Industrial Revolution, income distribution, economies of scale, choice of technique, spinning jenny

N00, N01, N70

Why was England the cradle of the Industrial Revolution? The present work shows that scale economies and demand, combined with the conditions of the relative prices of input factors, allow to provide a purely economic answer to this question. The labor-saving innovations of the Industrial Revolution were profitable only if, after their adoption, sales expanded enough to cover the upfront cost of capital. For some time, England was the only country in which sales exceeded the minimum threshold required to make adoption profitable. This fact is illustrated here by means of a detailed case study centered on the cotton industry and on the adoption of the spinning jenny in England and in France at the dawn of the Industrial Revolution. By then, the sufficiently large and relatively well-off English middle class could guarantee to cotton spinners a level of sales that was not viable in France, where income was lower and more concentrated in the hands of the upper classes.