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The ninth laird of Auchinleck, James Boswell achieved immortal fame for following around Dr Samuel Johnson, compiler of a famous dictionary of the English language. Boswell recorded Johnson’s every drop of wit, later publishing it in an unprecedentedly personal biography. But it was in Birmingham in 1776, while on an excursion away from his muse, that Boswell recorded one of the best lines in the history of technology. Upon being shown around Boulton and Watt’s steam engine factory at Soho, Matthew Boulton told him that “I sell here, sir, what all the world desires to have — Power.”
The line appears just about everywhere, and with good reason. It sums up the magnitude of the change wrought by the rotary steam engine, and more broadly by the burning of fossilised remains of Paleozic swamp jungles, from when amphibians once ruled the Earth. Coal. As a reader — let’s call them “Nicolas Carnot” — asked me recently:
Although invention was accelerating before the usual designation of the Industrial Revolution, didn’t the real jump shift to economic growth still come from the introduction of machines that used concentrated and controllable external power? It strikes me that it was by finding ways to concentrate energy, first perhaps with mill ponds, then by unlocking the potential of coal and other fossil fuels, and later through electrification, that we really got the unprecedented boosts to productivity, with external energy being more reliably applied, anywhere, to the human elbow so that one person could do the work of ten, a hundred, a thousand, or more.
It’s an especially thought-provoking question for me, as it happened to coincide with an optimistic post by Noah Smith, heralding the end of any Great Stagnation in recent productivity growth. Noah, like our Monsieur “Carnot”, points out that the past few centuries before the 1980s saw rapid improvements in energy technology, especially with the growing exploitation of coal and then oil. But that from the 1980s there was very little further progress, with nuclear fission never quite realising its potential, and with energy consumption per head in rich countries like the United States suddenly flatlining. That era is now over, Noah thinks, because solar and battery technologies have improved immensely in the past decade, and are now beginning to be more broadly applied. With newly cheap and abundant energy, everything else will become cheaper and more abundant too.
I’m biased to the view, because I’ve long been panglossian about our future growth. (Looking back at my defunct old blog from my PhD days, I’ve apparently been sceptical of any Great Stagnation for at least four or five years, though I’d call it more a hunch than a carefully evidenced prediction.) But I think there’s an important caveat to be made here. Yes, the awesome power of coal was vital to the economic growth that Britain experienced in the eighteenth and nineteenth centuries. As I’ve mentioned before, coal allowed us to escape an age-old constraint on our land, of whether it should be devoted to forest for firewood, fields for grain, or pastures for wool-bearing sheep. By 1800, English coal provided fuel each year equivalent to millions of acres of forest — a third of the country’s entire surface area, and many times larger than its actual forest. By 1850, the notional forest acreage of England’s coal output would have far exceeded the entire country.
And yes, coal may even have been responsible for some earlier growth too. By 1700, half of England’s energy consumption was already being provided by coal. Chiefly for heating London homes, but also because industries like brewing, salt-boiling, dyeing, glassmaking, brickmaking, soapmaking, and smithing had been making the switch away from firewood. Without coal, England would almost certainly have had fewer people, smaller cities, and very different industries. Its growth would have been slower, especially in the nineteenth century.
But slower growth is not the same as no growth at all, and is not necessarily a reflection of the underlying innovation that contributes to it. In fact, I suspect that although innovation has likely been accelerating continuously for the past few hundred years, every new invention has been having less and less of an impact on the economy as a whole — with the one, curious exception of energy technology, which by contrast have been becoming relatively even more important.
There’s a fantastic illustration of why this might be the case in the book A Farewell to Alms, by the economic historian Gregory Clark. In it, Clark shows how different the changes in living standards 1270-1870 would have looked if the people of the past had hypothetically been able to split their income in the same way that we do today — specifically, if they accorded the same shares of their income to things like books, clothing, glass, furnishings, travel, spices, sugar, and wine in the proportions favoured by Gregory Clark himself. With such a modern consumption basket, the real purchasing power to buy those goods suddenly begins to accelerate in the sixteenth century, after a period of prolonged stagnation. Overall, it increases fivefold.
Meanwhile, however, the actual, historical real purchasing power went up a bit following the Black Death, declined again until the seventeenth century, and then only really began to rise again in the late eighteenth and early nineteenth century. Overall, it only more less doubled. Why the difference? Because the things we now take for granted and spend quite a bit of our income on, like books, sugar, wine, travel, and glass, all steadily got cheaper, while the actual average person’s basket of goods was dominated overwhelmingly by a basic necessity: food. An average, “respectable” eighteenth-century English labourer household would spend about 75-85% of their income on food and drink alone, with much of it going just to bread. Today, we only spend about 10% on food, even though our overall expenditure on food has increased dramatically, while we also spend on a mind-boggling variety of things like flat whites, pumpkin spice, matcha tea, and avocado toast.
