The Rational Optimist (25 page)

The metal Midlands

The burst of innovation which Britain experienced quite suddenly in the late 1700s was both the cause and consequence of mechanisation, of the amplification of one person’s labour by machinery and fuel. The tiny nation of Britain, with just eight million people in 1750, compared with twenty-five million in far more sophisticated France, thirty-one million in far more populous Japan and 270 million in far more productive China, embarked upon a phenomenal economic expansion that would propel it to world domination within a century. Between 1750 and 1850 British men (some of them immigrants) invented an astonishing range of labour-saving and labour-amplifying devices, which allowed them to produce more, sell more, earn more, spend more, live better and have more surviving children. A famous print entitled ‘The Distinguished Men of Science of Great Britain Living in the Year 1807–8’, the year that Parliament abolished the slave trade, depicts fifty-one great engineers and scientists all alive at the time – as if they were gathered together by an artist in the library of the Royal Institution. Here are the men who made canals (Thomas Telford), tunnels (Marc Brunel), steam engines (James Watt), locomotives (Richard Trevithick), rockets (William Congreve), hydraulic presses (Joseph Bramah); men who invented the machine tool (Henry Maudslay), the power loom (Edmund Cartwright), the factory (Matthew Boulton), the miner’s lamp (Humphry Davy) and the smallpox vaccine (Edward Jenner). Here are astronomers like Nevil Maskelyne and William Herschel, physicists like Henry Cavendish and Count Rumford, chemists like John Dalton and William Henry, botanists like Joseph Banks, polymaths like Thomas Young, and many more. You look at such a picture and wonder, ‘How did any one country have so much talent in the same place?’

The premise is false, of course, because it was the aura of the time and place that drew forth (and attracted from abroad – Brunel was French, Rumford American) such talent. For all their brilliance, there are Watts, Davys, Jenners and Youngs galore in every country at every time. But only rarely do sufficient capital, freedom, education, culture and opportunity come together in such a way as to draw them out. Two centuries later, somebody could paint a picture of the great men of Silicon Valley and posterity will stand amazed at the thought that giants like Gordon Moore and Robert Noyce, Steve Jobs and Sergey Brin, Stanley Boyer and Leroy Hood all lived at the same time and in the same place.

Just as the Californian is today, so in 1700 the British manufacturing entrepreneur was unusually free, compared with both European and Asian equivalents, to invest, invent, expand and reap the profits. His huge capital city was unusual in being dominated by merchants, not the government, and always had been. He also had a world market thanks to the British ships that were plying the tropics of the world. His rural hinterland was filled with people free to sell their labour to the highest bidder. Most of the continent was still dominated by change-resistant lords and serfs neither of whom had an incentive to be more productive. In much of central and eastern Europe, serfdom gained a new lease of life in the eighteenth century following the wars and famines of the 1600s. Peasants owed much of their labour or their produce to seigneurs (plus a tithe to the Church) and had little freedom to move, so they had little incentive to be more productive or commercial. Lords, meanwhile, fiercely resisted the attempts by reforming monarchs to free their vassals. ‘The landlord looks on the serf as a tool necessary to cultivate his lands,’ explained one Hungarian liberal, ‘and as a chattel which he inherited from his parents, or purchased, or acquired as a reward.’

