Rethinking the Industrial Revolution · Rethinking the Industrial Revolution Liam Brunt Abstract1...
Transcript of Rethinking the Industrial Revolution · Rethinking the Industrial Revolution Liam Brunt Abstract1...
Rethinking the
Industrial Revolution
Liam Brunt
Abstract1 In this paper we offer a new and simple definition of the Agricultural Revolution, the event that facilitated and prompted the Industrial Revolution. We define it as an exceptionally rapid increase in Total Factor Productivity (TFP). This generates a rightward shift in the supply curve for agricultural products and results in rising output and productivity. We show that this definition is implicit in the work of most researchers working in this area. The clarity of the new definition enables us to show that the Agricultural Revolution debate cannot be answered by the data currently being generated (output estimates and real rent series). On the basis of the data, we cannot pinpoint the timing of the Agricultural Revolution anywhere between 1500 and 1850 – and so we cannot distinguish between the historical interpretations of Allen (1999) and Overton (1996). We show that instead we need to gather more direct evidence about the supply side and how technology changed over time. This will help us to understand the timing of the Industrial Revolution. Keywords: Agriculture, development, total factor productivity. JEL Classification: N01, N53, O47.
1 This research was funded by the Economic and Social Research Council I am grateful to Lucy White for helpful comments and I would like to thank Bob Allen for making his data publicly available. Any remaining errors are my own responsibility.
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I. Introduction. During the Industrial Revolution, economic growth and
structural transformation in Britain were dominated by changes in the
agricultural sector. At first sight this statement may appear paradoxical – but, in
fact, it is easy to justify. First, we should note that agriculture was the largest
sector until 1840 (measured as a percentage of total output or total employment)
and wheat was the largest single component of national income.2 Second, the
pre-eminence of the agricultural sector meant that the growth rate in agriculture
was the primary determinant of the national growth rate (of both output and
productivity). Moreover, the downward revision of growth by Crafts and Harley
merely accentuates this effect – because it implies that the agricultural sector
was proportionately larger in 1700 than we had hitherto believed.3 Third, the
defining feature of the Industrial Revolution was the transfer of labour
resources from agriculture to industry. But Britain had to remain more or less
self-sufficient in foodstuffs because there were relatively few exportable
surpluses being produced by other European countries, at least in the eighteenth
century.4 So in order to release labour from agriculture and remain self-
sufficient, Britain required a high level of output per worker in agriculture. In
that sense, an improvement in agricultural productivity was a pre-requisite for
industrialisation to occur.5 Fourth, in international terms Britain was
conspicuous for its high level of agricultural output and productivity.6
In the light of these facts, it is scarcely surprising that historians have
been extremely interested in the timing and causes of output and productivity
growth in English agriculture. Moreover, there is ample qualitative evidence
(from both domestic and foreign sources) that important changes were
2 Crafts N F R, ‘The Industrial Revolution,’ in Floud R and D N McCloskey (eds), The Economic History of Britain since 1700, vol. 1 (Cambridge, 1994), 144-59. 3 Crafts N F R and C K Harley, ‘Output Growth and the British Industrial Revolution: a Restatement of the Crafts-Harley View,’ Economic History Review, vol. 45 (1992), 703-30. 4 That is to say that Britain was a large country (in terms of international trade) and the world elasticity of supply of agricultural products was low. So transferring labour from agriculture to industry in Britain would have resulted in a sharp rise in British agricultural prices and no off-setting inflow of foreign foodstuffs. 5 Crafts N F R, British Economic Growth during the Industrial Revolution (Oxford, 1985), 116-22. 6 Wrigley (Sir) E A, People, Cities and Wealth (Oxford, 1987), 157-193.
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occurring in the English agricultural sector.7 This included the adoption of
many new techniques and the reorganisation of production and rural
institutions. Together these changes were deemed by Toynbee to constitute
nothing less than an ‘Agricultural Revolution’ which immediately preceded the
Industrial Revolution.8 The Industrial Revolution was thought to have started
quite abruptly in 1780 following a sudden upturn in agricultural output after
1740.9
But the timing of the Agricultural Revolution has become rather
controversial in the last thirty years and has generated a large and contentious
literature. Kerridge was the first dissenter and argued that the important changes
in farming technique occurred in the sixteenth and seventeenth centuries.10 He
was supported in this by Jones and Allen, the latter of whom has argued
strongly in favour of a ‘Yeoman's Revolution’ in the seventeenth century.11
Counter-revisionism has been spear-headed by Overton, who locates the
Agricultural Revolution firmly in the late eighteenth century.12 The desire to
move the Agricultural Revolution in time has necessitated changing the
emphasis on various innovations as engines of growth. Eighteenth century
enclosures, turnips and seed drills were once in favour13; whereas sixteenth
century water meadows and seventeenth century seed varieties have more
recently come into fashion.14
The purpose of this paper is to show that the Agricultural Revolution
debate, in its current incarnation, has a fatal weakness. Quite simply, it will
never be possible to resolve the debate using the type of evidence being
7 For Example, Rochefoucauld F de La (Lord), A Frenchman in England (Paris, 1784; translated by Roberts S C and reprinted in Cambridge, 1933); Young A, A Six Month’s Tour through the Eastern Counties of England (London, 1771). 8 Toynbee A, Lectures on the Industrial Revolution in England (London, 1884); Prothero R E (Lord Ernle), English Farming Past and Present (London, 1912). 9 Deane P and W A Cole, British Economic Growth, 1688-1959 (Cambridge, 1962), 78. 10 Kerridge E, The Agricultural Revolution (London, 1967), 15. 11 Jones E L, ‘Agriculture, 1700-80,’ in Floud R and D McCloskey (eds), The Economic History of Britain since 1700, vol. 1 (1st edition, Cambridge, 1981), 66-86; Allen R C, Enclosure and the Yeoman (Oxford, 1992), 13-21. 12 Overton M, ‘Re-establishing the Agricultural Revolution,’ Agricultural History Review, vol. 44 (1996), 1-20. 13 For example, Chambers J D and G E Mingay, The Agricultural Revolution, 1750-1880 (London, 1966), 54. 14 For example, Allen R C, ‘The Two English Agricultural Revolutions, 1450-1850,’ in B M S Campbell and M Overton (eds), Land, Labour and Livestock (Manchester, 1991), 236-254.