What this means is that when there were even some slight improvements in agriculture alone, the effects on living standards could be dramatic. But absent such improvements, a rich culture of innovation affecting everything from clothes to watches to books, wine, glassware, metals, and pottery would have been almost entirely masked from the figures. Importantly, the same applies not only to the composition of average notional consumption baskets, but to the contributions of different sectors to the economy as a whole. While the total amount of food has increased dramatically for the past few hundred years, for example, agriculture’s share of the economy steadily fell (from over 40% of the English economy in 1600, and an even greater share of total employment, to less than 1% today, with a similar trend repeated worldwide). So the relative importance of your typical agricultural innovation for overall growth rates has fallen dramatically. Perhaps it’s no wonder that twentieth-century agricultural pioneers like Norman Borlaug still don’t really get their due.
The same goes, more recently, for manufacturing. The reason the textbooks always name Kay, Hargreaves, Crompton, Cartwright and Arkwright, is because they made improvements to what was already one of the most important sectors of the economy: textiles. In the eighteenth century, textiles as a whole accounted for a whopping 16-17% of the British economy. So any growth in the value of wool, linen, and increasingly cotton goods, had an appreciable impact on overall economic growth. Today, by contrast, you’d be hard pressed to find many sectors that account for even 5% of the country’s economy (except construction, and possibly financial services, depending on how broadly you define them). And while Britain may have long lost its role as the workshop of the world, textile production in China today still only accounts for about 7% of the country’s economy. To put it another way, the modern Arkwrights and Cartwrights and Cromptons of China, to have any comparable effect on national statistics, would have to make productivity improvements to their industry that are at least three times as impressive.
And impressive they are, though you won’t have heard of them. Arkwright and Crompton multiplied the number of threads that a single machine could spin, from one to dozens. Today, thread is spun by the thousands, at speeds they could have scarcely comprehended, and with entire factories hardly needing a single pair of human hands. Automatic sensors monitor the yarn’s tension and detect any defects while it is being spun, with robots even whizzing along to repair any snaps, able to find a loose end and piece the yarn together again — a task that once required the nimble fingers of small children. From an eighteenth-century perspective, our textile machines routinely now do magic, and are getting ever more fantastical every day. Imagine showing Arkwright the use of lasers in fading and cutting jeans.
But by replacing human labour, innovation has become ever more hidden. Many people don’t realise that British manufacturing is actually larger and more valuable than ever. It’s just that it employs fewer people than ever, so hardly anybody gets to witness its great strides forwards (to witness a flavour of manufacturing’s modern marvels, I recommend checking out MachinePix).
And more importantly, the overall effect of each innovation has also been steadily diluted — itself the result of growth. Innovation has, in a sense, been the victim of its own success. By creating ever more products, sprouting new industries, and diversifying them into myriad specialisms, we have shrunk the impact that any single improvement can have. When cotton was king, a handful of inventors might hope to affect the entire national textile industry in some way. Nowadays, there’s not a chance. Doubling the productivity of cotton spinning is all well and good, but what about nylon, polyester, rayon, and the host of other fibres we have since invented? And which kind of spinning machine would you improve? An old-fashioned ring-spinner, a newer rotor spinner, or perhaps even one of the brand new air-jet types?
If you make an improvement, it’s not going to be to the industry as a whole — it’ll be specific. And actually improvements have always been specific; it’s just that the industries have since multiplied and narrowed. Inventors once made drops into a puddle, but the puddle then expanded into an ocean. It doesn’t make the drops any less innovative. This paradox of progress affects all innovation, such that it is no wonder that the number of researchers has been increasing while national-level productivity growth has appeared fairly stagnant. Even general-purpose technologies, like the recent dramatic improvements to telecommunications, computing, and software, have had a muted effect, being applied more slowly than we’d have liked. I expect that all future general-purpose technologies will fare even worse, for it takes still further effort and innovation to apply a technology to a given industry, and those industries will continue to multiply. All future general-purpose technologies, that is, except improvements to energy.
For energy is required to make or do everything. And thanks to electrification, we need only improve the input and storage of energy rather than how we apply it to a given industry. We shall see its effects immediately and across the entire economy. It is immune to the paradox of progress. So as all other kinds of invention have become relatively less important at the macro level, energy technologies have automatically become relatively more important. Matthew Boulton’s quip has never been more right.
Yet we should not forget that when we peer into the undergrowth of each industry, we shall often still find it teeming with improvement — more than ever before, though we rarely appreciate or know it.
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Hello Anthony. Thank you for this informative blog post. I was wondering if you are planning on discussing the role of British colonies is both acting as markets and sources of raw materials for the textile industry in Britain. It would be interesting if you could discuss the impact of the flooding of colonial markets with British textiles on British industrialization.
Hi Anton, new reader. Interesting premise (forgive the pithy summary) - because energy underlies all goods, innovation improvements in energy have larger positive impacts, relatively, because it lowers the price of all goods, etc. enabling people to modify consumption baskets.
Haven't we already had dramatic innovation in energy w/ rise of fracking + directional drilling (ignoring environmental effects)? Do you think that anything has changed as a result that supports your point that innovation in energy is more impactful than innovation elsewhere?