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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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    References listed on IDEAS

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    1. Gregory Clark, 2005. "The Condition of the Working Class in England, 1209-2004," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1307-1340, December.
    2. Broadberry,Stephen & Campbell,Bruce M. S. & Klein,Alexander & Overton,Mark & van Leeuwen,Bas, 2015. "British Economic Growth, 1270–1870," Cambridge Books, Cambridge University Press, number 9781107070783, May.
    3. Allen,Robert C., 2009. "The British Industrial Revolution in Global Perspective," Cambridge Books, Cambridge University Press, number 9780521868273, March.
    4. Sara Horrell & Jane Humphries & Ken Sneath, 2015. "Consumption conundrums unravelled," Economic History Review, Economic History Society, vol. 68(3), pages 830-857, August.
    5. Bilias, Yannis & Chen, Songnian & Ying, Zhiliang, 2000. "Simple resampling methods for censored regression quantiles," Journal of Econometrics, Elsevier, vol. 99(2), pages 373-386, December.
    6. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521719254, May.
    7. Morgan Kelly & Joel Mokyr & Cormac Ó Gráda, 2014. "Precocious Albion: A New Interpretation of the British Industrial Revolution," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 363-389, August.
    8. Jones, Eric, 2011. "Industrialisation and de-industrialisation: England divides," MPRA Paper 29247, University Library of Munich, Germany.
    9. Broadberry, Stephen & Campbell, Bruce M.S. & van Leeuwen, Bas, 2013. "When did Britain industrialise? The sectoral distribution of the labour force and labour productivity in Britain, 1381–1851," Explorations in Economic History, Elsevier, vol. 50(1), pages 16-27.
    10. Crafts, Nicholas, 2014. "Productivity Growth during the British Industrial Revolution: Revisionism Revisited," CAGE Online Working Paper Series 204, Competitive Advantage in the Global Economy (CAGE).
    11. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521895026, May.
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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. 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.
    2. Cormac Ó Gráda, 2016. "Did Science Cause the Industrial Revolution?," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 224-239, March.
    3. 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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    JEL classification:

    • N0 - Economic History - - General

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