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produced by the protagonists. Understandably, historians have collected data
which are relatively abundant and relatively easy to interpret (such as output
estimates). But we will show this is neither necessary nor sufficient to establish
the timing and causes of the Agricultural Revolution. Economic historians have
been led astray partly by their failure to define the Agricultural Revolution in
precise economic terms. We start our analysis in the next section by proposing a
clear definition which encompasses the concepts of Agricultural Revolution
embedded (explicitly or implicitly) in the work of the leading researchers in the
area. We then show in section III that the output estimates and price series
currently on offer are neither necessary nor sufficient to establish the timing of
the Agricultural Revolution. In section IV we show that estimates of Total
Factor Productivity (TFP) are both necessary and sufficient – but we cannot
generate reliable empirical estimates using Allen’s real rent technique. And in
section V we discuss what type of evidence will be required to resolve the
debate.
II. Defining the Agricultural Revolution. We have already noted that there
are a number of perspectives on the Agricultural Revolution and these
perspectives stress different aspects of agricultural development. In
consequence, each perspective generates a different description of the timing
and causes of the Agricultural Revolution. Of course, we are trying to
adjudicate between these perspectives in terms of historical relevance rather
than rule out any of them on a priori grounds. So we would like a definition
which encompasses as many of these aspects as possible – it would be pointless
to define the term so tightly that only one characterisation could possibly be
correct. On the other hand, we need a definition which is sufficiently simple and
precise that it is possible in practice to measure changes according to that
definition. It would be no use having a list of ten criteria which were difficult to
measure, such as the rate of institutional change or the level of factor mobility.
We suggest that the Agricultural Revolution be defined as an
exceptionally rapid increase in TFP, which moves outwards the supply curve
for agricultural products and generates higher output and lower prices. Most
researchers regard increases in output and productivity as the key characteristics
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of the Agricultural Revolution. This is reflected in recent comments by both
Overton and Allen.15 Notice in Figure 1 below that if the demand and supply
curves have the normal shape, then the only way that output and productivity
can rise at the same time is if the supply curve shifts outwards (S to S1). Then
output rises (Q to Q*) and price falls (P to P*): productivity has risen owing to
the shift in the supply curve. By contrast, an outward shift in the demand curve
(D to D1) would lead to an increase in output (Q to Q’) and also an increase in
price (P to P’); productivity has then fallen owing to the existence of
diminishing returns. So an outward shift in the supply curve is the essential
ingredient in the Agricultural Revolution because only then do output and
productivity rise at the same time.
Figure 1. Raising Ouput and Productivity Together.
Notice that the supply curve can shift outwards for two reasons. First,
there could be a fall in one or all of the input prices (land, labour or capital).
Then farmers would be willing to supply more output at any given price
because their costs would have fallen. However, this mechanism for shifting the
supply curve is not particularly interesting for several reasons. Notably, a
change in factor prices could be a temporary phenomenon and so the
agricultural supply curve could easily shift back to its old position - a kind of
Agricultural Counter-Revolution. This kind of cyclical behaviour of factor
prices undoubtedly happened at various times in the early modern period. In
15 Overton M, Agricultural Revolution in England (Cambridge, 1996), 7; Allen R C, ‘Tracking the Agricultural Revolution,’ Economic History Review, vol. 52 (1999), 209.
01 Quantity
Price
D1
D
S1
S
P
Q
P'
Q'
P*
Q*
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particular, an exogenous increase in population (say, owing to an improvement
in the disease environment) would lead to an increase in the price of output and
a fall in the price of labour. This generates an outward shift in the agricultural
supply curve. Moreover, in a Malthusian model this is partially off-set by a
reduction in food consumption per head and a consequent downward pressure
on the population, thus shifting the supply curve inwards again.16 However, it
seems unlikely that researchers have this kind of mechanism in mind when they
talk about the ‘Agricultural Revolution’. An exogenous fall in factor prices
simply represents more of the same kind of production, rather than something
qualitatively different; and a change in factor prices can be easily reversed.
So we would prefer to have a definition of ‘Agricultural Revolution’
which represents something permanent and demonstrates an important break
with the past. It is for that reason that we define the Agricultural Revolution as
an increase in TFP. Increasing TFP is the other way in which the supply curve
can shift outwards. This shift will generally be permanent because it results
from an increase in the stock of knowledge; and it will result in a new pattern of
production (be it a change in the pattern of outputs or inputs). Hence the new
manner of farming will be qualitatitvely different to the old manner of farming.
This definition makes sense on a number of other grounds. First, it can
encompass all the perspectives which have been proposed on the Agricultural
Revolution. Various agricultural developments have been claimed as more
‘revolutionary’ than others. We can easily assess these claims by considering
how each innovation raises TFP. The size of the increase will be a function of
how much more productive is the new technique than the one which it replaces;
and how widely the technique is adopted. This is a good measure of overall
historical importance. Social and institutional changes fit easily into this
framework. For example, we can consider the effect of enclosure on TFP and
then chart the increase in enclosure over time. Second, our supply curve
definition is closely linked to economic growth - which is a matter of central
16 The Malthusian model of population is complicated because it represents both a supply shock and a demand shock. In general, we can say that the supply shock would be smaller than the demand shock (owing to diminishing returns in agriculture); so eventually the food constraint would bind and off-set some of the exogenous increase in population. Notice, however, that the new low-disease equilibrium could still have more workers than the old equilibrium and hence the supply curve could see a permanent shift to the right.
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importance in understanding economic development in general and the
Industrial Revolution in particular. An increase in TFP reflects an outward shift
in the Production Possibility Frontier for agricultural products.
We have shown already that most researchers in the Agricultural
Revolution debate have been using the term in a way which is consistent with
our TFP and supply curve definition. We are simply making their concepts
explicit rather than implicit. The main dissenter from this view would be
Grantham and it is important to see how he differs from the others.17 Grantham
views the Agricultural Revolution largely as an intensification in production in
response to population pressure. Recall that rising population creates an
outward shift in the demand curve. Grantham argues that there was very little
change in the knowledge set of farmers between mediaeval times and 1850. For
example, farmers knew very early on that marling would raise grain yields and
total output. Sometimes in early societies it was economic to produce high
yields and output (when population pressure was high) and sometimes it was
not economic to do so (when population pressure was low). So population
growth shifted the demand curve outwards and led farmers to change their
choice of technique in favour of more intensive production. Grantham would
argue that we simply observed this phenomenon on an unprecedented scale in
England in the seventeenth and eighteenth centuries owing to unprecedented
population growth.
