The Industrial Revolution

A cotton mill in Lancashire, England, ca. 1834

Dr. Gomis-PorquerasECO 680

• Industrial Revolution (1790-1830 in England) was heralded by the introduction of machines

• Machines– increased demand for inputs– increased supply of output– Business needed free markets to more easily obtain

inputs and sell outputs

• Industrial Revolution gave rise to • the market economy, • the policy of laissez faire

Historical backdrop

Historical backdrop

– Industrial revolution was based on the principle of the division of labor,

– Industrial Revolution• Led to the decline of cottage industries

(production based in the home)• Reduced the demand for skilled craftsman• Introduced a new means of organizing

production: the factory system• Based on a new energy sources: fossil fuels

The Industrial Revolution:Characteristics

• New energy sources – Steam– Electricity– Oil

• New forms of organization – The factory system– The joint stock investment

bank• New means of transportation

– Steamships – Railroads– Automobiles

• New industries– Coal– Iron– Steel– Chemicals

“The Triumph of Steam and Electricity”

Why did the Industrial Revolution begin in Great Britain?

• Rise of science

• Increasing productivity in agriculture

• Expanding population

• Merchant tradition; entrepreneurial spirit; capitalist philosophy

Why did the Industrial Revolution begin in Great Britain?

• Geography – Coal deposits– Navigable rivers– Natural harbors– Island location

• Global trading• State-supported economic development• Constitutionalism; Locke’s philosophy

(property!)

Consequences of the Industrial Revolution

• Urbanization– Overcrowding– Crime– Sanitation

• Population growth• Social change: new

social classes– Middle class

(bourgeoisie)– Urban working class

(proletariat)

Tenements in Manchester, England, ca.1850

Consequences of the Industrial Revolution

• Rise in overall standard of living

• Split between producer and consumer

• Era saw rise of classical liberal political and economic thought

Post-industrial society

• Characteristics of the post-industrial society:– Rise of the service sector– Decline of agricultural-based economy– Predominance of “information-based” work– Knowledge now key factor in the economy,

outstripping physical plant / manufacturing