O'Hearn - Innovation and The World-System Hierarchy - British Subjugation of The Irish Cotton Industry

Innovation and the World-System Hierarchy: British Subjugation of the Irish Cotton
Industry, 1780-1830
Author(s): Denis O'Hearn
Source: The American Journal of Sociology, Vol. 100, No. 3 (Nov., 1994), pp. 587-621
Published by: The University of Chicago Press
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Innovation and the World-System
Hierarchy: British Subjugation of the Irish
Cotton Industry, 1780-1830'
Denis O'Hearn
Queen's UniversityofBelfast
Analysesofinnovationgenerallyassumethatit is a local or national

process.This articleuses world-system conceptsand thecase ofthe
Irish and English cottonindustriesto argue that innovationsare
not intrinsicallylocal but mustbe localized. Irishand Englishcus-
tomsdata and historicalanalysisare used to demonstratehow the
localizationof innovationaroundManchesterinvolvedthe periph-
eralizationof the Irish industryby Britain.This peripheralization
involved,first,thedestruction ofIrishspinningand thesubjugation
ofIrishweavingand, eventually,thetransformation ofIrishtextile
activityinto linen. It is furtherargued that innovation(Schum-
peter's innovativeresponse)is the definingcharacteristicof core
activities,whileadaptiveresponsecharacterizessemiperipheral in-
dustry.
The theoryof innovationand world-system analysis are relatedfields

thatcould be strengthened by dialogue.World-systemanalysisfillsa gap
in the theoryof innovationwhere,withfewexceptions,authorsassume
thatinnovationis a localizedprocess-the resultofentrepreneuriallead-
ership(Schumpeter1939, pp. 102-4) or national systemsof innovation
1
I would like to thankAndrewSchrank,membersof the trainingseminarin the
SociologyofEconomicChangeintheUniversity ofWisconsin, and theAJSreviewers
fortheirvaluablecomments onearlierdrafts.Myarguments werealsostrengthenedby
conversations withVincentTuckeraboutIrishrevisionism, RobertoFranzosiabout
historicaland quantitative
methods, and StephenBunkeraboutaccessto rawmateri-
als and industrial
ascent.Accessto data was graciouslyand helpfullyprovidedbythe
staffofthearchivessectionoftheNationalLibraryofIrelandin Dublin.Supportfor
thisresearchwas providedby the Department of Sociologyat UniversityCollege
Dublin,theGraduateSchooloftheUniversity ofWisconsin, and theFulbrightFoun-
dation.Correspondence may be sentto Denis O'Hearn, Departmentof Sociology,
Queen'sUniversity ofBelfast,BelfastBT7, Northern Ireland.
? 1994byThe University
ofChicago.All rightsreserved.
0002-9602/95/10003-0001$01.50
AJS Volume 100 Number3 (November1994): 587-621 587

AmericanJournalof Sociology
(Freeman 1987).2 Froma world-system standpoint,however,innovation

is notinherentlylocal, butis localizedthrougha seriesofglobal strategies
to captureinnovationsand suppressthemelsewhere.No doubt,the na-
tional environment forinnovation-infrastructures, humanknowledge,
and capital resources,to quote a recentlist(Porter1990)-is important,
but global power to achieve cheap and stable access to raw materials,
markets,and humanlaboris necessaryforsuchnationalsystemsofinno-
vation to succeed. Suppressinginnovationin the semiperiphery stifles
potentialcompetition just as it freessemiperipherallaborforsubordinate
activitiesthatare usefulto the core. Thus, world-system conceptsand a
theoryof the localizationofinnovationcan be mutuallysupportive.
On theotherhand,world-system conceptssuchas core,periphery, and
semiperiphery-thebasis of the world-system hierarchy-are seriously
undertheorized. The distinction betweencoreand semiperiphery is espe-
ciallyunclear.Moreover,withouta betterconceptualization ofwhatcon-
stitutes"coreness,"it is difficult to analyze how core regionsmaintain
theirpositionin thehierarchy.In thisarticleI use theconceptofinnova-
tion not simplyas the characteristic core fromsemi-
that distinguishes
peripheraleconomicactivities,but as a processthatmustbe localizedin
core regionsif thoseregionsare to maintaintheirdominantpositionin
the world-system hierarchy.3
In exploringrelationsbetweenthe core and semiperiphery, I am not
concernedwiththe obvious world-system distinctions-microprocessors
and bananas-but with the murkierboundarybetweencore and semi-
peripheralindustry.I willanalyzetheconnections betweensemiperipher-
ality, coreness,and innovationby using an importantcase study:the
Irishand Englishcottonindustriesof thelate 18thand early19thcentu-
ries. The case of Britishand Irishtextilesis apt because bothcountries,
a colonizingeconomicascendantand its colonizedperiphery, engagedin
the same broad industrialsectorsfora time after1780. From 1780 to
1825 agentsin both countriesattemptedto industrializearound cotton,
whichwas the mostdynamicindustryof the periodand eventuallythe
largest.The case is also an importantone because the English-centered
2 AlthoughI referto the "theory of innovation,"I am not particularly

concerned
herewithexplainingwhycertaininnovations or inventionsarise whereand when
theydo. Rather,myconcernis who capturesand appliesinnovations and how they
do this.Schumpeter himselfmakesthedistinction betweeninventions,innovations,
and theapplicationofinnovations, and he considersthefinalstepofapplicationnot
onlyto be distinctfromthefirsttwo but also to be themostimportant (1939,pp.
72-129).
3 The importanceofinnovationas a characteristic
ofcorenesshas beenpursuedbriefly
by Arrighiand Drangel(1986)in theirattemptto explainthesemiperipheral zone.
The presentanalysisbuildson theirwork.
588
Irish CottonIndustry
industrialrevolutionis regularlycited as evidence for nation-centered

studiesofinnovationdespitetheimportanceofempireto Britishsuccess.
The economichistoryliteraturegenerallytreatsIrishand British"cot-
ton" as equivalents, explainingthe eventual Irish failureby internal
shortcomings that have recentlycome to be associated with "national"
systemsof innovation-lack of entrepreneurial spirit,failureto modern-
ize, and lack of capital (Cullen 1972). I pursue a different argument.
Irish cottonwas peripheralizedby Britain,while Britishcottonbecame
the leading sectorat the centerof its 19th-century dominationof the
world-system. Two industrialsectorsthatseem at firstto be equivalents
are, on closerexamination,distinct.The industry of thecolonizeris core
and thatofthecolonized,semiperipheral. Furthermore, whileinnovation
distinguishessemiperipheral fromcoreindustries,it is also a process.An
explorationofhow coreregionscaptureinnovations,and even extinguish
innovativeimpulsesin semiperipheral regions,is crucial to our under-
standingof how the world-system hierarchyis reproduced.4
CORE INDUSTRY, SEMIPERIPHERAL INDUSTRY,

AND INNOVATION
The structureof the capitalistworld-system is a well-defined
hierarchy
ofrich,notso poor,and poorregionsratherthana continuumfrompoor
to rich(Arrighiand Drangel 1986). It is generallyassumedthatthelevel
of materialwell-beingin a countryor zone is a resultof that area's
economicactivities-how the inhabitantsproduce,appropriate,or are
exploitedof "want-satisfying materialmeans" (Polanyi)or "use values"
(Marx). Yet we have no precisedefinitionof what distinguishessemi-
peripheralfromcore economicactivitiesand, therefore, preciselywhy
one set of activitiesis more conduciveto increasinga region'saverage
level of materialwell-being.
World-system analystsagreethatthecore-periphery hierarchyis based
4 The distinctions I am drawingbetweencoreand semiperipheral industry are not

dependenton thespecificformof colonialismthatwas pursuedin Ireland,or even
on formalcolonialismas opposedto moreinformal meansof marketcontrol.The
strategyBritainpursuedin Irelandduringthe periodanalyzedhere was a fairly
classical"liberal"strategy of domination throughmarketmanipulation ratherthan
thedirectelimination ofa competing industrythrough coloniallaw, as in theearlier
Englishban on Irishwoollenexportsin 1699.Thus, Irelandis nota "specialcase."
The central concept that distinguishescore from semiperipheralindustry-
innovation-isrelatively independent ofthemeansusedbycoreregionsto subjugate
semiperipheral industries. Moreover, themechanisms whichBritainusedtosubjugate
and peripheralize Ireland'scottonindustry were"market"mechanisms ratherthan
directpoliticalcontroland generalize,withsome specificities, to a seriesof other
world-systemic cases. I willdiscussthislastpointin thefinalsectionofthearticle.
589
on divergentregionalmaterialintereststhatresultfromdirectexploita-
tionand unequal exchange(Chase-Dunn 1989, p. 203). They also agree
that exploitationis achieved throughthe manipulationof regionaleco-
nomicactivities,so thatthemostprofitable and expansiveactivitiestake
place in thecorewhilesemiperipheries and peripheriesdo thingsthatare
not only less profitablebut may also increasethe profitability of core
activitiesor the materialwell-beingof core regions.Thus, at the most
generallevel, the periphery and semiperiphery providecore capital with
thingsit needs, and throughdominationof the world-system that core
hopes to cheapen and stabilizesuch provisionas muchas possible.
Wallerstein(1979) definesthe world-system as multiplenation-states
and societiesincorporatedwithina singledivisionof labor. Withinthis
(now-global)divisionof labor, core zones performpredominantly core
activities,peripheralzones performperipheralones, and semiperipheral
zones performa balance of bothkinds.Chase-Dunn(1989, p. 211) adds
the possibilitythat semiperipheries may performdistinctintermediate
activities between core and peripheralzones-for example, labor-
intensiveindustrialactivitiessuch as assemblyor someinternational ser-
vices such as bankingand shipping.
Yet thereis disagreementboth about how to definethis divisionof
labor and about how it getsreproduced.One setof explanationsconcen-
trateson the relativepositionof core and peripheralactivitieswithina
continuumof economicactivitiesbetweentheraw materialand thefinal
product.Some structuralists hypothesizea correlationbetweenlevel of
processingand profitability, national economic power, or economic
growth.Galtung(1971, p. 159)assumesthatcoreregionsproducemainly
manufacturedgoods and peripheralregionsproduceraw materials;he
refersto a "gap in processinglevel" betweenthetwo zones. This implies
thattheproductionofprocessedcommodities is corewhileless processed
productionor extractionis peripheral.Yet definingcorenessby level of
processingis problematic.Final assemblyregularlytakes place in the
semiperiphery. Textileweavingwas once a semiperipheral activityand
spinninga core activity,even thoughclothis moreprocessedthanyarn.
Level of processingmay distinguishperipheral(agrarian,extractive)ac-
tivitiesfromnonperipheral (semiperipheraland coreindustrial)activities.
But it cannot distinguishthe industrialdivisionof labor betweencore
and semiperiphery.
Hopkins and Wallerstein(1986) defineglobal productionas a seriesof
commoditychains that "link raw materials,labor, the sustenanceof
labor, intermediate processing,finalprocessing,transport,and finalcon-
sumption"(Chase-Dunn 1989, p. 205). Certaincore nodes along these
chains receiveespeciallyhigh profits,while othersreceivelow returns.
Core regionscontainrelativelyhighproportions ofcorenodes,peripheral
590
regionscontainlow proportions,and semiperipheral regionsare in be-

