![]() When and where labor is expensive, and energy and capital are cheap, then it is a good investment to build machines that consume energy in order to automate labor, and further, it is a good investment to do the R&D needed to invent such machines. ![]() In particular, he emphasizes high wages, the price of energy, and (to a lesser extent) the cost of capital. He makes his case in The British Industrial Revolution in Global Perspective, in which he argues that many major inventions were adopted when and where the prices of various factors made it profitable and a good investment to adopt them, and not before. Robert Allen thinks demand factors have been underrated. Riffing on an old anti-war slogan, we can ask: What if they gave an Industrial Revolution and nobody came? But where does demand for innovation come from? What if demand for innovation is low? And how much can demand factors explain industrialization? To explain the Industrial Revolution, economic historians like Joel Mokyr emphasize supply factors: factors that create innovation, such as scientific knowledge and educated craftsmen. In the market for innovation there is supply and demand. We can think of innovation as a kind of product. ![]() Why waste precious iron and fuel in order to lighten the load of a slave? You are a fool!” Our empire has plenty of labor I personally own many slaves. ![]() And even if we built these engines, they would consume enormous amounts of fuel, which we need for smelting, cooking, and heating. It is made of iron, which could be better used for weapons and armor. It is tremendously complicated it would take my best master craftsmen years to assemble. You carry with you plans for a steam engine, and you present them to the emperor, explaining how the machine could be used to drain water out of mines, pump bellows for blast furnaces, turn grindstones and lumber saws, etc.īut to your dismay, the emperor responds: “Your mechanism is no gift to us. Imagine you could go back in time to the ancient world to jump-start the Industrial Revolution. ![]()
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