The returns to invention during the British industrial revolution

by Sean Bottomley (Max Planck Institute for European Legal History)

This article is published by The Economic History Review, and it is available on the EHS website


british industry
Ancoats, Manchester. McConnel & Company’s mills, about 1820. Available at Wikimedia Commons

Since the Victorian period, it has been commonly assumed that inventors were rarely remunerated for their inventions. To contemporaries they were ‘the miserable victim of [their] own powerful genius’, ‘Martyrs of Science’ who worked ‘alone, unfriended, solitary’, while ‘the recorded instances of the[ir] martyrdom would be a task of enormous magnitude’. Prominent examples of important inventors from the industrial revolution period, but who had the misfortune to die in penury (the steam engineer Richard Trevithick, for example), has meant that this view has passed into the modern literature almost without scrutiny.

This assumption, though, is significant, as it directly informs how we might explain probably ‘the’ big problem in economic history: what were the origins of the industrial revolution, and concomitantly, of modern economic growth. In particular, if inventors did usually fail to obtain financial rewards, this precludes potential explanations of the industrial revolution that invoke incentives to explain the actions of those who invented and commercialised the new technology industrialisation required. It also precludes the applicability of endogenous growth theory to the industrial revolution (theory which has earnt two of its progenitors 2018 Nobel prizes) as it assumes that profit incentives determine the amount of inventive activity that occurs.

In an attempt to determine the wealth of inventors, I have collected probate data for over 700 inventors born in Britain between 1660 and 1830, from a list first compiled by Ralf Meisenzahl and Joel Mokyr. This probate data indicates that inventors were in fact extremely wealthy. For instance, in one exercise, I compared the probated wealth of 422 inventors who died between 1800 and 1870, with that of the overall adult male population.


Table 1.           Probated wealth of inventors, 1800-1870

Probated wealth Adult male population (1839-1841) Adult male population (1858) Inventors
<£200 or no will 73302 (88.14%) 87043 (87.70%) 124 (29.4%)
<£1,000 5570   (6.70%) 6690   (6.74%) 39   (9.2%)
94.84% 94.44% 163 (38.6%)
<£10,000 4296 (5.16%) 4554 (4.59%) 104 (24.6%)
<£50,000 812 (0.82%) 95 (22.5%)
   £50,000+ 154 (0.16%) 60 (14.2%)
5.16% 5.56% 259 (61.4%)

Notes: For details on how the distribution of male probated wealth was estimated for 1839-41, and 1858, please refer to the appendix in the original article published in the Economic History Review.


The table above shows us that approximately 5 to 6 percent of adult males who died in 1839-41 and 1858 (years for when these figures can be collated), left behind wealth probated in excess of £1,000. The equivalent figure for inventors was over 60 percent. The disparity only increases as we move up through the wealth categories. Whereas only 0.16 percent of adult males left behind wealth probated in excess of £50,000 in 1858 (one in 650), for inventors it was 14.2 percent (one in 7).

It does not, however, automatically follow that the wealth of inventors was actually derived from their inventions. These were presumably talented individuals and their income may have been accrued over the course of a ‘normal’ business career and/or inherited. Unfortunately, this is a prohibitively difficult subject to approach directly: accounts rarely survive for these inventors and in any case, it is doubtful whether income from an invention could be neatly distinguished from ‘normal’ business income. As an indirect approach, I have also collected probate information for the brothers of inventors. Brothers are an especially apposite group for comparison: they would have enjoyed a very similar inheritance to their brothers (although inheriting financial capital appears to have mattered less than inheriting social capital) and they tended to enter similar occupations to their (inventive) brothers. Indeed, 24 of the inventors in the entire dataset were related as brothers – the talents and opportunities required to become an inventor were clearly not evenly distributed among the adult male population.

For 143 of the 422 inventors discussed in table 1, it was possible to confirm the existence of at least one adult brother who reached at least the age of 25 and who died in Britain between 1800 and 1870 (253 brothers in total). In the table below, the top row divides these 143 inventors into the same wealth categories as those used in the table above, with the number in parentheses denoting how many of the 143 inventors are in each category. The columns beneath this then show the distribution of the wealth of their brothers. So, there are 25 inventors in this exercise whose estate was worth less than £200. Of their 45 brothers, 31 were also left behind less than £200. Three had probated wealth between £200 and £1,000, nine between £1,000 and £10,000 and two between £10,000 and £50,000. None left behind more than £50,000.


