Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-25T18:08:42.735Z Has data issue: false hasContentIssue false
  • English
  • Français

Why Isn't the Whole World Developed? Lessons from the Cotton Mills

Published online by Cambridge University Press:  03 March 2009

Gregory Clark
Gregory Clark
Affiliation:
The author is Assistant Professor of Economics, Stanford University, Stanford, CA 94305.
Get access Rights & Permissions [Opens in a new window]

Abstract

In 1910 one New England cotton textile operative performed as much work as 1.5 British, 2.3 German, and nearly 6 Greek, Japanese, Indian, or Chinese workers. Input substitution, and differences in technology, management, and workers' training or inherent abilities do not explain this. Instead local culture seems to have determined worker performance. Such differences, if widespread, would explain much of the international variation in wages. They also have important consequences for understanding labor migration, the choice of technique, and the sources of economic growth.

Type
Articles
Information
The Journal of Economic History , Volume 47 , Issue 1 , March 1987 , pp. 141 - 173
Copyright
Copyright © The Economic History Association 1987

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Floud and McCloskey's recent compilation on the economic history of Britain, although an excellent presentation of recent research, suffers this problem. We learn much more about what did not cause British economic development than about what did. See Floud, Roderick and McCloskey, Donald, eds., The Economic History of Britain since 1700 (Cambridge, 1981).Google Scholar

2 See, for example, Easterlin, Richard, “Why Isn't the Whole World Developed?” this JOURNAL, 41 (03 1981) pp. 1–19;Google ScholarLandes, David, The Unbound Prometheus (Cambridge, 1969);Google ScholarHirschman, Albert, The Strategy of Economic Development (New Haven, 1966);Google ScholarRosenberg, Nathan, Perspectives on Technology (London, 1976).CrossRefGoogle Scholar

3 Henderson, W. O., Britain and Industrial Europe, 1750–1870 (2nd edn., London, 1965), pp. 4–9;Google Scholar and Landes, The Unbound Prometheus, p. 148.Google Scholar

4 Milward, Alan S. and Saul, S. B., The Economic Development of Continental Europe, 1780–1870, (London, 1973), pp. 190, 296, 299, 303,Google Scholar and Henderson, Britain and Industrial Europe, p. 143.Google Scholar

5 Mehta, S. D., The Cotton Mills of India, 1854 to 1954 (Bombay, 1954), p. 5.Google Scholar

6 Ure, Andrew, The Cotton Manufacture of Great Britain (London, 1836), p. lxxv.Google Scholar

7 Ibid., p. xliii, lxxvii.

8 Ibid., p. lxxviii.

9 Ibid.

10 U.S. House of Representatives, Report of the Tariff Board, Cotton Manufactures (Washington, D.C., 1912), table 21, p. 46.Google Scholar

11 Ibid., tables 106, 107, pp. 214–19. World net exports is calculated as the sum of the net sales of yarn and cloth by countries which are net exporters of cotton goods.

12 See Lazonick, William, “Factor Costs and the Diffusion of Ring Spinning in Britain Prior to World War I”, Quarterly Journal of Economics, 96 (02 1981), pp. 89–109.CrossRefGoogle Scholar Also Lazonick, , “Competition, Specialization and Industrial Decline”, this JOURNAL, 41 (03 1981), pp. 31–38.Google Scholar An earlier criticism of the failure to integrate mills can be found, for the case of the introduction of automatic looms to Britain, in Frankel, M., “Obsolescence and Technological Change in a Maturing Economy”, American Economic Review, 45 (06 1955), pp. 296–319.Google Scholar

13 See Chin, Rockwood, Management, Industry and Trade in Cotton Textiles (New Haven, 1965), p. 85.Google Scholar See also Lazonick, “Factor Costs”, pp. 104–7.Google Scholar

