Von Thünen's The isolated state provides a telling analysis of the constraints imposed by transport costs on economic activity in an organic economy. Von Thünen had personal experience of these constraints since as a young man he bought the estate of Tellow in Mecklenburg. He describes, for example, the transfer of a load of grain weighing 2,400 pounds by a wagon drawn by four horses from the estate to the town of Rostock, a distance of 23 miles. In hauling the wagon to Rostock the horses consumed 150 pounds of grain so that only 2,250 pounds of grain was delivered. The energy needed to transfer the product reduced its value by 6 per cent, illustrating the way in which the energy consumed in effecting a transfer gradually reduced the net value of the goods delivered. The heavier and bulkier the product, the more severely the accessible market area was limited.

One of the central issues examined in The isolated state is the way in which transport cost strongly influenced land use in an area surrounding a town. In approaching this topic, von Thünen was influenced by his reading of The wealth of nations. Adam Smith stressed the significance of transport costs in relation to the size of an accessible market. In an assessment of the importance of good transport facilities, he asserted that: ‘Good roads, canals, and navigable rivers, by diminishing the expence of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. They encourage the cultivation of the remote, which must always be the most extensive circle of the country.’ Von Thünen's book is an examination of the characteristic pattern of land use in the countryside surrounding a market town in an organic economy. To simplify his exposition he assumed that the surrounding countryside was a uniform flat plain. In these circumstances, the type of crop that will be found in any given area will be a function of its value to weight ratio and its distance from the town. Jointly, these two factors will give rise to a series of concentric bands of land use providing the food and fuel needs of the town.

For those living in the centuries after an event that changed the nature of their society fundamentally, achieving an understanding of how the world appeared to their ancestors living at the time of its occurrence is apt to be challenging. That the industrial revolution changed societies fundamentally is evident to people today, but not to contemporaries. The very fact that the term ‘industrial revolution’ only came into common usage towards the end of the nineteenth century is indirect evidence of this. To those living in the decades during which the industrial revolution was long supposed to have reached its climax, the possibility of prolonged, rapid growth appeared an idle fancy. It may be difficult today to appreciate the weight of arguments that had once carried conviction. But the very fact that the significance of some aspects of the changes taking place during the industrial revolution were so difficult for contemporaries to appreciate can itself be helpful in investigating its character.

Partly for this reason, the reflections of the classical economists, Adam Smith, Thomas Malthus, and David Ricardo, are instructive when seeking to understand the nature of organic economies. They were eloquent in stressing the benefits of market economies in which the state ensured the operation of a legal system that enabled entrepreneurs when assessing risk to have confidence in the enforcement of contracts. They identified the scope for the increase in productivity that could flow from specialisation of function if the size of the accessible market was enlarged, and in turn the connection between this and improvements in transport. They were conscious that developments of this sort had brought about substantial economic advance in England during the two preceding centuries. They demonstrated the economic benefits associated with what has subsequently come to be described conventionally as a capitalist economy. They are even sometimes portrayed as demonstrating the possibility of what came to be termed exponential economic growth. Yet they were explicit in rejecting such a possibility. They saw no reason indeed to suppose that the lot of the bulk of the population would be any better at the end of an expansionary cycle than it had been at its beginning. In short, they saw clearly that, unhappily, the very nature of growth in what has recently come to be termed an organic economy must eventually entail a loss of momentum and probable decline. Negative feedback must always eventually prevail.

During three centuries from the mid sixteenth to the mid nineteenth century the English economy changed from being a laggard compared to the most advanced economies on the continent to being the leader of the pack by a substantial margin. During the second half of the nineteenth century, however, the wheel turned again, and England ceased to be either a laggard or a leader. Consideration both of the circumstances that gave rise to the divergence between English experience and that of the bulk of the continent, and to the subsequent convergence which took place, is the subject matter of this chapter. Reviewing these changes also throws light on the timing of the completion of an industrial revolution in England. That its completion promoted further change whose character severely affected the regions of England closely identified with the initial accomplishment of an industrial revolution is briefly discussed in the final section of the chapter.

The concomitants of urban growth

A first topic to consider in relation to the period of divergence between England and her continental neighbours is the extent of the contrast in the scale and character of urban growth in the seventeenth and eighteenth centuries. It was both striking and significant. It offers an opportunity to explore the developments which gradually weakened the constraints on growth which were universal in organic economies, strengthening the prospect of securing prolonged growth and a sustained rise in the real incomes of the mass of the population: in short, of bringing about an industrial revolution. It also exemplifies the scale of the difference between changes on either side of the Channel, and suggests why comparable development was inhibited on the continent.