tween.
Otherdescriptions ofcorenessare indicative.Threecommonindicators
are wage rates,profitrates,and capital intensity.Emmanuel(1972) de-
finescorenessby wage rates,in whichrelativelylow wages in theperiph-
erycause unequal exchange.5Wallerstein(1979) expectscore profitrates
to exceedperipheralonesand explainsthedifference bythehighercapital
intensityof core activities.Chase-Dunn(1989, p. 207) assumesthatcore
activitiescombine all threecharacteristics: skilled labor receives rela-
tivelyhighwages in relativelycapital-intensive production,whichin turn
facilitateshigherlabor productivity and higherratesof profit.
Wage rates,profitrates,and capitalintensity, however,indicatecore-
ness but do not define it. Each indicatoris imperfectly correlatedwitha
priordefiningcharacteristic. Arrighiand Drangel (1986) claim that this
priorcharacteristic is the relationshipof an economicactivityto clusters
of otherinnovativeactivities.Activitiesin leadingsectorsthatdefinean
era of capitalistexpansionare clearlycore activities.The corenessof
activitiesthatare linkedto leadingsectorsdependson whetherthelink-
ages induce expansionof the activityand innovationin its productive
techniques.Thus, simple economicgrowthis not equivalent to core-
ness-growth may resultfromthe captureof innovationand resultant
productivity enhancement,but it can also occur in the semiperiphery
withoutinnovativechangesin techniqueor technology.Growthis a nec-
essaryconditionof corenessbut not a sufficient one in the absence of
innovation.6
But what is innovation?Schumpeter(1939) suggeststhat economic
changetakes place througheconomicevolution-a nonequilibrium, dis-
continuousprocesswherebyeconomicactivitymoves to quantitatively
levels.At thecenterofmajoreconomicchange
and qualitativelydifferent
are innovationsthatsubstantiallyincreaselabor productivity,
makingit
possibleto producemoreoutputwitha givenlevel of inputs(or a given
outputwithfewerinputs).They clusterin space and time.They concen-
tratein certainsectorsand surroundings. new
They requiresignificant
5 Mandel (1975) and Amin(1975) contendthata core-periphery wage differential

emergedin the1880s,whileChase-Dunn(1989,p. 53) identifies a growingwage gap
sincethe 16thcentury.
6 Thisdistinctionbetweengrowth andinnovation is foreshadowedinseveralresponses
to Bill Warren's(1973)thesisthatimperialismis conduciveto capitalistindustrializa-
tion.BothEmmanuel(1974)and McMichael,Petras,and Rhodes(1974)have pointed
out thatthegrowththatoccurredin thesemiperiphery duringthe 1950sand 1960s
was not rootedin an independent technologicalbase. Semiperipheral growthwas,
therefore,unsustainable,and it failedto close the incomegap betweencore and
semiperiphery.
591
construction of plantand equipmentand thecreationofnew firmsor the

reorganizationof old ones. Innovationis not equivalentto invention-
how an inventionis utilized is more importantthan inventionitself.
Indeed, the reorganizationof productionmay be more importantthan
technologicalchange. Chandler(1962, 1990),forexample,proposesthat
largerfirmscan organizeproductionin new ways to captureeconomies
ofscale (whichtransform higherfixedcostsintolowerunitcosts),techno-
logical complexity(allowingfirmsto combineresourcesin new ways),
and verticalintegration(reliancemore on theirown resourcesthan on
marketsfor criticalinputs). New formsof corporateorganizationalso
involve new methodsof skill formation,motivation,retentionof key
workers,and gainingcontrolofa satisfactory portionoftheproductivity
gains thatarise frominnovation.
Mass and Lazonick (1990) and Lazonick (1991) put organizational
changeat thecenterofinnovation.TheytraceBritishcompetitive advan-
tages in the cottonindustryto five main sources of innovation:labor
costs,fixedcapital costs,materialscosts,marketingcosts,and adminis-
trativecosts. Unlike entrepreneur-centered accounts,theiranalysiscen-
ters on the importanceof developingan experienced,specialized, and
cooperativelabor forceout of preexisting domesticand craftlabor. This
is a welcomechangein emphasisfrommodernizationist accountsof core
entrepreneurial superiority.Yet, withouta theorythat elaborates the
structuralsourcesof and impedimentsto developingdisciplinedfactory
labor froma pool ofdomesticand craftlabor,we runtheriskofblaming
peripherallabor fornot "developingcapitalism"just as some analysts
blame peripheralcapitalistsfor not "developingcapitalism."Thus, it
is valuable to combinestructuralapproachessuch as the world-system
perspectivewithhistoricalapproachesto innovationand competitivead-
vantage.
Mass and Lazonick's (1990) othersources of innovationare equally
important.The developmentof a closelylinked engineeringindustry
cheapenedthe cost of producingcottongoods and increasedthe indus-
to respondto changesin marketdemandsand thequality
try'sflexibility
of cottonsupplies. Manchester'sclose proximityto the major point of
entryoftheraw materialcheapenedproductionand increasedthestabil-
ityofmaterialsupply.The advantagesofempirein access to raw materi-
als werematchedbytheway itstransport and informationinfrastructures
opened up new marketsforyarnand cloth.And the Lancashirecotton
industry'scentralizationaround well-developedinput and outputmar-
kets reducedthe amountsof financialresourcesand managementskills
thatwere necessaryto compete.
Finally, corenessand innovationare relatedto generalizedeconomic
growththroughexternaleconomies (Schumpeter1939) and linkages
592
(Hirschman 1958). Schumpeterlinks innovationto the expansionary

phase of the economiclong wave (see Van Djuin 1983). A "primary
wave"lcenterson a limitedgroupof leadingsectorswhereinnovationis
concentrated.The primarywave persistsuntilinnovationis generalized
(or those who fail to adapt are destroyed)and surplus profitsin the
leading sectorsfall. Meanwhile, the prosperitycreatedby the primary
wave inducesa "secondarywave." Many firmsspeculateon theprimary
expansion,some in a recklessand overlyoptimisticway. Because it cov-
ers a muchwiderpartofa regionaleconomy,theeffects ofthesecondary
wave on economicgrowthcan be muchgreaterthanthe primarywave.
Simpleeconomicgrowth,however,is not equivalentto innovationeven
thoughinnovationmay be the mostimportantcause of growth.Rather,
corenessis indicatedby thegrowthof innovativesectorsrelativeto total
economicgrowth.
The "secondarywave" resemblesHirschman's(1958) conceptof link-
ages, in whichfirmsare inducedto (1) beginproducingthingsthat are
neededby theprimaryinnovatorsor (2) use theiroutputto produceother
commodities.Schumpeter'sconcept of externaleconomy,however,is
bothbroaderand moreprecise.It is broaderbecause thesecondarywave
includesboth activitiesthat are directlylinkedto innovationand those
that are induced by the general "prosperity"that followsclustersof
innovation.It is moreconcisebecause Schumpeter(1939)beginshis anal-
ysis of economic change with innovation(independentvariable) and
works throughlinkagesand secondarymultipliers(intervening mecha-
nisms)to economicgrowth(dependentvariable),whileHirschmanbegins
withlinkageswithoutadequatelyexploringthe innovativeprerequisites
fortheirsuccessfulinducement.
The distinctionbetweencore and semiperipheral industryis clarified
by the conceptsof creativeand adaptiveresponse.Schumpeter(1947, p.
150) proposes that economies,sectors,or firmsresponddifferently to
change. Those that do somethingnew make a creativeresponse-they
utilizenew technologies or formsoforganizationin waysthatallow them
to outcompeteothers.Those that respondby extendingtheirexisting
practicemakean adaptiveresponse,whichenablesthemto competewith
innovatorsfora time by intensifying workers'efforts,reducingwages,
and acceptinglowerratesofprofit.Core activities(orfirmsor sectors)are
centersof creativeresponse.Semiperipheralactivitiesrelyon adaptive
responsesand are, therefore, proneto lowerratesofprofit,lowerwages,
lowercapital intensity, and greaterratesof stagnationand failure.
Creative and adaptive responsesresemblethe Marxian conceptsof
absoluteand relativesurplusvalue. Like creativeresponse,relativesur-
plus value refersto a firm'sabilityto increaseitsrateofprofitby utilizing
productiontechniques,so thatit uses less than the social average labor
593
time to producea given level of output.Surplusprofitsmay accrue to

innovatingfirmswithina sectoror to whole sectors.Absolute surplus
value, on theotherhand, refersto a firm'sabilityto increaseor maintain
its rate of profitby increasingthe rate of exploitation-extendingthe
work day, increasingthe intensity of work,or reducingthe wage rate.
This is clearlyan adaptive response.Laclau (1971) and Brenner(1977)
argue that technologicalchangesin advanced capitalismhave made it
impossibleforthe core to exploitthe peripherythroughcapturingabso-
lute surplusvalue. They implythat peripheralregionsfail to innovate
not because of core interests, but because of a lack of dynamismof local
elites. Yet restrictionson the transferof leading edge technologyor on
participationin leadingsectorsmay consignperipheralfirmsto use out-
moded technologiesor previousinnovations.This formof adaptive re-
sponse enables peripheralfirmsto maintaina presencein certainindus-
trialsectorsover long periodsof time,althoughwithlower profitrates
and lowerwage rates.
Finally, innovation occurs in distributionas well as production.
Schumpeter'slist of importantinnovationsincludesaccess to new mar-
kets and sources of supply. Mass and Lazonick (1990) emphasize the
importanceof conditionsof materialsupplyand marketingstructures to
competitiveadvantage. Schumpeter(1939, pp. 93, 99), by distinguishing
between factor-usingperiods of innovative "gestation"and output-
increasingperiods of innovative"operation,"underscoresthe impor-
tance of marketstabilityand potentialmarketexpansionforextendinga
firm'sor agent's horizon.7
Recent approaches fromwithinthe Schumpeteriantraditionpursue
the importanceof institutions thatencouragethe stable yet challenging
environment thatis necessaryforinnovation.The mostinfluential recent
worksin thisregarddevelopconceptssuchas nationalsystemsofinnova-
tion (Freeman 1987; Bengt-Ake1992) and national competitiveadvan-
tage(Porter1990). These approachessuggestthatinnovationis captured
notby entrepreneurs, but by institutionswithinfirmsand in thenational
economy.Schumpeter's insistencethatinnovationscomein clustersleads
some to emphasize the importanceof nationallybounded, interactive
processesof technologicalchange,learning,and productivereorganiza-
tion.Porter(1990),forinstance,emphasizesthecreationofnationalcom-
petitiveadvantagesthroughhighlylocalizedprocessesthatimprovefac-
tor conditions(skilled labor and infrastructure), demand conditions
7 Lange (1943,p. 21), on theotherhand,excludesmarketchangesfromhisdefinition

of innovations,whichmustbe ouputincreasingor factorsaving.Yet his formal
economicapproach avoids the relationship betweenuncertainty,"horizon,"and
agents'willingnessto introduceinnovations.
594
(homedemandforan industry's productor service),supportingindustries

