Wages and Prices in Early Catalan Industrialisation

Abstract

Catalonia was the only Mediterranean region among the early followers of the British Industrial Revolution in the second third of the nineteenth century. The roots of this industrialisation process can be traced back to the seventeenth and eighteenth centuries when the Catalan economy became successfully integrated in international trade and the region enjoyed an intensification of its agrarian and proto-industrial activities. These capitalist developments were subsequently reinforced by a successful printed calico manufacturing business concentrated in the city of Barcelona. Although the factory system was largely adopted by the cotton industry in the 1840s, the diffusion of the spinning jenny had occurred earlier in the 1790s. In this paper, in line with Allen (2009a, 2009b), we explore whether relative factor prices played a role in the widespread adoption of the spinning jenny in Catalonia. First, we supply series of real wages in Barcelona for the period 1500-1808 in line with studies conducted within the 'Great Divergence' debate. Second, we undertake a comparative analysis of the relationship between the prices of labour and capital. Finally, we focus on the cotton spinning sector to determine the potential profitability of the adoption of the spinning jenny in Catalonia. We find that although Catalonia was not a high wage economy in the way that Britain was in the second half of the eighteenth century, evidence from the cotton spinning sector confirms the relevance of relative factor prices in the adoption of new technology. Within the booming sector of cotton after the 1780s, high wages created strong incentives for adopting the labour-saving spinning jenny.