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Prices and Profits in Cotton Textiles During the Industrial Revolution

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  • C. Knick Harley

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 Economic and Social History Working Papers _081, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:esohwp:_081
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    References listed on IDEAS

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    1. Antras, Pol & Voth, Hans-Joachim, 2003. "Factor prices and productivity growth during the British industrial revolution," Explorations in Economic History, Elsevier, vol. 40(1), pages 52-77, January.
    2. Coleman, D. C., 1962. "Guinness's Brewery in the Irish Economy, 1759–1876. By Patrick Lynch and John Vaizey. Cambridge: Cambridge University Press, 1960. Pp. viii, 278. $7.00," The Journal of Economic History, Cambridge University Press, vol. 22(2), pages 279-280, June.
    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(1), pages 283-284, March.
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    Cited by:

    1. Robert C. Allen, 2016. "The Hand-Loom Weaver and the Power Loom: A Schumpeterian Perspective," Oxford University Economic and Social History Series _142, Economics Group, Nuffield College, University of Oxford.
    2. Paul 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 Economic and Social History Working Papers _083, University of Oxford, Department of Economics.
    3. 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.
    4. Robert Allen, 2016. "The Hand-Loom Weaver and the Power Loom: A Schumpeterian Perspective," Oxford Economic and Social History Working Papers _142, University of Oxford, Department of Economics.
    5. 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.
    6. Robert C. Allen, 2017. "The Hand-Loom Weaver and the Power Loom: A Schumpeterian Perspective REVISED," Working Papers 20170004, New York University Abu Dhabi, Department of Social Science, revised May 2017.
    7. Robert C. Allen, 2019. "Class structure and inequality during the industrial revolution: lessons from England's social tables, 1688–1867," Economic History Review, Economic History Society, vol. 72(1), pages 88-125, February.

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    More about this item

    Keywords

    Industrial Revolution; Cotton textiles; Prices; Profits;
    All these keywords.

    JEL classification:

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

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