14 Lazonick, “Factor Costs”, pp. 102, 104–7.Google Scholar

15 It cost $0.00446 per pound more to ship ring weft yarn between factories than to ship mule weft yarn, well yarn forming the cross threads in weaving cloth. The cost of manufacturing standard gray cloth in Britain, exclusive of the cotton, is given in the U.S. Tariff Board report at $0.123 per pound of cloth. The saving of transport costs would only apply to half the yarn, and 25 percent of British spindles were in integrated mills anyway, giving the total extra transport cost as 1.36 percent of the manufacturing cost. (U.S. House of Representatives, Report of the Tariff Board, Cotton Manufactures, p. 471).Google Scholar

16 See Copeland, Melvin, The Cotton Manufacturing Industry of the United States (Washington, DC., 1912), pp. 284–86.Google Scholar Because of the extensive development of the Liverpool cotton market, English spinners were able to economize through keeping smaller stocks of cotton at the mills than those of other countries, including the United States. French mills, for example, were reported to have had twice the stocks of cotton that the British mills had (Forrester, R. B., The Cotton Industry in France [Manchester, 1921], p. 30). Someone had to hold the cotton stocks, however, between their shipment to Europe in the fall and their eventual use in manufacturing. The merchants of Liverpool who fulfilled this function presumably were appropriately rewarded for the capital they had tied up in these stocks, through receiving a higher price when cotton was passed on to the mills.Google Scholar

17 Copeland, The Cotton Manufacturing Industry, p. 317; Forrester, Cotton Industry in France, p. 31.Google Scholar

18 Odell, Ralph, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 51, Cotton Goods in Russia (Washington, D.C., 1912), pp. 14–15.Google Scholar

19 Odell, Ralph, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No.107, Cotton Goods in China (Washington, D.C., 1916), pp. 175–76.Google ScholarClark, W. A. Graham, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No.13, Cotton Fabrics in British India and the Philippines (Washington, D.C., 1907), pp. 23–24.Google ScholarOdell, Ralph, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 157, Cotton Goods in British India, Part VI (Washington, D.C., 1918), p. 39.Google Scholar

20 The share of labor, depreciation and repairs, coal, and capital in the manufacturing cost of plain cloth in a British mill can be calculated independently from two sources. The U.S. House of Representatives, Report of the Tariff Board, Cotton Manufactures, pp. 462–67, 470–71, appendix D, pp. 799–820; tables 209, 210, pp. 662–65;Google Scholar and von Schultze-Gaevernitz, G., Cotton Trade in England and on the Continent (London, 1895), pp. 157–58. The cost shares these sources imply agree fairly closely.Google Scholar

21 See Forrester, Cotton Industry in France, p. 36.Google Scholar

22 Morris, Morris D., The Emergence of an Industrial Labor Force in India (Berkeley, 1965), p. 29Google Scholar, reports figures showing profit rates of 27.1 percent on average between 1905 and 1914 in the Bombay industry. This rate greatly overstates the real returns since it includes depreciation on capital and is calculated on the nominal share value of the firms. Since any earlier profits which were not paid out in dividends are added to the capital value of the firm, the real capital stock could be many times the nominal share value. profits net of depreciation and payments to the mill managing agents averaged only 10.3 See, for example, Morris, The Emergence of an Industrial Labor Force in India, pp. 32, 203.Google Scholar

23 See, for example, Morris, The Emergence of an Industrial Labor Force in India, pp. 32, 203.

24 See Besso, S. L., The Cotton Industry in Switzerland, Vorarlberg, and Italy (Manchester, 1910).Google Scholar

25 Clark, W. A. Graham, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 24, Cotton Fabrics in Middle Europe (Washington, D.C., 1908), p. 127.Google Scholar

26 Forrester, Cotton Industry in France, p. 41.Google Scholar

27 Copeland, The Cotton Manufacturing Industry, p. 299.Google Scholar

28 U.S. House of Representatives, Report of the Tariff Board, Cotton Manufactures, table 153, pp. 490–93.Google Scholar

29 Clark, W.A. Graham, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 86, Cotton Goods in Japan (Washington, D.C., 1913), pp. 191, 194;Google ScholarOdell, Cotton Goods in Russia, p. 16;Google ScholarOdell, Ralph, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 48, Cotton Goods in Italy (Washington, D.C., 1912), p. 24.Google Scholar