(linkagesto suppliers),and firmstructure (includingconstructive
domes-
tic rivalry).Competitiveadvantages are thus created ratherthan en-
dowed as in neoclassicaleconomictheory.
Yet such approachesto innovationremainwedded to the nation-state
or thefirmas thecriticalunitofanalysisand ignoreor seriouslyunderesti-
matetheimportanceofglobalinstitutions to thecaptureand localization
of innovations.State activitiesto protectmarketsand open up new ones
are importantin thisregard,especiallyif innovationis associatedwith
economiesof scale. Fromwithina world-system framework, Bornschier
(1992, p. 4) views thestateas produceror protector ofinnovation,refer-
ring to the "world marketfor protection"or social order,which is a
territoriallyboundedpublicutilityand an elementofthenationalproduc-
tion function.States supportinnovationand investment, he argues,by
placing theirfirmswithinnational and internationalnetworksof eco-
nomic transactionsthat are effectively protected.Hegemony,zones of
influence,and nationalprotectionare all means by which statestryto
improvethe structuralenvironment forinnovation.
Conceptsfromthe world-system approach,then,enhanceour under-
standingof how innovationis captured,localized,and protected.There
is no such thingas a national systemof innovationbecause clustered
innovationsrequire global strategiesto secure raw materials,capture
marketsfor the exportof core products,and stiflecompetitionfrom
withinand outsidethe core. What appears as a highlylocalized process
is embeddedwithinglobal strategiesto securethe necessarycommercial
and materialenvironment forinnovationsto clusteror interactwithin
the boundariesof a core state or region.These global strategiesmay
followcharacteristic temporalpatterns,movingfromprotectionto free
trade, from directmanipulationto liberalhegemony,fromwarringwith
rivals to the enforcement of peacefultrade(Chase-Dunn 1990, pp. 54-
69). The globalizationof studiesof innovationallows one to recognize
thatthecaptureof innovativecoreactivitiesis notjust a matterofintra-
core competition, but also partof thesimultaneousprocessby whichthe
world-system hierarchyis reproduced.
The associationbetweencore activitiesand innovationis, I believe,
robust.Innovationdefinesthe cuttingedge betweencorenessand semi-
peripherality withinthe global structure.It allows moreprocessedeco-
nomic activitiesto be semiperipheral if innovationis concentratedup-
stream.It allows sectorsor commoditiesto move in and out of coreness
as theirrelationshipto centersofinnovationand theirsitesofproduction
changeovertime.It enablesus to distinguish whichregionalcompetitors
in a singleindustry-suchas cotton-are coreand whichare semiperiph-
eral. Unlike approachesthat use commoditychains and defineas core
595
thosenodes thatreceivehigherratesof profit,it examinesthe causes of

surplusprofitsand even allows us to analyze indirectlinkagesamong
nodes of different commoditychainsin a givenregion.
Furthermore, an examinationof how classes and statesinduceor con-
strainactorsor regionsfromparticipating in innovativewaves may help
us understandhow thestructural hierarchy is producedand reproduced.
Innovationputs activitiesor sectorsin theirregionaland temporalcon-
text. Core activitiesare definedin relationto each other-since they
cluster,core activitiesand regionalcorenessare related.Even if a sector
or firminnovates,it is core only if it is connectedto a seriesof other
core activitiesin the region.The absence of such linkagesthreatensthe
long-term stabilityof theactivityand its abilityto remaininnovative.It
will becomedependenton outsidesourcesof supplyand on outsidemar-
kets and, in the long run, will eitherbe peripheralizedor decline. A
completetheoryof innovation,therefore, musttie structuralcharacteris-
tics of the global hierarchy(whichworld-system analystsassume to be
stable)to the ever-changing locationsof clustersof innovation.
WHAT WAS "LEADING" ABOUT COTTON?

A "leading"sectoris one at the centerof innovation.It expands,gener-
ates surplusprofits,and links with othercore sectors.Cottonby itself
did not constitutethe whole of England's industrialrise; it was at the
centerof a series of linked innovationsthat made up the "industrial
revolution."Deane (1968, pp. 104-7) belittlescotton'simpact because
the industrynever exceeded 5%-6% of BritishGNP, althoughother
estimatesput thefigureat 11%-12% (Farnie 1979,p. 24). Yet herfocus
on the size of the cottonindustrymissesthe sector'simpacton overall
Englishindustrialization.8
Once we recognizethat cottonwas the centerof a wide clusterof
innovationsand a widernetworkofexpansionary impulses,Deane's revi-
sionismloses much of its force.Cotton induced technicalspin-offsin
mechanical engineering,chemicals, and steam power (Musson and
Robinson 1969)..It was a bulwark of the English exporttrade, with
importantlinkagesto shipping(Davis 1962).9And theriseofManchester
8A morerecentrevisionin thelate 1980squestionedtheconceptof the "industrial

revolution"
duringtheyears1780-1830on thegroundsthatratesofgrowth ofBritish
nationaloutput,totalfactorproductivity,
and industrialoutputwereall slowbefore
1830and did notdisplaythesharpupwardturnaround1780thatpreviouseconomic
historians
claimed.For a reviewofthisrevisionist
literature
and an excellent
critique,
see Berg (1994, pp. 13-33).
9 Cottonmanufactures
madeup 52.8% oftheincreaseofvalueofBritishexportsfrom
1785 to 1815, and 35% from1820 to 1850 (Farnie1979, p. 10).
596
and Liverpoolinducedthedevelopmentofshipping,canal, and railtech-

nologies-the centerof the "secondindustrialrevolution"-and the im-
provementof post and communications (Redford1934, pp. 188-204).
Farnie (1979, pp. 27-36) uses a linkageapproachto assess theimpact
of thecottonindustryon Britisheconomicchangebeforeand after1830.
Before 1830, the greatestgrowtheffectsof cottonwere in the spinning
sector,wherea discontinuous breakfromearlierlevelsofproductionwas
enabled by changesin technique,productiveorganization,and supplyof
the raw material. There were importantbackward linkages in engi-
neeringand transport, but forwardlinkageswerelimitedto weavingand
finishing.Weavingwas stillperformed primarily on handloomsin homes
or small workshops.The finishingtrades, especiallybleaching,were
morecapital intensivebut were not yetlinkedto the chemicaland dye
industriesthatwould becomeprominent laterin the 19thcentury.
After1830 thenew demandsofthespinningsectorinduceda transfor-
mationof the whole economy.The introduction of power looms added
impetusto mechanicalengineering. Transportation requirements stimu-
lated theintroduction and expansionoftheLancashirerail system.Fair-
burnand othersrevolutionized thetechnology of millbuildingin Lanca-
shire.Cottonmay have consumedhalfof theincrement in steelproduc-
tionand fabrication throughitsdemandforpowerlooms,printing, cylin-
ders, steam engines,and boilers(not to mentionthe steel consumption
of transportand miningmachinery).Otherlinkagesincludedmachine
oils, wooden bobbins,chemicalsand dyes, and rubberand leatherma-
chinebelts.Murray(1870)estimatesthat154ancillaryindustries supplied
the cottonsectorby 1870. To this we may add the consumerdemand
generatedby the industry'sworkers.
But ratesofchangeoftechnology, productiveorganization, wage rates,
skilllevels,and profitability
wereunevenamongsubsectorsofthecotton
industry.Innovationswere concentrated in certainsectors,whileothers
remainedrelativelyunchangedforlong periods.Before 1830, the most
innovativeprocesseswereupstreamfromless advanced ones. The major
technicalinnovations-thewaterframe,themule,and thejenny-were
in spinning.Moreover,spinningfirstcombinedthesenew technologies
withfactory-based production.Most authorsagree thatthe impetusfor
changein spinningwas the bottleneckit createdto weaving. Yet, even
afterthe remarkableseriesof technicalinnovationsof thelate 18thcen-
turyand the centralizationof spinningin the factory,weavingwas not
a bottleneckon spinning.Traditionalsocial relationsin weaving were
actually encouragedby the use of the exportmarketas a "vent" for
surplusyarn. Thus, spinningbefore1830 was the centerof "innovative
response"and weavinga centerof "adaptive response."As mechanized
mill spinningincreasedyarnoutput,ruralhand weavingwas extended.
597
The putting-out systemcontinuedto dominateweaving untilthe 1840s

(Landes 1969, pp. 42-44).
To summarize,the corenessof a leading economicsectoris defined
partlyby its relationto othersectors.It inducesa seriesof profitableand
expandingoutside activities.But not all parts of a leading sectorare
equally core. Some processesare centersof innovativeclusters,while
othersremainrelativelyuntouchedby innovation.Core and semiperiph-
eral activitiesmay residenextto each otherin a commodity chain. This
was the case with cotton spinningand weaving between 1780 and
1830.
GROWTH,INNOVATION,AND PERIPHERALIZATIONIN BRITISH

AND IRISH COTTON
Ireland's textileindustrybegan in wool, which grew rapidlyuntil the
BritishWoollenAct prohibitedthe exportof woolen clothfromIreland
in 1699. The suppressionof Irish wool, like Indian textiles,was a state
responseto pressuresby Englishwoolen interests(Kearney1959; Kelly
1980). But the Englishstate'swiderintentwas to subjugateand trans-
formIrish industryto producelinenand provisionsforthe Britishfleet
(Ellison 1886, p. 19). Irish textileexpansionafter 1700 was in linen,
which was stimulatedby a 1696 act that allowed plain Irish linen to
enterEngland duty-free and by the activitiesof the Irish Linen Board,
establishedin 1711 (Crawford1969,p. 26).
The linen act gave Ireland advantages over continentalproducers,
but Irish linen was a dependentindustryfromthe beginning.Britain
encouragedIrishlinento relieveits dependenceon Baltic sources.Mar-
kets for linen expanded more slowly than other textilesand Britain
strictlylimitedIrish exportsof certainlinensin orderto keep the most
profitablemanufactures in England. In 1773, on the eve of the birthof
Ireland's cottonindustry,England took more than 90% of Irish linen
exports.As a result,theindustry was highlyunstable.Duringthedepres-
sion of 1773, up to three-quarters of the linen looms in the northof
Ireland were idle (Monaghan 1942,p. 1). Linen's dependentnaturewas
increasedby a limitedworld supplyof flax so that, unlike cotton,its
pricerosewithdemand(Durie 1976,p. 90); by its absenceoflinkagesto
associatedactivities;and byitsdecentralized organizationamongfarmers
withtinyplots,who movedin and out ofweavingor spinningas a hedge
againstfluctuations ofthecostofsubsistence(Crawford1969,pp. 27-28;
Durie 1976, p. 91). Until technologyand factoryorganizationbecame
routineenoughthattheycould be introducedwidelyinto a textilewith
suchlimitations ofraw materialsupplyand finaldemand,therewas little
598
IrishCottonIndustry
impetusto innovate. Nearly all increasesof linen output in the 18th

centuryrequiredproportionalincreasesof labor."?
The Irish cottonindustry,on the otherhand, was establishedduring
a periodof relativeautonomyfromBritain.In responseto mobilization
by the Irish Volunteers,Britainrepealedsome of its moreegregiousre-
strictions on Irishtradeand industry(althougha centuryof the naviga-
tionand woolenacts leftIrishcommerceand industry woefullyunderde-
veloped).As linenstagnatedduring1770-80, thesemi-independent Irish
parliamentrespondedwith incentivesfor cottonmanufacturesin the
formof bountiesand protectionagainst importsof English calico and
muslin. New spinningtechnologywas introduced,includingwater-
drivenmills,and cottonprogressively replacedlinen.
'
Althoughsmall by English standards,Irish cotton productionex-
panded rapidlybefore1800. Because all theraw materialfortheindustry
was imported,ratesof growthofIrishand Britishcottonproductioncan
be estimatedfromtheirretainedimportsofcottonwool. 2 Figure1 shows
the logged outputof the Britishand Irish industriesbetween1782 (the
firstyear of normalactivityfollowingthe AmericanWar of Indepen-
dence) and 1822 (the last year forwhich separateIrish data are avail-
able).13 The overallratesof growthin theIrishand Britishindustriesare
'o Although machinery was availablefromthe1730s,Irishflaxwas scutchedbyhand.