Table 2.           Brother’s Probates, 1800-1870

< £200 (25) < £1,000 (11) < £10,000 (35) < £50,000 (44) £50,000+ (28)
     < £200 31 12 26 35 23
  < £1,000 3 3 7 7 2
< £10,000 9 2 14 31 13
< £50,000 2 2 3 9 8
    £50,000+ 3 2 6

Notes: as Table 1


Overall, if inventors were wealthier than their brothers, then the latter should be concentrated at the top and to the right of the table, and away from the bottom left corner. Clearly, they are – overwhelmingly so when one considers how important simple happenstance can be in influencing an individual’s financial success over the course of their career.

Previous work has relied on impressionistic evidence to suggest that inventors in this period rarely obtained financial rewards commensurate with their technical achievements. Probate information, though, shows that inventors were extremely wealthy relative to the adult male population. Inventors were also significantly wealthier than another group who would have received a similar inheritance (in terms of both financial and social capital) and entered similar occupations: their brothers. Their additional wealth was derived from inventive activities: invention paid.


To contact Sean Bottomley:

Bees in the Medieval Economy

by Alex Sapoznik (King’s College, London)

This article is published by The Economic History Review, and it is available on the EHS website

In his seventh-century Etymology Isidore of Seville wrote ‘bees originate from oxen, just as hornets come from horses, drone bees from mules, and wasps from asses’, reflecting the belief that bees were the tiniest of birds, which sprang spontaneously from the putrefying flesh of cows. Such ideas were not new to the Middle Ages, and had been common from Antiquity, when Pliny the Elder commented that dead bees could be brought back to life if covered with mud and bovine carcass.

Yet despite this peculiar (to modern eyes) belief, medieval people were in fact keen observers of the natural world. They knew that there was a larger bee which was especially important—although they thought this was a king, rather than a queen—which the other bees protected, even to the death. They knew that bees lived in well-ordered communities, where every bee had a particular task which it dutifully carried out. They especially emphasized worker bees, which went out tirelessly collecting dew, from which they thought honey came, and flowers, which they thought turned to wax. But they observed no mating in bee colonies, and the implications of this were profound. Medieval theologians associated the virginity and chastity of bees with the two figures whose virginity and chastity were central to the Christian faith: Christ and Mary. This religious symbolism had a singularly important practical consequence, for it meant that beeswax candles were required for observance of the ritual of the Mass.

Over the high and late middle ages Christian religious practice became increasingly elaborate, with a greater number of services celebrated at an expanding number of cathedrals, churches, chapels, chantries and shrines. All of these required wax candles. Candles also burned on the rood screens and before each image, shrine, and many tombs in every church in Europe. Every stage of a medieval Christian’s life, from the baptismal font to the grave, was accompanied by candles.

The imagery of light and dark, fundamental to Christian devotion, was reliant on the supply of vast quantities of beeswax for candles and torches. The cost of provisioning religious institutions with lights was significant. In England wax accounted for on average half of the total running cost of the main chapel of major religious institutions and, apart from the fabric and bells, was the most expensive single item in parish churches. The need for wax across medieval Europe was continuous and persistent, yet the extent and significance of the production, trade, and consumption of wax has yet to be fully considered.


Figure 1. Bees (apes) are so-called because they are born without feet. A medieval bestiary

ehs 1

By permission of the British Library: Bestiary: BL Royal MA 12 C XIX f45r


Where did this beeswax come from? Although demand for wax was high across Europe, production itself was unevenly spread. In northern and central Europe high medieval urbanization and settlement expansion came at the expense of favourable bee habitats. This meant that the areas with the greatest need for wax were under intense pressure to meet demand through local production. These regions were therefore especially attractive to merchants bringing wax from the Baltic hinterland, where large-scale sylvan wax production took place in forests which had not been felled to make room for arable fields. This high-quality wax became an important feature of Hanseatic trade, and a brisk westward trade brought this wax ‘de Polane’ to England and Bruges where eager buyers were readily found.

Yet even this thriving international trade was not enough to meet the demand for wax from the c.9,000 parish churches which existed in England by the early fourteenth century.  Comparing the total amount of wax needed for basic religious observance with wax imports suggests that foreign wax accounted for only a fifth of the amount of wax needed in England before 1475. The remaining wax must have been the product of hundreds of thousands of skeps kept by small domestic producers. This local beekeeping is almost invisible in manorial documents, and it is only by considering the total demand for wax that the importance of beekeeping within the peasant economy becomes apparent.

