3 - Natural resources and the labour supply

Summary

Ideally our search for explanations of French economic growth before 1914 would begin with attempts to measure the contributions of its main determinants: rising inputs of natural resources, labour and capital, plus an increase in the productivity of these inputs. The reality is that economic historians have hesitated to give such a breakdown in the French case, partly for practical reasons of documentation, partly because of the marked discontinuities in the country's development [73, 10–11]. This gap in the available data means that some imprecision is inevitable in what follows. Nonetheless, there is the consolation that estimates of ‘total factor productivity’ risk a spurious accuracy, raising as many questions as they answer. And, given certain uniformities of development among the advanced nations, it seems reasonable to assume that the sources of growth in France were broadly similar to those observed elsewhere. That is to say, the deeper we move into the nineteenth and twentieth centuries, the more growth in per capita output can be attributed to increases in the productivity of land, labour and capital, rather than to the deployment of greater quantities of these resources. In this section we need to bear in mind two points. First, the empirical evidence (not to mention common sense) suggests that an increasing supply of natural resources was unlikely to be a major source of growth – though particular shortages in this field could result in important bottlenecks. Secondly, changes in the quality as well as the quantity of labour available could have important consequences for economic growth.