ways. In 1870 at the Battle of Sadowa, Prussia was able to carry its field army
of 285,000 men over five railway lines to concentrate them on the frontiers of
Saxony and Bohemia in five days. Austria then had only one line of rail and it
took them 45 days to assemble 210,000 men (Wolmar 2009:ch4). The German
victory contributed to its own territorial expansion and nation building. In
1857 railways were used to transport troops to suppress the Indian Mutiny
and preserve the British Empire. In 1871 the Gottard railway opened up
Switzerland for travel during the winter months and created a new line to Italy,
tripling German exports (mostly coal and iron) to Italy in less than five years
and revolutionizing patterns of European growth and development. In the nine-
teenth century the US government played a vital role in promoting and regulat-
ing railway schemes, providing financial aid and free route surveys. As
railroads spread westwards into new territory, government provision of land
grants became the principal means of supporting railways, and compulsory
purchase, known as ‘eminent domain’, gave the railroad freedom in the selec-
tion of its route after the charter was obtained. In the UK, by contrast, the route
had to be approved by Parliament, putting landowners in a strong position to
hold out for large compensation payments (Wolmar, 2008, 2009).
While case studies such as these illuminate the sequence of cause and effect,
they do not explain the origins of the railways. Why was Britain the pioneer of
railways? How was the state in the US but not in the UK able to intervene so
effectively to promote the growth of the railways? If technological change in
railways was the initial spur for economic growth, as argued by Wolmar, where
did the necessary finance come from? Another problem (discussed in the
Introduction) is that these sort of big one-story explanations have problems (or
usually completely ignore) comparing the merits of alternative one-story
explanations such as the introduction of the potato (Nunn and Qian,2011),
rising costs of military technology (Bean, 1973), or time keeping and clocks
(Landes, 2000).
Technological change in economic theory
Simplified models of technology transfer assume that technology is freely
available to all countries/firms, who select the technology that best suits
domestic wages and the availability of savings for the necessary investment.
According to this argument, countries with abundant low-wage labour would
be more likely to select labour-intensive technology, which can be either
costlessly absorbed, or else any learning period is predictable and automatic
(Lall, 1992, 1994). The graphs illustrated earlier in this chapter suggest that
firms or countries can easily move along curves as technology changes. This
approach to technology assumes that the activity of innovation is completely
distinct from gaining mastery of technology or adapting it to different condi-
tions (the only differences between countries are assumed to be factor price
ra tios).
Technology and Economic Growth 103