What emerges, then, is a dual economy for wax. Wealthy religious institutions attracted merchants bringing high-quality Baltic wax in great quantities, demonstrating that geographically peripheral areas were not only vital to European trade, but that the cultural practices of high and late medieval society were dependent on these regions. At the same time, small producers found ready markets for the product of their hives in their local parish churches, supplying much-needed injections of income within the household economy.


Figure 2 Bees in the Luttrell Psalter

picture 2

By permission of the British Library:  Luttrell Psalter: BL Add MS 42130 f240r


Bees and bee products held a uniquely important place in medieval culture, and consequently in the medieval economy. In these tiny golden creatures medieval people saw something flung from Paradise, imbued with mystical qualities and powerfully symbolic. Today, as we face climate change, habitat destruction and the decline of bee colonies, we might do well to look at the natural world with something of the same wonder.

This research is being expanded in the Leverhulme project ‘Bees in the medieval world: Economic, environmental and cultural perspectives’, which will also explore the Mediterranean trade in beeswax and consider encounters between the Christian and Muslim worlds.

To contact Alex Sapoznik:

The Price of the Poor’s Words: Social Relations and the Economics of Deposing for One’s “Betters” in Early Modern England

by Hillary Taylor (Jesus College, Cambridge)

This article is published by The Economic History Review, and it is available on the EHS website

Poverty and Wealth. Available at Wikimedia Commons

Late sixteenth- and early seventeenth-century England was one of the most litigious societies on record. If much of this litigation was occasioned by debt disputes, a sizeable proportion involved gentlemen suing each other in an effort to secure claims to landed property. In this genre of suits, gentlemen not infrequently enlisted their social inferiors and subordinates to testify on their behalf.[1] These labouring witnesses were usually qualified to comment on the matter at hand a result of their employment histories. When they deposed, they might recount their knowledge of the boundaries of some land, of a deed or the like. In the course of doing so, they might also comment on all sorts of quotidian affairs. Because testifying enabled illiterate and otherwise anonymous people to speak on-record about all sorts of issues, historians have rightly regarded depositions as a singularly valuable source: for all their limitations, they offer us access to worlds that would otherwise be lost.

But we don’t know much about what labouring people thought about the prospect of testifying for (and against) their superiors, or how they came to testify in the first place. Did they think that it presented an opportunity to assert themselves? Did it – as some contemporary legal commentators claimed – provide them with an opportunity to make a bit of money on the side by ‘selling’ dubious evidence to their litigious superiors?[2] Or were they reluctant to depose in such circumstances and, if so, why? Where subordinated individuals deposed for their ‘betters’, what was the relationship between the ‘pull’ of economic reward and the ‘push’ of extra-economic coercion?

I wrote an article that considers these questions. It doesn’t have any tables or graphs; the issues with which it’s concerned don’t readily lend themselves to quantification. Rather, this piece tries to think about how members of the labouring population conceived of the possibilities that were afforded to and the constraints that were imposed upon them by dint of their socio-economic position.

In order to reconstruct these areas of popular thought, I read loads of late sixteenth- and early seventeenth-century suits from the court of Star Chamber. In these cases, labouring witnesses who had deposed for one superior against another were subsequently sued for perjury (this was typically done in an effort to have a verdict that they had helped to secure overturned). Allegations against these witnesses got traction because it was widely assumed that people who worked for their livings were poor and, as a result, would lie under oath for anyone who would pay them for doing so. Where these suits advanced to the deposition-taking phase, labouring witnesses who were accused of swearing falsely under oath and witnesses of comparable social position provided accounts of their relationship with the litigious superiors in question, or commentaries on the perceived risks and benefits of giving evidence. They discussed the economic dispensations (or the promise thereof) which they had been given, or the coercion which had been used to extract their testimony.

