From domestic manufacture to industrial revolution: long-run growth and agricultural development

The classical story of industrialization always begins with agriculture: the modernization of rural institutions, involving both the enclosure of 'open fields' and a shift from peasant farming to larger scale capitalist farming, generates a rise in agricultural productivity, which in turn fuels industrial development. An emerging view, however, turns the old story on its head, arguing that agricultural improvement is a response to urban development. This paper follows the line of this emerging view, demonstrating that productivity growth in commercial manufacture is crucial to the performance of farmers and thus to the transfer of labour from agriculture to industry.