| Conclusion |
Pre-Industrial Revolution Economy
- Before the Industrial Revolution the major means of production was the Cottage Industry. It was an industry whose labor force consists of family units or individuals working at home with their own equipment. It is often a small and informally organized industry. Men, women, and children all work on farms, which were basically small plots of land, to produce food to feed themselves and their village. They sold the extra food at a price affordable by everyone that needed it in their village (Moral Economy).
- Over the course of the 18th century agriculture became increasingly commercialized. Landlords were willing to finance more experiments. Inventions like the plow and seed drill improved planting. Charles Townsend from England learned from the Dutch about fertilizers and instituted a new system of crop rotation. These and several other agricultural innovations in animal husbandry and crop production created what has become known as the agricultural revolution. These advancements led to the unemployment of many peasants and caused much economic and social conflict. Many farmers were forced to seek employment as factory workers. The industrial revolution was a gradual series of changes in agriculture, trade and industry.
- The textile industry was a pacemaker for industrial change. The textile industry is the industry that produces fiber, filament, or yarn used in making cloth. These textiles include wool, cotton, silk, and linen. Cotton is a white fibrous substance composed of the hairs surrounding the seeds of the cotton plant. It was first imported to England in the 16th century. Initially it was mixed either with linen or worsted yarn. By 1750 some pure cotton cloths were being produced in Britain. Imports of raw cotton from the West Indies and the American Colonies gradually increased and by 1790 it had reached 31,447,605 lbs.
- By 1802 the textile industry accounted for 4 to 5 per cent of the national income of Britain. By 1812 there were 100,000 spinners and 250,000 weavers working in the industry. Production had grown to 8 percent and had now overtaken the woolen industry. By 1830 more than half the value of British home-produced exports consisted of cotton textiles.
-In the eighteenth century all of Western Europe began to industrialize rapidly, but it all began in Great Britain. Britain's head start may be attributed to the emergence of a number of simultaneous factors.
§ There was abundant coal and iron deposits and there was an abundant labor supply to mine these resources and to man the factories.
§ The British had a very suitable climate for all of the crops grown. These crops helped the British with their everyday life.
§ Mercantilism had thrived in England in ways that it hadn't on the continent. In particular, the English had no internal tariffs or duties on commerce, which wasn't true of any of the continental European states. Moving goods around in continental Europe was an expensive affair as you had to pay taxes and duties every hundred miles or so, but moving goods around in England was cheap, and profits soared.
§ England had a monopoly on overseas trading. Every time England fought a war in the eighteenth century it always acquired new overseas territory. It completely monopolized trade with the North American colonies—in fact, one-half of all British exports went to America in the 1780's—but it also began to control the South American and, most importantly, the Indian trade. All this trade produced the largest merchant marine in the world as well as a navy to protect this merchant marine fleet.
§ Africa was also a very useful continent. It had tons of land and resources, which was very appealing to any country with power and wanted to colonize. The British colonized much of Africa. Through the resources Britain gained from its colonies it had more money to put into research and development, which is an important part of the Industrial Revolution.
§ The tobacco merchants of Glasgow and tea merchants of London and Bristol had capital to invest and the technical know-how derived from the Scientific Revolution of the seventeenth century.
§ Among the most compelling is the exponential increase in food production following the enclosure laws of the eighteenth century; Parliament passed a series of laws that permitted lands that had been held in common by tenant farmers to be enclosed into large, private farms worked by a much smaller labor force. While this drove peasants off the land, it also increased agricultural production and increased the urban population of England, since the only place displaced peasants had to go were the cities. The English Parliament, unlike the monarchies of Europe, was firmly under the control of the merchant and capitalist classes, so the eighteenth century saw a veritable army of legislation that favored mercantile and capitalist interests.
§ Last, but not least important, the insularity of England saved industrial development from being interrupted by war.
Changes in Traditional Economic System
- To support increasing trade, governments realized they must change their control over the economy. They had to decrease their influence on the economy, allow for more freedom, and adapt to a new system: laissez-faire, a ideal proposed Adam Smith in his book, The Wealth of Nations.
- This doctrine favors capitalist self-interest, competition, and natural consumer preferences as forces leading to optimal prosperity and freedom. The "invisible hand" of competition is used as the economic regulator.
-The British government realized the importance of having a central economy and a national common currency in order to promote economy growth. The Bank of England became a national bank and the English pound became a stable, common currency. As a result, Britain thrived tremendously during the Industrial Revolution and grew to the largest Empire in the World.
- This situation is reflected in today’s society by the Euro, which has the same function to strengthen the economy as did the Bank of Britain. It is achieving its effect as the richer and poorer countries are balancing their economies and Europe together is becoming a stronger, more stable, financial power.
Economic Changes Brought by the Industrial Revolution
- It led to changes in the form and supply of money, the provision of credit, and in forms of investment. It changed financial institutions such as banks and stock exchanges. It altered the role of the state in relation to the economy, and it brought about a new understanding in economies.
- Maritime trade greatly increased, ships sailed all around the world to bring back goods. Slaves from Africa, sugar from West Indies, fine porcelain from China and Japan, cotton from India, Egypt, and later the United States.
- A new group of people called industrial entrepreneurs were born. Traders with limited funds and credit from existing trade invested small amounts of capital in new properties and machines. The entrepreneurs who increased their profits would re-invest the profits into further innovations.
