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Industrial Revolution, cotton and iron revolution, causes of ind rev, sources of growth, Livings standards, Labour force compsition

Industrial revolution was actually a gradual change. We can't ignore the human side of the revolution (child labour, urbanisation)

New Industries


changed to factory production. They have also effects on the rest of the economy. 1841 we have some good data. Contribution to GDP, employment and leading sector information on both cotton and iron.


1760 cotton is a tiny industry compared to woollen - 600 000 and 200 000 exported, woollen 5.5m exported.

Woollen is highly regulated (because a major industry). Cotton was there before the inventions. There are also vested interests (people had to wear wool etc.). There are loops in the regulation.

USA growing export lead to an increased import in Britain.

Imports of raw cotton increased 8 times, 1830 1/2 of export was cotton

1802 5%, 1812 8% of GDP and exceeding wool.

Grew because

1.      existing expertise

Cotton industry was woollen industry before IndRev.

2.      changing fashions

Second half of 1750 has a change in fashion. More standard type of dress was emerging. Mass market (not differentiated).


Quality of cotton output goes down as export markets are poor.

Exports were really important in production.

Why was it cotton that grew:

 1.     Few industrial restrictions

 2.     New mass-markets  geographically

 3.     Skill already existed in wool

 4.     Fashion changed

 5.     Initial output done in homes, you can expand output easily with no extra capital requirements.

 6.     Concentrating was possible (Lancashire) because steam (no streams needed). Coal near and streams exists, close to the Liverpool port. Economies of scale and spread of ideas.


Was not a new industry. In 1720 only 20 000t per annum. Amount is less than 1625. Industry is facing severe constraints. Between 1780 and 1805 output doubles. 1812 UK starts to export iron. 1810 6% of GDP output.


1.      Technology was revolutionised. It required a lot of investment, before poor quality iron and steel was imported. Now home material could be used. Iron expands from the basis of domestic raw material. In pre-ind. time iron was using pig-iron.

2.      After 1720 a lot of effort is put into iron. Production moved to coal.

3.      Economising on raw material occurred.

4.      It became local.

5.      The industries that are using iron (railways) were growing very fast.

How important were they

1.      Contribution to national income and representativeness

Value added  reveals that agriculture is most important. Textile is second largest. Cotton is a third of total textiles, so 5% of GDP also. Great in manufacturing output 17%.

Iron is a lot smaller. Financial services start to develop, distributive too because of cotton.

Textile is largest employer. Cotton and iron was thus different from rest. Most income is still created from classical sources.

2.      Were cotton and iron leading sectors?

Each sector was quite independent. We are interested in linkages. Backward industries are things having loads of inputs (vertical), forward linkages are the production of intermediate goods (horizontal). Metal has both front - back.

Textiles are not linked, so cotton is not a leading sector. 

Dean: if you can supply most of your raw material relatively cheaply, then it is very important (esp. iron).

Neither iron or cotton were not that important nor representative. They were supplying home demand not export

Causes of IndRev

1.      Demand Exports Led

Home demand (McKendrik - increased earning opportunities and family incomes mean that they can buy more industrial goods, cause and consequence is IndRev. Arises from increased income and trickle down effect (desire to consume more)).

Stimulus to industrial demand rose from

1.      Population growth - but increase in fertility was a response to economic conditions. This increased the demand for food, decreased living standards and might mean there is less money for industrial goods.

Effects on agriculture - to feed pop. need more productivity

a.      increase in farmers incomes (demand more manufacture). Evidence shows real incomes did not go up.

b.      higher productivity reduces the price of food (real wages of people in towns go up and can buy more industry). Grasp says that the productivity growth is lower during ind rev than before. Food prices actually go up.

c.      declining self subsistence (provisioning), because land closure. So they have to buy goods, become more market orientated and wage earning and get used to buying ind. There was large pool of unemployed people, so real wages were not going up.

Max 20% gains to manufacture from agriculture. So the whole thing about agriculture is suspicious.


1.      Must be exogenous

2.      Most of these demand stimulus's can be supply side initiated.

2.      Production led

1.      Stimulates technical innovations - meant to expand job opportunities.

2.      Enhancing women and children employment especially.

3.      Higher pay, because productivity of labour increases (de Vries "The industrious revolution").

4.      You get a more market orientated view - wants increase and people start working harder and longer - sacrificing leisure.

