You’re reading my newsletter, Age of Invention, on the causes of the British Industrial Revolution and the history of innovation. It currently goes out to 3,450 people. You can subscribe here: When we measure historical economic growth, we tend to focus on living standards — often measured in terms of output per person. But one of the most remarkable features of modern, sustained, and continuous growth over the past few centuries has also been the increase in the sheer number of people. Great Britain has a population today of almost 64 million, about 3 million of whom live in Wales. Yet 3 million was roughly the population of the whole island in the early sixteenth century. If the might and honour of a country was determined by the multitude of its people, as wise Solomon was supposed to have said, then Henry VIII was about as mighty as Mark Drakeford, the current Welsh First Minister.
if you are looking for a pull-factor that would start to work in London in the early C17th, I would be tempted to look at the social and political changes under James 1st, specifically the social and ecclesiastical contortions that made exploitation of the time value of money -- forward contracts, and lending/borrowing at interest -- into acceptable business practice between gentiles.
Obviously the practices were all known and done in Amsterdam for example, but I don't know that any foreign centre had previously managed to escape the idea that interest was disreputable defiance of God's will, that had to be laundered through the crushed but essential Jewish commercial network.
Because of past oppression in England, that social infrastructure would perhaps have been weaker in London. Perhaps that forced bishops and merchants to trim their distaste for usury to fit their colossal greed and commercial appetite, demanding and paying interest directly between themselves, with a consequent increase in efficiency and certainty. Perhaps the nutty hybrid of the CoE left the local prelates without the power to shut it down.
Interest is such a powerful creator of value, that if it worked only a little better in London than elsewhere, that could perhaps result in the sort of wealth growth that would draw in the people needed to put the City on a self-sustaining growth path.
It's hard to think what else would do it. Double-entry book-keeping is epochal enough, but it's not London, and it's too old. International credit networks are sth same. Joint-stock-limited-liability is somewhat English, but comes too late to give the boost we want.
So my fiver's on the normalisation of usury (after all there's no point leaving it in the bank at 0.01%) but other ideas may be cooler and I would love to hear them.
Thanks for this note which I enjoyed very much.
if you are looking for a pull-factor that would start to work in London in the early C17th, I would be tempted to look at the social and political changes under James 1st, specifically the social and ecclesiastical contortions that made exploitation of the time value of money -- forward contracts, and lending/borrowing at interest -- into acceptable business practice between gentiles.
Obviously the practices were all known and done in Amsterdam for example, but I don't know that any foreign centre had previously managed to escape the idea that interest was disreputable defiance of God's will, that had to be laundered through the crushed but essential Jewish commercial network.
Because of past oppression in England, that social infrastructure would perhaps have been weaker in London. Perhaps that forced bishops and merchants to trim their distaste for usury to fit their colossal greed and commercial appetite, demanding and paying interest directly between themselves, with a consequent increase in efficiency and certainty. Perhaps the nutty hybrid of the CoE left the local prelates without the power to shut it down.
Interest is such a powerful creator of value, that if it worked only a little better in London than elsewhere, that could perhaps result in the sort of wealth growth that would draw in the people needed to put the City on a self-sustaining growth path.
It's hard to think what else would do it. Double-entry book-keeping is epochal enough, but it's not London, and it's too old. International credit networks are sth same. Joint-stock-limited-liability is somewhat English, but comes too late to give the boost we want.
So my fiver's on the normalisation of usury (after all there's no point leaving it in the bank at 0.01%) but other ideas may be cooler and I would love to hear them.
The link to the Broadberry paper does not work. I believe you mean this paper.
https://ora.ox.ac.uk/objects/uuid:d11c9af0-4317-436c-8dfd-8b6d67fe7d5e/download_file?file_format=&safe_filename=Broadberry%2BAccounting%2Bfor%2Bthe%2Bgreat%2Bdivergence.pdf&type_of_work=Working+paper