were there factors which made the probability of the onset of the Industrial revolution high in 18^th century England>”

NOT What made France inferior>” comparative economic historians translation of Why was England first?”

No longer seems obvious, esp. given achievements French economy 18^th century to seek reasons for French inferiority probably may have been higher in France

Stochastic view leads to a separation of the two questions:

• Why was the IR likely in the 18^th century?
• Why was it likely in England>” eradicate post hoc ergo propter hoc fallacies

Conclusions

Not argued Industrial Revolution in England was an entirely fortuitous event

Not that French economy was more likely than British economy to have an industrial revolution features of English economy HAVE NOT BEEN PROVEN TO BE SUPERIOR.

Warns against expecting too much for comparative economic history Lanes: if history is the lab. Of the social sciences, the economic evolution of Europe should provide the daa for some rewarding experiments” unfortunate that some of the uncontrolled experiments that history performed were unique, non-repeatable events”

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