«How important was coal to the Industrial Revolution? Despite the huge growth of output, and the grip of coal and steam on the popular image of the ...»
Coal and the Industrial Revolution, 1700-1869
Gregory Clark (UC-Davis, Economics) and David Jacks (Simon Fraser, Economics)
How important was coal to the Industrial Revolution? Despite the huge
growth of output, and the grip of coal and steam on the popular image of
the Industrial Revolution, recent cliometric accounts have assumed coal
mining mattered little to the Industrial Revolution. In contrast both E. A.
Wrigley and Kenneth Pomeranz have made coal central to the story. This paper constructs new series on coal rents, the price of coal at pithead and at market, and the price of firewood, and uses them to examine this issue. We conclude coal output expanded in the Industrial Revolution mainly as a result of increased demand rather than technological innovations in mining.
But that expansion could have occurred at any time before 1760. Further our coal rents series suggests that English possession of coal reserves made a negligible contribution to Industrial Revolution incomes.
Introduction Coal has played a curious role in the history of the Industrial Revolution. In the popular imagination the Industrial Revolution is coal, steam, iron, cotton mills, and railways. And for an earlier generation of economic historians—T. S. Ashton, Fernand Braudel, Roy Church, J. H.
Clapham, Phyllis Deane, Michael Flinn, and John Nef—coal was indeed at the heart of the Industrial Revolution.1 Roy Church notes in his history of the coal industry, for example, “It is difficult to exaggerate the importance of coal to the British economy between 1830 and 1913.”2 Yet “cliometric” accounts of the Industrial Revolution, produced from the 1980s on, — those of Deirdre McCloskey, Nick Crafts, Knick Harley, and Joel Mokyr, for example—make coal only a bit actor.3 Despite enormous increases in output, the coal industry is credited with little of the national productivity advance either directly, or indirectly through linkages to steam power, See Ashton (1948), Braudel (1981), Church (1986), Clapham (1926), Deane (1965), Nef (1932).
Church, 1986, p. 758.
3 McCloskey (1981), Crafts (1985), Crafts and Harley (1992), Mokyr (1990).
metallurgy, or railroads. McCloskey (1981) does not even list it among the revolutionized sectors of the Industrial Revolution.
But the partisans of coal as the key transformative element of the Industrial Revolution have not conceded, and in recent accounts of the Industrial Revolution, most noticeably in the work of E.
A. Wrigley and Kenneth Pomeranz, coal is still the key actor.4 Both argue that the switch from a self-sustaining organic economy to a mineral resource depleting inorganic economy was central to the British Industrial Revolution. Indeed, Pomeranz’s account of the Industrial Revolution was recently dubbed “Coal and Colonies” by one reviewer.5 Pomeranz argues that Britain, in contrast to China, had accessible deposits of coal near population centers. That, rather than differences in innovative potential, explains British success and Chinese failure. The exploitation of the coal in the Industrial Revolution did, however, required dramatic technological advance: “technological expertise was essential to Europe’s coal breakthrough.” This was supplied by the arrival of steam power in the form of the Newcomen engine in 1712. Steam engines “spread rapidly and transformed an entire industry within a few decades.”6 These contrasting views of the role of coal in the Industrial Revolution can be portrayed in figures 1-3. Figure 1 shows estimated cumulative output in millions of tons from the north east coalfields in England compared with the estimated real price of coal in London, supplied by the north east, measured in the prices of the 1860s.7 In real terms the price of coal to consumers in London fell by 40% over the course of the Industrial Revolution, at a time when coalfield annual output expanded 18-fold.
Wrigley (1988), Pomeranz (2000).
6 Pomeranz, 2000, pp. 66-68.
7 Thus the price in London in the 1700s was 18 s. in nominal terms, compared to the 1860s nominal price of 19 s. 8 d.
But between the 1700s and 1860s all prices rose by 61%, so in real terms the 1700s price was higher at 32 s. per ton.
The “cliometric” account of coal in the Industrial Revolution can be represented in figure 2.
The horizontal axis shows cumulative output since the beginning of extraction in the north east coal field, and the vertical axis a hypothetical real cost of extraction per ton, which rises slowly as total extraction increases. But real extraction costs are only moderately higher at the cumulative output of the 1860s than at cumulative output of the 1700s. Also plotted are actual cumulative outputs by the 1700s and 1860s. In this portrayal the supply of coal is elastic. When demand increased so did output, with little increase in the price at the pithead. But the same expansion of output could have occurred earlier or later had demand conditions been appropriate. The movement outward in the rate of extraction was caused by the growth in population and incomes, and by improvements in transport and reductions in taxes which reduced the wedge between pithead prices and prices to the final consumers. Coal experienced a mere ‘shift along the supply curve, rather than outward movement of the curve’; that is, output soared because of increased input utilization and not due to the development of ‘new techniques allowing existing resources to produce cheaper or better’ (Mokyr, 1990, 110).
The alternative picture, favored by Wrigley and Pomeranz, where the industry was subject to major efficiency gains is that of figure 3, where the cost of extraction in 1700 increased sharply with increased output. Greater extraction with the technology of the 1700s would have caused sharp increases in real coal prices. As Michael Flinn notes, The increase in the supply of coal at prices that in real terms were constant or even diminishing was, of course, made possible by an unceasing flow of technical advances. The number and economic significance of these developments have been much underrated by historians in the past. (Flinn (1984), p. 442).
In the northeast, for example, there were coal seams at various depths from the surface. By the 1700s the shallowest, most easily worked seams had been largely exploited and further output depended on sinking deeper shafts, with greater associated costs of excavation, haulage, drainage, and ventilation. Technological advances in the coal industry from 1700 to 1860 shifted the extraction cost curve downwards. The coal industry was only able to respond to increases in demand in the Industrial Revolution era because of this technological advance. With the technology of the 1700s energy costs would have been radically higher by the 1860s, and much of the Industrial Revolution growth would have been choked off.
