Opening Pandora’s box: A new look at the industrial revolution

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Tony Wrigley Former Professor of Economic History, Cambridge University and Master of Corpus Christi College

Before the industrial revolution, economists considered output to be fundamentally constrained by the limited supply of land. This column explores how the industrial revolution managed to break free from these shackles. It describes the important innovations that made the industrial revolution an energy revolution.

The most fundamental defining feature of the industrial revolution was that it made possible exponential economic growth – growth at a speed that implied the doubling of output every half-century or less. This in turn radically transformed living standards. Each generation came to have a confident expectation that they would be substantially better off than their parents or grandparents. Yet, remarkably, the best informed and most perspicacious of contemporaries were not merely unconscious of the implications of the changes which were taking place about them but firmly dismissed the possibility of such a transformation. The classical economists Adam Smith, Thomas Malthus, and David Ricardo advanced an excellent reason for dismissing the possibility of prolonged growth.

Smith and Ricardo as growth pessimists

They thought in terms of three basic factors of production, i.e. land, labour, and capital. The latter two were capable of indefinite expansion in principle but the first was not. The area of land which could be used for production was limited, yet its output was basic – not just to the supply of food but of almost all the raw materials which entered into material production. This was self-evidently true of animal and vegetable raw materials – wool, cotton, leather, timber, etc. But it was also true of all mineral production since the smelting of ores required much heat and this was obtained from wood and charcoal. Expanding material production meant obtaining a greater volume of produce from the land but that in turn meant either taking into cultivation land of inferior quality, or using existing land more intensively, or both. This necessarily meant at some point that returns both to capital and labour would fall. In short, the very process of growth ensured that it could not be continued indefinitely. This was a basic characteristic of all “organic” economies, those which were universal before the industrial revolution. Adam Smith summarised the problem as follows:

In a country which had acquired that full complement of riches which the nature of its soil and climate, and its situation with respect to other countries, allowed it to acquire; which could, therefore, advance no further, and which was not going backwards, both the wages of labour and the profit of stock would probably be very low.

He went on to spell out in greater detail what his statement implied for the living standards of the bulk of the population and for the return on capital. When Ricardo tackled the same issue he came to the same conclusion and was explicit in insisting that the resulting situation “will necessarily be rendered permanent by the laws of nature, which have limited the productive powers of the land” (Ricardo 1817).

The constraint stressed by the classical economists can be expressed differently in a way that highlights the change that transformed the possibilities of expanding output and enabled an industrial revolution to take place.

Every form of material production involves the expenditure of energy and this is equally true of all forms of transport. In organic economies the dominant source of the energy employed in production was the process of photosynthesis in plants. The quantity of energy which reaches the surface of the earth each year from the sun is vast but photosynthesis captures less than 0.5% of the energy in incident sunlight.

Photosynthesis was the source of mechanical energy which came predominantly from human and animal muscle power derived from food and fodder. Wind and water power were of comparatively minor importance. Photosynthesis was also the source of all heat energy used in production processes since the heat came from burning wood.

The implications of this situation in limiting productive potential are clear and dire. The land constraint was a severe impediment to growth. It is epitomised in a phrase of Sir Thomas More. He remarked that sheep were eating up men. An expansion of wool production meant less land available to grow food crops. Or again, it is easy to show that, if iron smelting had continued to depend upon charcoal, a rise in the production of iron to the scale which became normal in the mid-nineteenth century would have involved covering the entire land surface of Britain with woodland.

Breaking free from photosynthesis

Access to energy that did not spring from the annual product of plant photosynthesis was a sine qua non for breaking free from the constraints afflicting all organic economies. By an intriguing paradox, this came about by gaining access to the products of photosynthesis stockpiled over a geological time span. It was the steadily increasing use of coal as an energy source which provided the escape route.

It was simple to substitute coal for wood as a solution to the problem of increasing the supply of heat energy, at least where the heat generated by burning coal and the object to be heated were separated by a barrier that allowed the transfer of heat but prevented chemical exchange.

Coal could, for example, readily be substituted for wood to heat salt pans or dye vats. It could also readily be used as a source of domestic heat in an open fire though it was some time before trial and error gave rise to a chimney which could both improve combustion and evacuate smoke. The early expansion of coal production was largely for domestic use, dominated by the supply of coal from coal pits near the Tyne to London. The east coast coal trade expanded so greatly from Tudor times onwards that by the end of the seventeenth century roughly half the tonnage of the merchant navy was devoted to this trade. But it took many decades of trial and error to enable coal or coke to be substituted for charcoal in smelting iron because the transfer of chemical impurities prevented a good quality result.