Now, there is an important distinction to be made between the choice of
technique on the one hand, and technological change on the other. First, let us
consider the choice of technique. At a given point in time, farmers have a
number of techniques available to them; and generally we assume that they
choose the technique which minimises the cost of production, given the
prevailing prices of factor inputs (land, labour and capital). Therefore, a change
in relative prices leads to a change in the choice of technique. In Grantham’s
economy, population pressure reduces the real wage and leads to intensification
in production through the employment of more workers (in weeding, ploughing,
drainage and so on). Now let us consider technological change. Economists
17 The clearest exposition of Grantham’s view was posted on the World Wide Web in November 1998. It can be found in the archives of eh.res at: www.eh.net/
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define technological change as the addition of a new technique to the existing
set of available techniques. If the new technique is economically viable, then it
will lead to a change in the choice of technique even in the absence of a change
in relative prices. This will result in an increase in TFP.
Grantham’s concept of the Agricultural Revolution is rather
unsatisfactory for three reasons.
First, technological change creates economic growth by pushing out the
Production Possibility Frontier. But a simple change in the choice of technique
has no such effect in a neo-classical framework. Grantham’s demand curve
concept of the Agricultural Revolution is therefore unsatisfactory in the sense
that it is not linked to economic growth. This makes it seem rather less
interesting than the TFP definition which we use in this paper. There are
actually two ways in which Grantham’s demand shock can generate a
permanent increase in output and productivity, although he has not explicitly
endorsed either of them. First, the economy could be in a Keynesian
equilibrium characterised by under-employment of resources – that is, operating
within the PPF. Then a demand shock could be validated by an increase in
supply and the economy would move closer to the PPF. This is not a
particularly attractive model because it is not obvious that the economy was
under-employed in the seventeenth and eighteenth centuries and there is no
evidence that markets were failing to clear – which is a prerequisite for
operating within the PPF. Second, we might believe in Boserupian induced
technological change – whereby a demand shock can create its own supply
through technological innovation. Again, this hypothesis has not proved
particularly popular amongst researchers of the Agricultural Revolution. An
obvious question arises as to why demand pressure induced technological
change in England and nowhere else (such as France).
The second problem with Grantham’s definition of the Agricultural
Revolution is that it suffers from reversability. Whereas an increase in TFP will
be permanent, Grantham’s Agricultural Revolution could disappear in response
to a fall in demand. Moreover, this reduction in demand might occur in
response to any number of shocks to the economy - population decrease,
increased foreign competition, a change in taxes, a change in tastes, and so on.
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Third, Grantham’s demand curve definition throws the responsibility for
both the Agricultural Revolution and economic growth during the Industrial
Revolution wholly onto the industrial sector. A static supply curve implies zero
economic growth in agriculture. Therefore Grantham would have to propose a
very high rate of industrial productivity growth to generate an Industrial
Revolution; and he would have to postulate a large differential between
agricultural and industrial growth rates (since he has just revised downwards the
agricultural growth rate). This can be shown as follows. First, suppose that there
is an increase in agricultural demand through an increase in population. The
increase in output cannot continue unchecked in the face of diminishing returns
in agriculture - because wages will be driven down to subsistence levels (or
lower) in a Malthusian trap. A continuation of the Agricultural Revolution
(intensified production) requires an increase in consumer purchasing power.
But this increase in purchasing power cannot come from the agricultural sector
because there are diminishing returns and there has been no economic growth.
So the industrial sector must be growing very fast in order to drive agricultural
change forward. Second, the absence of productivity growth in agriculture
would drive down the overall rate of productivity growth during the Industrial
Revolution because agriculture was the largest sector. This necessitates a
revision of our growth estimates during the Industrial Revolution in one (or
both) of two ways. Either we need to revise downward further our estimate of
overall economic growth in the Industrial Revolution. Or we need to revise
upwards the rate of productivity growth in the industrial sector. Revising
upwards the rate of industrial growth seems to be the most attractive option, in
the light of the required differential between agriculture and industry. Current
estimates of overall productivity growth and sectoral growth rates in the
Industrial Revolution do not lend much support to this characterisation of
events.
We have now defined the Agricultural Revolution simply and precisely
as an increase in TFP, which is consistent with the usage of most researchers
(particularly Allen and Overton). The next step is to consider how the empirical
evidence can guide us in determining when and why the agricultural supply
curve shifted outwards. We take the recent article by Allen as the basis for our
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analysis. This is not because our comments are more relevant to Allen than
anyone else in the debate – it is simply because he has offered the most recent
and articulate summary of the current state of knowledge. In the next section we
show that on the basis of aggregate output estimates it is impossible to reach
any sound conclusions regarding the timing of the Agricultural Revolution.
Aggregate output data are neither necessary nor sufficient to resolve the debate.
We show that even if we grant all of Allen’s points (for the sake of argument)
then Overton’s characterisation of the Agricultural Revolution could still be
correct.
III. Demand Equations and Output Estimates. It is obviously important to
estimate the level and growth of aggregate agricultural output. These figures
help to guide our interpretation of agricultural development and feed into our
estimates of national income. In fact, it was in order to refine our estimates of
national income that Crafts introduced the use of demand equations into the
analysis of English agriculture.18 Instead of assuming constant per capita food
consumption (as in the ‘population method’), Crafts simulated changes in per
capita consumption on the basis of prices and incomes. This technique was
ideal for Crafts’ analysis for three reasons. It harnessed much more information
(i.e. wages and prices); the information was relatively easy to come by; and
Crafts could avoid an explicit examination of agricultural development.
Unfortunately, the third of these qualities also makes the demand
equation approach very little use for an analysis of the Agricultural Revolution.
Demand equations are not a magic solution for generating information – we can
only get out as much information as we put into them. Since we put into them
very little information about agricultural production, it is scarcely surprising
that we get very little useful information back out. Researchers have been led
astray because they have not realised that it is historically more interesting to
describe (quantitatively) how production occurred rather than how much
production occurred. We show in this section that aggregate output estimates
18 Crafts N F R, ‘English Economic Growth in the Eighteenth Century: a Re-examination of Deane and Cole’s Estimates,’ Economic History Review, vol. 29 (1976), 226-35.
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are neither necessary nor sufficient to establish the timing of the Agricultural
Revolution.