30 The information on outputs and twist per inch for Japan, India, and China is from Pearse, Arno S., The Cotton Industry of Japan and China (Manchester, 1929);Google ScholarPearse, Arno S., The Cotton Industry of India (Manchester, 1930);Google Scholar and Moser, Charles K., The Cotton Textile Industry of Far Eastern Countries (Boston, 1930).Google ScholarFor the United States the output and corrections for twist per inch are from the National Association of Cotton Manufacturers, Year Book, 1928, p. 212.Google Scholar For England the outputs are given in Winterbottom, James, Cotton Spinning Calculations and Yarn Costs (2nd edn.London, 1921), pp. 204–15.Google Scholar

31 See Saxonhouse, Gary, “Productivity Change in the Japanese Cotton Spinning Industry, 1891–1935” (Ph. D. thesis, Yale University, 1971), p. 123.Google Scholar

32 Forrester, Cotton Industry in France, p. 41.Google Scholar

33 Dohn, R.M.R., The German Cotton Industry (Manchester, 1913), p. 51.Google Scholar

34 Pearse, The Cotton Industry of India, p. 129.Google Scholar

35 Ibid., p. 149.

36 Ibid., p. 155.

37 Great Britain, Cotton Board, Labour Dept., Report on Labour Redeployment in the Musgrave Cardroom, Bolton (London, 1948), pp. 17–24.Google Scholar

38 Copeland, The Cotton Manufacturing Industry of the United States, p. 299.Google Scholar

39 Pearse, Cotton Textile Industry of India, p. 129.Google Scholar

40 From the relative strength of Indian and U.S. yarns it appears that in the 1920s Indian mills used Cotton which had fibers slightly less than one-eighth of an inch shorter for 20s yarn. Pearse gives a set of prices of cottons in India, together with the length of the cotton fiber. (Pearse, Cotton Industry of India, pp. 42–43). These prices show that with cottons of staple around seven-eighths of an inch, an increase of staple length of one-eighth inch increased cotton prices by about 12 percent. A similar calculation for the Memphis market for staple of one inch gives the same result (National Association of Cotton Manufacturers, Year Book, 1928, pp. 138–41).Google Scholar

41 Clark, Cotton Goods in Japan, pp. 80–81.Google Scholar

42 Clark, Cotton Fabrics in British India, p. 13.Google Scholar

43 Rutnagur, S. M., Bombay Industries: the Cotton Mills (Bombay, 1927), p. 24.Google Scholar

44 Forrester, Cotton Industry in France, p. 31.Google Scholar

45 Clark, W. A. Graham, U. S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 36, Cotton Goods in Latin America, Part II (Washington, D.C., 1910), p. 48.Google Scholar

46 Besso, Cotton Industry, p. 16.Google Scholar

47 Rutnagar, Cotton Mills, p. 294.Google Scholar

48 Odell, Cotton Industry in China, p. 158.Google Scholar

49 Clark, Cotton Goods in Latin America, Part II, p. 46.Google Scholar

50 Besso, Cotton Industry, p. 16.Google Scholar

51 Clark, Cotton Fabrics in British India, p. 88.Google Scholar

52 U.S. House of Representatives, Report of the Tariff Board, Cotton Manufactures, table 147, p. 472.Google Scholar

53 Clark, Cotton Fabrics in Middle Europe, p. 161.Google Scholar

54 Besso, Cotton Industry, p. 68.Google Scholar

55 Clark, W. A. Graham, U.S. Bureau of Foreign and Domestic Commerce, Special Agents Series, No. 18, The Cotton Textile Trade in the Turkish Empire, Greece and Italy (Washington, D.C., 1908), p. 48.Google Scholar