Mechanization ofspinning and weavingfollowedcottonbydecades.The onlymajor
gainsin productivity before1800werefromsubstituting thespinningwheelforthe
distaffor rockand themodification ofhandlooms.Even thespinning wheeldid not
reachsomeremoteareasuntilthe 1790s(Durie 1976).
1"In Belfastin 1760therewere400 linenloomsand no cottonlooms;an 1810census
reported 860 cottonloomsand 6 linenlooms(Monaghan1942,p. 3).
12
Data on Irishimportsand exportsof cottonwool,yarn,and clothbetween1764
and 1822arein theannualledgersoftheIrishCustoms,foundintheNationalLibrary
ofIreland.Britishdata beginning in 1881arefromBaines(1835, p. 347). Blaug(1961,
p. 377),following Bainesand others,assumesthatwastagein spinning was constant
at about11%untilthe1860s.Bythe1780stheuseofcottoninotherlinesofproduction
(candlewicks, mixedfabrics)was minimal.Thus,cottonyarnoutputcan be estimated
withreasonableaccuracyas 89% of retainedcottonwool imports(importsnet of
reexports).Clothmanufactures (byweight)are generallyconsideredto be equivalent
to retainedyarnoutput.This methodcannotdistinguish betweenvalue added in
spinning,weaving,and finishing. Regionalindustries
thatconcentrate in different
stagesare not strictlycomparable,nor are specializingregionsstrictly comparable
withthosethatare integrated fromspinningthrough finishing.Initially,however,I
willuse a globalestimateofcottonoutput,whichis cottonyarnavailableforweaving
(whetherthe yarnis subsequently wovenor exported).Thus, "cottonoutput"(in
pounds)is estimated as thesumofyarnproducedand yarnimported.
13Irishcottonwoolimports for1809-11areexpectedvaluesestimated bythemodified
Cochrane-Orcutt iterativeprocess.This was necessarybecausecottonwool imports
doubledduringthoseyears,from2.5 to 6 millionpounds,onlyto dropback to 2.6
599
output20 -
19 _
18 - _vXf<. ,> Britain

17 _- ~ g t-A
16 _*-
15 -reland
14
13
12
1782 1787 1792 1797 1802 1807 1812 1817 1822
year
FIG. 1.-Logged outputoftheIrishandBritish
cottonindustries
(inpounds),
1782-1822, calculatedfromIrish Customs(variousyears).
estimatedbyautocorrelation modelswhichregressloggedoutputon time,

where 1782 = 1 and 1822 = 41.14 The ratesof growthof cottonoutput
are the coefficients
of time. The resultsare the following(t-statistics
in
parentheses):
Britain: ln(OUTPUT) = 16.218 + .060TIME R2 = .902.

(11.641)
(1)
Ireland: ln(OUTPUT) = 13.489 + .050TIME R2 = .808.
(9.342)
millionpoundsin 1812and neverachievethe 1809-11levelsagain. These werethe

yearsof U.S. embargoeson exportsto England,and thedifference betweenactual
valuesand expectedvaluesconsistedofcottonwoolthatwas imported byAmerican
shipsintoIrelandand reexported to Britainas a wayofcircumventing theembargo
"through theback door."Dubourdieu(1812),in his statistical surveyof countyAn-
trim,estimatesthat21% of cottonwool importsin Belfastwerereexported in 1811.
This is probablya seriousunderestimate. MostIrisheconomichistorians who quote
Dubourdieu(e.g.,Monaghan1942;Gill1925)failtorecognize theextraordinary period
duringwhichhis observations weremade. In otheryears,reexports of cottonwool
werepractically nil and werenotevenrecordedin thecustomsbooks.Data on reex-
portsis availablefor1835,Irishexportsof cottonwool are less than1% of imports
(IrishRailwayCommissioners 1837).
14 All of the regressionsin thisarticleare estimatedusingthe modifiedCochrane-
Orcuttmethod,with maximum-likelihood estimationof p. In all cases, Durbin-
Watsontestsindicatedfirst-order autocorrelation.
600
IrishCottonIndustry
Both ratesof growthare similar.The Britishindustrygrewby 6% per

year,and theIrishindustryby 5%. 15 At thislevel of generality,the two
cottonindustriesappear to be nearlyequivalent.
A closerlook at figure1, however,indicatesthattheIrishcottonindus-
trywentthroughtwo phases. Cottonoutputgrewrapidlyand relatively
smoothlyuntil the mid-1790sand thereafter became slower and more
erratic.16 Once we divideIrishcottonintoitsearlyand late phases,using
the union of Ireland withBritainin 1801 as the dividingyear, we find
two distinctgrowthpatterns:
Period 1, 1782-1801:
(5.069)
(2)
Ireland: ln(OUTPUT) = 13.107 + .070TIME R2= .594.
(4.541)
Period 2, 1802-22:
(3.952)
(3)
Ireland: ln(OUTPUT) = 14.253 + .026TIME R2= .472.
(2.867)
Before1801,thetwo TIME coefficients indicatethateach industrygrew
at an equivalentrate of 7%. After1801, while Britishoutputgrowth
remainedhigh(5.1%), the Irishgrowthratefelldramaticallyto 2.6%. "
Moreover,the simpletimemodel forIreland fails to account fora lot
more of the observed variance after1802, which indicatesthat Irish
cottonoutputwas moreunstableduringthe second period. There were
15 It shouldbe remembered thatthelinearity of theseestimatedmodelsis produced

byloggingcottonoutputtoobtainratesofgrowth. Thismasksa discontinuouschange
in actualoutput,and alsoobscuresa pathofexpansionthatexperienced severeperiods
ofstagnation as wellas periodsoframpantgrowth.
16 The exploratory techniqueof a runningmedianidentifies morepreciselywhen
growthratesshifted.Therewereclearbreaksin themedianratesofgrowthofIrish
outputin 1795-97 (whenthe mediangrowthrate declinedfrom17.5%-19.9% to
9.6%-17.5%), in 1805-9 (whenit declinedto 9.4%-9.6%) and in 1816 (whenit
declinedto 9.4%). Unfortunately, Irishtradedata are notavailableafter1822,but
one wouldexpectrathersteadydeclinessoonthereafter.
17 The distinctionbetweenthetwoindustries in different
timeperiodsis evenstarker
whenwe considertheirearliestyears.During1782-95,outputin theIrishindustry
grewat an estimatedrateofmorethan11% perannum,whiletheEnglishindustry
grewby7%. Thus,whiletheBritishindustry maintained a ratherevenrateofgrowth
through the 1790s,theIrishindustry was alreadyin decline.
601
periods of high outputand equally distinctiveslumps. Instabilityand

recessionin the Britishindustrywere less severe.
The early success of the Irish cottonindustry,as indicated by its
growthrate in model (2), is reflectedin the English responseto Prime
MinisterPitt's1785 proposalsforlimitedfreetradebetweenIrelandand
England. Lancashire cottonmanufacturers rejectedthe proposals out-
right.They regardedIrelandas a commercialthreatbecause of its abun-
dant low-wagelabor, plentifulwaterpower, and state incentivesto in-
dustry(Edwards 1967, p. 11). RobertPeel even threatenedto move his
cottonmanufactures to Irelandifthepropositions wereenacted.English
industrialcapital organizedsolidlyagainst Pitt and defeatedthe pro-
posals.18
Fifteenyears later the Englishmanufacturers' attitudehad changed.
They pressedPittto withdrawIrishcottondutiesimmediately underthe
1801 Act of Union of Ireland withBritain,in orderto gain freeaccess
to Irish markets.The ManchesterChamberof Commerceargued that
"the removal of all restrictions would tend to directthe capital and
industryof bothcountriesto prosecuting thosevariousmanufactures for
whicheach possessedthe greatestnaturalqualifications"(Redford1934,
p. 142). Afterdelays caused by politicalconsiderations, Irish dutieson
cottonyarnwere eliminatedin 1816 and on cottonclothin 1824.
In 1785 Britishindustrialcapital rejectedfreetradewithIreland be-
cause it had too manyof the "greatestnaturalqualifications"in cotton
manufactures. By 1801,theydemandedfreetradebecause England now
possessedthese"natural"qualifications.What happenedin between?I
believe the distinctgrowthpatternsof Irish and Britishcottonoutput
and thetimingof theirdivergence-reflected in models(2) and (3)-can
be explained by the localizationof innovationin the cottonindustry
around Lancashire and by the peripheralization of the Irish industry.
The Englishindustrybecame a centerof creativeresponse,introducing
new technologiesbut, what is moreimportant,exploitingnew formsof
productiveand commercialorganization.The Irishindustry, on theother
hand, extendeditscottonactivitiesthroughadaptiveresponses,primarily
byextendingthelabor-intensive systemofputting-out in weaving,which
became a subsidiarysectorto Englishspinning.Ireland's peripherality
is indicatedby its concentrationin weaving ratherthan spinning,its
unfavorableaccess to theraw material,itslack oflinkagesto otherinno-
vatingsectors,and its unfavorableaccess to externaland even domestic
markets.
18
Ironically,
theEnglishindustrialists
demandedfreetradewithFrancebecausethey
desiredaccessto itsmarketsand perceivedno threatfromthelocalindustry
(Redford
1934,p. 127).
602
IrishCottonIndustry
For a time, Ireland's relativeadvantages in cheap labor costs and

water power enabled it to remaincompetitivewith Britain,despiteits
continuedrelianceon adaptiveresponses.But in theadversecommercial
conditionsof the early 19thcentury-a period of war and global eco-
nomicinstability-thestrength oftheEnglishinnovativesectorsenabled
themto surviveand expand at a higherrate than the Irishsectors.But
England's innovationswerenota nationalevent.They also requiredthe
subordinationof theIrishtextileindustry,whichgave thelargerEnglish
spinnerstheflexibilityto move in and out of the Irishmarket,dumping
theirsurplusyarntherein periodsofslumpingdemandwhileusingcheap
Irish weaving labor to cheapen the cloth England sold throughoutthe
world.This explainstherisinginstabilityoftheIrishindustry after1801,
as observedin model (3) above. England achieved the stable supplyof
raw materialsthatwas necessaryforits firms'increasedthroughput by
of supplyin subordinatemarketsthattheyser-
increasingthe instability
viced throughreexports.England's innovationsand creativeresponses
and, ultimately,its rapid ratesof growthand relativemarketstability,
came at the cost of Irish adaptive response,instability,and periodic
stagnation.
SPINNING AND WEAVING:INNOVATIVEAND

ADAPTIVE RESPONSES
The keyinnovationsduring1780-1820werecenteredin cottonspinning,
whichwas clearlytheleadingsectoroftheworldeconomy.New spinning
technologieswere combinedwiththe new factoryorganizationto radi-
cally increase throughputand labor productivity.Linked capital-
intensivesectorssuch as finishing,machinebuilding,shipping,and dis-
tributionwereincreasingly mechanized.But weavingwas stillprimarily
done in homesand small weavingsheds. Expansionof yarnoutputwas
achieved primarilyby increasinglabor productivity due to innovations
in technique, organization,productive scale, and material supply.
Expansion of weaving (and of noninnovating spinningoperations)was
achievedprimarily byaddingmorelaborand equipment.The firstexpan-
sionwas a creativeresponse,whilethesecondextensionwas an adaptive
response.Some spinnerscompetedfora timebyintensifying laborexploi-
tationand acceptinglower profitrates; weavers in generaladapted to
theincreasedsupplyof yarnby extendingtheirexistingpracticethrough
the putting-outsystem.In world-system terms,cottonspinningwas at
thecenterofcoreindustry whileweavingwas a semiperipheral industrial
activity.
How did thisdistinction affectthetrajectoriesof the Britishand Irish
cottonindustries?Figure 2 shows Irish outputof cottonmanufactures
603
million
pounds7
6
cotton
manufactures
4
-,yam output
3
2 yamimports
1782 1787 1792 1797 1802 1807 1812 1817 1822

year
FIG. 2.-Irish cottonindustry
outputand itscomponents,
1782-1822,calcu-
latedfromIrishCustoms(variousyears).
and its components,yarn outputand yarn importsfromBritain. Irish

