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Comment by bh23ha | Hacker News Reader

I have to agree with the latest theory that Britain had the unique combination of expensive labour and cheap energy.

It was unique to Britain for reasons having to do with coal and trade with the colonies, but the bottom line is only when you have cheap energy and expensive labour does it make sense to invest in machinery.

Only under those circumstances is it economical.

Even today companies in China who have tried to use more advanced machines to replace workers have found out it is less profitable. There is nothing magic about machines, they have to be more profitable then the alternative. And when labour is cheaper, you just use human labour, what ever is cheapest and works.

For those who prefer to read: http://www.voxeu.org/index.php?q=node/3570

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Even if that were a necessary condition, it wouldn't be sufficient. You also have to have an economy where investment in machinery makes sense. (I.e. your investment won't be confiscated by corrupt officials or destroyed by invaders.)

Also, humans only compete with machines in a few types of work. For example, you could not use human power to drive most of the things we drive with engines: cars, trains, ships, planes, etc.

> For example, you could not use human power to drive most of the things we drive with engines: cars, trains, ships, planes, etc.

True, but not relevant to the initial, successful commercialisation of the technology. The mobile power plants are a whole step beyond the "lets mechanize labour".

Newcomen engine: 1712, Stephenson's Rocket 1829.

That would be Hernando de Soto's ideas about developing capitalism in the western world as higher order property rights: i.e. a system where you are guaranteed the right both to use what you own and to perform other operations with it: selling to a complete stranger, renting, using it as collateral etc. I still haven't read any explanation as to why it happened in the western Europe but not elsewhere.

This thought struck me when I observed the reverse process in some poor countries during the oil boom. Where people are poor and energy is expensive, there's an incentive to 'deindustrialize' by replacing expensive machines with cheap labour. Industries weren't just standing still or going bust, but innovating by eliminating mechanization and taking on workers. Presumably an industrial revolution is the same process in reverse.

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