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Sir Richard Arkwright: premier crook in the Industrial Revolution.

The history of invention may date back to the dawn of ages. Who, for example, discovered the wheel? As plausible as any hypothesis, is that Mesolithic man invented it. If he were a single individual, he must be ranked as one of the greatest benefactors of mankind. The cost savings of running the modern economy "with" versus "without" the notion of the wheel must reach billions of dollars per annum.

It can be conceded that if he, or some comparable ancient inventor, had not invented it, it may have been invented some time later. But the pace of technical change during the early history of mankind was glacial. A postponemen of that historical process by 1,000 years puts most contemporary economists, if alive, as landless serfs slaving on the lords' lands from dawn to dusk. A postponement by some thousands of years puts them in slave gangs or sharing hut with the whimsical inventor.

We know that he is not receiving a cent from the cost savings that the wheel brings to the contemporary economy. Nor is the savage who cut and first rolled tree stump. Did he ever receive any reward? His most likely fate was that his fellow cavemen looked at the tree stump that rolled, and said to themselves, "This is final proof that the guy is mad", and they killed and ate him.

The tale has two morals. The first concerns the return to invention. Fortunately, progress has occurred in more ways than the purely economic, and mankind has come to treat inventors in a more genteel fashion. But the fundamental reality remains unchanging: the inventor should consider him/hersel extremely fortunate if his/her economic gain is not negative.

The second moral wonders how the benefits were distributed? Like most people, economists never deserved any benefit. On the whole, they have never invented anything of value, and the wheel has been much more important in accounting for their present standard of living than any of their own scribblings.

The favourite story of how the benefits were dispersed among the public was through reductions in the price of the relevant goods and services:

He, indeed, who made the discovery of the machine, or who first usefully applie it, would enjoy an additional advantage, by making great profits for a time; but, in proportion as the machine came into general use, the price of the commodity produced would, from the effects of competition, sink to its cost of production, when the capitalist would get the same money profits as before, and he would only participate in the general advantage as a consumer, by being enabled, with the same money revenue to command an additional quantity of comforts and enjoyments (Ricardo, 1951, p. 387).

If the benefits came through price reductions, they were probably not shared equitably. The rich, being big consumers, got more benefit than consumers of middling expenditures, and the homeless got none. There was another group of people who often received little benefit: the inventors.

One of history's most famous sequence of inventions came at a time when inventors were private, ordinary folk, not dependent on public, academic and corporate funding. Their efforts resulted in the manufacture of textiles becoming mechanized during the eighteenth century.

There were four rather distinct stages in making textiles. The preparatory stag involved sorting, cleaning and combing the fibres into lying beside one another Spinning consisted of drawing and twisting the fibres into a yarn. Weaving laid the yarn lengthwise (the warp) and perpendicularly (the weft) over and under th warp to form a cloth. The finishing stage cleaned, sheared, bleached, dyed, printed the cloth. The key inventions were at the weaving and spinning stages.

Weaving encompassed the making of many kinds of fabrics. Material of the more elaborate and decorative pattern, as for worsteds, was woven on the draw-loom. It was a large and intricate machine that is thought to have come from the East and was first used in Europe to weave silk (Singer, 1957, pp. 3, 165). It was improved in the fifteenth century by Jean le Calabrais, and in the seventeenth century by the inventions of Galantier, Blache, and Joseph Mason. Its draw cords, however, remained tedious to alter for a change in pattern. Early in the eighteenth century, Basile Bouchon designed a mechanism to automatically select the cords to be drawn. Jean Baptiste Falcon and later Jacques de Vaucanson (1709-82) improved the selection process, and Joseph Marie Jacquard (1752-1834) added a mechanical action that subsequently could be power driven. The Jacquard machine was invented in 1801 and soon came into widespread use.

Hosiery was a less elaborate fabric. Its knitting was facilitated by William Lee's (d. 1610) invention in 1589 of the knitting or stocking frame. He was unable to patent it in either England or France. It was treadle operated by foot. Nevertheless, it could do more than ten times as many stitches per minute as a hand-knitter. It was the basic invention which other men later improved with supplementary parts and devices that permitted the substitution of mechanical power for labour.

