Smith and Ricardo as growth pessimists
They thought regarding three basic factors of production, i.e. land, labour, and capital. The latter two were with the capacity of indefinite expansion in principle however the first was not. The region of land that could be utilized for production was limited, yet its output was basic – not only to the way to obtain food but of virtually all the recycleables which entered into material production. This is self-evidently true of animal and vegetable recycleables – wool, cotton, leather, timber, etc. Nonetheless it was also true of most mineral production because the smelting of ores required much heat which was obtained from wood and charcoal. Expanding material production meant finding a greater level of produce from the land but that subsequently meant either taking into cultivation land of inferior quality, or using existing land more intensively, or both. This necessarily meant at some time that returns both to capital and labour would fall. In a nutshell, the very procedure for growth ensured that it might not be continued indefinitely. This is a basic characteristic of most “organic” economies, those that were universal prior to the industrial revolution. Adam Smith summarised the problem the following:
In a country which had acquired that full complement of riches that your nature of its soil and climate, and its own situation regarding other countries, allowed it to obtain; that could, therefore, advance no more, and that was not going backwards, both wages of labour and the profit of stock may possibly be suprisingly low. (Smith 1789)
He continued to explain in more detail what his statement implied for the living standards of the majority of the populace and for the return on capital. When Ricardo tackled the same issue he found the same conclusion and was explicit in insisting that the resulting situation “will necessarily be rendered permanent by the laws of nature, that have limited the productive powers of the land” (Ricardo 1817).
The constraint stressed by the classical economists could be expressed differently in a manner that highlights the change that transformed the options of expanding output and enabled an industrial revolution to occur.
Every type of material production involves the expenditure of energy which is equally true of most types of transport. In organic economies the dominant way to obtain the energy used in production was the procedure of photosynthesis in plants. The amount of energy which reaches the top of earth every year from sunlight is vast but photosynthesis captures significantly less than 0.5% of the energy in incident sunlight.
Photosynthesis was the foundation of mechanical energy which came predominantly from human and animal muscle power produced from food and fodder. Wind and water power were of comparatively minor importance. Photosynthesis was also the foundation of most heat energy found in production processes because the heat originated from burning wood.
The implications of the situation in limiting productive potential are obvious and dire. The land constraint was a severe impediment to growth. It really is epitomised in a phrase of Sir Thomas More. He remarked that sheep were eating up men. An expansion of wool production meant less land open to grow food crops. Or again, you can easily show that, if iron smelting had continued to rely upon charcoal, a growth in the production of iron to the scale which became normal in the mid-nineteenth century could have involved within the entire land surface of Britain with woodland.
Breaking clear of photosynthesis
Usage of energy that didn’t spring from the annual product of plant photosynthesis was a sine qua non for breaking clear of the constraints afflicting all organic economies. By an intriguing paradox, this came into being by gaining usage of the merchandise of photosynthesis stockpiled over a geological span of time. It had been the steadily increasing usage of coal as a power source which provided the escape route.
It was easy to substitute coal for wood as a remedy to the issue of increasing the way to obtain heat energy, at least where in fact the heat generated by burning coal and the thing to be heated were separated by a barrier that allowed the transfer of heat but prevented chemical exchange.
Coal could, for instance, readily be substituted for wood to heat salt pans or dye vats. It might also readily be utilized as a way to obtain domestic heat within an open fire though it had been some time before learning from your errors gave rise to a chimney that could both improve combustion and evacuate smoke. The first expansion of coal production was largely for domestic use, dominated by the way to obtain coal from coal pits close to the Tyne to London. The east coast coal trade expanded so greatly from Tudor times onwards that by the finish of the seventeenth century roughly half the tonnage of the merchant navy was specialized in this trade. Nonetheless it took many decades of learning from your errors to enable coal or coke to be substituted for charcoal in smelting iron as the transfer of chemical impurities prevented an excellent quality result.
Before early eighteenth century, coal, although used increasingly by the English, offered a remedy only to the issue of supplying heat energy. Mechanical energy remained a matter of muscle power and was therefore tied to the photosynthesis constraint. Hence the central need for the slow development of a highly effective steam engine that managed to get possible to convert heat energy into mechanical energy. Once this is possible the issue of limited energy supply was solved for your spectral range of material production and transport.
The phasing and scale of the energy revolution
Recently, it is becoming possible to quantify the phasing and scale of the energy revolution since scholars in several Europe have agreed a common group of conventions for the description and measurement of energy consumption. They have produced illuminating data.
Figure 1 . Annual energy consumption per head (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70
Source: Wrigley (2010).
Figure 1 depicts the growth in the annual consumption of energy per head in England over an interval of three centuries. In Tudor times, coal was only a contributor to national energy consumption and the energy scene was dominated by the mechanical energy supplied by people and draught animals which accounted for roughly half the energy total; and by firewood which supplied the majority of the rest. Already by the start of the eighteenth century half of most energy consumption originated from coal and by the mid-nineteenth century coal supplied more than 90% of the full total.
An identical depiction of energy consumption in Italy demonstrates during unification its energy situation bore a solid similarity compared to that of England in Tudor times. Indeed as more info becomes designed for other Europe the strong similarities between all countries whose economies remained organic is striking. None could liberate from the constraint which Adam Smith described unless they considered the accumulated product of photosynthesis during the past rather than with respect to the annual cycle of current photosynthesis. Coal consumption per head in England rose at an amazingly uniform rate over the complete three centuries covered in Figure 1, roughly doubling every half-century.
As could be observed in Table 1, the type of the change which occurred in energy consumption continues to be more dramatic if expressed in absolute instead of per caput terms as the population of England a lot more than quintupled from 3.036 million in 1561 to 16.732 million in 1851. All energy sources grew substantially in absolute terms (apart from firewood) however in many cases grew less quickly than population. In absolute terms coal output was a lot more than 240 times greater towards the end of the time than at its beginning.
Table 1 . Annual energy consumption in England and Wales, 1561-70 to 1850-9 (terajoules)