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EC120 Lecture 08Today’s Lecture:• The Industrial Revolution.• Agricultural Revolution.• Finance.• Technological Innovation.• Consumption and Trade.• Regional Variation.• Social Aspects.
• 100’s of free ppt’s from www.pptpoint.com library
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Reading
• Cameron and Neal, Chapter 7.• Hudson, P. (1992) “The industrial Revolution”
NY: Arnold. Chapters 3,5,6.• Jones, E. (1977) “Environment, agriculture and
industrialisation in Europe”, Agricultural History, 491.
• Landes, The Wealth and Poverty of Nations Chapters 13-14
• Landes, The Unbound Prometheus, Chapter 1.
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The Industrial Revolution
• A misnomer? • No sudden change, but gradual process (small
improvements by trial and error).• But profound changes.• Timing uncertain (1760?-1820), decades of
experiment precede given innovation.• By the beginning of 18th century, in several
regions in Western Europe significant concentrations of rural industry (textiles).
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The Industrial Revolution
• Proto-industrialisation: prelude to fully developed factory system.
Characteristics of proto-industrial economy:• Dispersed (usually rural) workers organised by
urban merchant-manufacturers. They supply the workers with raw materials and sell their output in distant markets.
• Primarily consumer goods industry (textiles).
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The Industrial Revolution
• Main difference between pre-industrial and modern industrial society is diminished role of agriculture (increased productivity of modern agriculture).
• Industrialisation: rise of the secondary sector (mining, manufacturing and construction) in proportion of the labour force employed and output.
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The Industrial Revolution
Characteristics of modern industry:• Substitution of mechanically powered machinery
for human effort. • Introduction of new inanimate sources of power
(fossil fuels).• Widespread use of synthetic materials and use of
new and more abundant raw materials.• Larger scale of enterprise in most industries.
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The Industrial Revolution
• Substitution of coal for wood and charcoal as fuel and the introduction of the steam engine for use in mining, manufacturing and transportation.
• The use of coal and coke in the smelting process of metals reduced the cost of metals.
• Application of chemical science created new synthetic materials.
• Industrial revolution as uneven process, destroyed old while building new.
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The Industrial Revolution
• In the 18th scientific knowledge was too “slender and weak” to be applied directly to industry.
• But methods of science (observation and experiment) were relevant.
• large proportion of major innovations made by mechanics, engineers etc. Trial and error rather than experimental method.
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The Industrial Revolution
Why in the 18th century?
• Accumulation of knowledge.
• Growing autonomy of intellectual inquiry (from Church).
• “Invention of Invention” (routinisation of research and its diffusion).
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The Industrial Revolution
Main Industries:
• Cotton textiles.
• Iron Industry.
• Mining (Coal).
• Manufacture of pottery.
• Chemical industry (soap, paper, glass, paints, dyes).
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Agricultural Revolution
• In England increase in agricultural productivity.
• Only 60% of workers involved in food production.
• Proportion declined steadily to about 36% at the beginning of the 19th century
• To about 22% in the mid-19th century.
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Agricultural Revolution
• Increase in productivity by trial and error with new crops and new crop rotations.
• Turnips, clover, and other fodder crops introduced from the Netherlands in the 16th century and diffused in the 17th century.
• Development of husbandry: alternation of field crops with temporary pastures.
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Agricultural Revolution
• Advantage of restoring fertility of the soil: improved rotations and larger number of livestock (more manure for fertiliser, more meat, dairy produce, wool).
Other innovations: • Selective breeding of livestock and manuring .• Floating of water meadows.• Marsh drainage.
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Agricultural Revolution
• Light soil areas of the South and East adapted most easily to the new techniques, (Norfolk, Suffolk, Lincolnshire and Northumberland).
• Important pre-condition for those innovations: enclosures.
• Under the traditional open field system difficult to obtain agreement on the introduction of new crops or rotations and to manage selective breeding.
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Agricultural Revolution
• Gradual tendency towards larger farms. By 1851 1/3 of the cultivated acreage in farms larger than 300 acres.
• Capitalistic tenant farmers, rented their land and hired agricultural labourers.
• New techniques associated with enclosures might have increased the demand for labour.
