Knowledge elites, enlightenment, and industrialisation
Nico Voigtländer, Mara Squicciarini 13 July 2014
Although studies of contemporary economies find robust associations between human capital and growth, past research has found no link between worker skills and the onset of industrialisation. This column resolves the puzzle by focusing on the upper tail of the skill distribution, which is strongly associated with industrial development in 18th-century France.
Much has been written about the ‘knowledge economy’, and a large literature in economics has highlighted the importance of human capital for economic development in the modern world. Schooling is a strong predictor of per capita income and growth across countries – a pattern that emerges because skills facilitate technology adoption and innovation (Nelson and Phelps 1966, Benhabib and Spiegel 1994, Caselli and Coleman 2006). In contrast, the importance of human capital during the Industrial Revolution has typically been described as minor.
Development Economic history Education
human capital, Industrial Revolution, industrialisation
How history can contribute to better economic education
Coen Teulings 11 July 2014
The financial crisis and the Great Recession have led to calls for more economic history in economic education. This column argues for a much broader use of history in economics courses, as a device for teaching both the logic and the empirical relevance of economics. A proposed curriculum would include the rise of agriculture, urbanisation, war, the rule of law, and demography.
Historians tend to stress the particularities in history. Each event is unique, caused by a set of conditions that will never reproduce themselves again. In turn, each event causes new events, which therefore are equally unique and equally irreproducible. Hence, historians conduct painstaking research into the details of these conditions to understand the course of history.
Economic history Education
geography, institutions, Agriculture, economic history, Industrial Revolution, urbanisation, agglomeration, history, new economic geography
Accounting for the great divergence
Stephen Broadberry 16 November 2013
The economic divergence we observe today was existent even a thousand years ago. Thanks to recent work on historical data, we can now trace the economic development of different countries centuries back in the past. This column discusses the roots of the Great Divergence between European and Asian economies. The column argues that divergence is due to the differential impact of shocks that hit economies with different structural features.
As a result of recent work, economic historians have produced historical national accounts reaching back to the early years of the second millennium (derived from data collected at the time). For the major European economies, at least, data are now available on an annual basis back to 1300.
Great Divergence, Industrial Revolution, trade routes, asymmetric shocks, Black Death
Competing successfully in a globalising world: Lessons from Lancashire
Nicholas Crafts, Nikolaus Wolf 22 October 2013
Europeans worry about competition from low-wage economies. This column looks at the basis of the success of the 19th-century Lancashire cotton industry faced with a similar situation. The message is that the productivity benefits of a successful agglomeration can underpin both high wages and competitive advantage in world trade. Policymakers can support such agglomerations by easing land-use restrictions, promoting investments in transport, and providing local public goods.
The ‘first globalisation’ of the 19th century – driven by the substantial falls in trade costs associated with the age of steam – saw the ‘First Unbundling’ (Baldwin 2006), in which industrial production and consumption became spatially separated, often by large distances. The period was characterised by the simultaneous processes of industrialisation in Europe and de-industrialisation in Asia (Table 1).
Table 1. Shares of world manufacturing output (%)
Economic history International trade
globalisation, wages, trade, Industrial Revolution, cities, agglomeration, industrialisation, Lancashire, cotton
The age of equality
Richard Pomfret 22 May 2012
Politicians who rail against socialism or capitalism always adopt a more moderate stance after they come into office. This column argues this is because we are still experiencing the consequences of the industrial revolution. The current state of that process involves a widely accepted compromise between aggregate prosperity and distributional equality.
Economic reporting in the media frequently appears superficial since important economic processes may take decades for their consequences to work through, whereas media typically need fresh daily or weekly news. Economic history provides an antidote to this rush-to-judgement (e.g. Findlay and O’Rourke 2008, Eichengreen and Irwin 2009).
Politics and economics
Industrial Revolution, capitalism, socialism
Opening Pandora’s box: A new look at the industrial revolution
Tony Wrigley 22 July 2011
Before the industrial revolution, economists considered output to be fundamentally constrained by the limited supply of land. This column explores how the industrial revolution managed to break free from these shackles. It describes the important innovations that made the industrial revolution an energy revolution.
The most fundamental defining feature of the industrial revolution was that it made possible exponential economic growth – growth at a speed that implied the doubling of output every half-century or less. This in turn radically transformed living standards. Each generation came to have a confident expectation that they would be substantially better off than their parents or grandparents.
Development Energy Environment Frontiers of economic research
economic history, Industrial Revolution, fossil fuels, England, Ricardo, Smith
Is education policy innovation policy?
Ralf R Meisenzahl, Joel Mokyr 13 June 2011
The industrial revolution is, for many, the start of modern economic growth. But what started the industrial revolution? The consensus view is that scarce labour stimulated labour-saving inventions and induced innovation. This column begs to differ. It argues that it was the technical competence of the British mechanical elite that allowed great ideas to turn into economic realities.
The Industrial Revolution is widely regarded as the start of modern economic growth. In his recent influential work, Allen (2009a, 2009b) has resurrected induced innovation theory and re-emphasised the role of factor prices. As the theory goes, scarce labour (measured by high wages) stimulated labour-saving inventions in Britain – basically induced innovation is a corollary of the old saying, “necessity is the mother of invention”. We beg to differ.
Development Economic history Poverty and income inequality
education, growth, Industrial Revolution
Before the Great Divergence: The modernity of China at the onset of the industrial revolution
Jan Luiten van Zanden 26 January 2011
China has been one of the world’s most dynamic economies in recent decades, but how did it fall so far behind? This column argues that the industrial revolution occurred in Europe rather than China because European entrepreneurs were eager to adopt machines to cut down on high labour costs. China didn’t “miss” the industrial revolution – it didn’t need it.
One of the big debates in economics is about the causes of the arguably most dramatic change in development trajectory in (recent) world history, the industrial revolution.
Productivity and Innovation
productivity, China, economic history, Industrial Revolution, UK
Being the educational world leader helped Prussia catch up in the Industrial Revolution
Ludger Woessmann, Sascha O Becker, Erik Hornung 09 May 2010
Did education play a role in economic development during the Industrial Revolution? This column discusses new evidence from Prussia showing that formal education was critical to technology adoption in the first and second phase of the Industrial Revolution during the 19th century.
The Industrial Revolution was British, which is why British evidence sets the received wisdom on the Industrial Revolution. Consequently, the received wisdom in the literature is that – contrary to economic growth in the 20th century – formal education had no role in economic development during the Industrial Revolution (Mitch 1993 and Mokyr 1990).
Development Economic history Education
education, Industrial Revolution, Prussia