Taken in aggregate, this evidence suggests that members of the labouring population had a keen sense of the politics of testimony. In a dynamic and exacting economy such as that of late sixteenth- and early seventeenth-century England, where labouring people’s material prospects were irrevocably linked to their reputation and ‘honesty,’ deposing could be risky. Members of the labouring population were aware of this, and many were hesitant to depose at all. Their reluctance may well have been born of an awareness that doubt was likely to be cast upon their testimony as a result of their subordinated and dependent social position, which lent credibility to accusations that they had sworn falsely for gain. More immediately, it reflected concerns about the material reprecussions that they feared would follow from commenting on the affairs of their ‘betters.’ Such projections were not merely the stuff of paranoid speculation. In 1601, a carpenter from Buckinghamshire called Christopher Badger had put his mark to a statement defending a gentleman, Arthur Wright, who had frustrated efforts to impose a stinting arrangement on the common to, as many locals claimed, the ‘damadge of the poorer sorte and to the comoditie of the riche.’ Badger recalled that one of Wright’s opponents – also a gentleman – later approached him and said ‘You have had my worke and the woorke of divers’ other pro-stinting individuals. To discourage Badger from further involvement, he added a thinly veiled threat: ‘This might be an occasion that you maie have lesse worke then heretofore you have had.’[3] For members of the labouring population, material circumstance often militated against opening their mouths.

But there was an irony to the politics of testimony, which was not lost on common people. If material conditions made some prospective witnesses reluctant to depose, they all but compelled others to do so (even when they expressed reservations). In some instances, labouring people’s poverty rendered the rewards – a bit of coal, a cow, promises of work that was not dictated by the vagaries of seasonal employment, or nebulous offers of a life freed from want – that they were promised (and less often given) in return for their testimony compelling. In others, the dependency, subordination and obligation that characterized their relations with their superiors necessitated that they speak as required, or face the consequences. In the face of such pressures, a given individual’s reservations about testifying were all but irrelevant.

To contact Hillary Taylor:


[1] For debt and debt-related litigation, see Craig Muldrew, The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England (Basingstoke, 1998).

[2] For suspicions surrounding the testimony of poor and/or labouring witnesses, see Alexandra Shepard, Accounting for Oneself: Worth, Status, and the Social Order in Early Modern England (Oxford, 2015).

[3] TNA, STAC 5/W17/32. Continue reading

A New Take on Sovereign Debt and Gunboat Diplomacy

Going multilateral? Financial Markets’ Access and the League of Nations Loans, 1923-8


Juan Flores (The Paul Bairoch Institute of Economic History, University of Geneva) and
Yann Decorzant (Centre Régional d’Etudes des Populations Alpines)

Abstract: Why are international financial institutions important? This article reassesses the role of the loans issued with the support of the League of Nations. These long-term loans constituted the financial basis of the League’s strategy to restore the productive basis of countries in central and eastern Europe in the aftermath of the First World War. In this article, it is argued that the League’s loans accomplished the task for which they were conceived because they allowed countries in financial distress to access capital markets. The League adopted an innovative system of funds management and monitoring that ensured the compliance of borrowing countries with its programmes. Empirical evidence is provided to show that financial markets had a positive view of the League’s role as an external, multilateral agent, solving the credibility problem of borrowing countries and allowing them to engage in economic and institutional reforms. This success was achieved despite the League’s own lack of lending resources. It is also demonstrated that this multilateral solution performed better than the bilateral arrangements adopted by other governments in eastern Europe because of its lower borrowing and transaction costs.

Source: The Economic History Review (2016), 69:2, pp. 653–678

Review by Vincent Bignon (Banque de France, France)

Flores and Decorzant’s paper deals with the achievements of the League of Nations in helping some central and Eastern European sovereign states to secure market access during in the Interwar years. Its success is assessed by measuring the financial performance of the loans of those countries and is compared with the performance of the loans issued by a control group made of countries of the same region that did not received the League’s support. The comparison of the yield at issue and fees paid to issuing banks allows the authors to conclude that the League of Nations did a very good job in helping those countries, hence the suggestion in the title to go multilateral.

The authors argue that the loans sponsored by the League of Nation – League’s loan thereafter – solved a commitment issue for borrowing governments, which consisted in the non-credibility when trying to signal their willingness to repay. The authors mention that the League brought financial expertise related to the planning of the loan issuance and in the negotiations of the clauses of contracts, suggesting that those countries lacked the human capital in their Treasuries and central banks. They also describe that the League support went with a monitoring of the stabilization program by a special League envoy.


Empirical results show that League loans led to a reduction of countries’ risk premium, thus allowing relaxing the borrowing constraint, and sometimes reduced quantity rationing for countries that were unable to issue directly through prestigious private bankers. Yet the interests rates of League loans were much higher than those of comparable US bond of the same rating, suggesting that the League did not create a free lunch.