Until the early eighteenth century, coal, although used increasingly by the English, offered a solution only to the problem of supplying heat energy. Mechanical energy remained a matter of muscle power and was therefore limited by the photosynthesis constraint. Hence the central importance of the slow development of an effective steam engine that made it possible to convert heat energy into mechanical energy. Once this was possible the problem of limited energy supply was solved for the whole spectrum of material production and transport.

The phasing and scale of the energy revolution

In recent years, it has become possible to quantify the phasing and scale of the energy revolution since scholars in a number of European countries have agreed a common set of conventions for the description and measurement of energy consumption. They have produced illuminating data.

Source: Wrigley (2010).

Figure 1 depicts the growth in the annual consumption of energy per head in England over a period of three centuries. In Tudor times, coal was only a minor contributor to national energy consumption and the energy scene was dominated by the mechanical energy provided by people and draught animals which accounted for roughly half the energy total; and by firewood which supplied the bulk of the remainder. Already by the beginning of the eighteenth century half of all energy consumption came from coal and by the mid-nineteenth century coal supplied well over 90% of the total.

A similar depiction of energy consumption in Italy shows that at the time of unification its energy situation bore a strong similarity to that of England in Tudor times. Indeed as more information becomes available for other European countries the strong similarities between all countries whose economies remained organic is striking. None could break free from the constraint which Adam Smith described unless they turned to the accumulated product of photosynthesis in the past rather than depending on the annual cycle of current photosynthesis. Coal consumption per head in England rose at a remarkably uniform rate over the whole three centuries covered in Figure 1, roughly doubling every half-century.

As may be seen in Table 1, the nature of the change which took place in energy consumption is still more dramatic if expressed in absolute rather than per caput terms because the population of England more than quintupled from 3.036 million in 1561 to 16.732 million in 1851. All energy sources grew substantially in absolute terms (other than firewood) but in many cases grew less quickly than population. In absolute terms coal output was more than 240 times greater at the end of the period than at its beginning.

Table 1. Annual energy consumption in England and Wales, 1561-70 to 1850-9 (terajoules)

Source. Wrigley (2010).

The implications of the new age, which were invisible to the classical economists, were only fully appreciated much later by the generation of Karl Marx. He and his contemporaries saw clearly that output was rising rapidly and that it was reasonable to expect it to continue to do so, though they differed widely about the implications of this new situation.

Pandora’s box?

In Greek mythology, Pandora was created by Zeus to enable him to punish Prometheus for having stolen fire from the sun to animate his man of clay. Zeus intended that Pandora should marry Prometheus and had given her a jar with the instruction that she should present the jar to the man she married. She was ignorant of its contents. Prometheus was suspicious and repulsed her. She instead married his brother Epimetheus, who ignored a warning about acting imprudently and opened the jar. In so doing he released into the world a host of previously unknown and malign forces.

The story has parallels with the occurrence of the industrial revolution. Contemporaries were not aware of the radical and irreversible nature of the changes which were in train. The analogy is not, of course, exact. On balance, the forces released by the industrial revolution may be thought beneficial rather than malign but the balance is a fine one.

Every increase in the powers of production has been offset by a matching increase in the powers of destruction, exemplified perhaps most vividly by the atomic bomb. And the possible impact of the massive increase in the burning of fossil fuels on the environment may also call in question the future stability of the gains which have been made in productive power.

The great bulk of the literature about the industrial revolution has been devoted to explaining how it began. This has been to the neglect of the equally important question of why the growth did not grind to a halt as all previous experience suggested was inevitable. It is in this context that the history of energy usage is critical to the understanding of the changes which took place.

Societies whose productive capacities were limited by the annual product of photosynthesis operated within severe and seemingly immovable constraints. Societies which switched to depending on the stored products of photosynthesis in the form of fossil fuels were released from these constraints, though whether the immense benefits which were thus made possible will prove durable and stable remains an open question.

References

Ricardo, D (1817), On the principles of political economy, P Sraffa (ed.), Cambridge (1951), 125-126. Smith, Adam (1789), An inquiry into the nature and causes of the wealth of nations, 5th Edition, E Cannan (ed.), London (1961), Volume I, p.106. Wrigley, EA (2010), Energy and the English industrial revolution, Cambridge University Press. Read more at www.voxeu.org