An increase in the proportion of the population living in towns is a reliable measure of the level of productivity in the agricultural sector (assuming, for convenience, that urban food supplies are locally produced rather than imported). Since those living both in towns and in the countryside must be fed, only if productivity is high enough to produce an increasing surplus above local rural requirements is urban growth possible. Bairoch concluded that in early modern Europe the maximum proportion of the population that could live in towns with 5,000 or more inhabitants was 13–15 per cent.

Before the industrial revolution all human societies laboured under a common constraint in attempting to increase their ability to produce even the basic necessities of life. Their degree of success in this regard varied enormously. It might seem ridiculous to regard those living in Renaissance Italy as similarly placed to the early tribes of hunter-gatherers. In many contexts such an assertion is indeed ridiculous; but in seeking to put into perspective the radical nature of the change implied by the occurrence of an industrial revolution, it is instructive to explore the sense in which the assertion is justified. All life on earth is dependent on the process of plant photosynthesis, by which a fraction of the energy reaching the surface of the earth from the sun is captured by plants. The energy thus captured creates the base of the pyramid comprising all life forms as, for example, in providing food for herbivores and therefore also indirectly for carnivores. Plant photosynthesis, however, captures only a tiny fraction of the energy contained in incident sunlight. One estimate suggests that 400,000 kilocalories of solar radiation reach each square metre of soil annually, of which 4,000 kilocalories, or 1 per cent of the energy involved, is translated into vegetable matter. Other estimates suggest a lower figure. Pimentel indicates the wide range of efficiency with which different crops capture the energy from sunlight: maize captures 0.5 per cent, wheat only 0.2 per cent. White and Plaskett calculate that the total of solar energy arriving on the surface of the United Kingdom from the sun each year translates into the equivalent of the energy contained in c. 26 billion tons of coal, an enormous figure, many times greater than current national energy consumption, implying that a total for England and Wales alone the figure would be perhaps c. 16 billion tons. Assuming an average efficiency of energy capture of 0.35 per cent, this suggests that the equivalent of the energy in 56 million tons of coal might have been secured from the products of plant photosynthesis in early modern England and Wales.

There are wide bands of uncertainty round any estimates of this kind. It is clear, however, that in reality the energy limit imposed by plant photosynthesis on the English economy was very much lower than any suggested in the last paragraph.

In 1831 England was entering the last phase of the long process of change that came to be termed an ‘industrial revolution’. Following the invention and steady improvement of the efficiency of the steam engine, coal was able to transform the supply of mechanical energy as it had already transformed the supply of heat energy, but this second advance was in its early stages in 1831. Land transport, for example, still remained almost exclusively dependent on the traditional sources of energy in organic economies, but in 1830 the dawn of a new transport era was symbolised by the opening of the first commercially successful railway line between Liverpool and Manchester, providing both passenger and freight facilities, and depending exclusively on the traction power of the steam engine. The country was on the eve of the construction of a railway network on which the steam engine could transport both goods and passengers on a scale and at a speed that greatly exceeded anything previously achieved. In the following year the fourth national census was taken. It provides a revealing insight into several aspects of the English economy as it was about to enter the period when the supply of mechanical energy was transformed in a fashion that paralleled what had happened earlier with heat energy. During the middle decades of the nineteenth century, roughly between the 1830s and 1870s, the use of steam engines as the source of mechanical energy became general in all branches of industrial production. With the supply of both energy types freed from dependence on plant photosynthesis, a prolonged period of exponential growth became possible – an industrial revolution.

The unusual character of the 1831 census

The 1831 census was the fourth and last census that Rickman directed. Like all earlier and later censuses it provided counts of the totals of men and women alive at the time but it had a number of features which distinguish it from other censuses, features which are at once frustrating in that there is often no directly comparable information in later censuses and illuminating in that it provides an insight into aspects of the structure of the economy which might otherwise have remained largely invisible.

Adding access to a vast stock of energy in the shape of coal to the flow of energy derived from plant photosynthesis was central to many of the changes that transformed the English economy from the mid sixteenth century onwards. The history of the changing balance between new and traditional energy sources in this period therefore deserves attention. It provides a background to many aspects of the economic and social changes that are the subject of the subsequent chapters of this book. There was a major increase in energy consumption per head of population due almost entirely to the increasing use of coal, but it is important to note that until the end of the eighteenth century coal was almost exclusively a source of heat energy. The principal traditional sources of mechanical energy, animal and human muscle, remained dominant until the early decades of the nineteenth century. It was only when the development of the steam engine made coal a convenient source of both types of energy, and it had proved possible to harness the steam engine to a very wide range of productive tasks, that the industrial revolution could be regarded as accomplished. If mechanical energy had continued to be provided almost exclusively by human and animal muscle, the constraints of an organic economy would have continued to limit growth. Because draught animals were the most important single source of mechanical energy in early modern England, increasing use of mechanical energy would only have been possible by devoting a larger and larger acreage to animal fodder, thus experiencing once again the constraint on growth that afflicted all organic economies. As Sieferle remarked, ‘The history of energy is the secret history of industrialisation’.

