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The Democratization of Invention During Early Industrialization: Evidence from the United States, 1790–1846

  • Kenneth L. Sokoloff and B. Zorina Khan (a1)

The skills and knowledge necessary for patentable invention during early American industrialization were widely dispersed among the general population. This endowment permitted a rather elastic supply of patentable ideas over the relevant range as the expansion of markets induced more individuals to invent and innovate.Although a broadening of the ranks of patentees was primarily responsible for the initial acceleration of patenting, the importance of patentees with greater long-term investments in inventive activity increased during later stages of development.

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We are grateful to James Lin for excellent assistance, and to Francesca Bray, Stanley Engerman, Naomi Lamoreaux, Pamela Nickless, Jean-Laurent Rosenthal, Michael Waldman, Gordon Wood, and Mary Yeager for helpful comments. Research support was provided by the California Institute of Technology, the Center for Advanced Study in the Behavioral Sciences, as well as the Institute of Industrial Relations and the Academic Senate at UCLA.

1 For example, see Mokyr, Joel, The Lever of Riches: Technological Creativity and Economic Growth (Oxford, 1990).

2 Historians of American technology generally emphasize that much of the population was very familiar with the basic technology of the period. See Hounshell, David, From the American System to Mass Production, 1800–1932 (Baltimore, 1984).For studies of the rise in patenting, see Sokoloff, Kenneth L., “Inventive Activity in Early Industrial America: Evidence from Patent Records, 1790–1846,” this JOURNAL, 48 (12 1988), pp. 813–50; Dutton, H. I., The Patent System and Inventive Activity During the Industrial Revolution, 1750–1852 (Manchester, 1984); MacLeod, Christine, Inventing the Industrial Revolution: The English Patent System, 1660–1800 (Cambridge, 1988); and Sullivan, Richard J., “England's ‘Age of Invention’: The Acceleration of Patents and Patentable Invention During the Industrial Revolution,” Explorations in Economic History, 24 (10. 1989), pp. 424–52.

3 For discussions of the data set, and of the patent system during the period, see Sokoloff, “Inventive Activity.”

4 For a review of the economics literature using patent data, see Pakes, Ariel and Simpson, Margaret, “Patent Renewal Data,” Brookings Papers on Economic Activity: Microeconomics (1989), pp. 331–401.

5 Invention-generating capital encompasses any human and physical capital which raises productivity in inventive activity. Such capital can be either sector-specific or general in its effects. Individuals with large investments in such capital will presumably tend to focus on ideas which involve capital equipment–both because they may have a comparative advantage in such inventions and because private returns to such inventions are easier to appropriate. For an interesting treatment of the bias under patent systems toward inventions involving large-scale or capital equipment, see Marglin, Stephen A., “What Do Bosses Do?: The Origins and Functions of Hierarchy in Capitalist Production,” Review of Radical Political Economics, 6 (Summer 1974), pp. 60112.For estimates of manufacturing investment in capital equipment, see Sokoloff, Kenneth L., “Investment in Fixed and Working Capital During Early Industrialization: Evidence from U.S. Manufacturing Firms,” this JOURNAL, 44 (06 1984), pp. 545–56.

6 Schmookler, Jacob, among others, noted the pro-cyclicality of patenting in Invention and Economic Growth (Cambridge, MA, 1966).

7 For more discussion of the Embargo period and cyclicality, see Sokoloff, “Inventive Activity”; Allen, Robert C., “Collective Invention,” Journal of Economic Behavior and Organization, 4 (03 1983), pp. 124; and Shleifer, Andrei, “Implementation Cycles,” Journal of Political Economy, 96 (12 1986), pp. 1163–90.For a related theoretical treatment of trade and invention, see Romer, Paul M., “Endogenous Technological Change,” unpublished working paper (Chicago, 1989).

8 Patentees active at the beginning or end of the period might have patentable ideas unrecorded in our data and accordingly have their career patents (or would-be patents) undercounted. Although careful examination indicated that patentees active after 1842 suffered from this problem (biasing estimates downward), nonsuch effect was detected for those who filed before. Hence only the observations from 1843 on are suspect and deleted from the regressions below. Since any bias during the 1790s would work against us, no adjustments were made there. The 1836 change in the patent system could also explain some decline in the average number of career patents, but since most of the shift toward patentees with few patents was realized during the Embargo, it is unlikely that either this change or the cutoff at 1846 could provide an adequate explanation.

9 The lack of information about the occupations of individuals who did not receive patents, as well as for most of the sample, raise questions about the interpretation of the regressions presented below.

10 Part of the trend in the occupational distribution may be due to the development of markets which eased capital requirements. See Struik, Dirk J., Yankee Science in the Making (Boston, 1948).Also see MacLeod, , Inventing the Industrial Revolution, chap. 7, for evidence of a similar trend in England.

11 Commercial patentees may have patented ideas conceived by others.

12 Metropolitan patentees received 31.3 percent of all patents during 1805–1811, but only 22.1 and 28.0 percent in 1830–1836 and 1836–1842.

13 Gibb, George S., The Saco-Lowell Shops (Cambridge, MA, 1950), p. 10.

14 Although some patentable inventions could be used in more than one sector, our sectoral classification mitigates the potential mismeasurement of specialization. We were consistent about classifying closely related inventions in the same sector. Hence even though a patentee might have registered several patents for steam engines to be used in different sectors, all of his patents would be in the same category, and he would be considered specialized. Inclusion of dummy variables for sectors in the specialization regressions below did not alter the qualitative results.

15 Dutton argued that patentees during early British industrialization were not very specialized. Although his estimates of the degree of specialization are not directly comparable, American patentees seem to have been less specialized. His data also imply that British patents were more concentrated among patentees with many career patents than U.S. patents were. Many factors may contribute to these differences, including the much higher cost of securing a patent in Britain. See Dutton, The Patent System, chap. 6.

16 See the discussion in Sokoloff, “Inventive Activity,” pp. 830–47.

17 Accounting decompositions of the differences between metropolitan, urban, and rural counties, or between regions, yield the same conclusion.

18 Those on waterways were less specialized, however, perhaps because they changed their livelihoods after the opening to the wider market.

19 See Sokoloff, Kenneth L., “Productivity Growth in Manufacturing During Early Industrialization: Evidence from the American Northeast, 1820–1860,” in Engerman, Stanley L. and Gallman, Robert E., eds., Long-Term Factors in American Economic Growth (Chicago, 1986).

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