Even where freedom to trade and prosper were obtained – around Toulouse, in Silesia, in Bohemia – enforcers of rules and extorters of bribes were legion, while frequent wars played havoc with commerce. Seventeen tolls were exacted in sixteen leagues in the Limousin valley. France, three times as populous as England, was ‘cut up by internal customs barriers into three major trade areas and by informal custom, obsolete tolls and charges, and above all poor communications into a mosaic of semi-autarkic cells’. Internal smuggling was rife. Spain was ‘an archipelago, islands of local production and consumption, isolated from each other by centuries of internal tariffs’. The Englishman, by contrast, did not have to answer to petty bureaucrats and pesky tax collectors to the same extent. For this he could partly thank the upheavals of the previous century, including a civil war and a ‘glorious revolution’ against James II’s arbitrary government. The latter event was more than a king-swap; it was in effect a semi-hostile management buy-in of the entire country by Dutch venture capitalists, which resulted in a rush of Dutch capital investment, a lurch towards foreign trade as the engine of state policy in emulation of Holland, and a constitutional shake-up that empowered a parliament of merchants. William III had to settle for respecting his people’s property rights if he was to keep the throne. Add in that Britain did not support a standing army, that a heavily indented coastline allowed seaborne trade to reach most parts of the country, and that the administrative capital of the country was also its commercial capital, and it becomes clear that this was not a bad place to start or expand a business in say 1700. ‘Nowhere else,’ says David Landes, ‘was the countryside so infused with manufacture; nowhere else, the pressures and incentives to change greater, the forces of tradition weaker.’

The small town of Birmingham, with no restrictive guilds and no civic charter, had begun to thrive as a centre of the metalworking trade in the early 1600s. By 1683 it had over 200 forges producing iron using coal. The heady combination of available skills and freedom of enterprise created a boom in an industry known as the ‘toy trade’, though the items made were mostly buckles, pins, nails, buttons and small utensils, rather than toys themselves. More patents were issued in Birmingham than in any other city than London in the eighteenth century, though few would count as major ‘inventions’: this was incremental exploration of the possibilities of iron, brass, tinplate and copper. The work was done in small workshops, with little new-fangled machinery, but it was split into skilled, specialised trades and organised along increasingly sophisticated lines. Manufacturers spun out of each other’s firms and started business on their own account, just as they would do around San Francisco Bay in the 1980s.

Demand it and they will supply

People do not start businesses unless there is demand from consumers. One root cause of England’s miracle was that thanks to trade enough Britons were rich enough after 1700 to buy the goods and services supplied by manufacturers so that it paid manufacturers to go out and find more productive technologies, and in doing so they stumbled upon something close to an economic perpetual motion machine. ‘One of the most extraordinary facts of the [eighteenth] century was the enlargement of the consuming classes,’ says Robert Friedel. ‘There was a consumer revolution in eighteenth century England,’ writes Neil McKendrick: ‘more men and women than ever before in human history enjoyed the experience of acquiring material possessions.’ Compared with mainland Europeans they were wearing wool cloth (as opposed to linen), eating beef (as opposed to cheese) and white wheat bread (as opposed to rye). For Daniel Defoe, writing in 1728, a low level of demand from the masses was far more important than a rich demand from a few:

Initially, it was the cost of luxuries that fell fastest. If you could afford only to buy food, fuel and fibre, you were not much better off than your medieval predecessor; but if you could afford spices, wine, silk, books, sugar, candles, buckles and the like, then you were three times better off, not because your income had gone up, but because the price of these goods was coming down thanks to the efforts of traders in the East India Company and their ilk. There was a mania for Indian cotton and Chinese porcelain and it was by copying these Oriental imports that the industrialists got started. Josiah Wedgwood, for instance, was not technically better at making pottery and porcelain than many others, but he was supremely good at making sure it was affordable, by dividing labour among skilled workers and applying steam to the process. He was also very good at marketing porcelain to the consuming classes by making it seem to be both posh and affordable – the holy grail of marketing ever since.

Cotton tells the tale best, though. In the 1600s, English people wore wool, linen and – if they were rich – silk. Cotton was almost unknown, though some refugees from Spanish persecution in Antwerp settled in Norwich as cotton weavers. But trade with India was bringing more and more ‘calico’ cotton cloth into the country, where its light, soft, washable character, and the way it could be colourfully printed and dyed, attracted demand from the well off. The weavers of wool and silk resented this upstart rival, and pressed Parliament for protection against it. In 1699, all judges and students were told to wear gowns of wool; in 1700 all corpses were ordered to wear shrouds of sheep’s wool; and from 1701 it was decreed that ‘all calicoes painted, dyed, printed or stained ... shall not be worn’. So ladies of fashion bought plain muslin and had it dyed. Riots broke out and women seen wearing cotton were even attacked by gangs of silk or wool weavers. Cotton was considered unpatriotic. By 1722 Parliament had bowed to the wishes of these weavers and on Christmas day that year, when the Calico Act took effect, it became illegal to wear cotton of any kind, or even to use it in home furnishings. Not for the last time, the narrow interest of producers triumphed over the broader interest of consumers in an act of trade protectionism.