yarnoutputincreasedrapidlyfrom1782 to 1788, was stagnantbetween
1788 and 1806, and rose slowly thereafter.On the otherhand, Brit-
ish yarnexportsto Ireland increasedrapidlyafter1790 and rose irregu-
larly but steadilyuntil the 1820s. Britishyarn was eitherwoven into
fabricsfor the Irish marketor woven for Britishdealers who reim-
portedthefabricforfinishing and marketing aroundtheworld.The rates
of growthof homespunversus importedyarn as inputsinto the Irish
cloth industry,estimatedby autocorrelationmodels, are the following
for1790-1822:
Irish
spinning: ln(OUTPUT) = 13.562 + .0348TIME R2 = .6552.
(9.0123)
(4)
British
yarn: ln(IMPORTS) = 12.173 + .0531TIME R2 = .5364.
(5. 1158)
Yarn importsrose by an estimated5.3% per annum between 1790 and
1822, whileIrish spinningexpandedby less than 3.5%. Irish cottonbe-
came concentratedin weaving, where Britishspinnersand dealers put
out yarn, and Irish entrepreneurs,in a classic adaptive response,took
cheap Britishyarnand extendedtheirexploitationofIrishweavers. The
resultingIrish "cottonindustry"was capable of periodsof rapid expan-
sion but was highlydependenton Britishmachinesand materials.It had
few of the innovativecharacteristics
thatmade Britishcottona leading
sector.Increasingly,core spinningbecame delinkedfromsemiperipheral
weavingand was concentratedin Britain.
604
The importedshare of Irishyarnconsumptionrose rapidly,fromless

than 1% in 1782 to more than 30% in 1795. After1795, it fluctuated
between20% and 50%. The fluctuation ofyarnimportsadded substantial
instabilityto the Irish cottontrade. Irish capital's "failure"to innovate
morewidelyin cottonspinningwas a rationalreactionto a marketthat
was periodicallygluttedby imports.These dislocationsbecame particu-
larly problematicunder freetrade afterthe union. Irish weaving was
also in a precariouspositionbecause its supplyofyarnwas unstable(fig.
2). Because it did not innovate,it became vulnerableonce technical
changesand factoryorganizationswepttheBritishweavingsectorin the
1830s. Adaptiveresponsemay be successfulfora time,but its effective-
ness is temporallylimitedwhen faced with a continuallyhigh rate of
innovationin competingsectors.
How did the distinctionbetweenspinningand weavingarise?During
the early cottonperiod,the capital needed to begin eitherspinningor
weavingwas quite small. Yet the organizationof productionintofacto-
ries was concentratedin spinning,culminatingin the predominanceof
large spinningmillsin the early 19thcentury(Edwards 1967, p. 9). A
small spinnercould producewithrelativelylittlecapital outlay,but the
large mill,whichcombinedpowermulesand multiplespindleswiththe
advantages of buyinglarge lots of cottonwool, massivelyincreased
throughput. Factoryinnovationsturnedspinningfrombeinga bottleneck
on weaving to being an inducerof rapid expansionin weaving.'9 But
weaving did not expand by increasingits labor productivity-through
innovation-but byextendinga systemofmiddlemenwho intermediated
between the relativelyconcentratedspinners and multiple weavers
spread out over large areas.
Low wages gave Irishweaversa greatadvantageovertheBritish.But
Irishspinningcould surviveonlyiflow wages compensatedfortechnical
disadvantagesand highermaterialcosts.20Lowerwages weremaintained
by continuingthe Irish agrarian-basedrelationsof production,which
reduced the subsistencecosts of farmer-spinners and farmer-weavers.
But the persistanceof this agrarian-basedorganizationof production
precludedthe widescaleintroduction of factory-based spinningthatwas
revolutionizing the English industry.21 Thus, Irish entrepreneurs used
19 In 1770spinning was a bottleneck:

six-eightpeoplewererequiredto spinenough
yarnforone weaver.By 1785theproductivity of spinninglaborincreasedso much
thatweavinghad to expandfortheyarnto be sold (Ellison1886,p. 48).
20 Geary(1981, p. 41) estimates
thatcoal was 2% of totalcostsin theIrish"cotton
industry" whilewageswere33%. Belfastspinning wageswereabout72% ofLanca-
shirewagesin 1833,and weavers'wagesweresubstantially lower.
21 In addition,a higherproportionof Irishurbanlaborwas femalethanin Lanca-
shire-a maleto femaleratioin Belfastofabout1:2 and in Lancashireof 1:1-while
605
relativelylabor-intensiveprocesses,includingputting-out, to competefor
a timewith Lancashirespinners.As a result,Irish spinningeventually
declinedand weavingpredominated.
But weaving was clearlya semiperipheral industry.Weavers' wages
were extremelylow;22theirmarketwas unstable and it was the first
textilesectorto feelthe effectsof a recession(Ellison 1886, pp. 78-79);
weavingshedsrequiredfarless capitalthanspinningmillsofcorrespond-
ingdimensions,so therewerefeweconomiesofscale or speed; and weav-
ers were oftentied to buyers,whilethelargerspinnersmoved back and
forthbetweenhome marketsand export(Ellison 1886, p. 79; Edwards
1967, pp. 27, 50).
Yet the spinningfirmsdid not automaticallyachieve the diversified
marketaccess thatwas necessaryto realizeeconomiesof scale. This had
to be created.Throughouttheworld-system, Englishmarketaccess was
establishedthroughits use of sea powerto dominateinternational com-
merceand to regulateits imperialtradelaws and practices.WithinIre-
land, the Britishstate'sdesireto reassertdirectpoliticalcontrolafterthe
1798 Irish rebellioncorrespondedto cottoncapital's demands for free
access to the Irish market.Both interestswere enhancedby the forced
unionof IrelandwithBritainin 1801. Free trade(in Irelandas through-
out theworld-system) enabledspinnersto dumptheiryarnabroad during
difficultperiodssuch as thewartimeperiodafter1803,when"theexport
effortsometimesresembleda giganticdumpingoperation;the outcome
ofdesperateattemptsbymanufacturers to fightoffidle capacityillustrat-
ing theirdependenceon the foreignmarketfortheirsuccessfulexpan-
sion" (Edwards 1967, p. 74). Englishdumpingwas especiallyimportant
in the fineryarns where yarn stockstied up huge amountsof capital
(Edwards 1967, pp. 128-30).
As the Englishindustrybecame moreconcentrated,smallerspinners
became dependenton largespinnersand dealerswithmarketcontactsto
sell theiryarn.In time,thesmallerspinnersbecame "controlledby their
yarndealers"(Edwards 1967, p. 34). They had limitedcapital, spun on
a commission,and sent all of theiryarn to a dealer who kept them
suppliedwithcottonand made cash advances. Small spinnerswere at a
disadvantageon foreignmarketsbecause of hightransactionscosts and
womenspinnersearnedless thanone-third thewagesofmalespinners(Geary1981,

p. 44).
22 In 1811,Irishhomeweaversand their spousesreportedly
workedfromfourin the
morning six daysa weekfora netwage ofabouttwoshillings,
to midnight sixpence
(2s. 6d.; Monaghan1942,p. 12). Mostfactoryweaversmade 9s.-15s. perweek.In
1832-33Irishhomeweaversreceived7s. perweekwhileManchester spinnersmade
20s.-25s., mechanics24s.-26s., machinemakers 26s.-30s., and iron founders
28s.-30s. (Redford1934,p. 80).
606
unfavorablecreditterms,so that theywere oftenforcedto sell on the

less profitablehome market.
Free tradeextendedthisproductivehierarchy to Irelandand theworld-
systembeyond.The largeEnglishspinnersincreasingly subjugatedIrish
weaving throughtheirdealers in Ireland, who regularlyreduced their
Irish pricesto undercutlocal competition(Edwards 1967, p. 140). The
pressureto sell yarnto Irishweaversincreasedduringthe 1790swiththe
size and throughputof English spinningmills. Eventually,the largest
Englishspinnerscolludedto share out the Irish marketat agreed mini-
mum prices(Edwards 1967, p. 141).23
WhentheUnitedStatesimposedtradebarriersagainstBritainin 1809,
Britishmanufacturers began dumpingclothas well as yarnin Ireland.
Irish manufacturers could not respondby exportingtheirown clothbe-
cause theylacked a solid exportinfrastructure-the by-productof more
thana centuryof Britishdomesticprotectionand restrictions on its colo-
nies' trade with countriesotherthan England. SingularIrish attempts
to exportclothto Americaended in disaster,and Irish customsrecords
show only a handfulof small cottontextileshipmentsfromIreland to
Americaafter1805.
The Irish cottonindustryfinallycollapsed afterEngland removedits
tariffson yarnin 1816 and clothin 1824. Between 1825 and 1835 Irish
yarnoutputfellfrom3.6 to 2.3 millionpoundsand clothoutputfellfrom
6.3 to 2.9 millionpounds(IrishRailwayCommissioners 1837). As English
weavingwas mechanized,theManchestermanufacturers beganto export
finishedclothto Ireland ratherthanputting-out there.Englishclothex-
portsto Irelandaveragedless than80,000yardsbefore1815, but reached
850,000 yards in 1822. Britishclothexportsrose to 5 millionyards in
1825 and 14 millionin 1835, while yarn exportsfellfrom3 millionto
500,000 pounds.24
Belfastspinnersmoved into spinningflaxwhen theybecame unable
to competein cotton. Both the numberof cottonspinningmills and
importsof cottonwool into Belfastfelldramaticallybetweenthe early
1820sand 1835(Dickson 1976,p. 110; IrishCustoms1823;IrishRailway
Commissioners1837, p. 73). Dublin and Cork foundno adaptive re-
23 Even aroundBelfast,wherethereweresomemodernmills,thefineryarnscontin-
ued to be importedfromEngland.Ironically, theskilledUlsterweaverswereespe-
ciallydependenton theBritishindustrybecauseUlster'smillscouldnotspinthefine
yarnstheyneededto weave high-quality cloth(Geary1981,p. 38). The dependent
Ulsterweaverswere typically controlled
by Britishspinnersunderthe putting-out
system.
24 The remainingyarnexportscame mainlyfromScottishspinnerswho were at-
tempting to competein an evermoredifficult environment by theirown adaptive
responseofputting-outin Ireland(Dickson1976,p. 111).
607
sponse. The recessionof 1825-26 caused the greatestrun of company

failuresin Dublin historyto that time. The Cork industryentirelycol-
lapsed, causingemigration"on a scale unique by pre-Faminestandards"
(Dickson 1976,p. 110). As Irishlabor advantagesdecreased,Irishweav-
ers failed to remaincompetitiveeven in coarserlines of cottonmanu-
facture.
The overallnature,timing,and depthof theperipheralization of Irish
textilemanufactures between1780 and 1835 is indicatedby patternsof
Britishpenetrationof Irishmarkets.Marketpenetrationis not the core
meaningof peripheralization, but openingup new marketsis necessary
to core innovationswhile it destabilizesperipheraleconomies.At the
same time, core protectionforeclosesreversepenetration.Irish (like
Asian) textileswere prohibitedfromcompetingin theirmostimportant
exportmarkets,England and the empire,while the English industry
establishedits competitiveadvantage. England protectedits imperial
marketsfromIrishcompetition underthenavigationacts whileit estab-
lishedcompetitiveadvantagesin exportmarketingand transport.Once
Britainestablishedcompetitiveadvantagesin spinningby the 1790sand
in weaving by the 1830s, it enforcedfreetradethroughout the empire,
quicklypenetrating itsmarketsand makingthemunstableenvironments
forinnovation.
Table 1 shows Britishimportpenetrationof the Irish marketfrom
1780-1822,alongwiththesharesofyarn,cloth,and cottonmanufactures
in importpenetration.25 The table revealsan initialdecreasein thelevels
25
Importpenetration
(IP), definedbytheratiosofimports
to apparentconsumption,
is given by
IP - Mc + My
(Mc + Pc) -Xc'
whereMc is Irishimportsof cloth(plain and coloredcalico, muslin,hosiery,and
miscellaneousmanufactures), Pc is domesticproductionof cloth,and Xc is Irish
exportsof cloth.In orderto avoid doublecounting,domesticproduction does not
includeclothmadefromBritishyarn,and is calculatedas
Pc = 0.89 x Mw,
whereMw is imports ofcottonwool.Importpenetration is measuredinphysicalterms
by convertingIrishand Britishproductsintophysicalunits(pounds).Englishtrade
datafor1833byvalueand weights (Baines1835,p. 407)givethefollowingmultipliers
(poundsperyard):plaincalico = .2396;coloredcalico = .1429;muslin= .15; hosiery
= 2.5 poundsperdozen.The valuesoftheseproductsperpoundvaryfromls. 3d.
perpoundforplaincalicoto3s. 5d. formuslinin 1833prices.Weights ofmiscellaneous
cottonmanufactures are estimatedbyapplyingtheofficial customsvaluesforvelvets,
etc.,mixedfabrics,and lace (whichremainedunchanged), weightedbyeachproduct's
proportionof 1833Britishexports(Baines1835,pp. 351,407). This assumesthatthe
ratiosofeachproductto totalexportsremained aboutthesameovertime,whichmay
608
of importpenetration,associatedwithIrishprotectionin the 1780s,fol-