If we just consider pithead prices and output then these very different accounts are observationally equivalent. Table 1 shows our calculated price of coal at Newcastle, which is close to the pithead price, from the 1700s to the 1860s. The sources are listed in the appendix. Since coal varied greatly in quality we set the level of the Newcastle series calculated for 1700 to 1869 to be equivalent to the pithead prices for the northeast reported by Church for 1882-1913 (Church (1986), pp. 58-9). Figure 4 shows what happened to this prices, expressed as a real price by deflating by the average price level, as cumulative output rose. This picture is consistent with either a slowly rising cost of extraction and no significant technological advance between the 1700s and the 1860s or a steady and dramatic advance in the efficiency of the extraction technology. For the decline in real prices in London, as is well known, was caused by declining shipping and distribution costs coupled with a decline in taxation of the coal trade. In real terms the costs of coal close to the pithead actually increased moderately.
Thus discriminating between these stories of what happened in the coalfields requires further information. Below we develop a test of whether the supply curve for coal was believed to be close to horizontal in the eighteenth and early nineteenth century by looking at the behavior of mineral rents.
The Coal Supply Curve in 1700 What was the coal supply curve with the technology of the 1700s? Was it steeply upward sloped? We consider this from two aspects. First are the technological constraints.
The quantity of the unexploited coal reserve in the northeast was vast in the eighteenth century. Stanley Jevons estimated in 1865 that the northeast coal field originally contained 8,550 million tons of coal.8 In 1755 it was being extracted at the rate of 2 m. tons per year. At that rate there were reserves for 4,000 years or more.
However the coal seams lay at various, up to 2,000 feet. In 1700 the deepest mines were already about 300 feet. By the 1750s they reached 600 feet. By the 1820s some pits reached nearly 900 feet underground. Table 2 shows the distribution of mine depths on the Tyne in 1828. Two thirds of the mines then were below the 300 foot maximum of 1700, one third below the maximum of 600 feet in the 1750s. Another feature table 2 reveals, which was characteristic of the industry throughout the years 1700-1860, is that pits were always spread across a wide range of depths. The shallowest pits listed in 1828 were Blaydon Main and Baker’s Main, both at only 150 feet. In the 1750s when the deepest pits were 600 feet, the average depth was less than 200 feet.
Could the deeper coal reserves have been reached with the technology of 1700 at only modestly greater cost? Deeper seams involved greater costs in the form of shaft sinking, in hauling coal out, and in pumping out seepage water. Would costs in deeper pits have been radically higher in 1800 or 1860 if miners had been forced to reach deeper seams without steam power?
Hauling (winding) costs themselves were not the major obstacle, since here the cost advantages of steam did not appear till quite late. The haulage in even the deepest mines was still done using horse power up until at least the 1760s. Thus in the Walker colliery in 1765, the deepest mine at that point at 600 feet, coal was lifted from the mine by a gin powered by 8 horses. So while 8Jevons (1865), pp. ---.
winding costs rose with depth there was no technological constraint on depth imposed by haulage costs with the technology of the 1700s, and no advantage gained from steam here before the 1760s.
By the 1760s, however, mine drainage was mainly accomplished using Newcomen steam engines.9 However there was no technological barrier to using horse powered gins for drainage.
The advantage of steam power was purely one of cost. Thus the engineers at the copper mine in Middleton Tyas, faced with a coal cost of 11/- per ton in 1750, double the cost of coal at the pithead, opted to drain the mine using “a battery of pumps worked by horses.”10 This implies that in 1750 steam engines were only about 40 percent cheaper than horse powered pumps (since coal costs were only 70 percent of the costs of steam drainage).
The cost advantage of steam versus horse winding and pumping depended mainly on the cost of steam engines, the cost of coal at the pithead, and the cost of horse fodder. Nicholas von Tunzelmann gives enough information in his book on steam power in the Industrial Revolution to make a rough calculation of the cost per horse-power hour of horses versus mine steam engines over the years 1700-1869. This calculation is shown in table 3. In the 1720s steam had, as expected modest advantages. The introduction of steam power certainly did not revolutionize the industry then. But by the mid-nineteenth century steam cost only 25-30% as much as horse power.
Table 4 calculates how much the absence of coal would have raised costs of production in each epoch. The method here is to calculate how many lbs of the equivalent of best coal were used at the colliery per ton of coal raised, using the share of mining costs reported as coal consumed in winding or pumping. These lbs of coal were then translated into horse-power hours per ton of coal, shown in column 3 of the table. The extra cost of supplying this energy as horse power as opposed to steam power is given in column 4, and the percentage increase this would imply in production 9Smeaton found 57 Newcomen engines at work in the northeast coal field in 1767, with an aggregare horse power of 1,200 (Farey, 1827, 233-7).
10Raistrick, (1938), p. ---.
costs in the last column. The implication is that production costs in the nineteenth century would have risen by 10-20 percent absent the introduction and development of steam power in collieries.
The absence of the new steam technology would not have crippled the industry even late into the Industrial Revolution.
This demonstration deals, however, with only one aspect of technological advance in the coal mining industry, steam power. If there was a steeply rising extraction cost curve in 1700, the introduction of steam power on its own did little to flatten that curve. While it will cast serious doubts on the statements by Pomeranz on the key role of steam, however, it does not demonstrate that in a wider sense other less heralded technological advances were not indispensable to the expansion of the industry. Might the absence of an “unceasing flow of technical advances” - safety lamps, gunpowder in shaft excavating, improved winding gearing, ventilation systems, and so on – have driven up costs in the nineteenth by hundreds of percent?