I am an economic historian, part economist and part historian. To some, economists are funny. Historians do not appear to be as funny as economists. But at times one can find a good characterization of what historians do. A good metaphor of what economic history is about is contained in a nice anecdote I read not long ago about a tour guide in the Metropolitan Museum of Art, where a group of visitors was shown one of the famous but idealized pictures of George Washington made by Gilbert Stuart. A skeptical member of the group remarked that surely this picture bore but little resemblance to the real Washington. "Well," said the guide, "maybe that is not what he looked like then, but that surely is what he looks like now." This in a nutshell is what historians do: they interpret the past, but when doing so both the questions asked and the way the answers are provided are tainted with a certain measure of "now-ism." That is, they formulate questions that are of interest to them, and as they are children of their own time, their interests are inevitably conditioned by the world they live in. There is nothing wrong with that, as long as we do not force inappropriate mechanical inferences from analogies in the style of "this is the way it was then, so what we can expect now is .... "
Each society, then, writes most fondly about historical phenomena with which it is most familiar, and technological progress clearly is dominating our lives as much as it has ever done. The concept of an Industrial Revolution has recently become of great interest to general economists of all persuasions. The New Growth Theory has placed renewed emphasis on the importance of technological change in modern economic growth, and a number of publications have in recent years tried to look at the Industrial Revolution from the point of view of the new growth theory, examining and reexamining the somewhat-questionable time series we have for this period to the point of beating them to death (Brezis and others; Crafts; Greasley and Oxley; Greenwood and Yorukoglu). Rank and file economic historians such as myself who have been laboring in the trenches for decades trying to make some sense out of the historical data we have for the period are rejoicing in our sudden popularity among our fellow economists. It is therefore tempting to look at the events of our own time as analogous to those of the British Industrial Revolution since it adds legitimization to the research we were already doing anyway. But the temptation to look at the past to guide us in making predictions and policy recommendations should be resisted. Historical analogies often mislead as much as they instruct and in technological progress, where change is unpredictable, cumulative, and irreversible, the analogies are more dangerous than anywhere.
The British Industrial Revolution
The British Industrial Revolution in its "classical period" was, by and large, a small and localized affair, confined to a few regions in the northwest of England and the Scottish lowlands. As late as 1830, one could travel through the vast part of Britain and never see a factory chimney. The modern sector, as we may call it, employed perhaps 10 percent of the labor force. The largest sectors such as construction, services, agriculture, and most of manufacturing were operating more or less in the same technological paradigm as a century before. By the middle of the century, the small workshop, where the independent artisan labored with his sons and apprentices, was still far more common than the large cotton mill. Consequently, the productivity gains and the increase in real wages and the standard of living occurred late, by the reckoning of some not until the mid-1840s, two generations after the first great breakthroughs occurred (Mokyr 1993).
In our century, everything happens faster. But, adjusting for scale, are the phenomena comparable? For one thing, despite the fact that the British Industrial Revolution in the 18th century was limited to a small part of the economy, it was not limited to a single industry or even a handful. …