Output growth and the British industrial revolution: a restatement of the Crafts-Harley view

Abstract

n the early 1980s we published revised estimates of aggregate economic I performance during the British industrial revolution which have stimulated reappraisal of the beginnings of modern economic growth.2 These new estimates have led most scholars to abandon the previous orthodoxy which had been based on the pioneering work of Deane and Cole.3 We have subsequently explored further aspects of the industrial revolution using our 1982/3 estimates of the rate of growth as acceptable best g~e s s e s .~ Recently, however, several papers published in this journal have, with varying degrees of hostility, expressed doubts about our estimate^.^ We think it is now opportune to respond to these comments. Our critics have questioned the appropriateness of our estimation techniques and have suggested that our overall view of the industrial revolution is misconceived. While we do not wish to dismiss the points that have been made, we feel both that many of the specific criticisms of our estimating techniques have been erroneous and that our overall view of the late eighteenth and early nineteenth centuries has been misunderstood.Initially in section I we present a brief summary of a coherent new view of British growth that emerged from our aggregate estimates. The bulk of the paper then takes up the technical issues that have recently been raised. In particular, we argue the following main points. First, that there is inevitably a range of possible estimates for industrial output growth given the inherent index number and data problems. Both Crafts's and Harley's original estimates fall within this range, as do Jackson's new estimates, whereas Deane and Cole's do not. Second, that we do not accept Jackson's case for preferring what he calls a Crafts rather than a Harley view of industrial output growth nor do we accept his dismissal of the indices of industrial output presented by Crafts, Leybourne, and Mills (CLM) and by Harley. Third, that Hoppit and Berg and Hudson substantially overstateWe are grateful to Maxine Berg, Brian Mitchell, Joel Mokyr, Patrick O'Brien, and an anonymous referee for helpful comments on earlier drafts. Any errors are, of course, our responsibility.

When did Britain industrialise? The sectoral distribution of the labour force and labour productivity in Britain, 1381–1851

“…So much progress had been made by 1700 that the shift of labour from agriculture to industry during the eighteenth century was smaller than that proposed by Crafts and Harley, thereby reinstating industry as the sector with the fastest labour productivity growth during the classic Industrial Revolution period. Although there was also substantial agricultural labour productivity growth between 1700 and 1851, it was at a slower pace than in industry, thus reversing the most paradoxical finding of Crafts and Harley (1992). Yet while these findings reconcile the output estimates of Crafts and Harley with traditional views of an industrially dynamic Industrial Revolution they challenge those of Clark (2012), who argues for little or no trend growth in per capita incomes before 1800 and a relatively late final shift of labour out of agriculture.…”

“…This is in line with the recent findings of Shaw-Taylor (2009a). Since post-1700 growth rates of output by sector and in the aggregate economy remain broadly as suggested by Crafts and Harley (1992), this means that labour productivity growth was faster in industry and slower in agriculture.…”

“…Agricultural historians, however, in an important revision to this narrative, now see the agricultural revolution as having begun much sooner, in the early seventeenth century, so that agriculture's labour-force share was already much reduced before the industrial revolution got under way. The output estimates of Crafts (1985) and Crafts and Harley (1992) endorse this revision and, in turn, propose that industrial growth was slower during the eighteenth century than estimated by Deane and Cole, notwithstanding the continued transfer of labour out of agriculture and into industry. On this revised scenario eighteenth-century agriculture was more successful at shedding labour than industry was at expanding output.…”

From Stagnation to Growth: Unified Growth Theory

“…Galor and Moav (2002) propose that during the epoch of Malthusian stagnation that characterized most of human existence, individuals with a higher valuation for offspring quality gained an evolutionary advantage and their representation in the population gradually increased. The agricultural revolution facilitated the division of labor and fostered trade relationships across individuals and communities, 68 This mechanism was outlined by Galor and Weil (1999) and was examined in different settings by Erlich and Lui (1991), and Hazan and Zoabi (2004). It should be noted, however, that as argued by Moav (2005), the rise in the potential return to investment in child quality due to the prolongation of the productive life is not as straightforward as it may appear.…”

Property rights and the first great divergence: Europe 1500–1800

“…That this period should be subject to closer scrutiny follows from the revised assessments of historians of economic growth, who argue that the Industrial Revolution can no longer be regarded "as the beginnings of growth altogether but as the time at which technology assumed an everincreasing weight in the generation of growth" (Mokyr (2005)) and that the "accumulated evidence for an earlier increase in per capita income in northwestern Europe paired with a major refinement of material life casts serious doubt on the orthodoxy that the Industrial Revolution was the actual starting point for long-term economic growth" (de Vries, 2008, p.6). 9 Once the roots of long-term growth are seen to be planted in an era earlier than has traditionally been accepted, the question that immediately arises is the one concerning Crafts and Harley (1992), Crafts (1985), Feinstein (1998), Mokyr (2004), and Williamson (1984).…”