BobAllenLectureGrowth

BobAllenLectureGrowth - The Industrial Revolution and the...

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Why are some countries rich and others poor? The Industrial Revolution and the Rise of the West. Bob Allen Professor of Economic History Oxford University Graham Lecture, 2008
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Since 1500, incomes have risen in most of the world, however: • Incomes have risen fastest in the countries that were richer in 1500 • Consequently, world inequality is much greater today than in 1500 • In 1500, average income in the UK was only 30% higher than in India • Today, the average UK income is ten times that in India.
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The graph shows when the West got rich. 0 5000 10000 15000 20000 25000 1500 1600 1700 1800 1900 2000 UK Italy China India Japan GDP per head 1990 US$’s
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GDP per head, 1990US$’s 1500 1820 1913 2000 UK 714 1707 4921 19818 Italy 1100 1117 2564 18740 USA 400 1257 5301 28129 Canada 400 904 4447 22198 China 600 600 552 3425 India 550 533 673 1910 Japan 500 669 1387 21069
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Distribution of global manufacturing Source: Crafts and Venables (2003, p. 327)
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The Big Question is: Why are some nations rich and others poor? • Technological change is the fundamental cause of economic growth • Other changes—urbanization, rising incomes, capital accumulation are results of more efficient production • The Rise of the West, therefore, comes down to the invention and utilization of labour saving technology.
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Why was Arkwright’s water frame applied on a mass scale in Britain?
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While this machine was little used and then abandoned in China
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and Vaucanson’s automated loom was ignored in eighteenth century France?
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Five classic answers explain the Rise of the West • Geography: did the natural world favour the West? • Political institutions: Did limited government foster commerce and thereby the rise of the West? • Demography: Did different patterns of marriage and fertility give the West its lead? • Culture: Was the West more ‘rational’ than the Rest? • Science: Did the scientific revolution of the 17 th century cause the industrial revolution of the 18 th ?
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1. Geography favoured the winners: • Coal was a corner stone of the Industrial Revolution • Abundant land and resources led the USA to invent labour saving technology • Do the tropics suffer from malaria and the tse- tse fly?
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2. Limited Government • ‘Good’ institutions include – Limited government – Low taxes – Secure property rights • They create a broad market and a ‘favourable climate for investment.’ • These were secured in England by the Glorious Revolution of 1688 (parliamentary supremacy) • The rest of the world was cursed with despotism.
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The trouble is that parliamentary ascendancy meant that • Britain had higher taxes than France • Britain was more successful than France in seizing an empire. • British property was more vulnerable than French
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This note was uploaded on 04/03/2011 for the course ECON 202 taught by Professor Kan during the Spring '11 term at University of Regina.

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BobAllenLectureGrowth - The Industrial Revolution and the...

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