lowed by rapidincreasesin the 1790s.Importpenetration remainedrela-
tivelystablein therangeof 35%-45%, withnotableshort-term dropsin
1807 and 1810 (duringrestrictive U.S. trade policies). There were two
periodsof rapid increase:1790-1805 and 1815-35.
The firstphase ofrapidimportpenetration was drivenby Englishyarn
exports,a resultof the regionalconcentration of spinningin Lancashire
and the peripheralization of Irish weaving. FollowingIrish success in
reducingEnglishclothimports,the share of yarnin importpenetration
rose rapidly,from1%-3% in theearly1780s,to 45% in 1790,and more
than67% in 1800. This helpsexplainthedivergenceofIrishgrowthrates
in cotton,whichwas uncoveredin theautocorrelation models(2) and (3)
above.
The secondphase, after1816,accompaniedtheend ofIrishprotection
and themechanizationof Britishweaving.Importpenetration increased
fromone-thirdin 1815 to more than 80% in 1835. Between 1825 and
1835, therewas a massiveshiftof Britishexportsfromyarnto clothand
clothing.While Britishyarn accountedfor 72% of importpenetration
in 1825, clothaccountedformorethan 80% by 1835. This remarkable
changerepresents theconsolidationof"cottonindustry"as an integrated
core activity,fromtransportthroughspinning,weaving, and finish-
ing.
Ireland'smodestexporttradein cottonclothafter1816 did not reflect
the industry'shealth. Cloth exportsrose after1816 because the British
marketwas protectedbeforethen.But theseexportswere the end prod-
uct of putting-out,by Manchesterduringthe 1820sand laterby Scottish
manufacturers tryingto competewithmechanizedEnglishweaving. In
time, Belfast weavers produced cloth ratherthan yarn, for Glasgow
ratherthanManchester(Geary1989,p. 27). This was a Scottishadaptive
responseto the concentration of the Englishindustry.Glasgow was pe-
ripheralizedwithinthe Britishindustry,and Belfast subordinatedto
Glasgowuntil,finally,thesubordinatedIrishcottonclothindustry disap-
peared altogether.
distort theresults.The distortion

is limitedbythepriceboundsofthemajorproducts
(between2s. 6d. forvelvets,etc., and ls. 3d. formixedfabrics)and by thefalling
shareofmiscellaneous manufactures in totalBritishcottonexports.If thereis a bias,
it is probablyto overestimate the weightsof miscellaneous manufactures in trade,
because velvetsand fustiansmade up a greatershareof traderelativeto mixed
fabricsin 1833thanin earlieryears.The bias is notverylarge,however,because
mixedfabricsalreadywere a small shareof cottonmanufacture and tradeby the
1790s.
609
TABLE 1
BRITISH IMPORT PENETRATION OF IRISH COTTON MARKETS AND SHARES OF

DIFFERENT COMMODITIES IN IMPORT PENETRATION, 1780-1835
Miscellaneous
Import Total Yarn Calico Muslin Manufacturers'
Year Penetration Imports Share Share Share Share
1780 ....... .2988 176,894 .0383 .0018 .0630 .8970

1781 ....... .6914 221,898 .0132 .0021 .0365 .9482
1782 ....... . 3644 259,996 .0250 .0011 .0215 .9523
1783 ....... . 3539 231,345 .0144 .0013 .0110 .9732
1784 ....... .2217 147,492 .0319 .0022 .0146 .9512
1785 ....... . 2608 255,242 .0857 .0074 .0230 .8839
1786 ....... .2290 265,589 .1419 .0163 .0845 .7574
1787 ....... .2036 272,961 .1528 .0209 .0619 .7643
1788 ....... . 1776 291,964 .2871 .0112 .0468 .6550
1789 ....... .2052 306,721 .2519 .0171 .0702 .6608
1790 ....... . 2389 458,297 .4484 .0144 .0535 .4837
1791 ....... . 3537 558,275 .5344 .0223 .0248 .4185
1792 ....... . 2736 769,381 .4219 .0219 .0181 .5381
1793 ....... . 3109 338,658 .5130 .0178 .0178 .4515
1794 ....... . 2984 602,161 .5214 .0101 .0116 .4570
1795 ....... . 4210 954,225 .6155 .0040 .0065 .3739
1796 ....... . 4217 1,027,483 .6631 .0022 .0037 .3310
1797 ....... . 3549 364,756 .5228 .0027 .0066 .4679
1798 ....... .4347 929,197 .5467 .0014 .0110 .4408
1799 ....... . 5111 1,545,652 .6318 .0015 .0071 .3596
1800 ....... . 3746 942,621 .6761 .0019 .0060 .3159
1801 ....... .4029 720,661 .5212 .0033 .0061 .4695
1802 ....... .4739 1,650,039 .6702 .0012 .0045 .3240
1803 ....... . 4571 1,166,588 .6943 .0010 .0030 .3018
1804 ....... . 4632 1,561,536 .7357 .0007 .0024 .2612
1805 ....... .5248 1,840,864 .7930 .0008 .0041 .2021
1806 ....... . 4337 1,403,534 .7555 .0016 .0092 .2337
1807 ....... .2185 915,111 .6233 .0016 .0136 .3615
1808 ....... .4795 2,050,607 .7251 .0007 .0048 .2693
1809 ....... . 4335 1,613,373 .6910 .0053 .0143 .2893
1810 ....... .2375 664,101 .4733 .0052 .0172 .5043
1811 ....... .3773 1,353,505 .6578 .0038 .0111 .3273
1812 ....... .4586 2,186,115 .7343 .0040 .0101 .2515
1813 ....... . 4255 2,215,993 .7603 .0097 .0059 .2241
1814 ....... . 3566 1,311,257 .7252 .0045 .0099 .2604
1815 ....... .3263 984,587 .6357 .0116 .0127 .3401
1816 ....... . 3455 811,384 .6698 .0046 .0490 .2766
1817 ....... .3920 1,253,158 .6542 .0070 .0603 .2785
1818 ....... . 4007 1,952,599 .6636 .0226 .0487 .2652
1819 ....... .4775 2,381,738 .7297 .0411 .0323 .1971
1820 ....... .3802 1,600,824 .7471 .0292 .0367 .1869
1821 ....... .4624 2,885,583 .8055 .0432 .0193 .1321
1822 ....... .4256 2,296,327 .7835 .0424 .0255 .1486
1835 ....... .8256 3,544,151 .2787 . . .* . . .* . . *
* Importpenetrationof all typesof cloth(calico share, muslinshare, miscellaneousmanufacturers'

share) = .8355. Data for 1835 were not adequate to allow calculationof each typeseparately.
ACCESS TO THE RAWMATERIAL,LINKAGES, AND INNOVATION

I have arguedthatso-callednationalsystemsofinnovationare produced
bycontrolling peripheraland semiperipheral regionsoftheworld-system.
The hierarchicaldivisionof labor, whereinnovativeactivitiesaggregate
in the core while supportivebut noninnovativeones aggregatein the
semiperiphery, requirestheperipheralization ofpotentialindustrialcom-
petitorsin the semiperiphery so thatthecore can maintainits monopoly
of innovation.This can be achievedpartlythroughmarketcontrolsthat
allow importpenetration and periodicdumpingthatdestabilizesthesemi-
peripheralenvironment forinnovationwhile increasingtheflexibility of
the core producers.Two additionalkey strategiesare importantforthe
captureofinnovation:preferential accessto raw materialsand thecontrol
of linkedinnovativeindustries.
Access to key raw materialsis necessaryforindustrialgrowth.Since
raw cottoncannotbe grownin Europe, its access was a potentialcon-
strainton thegrowthoftheindustry, and mostimmediately on spinning.
Unlike the inelasticsupplyof flaxand wool, however,Americancotton
planterswere able to increasetheirsupplyof cottoneven fasterthan its
rapidlyexpandingdemand. England's advantageousaccess to thissup-
ply, and Ireland's lack of access, was a crucial reason why England
could capture and localize innovationswhile peripheralizing the Irish
industry.Under the navigationacts, Britishcolonieswere requiredto
channel theirtrade with each otherthroughEngland. This restricted
themfromdevelopinga transatlantic merchantmarineand commercial
infrastructure. Even afterU.S. independenceand therepealof thenavi-
gationlaws, England maintainedimportantcompetitiveadvantagesin
directaccess to raw materials.
These advantageswere increasedby the efforts of the BritishBoard
ofTrade to inducecottoncultivationin Asia, Africa,and America.From
the 1780s, Americanplantersreportedlygot the idea that the British
would do practicallyanythingto securea steadysupplyof cottonwool
(Redford1934, p. 217). Afterthe saw gin made it economicalto process
upland cotton,the southernUnited States went,in a decade, fromex-
portingno cottonto becomingBritain'smajor sourceof cottonby 1803
(Baines 1835, p. 302). When BritishconsumptionovertookU.S. supply,
the BritishBoard of Trade generatedextrasuppliesfromIndia, Brazil,
Egypt,and elsewhere(Ellison 1886, p. 87; Redford1934, pp. 217-28).
In the 1790s, as spinnersincreasedtheirdemandsforconsistentsup-
plies of raw cottonand the importanceof importersbeingclose to spin-
nersincreased,cottonsuppliesbecamecentralizedin Liverpool(Edwards
1967, pp. 107, 110). Innovationsin the organizationof cottonsupply
accompaniedits concentration in Lancashire.In the earliestyears,im-
611
porterssuppliedspinnersthrough dealers,whoboughttheirrawcottonand
resolditto spinnersbyauctionorprivatesale. Mostcottonbefore1800was
boughtin small lots of one or two bags. But as spinnersgot biggerthey
boughtin biggerlots and demandedpricediscounts(Edwards 1967, p.
113).
As the influenceof the largerspinnersincreasedafter1800, brokers
replaceddealers.Dealers wereimportant forsmallspinnersbecause they
extendedcredit,but the largerspinnerscould affordto buy largelots of
cottonat a discountwith shortercredits.Such a system,however,re-
quired the improvedorganizationof productionand marketingthatwas
possible only in large firms.Large spinnerseconomizedand increased
bykeepingexpensivecottonstocksin thehandsofimport-
theirflexibility
ers and brokers(an earlyexampleofjust-in-time delivery)and by selling
offtheirsuppliesto dependentsmallerspinners(Edwards 1967, p. 104).
Increasingly,brokerssold cottonby sendingsamples to spinnerson
approval (Edwards 1967, p. 103). This systemconsiderablydecreased
theturnovertimeof cottondistribution; a decisionwas usuallyexpected
beforethe day was out. And it increasedthe supplyadvantagesof the
biggestspinnersclose to Liverpoolbecause a brokercould get samples
to his favoredcustomersearlyin theday and keep thecottonfromcom-
petitorsuntil a purchasingdecision was made (Ellison 1886, p. 177).
Time economies-days or even hours-were alreadyimportantin the
1790s.26
A consistentlydiversesupplyof cottonwas crucialforthecompetitive
advantageof thelargerLancashirespinners.Theirabilityto spin a vari-
ety of weightsof yarn gave themmarketflexibility when coarse yarns
werein oversupply.Biggerscale, bettertechnology, and skilledmachine
operativesenabled themto switchproductionmore easily to different
weightsofyarn.They maintainedaccess to cottonofvariouslengthsand
qualitiesby employingseveralbrokers(Edwards 1967,p. 121). By 1800,
therewas a hierarchyof supplyof raw cottonby the buyer'ssize and
proximity to Liverpool-the mostconsistent and cheapestsupplyin Lan-
cashire,higherpricesin Glasgow,and thehighestpricesand mostuneven
qualityin Ireland and beyond(Edwards 1967,pp. 107, 110). Canal and
rail transportsystemsin Lancashirefurther increaseddifferences in sup-
plyconditions.Fromthe 1780s,Irelandbecamedependenton theBritish
reexporttrade,whichwas dominatedby lowerqualitiesof cotton,while
Englishspinnersretainedthe best cottonfortheirown use (Mann 1860,
p. 88).
26 Manchestermanufacturers complainedaboutthepossibility
consistently offoreign
mails missingthe Saturdaycoach fromLondon,whichwould put themtwo days
behindtheirLondoncompetitors in dealingwithforeigninquiries(Redford1934,p.
189).
612
Not only did Britishsuppliesof raw cottongrow more rapidly,but

