medium · LSAT Reading Comprehension

The 'labor scarcity' hypothesis in economic history suggests that the high wages resulting from a shortage of workers during the Industrial Revolution incentivized British manufacturers to invest in labor-saving machinery. This, in turn, accelerated technological innovation and provided Britain with a competitive advantage over continental Europe, where labor remained cheap and abundant. However, some scholars argue that this hypothesis oversimplifies the role of coal. They point out that while labor was expensive, energy in Britain was uniquely inexpensive due to accessible coal deposits. In this view, it was the low cost of coal, rather than the high cost of labor, that made the transition to energy-intensive steam power economically viable. Without cheap energy, manufacturers would have found the capital costs of new machinery prohibitive, regardless of the wage levels.

Which of the following most accurately describes the central point of the 'some scholars' mentioned?

  1. Inexpensive energy was an indispensable precondition without which mechanization would not have made economic sense, whatever wages happened to be.
  2. Costly labor, not cheap coal, was the chief engine propelling the technological innovation that set British manufacturing apart from the continent.
  3. British firms mechanized chiefly because their culture prized novel invention far more highly than the more tradition-bound continental rivals did.
  4. Britain's industrial takeoff would, on this account, have arrived appreciably earlier had its labor force been substantially cheaper and more plentiful.
  5. Continental Europe failed to industrialize largely because it lacked the ambitious entrepreneurial class that Britain is supposed to have possessed.

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