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Agricultural Revolution
• Increasing productivity in agriculture enabled England to sustain increasing population at rising standards of nutrition.
• From 1660 to 1760 England produced a surplus for export.
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Agricultural Revolution
Links between changes in agriculture and industrial development:
• Relatively prosperous rural population provided a market for manufactured goods.
• Increase in productivity: release of labour provide a source of cheap labour for industry?
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Agricultural Revolution
• Long distance migration of population from agricultural to industrial regions was small and occurred in waves.
• Most migration between towns and their immediate hinterlands.
• Expansion of proto-industries and urban manufacturing production occurred outside commercialising agricultural regions.
• Industrial regions were often short of labour, incentives for innovation and mechanical substitutes.
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Agricultural Revolution
• Importance of English agriculture in supplying food for the expanding population and raw materials for industry (clothing, footwear, soap and candle making).
• Size and dynamism of the home market during England’s industrialisation: did agriculture play a role?
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Agricultural Revolution
Possible consequences of agricultural change:
• rise in agricultural incomes which might be spent on manufactures,
• movement of workers out of agriculture into higher paid jobs,
• shifts in relative prices might encourage investment in industry.
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Agricultural Revolution
• But calculations suggests that those effects were modest (Hudson).
• Agriculture had role in providing revenue for central and local government and finance for industry, transport and urban developments.
• Land was the major security against which loans could be raised.
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Finance
• 1720 Bubble act prohibited the formation of joint-stock companies without the express authorisation of Parliament. Bubble act was repealed only in 1825.
• Most of industrial and other enterprises had to be partnerships or simple proprietorships.
• But remember that political institutions tended to favour wealth creation, property rights.
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Finance
• Remember Glorious revolution place public finances in parliament’s control, reduced the cost of public borrowing and freed capital for public investment.
• Regressive system of taxation permitted the accumulation of capital for investment.
• But most industry financed by reinvested profits and Informal networks (family and friends), banks short-term loans.
• Capital contributed indirectly (infrastructure investments) to the process of industrialisation.
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Technological Innovation
• Rapid mechanisation and growth of cotton industries in the last two decades of 18th century.
• The process of smelting iron ore with coke rather than charcoal and the invention of the atmospheric steam engine replacing wind and water mills as inanimate sources of power.
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Technological Innovation
• Major technological innovation: The water frame (spinning machine patented in 1769 by Richard Arkwright).
• Heavy and expensive, direct link to factory system.
• Factories were built most often near streams in the country, they did not result in concentrations of workers in the cities.
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Technological Innovation
• Samuel Crompton’s mule (combined elements of the jenny and the frame). The mule could spin finer, stronger yarn.
• It allowed large scale employment of women and children and favoured the construction of factories in cities where “coal was cheap and labour plentiful”.
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Technological Innovation
• Manchester only had two cotton mills in 1782, but 52 in 1801.
• Britain grew no cotton domestically • Import figures for raw cotton: good indication of
rapid development in the industry. • Less than 500 tons at the beginning of the 18th
century to 25,000 tons in 1800. • Sources: initially India and Levant, but soon not
enough to satisfy demand, so turned to Britain’s Caribbean Islands and Southern U.S.
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Technological Innovation
Why mechanise cotton textiles?• The growth of the textile industry was
outstripping labour supply. • Frustrated manufacturers turned away from
Putting out system. • Large workshops where spinners and
weavers’ work is monitored (no shirking or embezzlement of raw materials for sale).
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Technological Innovation
• Problem: large plants need substantial capital investment in land and buildings plus machines (before all this was done in worker’s house).
• To make factory system competitive need power machinery, only then possible to compete against the cottage product.
• Workforce frequently formed by Women and Children (some conscripted from the poor houses).
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Consumption and Trade
Sources of demand for manufactures:
• “Consumer revolution” People bought as never before.
• The spread of new consumption habits and tastes was result of wider changes in values and attitudes amongst the middle class.
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Consumption and Trade
• Increase in demand for manufactures rather than saving, food expenditure, luxury and/or imports expenditure.
• Why?
• Emulation, cultural change, marketing etc..
• Decline in subsistence sector and increased income earning opportunities.