Most kinds of cloth were woven on the broad loom. It was derived from the ribbo loom developed in early seventeenth century Holland, possibly earlier in Danzig to weave different breadths of ribbon simultaneously (Usher, 1954, p. 282). Joh Kay (1704-54) improved it with tappets that co-ordinated the control of the pedals with the other motions of the machine and Vaucanson developed an operating bar and rack-and-wheel motion that governed the spindles. These inventions made the loom into a more automatic weaving machine. But its shuttle was hand operated, requiring two workers, one on each side of the loom, to thro and return the shuttle. John Kay's invention, the flying shuttle, could be put into operation with a single jerk of a cord which worked a wooden spring which set the shuttle rolling to and fro on wheels. It was patented in 1733. At first its shuttle was narrow and small with the thread frequently breaking. Kay soon made an improved heavier and longer machine that also incorporated his inventio of a larger and fixed spool, which reduced the risk of the thread breaking. The flying shuttle was first used in weaving wool, and later came into widespread use in weaving cotton. It proved difficult to convert the loom from a hand operation because the shuttle could not be thrown too hard without breaking the warp or too slowly without being trapped and stopped. Conversion did come in 1784 when Edmund Cartwright (1743-1823) constructed his first power loom. He patented it in 1785, and subsequently built improved models. Although its movements were too harsh, it did replicate the motions of the hand-weaver, stopped automatically ff the thread broke, and sized the warp. It could be powered by horses, water-wheels or steam engines. Later improvements made it more useful.

Spinning had been done with a hand-turned spinning wheel for centuries. A foot treadle was invented by Master Jurgen in early sixteenth century Germany. The important invention came early in the eighteenth century. It was a machine that used rollers to draw out and twist the fibres into a yarn in which the fibres were locked and bound together. According to one description, but not its paten specification, the rollers were arranged in two sets, with the fibre passing from the first set directly to the second set of rollers which, running at a faster speed, further drew out the fibre. The inventors were Lewis Paul (d. 1759) and John Wyatt (1700-66). Opinion differs as to their respective roles. One view gives Paul, a rather dilettantist character, the credit for the idea while Wyatt is assigned the role of the practical mechanic who actually made th machine (Wadsworth and Mann, 1931, p. 419). Another assigns the primary role to Wyatt, an inventor of other machines, for constructing a model of the spinning wheel in 1733 (Mantoux 1927, pp. 213-6). The machine was patented in Paul's nam in 1738. Although it was a fragile machine which frequently broke down and was difficult to repair, it could perform the spinning operation.

Prior to spinning, the cleansed raw wool or cotton had to be carded, which was an operation of disentangling and straightening the fibres, and laying them parallel to each other. For centuries, it had been done with hand-cards which were specially designed brushes with wire hooks attached to a leather backing o wood. In 1760, Paul received a patent for a machine that carded by rotating the fibres between cards set on a cylinder that was turned by a handle. It was in use until the 1760s (Ure, 1861, pp. 2, 23). Paul and other inventors made subsequent improvements, and carding machines were in common use in the 1770s.

Carded fibres were spun into a thread by the hand spinner drawing the fibres between this thumb and forefinger, and twisting them. In 1764, James Hargreaves (d. 1778) invented the spinning jenny that replicated the actions of the hand-spinner. It was hand-operated but allowed the spinner to operate a number of spindles on a moving carriage. With the jenny, one spinner could produce as much in a given time as 200 could produce before the invention (Ellison, 1968, p. 56). It spun a soft, loosely-twisted yarn that was more suitable for the wef than the warp of the cloth.

The water-frame was an improvement, using sets of rollers of varied weights, on Paul's and Wyatt's machine. It spun a coarse but strong yarn suitable for hosiery and the warp. It was developed by a reed maker, Thomas Highs, a clockmaker, John Kay, who was not related to the more famous John Kay of the flying shuttle, and/or the barber, Richard Arkwright (1732-92). It was patented in Arkwright's name in 1769. It was first driven by horse power, soon altered s as to be driven by a water-mill, later by a steam engine. These power sources could also drive the carding machines, which gave one advantage over the cheape hand-operated jenny.

