Slides___Industrial_Revolution

The Industrial Revolution: Causes and Consequences

Overview

• Author: Juan Sebastian Salazar, Department of Economic History, UC3M, Madrid, Spain

• Date: March 4, 2025

1. Context

• Introduction to the Industrial Revolution and its significance in shaping economic history.

2. The Great Divergence: Europe and China

• Long Term Growth Trajectories: Western Europe experienced exceptional economic and political growth compared to other regions, partly due to the rise of trade capitalism and liberal governance.

• The Role of the Bourgeoisie: In Northern Europe, the bourgeoisie secured property rights, enhancing profitability of investments and improving wages, particularly in England where wages surpassed the European average.

• The Emergence of Skilled Labor: Industries, particularly textiles, benefitted from a skilled workforce, leading to increased productivity and living standards in late 18th-century England.

• Cultural Influence: The practical application of Enlightenment philosophy fostered innovation and set the stage for the Industrial Revolution.

3. Dawn of the Industrial Revolution

• Immediate Consequences:

  • Disruption of shared prosperity and rise of automation due to high labor costs.

  • Skilled workers displaced by mechanization and influx of unskilled labor (women and children).

  • Increased economic inequality and social unrest.

  • Urban centers faced pollution and overcrowding due to factory concentration.

  • Transition from a merchant society to one characterized by environmental degradation and social conflict.

4. The Political Checks and Compensation Mechanism

• Political Response: Contrary to predictions of deep social fragmentation, England restored shared prosperity and improved living conditions, facilitated by political governance and bargaining.

• Role of Trade Unions: The rise of trade unions led to negotiations that prioritized worker productivity incentives rather than mechanization.

5. The Chinese Trajectory

• Counterfactual Benchmark: China historically contrasted Western Europe but recent evidence suggests its historical advantages, especially in the Song Dynasty's economic advancements.

6. Comparison between Western Europe and China

• Key Characteristics: Both regions had access to agricultural centers, high productivity, and institutions supporting economic activity.

• Trade Routes: Evidence suggests extensive trade connections, raising questions about innovation diffusion.

7. The Southern Song Dynasty

• Economic Advancement: Recognized as exceeding Western Europe pre-Industrial Revolution.

8. Institutional Case Study: Columbus and Zheng He

• Zheng He: Chinese explorer whose voyages expanded diplomatic influence, contrasting Columbus's discoveries shaped global history.

• Resource Disparity: Zheng He had greater resources and technological advantages than Columbus, but differing objectives led to varying legacies.

9. The Rise of Trade Capitalism

• Transition from Feudalism: By the late 15th century, Northern Europe transitioned to trade capitalism, influenced by rising productivity and cultural transformations.

• Protestantism's Role: Encouraged capital accumulation and financial systems, paving the way for economic power through colonial trade benefits.

10. Share Prosperity: Income and Subsistence

• Labor Market Changes: Shift from feudal labor bonds to mobility under capitalism, with agricultural surpluses leading to labor migration to cities.

11. Share Prosperity: Workers’ Part of the Story

• Labor Surplus: The surplus of workers in successful regions led to improved worker productivity and rising wages.

12. Share Prosperity: Demographic Transformation

• Population Shares: Data showing urban versus rural population shifts between 1500 and 1750 across various countries.

13. A Culture of Innovation: British Enlightenment

• Influence of Enlightenment: Neo-empirical research and experimentation spurred technological progress and institutional support for innovation resources.

14. A Culture of Innovation: Evolution of Literacy Rates

• Literacy Growth: Improvements in literacy from 1500 to 1880 across different countries reflect growing educational access contributing to innovation.

15. Why England?

• Factors for Industrialization: England's unique conditions included access to coal, a culture of innovation, and high labor costs, which incentivized mechanization.

16. Industrial Revolution 101: Importance of Cheap Energy

• Coal: Central to industrialization, replacing wood and powering steam engines for factories and transport.

17. Industrial Revolution 101: The Role of Culture

• Sustainable Innovation: Cultural factors play a critical role in facilitating or resisting technological advancements in economic development.

