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Adam Smith, Watch Prices, and the Industrial Revolution

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  • Morgan Kelly
  • Cormac Ó Gráda

Abstract

Although largely absent from modern accounts of the Industrial Revolution, watches were the first mass-produced consumer durable and were Adam Smith’s preeminent example of technological progress. In fact, Smith makes the notable claim that watch prices may have fallen by up to 95% over the preceding century, a claim that this article attempts to evaluate. We look at changes in the reported value of over 3,200 stolen watches from criminal trials in the Old Bailey in London from 1685 to 1810. Before allowing for quality improvements, we find that the real price of watches in nearly all categories falls steadily by 1.3% a year, equivalent to a fall of 75% over a century, showing that sustained innovation in the production of a highly complex artifact had already appeared in one important sector of the British economy by the early eighteenth century.

Suggested Citation

  • Morgan Kelly & Cormac Ó Gráda, 2016. "Adam Smith, Watch Prices, and the Industrial Revolution," The Quarterly Journal of Economics, Oxford University Press, vol. 131(4), pages 1727-1752.
  • Handle: RePEc:oup:qjecon:v:131:y:2016:i:4:p:1727-1752.
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    File URL: http://hdl.handle.net/10.1093/qje/qjw026
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    1. The Napoleonic blockade & the infant industry argument: caveats, limitations, reservations
      by pseudoerasmus in Pseudoerasmus on 2016-12-26 18:01:04

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    Cited by:

    1. Cormac Ó Gráda, 2016. "Did Science Cause the Industrial Revolution?," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 224-239, March.
    2. Kelly, Morgan & Ó Gráda, Cormac, 2020. "Connecting the Scientific and Industrial Revolutions: The Role of Practical Mathematics," CEPR Discussion Papers 14885, C.E.P.R. Discussion Papers.
    3. Kelly, Morgan & Ó Gráda, Cormac, 2018. "Speed under Sail during the Early Industrial Revolution," CEPR Discussion Papers 12576, C.E.P.R. Discussion Papers.
    4. Bindler, Anna & Hjalmarsson, Randi, 2016. "The Fall of Capital Punishment and the Rise of Prisons: How Punishment Severity Affects Jury Verdicts," Working Papers in Economics 674, University of Gothenburg, Department of Economics.
    5. Morgan Kelly & Cormac Ó Gráda, 2017. "Technological Dynamism in a Stagnant Sector: Safety at Sea during the Early Industrial Revolution," Working Papers 201711, School of Economics, University College Dublin.

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