And not for the last time, protectionism would fail, even backfire. To get round the law, East India merchants began to import raw cotton instead, and entrepreneurs started ‘putting out’ cotton to the cottages of rural spinsters and weavers to be made into cloth for export or even, mixed with a little linen or wool to keep it legal (the Calico Act was eventually repealed in 1774), for domestic sale. They had already been ‘putting out’ wool for decades, stealing a march on the Low Countries, where powerful craft guilds had prevented ‘putting out’ by smashing looms in rural cottages. The putters-out were clothiers with a reputation for loan sharking who made a living mostly by supplying raw wool to workers in their cottage homes and paying to collect finished cloth later, minus any interest on loans. The wives and daughters of farmers, and their menfolk in certain seasons, were in effect prepared to add to family income by selling labour as well as produce. Sometimes they found themselves in debt, because they borrowed money from the putters-out to equip themselves.

You can see these folk as desperate wage slaves driven off communal land by enclosure acts, the division of common land into private plots that gradually spread across most of England between about 1550 and 1800. But this is misleading. It is more accurate to see the rural textile workers as taking the first step on the ladder of producing and consuming, of specialisation and exchange. They were escaping self-sufficiency into the cash economy. It is true that some people were dispossessed of their livelihoods by enclosure, but enclosure actually increased paid employment for farm labourers, so it was for most a shift from low-grade self-sufficiency to slightly better production and consumption. Besides, Irish and Scottish as well as English migrants flocked to the textile districts to join the cottage industries. These were people giving up peasant drudgery for the chance of joining the cash economy, albeit at a low wage and for hard work. People were marrying younger and consequently giving birth to more children.

The result was that the very people who were joining the industry as workers would soon begin to be its customers. Suddenly the rising income of the average British worker met the falling cost of cotton cloth and suddenly everybody could afford to wear (and wash) cotton underwear. The historian Edward Baines noted in 1835 that the ‘wonderful cheapness of cotton goods’ was now benefiting the ‘bulk of the people’: ‘a country-wake in the nineteenth century may display as much finery as a drawing room in the eighteenth.’ The capitalist achievement, reflected Joseph Schumpeter a century later, ‘does not typically consist of providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.’

But increasing supply was not easy, because even the remotest Pennine valleys and Welsh marches were now thickly settled with the cottages of weavers and spinsters, transport was dear and some of the workers were earning good enough wages to take weekend holidays, occasionally even drinking their pay away till Monday night, preferring consumption to extra income. As the twentieth-century economist Colin Clark put it, ‘Leisure has a real value even to very poor people.’

So, stuck between booming demand and stalling supply, the putters-out and their suppliers were ripe customers for any kind of productivity-enhancing invention, and with such an incentive, the inventors soon obliged. John Kay’s flying shuttle, James Hargreaves’s spinning jenny, Richard Arkwright’s water frame, Samuel Crompton’s mule – these were all just milestones on a continuous road of incrementally improving productivity. The jenny worked up to twenty times as fast as a spinning wheel and produced a more consistent yarn, but it was still operated entirely by human muscle power. Yet by 1800 the jenny was already obsolete, because the frame was several hundred times as fast. Frames were increasingly powered by watermills. Ten years after that the ‘mule’, a machine that combined features of both the jenny and the frame, already outnumbered the frame by more than ten spindles to one. And mules would soon be powered by steam. The result was a vast expansion in the amount of cotton worked and a steep fall in the price of woven cloth. British exports of cotton goods quintupled in the 1780s and quintupled again in the 1790s. The price of a pound of finespun cotton yarn fell from 38 shillings in 1786 to just 3 shillings in 1832.