18. Case Study: Manchester to Liverpool Train-line

• Railway Milestone: The 1829 Rainhill Trials illustrated competition among locomotives, with Stephenson's Rocket winning for its efficiency.

19. Industrial Revolution 101: Price Structure Importance

• Economic Factor Dynamics: Higher English wages led to incentives for mechanization, allowing for a shift from labor to machines in various industries.

20. Industrial Revolution 101: British Price Structure

• Wage Comparison: Analysis of labor wages across the world between 1375-1775, highlighting England's economic positioning.

21. Class Question

• Inquiry about the driving factors for England's early industrialization compared to other regions, focusing on cultural versus economic structures.

22. Interruption of Shared Prosperity

• Worker Hardships: Early industrialization led to severe hardships for the working class, leading to debates over public health impacts.

• Chadwick’s Findings: Industrial cities faced critical health issues due to negligence toward sanitary conditions.

23. Intensification of Malthusian Regime

• Population Growth Challenges: Urbanization surged, placing further strain on infrastructure and living conditions amid rising productivity.

The Industrial Revolution: Causes and Consequences

Overview

Author: Juan Sebastian Salazar, Department of Economic History, UC3M, Madrid, SpainDate: March 4, 2025

The Industrial Revolution signifies a pivotal moment in economic history, marking the beginning of dramatic changes in production and society. A notable phenomenon known as the Great Divergence occurred, where Western Europe, especially, exhibited exceptional economic and political growth compared to other regions, largely due to the rise of trade capitalism and liberal governance. Central to this transition was the role of the bourgeoisie in Northern Europe, who secured property rights that enhanced investment profitability and improved wage levels, particularly in England where wages outperformed the European average. Additionally, the emergence of skilled labor in industries such as textiles catalyzed increased productivity and improved living standards in late 18th-century England, while Enlightenment philosophy fostered a culture of innovation that prepared the ground for this transformation.

The dawn of the Industrial Revolution brought both immediate disruptions and challenges; shared prosperity diminished, and automation due to high labor costs saw skilled workers displaced in favor of unskilled labor, such as women and children. This led to heightened economic inequality and social unrest, with urban centers grappling with pollution and overcrowding as factories concentrated labor in cities. Contrary to predictions of extreme social fragmentation, England experienced a political response that restored shared prosperity and improved living conditions, largely supported by the rise of trade unions which advocated for worker productivity over mechanization.

In comparing the trajectories of Western Europe and China, evidence reveals that both regions had agricultural access, high productivity levels, and institutions facilitating economic activity. Historical advantages were also observed in China, especially during the economic advancements of the Song Dynasty, which underscore the complexities of divergence. Zheng He’s explorative voyages contrast with Columbus's endeavors, revealing differing objectives driven by resource disparity and technological advantages.

By the late 15th century, Northern Europe transitioned from feudalism to trade capitalism, with Protestantism playing an essential role in fostering capital accumulation and financial systems. The labor market saw significant changes as it transitioned from feudal bonds to more mobile capitalism, accompanied by agricultural surpluses that prompted migration towards urban centers. This labor surplus in successful regions positively influenced productivity and wages, reflected in demographic transformations evidenced by the shifts in urban versus rural populations between 1500 and 1750.

The British Enlightenment significantly influenced culture and innovation, marked by improved literacy rates contributing to growing educational access which, in turn, fueled technological advancement. Factors unique to England, such as access to coal, a robust culture of innovation, and high labor costs, created ideal conditions for industrialization, with coal serving as a pivotal source of energy that replaced wood and powered steam engines for factories and transportation.

Infrastructure development, exemplified by the Manchester to Liverpool train-line and milestones like the 1829 Rainhill Trials, showcased the competition and technological progress in the railway sector. The analysis of wage comparisons globally between 1375-1775 highlights England’s economic positioning, posing inquiries regarding the cultural versus economic structures driving early industrialization compared to other regions. Despite early industrial successes, the working class endured severe hardships, igniting debates over public health in industrial cities, as findings by Chadwick revealed alarming health issues linked to neglecting sanitary conditions. This urbanization induced challenges amid rising productivity, intensifying the Malthusian regime as population growth strained living conditions and infrastructure as cities expanded rapidly.