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Consumption and Trade
The role of external trade:• Growing English and continental demand for tea,
coffee, sugar, raw cotton, spices etc. gave trading partners the purchasing power to buy English manufactures.
• British exports in the 18th and 19th centuries consisted overwhelmingly of manufactures.
• Export markets were important for manufacturing expansion also because they grew faster than domestic demand.
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Consumption and Trade
• Demand for manufactures in North America particularly important.
• Important legacy of 18th century foreign trade: commercial infrastructure (insurance companies, banks, the stock exchange etc.).
• Contribution of slavery and slave trade to the industrial revolution.
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Consumption and Trade
• Importance of investment of plantation and slave-trade profits in shipping, banking, insurance and industry.
• Average profit rates more modest, but large variation.
• But it is more relevant to look widely at the “Atlantic economy”. Sugar and tobacco made Britain the centre of re-export trade to continental Europe.
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Consumption and Trade
• West African market constituted a significant demand for British exports, so incomes generated by slave trade there were important.
• Also demand for manufactures in the Caribbean. • Domestic demand represented a much larger
market for goods and services. But foreign demand had strong effect on sectors involved in mass manufacture.
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Regional Variation
• Importance of the coalfields located mainly in the Northeast, the Midlands and Lancashire.
• London many consumer goods industries.• South remained primarily agricultural: most fertile
soil and most advanced agrarian organisation.• Pastoral extreme North and Northwest lagged
behind.
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Regional Variation
• In the latter part of the 18th century coalfields of South Wales basis for a large iron industry.
• Wales interior remained pastoral and poor: mountainous and infertile.
• Ireland failed almost entirely to industrialise.
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Regional Variation
• In mid-18th century Scotland was a poor and backward country (population in near-subsistence agriculture).
• Less than a century later Scotland “industrialised”. • Inclusion in the British Empire after 1707 gave it
access to English and Colonial markets. • The country’s educational system: relatively
literate population. • Scotland banking system free from government
regulation (easy access to credit and capital).
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Regional Variation
• Jones: The lay-out for Europe’s agriculture and early industrialisation is a consequence of natural resource endowments and topography.
• Differences in topography, soil and precipitation determined costs of crop production.
• Regions with comparative advantage in growing food crops and others with comparative advantage in pastoral husbandry and/or mining and/or cottage industry etc.
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Regional Variation
• European countryside gradually separated: one agricultural, the other proto-industrial both linked by trade.
• The transformation of proto-industrial regions into regions of mechanised industry was influenced by relative costs of available sources of power.
• “…different endowments of energy sources influenced where in the handicraft regions modern industry would evolve”.
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Social Aspects
• Rapid rise in population. • Hypothesis that birth rate rose because of earlier
marriage (Mean age of first marriage fell from 26 to 23 years, proportion of women never marrying from 15% to 7.5%).
• Wrigley and Schofield study sample of 404 parish registers: average life expectancy at birth rose from 32.4 to 38.7 years between the 1680s and 1820s.
• Rising fertility contributed 2.5 times more to population growth than did mortality improvement.
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Social Aspects
• Links between proto-industry and decline in the age of marriage as it gave a source of independent income early in life.
• Also may not be responding to real wage improvements, but simply to greater availability of employment.
• The death rate declined (Vaccination, improvements in medical knowledge, rise in living standards).
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Social Aspects
• Agricultural progress greater abundance and variety of foodstuffs improving nutrition.
• Increased coal production home heating. • Soap production and hygiene. • Population growth provide stimulus for
industrialisation through the supply of labour and through the demand it creates for food and manufactured goods.
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Social Aspects
• Internal migration: shift in density from the southeast to the northwest and increasing urbanisation
• Growth of cities, but sanitary facilities non-existent, poor housing for working class families.
• Breeding ground for epidemic diseases. • Rapid growth because of migration from the
countryside. Bad sanitary conditions: the death rate exceeded the birth rate.
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Social Aspects
Standard of Living debate:• Some groups such as factory workers and skilled
artisans improved their conditions, others not. • Various quantitative studies failed to prove the
existence of a major increase in real incomes for the mass of the population before the 1820s.
• Gradual improvement in standard of living in the century from 1750 to 1850. But the inequality of income distribution increased in the early stages of industrialisation.