be very beneficial to me, as there is already
considerable demand for them.
This letter reveals two things. First, Watt was motivated
by the market opportunities he anticipated, by the
“considerable demand” in Great Britain and its plantations,
the English overseas colonies. Second, it shows how he
was able to influence Parliament to get what he wanted
since it was responsive to the appeals of individuals and
innovators.
The technological advances, the drive of businesses to
expand and invest, and the efficient use of skills and talent
were all made possible by the inclusive economic
institutions that England developed. These in turn were
founded on her inclusive political institutions.
England developed these inclusive political institutions
because of two factors. First were political institutions,
including a centralized state, that enabled her to take the
next radical—in fact, unprecedented—step toward inclusive
institutions with the onset of the Glorious Revolution. While
this factor distinguished England from much of the world, it
did not significantly differentiate it from Western European
countries such as France and Spain. More important was
the second factor. The events leading up to the Glorious
Revolution forged a broad and powerful coalition able to
place durable constraints on the power of the monarchy
and the executive, which were forced to be open to the
demands of this coalition. This laid the foundations for
pluralistic political institutions, which then enabled the
development of economic institutions that would underpin
the first Industrial Revolution.
S MALL D IFFERENCES T HAT M ATTER
World inequality dramatically increased with the British, or
English, Industrial Revolution because only some parts of
the world adopted the innovations and new technologies
that men such as Arkwright and Watt, and the many who
followed, developed. The response of different nations to
this wave of technologies, which determined whether they
would languish in poverty or achieve sustained economic
growth, was largely shaped by the different historical paths