1. EC120 Lecture 08
Today’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

2. 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.

3. 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).

4. 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).

5. 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.

6. 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.

7. 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.

8. 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.

9. 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).

10. The Industrial Revolution
Main Industries:
• Cotton textiles.
• Iron Industry.
• Mining (Coal).
• Manufacture of pottery.
• Chemical industry (soap, paper, glass,
paints, dyes).

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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?

18. 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.

19. 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?

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.

26. 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”.

27. 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.

28. 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).

29. 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).

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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.

38. 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).

39. 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.

40. 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”.

41. 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.

42. 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).

43. 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.

44. 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.

45. 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.