Understanding the Industrial Revolution

• The emergence of the Industrial Revolution is a complex issue that requires clarification to understand fully.

Defining the Industrial Revolution

• It is not just an acceleration of economic growth, but a transformation driven by economic and social changes.
• Early observers correctly focused on new production methods like machines and factories.
• Manchester, with its revolutionary production methods, better exemplifies the Industrial Revolution compared to Birmingham, which saw increased production using traditional methods.
• In the late 18th century, this transformation occurred within a capitalist economy.
• Capitalist industrialization needs specific analysis to understand how private profit led to technological advances, which isn't always automatic.
• Capitalist industrialization can be seen as a specific instance of a broader phenomenon, but its helpfulness to understanding the British Industrial Revolution is debatable.

The Uniqueness of the British Revolution

• Britain's Industrial Revolution was the first, initiating self-sustained economic growth through continuous technological and social changes.
• As the first, it differs significantly from later industrial revolutions.
• It cannot be explained by external factors like imitating advanced techniques or importing capital, unlike subsequent revolutions.
• The British Revolution was built on 200 years of prior economic development, making Britain well-prepared compared to countries like 19th or 20th-century Russia.

The Wider European Economy

• The Industrial Revolution cannot be explained solely by British factors; Britain was part of a broader 'European economy' or 'world economy of the European maritime states'.
• This economy included advanced areas, potential industrialization zones, and dependent economies.
• The 'European economy' was linked to the dependent world through economic activities, with a division between urbanized areas and zones producing raw materials.
• This system involved trade, international payments, capital transfers, and migration.
• The 'European economy' had been expanding for centuries but experienced setbacks and shifts, like in the 14th-15th and 17th centuries.
• From the 16th century, it was divided into competing politico-economic units like Britain and France, each with its own structure and sectors.
• By the 16th century, it was evident that industrial revolution would occur within the European economy.
• The key question is why Britain became the first 'workshop of the world' and why this breakthrough occurred in the late 18th century.

Debunking Misconceptions

• Explanations based on climate, geography, or biological changes are insufficient.
• The presence of coal reserves doesn't fully explain Britain's priority, as it lacks other raw materials and other regions with coalfields didn't industrialize as early.
• Environmental and resource factors are only effective within a specific economic, social, and institutional framework.
• Access to the sea and rivers was crucial for transport in the pre-industrial age, but non-geographic factors still played a role.
• Purely exogenous explanations for population movements are not widely accepted.
• 'Historic accidents' like overseas discovery or the scientific revolution do not fully explain industrialization timing.
• The Protestant Reformation is also not a direct cause, as industrialization didn't occur in all Protestant areas, and some Catholic regions industrialized earlier.
• Purely political factors are insufficient, as many European governments wanted to industrialize, but only Britain succeeded.
• Rejecting these factors as primary explanations doesn't mean they're unimportant, but establishes their relative significance.

Preconditions for Industrialization in Britain

• Most preconditions for industrialization were present or easily achievable in 18th-century Britain.
• Britain was not underdeveloped compared to modern standards, with weak economic, social, and ideological constraints on traditional practices.
• Landholding peasantry and subsistence agriculture were declining, easing the shift to industrial jobs.
• The country had sufficient capital for investment in equipment for economic transformation.
• Capital was in the hands of those willing to invest in economic progress, not wasteful displays.
• There was no capital shortage.
• Britain had a market economy, forming a single national market with developed manufacturing and commercial sectors.

Advantages of 18th-Century Britain

• Problems faced by modern underdeveloped countries were less severe in 18th-century Britain.
• Transport and communications were easy and cheap, with most areas near the sea or navigable waterways.
• Early Industrial Revolution technological challenges were simple, needing only basic literacy, mechanical knowledge, and experience.
• Centuries of development had provided such a workforce.
• New technical inventions and establishments could start small and expand with accumulated profits.
• Industrial development was within reach of small entrepreneurs and artisans.
• No 20th-century country has similar advantages when starting industrialization.

Overcoming Obstacles

• Obstacles to British industrialization were easy to overcome due to existing social and economic conditions.
• The 18th-century industrialization was cheap and simple, and the country was wealthy enough to handle inefficiencies.
• Britain's trust in muddling through was possible due to its fortunate position.
• Overcoming growth difficulties was never critical.
• The key question is how the economic explosion was ignited and sustained.
• It is important to determine whether a specific mechanism was necessary or if accumulating explosive material would inevitably lead to spontaneous combustion.
• The manner in which a private enterprise economy brings about industrial revolution poses puzzles.
• While it happened in some regions, it failed in others and took a long time in Western Europe.

Profit vs. Innovation

• The puzzle involves the relationship between profit and technological innovation.
• Private enterprise economies are often assumed to favor innovation, but their actual bias is toward profit.
• Manufacturing revolution occurs only when it leads to greater profits than other approaches.
• Pre-industrial societies rarely see this, as markets consist of wealthy individuals demanding small quantities of luxury goods with a high profit margin, and poor individuals lacking money and unfamiliar with new products.
• A mass market is unlikely to grow faster than the slow rate of population increase.
• Entrepreneurs will prefer expensive goods for aristocrats over risky cheap goods.
• Launching revolutionary cheap goods is financially risky
• In non-industrialized countries, industry is not the best way to make profits.

The Impact of Industrialization

• Industrialization changes this dynamic by enabling production to expand and create markets.
• Henry Ford's Model-T created a demand for affordable automobiles.
• A century of industrialization showed that producing cheap goods can multiply markets and create new consumer needs.
• Before the Industrial Revolution, Henry Ford would have failed.

