Monday, August 31, 2009

Allen: The British Industrial Revolution in Global Perspective

Robert C. Allen tries to explain why the Industrial Revolution took place in Britain in his new book The British Industrial Revolution in Global Perspective.

Allen (2009) places energy innovation centre-stage in his theory. Like Tony Wrigley, he compares Britain to the Netherlands and Belgium. These were the most developed economies in the world in the early modern age with much higher wages than elsewhere due to their dominant position in world commerce. In both countries the price of fuelwood was rising in the early modern period relative to the price of coal. But the price ratio of traditional fuel to coal was higher in London than in the Low Countries and even higher in the coalfield areas of northeastern England and western Britain. Compared to France, India, or China, Britain had both cheap sources of fuel and high wages.

Coal was lower quality than wood as a heating and cooking fuel but became a “backstop technology” once the relative price of wood to coal rose sufficiently, while in the Netherlands peat replaced coal. But innovations were required in order to use coal effectively in new applications from home heating and cooking – new specially designed chimneys had to replace older chmneys and open hearths - to iron smelting and then steam engines. These induced innovations sparked the industrial revolution. Initially though the new innovations were only profitable in Britain where wages relative to energy prices were the highest in the world. Continued innovation eventually made coal using technologies profitable in other countries too.

He concludes: "The British were not more rational or prescient than the French in developing coal-based technologies. The British were simply luckier in their geology... In other words, there was only one route to the twentieth century - and it traversed northern Britain." (p275)

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