The hand-loom weaver and the power loom: A Schumpeterian perspective

The invention of the power loom was a response to the increase in supply of yarn in the 1780s. This led to an expansion of handloom weaving and a rise in earnings in the 1790s, thereby, creating the “golden age”. The high earnings increased the profitability of developing the power loom by raising the value of the labour that it saved. Consequently, less efficient—hence, cheaper to develop—power looms could be brought into commercial use than would have been the case had the golden age not occurred. The power loom, in turn, devalued the old skills, so poverty accompanied progress.