COMMENTS ON FACTOR PRICES AND INCOME DISTRIBUTION IN LESS INDUSTRIALISED ECONOMIES, 1870–1939: REFOCUSING ON THE FRONTIER

A great deal of the current research into nineteenth- and twentieth-century globalisation has been focused through a neoclassical trade theory lens. Applying the Stopler-Samuelson paradigm from Heckscher-Ohlin trade theory, the result is an approach that sees price convergence as pivotal in defining, identifying, and measuring globalisation. This focus, however, obscures the implications of frontier incorporation and other insights achieved by viewing nineteenth-century globalisation as a mechanism whereby peripheral economies were incorporated into the core of organised economic activity. A frontier-centred perspective also reintroduces the role of economic institutions as a crucial element of economic growth and development.     

Growth theory and industrial revolutions in Britain and America

Abstract. Long‐run economic growth has again become a major focus of economic theory. A perception of technological change as an economic process with externalities has motivated the development of aggregate models that generate different steady‐state growth paths. Economic history has also long been interested in long‐run economic growth. Here, a dialogue is presented between growth theory and the historical literature on the industrial revolution in Britain and America's surge to international economic leadership in the late nineteenth century. In conclusion, economists’ recent thinking about the microeconomics of technological change has provided fruitful material for the economic historian of growth. Unfortunately, the models of endogenous growth, on the other hand, present too aggregated a view of the economy to prove helpful when confronted with the details of economic history. JEL Classification: N0, N1.1 Théorie de la croissance et révolutions industrielles en Grande Bretagne et en Amérique. La croissance économique à long terme est redevenue un point d’intérêt majeur pour la théorie économique. Une perception du changement technologique comme processus économique porteur d’externalités a engendré le développement de modèles agrégés qui génèrent différents sentiers de croissance en régime permanent. L’histoire économique s’intéresse depuis longtemps à la croissance économique à long terme. Ce texte engage le dialogue entre la théorie de la croissance et la littérature historique à propos de la révolution industrielle en Grande Bretagne et de l’émergence de l’Amérique au statut de leader international à la fin du dix‐neuvième siècle. On en arrive à la conclusion que les récents développements dans la pensée économique à propos de la micro‐économie du changement technologique ont produit des résultats utiles pour l’histoire économique de la croissance. Malheureusement, d’autre part, les modèles de croissance endogène présente une vue trop agrégée de l’économie pour s’avérer utile dans l’examen des détails de l’histoire économique.     

Was technological change in the early Industrial Revolution Schumpeterian? Evidence of cotton textile profitability

Price and profit data between the 1770s and the 1820s from accounting records of three Lancashire cotton firms help to illumine the nature of the economic processes at work in early industrialization. Many historians have seen the Industrial Revolution as a Schumpeterian process in which discontinuous technological change led by the mechanized factories of the cotton industry created large profits for innovators that persisted in succeeding decades while technology slowly diffused. In this view imperfect capital markets limited the use of the new technology, keeping profits high. Reinvestment of these profits gradually financed expansion of innovating firms. The new technology dominated only after a long diffusion process. The evidence here, however, supports a more equilibrium view in which the industry expanded rapidly and prices fell in response to technological change. Expansion of the industry led to dramatic declines in the prices of cotton goods as early as the 1780s. There is no evidence of super-normal profits thereafter. Prices continued to fall and output expand thereafter as cost-reducing technological change continued.