theywere morestable than suppliesto Ireland. This pointis borneout
if we comparethe varianceof suppliesto each country.Autocorrelation
models,usingthelog ofcottonimportsas thedependentvariableand time
as theindependentvariable,yieldthefollowingresultsfor1782-1822:
Britain: ln(COTTON IMPORTS) = 16.197 + .066TIME
(12.121)
R2 = .899.
(5)
Ireland: ln(COTTON IMPORTS) = 13.387 + .044TIME
(6.575)
R2 = .740.
The TIME coefficient indicatesthatthe rateof growthof Britishcotton
importswas higherthanthatofIreland,whilethet-statistic oftheTIME
coefficients shows that the supply of cottonwool in Ireland was less
stable than in Britain. Irish supplybecame particularlyunstable after
1800. This increasingdisadvantagein access to thekeyraw materialfor
thespinningsector,whichwas a cumulativeeffectofEnglishmercantilist
policiesthat thrivedunderfreetrade,souredthe Irish environment for
innovation,regardlessof considerableefforts to enhanceit by the Irish
stateand its prospectiveindustrialclass.
Like the raw material,theIrishcottonindustrybecame dependenton
England for its linked inputs. This furtherisolated weaving fromthe
moreinnovativepartsoftheindustry.The othermajorsectorsthatcom-
prisedthe clusterof innovationsin earlycotton-engineeringand textile
finishing-werealso dominatedby Englishcore capital. Not only was
theIrishindustry less mechanizedthantheBritish,itreliedon Britainfor
what machineryit had.27There was a particularly big traffic
to Ireland
in secondhandEnglish steam enginesand cottonmachinery.Everyday
supplies such as card brushes,rollersand spindles,full sets of mules,
dressingmachines,and millgearingwerealso suppliedfromManchester.
Irish weavers, even in Ulster,workedin homes and small weaving
sheds even afterpower looms had displaced hand looms in England
(Green 1944; Mokyr 1983, pp. 176-77).28 The persistenceof the hand
loom was a rationalresponseto the low priceof Irish labor, which in-
duced entrepreneurs factormixthanin England(Geary
to use a different
27 The ratioofsteamto waterhorsepower

was about7.5:1 in Lancashireand 2:1 in
Belfast(Geary1989,p. 262).
28 There were 2,000 powerloomsin Manchester
by 1818and 10,000by 1823,but
Irishweavingwas donealmostentirelyby handas lateas 1831(Monaghan1942,p.
10).
613
1989, p. 262). But while it was rationalto use cheap labor, given Ire-
land's exclusionfromcore innovations,the substitution of labor forma-
chineswas a semiperipheral adaptive responsethatfurtherconstrained
the region'slong-term participationin capitalistindustrialization.
Like thecontrolof trade,however,thecontrolof machineryand con-
centrationof engineering in Lancashirewas explicitBritishpolicy.Cot-
ton merchantsand manufacturers, includingthe otherwisevehement
Manchesterfreetraders,opposed machineryexportsand the emigration
of skilledmachiniststo forestallforeigncompetition.The Britishstate
compliedwithcomprehensiveand rigorously enforcedlegislation(Mus-
son and Robinson1969; Redford1934,pp. 131, 133). WhileIreland had
freeraccess to Britishmachineryafterthe unionof 1801, it had become
dependenton Britishengineering and even themostadvanced Irishpro-
ducersremaineda step or two behindthe Englishindustrialcore.29
Most new Irish capital in the earlycottonindustrywas concentrated
in finishing.Worstedyarnmerchantsand merchantsexperiencedin im-
portingand marketingEnglish goods made large investmentsin Cork
and Dublin (Dickson 1976,pp. 105-6). These merchantsmade theshort
backward link into finishingcottoncloth that theycould sell in their
existingmarkets.But theydependedon nonintegrated supplybyunstable
regionalweavingindustries.WhenBritishputting-out replaceditsdump-
ing of yarn, and especiallywhen weaving was transferred outrightto
England, the finisherswere vulnerable.The collapse of Irish spinning
and especiallyweavingprecipitatedtheend offinishing, regardlessof its
efficiency of operation.
It is possible to concludethat Ireland's limitedsuccess in the cotton
industrywas enabled by its proximity to a supplyof cottonwool and
technology thatwouldnothave beenavailable had Irelandnothad access
to Englishimports.On the otherhand, Ireland became dependenton a
marketfor cottonwool that was organizedto supplyfirstthe largest
29 It is worthdistinguishing
thepresentanalysisfromproductlife-cycle models(e.g.,
Vernon1966).These modelsimplya ratherunilineardevelopment patternas semi-
peripheral countriesadoptthetechnologiesthatarediscardedbythecore.The process
I am describingin Irelandis not one in whichthe semiperipheral industrylagged
behindthecorebutcontinued tomoveforward a coupleofstepsbehindin theproduct
cycle,thusachievingsomeformof "dependent development" or evenlimited"mod-
ernization." Rather,Britishimperialpowerperipheralized Irishcottonas it enabled
thelocalizationofinnovationsintheEnglishcore,ultimately leadingtothedestruction
ofan Irishindustry whichwas previously growingapace withtheEnglishindustry.
Irishproducers weremovedoutofthemostprofitable partsofcottonproduction for
a time,untiltheyweremovedout of thesectoraltogether and intosemiperipheral
and peripheral economicactivities.This describesa processthatis moreakinto the
development ofunderdevelopmentorperipheralization thantodependent development
or modernization.
614
Englishspinners,and onlyafterthatthe smallerand moredistantspin-

ners. It became a consumerof secondhandEnglish machineryrather
thana producerand userof thelatesttechnologies.Withoutguaranteed
access to high-quality
cotton,rationalinvestorscould hardlybe expected
to innovateby supplyingthe capital and technologythat would allow
Irishspinningto competewithits mainBritishrivals.Erraticsupplyleft
spinningcapacityunderutilized and contributed to thefailureofspinning
mills,causingthe regionalsectoras a whole to be moreinefficient than
better-supplied regions.
Ratherthan a commonsourceof supplycreatingequal conditionsfor
England and Ireland, the fact that Irish spinnershad to importtheir
machineryand raw materialsfromBritainshows thattheywere depen-
dent and helps explain theircompetitivedisadvantagesrelativeto the
Englishcore. If we substitute"dependedon" for"had access to" in the
followingquote, whichis meantto describea fullyintegratedregionof
the Britishcore, we see Belfastas a fullyincorporatedsemiperipheral
zone in theBritish-centered world-system: "Belfastproducershad access
to the channelsof raw materialsupplyand to the marketingtechniques
and marketsbeingdevelopedby Britishproducers.They had access to
the new technologyand the skilledlabour forceto erectand maintain
the machinesembodyingit. Finally theywere well integratedinto the
developingBritishcommercialand financialsystem.Events in Belfast
were, then,influencedby eventsin Lancashire"(Geary 1989, p. 267).
Ireland's unstabledependenceon Englishchannelsof supply,however,
was not simplya matterof geographicalproximity. It was the resultof
the country'slogical subordinationto England throughits incorporation
in the world-system. This disabled Ireland,like othercoloniesand even
noncolonieswho were subjectto Britishnaval power,fromestablishing
the commercialconnectionsand naval capabilitiesthat would enable
access to raw materialsfromaroundthe world.
Taken togetherwiththe disruptiveeffectsof Britishyarnpenetration
on the Irish market,whichincreasedas regionaland global trade rela-
tions were liberalized,unstablecottonsupplyindicatesIreland's semi-
peripheralor dependentrelationship withEngland. Ireland'ssemiperiph-
eral incorporation,then,is a powerfulexplanationof whyrationalIrish
cottonentrepreneurs-particularly in spinning-did notintroduceinno-
vationsat nearlythe same rate as Britishindustrialists.
CONCLUSIONS: AGAINON CORE, SEMIPERIPHERY,

AND INNOVATION
The Britishcottonindustryis the classic case of a leading sector in
whichgeneralizedeconomicgrowthis inducedthroughinnovationsin a
615
clusterof linkedactivities.Linkedinnovationsin engineering, transport,

and distribution increasedthe level of throughput in mill-basedcotton
spinning,enabling economiesof scale and speed. This versionof the
innovationstoryis a familiarexplanationof why industryconcentrated
in certaincore regionsand not in others.It is the storyof how a core
nationachievescompetitiveadvantageby introducing a nationalsystem
of innovationthatis betterthan thoseof othercore nations.The actors
are classes, entrepreneurs, developmentalstates,cultures,money,and
marketsof the core.
But anotherstoryis absent fromthis literature-the subjugationof
semiperipheral and peripheralregionsto supportinnovationin the core.
In Ireland,thismeantperipheralizing an industrialcompetitor so thatit
profitably complementedthe innovativecore sector,and its expansion
requiredtheextensionofexistingtechnologies and formsoforganization.
Even Belfast'smillsused technologies and organizations thathad become
routinein England and Scotland. Irish semiperipheralweaving sup-
portedtheintensification of Englishspinningby assuringthedemandfor
yarn.
The localized focusof conceptssuch as "nationalsystemsof innova-
tion" or "national competitiveadvantage" impliesthat states or firms
that attain competitiveadvantage "do somethingright"while others
"fail" to innovate.This is highlymisleading.There was no such thing
as a "national"systemof innovationin cotton-many of theinstitutions
thatwere necessaryforthe captureof innovationand its loss elsewhere
were global.
The infrastructural supportforinnovationwas global. The concentra-
tion of advantageoussupplies of raw cottonaround Liverpool, which
enabled large spinnersto attaincompetitiveadvantage,requiredthe cu-
mulativeeffectsof the navigationlaws and otherrestrictive (oftenmili-
tarilyviolent)efforts thatincreasedBritishnaval and commercialpower
whiletheyweakenedthoseof competitors. Increasedand stableflowsof
materialsof diversequality were necessaryforthe largermills to run
efficientlyand to respondflexiblyto changingmarkets,and theseflows
requiredinnovativeglobal transportand communications networksthat
were controlledby the Englishcore and policed by English sea power.
Competingindustrialcentersthatmightdivertcottonsuppliesweresup-
pressed.
The demandconditionsnecessaryforinnovationwereglobal. The cap-
ture of the local English marketand the marketsof empirerequired
restrictions on productionin regionssuch as Irelandand India untilEn-
glishproducersattainedcompetitiveadvantages.Then, theenforcement
of freetradethroughout the world-system gave the Englishindustryits
616
freedomto sell and even dump goods in othermarkets.This followeda

