For the eighteenth century the derivation of economic output is even more indirect and incomplete. Here Deane and Cole estimated the output as a weighted average of outputs in different sectors of the economy. Those were estimated by various proxies, for example did they use population as a proxy for the output in the agricultural sector. In order to eliminate inflation Deane and Cole deflated by the Rousseaux price index which left the accuracy of the data arguable. Their figures did in fact show that a more rapid growth started already in the 1740s (Hudson, 1992) but it accelerated between 1780 and 1831.
Although the data presented by Deane and Cole may not be accurate, the importance of their work was that it started a new debate about the significance of the Industrial Revolution as a period of rapid economic change.
In the 1980s Crafts revised Deane’s and Cole’s estimations and drew a picture of more gradual and cumulative growth. Crafts used different data sources not available to Deane and Cole, but this was not vital for the disagreement. In Craft’s view Deane and Cole did not properly deal with the weighting of different sectors of the industry, in particular of the cotton industry. For Crafts, Deane and Cole had overestimated the importance of the cotton industry in their calculations which had led to a faster growing picture than he thought to be true. The correct weighting of the cotton industry at each stage is very important for the growth estimation as it was by far the fastest growing part of the economy. Crafts developed a weighting system which averaged the weights of different industries during the Industrial Revolution and led to a much slower rate of growth in GDP and industrial output than Deane and Cole had proposed.
In Crafts’ approach there was a more gradual and steady growth and less acceleration in the rate of growth, change was much rather evolutionary than revolutionary. He emphasised on the fact that there were only few very dynamic and fast growing sectors of the industry such as cotton and iron, and the majority of the industries remained traditional and unmodernised, showing only modest growth rates. To Crafts total factor productivity was steady and most of the growth was confined to few atypical sectors, the traditional industries acted as a drag to the whole economy.
Crafts agrees on the idea of there being enormous change during the Industrial Revolution. To him the growth was evolutionary but the changes in the structure of industry were revolutionary. There was a shift towards employment in industry, but for Crafts this was rather due to the labour intensity of gradually expanding traditional unmodernised industries. Innovations and rising productivity in agriculture (‘Agricultural Revolution’) were also important for Crafts in that context making the increased use of labour in the industry possible.
Berg and Hudson did not doubt that Crafts’ approach showed evolutionary growth but they argued that it was not an appropriate approach to use. Their own approach was less quantitative, less aggregate, less economistic and they wanted to restore the notion of the Industrial Revolution being revolutionary rather than a gradual development as Crafts had proposed. They stressed on the inaccuracy of the data used by Crafts, for example their attempt to estimate occupational divisions or the weighting system of different sectors of the economy.
Berg and Hudson also doubted the division of industry into a traditional and a modern sector, especially the idea of the traditional sector acting as a drag to the whole economy. In their point of view there had been significant changes not only in cotton and iron but also in other parts of the industry with only limited effects on total factor productivity. Those changes had been for example innovations in product types and quality as well as improved work organisation.
More than that Berg and Hudson questioned the total factor productivity as being an appropriate measure of the significance of the Industrial Revolution. As mentioned already, certain changes in type and quality of products had not been immediately visible or measurable. In addition to that the structural changes in industry may even have led to diminishing labour productivity in the short run as workers in new positions had to learn new skills. Berg and Hudson also argued that the exclusion of women and children in Crafts’ estimates is distorting and understated the significance of the changes during the Industrial Revolution.
Finally Berg and Hudson criticised Crafts’ aggregate national perspective which did not reflect the diverse regional developments seen during the Industrial Revolution. In cases like Yorkshire those regional developments had been very distinct and intensive but were diluted by Crafts’ wide perspective.
The current debate centres around these approaches and it is hard to be in favour of only one of them because each emphasises on different aspects of the Industrial Revolution and proof is not always easy as the quality of the data used is open t dispute. The most comprehensive approach is to take the different views together into an integrated approach in order to draw a complete picture and to fully understand the nature of the Industrial Revolution.
