The paper begins by examining the dramatic reduction of interest rates and the increase in agricultural yields in a bid to help us better understand England’s economic revolution in the 17th and 18th centuries. During this time, there was a reduction in adult mortality and this resulted in increased savings, increased acreage of agricultural land, increased capital stock, reduced rates of capital returns, and improved agricultural production (Nicolini, 2004, p. 131). Technical changes in farming during this period resulted in the introduction of farm inputs such as fertilizers. This increased the fertility of the land, thereby increasing yields. At the same time, interest rates declined and this stimulated economic activities, including agriculture. Institutional innovations experienced in England during the ‘Glorious Revolution’ led to improved financial markets. Consequently, interest rates declined while there was improved capital accumulation.
Nicoli also brings in a demographic element in an attempt to better explain the processes of increased agricultural yields and reduced interest rates: the substantial decline in English mortality rate, and the increase in adult life expectancy (Nicolini, 2004, p. 133). Along with this development, the author incorporates the evolution of interest and investment rates. Towards this end, the author has applied the life-cycle theory savings. With higher life expectancy comes increased impatience for economic agents, higher production, and increased capital accumulation. The model of capital accumulation that the author has adopted forecast that as the adult mortality rate decreases, farmers respond by accumulating more capital. In this case, capital accumulation is represented by increase in land acreage meant for agricultural production. It also includes increased land fertility and improved nitrogen stock in the soil. The author argues that this is what could have transpired in England during this period.
In addition, farmers were also forced to clear more marginal land to expand agricultural production area. Crop rotation is associated with the efficient management of nitrogen content in the soil. As farmers became more knowledgeable about crop rotation, the increased investment in land by farmer led to improved production per acre. Moreover, farmers had already started implementing land rotation practices. Pastureland also declined marginally between 1800 and 1830 as more land was dedicated to agricultural production (Nicolini, 2004, p. 140).The attitude of farmers towards agricultural production was also changing and many of them were already implementing aggressive land preparation practices prior to sowing. In turn, this led to improved yields.
Between 1700 and 1800, England experienced a significant improvement in adult life expectancy by approximately four years. As such, farmers became increasingly apprehensive about their future (Nicolini, 2004, p. 137). This could have perhaps stimulated their propensity to increase savings, reduce consumption, and make long-term projections. In addition, farmers were also enjoying improved lengths of land tenure and as a result, they invested more on long term benefits. There is also the added incentive of maximizing production in the long term because of the improved land leases.
Through the aforementioned arguments, the author presents a strong and plausible assertion that the increase in life expectancy in England between the 17th and 18th centuries had the potential to bring about profound proportion of the economic changes within the agricultural sector before the Industrial Revolution. The author summarizes the article by stating that there is the need to factor in this argument along with other traditional hypotheses as an alternative explanation to the increased adult life expectancy, increased agricultural production, improved investment and interest rates in England in the 18th Century.
Reference
Nicolini, E. A. (2004). Mortality, interest rates, investment, and agricultural production in 18th century England. Explorations in Economic History, 41, 130- 155.