A decade later, a much better spinning machine appeared. Samuel Crompton (1753-1827) began experiments in 1774 and finished with a working machine, the mule, in 1779. It combined the rollers of the water frame with the movable spindle carriage of the jenny. As the fibres came out of the rollers, they were clasped and the spindle carriage could be moved back and forth, thereby rapidly turning the spindles mounted on it which further drew out and twisted the thread. The result was that the mule could produce either a soft or hard yarn; thinner, lighter, more-twisted (higher count) or thicker, less twisted (lower count) yarn. It could be used to produce both sorts of yarns, those suitable fo the warp and those suitable for the weft. It was never patented. It soon supplanted the water frame although the latter remained in use because it produced a stronger, lower count yarn more cheaply. Initially the mule was a heavy, wooden, hand-operated machine. Other inventors soon made lighter, metal versions which were power driven.

By the end of the century, many factories using these machines came into operation. They featured iron pots for washing the raw material, stoves for drying it, carding machines to feed it to the jennies, water frames or mules, and looms to weave the thread into cloth (Wadsworth and Mann, 1931, p. 494).

The biographies of the inventors do not make happy reading. William Lee tried and failed to patent his stocking frame in England, moved to France where some governmental interest was temporarily aroused. John Kay did manage to patent hi flying shuttle, but not his spool. Both were widely pirated. His litigation expenses drove him in flight to France where governmental authorities showed some interest, and gave a small pension to him. Both Lee and Kay died abroad in obscurity.

Lewis Paul and John Wyatt installed some of their machines in a workshop. It wa a small operation that staggered for a few years until it was abandoned. Two other attempts to use their machines were made without any greater success. Neither man made money from their machine.

James Hargreaves was more successful. He went into partnership with Thomas James, and they operated a workshop using the jennies. He had a modest success, leaving an estate of |pounds~7,000 on his death.

Samuel Crompton never patented his mule. He revealed his secret to some manufacturers, who subsequently took up a collection totalling |pounds~60 which they most graciously presented to him in 1800. They were not so hesitant in making use of his invention. "By 1795, ... it was soon greatly to outnumber the water frame and jenny spindles at work in the industry" (Edwards, 1967, p. 200) "By 1811, four-fifths of the cotton goods produced in Lancashire were made of mule yarn" (Ashton, 1948, p. 74), the fixed capital in mules was four times tha in water frames (Chapman, 1971, p. 75). The gross value of British cottons amounted to |pounds~28 million, the value-added reached |pounds~23 million in 1812 (Deane and Cole, 1962, p. 185). Fortunately, the British government was more generous, and Parliament voted a gift of |pounds~5,000 to him in 1812. Earlier in 1809, it had given |pounds~10,000 to Cartwright who also had little success in attempts at exploiting his power loom.

Not much seems to be known about Thomas Highs or John Kay, the clockmaker. They are not listed in the most comprehensive encyclopedia of British lives (Stephen 1917-). Nor can the names of Blache, Bouchon, Falcon and Galantier be found in the French equivalent (Balteau 1933-). Highs lived out his old age on a dole from a kindly manufacturer (Baines, 1966, p. 156).

There are records of the lives of Vaucanson and Jacquard. Neither achieved business success. Both received compensation from the French government. The Bourbons appointed Vaucanson to a government post, and Bonaparte gave a pension and a royalty payment to Jacquard. Governmental support in that era tended to come after the fact of invention rather than a funding of the invention process Otherwise it was just like the present: it gave more support than private enterprise to inventions of fundamental significance.

Such is the account of the lives of the leading lights in the process of the technical development. Indubitably there were many other nameless individuals who made mechanical contributions. "It would be vain to enumerate all the littl additions to Crompton's original machine; also, as they arose so much out of on another, it is impossible to give every claimant what is exactly his due for improvements" (Ure, 1861, pp. 1, 288). Presumably they did not achieve much greater worldly success, or at least not enough to be remembered by posterity.

The record of little economic gain to invention in the capitalist economy is no surprising. Many of the inventions were not, in themselves, economically viable They played only parts in a process of development, the last link being the one that made the machine into a useful implement. Its patent would have been valuable but its inventor, almost invariably a nobody in the social order, was poorly equipped to handle the bureaucratic and legal intricacies of securing th patent:

those that do are at length so changed by the various contrivances of others, that not any one man can pretend to the invention of the whole, nor will agree about their respective shares in the parts. And moreover this commonly is so long a-doing, that the poor inventor is either dead or disabled by the debts contracted to pursue his design (Baines, 1966, p. 114).

