The demand that isn’t working

Some say that the industrial revolution of around 1780 didn’t need any of the Western Enlightenment that historians say was broadly shining all around in many people’s minds at that time.

Let’s face it, the first factory cotton spinning machine was got together by a carpenter who knew little mathematics and even less engineering science.  But let’s pause — there were probably a quarter of a million carpenters in England, Wales and Scotland at that time and everal million living in Europe.

Contemporaneously, there must have been several million single spinning wheels in cottages all round Europe ever since relatively small amount of surplus cotton from India had been imported every year for several generations beforehand.

If innovation is some sort of statistical fluke, then one might have thought that there to have been hundreds of two- or three- or four-wheel spinning machines to have been invented and at least being experimented with all round Europe, including England.

After all, a largely unfulfilled consumer demand was there already — a very small middle-class (for example, yeoman farmers’ wives in this country) was slowly rising all over Europe.  They were desperate for a beautifully woven cloth for summer wear that was equivalent to silk — the apparel of the aristocracy they yearned to imitate but couldn’t afford to buy.

This is where J. M. Keynes and most of today’s neo-Keynesian economists have got it wrong.  They think that consumer demand is all-important.  It isn’t.  The supply has got to be there in sufficient numbers for there to be a market in the first place.

But it was not there in 1700s England even though, probably, a quarter of a million poor women were working at their spinning wheels for pin money whenever they had some spare time from their children and household — or smallholding — chores.

It all changed when large quantities of raw cotton quite quickly became imported through (mainly) Liverpool docks from large slave labour plantations in the West Indies and America.  Suddenly the need to be able to spin cotton into fine thread in large quantities became apparent.

Invention is the Mother of Necessity.  Soon, a six-wheel spinning machine was devised, requiring only one operator instead of six, then an eight- . . . and so on. It only required one unknown carpenter — no doubt brilliant in all sorts of ways also — to have got the ball rolling.  The supply could suddenly all be made apparent.

Was the industrial revolution purely a by-product of the need to supply?  It looks like it, but perhaps not exclusively so because there was also a great feeling of independence and release around at the time.  Aristocrats were going on Grand Tours around Europe bringing back works of art and books and ideas which were eye- and mind-openers.

The Royal Society of intellectuals with outsize curiosity was founded a century before. A new feeling was being epigenetically bred into the culture of England — and also the Low countries and Germany — all on a narrow northern coastal strip of Europe.

Whether the one carpenter who built the first automated spinning machine was impelled by an economist’s  ‘supply factor’ or a personal need for enlightenment — or a mixture of both — does not really matter.  It certainly wasn’t demand — the item spelled in large numbers by modern economists.  It just wasn’t available then.  Demand only become fully apparent when an abundance of supply could be established first.  There’s already more than enough of demand-only type of thinking in today’s advanced countries and it’s plainly not working.

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