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Michael Magoon's avatar

Great essay. The origins of the English textiles industry are quite interesting and historically relevant.

One additional point that could be made is that the impact of government policy on the English textile industry goes much further back than Defoe. The industry went through 4 phases. Each was heavily influenced by government policy:

1 Raw wool exports

2 Wool cloth exports (so-called Old Draperies)

3 New Draperies

4 Cotton textile exports

In the 13th and 14th Century raw wool made up 90% of England’s export revenues. In 1275 the Crown started taxing raw wool exports for the first time. The Crown kept increasing the taxes to pay for the constant wars with France. It was not industrial policy, only a means to raise revenue. This tax encouraged the English to shift from raw wool to processing the raw wool into woolen cloth.

Then in 1363 the Calais Staple Company, a government-sponsored import monopoly in Calais, was established to shift taxes to the Low Countries. By the 1390s the taxes were 50% of the price of wool exports. Due to the taxes, the Flemish switched from English raw wool to Spanish merino wool as a supplier.

From 1465-1550s England dominated the European wool cloth industry (based mainly on exports to Antwerp).

A similar change happened with New Draperies, a lighter, cheaper and less durable type of woolen cloth), and later cotton textiles. The Calico Act of 1721 forbade importation and wearing of Indian textiles, helping the fledgling British cotton textile industry.

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Md Nadim Ahmed's avatar

Isn't part of the problem with ISI that the locals are too poor to afford cars or textile in the first place. I guess you can adopt different paths for different sectors at the same time.

For example, in Bangladesh we give export incentives to textiles and ICT. But we do import substitution for cars and consumer electronics. Personally, I'm more moderate on industrial policy. But I'm fine with "protecting" the car industry because less than 10% of Bangladeshis own cars and crude oil is our biggest import. Worst case scenario, it's basically a luxury tax. I think Ethiopia banned ICE passenger vehicles because fuel is also a big import item. Plus 30% of our taxes comes from tariffs despite being the lowest taxed country in the world. So we can't exactly afford to stop imposing tariffs.

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