Research Report, Department of Economics, University of Western Ontario 2002-13
[Conclusions] There are several important messages to take away from this analysis both methodological and substantive. With regard to the former, we believe that the paper has reinforced the point that CGE models can be valuable tools for economic historians. At the same time, it should also be clear that to understand structural change in the British industrial revolution requires an open economy framework and explicit recognition that, in the terminology of international economics, Britain was a big country. In terms of the historiography of British industrialization, our simulations suggest that various familiar explanations for pronounced structural change do indeed have some validity. These include the suggestion by Williamson that unbalanced sectoral productivity growth played a part and the argument of Landes that population growth was conducive to industrialization. But we have also demonstrated that it is crucial to distinguish between a release of labour associated with a switch from family to capitalist farming and agricultural productivity improvement in a fully capitalist economy. Indeed, our most important substantive conclusion is that the key feature of the British economy was its (virtually) complete conversion to capitalist farming. Without taking this into account, it is not possible to explain British exceptionalism in its mid-nineteenth-century employment structure.