A series of new studies point to the causes of the Industrial Revolution

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This industrial revolution it was the biggest transformation in economic history. For centuries scholars have tried to understand why this process occurred in Britain around 1750. But without the ability to run tests against reality, it is difficult to confirm a single explanation.

Researchers are now testing the theories by investigating why similar parts of Britain industrialized at different rates. New papers have provided evidence for several key factors: the capital of slave owners, entrepreneurs who stood to benefit from investment, and the shortage of lower-skilled workers.

Business requires investment, which requires capital. To measure the effect of available wealth, Stephan Heblich, Stephen Redding and Hans-Joachim Voth analyzed geographic variation in plantation ownership. The wealth that the British brought from slaves in America flowed largely to several cities, such as Liverpool. In the 1830s there were large numbers of cotton mills and sections of workers working in manufacturing in these regions.

Other reasons could have led these areas to both accumulate wealth from slavery and to do business quickly. But the paper tries to isolate the impact of slavery using slave ship voyages. Long journeys, especially caused by bad weather, reduced the share of prisoners who survived and thus the profits of traders. And among similar areas, those where the slave trader visits of residents in the 1830s were unusually short industrialized faster than those where the visits of their resident ancestors were long unusually.

Investors still needed financial incentives to buy machinery. In early modern Britain, most tenant farmers paid fixed rents, preventing both displaced workers and landlords from benefiting from investment . An exception was the lands of monasteries, where such contracts were rarer. In 1536-40 Henry VIII dissolved these monasteries and sold the land. The buyers could farm or rent it on market terms.

A study by Leander Heldring, James Robinson and Sebastian Vollmer shows that areas with monasteries end up at the very beginning of industrialization. In the 1830s they had an unusually large number of workers in trades and crafts, agricultural implement patents, textile mills and grain separators. The authors say that market-based farms, common on former monastic lands, created an entrepreneurial class and incentives for technological advances.

Another factor that has been supported is labor shortages. Mr. Voth, Bruno Caprettini and Alex Trew studied Britain’s wars with France in 1793-1815, when the workers suddenly crushed the workers. They found that the adoption of machines instead of manual labor was greater in the areas that provided the largest number of attendants – as long as these departments also had mechanics. The effect was weaker without such skilled workers, and on machines that did not save labour.

The strength of the evidence for each of these variables means that business may have required a complex combination of conditions. Many significant ones are difficult to prove statistically. But measuring even a little is promising progress.

Chart sources: Maddison Project; “Agricultural Census in Europe, 1300-1800”, by RC Allen, 2000; “Slavery and the Industrial Revolution”, by S. Heblich, SJ Redding and H. Voth, 2022; “Fighting for growth, by H. Voth, B. Caprettini and A. Trew, 2022

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