It is clearly not necessary to observe aggregate output in order to
estimate changes in TFP. If we can show instead that a given level of output can
be produced with fewer inputs than previously, then we can measure the
increase in TFP. We could make this calculation with a sample of farms and we
do not actually have to build up national output estimates. We could be forgiven
for concentrating on aggregate output estimates if they were sufficient to
estimate changes in TFP (rather like using a sledgehammer to crack a nut).
Unfortunately, aggregate output estimates are not sufficient. We need to chart
changes in the supply curve due to increases in TFP. But in fact, it is impossible
to quantify changes in the supply curve from documenting changes in the
demand curve. (And even if we could show that the supply curve had shifted,
we would still need to rule out changing factor prices as a cause). This
shortcoming is demonstrated clearly in Figure 2 below.
Suppose for the sake of argument that we knew the position of the
demand curve. We know the market price of agricultural goods and therefore
we can read off the quantity demanded (since we must be somewhere on the
demand curve). At price P1770 in Figure 2 the quantity demanded in 1770 will
be Q1770. Since the quantities supplied and demanded must be equal in
equilibrium, we know that the quantity supplied in 1770 must also be Q1770. If
several conditions are met (such as zero storage from year to year) then output
in 1770 must also be Q1770. So we have now pinpointed one particular spot on
the supply curve for 1770 (marked by the black dot). Now suppose that we
know the position of the demand curve and the market price in every year.19
Then we can estimate output in each year and we generate a graph showing
hundreds of dots, as shown in Figure 2 below.
19 For the period after 1770 we can actually make this calculation using Feinstein’s annual real wage data, provided that certain assumptions are met. See Feinstein C H, ‘Pessimism Perpetuated: Real Wages and the Standard of Living in Britain during and after the Industrial Revolution,’ Journal of Economic History, vol. 58 (1998), 625-58. For the period before 1770 we have to use estimates of per capita national income which are averaged over much longer periods.
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Figure 2. Output Estimates from Demand Equations.
We must then ask whether we can estimate the supply curve from this
information. The answer is no. In econometric terms, the supply curve is still
not identified. The reason for this is simple. When we observe a move from one
level of output to another, we cannot tell to what extent this is a shift along the
supply curve and to what extent there has been a shift in the supply curve. We
can see this problem in Figure 3 below.
Figure 3. Two Possibilities for Changing Equilibrium Output.
In Figure 3, we observe a movement in the demand curve (D to D1) and
an increase in output (Q to Q1). But this could arise from a move along a
01 Quantity
Price
D
Q1770
P1770
01 Quantity
Price
D1
D
Q Q1
S(flat)S(steep)1
S(steep)2
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stationary flat supply curve S(flat); or it could arise from a large shift in a steep
supply curve, S(steep)1 to S(steep)2. So if we can information only on the
demand curve, then there is no way that we can distinguish these two cases.
The problem is very clear if we write down the equations for a simple
model of the demand and supply for agricultural goods. The most recent
formulation of the demand curve is presented by Allen.20 He takes a standard
demand function:
Qd = aPeIgMbN
(1)
where Qd is the quantity demanded, a is a constant, P is the market price, e is
the price elasticity of demand, I is per capita income, g is the income elasticity
of demand, M is the price of other goods, b is the cross-price elasticity of
demand for agricultural and other goods, and N is population. All these
variables are in real terms (i.e. deflated by the price index). Then on the basis of
theory and empirical evidence, Allen imposes values on e, g and b. With data
on P, I, M and N, he can then easily calculate Qd.
We could analogously write a simple supply curve:
QS = TPε (2)
where QS is the quantity supplied, T is the level of technology, P is the market
price of output, and ε is the elasticity of supply. Taking natural logarithms
would allow us to express the supply function in a linear form with could be
estimated using regression analysis:
lnQS = lnT + ε.lnP + u (3)
The problem depicted in Figure 2 above is immediately apparent in
equation (3). We have data on P and an estimate of Q from the demand equation
- but we do not know the elasticity of supply, ε, or the level of technology, T.
We have two unknowns and only one equation, so it is impossible to estimate
the values of either of the unknown terms. Notice that in principle we could
rearrange equation (3) to find T.
lnT = lnQ - ε.lnP – u (4)
We have annual data on P and annual estimates of Q. So if we knew the value
of the elasticity of supply, ε, then we could easily produce annual estimates of
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technology, T. We could then chart the rate of technological progress and the
movement of the supply curve every year and the debate about the Agricultural
Revolution would be over. Putting a value on the elasticity of supply, ε, is the
crux of the problem.
Three potential solutions present themselves at this point. By far the
easiest solution is simply to assume a value for ε. Unfortunately, we have very
little idea what a plausible value might be. The problem is compounded by the
fact that ε is unlikely to be stable over time, especially the long period which
Allen is analysing (three hundred and fifty years). For example, as land
resources become more scarce we might suppose that it will become
progressively more difficult to increase output in response to a rise in price (that
is, the elasticity of supply, ε, will fall).
A more attractive solution would be to assume that T is constant over
short periods (say, thirty years). Then we could estimate ε using the annual data
on output and prices. If our estimates of ε were sufficiently stable, then we
could set a value for ε for longer periods (say, 120 years) and calculate annual
values of T. Unfortunately, this is much more difficult than it appears at first
sight because the production function is rather more complicated than the
simple case which we have so far considered. In particular, agricultural supply
is subject to both annual weather shocks and climatic change.21 So our output
estimate does not enable us to observe the supply curve perfectly – it is
contaminated by a great deal of ‘noise’. The supply curve actually looks more
like this:
lnQ = lnT + ε.lnP + φln.W + u (6)
where W is weather. This is problematic for two reasons. First, remember that
technological change is very gradual (TFP growth of 1 per cent per annum
would be very fast for the eighteenth century). But annual weather shocks are
very large (maybe 40 per cent per annum). So we are trying to measure small
changes in the underlying supply curve whilst observing it through very large
20 Allen R C, ‘Tracking,’ 212. 21 For example, if the index of wheat production were one on average, then it would typically fluctuate between 0.6 and 1.4 on an annual basis. See Brunt L, ‘Estimating English Wheat Production in the Industrial Revolution,’ University of Oxford Discussion Paper in Economic and Social History, no. 29 (June 1999).
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transient shocks. Even if we controlled quite effectively for weather shocks, it
would be difficult to generate an accurate estimate of ε over a period as short as
thirty years. Notice further that there could be long run changes in the English
climate which move the supply curve outwards.22 This would look like
technological progress because it shifts outward the supply curve but it is really
an unmeasured input (more land).