56 Apart from those in the Reports of Clark and Odell, such comments can be found in Forrester, , Cotton Industry in France, pp. 42–43;Google ScholarGreat Britain, House of Commons, Report of the Indian Factory Labour Commission, British Parliamentary Papers, Cd. 4292, 1908, p. 20; Great Britain, House of Commons, Minutes of Evidence taken before the Indian Industrial Commission, British Parliamentary Papers, Cmd. 234, 1919, p. 278; Moser, Cotton Textile Industry of the Far Eastern Countries, pp. 15, 68; Pearse, Cotton Industry of Japan and China, pp. 165, 172; Pearse, Cotton Industry of India, p. 53.Google Scholar

57 See Saxonhouse, Gary, “Productivity Change and Labor Absorption in Japanese Cotton Spinning, 1891–1935,” Quarterly Journal of Economics, 91 (05 1977), pp. 195–219.CrossRefGoogle Scholar

58 Copeland, Cotton Manufacturing Industry of the United States, p. 34.Google Scholar

59 Saxonhouse, Gary and Wright, Gavin, “Two Forms of Cheap Labor in Textile History,” in Saxonhouse, and Wright, , eds., Technique, Spirit and Form in the Making of Modern Economies: Essays in Honor of William N. Parker (Greenwich, 1984), table 24, p. 24.Google Scholar

60 I am grateful to Gavin Wright for pointing this out.Google Scholar

61 If the machine-worker ratio on new machinery is increasing at a rate of v relative to the machine-worker ratio on old machinery, the rate of growth of machinery investment is g, and machinery has a life of N years, then the machine-worker ratio on the existing stock of machinery relative to that on new machinery will be:Google Scholar

62 Report of the Indain Factory Labour Commission, appendix C.Google Scholar

63 Roberts, Charles, A Manual of Anthropometry (London, 1878), table 9, p. 86.Google Scholar

64 Moser, Cotton Textile Industry of the Far Eastern Countries, p. 101.Google Scholar

65 Senate, U.S., Immigration Commission, Abstracts of the Reports of the Immigration Commission (Washington, D.C., 1911), table 7, pp. 329–33.Google Scholar

66 Clark, Cotton Goods in Latin America, Part II, p. 48.Google Scholar

67 Pearse, Cotton Industry of India, p. 158.Google Scholar

68 Ibid., p. 129

69 Moser, Cotton Textile Industry of the Far Eastern Countries, p. 101.Google Scholar

70 Anstey, Vera, The Economic Development of India (4th edn., London, 1952), p. 276.Google Scholar

71 Clark, Cotton Goods in Latin America, Part I, p. 22.Google Scholar

72 Forrester, Cotton Industry in France, p. 42.Google Scholar

73 Gregory Clark, “Productivity Growth without Technical Change: European Agriculture before 1850” (unpublished manuscript). See also Gregory Clark, “The Cost of Capital and Medieval Agricultural Technique” (unpublished manuscript).Google Scholar

74 Smith, Adam, The Wealth of National (New York, 1937), p. 75.Google Scholar

75 Milward, Alan and Saul, S. B., The Development of the Economies of Continental Europe 1850–1914 (Cambridge, 1977), p. 64.Google Scholar

76 Thomas, Brinley, International Migration and Economic Development (Paris, 1961), pp. 10–11.Google Scholar

77 Habakkuk, H. J., American and British Technology in the Nineteenth Century: the Search for Labor-Saving Inventions (Cambridge, 1962), is the most celebrated argument for the influence of high American wages.Google ScholarDavid, Paul, Technical Choice, Innovation and Economic Growth (Cambridge, 1975), chap. 1, contains an extensive summary and discussion of the various labor scarcity analyses of American technological development.Google Scholar

78 Wood, George Henry, The History of Wages in the Cotton Trade (London, 1910), p. 143.Google Scholar

79 Wood, History of Wages, pp. 141–142.Google Scholar

80 Clark “Productivity Growth without Technical Change.”Google Scholar