global cycleof protectionand liberalization,as the economicascendant
(England) moved fromcontrolling its zones of influenceto global hege-
mony.The cyclewas reproducedat thelocal level,firstby directcontrols
over Irish productiveand commercialactivitiesand laterby liberalizing
trade so that English goods (now competitivelyadvantageous) could
freelyenter.Liberalizationin all of theEnglishcolonieswas enforcedby
directpoliticalmechanisms,althoughthe specificmechanismin Ireland
was its integrationintoa Britishfreetradezone.30In Latin Americaand
elsewhere,Britainenforcedits marketentryby moreindirectmeans.
In conclusion,world-system analysis freesthe theoryof innovation
fromthe restrictive assumptionthatinnovationis nationaland, instead,
relatescore strategiesto build zones of interestand global hegemonyto
theirsuccessat localizinginnovationsand suppressing themin competing
regions(includingsemiperipheries). "National" systemsof innovation
have different resultsin the semiperiphery, wherethe "innovative"de-
velopmentof humanand knowledgeresourcesmaysimplyresultin emi-
grationand braindrain;and thedevelopmentofinfrastructure maysim-
ply enable core firmsand regionsto extractnew materialsand the
productsof semiperipheral labor moreefficiently, while marketingtheir
own productsmorecheaply.On theotherhand,thetheoryofinnovation
adds clarityto world-system analysisinsofaras it distinguishescorefrom
semiperipheral industry.The strategiesemployedto captureinnovation
and maintaincompetitiveadvantage additionallyhelp explain how the
hierarchyis reproduced.
But can lessons fromthe presentcase be generalizedor is it simply
interesting but special? The case distinguishes clearlybetweencore and
semiperiphery because both regionsdirectlycompetedfora timein an
ascendingleadingsector.In thisrespectit is special, but its peculiarities
informus about the strategiesof core economieswhen semiperipheral
competitionbecomesa threat.Japanesestrategiesto channelthe South
Korean electronicsindustryintosubordinateand complementary activi-
ties (buyinginnovativeJapanesetechnologiesand microchipsforassem-
bly into electronicproducts)may parallel Ireland's subordinationin
weavingand linen. There may also be parallelsto the methodsused by
30 The parallelsto Europeaneconomicintegration aftertheSecondWorldWar and,

morerecently in thelate 1980sand 1990s,have gonelargelyunnoticed.Perhapsthis
is becausemostanalysesof Europeanintegration focusalmostentirely
on theEuro-
pean core(theequivalentof Englandand perhapsScotlandin thepresentanalysis)
and ignorethe effects of integration
on the Europeanperiphery (theequivalentof
Irelandin the18thand 19thcenturies).
617
New England capital to localize the NorthAmericanspinningsectorin

the 19thcentury,even thoughcompetingmills in South Carolina had
lower wages, plentifulwater power, and closer proximityto the raw
material(see Wright1979).
Anotherpeculiarityof the presentcase is Ireland's spatial proximity
to England,whichallowedthelatterto use directintegration to subjugate
the Irish economy.The use of an act of politicalunion to allow direct
rule over a territory may sound more like world-empirethan world-
system,3'but I believe this is mistaken.True, Ireland was integrated
politicallyby the Britishstate in 1801 as a means of assertingmore
effective controlover the territory.But Britainemployeddirectcontrols
throughout its empirebefore1800 and liberalizationand freetradeafter
1800 to realize its competitiveadvantages. Ireland was no different in
thisrespect.Union was simplya meansof subduingtheIrishparliament
and social movements,whichhad attaineda degreeof autonomyin eco-
nomicpolicy-making thatwas not presentin otherpartsof the empire.
Throughoutthehistoryof itsindustrialsubjugation,Irelandwas periph-
eralized by the same means as otherpartsof the world-system-direct
restrictions on commerceand industryand, once English competitive
advantagewas clearlyestablishedin the innovativesectors,the indirect
mechanismsof freetrade.
Moreover,world-system analystsexplicitly chooseregions,ratherthan
nation-states, as theirprimaryunitof analysis.Undercertainconditions
internalcolonialismmay be nearlyequivalentto global imperialismas a
means of localizinginnovation.Again, the cases of New England and
South Carolina, as well as thoseof otherperipheralregionsof Britain,
have close parallelsto the Britishsubjugationof Irishcotton.
A moreimportantresultof Irishproximity may be thatthe ascendant
settlerclass, manyof whom retainedtheirties to and even domicilesin
England, had unique opportunities as Irishentrepreneurs to competein
successiveperiodsof core Englishexpansion(cattle,wool, and cotton).
In mostperipheralor semiperipheral cases, competitiveinnovationsoc-
cur less frequently-coreregionsmustprimarily defendagainstcompet-
ing core regionsratherthan semiperipheralones. Yet the Irish case
clearlyrevealsthenecessityof localizinginnovationsand, because of the
tenacityof Irish competition,it reveals a world-system processthat is
usually much simplerand shorterand, therefore, less observable. All
peripheralregionsare continuallyperipheralized and reincorporated into
the capitalistworld-system as the precisenatureof theirrelationswith
31 Worldempireis "atypeofworld-system in whichtheterritorial

economicnetwork
is largelycontainedwithina singlestateapparatus"(Chase-Dunn1990, pp. 348-
49).
618
coreregionsand theworld-system changesacrosstime.Irish"reperipher-

alizations"were starkerbecause theyinvolved the destructionof Irish
competitorsin leading industrialsectorsand theirtransformation into
complementary semiperipheral activitiessuch as linen.
There maybe no singlespecificcorestrategy forachievingcompetitive
advantage and, in the process,excludingotherregionsor states from
participating.Indeed, I would expect that competitiveadvantage is
achieved"by any meansnecessary."Yet economicascendantsand even-
tual hegemonscharacteristically achieve and maintaintheir positions
throughthecaptureofmarkets,raw materials,and laborresources.Inno-
vations create competitiveadvantages for regionalcore economieson
the basis of economiesof labor, fixedcapital, materials,marketing,and
administration. In contrast,peripheralor semiperipheralactivitiesex-
pand mainlyby extendingthe use of labor and materials.The core-
periphery divisionoflabor in theearlyBritishand Irishcottonindustries
followsthis pattern.England was not endowed with,but captured,its
competitive advantagesin access to materialsand markets,skilledtechni-
cians, and experiencedtradesmenand merchants.Ireland's advantages
lay in cheap labor and plentifulwaterpower (both of which may have
worked against the introductionof labor- and energy-savinginnova-
tions).Withtheestablishment ofa semi-independent parliament,Ireland
had a developmentalstatethatwas willingto protectitsinfantindustries
and provideinducementsto new investments, essentiallyby introducing
a "national systemof innovation."Many Irish parliamentarianswere
men of propertywho hoped to become rich throughcotton. Yet En-
gland's developmentalstate could not only protectits infantindustries
and theirmanylinkedsuppliersand buyers,it could also providea rela-
tivelystableglobalenvironment wheretheseindustriescould obtaintheir
raw materialsand sell theirproduct.The Irish developmentaliststate
could providemonetaryincentivesand local protection, whiletheBritish
stateprovidedthe whole world-system.
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Innovation and the World-System Hierarchy: British Subjugation of the Irish Cotton

Analysesofinnovationgenerallyassumethatit is a local or national

The theoryof innovationand world-system analysis are relatedfields

AJS Volume 100 Number3 (November1994): 587-621 587

(Freeman 1987).2 Froma world-system standpoint,however,innovation

2 AlthoughI referto the "theory of innovation,"I am not particularly

industrialrevolutionis regularlycited as evidence for nation-centered

CORE INDUSTRY, SEMIPERIPHERAL INDUSTRY,

4 The distinctions I am drawingbetweencoreand semiperipheral industry are not

regionscontainlow proportions,and semiperipheral regionsare in be-

5 Mandel (1975) and Amin(1975) contendthata core-periphery wage differential

construction of plantand equipmentand thecreationofnew firmsor the

(Hirschman 1958). Schumpeterlinks innovationto the expansionary

time to producea given level of output.Surplusprofitsmay accrue to

7 Lange (1943,p. 21), on theotherhand,excludesmarketchangesfromhisdefinition

(homedemandforan industry's productor service),supportingindustries

thosenodes thatreceivehigherratesof profit,it examinesthe causes of

WHAT WAS "LEADING" ABOUT COTTON?

8A morerecentrevisionin thelate 1980squestionedtheconceptof the "industrial

and Liverpoolinducedthedevelopmentofshipping,canal, and railtech-

The putting-out systemcontinuedto dominateweaving untilthe 1840s

GROWTH,INNOVATION,AND PERIPHERALIZATIONIN BRITISH

impetusto innovate. Nearly all increasesof linen output in the 18th

'o Although machinery was availablefromthe1730s,Irishflaxwas scutchedbyhand.

18 - _vXf<. ,> Britain

estimatedbyautocorrelation modelswhichregressloggedoutputon time,

Britain: ln(OUTPUT) = 16.218 + .060TIME R2 = .902.

millionpoundsin 1812and neverachievethe 1809-11levelsagain. These werethe

Both ratesof growthare similar.The Britishindustrygrewby 6% per

15 It shouldbe remembered thatthelinearity of theseestimatedmodelsis produced

periods of high outputand equally distinctiveslumps. Instabilityand

For a time, Ireland's relativeadvantages in cheap labor costs and

SPINNING AND WEAVING:INNOVATIVEAND

1782 1787 1792 1797 1802 1807 1812 1817 1822

and its components,yarn outputand yarn importsfromBritain. Irish

The importedshare of Irishyarnconsumptionrose rapidly,fromless

19 In 1770spinning was a bottleneck:

womenspinnersearnedless thanone-third thewagesofmalespinners(Geary1981,

unfavorablecreditterms,so that theywere oftenforcedto sell on the

sponse. The recessionof 1825-26 caused the greatestrun of company

of importpenetration,associatedwithIrishprotectionin the 1780s,fol-

distort theresults.The distortion

BRITISH IMPORT PENETRATION OF IRISH COTTON MARKETS AND SHARES OF

1780 ....... .2988 176,894 .0383 .0018 .0630 .8970

* Importpenetrationof all typesof cloth(calico share, muslinshare, miscellaneousmanufacturers'

ACCESS TO THE RAWMATERIAL,LINKAGES, AND INNOVATION

Not only did Britishsuppliesof raw cottongrow more rapidly,but

27 The ratioofsteamto waterhorsepower

Englishspinners,and onlyafterthatthe smallerand moredistantspin-

CONCLUSIONS: AGAINON CORE, SEMIPERIPHERY,

clusterof linkedactivities.Linkedinnovationsin engineering, transport,

freedomto sell and even dump goods in othermarkets.This followeda

30 The parallelsto Europeaneconomicintegration aftertheSecondWorldWar and,

New England capital to localize the NorthAmericanspinningsectorin

31 Worldempireis "atypeofworld-system in whichtheterritorial

coreregionsand theworld-system changesacrosstime.Irish"reperipher-

Bornschier, Volker.1992."The EuropeanCommunity's Uprising:Graspingtowards

IrishRailwayCommissioners. 1837.SecondReportoftheCommissioners Appointed

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