The third solution to the identification problem is to introduce another
equation into the system. Two equations would enable us to solve out the two
unknown terms, ε and T. The obvious step is to model technology explicitly.
Although modelling the level and change in technology would be difficult, it
would also reveal a great deal of new information. We would not be limited to
saying when T changed; we would also be able to say why T changed. We
would thus be able to offer a much richer interpretation of historical events.
This approach has been noticeably absent in the literature on the Agricultural
Revolution.
So aggregate output estimates have substantial limitations for historical
analysis. We must ask whether this has any real impact on our interpretation of
history. The answer is yes. In Figure 4 below we have plotted the major output
movements highlighted by Allen – the large increase in output and stagnant
prices in the early period, versus the small increase in output and rising prices in
the later period.23 We can see that the large increase in output in the early
period (1520 to 1739) is consistent with a small shift in an elastic supply curve.
The supply curve is elastic because there are still unexploited land resources
which are gradually being brought into production. Then in the later period
(1739 to 1800) the small increase in output is consistent with a large shift in an
inelastic supply curve. That part of the supply curve is inelastic because most
land resources have now been brought into production and the remaining acres
are of low quality. Figure 4 shows that even if we accept all of Allen’s
estimates, it might be the case that the later period saw a rapid increase in TFP
and shift in the supply curve (and hence an Agricultural Revolution). Overton
22 In particular, the mean winter temperature has been getting steadily and significantly warmer in England since records began in 1659. See Manley G, ‘Central England Temperatures: Monthly Means 1659 to 1973,’ Quarterly Journal of the Royal Meteorological Society, vol. 100 (1974), 389-405.
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contends that the Agricultural Revolution occurred after 1750. So Allen might
have the correct data - but Overton might still be drawing the correct
conclusion.
Figure 4. Major Output Movements, 1520-1800.
The shortcomings of aggregate output data compel us to look at other
data series in order to establish the timing and causes of the Agricultural
Revolution. We will see in the next section that TFP estimates based on real
rent are the crux of Allen’s argument.
IV. Real Rent and Total Factor Productivity. Total Factor Productivity is the
ratio of outputs to inputs. A rise in TFP indicates that we can now produce more
output for a given level of inputs (or analogously, that we can produce the same
output as before using a lower level of inputs). So the crucial step from output
data to an estimate of TFP is the introduction of input data.
The drawback with TFP is that it is very data-intensive. To calculate
TFP at one particular point in time, we need data on all the inputs and outputs
for the each production unit (be it a farm, a county or a country). We then need
to replicate this calculation many times over to generate a time series for TFP –
which is essential if we are to pinpoint the Agricultural Revolution with any
degree of accuracy. Fortunately, if certain conditions are met then we can take a
short-cut by looking at real rent. Economic rent is the return on land generated
23 Allen R C, ‘Tracking,’ 215-6.
01
Quantity
Price
S1520
S1739
S1800
D1800
D1739D1520
21
by ‘that portion of the produce of the earth which is paid to the landlord for the
use of the original and indestructible productive powers of the soil’.24 If land is
in limited supply and there is perfect competition amongst farmers to rent land,
then the landowner can capture all the economic rent. An increase in TFP will
increase the economic rent because farmers will compete away all the extra
profit as higher rent to the landowner. Of course, over time the nominal
economic rent will change in order to keep pace with changes in the price level.
But if we deflate the nominal rent, then the resulting changes in real rent should
reflect changes in TFP. Notice that we do not need explicit estimates of inputs
and output in order to make this calculation – these are already netted out for us
in the rent. Allen produces a real rent series for the period 1540 to 1850 and
proposes to use it as an index of TFP.25 The problem is that real rent will only
reflect TFP accurately if certain conditions are met. The question then arises –
are all the relevant conditions met? The answer is no.
Allen graphs his time series of the level of real rent (his Figures 3 to 6,
pp218-20; they are labelled as TFP). The graphs demonstrate clearly that the
link between real rent and TFP is broken. Figure 3 shows a prolonged and
substantial decline in TFP between 1600 and 1650; Figure 6 shows an even
more impressive decline between 1750 and 1800. We normally think of TFP
growth as an addition to the stock of knowledge – a new ability to combine
inputs in a more efficient way. It is therefore difficult to see how TFP can
decline because a drop in TFP would imply that the body of knowledge open to
English farmers had shrunk. Farmers must have been very forgetful indeed for
TFP to have declined so far and so fast in the seventeenth and eighteenth
centuries. Productivity analyses for modern economies rarely find a decline in
TFP and most economists regard negative TFP as some kind of measurement
error. For example, firms may horde labour during a recession in order to keep
their skilled workers for the up-turn: the temporary decline in output makes TFP
growth look negative because there is no off-setting decline in inputs. This is
known as Okun’s Law. However, it is hard to believe that Okun’s Law explains
Allen’s prolonged negative productivity growth.
24 Allen R C, Enclosure and the Yeoman (Oxford, 1992), 174 (quoting Ricardo).
22
In fact, there are two lines of enquiry which seem more likely than
Okun’s Law to explain the apparent decline in TFP. Either there is a problem
with Allen’s data series; or there has been a violation of the conditions which
are required for real rent to be interpreted correctly as TFP. Let us consider each
of these in turn.
Allen appears to have a solid data series with 1543 real rent
observations for the period 1500-1850, which he presents on an annual basis as
a five-year rolling average. However, closer inspection reveals that this is no
normal time series. The observations are heavily clustered in a small number of
years, as demonstrated in Figure 5 below.
Figure 5. The Number of Rent Observations per annum, 1500-1850.
In fact, 1132 observations (73 per cent of the sample) are found in 17
years; and the remaining 411 observations are spread across the other 334 years
of Allen’s period. So effectively we have 17 benchmarks observed with a
reasonable degree of statistical confidence, and the rest is just interpolation
based on a few observations. So we have very little idea about how the real rent
series was moving between the benchmarks and the series is very erratic
because it is based on so few observations. The real rent series only appears
smooth in the graphs because Allen has taken a five year moving average. This
means that the massive impact of each benchmark is felt for nine years. The
interpolation problem becomes quite severe when we break down the real rent
25 Allen R C, ‘Tracking the Agricultural Revolution,’ Economic History Review, vol. 52 (1999),
0
25
50
75
100
125
150
175
200
1 51 101 151 201 251 301 351Year
Num
ber o
f Obs
erva
tions
23
observations into different categories, as we will need to do below (enclosed
versus open, arable versus pastoral). Then, outside the benchmark years, we
average only one observation of each type of rent every three years.