Conditions in 18th-Century Britain

• Conditions in 18th-century Britain led businessmen to revolutionize production, anticipating rapid expansion requiring revolution.
• One perspective emphasizes the domestic market, which was clearly the largest.
• Another stresses the foreign or export market, which was more expandable.
• Both were essential in different ways, along with government support.

The Domestic Market

• The domestic market, though large, had limited growth potential through population growth, shifts from non-monetary incomes, income increase per person, and replacing old manufacturing or imports.
• Population changes raised three questions such as, what happened to the British population and why; What effect did these population changes have on the economy?; and what effect did they have on the structure of the British people?
• Reliable population data is scarce before 1840, but the population of England and Wales remained relatively static until the 1740s, then rose substantially, doubling by 1840.
• Significant chronological and regional variations existed, with London depopulating without immigration while the North-West and East Midlands grew rapidly.
• International migration, including the Irish, had limited impact before the 19th century.
• Population changes resulted from variations in birth and death rates, but were mostly tied to economic factors like getting land, jobs, the demand for child labor, and environment improvements.
• Lower death rates, especially among infants and children, contributed to population growth.

Economic Effects of Population Changes

• Population growth meant more and cheaper labor
• Stagnation and distress ensued in some circumstances
• A growing labor force assisted development as the economy was already dynamic but this did not occur everywhere
• Population growth increases consumers providing stimulus for agriculture and manufacturers
• England was already a market economy with a large and growing sector
• Average English income likely increased in the first half of the 18th century
• People cultivated new wants and established expectations
• People preferred to take out their extra productivity in more consumer goods rather than in more leisure
• There may have been a 'consumer revolution'

Special Cases

• Three cases are transport, food and capital goods
• Improvements in inland transport were undertaken from the early 18th century to reduce the cost of moving goods overland and the impetus came from the home market
• Food industries compete with textiles due to visible markets and at least in cities at all times are awaiting exploitation
• The demand for manufactured food and drink is more limited than that for textiles
• Food products are immune to competitions

The Home Market

• The home market also provided a major outlet for what later became capital goods
• Coal grew with the number of urban households
• Its output could already be measured in millions of tons
• Even before the Industrial Revolution its output could already be measured in millions of tons
• The more modern engines of James Watt's type, made their way slowly in the mines
• The real Industrial Revolution in iron and coal waited until the era of the railway provided a mass market not only for consumer goods, but capital goods

Advantages of the Pre-Industrial Home Market

• The main advantage of size and steadiness
• It undoubtedly promoted economic growth
• London did not remain a modern enclave in the general backwardness, but became the model for the rest of the country
• The spark provided fuel to keep burning

Export Industries

• Export industries worked in more revolution conditions
• In the long run expand much more rapidly than home markets
• Demand from foreign markets multiplied
• Cotton manufacture, the first to be industrialized, tied to overseas trade
• From the end of the eighteenth century was an industry which exported the greater part of its total output
• They could create rapid growth means
• The country which took over other peoples markets could make industrialization virtually compulsory
• Britain succeeded in doing so

Conquering Market

• required also a government willing to wage war and colonize
• Britain over potential competitors is quite evident
• Systemic aggressiveness against the rival, France
• virtual monopoly among European powers of overseas colonies
• Monopoly of world wide naval power
• War contributed to technological innovation

The Role of Demand Sectors

• The systematic and aggressive help of government, provided the spark, and leading sector of industry
• They also provided major improvements in sea transport
• The home market provided the broad base for a generalized industrial economy
• Government contributed systematic support

Key Questions

• Why Britain and not another country?
• Why at the end of the eighteenth century and not before and after?
• By 1750 there was no much doubt that any state was likely to be the first industrial power it would be Britain
• Why did the industrial breakthrough come when it did?
• To the general European or world economy of which Britain was a part, advanced areas of Western Europe related to dependent economies and trade partners

European Expansion

• The traditional pattern perished in the great depression of the seventeenth century
• The new centers were located near the North Sea
• The new relationship between the advanced areas and the rest of the world
• Powerful, growing and accelerating current of overseas trade swept industries
• Overseas the creation of economic systems
• The conquest of colonies served economic advantage

East India Trade

• Around 1650 one third of the value of East India goods sold in Amsterdam consisted of pepper
• Around 1780 this proportion had fallen to eleven per cent
• By 1780 56 per cent of such sales consisted of textiles, tea and coffee
• Sugar, tea, coffee, tobacco similar tropical imports

Imperialism

• Slave trade expanded
• Eighteenth century saw a revival to expanded Empires British, French, not to mention forgotten essays by Danes, Swedes and others
• Sheer size of these economies increase
• Future USA grew from fewer than 300,000 to almost four million
• Canada grew from 14,000 to almost half a million

International Exchanges

• Eight per cent by the Dutch
• British was fifteen per cent
• Colonial system expanded
• War of Spanish Succession between 2,000-3,000 ships cleared from England
• Vast circulation created
• Created need to manufacture imports at home
• Industrial Revolution, this concentration on colonial and overseas markets, the successful battle to deny them to anyone else
• Benefitted British goods
• 1766 outsold Dutch in China
• One half of all slaves exported from Africa benefitted British slavers
• Grew form commerce with the underdeveloped world
• Throughout the nineteenth century maintain pattern
• Sometime after the second third of the eighteenth century a general quickening of the domestic economy to become noticeable.
• massive slow growth in the domestic economies combined with the rapid expanding of the international economy; and it occurred in the country which seized its international opportunities to corner a major share of the overseas markets.