
When British economist Alfred Marshall was looking out of his window in the late-19th century, he saw a country full of cottage industries and industrial clusters. In the Scottish Border towns up north, thousands of spinners, weavers, and knitters were making robust tweeds and soft cashmere. A little further south was Manchester, where steam-powered mills produced so much of the world’s cotton, the city was known as Cottonopolis. In the East End district of London known as Spitalfields, the descendants of French Protestant refugees and Irish immigrants were toiling over looms to make some of the world’s most beautiful silks. When those silks were woven, they were then transported to Macclesfield, where artisans decorated them with hand-blocked patterns.
Marshall wrote about similar clusters in his book Principles of Economics, which not only became the standard economics textbook in England for decades to come but also sparked an intellectual revolution. Most econ students will know Marshall as the man who transformed economics from the philosophical works of John Stuart Mill and Karl Marx to the rigorous mathematical field it is today. Marshall helped lay the groundwork for neoclassical economics, as well as developed the supply and demand graph. But in Book 4, Chapter 10 of Principles of Economics, there were also a few paragraphs about the benefits of spacial clustering — an idea that would come into greater prominence about a hundred years later and helped to shape developmental policies.
Clustering is the idea that firms benefit from sharing infrastructure, suppliers, and distribution networks. Companies that supply components and support services can fit neatly into each other like Lego bricks. When you have a cluster of businesses, skilled workers can also share knowledge and move between firms, which helps soften the blow of unemployment. Back in the day on Savile Row, tailors across the many firms gathered at the pubs after work, where they would imbibe, gossip, and share ideas. “They were all enormous drinkers,” Thomas Girtin wrote of them in his book Nothing but the Best. “When they had been paid, they would ‘go on the cod,’ indulging in monster drinking bouts — drinking like a fish, perhaps — from which there was no recalling them until they had spent all their money.” Tom Mahon of Redmayne tells me that he remembers how much fun he used to have with other tailors at the pub, as well as how tailors shared knowledge by sketching out drafting patterns on the back of napkins.
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