There are two further problems with Allen’s sampling procedure. First,
it is frequently the case that a large number of observations from a particular
year are drawn from a small number of villages. For example, the 27
observations for 1542 are drawn from eight villages – and 19 of those
observations come from just four villages. The greatly reduces our statistical
confidence in the estimate of real rent because the sample is not completely
random.26 Second, we are trying to judge the increase in average real rent over
time (in order to draw conclusions about TFP). But as the average real rent
rises, more marginal land will be brought into production. The marginal land
will earn a lower real rent. This will exert downward pressure on the average
real rent and therefore the average real rent series will not rise as fast as TFP. In
fact, the faster the increase in TFP the more marginal land will be brought into
production because it will now be economic to do so. So the increase in average
real rent over time will systematically underestimate the rise in TFP. The best
solution to this problem is to collect rent observations on only those plots of
land which were in production at the beginning of the survey period. Since
Allen does not follow this sampling strategy, we need instead to correct for the
likely downward bias.
So we do not really have an annual series of real rents: in fact, we would
need twenty times the number of observations and a more uniform distribution
to generate a reliable annual series. The econometrically sound way to proceed
209-35. 26 This is known as the Kish Design Effect and requires a corrected confidence interval. The Kish Design Effect arises because we might expect observations drawn from the same sub-sample to share certain characteristics. For example, suppose that we wanted to estimate the average height of the adult male population and we measured 27 people. We would obviously have lower confidence in the result if 19 of our observations were drawn from four families – because there are genetic forces leading to similarity of heights within each family. In the same way, we might wonder if the particular economic characteristics of a village were causing all the rent observations to be correlated. For a more detailed discussion, see Deaton A, ‘Data and Econometric Tools for Development Analysis,’ in Behrman J and T N Srinivasan (eds) The Handbook of Development Economics, vol. 3 (Amsterdam, 1995), 1797.
24
in this situation is to use the clustered observations as benchmarks and discard
the other observations.27 This is the strategy which we pursue here.
Let us turn to the conditions which need to be met in order to interpret
the changes in real rent as changes in TFP. There are (at least) four conditions
which were seriously violated in the period of Allen’s study.
First, recall that TFP is reflected in the economic rent, which is ‘paid to
the landlord for the use of the original and indestructible productive powers of
the soil’. We therefore need to net out the part of the real rent which is actually
a return on the landowner’s investment in physical capital (or we need to
assume that the investment is constant over time). It seems likely that
landowner investment rose and fell over time in response to changing interest
rates, but Allen makes no estimate or adjustment for these fluctuations.
Second, we need to control for economies of scale. When Allen first
adopted real rent as a measure of TFP, he noted explicitly that it was predicated
on the existence of constant returns to scale.28 Otherwise an increase in output
would cause an increase in productivity even though there was no technological
change. But Allen has argued more recently that there were important
economies of scale in agricultural production.29 He makes no adjustment for
this effect, despite the fact that it is normal to do so in productivity analysis.
Notice that Allen finds different economies of scale on arable and pastoral land
– this is not surprising since arable and pastoral production are based on
different technologies. This means that we have to separate arable and pastoral
observations in order to control for each type of economy of scale. Allen also
finds different economies of scale on open and enclosed land.
Third, Allen notes that inputs and outputs should be adjusted for taxes
when calculating TFP. He made this adjustment in his earlier work using a cross
section of farms.30 But remarkably, he makes no adjustment in his time series
real rent analysis. This is likely to be an important omission over the period
27 For another example of this approach, see Brunt L and E Cannon, ‘A Grain of Truth in Medieval Interest Rates? Re-examining the McCloskey-Nash Hypothesis,’ Bristol University Discussion Paper in Economics, No. 98/462 (February 1999). 28 Allen R C, ‘Efficiency and Distributional Consequences of Eighteenth Century Enclosures,’ Economic Journal, vol. 92 (1982), 937-53. 29 Allen R C, Enclosure and the Yeoman (Oxford, 1992), 211-217. 30 Allen R C, Enclosure and the Yeoman, (Oxford, 1992), 176.
25
1500-1850 when there were substantial changes in the taxes levied on land
through the Land Tax, the Poor Rate and the Corn Laws.
Fourth, Allen argues that enclosure caused rents to rise through a
redistribution of income from the tenant to the landowner.31 This is a serious
problem for two reasons. First, note that the enclosure of land would raise the
real rent but would not represent an increase in TFP. It is therefore not
legitimate to pool open and enclosed observations because the estimated
average rent would be affected by the mixture of open and enclosed
observations. If the mixture changed over time then the real rent series would
fluctuate independently of changes in TFP (the ‘composition effect’). Second,
note that if Allen’s characterisation of enclosure is correct then open field
farmers must somehow have been extracting a wedge from their landlord
(otherwise rents could not have risen after enclosure without making the
farmers bankrupt).32 We do not know if this wedge was constant over time. For
example, if population pressure increased the competition amongst open field
farmers to rent land then we might suppose that the wedge would fluctuate in
response to population pressure. The population rose and fell repeatedly
between 1500 and 1850, so the size of the wedge may also have changed.
It is not enough simply to criticise Allen’s assumptions. We need to
consider how the violations would effect his historical interpretation. Hence we
set out to adjust his real rent series and turn it into a TFP series, in order that we
could quantify the impact of the violated assumptions. The following strategy
recommended itself. First, decompose Allen’s data set into the necessary four
categories of land (open arable, enclosed arable, open pastoral and enclosed
pastoral). Second, adjust the average real rent in each category for scale
economies, taxes and marginal land. Third, aggregate the series using constant
proportions of open and enclosed land in order to eliminate the enclosure
composition effect.
31 This is a central plank of Allen’s Yeoman Revolution – enclosure was unnecessary and possibly pernicious. See Allen R C, ‘Efficiency.’ 32 It is not clear how open field farmers were able to withhold some of the value of farm land from the landlord - Allen has never proposed a specific explanation. Presumably there would have to be some kind of imperfect competition amongst open field farmers which prevented them competing away all the agricultural rents to the landlord.