The inventor was seldom well positioned to exploit his invention on his own, an competition would have virtually guaranteed losses instead of profits to him. I is a repugnant attribute of capitalism that a minor and trivial advantage can give a competitive edge sufficient to bring huge earnings to a finn without it having contributed anything to the underlying and fundamental processes of invention and economic growth. Once in possession of his machine, already established firms would have had considerable advantages over him in having lon standing contracts for selling the same or similar products, and obtaining any of the material and factor inputs required in its manufacture. In contrast to the actual process of invention, its exploitation often required a considerable capital outlay, and the lowly inventor could have borrowed at worse terms if he had indeed been able to find a lender.

Nor could he expect to receive payments for the use of his machine by pirate manufacturers. In the absence of patent protection, there was no obligation on their part. Not that they would likely honour such an obligation without imposing large litigation expenses on the patentee. Any scruples or generosity would have added to the costs of production of the donor, and put him at a competitive disadvantage with rival pirates.

If the capitalist order gave little motivation for invention, why did it occur? Instead of postulating that the inventor was irrational but economic, it is, perchance, better to imagine him as the normal human being: rational but not th economic man. The hope of gain need not be completely absent for it to be a matter of little consequence. There exists a plethora of hobbies and idle pastimes that give direct utility, and millions of people have indulged themselves in them with nary a serious thought of profit. Typically, a pastime is not removed from the rest of life, and can arise from anywhere in life's experiences, including the work life, but that latter connection need not imply an economic interest. It can merely reflect the fact that work is usually one o the major parts of life, and like them, can provide sustenance to enquiring minds. Most of the English inventors of the eighteenth century were mechanics, without much formal education but intelligent persons whose intellects can have puzzled over prosaic, workaday problems during their leisure moments. The next step, from puzzling to tinkering, was a short one.

Inventive activity in that era may have largely been such an avocation. Its indulgence had little to distinguish it from gardening, bird watching, toy soldier modelling, quilting and hundreds of kindred diversions, although the eighteenth century commonality, with their rationalist panache for the scientific and mechanical, may have had interests more particularly promising for invention. Like those amusements, it was often a virtually costless activity: the capital outlays being limited to some household tools and some pieces of wood and metal.

Too much may be made out of a dichotomy between work and pastime. The more likely reality was that a continuum existed between vocations that gave not direct utility and avocations that had no prospect of economic reward. It is no certain where eighteenth century inventive endeavour lay in such a continuum, but it is certain that the inventing mechanics were suckers if they had more than slight expectations of economic gain.

Whatever was their motivation, their efforts yielded untold economic benefit to mankind, and inventions were and continue to be overwhelmingly the single greatest source of economic growth.

The unworldly lives of the textile inventors did feature one glaring exception. He was Sir Richard Arkwright. Three issues have been raised over his connection with textile invention. Did he contribute anything to the invention of the wate frame? Was it much of a technical breakthrough? Was it economically significant

There is much disagreement over Arkwright's role in the invention. Although testimony, which may be fond imaginings, exists that he had mechanical interest and aptitudes, his early career was in barbering, innkeeping and wig making. None were mechanical in nature, and his work life in those occupations lasted 1 years from 1750 to 1768. In 1767, he met the clockmaker, John Kay, whom he employed for five years. Suddenly he appeared with the water frame in 1768, and received its patent in 1769.

In the early 1760s, Thomas Highs was known to be working to perfect a machine for spinning cotton with sets of rollers running in sequence at faster speeds. He was a skilled mechanic with a proven record of inventive talent. His assistant was the Kay whom Ark wright subsequently employed. It is an open question whether Kay merely reproduced, at Arkwright's importunity, a Highs' model or made an improved model that incorporated Arkwright's suggestions. On one side, there is the appraisal: "Probably he took advantage of some of the discoveries of others but he certainly contributed much himself. His mechanical keenness, confidence and adventurousness have been underestimated" (Fitton and Wadsworth, 1958, p. 62). An opposing judgement states: "The fact that he previously had no knowledge either of spinning or mechanics, and his suspicious dealings with Kay, make it fairly clear how he may have come into possession of another man's invention" (Mantoux, 1927, p. 236). Whatever was the case, there has always been a starling vagueness as to what exactly were Arkwright's technical contributions. In the 1785 patent trial, Highs gave testimony that Arkwright had stolen the invention from him.