5.      Occurring cross Europe - maybe because of the move to Protestantism.

6.      Proto industry developing. Very hard to quantify. St. Monday happened in some areas. Protoindustry developed because of that.

3.      Income inequality

towards property owners. Increasing middle and top class incomes. They demand more industrial goods. J.Williams says that 1800-50 income inequality is increasing. Feinstein says that Williams has wrong data. Wider income inequality it is not clear that they spend it on domestic manufacture. They might imports or buy expensive handicraft.

4.      Consumer revolution

1.      McKendrik argues that consumer revolution preceded IndRev. Combination of rising incomes and desires.

2.      People wanted to emulate the classes above them.

3.      New marketing skills and advertising too.

4.      Women wages rise and thus family consumption pattern sways towards women.


1.      Family incomes are not rising

2.      women work to make up falling men wages.

3.      Goods dead people leave behind are not industrial below a certain income level.

4.      Brewing and baking demand did increased, but coal went more expensive and expensive to bake their own bread.

5.      Servants did not have much money to spend and the clothes were bought for them.

6.      Small goodies were bought. Clothing was a consumer durable. Remake of clothes occurred.

Working classes have a distinct fashion and upper classes were influenced by that.

4.      exogenous mortality decline.

Lindet says that Wrigley is wrong in suggesting that the mortality did not matter. Now Wrigley admits it too. There is a decline in infant mortality rate. Why IMR could be coz increased nutrition or medical reasons.


75% on food, clothing and services increased. 4-7% spend on manufacture, so this only amounts to 6% of GNP. Unlikely that demand caused industrialisation

Read: Mokyr 1806 - there was not underemployment and demand could not help.

Sources Of Growth

Whether because of invention or the increase inputs.

Growth accounting is the term we use for all this rubbish. It ca be due to efficiency (total factor productivity) that the inputs are combined or the amount of these factors itself. Outputs - weighted inputs = growth of efficiency. Efficiency. can't be directly calculated.

1.      Total factor productivity

1.      New technology (steam, machines)

2.      People work more

3.      Better management practices

2.      Growth of investment.

Some writers found and others did not find investment growing.

Fastest growing investment to machinery. It starts with very low level and although grow rapidly still a small level.

Investment rises 8-14% rise from GDP, Crafts revises it to 7-10%.


1.      capital-labour ratio is not altering until 1830.

2.      Some argue that investment is caused by better banking system (savings more attractive), but banks did not invest long term.

3.      Also there could have been just more investment opportunities.

4.      Labour rose, but does not take account the skills. Partly because skills increases, the wages rose. Increase in skill might appear in efficiency rather than skills.

5.      Hours worked matters too.

1.      Changes in agriculture cause decline in seasonality.

2.      Factory production is much more intensive.

3.      Unofficial holidays (St. Mondays) were not allowed in factories. 0.2%rise per annum for labour increased participation of GDP

4.      females and children

3.      Growth in inventiveness

inventions happened in all industries. not scientific inventions, but minor ones among people working with capital.

move to the watt engine increased GDP is only 1/1000. Better equipment rather than more equipment matters. McCloskey agrees than invention matters. Cotton only grew 2% an anum. Railways and shipping matter. Virtually all growth


1.      1700-60 labour inputs grow 0.3% per annum and increases to 1.5% after.

2.      Productivity is growing faster in agriculture.

3.      For most industries no growth in productivity.

4.      Tertiary sector more capital intensive. So its the labour intensive firms are in the growth forefront.

5.      Increased amount of land.(enclosure).


Livings standards in the IndRev - trial capitalism.

Optimists(Most ideologists):

1.      Falling Prices

2.      Rising wagees

3.      some were worse off, but overall improved.


1.      Few got benefits, overall deteriorating

2.      Looked at individual, not macro evidence

3.      qualitative descriptions.

4.      Their previous ideology affected their position.



These been debated as affecting conditions

1.      Industrialisation

2.      Urbanisation

3.      The development of indstrial capitalism - most important nowadays.


Standard living = welfare and wuality of life.


We can't measure things directly - so we proxy them.

