Template-type: ReDIF-Paper 1.0
Author-Name: C. Knick Harley
Author-Workplace-Name: Dept of Economics and St. Antony's College, University of Oxford, Oxford
Title: Prices and Profits in Cotton Textiles During the Industrial Revolution
Abstract: Cotton textile firms led the development of machinery-based industrialization in the Industrial Revolution. 
This paper presents price and profits data extracted from the accounting records of three cotton firms between the 
1770s and the 1820s. The course of prices and profits in cotton textiles illumine the nature of the economic processes
at work. Some historians have seen the Industrial Revolution as a Schumpeterian process in which discontinuous 
technological change created large profits for innovators and succeeding decades were characterized by slow diffusion.
Technological secrecy and imperfect capital markets limited expansion of use of the new technology and output expanded 
as profits were reinvested until eventually the new technology dominated. The evidence here supports a more equilibrium 
view which the industry expanded rapidly and prices fell in response to technological change. Price and profit evidence 
indicates that expansion of the industry had led to dramatic price declines by the 1780s and there is no evidence of 
super profits thereafter.
Classification-JEL: N63, N83
Keywords: Industrial Revolution, cotton textiles, prices, profits.
Length: 42 pages
Creation-Date: 2010-05-26
Number: _081
File-URL: http://www.economics.ox.ac.uk/materials/papers/4363/harley81.pdf
File-Format: application/pdf
Handle: RePEc:nuf:esohwp:_081