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Knowledge and competitive advantage: the co-evolution of firms, technology, and national institutions

Cheap cotton textiles increased the demand for raw cotton; previously, it had primarily been consumed in subtropical regions where it was grown, with little raw cotton available for export. Consequently, prices of raw cotton rose. Some cotton had been grown in the West Indies, particularly in Hispaniola, but Haitian cotton production was halted by the Haitian Revolution in 1791. The invention of the cotton gin in 1792 allowed Georgia green seeded cotton to be profitable, leading to the widespread growth of cotton plantations in the United States and Brazil. In 1791 world cotton production was estimated to be 490,000,000 pounds with U.S. production accounting to 2,000,000 pounds. By 1800 U.S. production was 35,000,000 pounds, of which 17,790,000 were exported. In 1945 the U.S. produced seven-eights of the 1,169,600,000 pounds of world production.[19]:150

The Americas, particularly the U.S., had labor shortages and high priced labor, which made slavery attractive. America’s cotton plantations were highly efficient and profitable, and able to keep up with demand.[144] The U.S. Civil war created a “cotton famine” that lead to increased production in other areas of the world, including new colonies in Africa.

Impact on environment

Levels of air pollution rose during the Industrial Revolution, sparking the first modern environmental laws to be passed in the mid-19th century.

The origins of the environmental movement lay in the response to increasing levels of smoke pollution in the atmosphere during the Industrial Revolution. The emergence of great factories and the concomitant immense growth in coal consumptiongave rise to an unprecedented level of air pollution in industrial centers; after 1900 the large volume of industrial chemicaldischarges added to the growing load of untreated human waste.[145] The first large-scale, modern environmental laws came in the form of Britain’s Alkali Acts, passed in 1863, to regulate the deleterious air pollution (gaseous hydrochloric acid) given off by the Leblanc process, used to produce soda ash. An Alkali inspector and four sub-inspectors were appointed to curb this pollution. The responsibilities of the inspectorate were gradually expanded, culminating in the Alkali Order 1958 which placed all major heavy industries that emitted smoke, grit, dust and fumes under supervision.