Lecture 8: The Industrial Revolution outside of Europe

USA industrialization timeline

1789: Constitution took effect; almost 90% of population in agriculture
1820-1860: largest raw cotton supplier in the world
1861-1865: Civil War
1880: Non agriculture > agriculture workers; manufacturing income > agriculture income
1890: most industrialized nation in the world

Role of domestic market in the US

Boosted the mass production industries

During the first half of the 19th century:

• Investment in turnpikes/canals by states/municipalities/privates: integrated the domestic market

• Railway network: by 1840, exceed Europe’s; boosted transportation services, industrial sectors (iron, steel to build them)

Characteristics of US industrialization

• Increase in population: 4 million to 40 million between 1790 and 1870

• Increase in income/wealth: scarce labor with respect to land → higher wages → higher per capita income (wrt Europe)

• Political and religious liberties

• Higher economic growth (wrt Europe) due to rapid technological progress, regional specialization - varied climates, large territory

US region specialization before the Civil War, importance

North East: manufacturing, large-scale commerce, finance
West: livestock farming, wheat/maize cultivation
South: “colonial products” for export - cotton, sugar cane, tobacco

[Allowed regions to trade with one another, integrating the economy; revealed ideological differences (slave labor)]

US industrialization characteristics by 1890

• Big corporations: central office, multinational expansion, integration of production and distribution

• Introduction of business schools to study the strategy/management practices of big corporations

• Courses on mechanical, chemical and electrical engineering offered at universities

Taylorism founding father, work, year

Frederick Taylor, Principles of scientific management, 1911

Taylorism goal, characteristics

Increase profits by increasing the efficiency of the production process

1. Selection and training of personnel

2. Division of labour and management tasks

3. Identification of the best way to do things

Fordism goal, characteristics

To arrange things in such a way that the worker can only do his best job

1. Maximizes standardization, economies of scale: reduced individual tasks, reduction of movement to a minimum, practically no required skills

2. Design of the production layout → assembly line

3. High wages, corporate welfare, zero tolerance for trade unions

China industrialization timeline

1645: the Manchu conquer Beijing, start of Qing dynasty
1840, 1860: start of first/end of second Opium War, unequal treaties
1900-1901: Boxer Rebellion
1912: republican revolution led by Sun Yat-Sen - republic of China

Characteristics of pre-opium wars China, effects of trait 3

• Population growth: 275 to 350 between 1700 and 1800

• Agriculture economy

• Main exports: tea and silk to the British; received Silver Mexican dollars in exchange → costly for the British → substituted it with opium from Bengal

1. Decline in health of the Chinese population

2. Negative balance of trade (imported more than it exported)

3. Increase in corruption and administrative disorders

Unequal treaties stipulations, aftermath, effect on industrialization

• Hong Kong given to Britain

• Opening of 5 new ports

• Indemnity paid (to Britain and France)

This showed the government’s weakness → anti-government, anti-foreign demonstrations (Boxer Rebellion); Chinese students sent abroad to study (esp. Japan) → became critical towards traditional society → Sun Yan-Set’s republican revolution

China’s political weakness prevented it from industrializing early

Japan industrialization timeline

1603-1868: Tokuwaga period, closed world (sakoku) - only Koreans, Chinese/Dutch (through Nagasaki) allowed to trade
1853-54: US forced opening of trade relations under bomb threat; ship entered through the port of Endo
1868: start of the Meji restoration; shogunate defeated by an alliance of aristocrats: Mutsuhito rises as emperor until his death in 1912

Modernization endeavors during Tokugawa period

• Development of urban centers

• Development of a road network: favored the integration of national/regional market

• Luxury handicrafts

• Production models similar to Europe’s putting-out system

• Mercantile (esp rice) and credit circuits

• Widespread primary education

Characteristics of Japan unequal commercial agreements

• Imposed by other countries after US threat

• Exposed the weakness of the shogunate

• Granted extraterritoriality to foreign merchants

• Prevented the Japanese from rasing any tariffs above 5%

• Damaged the local industries by facilitating Western competition

Meji Restoration: goal, characteristics of modernization program (inspired by best Western models)

Goal: becoming a first-class nation; slogan “fokoku kyohei” (“rich nation, rich army”)

• Reforms: administration, armed forces, taxes, education, corporate law

• Construction of infrastructure

• Modernization of credit/banking systems

• Implementation of the gold standard/compliance with the international monetary system

• Import of technological knowledge from abroad; employment of foreign advisors as experts for the state/private sector

• Missions or individuals sent abroad (ex. Iwakura)

Meji Restoration: industrialization incentivizing initatives

1. Creation of infrastructure, esp. railway network

2. Establishment of production plants for: shipbuilding, iron/steel, weapon production, tool/machinery production, glass, textiles, etc

3. Sale to privates, formation of the zaibatsu: large industrial-financial conglomerates

4. Import substitution policy (starting 1911, full tariff autonomy): tariffs on imported products, stimulated domestic industry