Part I · The Hidden Variable

I.D — The Wrigley Synthesis

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The argument so far has been statistical and conceptual: energy and conversion efficiency appear to do explanatory work that standard growth models leave implicit, and when they are included explicitly, the residual shrinks. But statistical patterns, however suggestive, are not the same as historical demonstration. The Prologue traced the coal transition in outline; this section examines it through the lens of economic historians who have made energy the central variable in their explanations of modern growth. The question is whether the pattern holds when we look at the case that still defines how economists think about sustained growth: the English Industrial Revolution.

Start from the constraint rather than the outcome. An organic economy—the kind that existed everywhere before the eighteenth century and in most places well into the twentieth—runs on the annual flow of solar energy captured by plants. Wood provides fuel and construction material; fodder feeds the animals that provide traction and transport; crops feed the people who provide labor. All of these are limited by the productivity of the land, which is itself limited by the amount of sunlight, water, and nutrients available in a given growing season. An economy embedded in this energy regime can grow by bringing more land under cultivation, by improving agricultural techniques, or by trading for resources produced elsewhere, but it cannot escape the ceiling imposed by the photosynthetic rate. The land must be worked, and the land can only produce so much.

This is not a metaphor. It is a physical constraint that bound every preindustrial economy, including the most commercially sophisticated. England in the seventeenth century was pressing against that ceiling. The population was growing, the forests were shrinking, and the price of firewood was rising faster than wages. London, already one of the largest cities in Europe, depended on a network of coastal shipping to bring in fuel from the coalfields of the northeast, because the surrounding woodlands could no longer supply enough timber to heat the city’s houses and power its industries. The constraint was visible in the price of fuel and in the geography of supply.

E. A. Wrigley, the historical demographer who spent most of his career at Cambridge, built his account of the Industrial Revolution around this constraint.1 His books—Continuity, Chance and Change (1988), Energy and the English Industrial Revolution (2010), and The Path to Sustained Growth (2016)—argue that the distinguishing feature of the Industrial Revolution was not a change in institutions, or in culture, or in the accumulation of capital, but a change in the energy base of the economy. The transition from an organic economy, powered by recent photosynthesis, to a mineral economy, powered by ancient photosynthesis stored in coal, was the structural break that made modern growth possible.

Coal changed the arithmetic. Unlike wood, coal is not limited by the current flow of solar energy; it is the stored product of millions of years of photosynthesis, compressed and concentrated underground. A coalfield is, in effect, a subterranean forest—Rolf Peter Sieferle’s phrase—that does not need to be regrown after it is harvested.2 The energy density is higher, the transport is easier once rail and canal networks are built, and the supply, while ultimately finite, is far larger than anything the organic regime could provide. Shifting from wood to coal was not merely a substitution of one fuel for another; it was an escape from the land constraint that had bound all previous economies.

The feedback between fuel abundance and conversion efficiency is exactly the mechanism that the useful-work literature describes, and it is visible in the historical record long before anyone tried to measure it econometrically. Steam engines, at first inefficient and useful mainly for pumping water out of coal mines, became steadily more powerful and more versatile as their thermal efficiency improved. By the early nineteenth century, steam could drive textile mills, iron forges, and locomotives. Each improvement in the engine allowed more useful work to be extracted from a given quantity of coal, and each expansion of the coal supply allowed more engines to be deployed. The coal made the engines worthwhile; the engines made the coal accessible; and the loop, once started, did not stop.

The enclosure movement, the factory system, the railways, the urbanization of the labor force: all of these were downstream of the coal transition—responses to the possibilities it created rather than causes of the energy surplus itself. Wrigley is careful to note that he is not denying the importance of institutions, property rights, or cultural factors; he is arguing that these factors operated within a constraint set by the energy regime, and that the relaxation of that constraint was what made the modern growth trajectory possible.

Robert Allen, an economic historian who has written extensively on the British Industrial Revolution, offers a complementary argument.3 Allen emphasizes the role of relative prices: coal was cheap in Britain, labor was expensive, and wages were high enough that it paid to invest in machinery that substituted fuel for muscle. The steam engine was not adopted because it was technically superior in some abstract sense; it was adopted because the cost structure made it profitable. In a country where coal was expensive and labor was cheap—China, for instance, or much of continental Europe—the same technology would not have been worth the investment. The Industrial Revolution happened in Britain, on this account, because Britain had the right price ratios to make energy-intensive production economically attractive.

The two arguments are not in tension; they are two sides of the same coin. Wrigley is describing the physical preconditions: the presence of coal, the development of techniques to extract it, and the machines to convert it into useful work. Allen is describing the economic logic: the price signals that made adoption profitable and the incentives that drove investment. Both are saying that the story cannot be told without energy at its center.

Vaclav Smil, who has spent decades quantifying the role of energy in human history, makes the same point with characteristic bluntness.4 Modern economies are not primarily systems for allocating scarce resources among competing ends, as the textbook definition would have it; they are systems for converting energy into goods and services. The allocation problem is real, but it is secondary. The primary problem is throughput: how much energy can be captured, at what efficiency, and directed toward what ends. An economy that doubles its energy throughput, holding efficiency constant, can in principle double its output; an economy that doubles its efficiency, holding throughput constant, can do the same. In practice, both have been rising for two centuries, which is why output has grown so dramatically. The Solow residual, the mysterious “technology” that explains most of modern growth, is in large part a record of these gains.

What Wrigley, Allen, and Smil share is a conviction that the story of modern growth is, at bottom, a story about energy. The institutions, the ideas, the policies, the culture—all of these matter, but they matter within a framework set by the energy regime. When the regime changes, everything else rearranges to accommodate it. The organic economy had its own institutions, optimized for a world of limited throughput; the mineral economy required new ones, and those new institutions—factories, corporations, regulatory agencies, welfare states—emerged in response to the possibilities and problems that coal and oil created.

This is not technological determinism in any crude sense. The energy regime does not dictate the form that institutions take; it sets the boundary conditions within which institutional variation can occur. A country with abundant coal can choose to organize its coal industry in many different ways—private ownership, state ownership, cooperative ownership—and the choice will have real consequences for efficiency, distribution, and political power. But a country without coal, or without the means to extract it, cannot make that choice at all. The physical preconditions constrain the space of institutional possibilities.

The relevance to the present should be clear. If the Industrial Revolution was, at its core, an energy transition—a shift from the organic to the mineral regime—then it is natural to ask whether we are living through another such transition now. The analogy is not exact; no analogy ever is. But the structure is suggestive. A new form of useful work is emerging, one that runs on electricity rather than steam, and that converts energy into computation rather than motion. The question is whether this transition will be as consequential as the last one, and what institutional rearrangements it will require.

That question is the subject of the rest of this manuscript. But before we can address it, we need to understand what computation does—what physical constraints govern it, and why intelligence carries a thermodynamic cost. The next part turns from history to physics.