On the second issue of the machine's technical novelty, the consensus is that the basic idea of spinning with rollers goes back to Wyatt's machine. But the opinion differs as to whether the improvements in technical details were great or small. One view claims: "however much Arkwright may have used the ideas of others, two essential features are to be found in his spinning machine (subsequently known as the water frame) which do not appear on earlier ones" (Fitton, 1989, p. 17). The opposing stance is: "Generally speaking, this machin only differs in its details from that of Wyatt" (Mantoux, 1927, p. 228).

The third issue, of economic usefulness, has given rise to no disagreement then or now. At the time, there was an intense interest in the inventions, and Crompton had many disagreeable moments coping with prying eyes.

The consequence was that the old Hall was besieged by manufacturers and others from the surrounding districts ... many more prepared to penetrate the mystery of the wonderful new wheel and discover the principle of its operations by any means in their power. All kinds of stratagems were practised to obtain admissio to the house; and when this was denied many climbed up to the windows outside b the aid of harrows and ladders to look at the machine. Crompton erected a scree to protect himself from this kind of observation, but even that did not at all times serve the intended purpose. One inquisitive adventurer is said to have ensconced himself for some days in the cockloft, where he watched Samuel at wor through a gimlet hole pierced through the ceiling (French, 1970, p. 64).

One of the peepers was Arkwright who contrived a visit in Crompton's absence, "on the pretext of a friendly call ... but with the real purpose of secretly inspecting the new wheel" (French, 1970, p. 66).

More significantly, the speed at which cotton textile manufacturers brought the jenny, the water frame and the mule into employment fittingly bespeaks their utility. "Capital and labour rushed to this manufacture in a torrent, attracted by the unequalled profits which it yielded. Numerous mills were erected, and filled with water-frames; and jennies and mules were made and set to work with almost incredible rapidity" (Baines, 1966, p. 214). The number of English and Scottish firms using them in factories in 1795 has been put at slightly more than 200, about half of which were located in the Midlands (Chapman, 1971, pp. 92-107). This figure does not include many smaller workshops and homes where th jenny, and even the mule, were in use. Referring to the mule:

Its comparatively small cost made it accessible to persons of very moderate capital, while its compact form and inconsiderable weight enabled it to be worked by the human hand in moderately sized room of an ordinary dwelling-house ... Many industrious men commenced business with a single mule worked by their own hands (French, 1970, p. 119).

Nevertheless, "the structure of the industry continued to be polarized, that is characterized by a few giants and many small men dependent on the credit of merchants or merchant-manufacturers" (Chapman, 1987, p. 28). The merchants and the giant manufacturers made their fortunes while contributing little to the process of invention. Out of a list of almost 300 partners in the British cotto firms (Chapman, 1967, pp. 230-6), only about a dozen are recorded as patentees in any sort of invention (Woodcraft, 1969). The most outstanding fortune was Arkwright's, which was valued at half a million pounds sterling at the time of his death (Mantoux, 1927, p. 238).

The basis of his fortune was a large annual income, which Figure 1 can illustrate.

The representative firm in the industry was contributing OE output to the total industry's output of OJ. The revenue of each firm averaged OBCE which covered total factor payments for the relevant factor services. They included profits t providers of capital, managerial remuneration, etc.

Suddenly the human being closest to an angel of the Lord appeared with his invention. Unfortunately, he was not as good as an angel in safeguarding social welfare, and his invention fell into the grubby grasp of a capitalist "innovator".

With the machine, the "innovator" could have produced the product of lower unit costs, and his average cost curve became AC'. If he restricted his output to nearly OE, the market price would have remained close to OB, and his excess profits, above payments to co-operating factor services, would have approximate ABCD.

He could have chosen to license other firms to use the machine. Then their average cost curves would also have shifted downwards. He might have been able to collect a licensing fee from them, the maximum sum being ABCD, that each could have paid if each also restricted output to pre-existing levels. Their imitation would, however, have likely shifted the industry's supply curve downwards, and the price could have been maintained at OG, only if the industry's output were kept at OJ. The area FGHI represents the sum the "innovator" would have earned from the excess profits on his own operations and the licensing fees collected from his rivals.