Besides those important points, the paper is important by dealing with a major post war macro financial management issue: the organization of sovereign loans issuance to failed states since their technical administrative apparatus were too impoverished by the war to be able to provide basic peacetime functions such as a stable exchange rate, a fiscal policy with able tax collection. Comparison is made of the League’s loans with those of the IMF, but the situation also echoes the unilateral post WW 2 US Marshall plan. The paper does not study whether the League succeeded in channeling some other private funds to those countries on top of the proceeds of the League loans and does not study how the funds were used to stabilize the situation.


The paper belongs to the recent economic history tradition that aims at deciphering the explanations for sovereign debt repayment away from the gunboat diplomacy explanation, to which Juan Flores had previously contributed together with Marc Flandreau. It is also inspired by the issue of institutional fixes used to signal and enforce credible commitment, suggesting that multilateral foreign fixes solved this problem. This detailed study of financial conditions of League loans adds stimulating knowledge to our knowledge of post WW1 stabilization plans, adding on Sargent (1984) and Santaella (1993). It’s also a very nice complement to the couple of papers on multilateral lending to sovereign states by Tunker and Esteves (2016a, 2016b) that deal with 19th century style multilateralism, when the main European powers guaranteed loans to help a few states secured market access, but without any founding of an international organization.

But the main contribution of the paper, somewhat clouded by the comparison with the IMF, is to lead to a questioning of the functions fulfilled by the League of Nations in the Interwar political system. This bigger issue surfaced at two critical moments. First in the choice of the control group that focus on the sole Central and Eastern European countries, but does not include Germany and France despite that they both received external funding to stabilize their financial situation at the exact moment of the League’s loans. This brings a second issue, one of self-selection of countries into the League’s loans program. Indeed, Germany and France chose to not participate to the League’s scheme despite the fact that they both needed a similar type of funding to stabilize their macro situation. The fact that they did not apply for financial assistance means either that they have the qualified staff and the state apparatus to signal their commitment to repay, or that the League’s loan came with too harsh a monitoring and external constraint on financial policy. It is as if the conditions attached with League’ loans self-selected the good-enough failed states (new states created out of the demise of the Austro-Hungarian Empire) but discouraged more powerful states to apply to the League’ assistance.


Now if one reminds that the promise of the League of Nations was the preservation of peace, the success of the League loans issuance was meager compared to the failure in preserving Europe from a second major war. This of course echoes the previous research of Juan Flores with Marc Flandreau on the role of financial market microstructure in keeping the world in peace during the 19th century. By comparison, the League of Nations failed. Yet a successful League, which would have emulated Rothschild’s 19th century role in peace-keeping would have designed a scheme in which all states in need -France and Germany included – would have borrowed through it.

This leads to wonder the function assigned by their political brokers to the program of financial assistance of the League. As the IMF, the League was only able to design a scheme attractive to the sole countries that had no allies ready or strong-enough to help them secure market access. Also why did the UK and the US chose to channel funds through the League rather than directly? Clearly they needed the League as a delegated agent. Does that means that the League was another form of money doctors or that it acts as a coalition of powerful countries made of those too weak to lend and those rich but without enforcement power? This interpretation is consistent with the authors’ view “the League (…) provided arbitration functions in case of disputes.”

In sum the paper opens new connections with the political science literature on important historical issues dealing with the design of international organization able to provide public goods such as peace and not just helping the (strategic) failed states.


Esteves, R. and Tuner, C. (2016a) “Feeling the blues. Moral hazard and debt dilution in eurobonds before 1914”, Journal of International Money and Finance 65, pp. 46-68.

Esteves, R. and Tuner, C. (2016b) “Eurobonds past and present: A comparative review on debt mutualization in Europe”, Review of Law & Economics (forthcoming).

Flandreau, M. and Flores, J. (2012) “The peaceful conspiracy: Bond markets and international relations during the Pax Britannica”, International Organization, 66, pp. 211-41.

Santaella, J. A (1993) ‘Stabilization programs and external enforcement: experience from the 1920s’, Staff Papers—International Monetary Fund (J. IMF Econ Rev), 40, pp. 584–621

Sargent, T. J., (1983) ‘The ends of four big inflations’, in R. E. Hall, ed., Inflation: Causes and Effects (Chicago, Ill.: University of Chicago Press, pp. 41–97