“Watch” the (industrial) revolution!

I don’t know how I missed such a valuable article, but O’Grada and Kelly have this fascinating piece on the price of watches in England from the early 18th century to the early 19th century in the Quarterly Journal of EconomicsStarting from Adam Smith’s quote that the price of watches had fallen 95% over roughly one hundred years, they collected prices of stolen watches reported in court records.  They find that Smith was wrong. The drop was only 75% (see the sarcasm here).

watch-prices

Why is this interesting? Because it shows something crucial about the industrial revolution. This was a complex good to build which required incredible technical advances – many of which could be considered general purpose technologies which could then be used by other industries for their own advances (on the assumption that other entrepreneurs noticed these technologies). But, more importantly, it provides further evidence against the pessimistic view of living standards in Britain at the beginning of the Industrial Revolution. These “new” goods became incredibly cheaper. Along with nails, glass, pottery and shipping , watches did not weigh heavily in the cost of living of the British. However, they did weigh heavily as industrial prices which meant that costs of production were falling progressively which augured well for the beginning of the industrial revolution*.

Literally, you can watch the industrial revolution in that paper! (sorry, bad pun)

* By the way, I use the term because it is conventional but a revolution is a clean break. The British industrial revolution was not saltation as much as it was a steady process of innovation from the early 18th century up to the mid 19th century. The real “revolution” in my eyes is that of the late 19th century. The technological changes from 1870 to 1890 are the most momentous in history and if there was any technological revolution in the past, this was it.