SAN JOSÉ STATE UNIVERSITY
ECONOMICS DEPARTMENT
Thayer Watkins

The United Kingdom

The Industrial Revolution

 England during the Medieval Period was the supplier of wool to the textile industry of the Low Countries. Later England began to process the wool into yarn and cloth before export. The processing of the wool was through the putting out system. Merchants brought the material for each stage to farm families for processing to the next stage. When the wool was spun into yarn by a farm family the merchant picked it up to take it to the next stage of processing, the weaving of the yarn into cloth. The farm family worked long hours, typically ten to twelve hours per day, six days per week.

In the eighteenth century machines were invented to reduce cost by speeding up production and saving labor, first James Hargreave's spinning jenny (1764) and later Richard Arkwright's water frame (1769) and finally Samuel Compton's mule (1774-1779) for spinning yarn and John Kay's flying shuttle (1733) and later Edmund Cartwright's power loom (1785) for weaving. At first these machines were powered by water wheels but once the Watt steam engine was available much larger versions could be operated. These large scale machines required a factory building and workers who would come to the factory rather than working at home. With the steam engine there was little restriction on the location of the factories.

During this period of mechanical innovation there was a shift in the fiber used for textiles from wool to cotton. Eli Whitney's cotton gin made feasible the use of cotton as a raw materital for textiles by drastically reducing the cost of preparing cotton for spinning.

(To be continued)

The Impact of the Industrial Revolution on Living Standards

Much of the literature on the industrial revolution in Britain is concerned with what happened to living standards as a consequence of the industrial revolution. Upper class writers in the early 19th century, becoming aware of the working class perhaps for the first time because of the vast influx to the cities, were appalled at the low living standards compared to their own. There could have been an improvement in living standards for the working class but the upper class writers would still have focused upon their relatively low living standards. It is also possible that people migrating from the country side experienced an improvement in their living standards but those who were already in the cities experienced, as a result of the influx, a decline in their living standards. The issue is related to what in regional economics it is called the problem of People Prosperity versus Place Prosperity.

But even if there had been a decline in living standards it should be interpreted in terms of the functioning of a decentralized price system as a guide for economic adjustment. For example, to take a more recent case, consider the situation of the Oklahoma farm families of the Dust Bowl days of the 1930's. When the Depression and the Dust Bowl made life intolerable in Oklahoma many chose to migrate to California. The general perception is that the Okies were exploited by growers paying miserably low wages. But what should have happened in more migrants wanted to come to California than the economy could absorb? There should haave been a signal to the ones in California and back in Oklahoma that some should look for alternatives. The non-market approach to such a problem is to have some administrator in California say which people can come to California and which cannot. The market approach to the problem is for the real wage rate in California to drop creating pain and encouraging those who have alternatives to give up the idea of settling in California. The market system or any other system cannot guarantee that people can live wherever they want to live. So if hardship exists in a market economy it is not evidence of the failure of the market but instead it is a message that some must change their choices.

The evidence for what happened to the living standards in the Industrial Revolution in Britain is not clear. Before the Industrial Revolution and before the Enclosurement Movement the vast majority of the population lived in manors in the countryside subsisting by farming. It was largely subsistence farming. The development of the wool textile industry in the Low Countries provided a better market for wool. There was a shift from row crops to sheep raising. This meant generally that the marginal value of labor in agriculture was declining. But the wool textile industry provided an alternate occupation. Even for families fully engaged in farming there is a problem of idle time in the winter. This time could be used to process wool for the creation of cloth. A family might specialize in one particular process such as carding the wool to prepare it for spinning or taking carded wool and spinning it into yarn.

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