1.      Tangible aspects like consumption, material benefits(proxy incomes, changes in poor relief and self provisioning). Mortality, health and nutrition

2.      Intangible (more dificult to proxy, infant mortality, heights, qualitative commentary)- consequences of living in towns. Work organisation and dicipline (factories). Loosing independence (not selfemployment). Households composition (childs leaving). Oportunities (availability of studing, moving up socially).

Growth in the economy.

GNP per capita is increasing. We have to take out consumption. 0.8% per annum (Craft).

Income distribution. Williamson suggests that there is widening inequality. Feinstein has critisised (data is biased).

There should be rising inequality inside classes ie workers.

1.      Occupational method(10% miners)

2.      Real wage - deflate by cost of living.


1.      Only male wages (livingstandard tended to be determined by household, including contributions of women and children). Increasing dependence on the male breadwinner, so overstates.

2.      No account of Unemployment. There could be increased unemployment.

3.      Self employed was also excluded. Their proportion differed. IndRev declined selfemployed. They are paid by their output, so very hard to calculate wages.

4.      Selfprovisioning aspects. Some wage increase accounts for the selfprovisioning.

Cost of living index

1.      What goods should be counted, Expenditure paterns

2.      What index should be given.Basket of goods

3.      What prices(regional variations). We want retail price. We have instead prices paid by institution (colleges, poor houses). These are contracted and vary much less than retail prices. Import-Export prices (does not reflect markup changes). Potato prices - no info. Urban rents were 3x the rural ones. Flour is consumed a lot in the south. No milk in north.

4.      What year of weighting should be given. Weights change over time. One has to change weight as you go along.

Consumption data.

Limited amount only on aggregate level. Only ones that charge duty. M/X data(tee). Nothing on aggricultural product.


Engels said that many people had huge changes. Most of these things were noted and deteriorated living standards. Consumption also deteriorated. Looks at Manchester

1.      Streets were bad

2.      Overcrowding

3.      Mortality higher in towns, 35 ave, 15 factory

4.      Evils of womn working

5.      Mosst machines for women and childred, families separated

6.      Work conditions bad (cold, damp)

Heights -show net nutritionaal standards

1.      diseases

2.      Food

3.      Poisoning(keep children quiet)

4.      Environment (Damp)


Actual data shows that white-colar workers have larger wage increases are more than blue colar ones, but blue colar are better as weell.

They assume 15% unemployment, women are actually same as man. Also moving was not very significan. So there should be a substancial net gain on blue colar 87%.

Labour force composition

1851 first stats.  1/3 is women and only 1% is under 15.

Reasons for wanting to know more about labour composition:

1.         consumer revolution

2.         measurement of growth and TFP

3.         one of the defining characteristics of indrev

Population grows because

1.         Increase in participation

Dean and Cole 1718-1850 the participation goes up by 180% from 4million. 2500 hours to 3000 hours per annum does the work done increase.

1.      transport improves

2.      hours of work become more regular.

3.      1700 nutrition is low, so people can't work. no evidence.

There is not much evidence.

1.      Heights don't support.

2.      One bloke looks at witnesses in the court room to say what they were doing. Random sample of what people are doing. 6.50am and finish about 7pm 1850-1800. He finds no increase (London only). But days worked 1750 were 5 and 1800 a 6 day work.

3.      Also loads of holy days in 1750, but 1800 few people take the holy days off. 208-306days is the increase.

2.         Immigration

From Ireland, 4000 during Napoleonic wars and 40 000 for 1840. So level of immigration is quite low.

3.         Population increase


we only have literacy only from signing their marriage records. However 1750-1850 rates go up, for males 60-70%, for females 40-55%. Most occurs at the end. Britain has a high level before indrev. But in Lancashire (most industrial) it goes down (children going to work)

Participation in women and children

increased participation for married women. Some say women have always worked. Only work becomes more visible, people become an independent wage earners can support themselves. Some say women loose jobs in agriculture and proto-industry. By 19century female work is going down.

Children working contributes much more than women to family income. Child labour was cruel. Children work was essential to indrev. Factory Act caused declining. We only know about factories, but not overall picture. The proportion of children working in households did not increase, but the factory work increased 6x. But age declined from 11.5 to 10.5. Because older children left home. As machines improve less work for children. Higher paid fathers had more children working. Hammonds.

Overall change in labour over ind. rev

1.      Only hours increased

2.      no increase in productivity

3.      no consumer revolution.

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