26
Unfortunately, this strategy immediately ran into serious problems. In
the period 1624 to 1806 almost all the arable observations are drawn from open
land: so even for benchmark years it was impossible to get an estimate of
average real rent on enclosed arable land. Remember that in order to control for
economies of scale we need to treat the four categories separately (open and
enclosed arable, open and enclosed pastoral). Then to control for the
composition effect we need to re-aggregate the data in fixed proportions
throughout the period of study. So unless we placed a zero weight on enclosed
arable land, we could not re-aggregate the data over the period 1624 to 1806
(because we have no adjusted real rent figure for enclosed arable land before
1806). The reverse problem occurred after 1806 (i.e. virtually all the arable
observations pertain to enclosed arable land and there are not enough
observations of open arable land). We were confronted by a similar problem for
pasture land. In the period 1727 to 1844 almost all the pastoral observations are
drawn from enclosed land and it is impossible to generate an estimate for
pastoral rent on open land.33
In the face of this problem, we confine ourselves to presenting a series
for Open Arable Real Rents for the period 1624 to 1806 (Figure 6 below); and a
series for Enclosed Pastoral Real Rents for the period 1727 to 1844 (Figure 7
below). We then make the following comparisons and adjustments.
First, we demonstrate the composition effect by comparing our Open
Arable Real Rent series (OA RR) to Allen’s pooled All Arable Real Rent series
(AllA RR) in Figure 6; and comparing our Enclosed Pastoral Real Rent series
(EP RR) to Allen’s pooled All Pastoral Real Rent series (AllP RR) in Figure 7.
33 To get a reliable estimate of (say) enclosed arable rents, we required at least 20 observations of rent on enclosed arable land in each benchmark year. Before 1806 there were no benchmark years with 20 enclosed arable observations - in fact, the best we can manage is 1804 (ten observations), 1727 (eight observations from three villages) and 1791(six observations).
27
Notice that the upturn in the Open Arable series occurs later than in
Pooled Arable series. This is because Allen’s sample switches from being
almost all low rent open fields in 1806 to almost all high rent enclosed fields in
1811. According to Allen, this increase in real rent should not be interpreted as
a rise in TFP. Similarly, the Pooled Pastoral series grows faster up to 1770 than
the Enclosed Pastoral series – because after 1770 there are no more low rent
open pasture observations. Again, we should not confuse this pastoral
composition effect with TFP growth, which is what we do in Allen’s Pooled
Pasture Series.
Figure 6. Arable Real Rent, 1624-1806.
Figure 7. Pastoral Real Rent, 1727-1844.
0.44
0.94
1.44
1624 1661 1698 1735 1772 1809Year
TFP
AllA RROA RROASA RROASTA RROASTMA RR
1
1.5
2
2.5
3
3.5
1727 1750 1773 1796 1819 1842Year
TFP
AllP RREP RREPSA RREPSTA RREPSTMA RR
28
Second, Allen argues that the rate of TFP growth was the same on open
and enclosed land.34 For the period 1500-1739, Allen demonstrates the
similarity by graphing the pooled series (his Figure 3, p218) and the open field
series (his Figure 4, p219). The graphs are almost identical. However, it should
be noted that 75 per cent of Allen’s observations in period 1500-1739 come
from open fields. If we exclude the year 1727, then 81 per cent of Allen’s
observations come from open fields. So the reason that Allen’s Figures 3 and 4
look so much alike is that Figure 4 is simply Figure 3 reproduced with a few
missing observations. In order to examine the hypothesis that TFP growth is the
same on open and enclosed land we need a large sample of both types. In the
case of arable land, the only years for which this is possible are 1806 and 1811.
A comparison of real rents for open and enclosed arable over that period shows
that real rents on enclosed land were rising twice as fast as real rents on open
land. Of course, there is no reason to suppose that technological progress would
be the same on open and enclosed land – in fact, there is substantial historical
literature suggesting the exact opposite. The discrepancy in real rent behaviour
on open and enclosed land suggests that we should be sure to control for this
effect carefully in our overall real rent series.
Third, we then further adjusted the Open Arable series and Enclosed
Pasture series for economies of scale. We took Allen’s estimates of the size
distribution of farms and the effect of scale economies.35 This enabled us to
estimate the overall productivity effect of changing economies of scale. Again,
this is demonstrated above in Figure 6 (OASA RR) and Figure 7 (EPSA RR).
The trend towards land concentration over the period 1500 to 1850 implies a
downward revision to rate of productivity growth, particularly towards the end
of the period (when Allen finds a sharp increase in the level of TFP). It also
eliminates the apparent TFP growth on enclosed pasture land in the early
eighteenth century, during Allen’s ‘Yeoman Revolution’.
34 Allen, ‘Tracking,’ 219. 35 Allen R C, Enclosure and the Yeoman (Oxford, 1992). For the distribution of farm sizes, see p73; Allen gives data for 1600, 1700 and 1800 and we supplemented this with data for 1850 from Grigg D, ‘Farm Size in England and Wales, from Early Victorian Times to the Present,’ Agricultural History Review, vol. 35 (1987), 179-90. For the effect of economies of scale on Ricardian surplus per acre, see Allen p214.
29
Fourth, we made a further adjustment for the growing burden of the
Poor Rate on landowners. The poor rate was levied on each acre of land (in
accordance with the rateable value and the local burden of poor relief). In order
to make a proper adjustment for the changing tax burden, we would need to
know the rate levied in each village in Allen’s sample at the time the rent was
observed. This could potentially have a very large effect on the rent series
because the local variation in the cost of poor relief was large (so a high rent
might be due entirely to the high local cost of poor relief). We have avoided the
task of detailed adjustment here because it would obviously be a very onerous
undertaking. In fact, for many of the individual rent observations it could be
impossible because the relevant information may not exist in the local archives.
So instead we have focussed on the change in the average burden over time.
We estimated the average annual burden by taking the national expenditure on
poor relief in the benchmark years and dividing that sum by the number of acres
in cultivation.36 We then added that sum to the nominal rent. Remember that the
land owner is absorbing the poor rate – so an increase in the poor rate leads to a
lower nominal rent. Hence we need to add the tax to the nominal rent. The main
effect of this calculation is to revise upwards the estimate of real rent around
1800, when the poor rate was most burdensome. See Figure 6 (OASTA RR) and
Figure 7 (EPSTA RR).
