World Economy – The Industrious Revolution
There’s a debate over the supply-side causes of the IR – which revolutions mattered? Could a
demand side story be more decisive? These ideas led to a new set of theories:
• Consumer Revolution and Industrious Revolution
Consumer Revolution
• Focused on 18th C consumption of manufactured goods
• Households demanded goods both to indicate status and to defend against purchases of
others.
• Different tech and raw materials required innovation not just imitation
• Income earning opportunities increased for women and children.
• Women used their increased household power as consumers
Industrious Revolution
De Vries (1994) argues that it began before 18th C IR – a demand side phenomenon that preceded
the IR
• Change in household level consumption patterns and household bargain. Based on
expanding trade empire and consumption choices.
• Required a change in employment patterns to match.
• Places the IR in a broader historical setting.
Drivers behind a demand side revolution
After ‘great discoveries’ substantially larger bundles of consumption opened to some consumers.
• Discovery of America brought potatoes, tomatoes, maize etc. increased trade made goods
like tea, silks, china and sugar available.
• Rise of manufacturing replaced home with market production. Demand for new types and
combinations of goods drove supply side.
• Labour of women and children became fully employed in the market economy in response
to demand.
What does it imply?
• Consumer demand grew regardless of real wage trends – households increased demand for
goods in the marketplace.
• Households also increased both supply of commodities and labour. Households increased
supply of money earning activities.
• Driven partially by commercial incentives and changes in tastes.
• Impacted family considerations regarding quality and quantity of children, women’s labour
and home production.
How did the Industrious Revolution cause the IR?
De Vries (1994) argued that family or household labour per year increased in response to market
changes.
• New consumption possibilities led to increased market labour
• Households chose to adjust extra hours into the market and specialise.
IR was a result of increasing labour force participation due to changes in tastes and consumption
tech (demand driven)
There’s a debate over the supply-side causes of the IR – which revolutions mattered? Could a
demand side story be more decisive? These ideas led to a new set of theories:
• Consumer Revolution and Industrious Revolution
Consumer Revolution
• Focused on 18th C consumption of manufactured goods
• Households demanded goods both to indicate status and to defend against purchases of
others.
• Different tech and raw materials required innovation not just imitation
• Income earning opportunities increased for women and children.
• Women used their increased household power as consumers
Industrious Revolution
De Vries (1994) argues that it began before 18th C IR – a demand side phenomenon that preceded
the IR
• Change in household level consumption patterns and household bargain. Based on
expanding trade empire and consumption choices.
• Required a change in employment patterns to match.
• Places the IR in a broader historical setting.
Drivers behind a demand side revolution
After ‘great discoveries’ substantially larger bundles of consumption opened to some consumers.
• Discovery of America brought potatoes, tomatoes, maize etc. increased trade made goods
like tea, silks, china and sugar available.
• Rise of manufacturing replaced home with market production. Demand for new types and
combinations of goods drove supply side.
• Labour of women and children became fully employed in the market economy in response
to demand.
What does it imply?
• Consumer demand grew regardless of real wage trends – households increased demand for
goods in the marketplace.
• Households also increased both supply of commodities and labour. Households increased
supply of money earning activities.
• Driven partially by commercial incentives and changes in tastes.
• Impacted family considerations regarding quality and quantity of children, women’s labour
and home production.
How did the Industrious Revolution cause the IR?
De Vries (1994) argued that family or household labour per year increased in response to market
changes.
• New consumption possibilities led to increased market labour
• Households chose to adjust extra hours into the market and specialise.
IR was a result of increasing labour force participation due to changes in tastes and consumption
tech (demand driven)
