The world today is at the mercy of oil producers, rich countries have invested intensively in developing countries and are practicing neo-imperialism, there is a global outcry for food security especially post Russia-Ukraine war as well as effects of climate change, and we are at the brink of an agricultural revolution. If we look at the background of the industrial revolution we could realise that history in a subtle manner, repeats itself.
In 1760, the industrial revolution was a result of growth of capitalism, European imperialism, and coal mining, compounded with effects of the agricultural revolution. The period 1760 to 1850 was marked by fundamental changes in England. The country witnessed a gradual transformation in agriculture, textiles and metal production, transportation, economic policy, and social structure.
The era saw a change from a typical agrarian and handicraft-based economy to an economy that was predominantly based on industries and machine-manufactured products. This process of change has been termed the industrial revolution. The term industrial revolution was first used to describe England’s economic development from 1760 to 1840 by English economic historian Arnold Toynbee.
The process of change or the revolution that began in England in the 18 Century soon spread across Europe and North America. The main features of the changes were technological, social economic, and cultural aspects. The technological changes were key to the entire revolution, including the use of new metals such as iron and steel and most importantly use of coal-based steam engines, internal combustion engines, and electricity.
Invention of the spinning jenny and bar-looms resulted in increased production with minimal expenditure of human energy. The concept of a factory system having a distinct division of labour and the specialised role of the workers came into being. Development of means of transportation and communication enabled trade and expansion of the market for finished products. Technological advancements tremendously increased the efficient use of natural resources and allowed for the mass production of goods. During this period industries expanded rapidly.
The industrial revolution brought about changes that completely revolutionised families and lifestyles. Factory systems attracted workers to an extent, and they moved out of the rural family economy to urban areas.
This led to rapid urbanisation in England and cities at a tremendous rate. Apart from technologies other factors that favoured the industrial revolution in England included religious freedom, great potential due to the long coastline of this island nation, unification of states into a single economic unit, and presence of huge coal reserves.
However, there has been a great role of a political system, property rights, and flexibility of the legal system leading to the industrial revolution. Presumably, changes in the legal system created a conducive environment for investment which led to the industrial revolution.
The change was mainly a technological revolution brought about by the major inventions during that period. There was a shift and focus on economic incentives for the inventor, which acted as a driving force for inventions leading to the industrial revolution. It becomes evident that the industrial revolution in Britain was the outcome of Britain’s success in the international economy, which offered it incentives with unique and highly regulated possibilities.
The technological achievement of the industrial revolution was a consequence of the economic development that preceded the industrial revolution and which produced the high wage, cheap energy economy.
Robert Allen (2006) argues that the main motive for the invention of technology was to make money while the major implication of this concept was investments that would yield returns in the future high enough to offset the current cost.
The inventions and innovations were done mainly to come up with new products or reduce the making cost of existing products. Expensive labour and cheap energy led to the invention of machines that substituted energy and capital for labour.
Industrial revolution inventions
Market size is very crucial for profits to offset the cost of inventions. For example, scale of the mining industry was much greater than any other country, hence, returns on the investment in mining machinery were the highest. Inventions were also encouraged by patents which gave the inventor the rights to all the gains from the inventions. Better property rights for knowledge were the main reason that led to industrial revolution inventions. In the absence of patents, incentives for private inventions were small compared to group or collective inventions, enabling them to divide the cost and pool.
During the industrial revolution, families produced most of the food, clothing, and other articles they used in rural areas. In cities, manufacturing was strictly regulated by the guild and the government. Goods thus made were of high quality but limited and costly. Merchants needed cheaper items as well as large quantities for that trade to grow. This led to a significant shift in the organisation of production from the cottage industry to the factory.
Merchants started controlling the manufacturing process from start to finish. For example, cloth merchants’ would buy raw wool from the sheep owners, have it spun into yarn, and take it to the country weavers to be made into textiles. The country weavers manufactured the cloth at a much lower cost similar methods of organising and controlling the process of manufacture also started in other industries such as nail cutlery and leather goods.
Post imperialism, extensive trade in exotic goods, and the construction of large merchant and naval marines provided high-wage urban employment and generated large amounts of capital. Today, world economies are aware of their strengths, systems are in place to facilitate trade. We are in the midst of a further digital revolution which brings many challenges due to the unregulated nature of the entire digital world.
How far are the countries willing to go with their limited resources, to be masters of their field of expertise, follow best practices and become benchmarks of excellence to benefit from international trade?
With taxation being avoided by major players and benefits only going to a few, the financial advantage of another transformative period, corrective systems need to be put in place.
Robert Allen famously quoted “mediocrity and average performance win no prizes in economic development because they do not provide that margin of cost advantage without which the first faltering steps in new technology cannot be profitable”.
Ritesh Barot is a business and financial analyst, humanitarian, conservationist, occasional artist, recipient of OGW honour. [email protected]