The restriction on output may have been difficult to maintain as each firm woul have had an incentive to increase its output up to where marginal cost equalled the market price. As the industry's output increased, the market price would have fallen, and the excess earnings of the "innovator" would have tended to decline. He would have faced a dilemma: an open-handed licensing policy would have condoned increased output by his existing rivals while a close-fisted approach might have encouraged pirating and the entry of outside firms. In either case, output could have tended to increase substantially, with market equilibrium coming at K if the industry were subject to diseconomies of scale. At that point, the "innovator" would have ceased making excess profits on his own operations. So would his licensed rivals; and licensing would have ceased t command a market value.

In the case of the textile industry, the speed of entry seems very great but th water frame and the mule brought such huge cost savings that excess profits wer enjoyed for a few decades. The rate of profit has been estimated at 100 per cen for at least one firm during this era (Chapman, 1987, p. 31). It was not due to compensation for undue riskiness: the cost savings were obvious and attracted widespread public interest. "One cannot avoid the conclusion that the new machinery spread quickly in England because the whole community was interested in it" (Wadsworth and Mann, 1931, p. 506). Fate was particularly kind to those firms that could most easily and quickly put them into employment and thereby garner the gains. Most of the lucky firms were textile manufacturers and merchants already in the industry (Landes, 1969, p. 66).

In general, the "innovator" faced a choice in long run strategy. He could try t restrict entry and output, thereby prolonging the receipt of excess profits and licensing fees. That strategy required the prevention of pirating and the existence of some means of enforcing the licensees' collusion. The other choice was to accept entry and industrial expansion, and join in the race. In the interim, the excess profits and licensing fees could be ploughed back into establishing a large enterprise. Eventually its rate of profit would fall to ordinary levels, but its large size could continue to yield a large level of profits into the indefinite future. The "innovator" could anticipate a prolonge gleaning of some portion of the enlargement of the triangular producer surplus area from MGH to LNK in Figure 1. The enlargement, in the case of the enormous expansion in the cotton textile industry, represents an immense sum. Arkwright devoted the rest of his life to the latter strategy without completely turning his back on the other strategy. Not that the choice of strategy was that significant in determining the duration of excess profits. A much more significant event was the replacement, within a couple of decades, of the water frame by a superior substitute, the mule.

He collected licensing fees from other cotton manufacturers, enforced by his willingness to sue infringers on the patents in court. In 1780, the annual fee was |pounds~2 per spindle (Fitton, 1989, p. 93). The patent for the water frame expired in 1783, but was supplemented by a carding machine patent that has been characterized as "a legal manoeuvre by which Arkwright sought to monopolize the whole spinning process, including older inventions than his own" (Chapman, 1967 p. 50). It was issued in 1775, invalidated in a court case in 1781, re-instated in another case in 1785 and finally cancelled in yet another court case in the same year.

Besides pursuing licensees, he built an empire of cotton mills. In 1768, he entered a partnership with John Smalley, a publican, and David Thornley, a merchant. Neither was rich. After a failure to secure a bank loan, the partnership was extended in 1770 to include two wealthier individuals, Samuel Need, a hosier, and Jedediah Strutt, a silk manufacturer. The partnership lease property in 1769 for a small workplace in Nottingham where horses were used to drive the water frame. Shortly afterwards, in 1771, construction began on a large mill in Cromford where the machines were driven by a water mill. It used water frames that were built on the premises. That practice remained common during the coming decades. "One way of installing machines, which seems to have been widely adopted in the 1780s, was for spinners to make their own" (Edwards, 1967, p. 201).

The partnership changed when Thornley died in 1772 and Smalley was forced out i 1777. It continued with Need and Strutt until Need's death in 1781. The partnership built three mills and Arkwright subsequently built seven.

The pinnacle of his career came in 1786 when the Crown prostituted itself and bestowed a knighthood on him. On Sir Richard's death, his income stood at more than |pounds~40,000 per annum at a time when a skilled workman, like his benefactors, Thomas Highs and John Kay, could expect an annual wage of about |pounds~50 (Baines, 1966, pp. 374, 379, 436).

Such was the remarkable career of Sir Richard Arkwright. His work life began at age 18, continued in a modest way in the service sector of the economy for another 18 years, suddenly burst into a year of mechanical genius, lapsed into another 22 years of money grabbing. Is the reality of the short mechanical phas believable?

