In the pushback on Allen’s arguments, I feel like the focus on wages is misleading. The question of whether new machines are a good investment is determined by the producer’s costs, not by the worker’s revenue. This seems to mean:
Building worker wages being lower because there is a contractor getting a cut irrelevant, because money paid to the contractor is still labor cost.
I can’t get to the women and girls wages in spinning work paper, but I note they emphasize “widespread” in the abstract which causes me to question the distribution of workers. In order for this angle of attack to weaken the argument the women and girls would have to be working in the same places and for the same people that the men do; that may be what the data shows, but my prior is that women are more likely to work at home and men more likely to work at a centralized location like a factory, and only the centralized locations are likely to consider investing in the spinning jenny so theirs are the costs relevant to adoption. Entirely separately, the description as widespread implies transport costs which would also be a factor.
In the ROI of the spinning jenny in England v France, unless the calculations somehow shift the numbers such that they are similarly profitable, I don’t see what this changes about the picture—if it is as much more profitable in England under the new assumptions as it was under the old, we still expect England to deploy it widely first.
On reflection, I suppose it might be that they are all correctly refuting a generic claim of high wages. My model is is not the same, and differs in two key dimensions from a generic high wages model: one, I model on producer costs rather than worker wages; two, I model for specific producers rather than generic workers.
Reflecting further, these might be mutually reinforcing—if labor costs are high enough for mechanization to be profitable only for some producers, that means that they are also surrounded by people with much lower labor costs, and I feel like there has to be some effect of “how can I get my costs in the spinning business to be lower like my friend in the dyer business” or whichever other comparison obtains.
I think in Allen’s book there is both a generic claim of high wages, and some specific analyses of technologies like the spinning jenny and whether it would have paid to adopt them.
The builders’ wages are part of the generic claim, because there was no building-related technology that was analyzed.
The spinners’ wages might be related to the spinning jenny ROI calculations, but I haven’t gone deep enough on the analysis to understand how the paper that was linked might affect those calculations.
In the pushback on Allen’s arguments, I feel like the focus on wages is misleading. The question of whether new machines are a good investment is determined by the producer’s costs, not by the worker’s revenue. This seems to mean:
Building worker wages being lower because there is a contractor getting a cut irrelevant, because money paid to the contractor is still labor cost.
I can’t get to the women and girls wages in spinning work paper, but I note they emphasize “widespread” in the abstract which causes me to question the distribution of workers. In order for this angle of attack to weaken the argument the women and girls would have to be working in the same places and for the same people that the men do; that may be what the data shows, but my prior is that women are more likely to work at home and men more likely to work at a centralized location like a factory, and only the centralized locations are likely to consider investing in the spinning jenny so theirs are the costs relevant to adoption. Entirely separately, the description as widespread implies transport costs which would also be a factor.
In the ROI of the spinning jenny in England v France, unless the calculations somehow shift the numbers such that they are similarly profitable, I don’t see what this changes about the picture—if it is as much more profitable in England under the new assumptions as it was under the old, we still expect England to deploy it widely first.
On reflection, I suppose it might be that they are all correctly refuting a generic claim of high wages. My model is is not the same, and differs in two key dimensions from a generic high wages model: one, I model on producer costs rather than worker wages; two, I model for specific producers rather than generic workers.
Reflecting further, these might be mutually reinforcing—if labor costs are high enough for mechanization to be profitable only for some producers, that means that they are also surrounded by people with much lower labor costs, and I feel like there has to be some effect of “how can I get my costs in the spinning business to be lower like my friend in the dyer business” or whichever other comparison obtains.
I think in Allen’s book there is both a generic claim of high wages, and some specific analyses of technologies like the spinning jenny and whether it would have paid to adopt them.
The builders’ wages are part of the generic claim, because there was no building-related technology that was analyzed.
The spinners’ wages might be related to the spinning jenny ROI calculations, but I haven’t gone deep enough on the analysis to understand how the paper that was linked might affect those calculations.
I was thinking along similar lines as I read the post. I was hoping to find others mentioning this in the comments. Thanks for the detailed analysis.