This post continues the weekly series discussing themes from Gregory Clark’s book A Farewell to Alms. Chapter 15 describes how technological advances from the Industrial Revolution spread to different countries around the world. Clark says that the technological, organisational and political developments in the late 18th and early 19th centuries should seemingly have resulted in all countries becoming part of the new industrialised world. However, this did not happen.
Different countries took different amounts of time to adopt the innovations, and these differences should have translated into moderate differences in the efficiency levels of economies. However, what actually happened was that many countries failed to achieve any appreciable material improvement, and the difference in material living standards between the wealthiest and the poorest countries has been increasing ever since.
By the end of the 19th century, cotton grown in India was being transported 11,000 kilometres to England to be turned into cloth, then transported 11,000 kilometres back to India to be sold. This was occurring even though the wages of workers in English mills were four to five times as high as those of workers in Indian mills. Somehow, English workers using similar machinery were able to achieve many times the productivity of Indian workers.