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Prices and Profits in Cotton Textiles During the Industrial Revolution

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  • C. Knick Harley

    (Dept of Economics and St. Antony's College, University of Oxford, Oxford)

Abstract

Cotton textile firms led the development of machinery-based industrialization in the Industrial Revolution. This paper presents price and profits data extracted from the accounting records of three cotton firms between the 1770s and the 1820s. The course of prices and profits in cotton textiles illumine the nature of the economic processes at work. Some historians have seen the Industrial Revolution as a Schumpeterian process in which discontinuous technological change created large profits for innovators and succeeding decades were characterized by slow diffusion. Technological secrecy and imperfect capital markets limited expansion of use of the new technology and output expanded as profits were reinvested until eventually the new technology dominated. The evidence here supports a more equilibrium view which the industry expanded rapidly and prices fell in response to technological change. Price and profit evidence indicates that expansion of the industry had led to dramatic price declines by the 1780s and there is no evidence of super profits thereafter.

Suggested Citation

  • C. Knick Harley, 2010. "Prices and Profits in Cotton Textiles During the Industrial Revolution," Oxford University Economic and Social History Series _081, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:esohwp:_081
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    File URL: http://www.economics.ox.ac.uk/materials/papers/4363/harley81.pdf
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    References listed on IDEAS

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    1. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
    2. Mokyr, Joel, 1976. "Growing-up and the industrial revolution in Europe," Explorations in Economic History, Elsevier, vol. 13(4), pages 371-396, November.
    3. Lyons, John Stephen, 1978. "The Lancashire Cotton Industry and the Introduction of the Powerloom, 1815–1850," The Journal of Economic History, Cambridge University Press, vol. 38(01), pages 283-284, March.
    4. C. Knick Harley, 1998. "Cotton Textile Prices and the Industrial Revolution," Economic History Review, Economic History Society, vol. 51(1), pages 49-83, February.
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    Cited by:

    1. Paul A. David & S. Ryan Johansson & Andrea Pozzi, 2010. "The Demography of an Early Mortality Transition: Life Expectancy, Survival and Mortality Rates for Britain's Royals, 1500-1799," Oxford University Economic and Social History Series _083, Economics Group, Nuffield College, University of Oxford.
    2. Harley, C. Knick, 2012. "Was technological change in the early Industrial Revolution Schumpeterian? Evidence of cotton textile profitability," Explorations in Economic History, Elsevier, vol. 49(4), pages 516-527.

    More about this item

    Keywords

    Industrial Revolution; cotton textiles; prices; profits.;

    JEL classification:

    • N63 - Economic History - - Manufacturing and Construction - - - Europe: Pre-1913
    • N83 - Economic History - - Micro-Business History - - - Europe: Pre-1913

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