His apologists, particularly of a free market persuasion, may claim that his contributions were innovative rather than inventive, and his willingness to tak risks brought the water frame more quickly into use. To innocents, that is ordinary folk, the risks associated with the utilization of machines bringing huge cost savings may seem to compose a mystical presence. They may wonder why great "innovator" was not required in the equally speedy introduction of other textile inventions: the stocking frame, the flying shuttle, the jenny, the mule

Proof of Arkwright's thievery may never become definitive. It is as irrelevant as the actuality of the Mesolithic invention of the wheel. What is significant is that he could have stolen Highs' invention, and his fortune would have been as large whether he stole it or really invented it.

Sir Richard did, however, possess one unique quality. He was conscious of the connection between his fortune and the invention. In that awareness, he was a novelty among plutocrats of the modern era. Many seem to have had no conception whatsoever of the technical basis of their fortunes. Their biographies, whether official and obsequious or hostile and sceptical, can be read with a feeling of mystery as to how they thought or acted any differently from the thousands of their less fortunate business brethren. It is a mystery which can be solved easily. The typical circumstances were that a lengthy chain of stages of production and distribution separated raw material output and the delivery of finished product to consumers. An invention could have occurred anywhere in tha chain, and have repercussions throughout the chain. Suddenly, elsewhere in the chain, suitable land sites and other fixed factors of production appreciated markedly in value, and businesses producing intermediate, raw material or final products found the demand for their products skyrocketing. The businessman did not change his habits: he oversaw the same workmen, used the same accounting procedures, purchased material from the same suppliers, sold his output to the sa me demanders. The sole metamorphosis was that the prices and sales of his product mysteriously shot upwards, leaving him the lucky receiver of much enlarged profits. If entry were easy into his line of business, the excess profits might have continued for a few years before the rate of profit returned to old levels. He probably would, however, have been left with a larger enterprise and larger levels of profit. If he were part of a nice little cartel or monopolizing scheme already in place, the excess profits could have continue indefinitely and he would have more assuredly entered the ranks of the plutocracy.

The plutocrats of the eighteenth and nineteenth centuries enjoyed the good life They particularly relished a smug disdain for aristocracy. They had worked for their riches; the idle aristocrats had merely inherited their fortunes. They ignored the fact that aristocratic wealth had come from activities of true, not pretended, riskiness.

The aristocrats prided themselves on their ancient heritages: fondly dating the back to events such as the Gothic and the Norman conquests. Their genealogical imaginings may often have been feats of fiction, but their analyses were correct. Their wealth came from ancient land grabbing. Their ancestors had striven and taken risks which would have made those chimerical risk takers, the plutocrats, quake in their boots. How many raiding parties were annihilated by the defending legionnaires before some lucky warrior thugs managed to seize land. Their personal contributions, in plundering, rape and pillage, to the workings of the economy were negative. Once their possession of land became assured, the land again yielded and continued to yield useful factor services into the succeeding centuries. They did not create the land, nor did they creat its factor services. But they, and their descendants, received its factor payments.

The plutocrats owed their riches to another source: inventions. They did not create them, but they did appropriate them. Like the aristocracy, they reaped where they did not sow.

References

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Baines, E. (1836 and 1966), History of the Cotton Manufacture in Great Britain, 2nd ed. H. Fisher, R. Fisher and P. Jackson, London. Reprint, Frank Cass & Co. Ltd, London.

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Chapman, S.D. (1967), The Early Factory Masters, David and Charles, Newton Abbot.

Chapman, S.D. (1971), "Fixed Capital Formation in the British Cotton Manufacturing Industry", in Higgins, J.P.P. and Pollard, S. (Eds), Aspects of Capital Investment in Great Britain, 1750-1850, Methuen & Co. Ltd, London.

Chapman, S.D. (1987), The Cotton Industry in the Industrial Revolution, 2nd ed. Macmillan Education, London.

Deane, P. and Cole, W.A. (1962), British Economic Growth, 1688-1959, Cambridge University Press, Cambridge.

Edwards, M.M. (1967) The Growth of the British Cotton Trade 1780-1815, Manchester University Press, Manchester.

Ellison, T. (1886 and 1968). The Cotton Trade of Great Britain, E. Wilson, London. Reprint, Augustus M. Kelley, New York, NY.

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Title Annotation:acquisition of wealth by plutocrats
Author:Wellington, Donald C.
Publication:International Journal of Social Economics
Article Type:Biography
Date:Dec 1, 1993
Words:6325
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