Why The Industrial Revolution?

The National Bureau of Economic Research is a jewel-like minaret thrust above the ivory tower of academic economics. Where else would someone get paid to write a paper showing that famous painters produce their most noteworthy work either when they are quite young or toward the ends of their careers, but not so much in between? I like to peruse the abstracts of recent NBER publications just to get an idea of the sort of weird ideas economists are thinking about these days.

One not-so-new paper caught my eye recently, entitled "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run". I loved the typo at the NBER site that turned the last line of the abstract into a punchline:

the simulated economy indicates that the single most important factor in the transition to modern growth has been the increase in the fraction of output pain to compensate inventors for the fruits of their labor.

Yes, the output pain. I know it well. There should be a t-shirt that says, "I Subverted the Dominant Paradigm in Silicon Valley, but all I got was this lousy case of tendinitis." OK, I got pain, but I also got paid.

The paper itself is quite chockablock with mathematical modeling, quantifications of the seemingly unquantifiable. After satisfying himself that an Industrial Revolution was inevitable, the author Charls Jones asks, was The Industrial Revolution inevitable? His model gets it a little wrong in timing, and there seems to be an inevitable non sequitur in his attribution of root causes -- how could advances in property rights in the twentieth century explain the Industrial Revolution arising a century earlier? Well, he's looking at the 25,000 year perspective, maybe his model is a little cross-eyed when it gets down to the fine details of timing.

Maybe he basically has it right, but in my own theory of the genesis of the Industrial Revolution, at least one shock to the system didn't retard it but rather advanced it. Once conditions were right -- demographic, technological, economic, legal, and institutional -- there was still one more thing required: the idea that inventors were really worth something. And since those conditions had been achieved before (in China, for example) without industrial revolution take-off, it's clear that something else has to work on people's minds to get them to accept the idea that invention, for all its disruptive effects, is still a net public good. Charles Jones says that, aside from the network effects of a high enough (and I suppose, dense enough) population were established, the other major change required is to start investing a lot in invention. So we agree there. But I don't think his model explains why people started feeling that way about invention. People who didn't give a tinker's damn about invention for thousands of years suddenly started giving a damn about the tinker -- paying him real money, in fact.

My theory is that the Little Ice Age played a big role. Climate change in Europe, in Britain particularly, where conditions were ripest, reduced the quality of life for everyone, but most importantly the rich and powerful. The weather doesn't play favorites. The rich and powerful are endowed with many things, but they catch colds and sneeze in nasty weather, and get sick on bad food, and starve when there's no food, just like the rest of us. Invent something that keeps the poor warmer and well-fed, you won't get rewarded much. Invent something that keeps the rich warmer and well-fed, you've really got something. And if it trickles down the poor in the long run, so much the better, especially if it enables an industrial proletariat to keep the process feeding into itself.