The growth of coal production

Table 3.1 provides coal production estimates and population totals for England over a period of three centuries. Coal production rose massively. In the mid nineteenth century, it was 270 times larger than it had been in the 1560s, and 20 times larger than in 1700. Over the three centuries in question, however, the population more than quintupled, rising from 3.04 million in 1561 to 16.73 million in 1851. Rather than considering only absolute totals of coal production, it is therefore also helpful to consider consumption per head of population in assessing change over time, and the growth rates for each of them.

The object of this book is to describe the transformation in the capacity to produce goods and services which took place in England over a period of three centuries between the reigns of Elizabeth I and Victoria, and which is conventionally termed the industrial revolution. At the beginning of the period England was not one of the leading European economies. It was a deeply rural country where agricultural production was largely focused on local self-sufficiency. In part this was a function of the low level of urbanisation at the time. England was one of the least urbanised of European countries: the only large town was London. The market for any agricultural surplus was limited other than close to the capital city. There was therefore little inducement to undertake improvement. Industry was little developed compared with the situation in the more advanced continental countries. Across a wide range of products there was little or no domestic production. When an initiative was taken to create a domestic source of supply, it was often the case that foreign expertise was sought to enhance the chances of success. England was on the periphery of Europe economically as well as geographically. However, although other European economies were well in advance of England in the mid sixteenth century, all were subject to the limits to growth that were common to all organic economies.

The underlying constraint that prevented sustained growth in organic economies arose from the nature of its energy sources. All acts of material production, whether in the field, the forest, the workshop, or the household necessarily involved the expenditure of energy; and the same was true of all types of transport. But the quantum of energy that could be secured for these purposes was limited. It was based almost exclusively on the energy secured by the process of plant photosynthesis. The conversion of raw materials into finished products always involved the expenditure of either mechanical or heat energy, or both. The great bulk of the mechanical energy was provided by human or animal muscle power. This energy came from plant photosynthesis in the form of food or fodder. Wind and water power was of relatively slight importance. Heat energy was secured from burning wood or charcoal.

The demographic characteristics of a society may have an important bearing on its prevailing standard of living and economic growth prospects. This was an issue explored by Hajnal in his remarkable essay on marriage in western and eastern Europe, published in 1965. He was intent on exploring the nature and significance of the west European marriage system. Table 6.1 reproduces the table that appeared on the first page of his essay.

The differences between the two marriage systems are striking. They are especially pronounced in the case of women. In the western pattern, approaching half of the women in the age group 25–29 are unmarried, and this remains true of roughly a sixth of women even in the 45–49 age group. In eastern Europe in both these age groups the proportion of women who had never married was negligible. Hajnal provided evidence that what was true of eastern Europe was true of almost all societies elsewhere in the world for which he had reliable data. The difference in proportions ever married in the two systems clearly implies wide differences in the average age at first marriage. Hajnal noted, for example, that in Serbia, in 1896–1905, the decade centred on the year for which Table 6.1 shows percentages single, the mean age at first marriage for women was 19.7 years. In the west European marriage system the average female age at first marriage, though it varied considerably, was three to eight years later in life.

Hajnal noted that: ‘There was a widespread conviction among eighteenth-century authors that European conditions were fundamentally different not only in marriage, birth and death rates, but above all in standards of living, from those obtaining elsewhere in the world.’ He was, however, very conscious of the lack of empirical evidence to enable the issue to be explored effectively, not least because reliable demographic evidence for earlier centuries was so slender. Since his essay was published much new research on the west European marriage system has been carried out. It has become clear that the system had existed for centuries in some countries rather than being of recent origin, as Hajnal supposed. Even though exponential growth was physically impossible in organic economies, the prevailing standard of living was not foredoomed to be depressed close to bare subsistence for the mass of the population in societies in which the west European marriage system had become established.

