It is true that this was a period of hunger marches and demands from the cotton weavers for a legally- enforced minimum living wage; a time when brave cavalrymen with swords drawn charged and killed defenceless protestors at Peterloo, in Manchester. But the argument is inconsistent with the timing. In 1808, one estimate put the number of factories using the power loom as only 28 or 30.3 In 1813 there were about 2,400 power looms in the UK; in 1820 there were a mere 14,150. But then, in the next decade, the number escalated to about 55,000 in 1829.4 Why, in the third decade of the 19th century — when wages were still low — did entrepreneurs suddenly find the power loom an attractive proposition ?5
The cotton weavers’ wages were low, but this was not due to their having to compete with machines. If anything, the higher output of machine production should have raised wages, and for this there is evidence.6 One major reason for the level of wages was the competition from migrant Irish peasants, who could learn the weaving technique quickly and were willing to accept lower wages than Englishmen.7
Brougham’s explanation is also unconvincing because it implies that the entrepreneurs were making sufficient profits — thanks to the low rate of wages and piece rates — to justify continued production under the existing system. This was not the case.8 Nor does a change in consumer demand offer an explanation. If the foreign markets were restricted during the Napoleonic war, they were not much better when peace came: an impoverished Europe did not act as a significant stimulant to output in the 1820s. A minor boom in 1825 was preceded and followed by business recessions. Yet there was a marked switch to power looms during this decade.
Equally unsatisfactory is the suggestion by Halévy that the rate of take-up of power looms could have been retarded by the threats against the machines from the handweavers.9 Weavers were no more vigorous in their protests than other groups of workers who, before or since then, believed that their livelihoods were jeopardised by the introduction of machinery; and threats from workers in agricultural or other manufacturing sectors did not deter capitalists from introducing their innovations if there was a profit to be made.
Even less plausible is Halévy’s main explanation, that manufacturers would not invest in the power loom because existing capital equipment had not been exhausted. In fact, it is difficult to understand how he could have advanced this argument at all. After describing how the cotton manufacturers had readily adopted machines for spinning the yarn, he continued:
For the weavers, however, the change involved the complete sacrifice of the old plant, in which much capital had been sunk. It was surely but natural that the forces of resistance should be much stronger in this department and that the critical period of change should be far longer and should entail far greater suffering.10
This suggests that Halévy did not understand the structure of the cotton industry at that time, yet on the next page he gave an adequate description of it. The yarn was spun in the factories and then bought by merchants who took it to the weavers to turn into cloth at agreed rates; the cloth was then sold back to the manufacturers for finishing (e.g., dyeing). The merchants had no large fixed capital equipment at risk, and there was no question of the weavers themselves having the power to resist technological innovation in order to preserve the capital value of the looms which they owned. Those looms, while precious to the weavers, were not as vulnerable as Halévy suggests; and their owners wielded no influence over the manufacturer, merchant or Parliament such that they could deter new capital formation by fair means or foul. Halévy must have intuitively understood this, for he fell back on the ‘low wages’ thesis which he believed he had rejected.11 But he reversed the argument; instead of the machines beating down wages, and thereby making fresh capital formation unattractive, he concluded that the weavers anticipated the mechanical threat to their traditional, independent weaving process by accepting lower wages and thereby removing the incentive to use machinery.12 This assumes that the slum-dwelling weavers had at some early stage enjoyed reasonably high wages which they could then afford to reduce, an untenable hypothesis according to the historical evidence.
The point at which the power loom would have been introduced was in the factory, alongside the established cotton spinning processes. The factory owners had no weaving machines threatened with redundancy; but they did have an incentive to adopt the power loom, to use up some of the surplus yarn which they were now producing. And credit from banks was available for the manufacturers in the biggest growth industry in the leading trade nation in the world.
On top of all this, there was another sound reason for a quick transformation to mechanical weaving. The price of cotton goods slid fast during the first two decades of the 19th century. Profits were squeezed, but could have been raised by the use of the new machines, which would have cut the unit costs of producing the final article. The power loom, as Mr Brougham pointed out, ‘saves three labourers in four’. And inventors like Cartwright were not bashful about publicising the efficiency of their mechanical process compared with the traditional way of doing things by hand. Why, then, was investment in the power loom avoided during the formative decades of an industrial society in which innovation and enterprise constituted the motivating ethos ?
The answers can be found in the evidence left by William Radcliffe, who chronicled the affairs of the cotton industry for the benefit of future historians. Radcliffe presents us with a paradox. He earned a good living out of trading, yet he was the first industrialist in the history of modern society to systematically campaign for restrictions on trade. From 1800 onwards he fought vigorously to turn public sentiment away from free international trade which, due largely to the popularity of The Wealth of Nations, swayed the parliamentarians who formulated national policy. Radcliffe’s campaign was tragic not because he failed, but because it was misconceived. He failed to correctly identify his enemy, the landowner; so much so, that he actually ended up by siding with them and supporting their cause. In doing so, he unwittingly multiplied the problems which confronted the industry to which he devoted a lifetimes’s work.
Radcliffe believed that Britain should stop exporting her surplus yarn to European and North American countries, where weavers turned it into cloth which then competed with British cloth in the world’s markets.13 Mercilessly he attacked the Lancashire cotton manufacturers who indulged in what he called the ‘vile traffic’ which was — he believed — responsible for impoverishing both employers and workers. Convinced that he had isolated the true cause of the industry’s problems, he roundly attacked ‘the curse of modern political economists, and liberal (meaning retrograde) march of mind’.
So it came about that, by one of those curious twists of history, the first major critique of free international trade came from a man who was a leading capitalist and benefactor of laissez faire! Radcliffe was not pursuing this policy out of self-interest; he was not attempting to line his pockets with the profits arising from oligopolistic control over markets. He was responding to an industry-wide problem. His misdiagnosis of that problem, and the solution which appeared to commend itself, was to be the first of many more similar errors perpetrated as the industrial system evolved.
William Radcliffe was a substantial entrepreneur in his own right, but he did not fit the stereotyped image beloved by socialist critics of capitalism. He was neither inhumane towards his employees, nor