Fifth, we revised the real rent series in order to control for changes in
the average quality of arable and pastoral land (OASTMA RR and EPSTMA
RR respectively). Without a full production model it is difficult to know by how
much the output was lower on marginal land. We know that in the case of wheat
production, yields on marginal land were around one third lower.37 So in the
absence of more precise data, we simply assume that output per acre was one
third lower on both marginal arable land and marginal pasture land. We can see
in Figure 6 above that the effect of marginal land on average real arable rent
was quite modest; this is because the proportion of arable land going into and
36 For poor relief expenditure, see Slack P, The English Poor Law (Basingstoke, 1990), 30; and Fowle T W, The Poor Law (London, 1881), 156. Acres in cultivation are taken from Brunt L, ‘Estimating English Wheat Production in the Industrial Revolution,’ University of Oxford Discussion Paper in Economic and Social History, no. 29 (June 1999). 37 Brunt L, ‘Estimating English Wheat Production in the Industrial Revolution,’ University of Oxford Discussion Paper in Economic and Social History, no. 29 (June 1999), 16.
30
out of production was quite small. By contrast, we can see in Figure 7 that the
effect of marginal land on average real pastoral rent was very large. This is not
surprising because, according to Allen’s data, the acreage of pasture land
increased from 10 million in 1700 to 17.5 million in 1800.38 In fact, if output
were only 20 per cent lower on marginal pasture land (rather than the 33 per
cent which we are currently assuming), then this would be sufficient to
completely eliminate the suspicious decline in real pastoral rents which Allen
finds for the late eighteenth century.
The overall effect of these revisions is to make the Open Arable and
Enclosed Pastoral real rent series noticably flatter, and to eliminate almost all
the puzzling drops in the pasture series. It is clear that these adjusted real rent
series cannot yet be interpreted as indices of TFP because there are still violent
fluctuations and substantial declines in the series, particularly in the case of
arable rents. It is likely that the extreme peaks and troughs are caused by the
lack of data: if we had more observations then we would have more precise
estimates of average real rent and the series would probably be smoother. It is
also likely that correcting for the violated assumptions would eliminate more of
the long upswings and downswings in the series. Of course, the crucial question
is - what upswings would remain and when would they be most rapid? The
substantial revisions proposed thus far (inadequate as they clearly are) suggest
that it is difficult to form a confident opinion about TFP on the basis of the
current real rent evidence. For example, if we postulate that output on marginal
pasture land was 20 per cent lower then we are left which an upturn in real rents
starting in 1806 (supporting Allen’s argument). But if we postulate that output
on marginal pasture land was 50 per cent lower then the upturn in real rents
starts around 1776 (supporting Overton’s argument). Clearly more precision is
required before we can reach any firm conclusions using real rents. A fact
which gives this interpretation added bite is that rents are likely to reflect
lagged productivity change. The qualitative evidence suggests that landlords
and farmers were constantly surprised in the eighteenth century by the growth
of prices, ouput and productivity. If leases were renewed every 20 years, then
38 Allen R C, ‘Agriculture during the Industrial Revolution,’ in Floud R and D N McCloskey (eds), The Economic History of Britain since 1700, vol. 1 (Cambridge, 1994), 96-123.
31
the rent increase between contracts reflects the increase in TFP which occurred
over the last 20 years. So in line with Overton’s argument, Allen’s evidence
could imply that the increase in pastoral TFP started in 1756.
Again it is important to ask whether these revisions could lead to any
change in our interpretation of history. Let us return to the debate between
Allen and Overton. We showed in the previous section that Allen’s estimates of
output growth are consistent with Overton’s interpretation of a large shift in the
supply curve in the late eighteenth century. Now we can further show that
Allen’s estimates of output and real rent growth are together consistent with
Overton’s interpretation of a large shift in the supply curve in the late
eighteenth century.
Recall that Allen finds that there was more rapid growth in real rents in
the early period than in the late eighteenth century. On the one hand, there are
several reasons to suppose that the rise in real rents was unrelated to
productivity (the switch from open to enclosed land, the growing tax burden). In
that case, Figure 4 in the previous section already captures all the essential
features of Allen’s evidence. On the other hand, supposed that there was some
increase in productivity in the early period as Allen suggest. Then it is still
possible that there was no shift in the supply curve in the early period because it
could have been due to economies of scale. This is a genuine increase in
productivity which would push up real rent (although not TFP). If the supply
curve were very elastic in the early period then the existence of economies of
scale could imply a downward sloping supply curve over some range of output.
This is reflected in Figure 8 below. The increase in demand between 1520 and
1739 could create not only higher output but also higher rents through
productivity increases. So Figure 8 can capture the finer points in Allen’s
description of events. But Figure 8 also shows that the supply curve could have
shifted much more dramatically between 1739 and 1800 than in the preceding
230 years. So Overton could still be correct in placing the Agricultural
Revolution at the end of the eighteenth century. We simply do not have enough
data to discriminate between the contrasting perspectives of Allen and Overton.
Despite the research effort of the last 30 years, we are not yet in a position to
pinpoint the timing of the Agricultural Revolution within a period of 350 years.
32
Figure 8. Major Output and Productivity Movements, 1520-1800.
V. Still Seeking the Agricultural Revolution. The uncertainty over the timing
of the Agricultural Revolution cannot be resolved using the data which has so
far been presented in the debate. We have discussed in some detail the
limitations of the two main types of evidence (output estimates and real rents).
The other types of evidence are no more conclusive. For example, grain yields
are often taken as a indicator of productivity growth but the evidence is open to
many interpretations. In particular, crop yield is a choice variable which farmers
adjust in response to the prevailing input and output prices (as well as the state
of technology). One of Grantham’s insights is that a rise in crop yields does not
necessarily represent a shift in the supply curve – it could just be a best
response to a shift in the demand curve.
If we want to ascertain what happened to the supply-side of the
agricultural sector then it behoves us to study the supply-side. The application
of modern quantitative techniques has been notably lacking in that area. A
careful reconstruction of the production function for agricultural goods would
achieve much more than pinpointing an increase in TFP and hence the
Agricultural Revolution. It would enable us to quantify the role of different
techniques and we could then extend the analysis by modelling the invention
and adoption of new technology. We could then postulate counterfactuals
examining how British agricultural development might have been different and
01 Quantity
PriceD1520 D1739
D1800
S1520
S1739
S1800
33
why it differed from other European economies. These are more fundamental
and interesting issues than simply dating the Agricultural Revolution. We
should not let an obsession with the Agricultural Revolution deflect us from a
more complete understanding of the sources of economic growth in developing
economies.