In organic economies it was always the case that the size of the urban sector was strongly influenced by the productivity of agriculture. City dwellers needed food and drink no less than those living in the countryside and since they produced little food themselves, they depended upon the existence of a rural surplus. If, for example, the agricultural sector produced 25 per cent more food than would cover the needs of the rural population, the food needs of an urban population that constituted a fifth of the total population could be satisfied. Agricultural productivity set limits to the urban growth that could take place, but agricultural productivity was itself strongly influenced by urban demand. In the absence of a substantial urban sector, in rural areas there was little incentive to produce an output greater than that needed to meet local needs. In other words, agricultural productivity and urban growth might be characterised by either negative or positive feedback. If the urban sector was trivially small and stagnant there would be minimal incentive for increased agricultural output since any surplus over local rural needs would be unable to find a market. If, however, the urban sector was significant and growing it created an incentive to increase agricultural output, thus ensuring that demand and supply remained in balance as urban growth progressed. Positive feedback between urban growth and improved agricultural productivity was always possible in organic economies. If it occurred, however, although the level of urbanisation might increase for a time, matched by an increasing rural surplus, the positive feedback could not continue indefinitely, because of the implications of the fixed supply of land which the classical economists described so effectively.

The scale of urban growth in England and the continent

Perhaps the most striking and important of all the contrasts between England and her continental neighbours in their economic development in the early modern period was in the speed, scale, and nature of the urban growth taking place. It was striking in England but muted to the point of non-existence in most of continental Europe. This in turn, necessarily meant that throughout this period English agriculture was making notable progress, given that the island remained broadly self-sufficient in food production.

The changing balance between primary, secondary, and tertiary employment in early modern England provides a valuable insight into the nature of the changes that were gradually transforming an organic economy into the first example of a completed industrial revolution. In organic economies it was normal for 70–80 per cent of the workforce to be employed on the land, reflecting the fact that labour productivity in agriculture was low. The secondary and tertiary sectors were always dwarfed by the primary sector. Ten peasants might produce enough food for their own families and perhaps two or three other families who were then able to engage in textile manufacture, handicrafts, building, retailing, transport, etc., but the surplus in question was limited and might prove fragile in hard times. For the same reason, the proportion of the population living in towns and cities was always modest. Labour productivity in agriculture was too low to support a large urban sector. Equally, the absence of a large urban demand for food meant that there was little incentive for a peasant farmer to increase his output since there was no guarantee that it would find a market.

Recently new estimates of the changing occupational structure of England in the early modern period have been made. They differ substantially from earlier estimates; they suggest that the rise in the proportion of the workforce in the secondary and tertiary sectors occurred earlier, and was larger than was once supposed. The revised estimates and their implications for the nature and timing of the changes that ultimately brought about an industrial revolution are the subject of this chapter. It should be noted that the estimates normally relate to the male labour force only.

The expansion of the secondary and tertiary sectors

Given the relative income elasticities of demand for the products of the primary, secondary, and tertiary sectors in organic economies, a very high proportion of the labour force engaged in agricultural production normally indicated a modest standard of living and sometimes deep poverty. The bulk of the population, if they engaged in market transactions, spent much of any income at their disposal to obtain food.

The term ‘industrial revolution’ has had a wide currency for many decades. It can be misleading in that the changes taking place were not found solely in industry, nor were they always induced by a prior stimulus brought about through industrial advance. The term is, nonetheless, in all probability, through long usage, here to stay. Perhaps because of the inadequacy and ambivalence of the term ‘industrial revolution’, it has proved difficult to secure agreement on when it should be regarded as having been completed.

If a single, symbolic date is sought to mark the completion of the industrial revolution it might, in my view, be that of the Great Exhibition of 1851. Although the employment of the steam engine as the prime source of mechanical energy was only partially completed at this date, it was already clear that mechanical energy needs no less than heat energy needs could be met by burning coal. Two or three decades were to elapse before virtually all the industries which used mechanical energy on a considerable scale were securing their supply from the steam engine, but it was already clear at the time of the Great Exhibition that this change was under way. The rail network in Britain had already transformed inland transport and was in the process of radically revising the economic geography of the country. Further, the centuries during which there was a marked contrast between developments in England and on the continent had ended. Other countries were quick to realise where the future lay and to ensure that they were not left behind. It became clear that events in England had resulted in a ‘package’ of changes covering all major energy uses that it was both desirable and feasible to adopt elsewhere. Implementing the new ‘package’ involved changes that were largely technical rather than institutional and compatible with a wide range of different political and institutional structures. The ‘package’ was widely taken up in the second half of the nineteenth century, with striking results for the relative economic performance of Britain and her neighbours.

The first edition of Jevons’ The coal question was published in 1865.