Monday, April 18, 2011

If China Invents Better Solar Panels, We All Benefit

More evidence Angus has it right:

Why the Industrial Revolution Was British: Commerce, Induced Invention, and the Scientific Revolution

R.C. Allen
Economic History Review, May 2011, Pages 357–384

Abstract: Britain had a unique wage and price structure in the eighteenth century, and that structure is a key to explaining the inventions of the industrial revolution. British wages were very high by international standards, and energy was very cheap. This configuration led British firms to invent technologies that substituted capital and energy for labour. High wages also increased the supply of technology by enabling British people to acquire education and training. Britain's wage and price structure was the result of the country's success in international trade, and that owed much to mercantilism and imperialism. When technology was first invented, it was only profitable to use it in Britain, but eventually it was improved enough that it became cost-effective abroad. When the ‘tipping point’ occurred, foreign countries adopted the technology in its most advanced form.

1 comment:

Kindred Winecoff said...

Haven't read the paper, but merging the abstract with other recent discussion, does that mean that the Great Stagnation will only be overcome if the US transitions to full-on empire, with an imperial-preference trading system?

Or, paradoxically, that technological development that leads to growth is more likely when the world is less integrated?

I'm not sure that this -- "Britain's wage and price structure was the result of the country's success in international trade, and that owed much to mercantilism and imperialism" -- is evidence that Angus is right, unless by "right" you mean that China controls the global political economy for a few centuries until a series of global depressions and world wars leads to a shift in power.

Guess I need to read the paper now.