How the Industrial Revolution Transformed the World Economy

Introduction

The Industrial Revolution that started in Great Britain in the latter part of the eighteenth century is considered by some historians to be the most significant transformation in the economic environment of human civilization after the Agricultural Revolution. While there is no disagreement that the revolution had a great effect on the world economy and transformed the lives of a large number of people, its effect was by no means uniform. While it rapidly took root in certain parts of the world — in Great Britain first, followed by certain countries of Western Europe and the United States — large parts of the world, in particular Africa, remained untouched by it. This paper discusses the causes of the Industrial Revolution, identifies the countries most affected by it and explains why, examines the revolution's effect on the world economy, and focuses on why the phenomenon bypassed Africa altogether.

Causes of the Industrial Revolution

In order to understand the effect of the Industrial Revolution on the world economy, it is useful to take a brief look at its causes.

The most important reason behind the revolution was the advancement in scientific knowledge in Europe following the Renaissance (fourteenth to seventeenth centuries) and the change in outlook brought about by the Age of Enlightenment. Because this intellectual shift also occurred in several other European countries, it is pertinent to ask: why did the Industrial Revolution start in Great Britain and not elsewhere? The short answer is that the social, political, and legal conditions in Britain were riper for such a movement in the eighteenth century than those in other European countries. Property rights — including patents on new inventions — were well established. By the 1700s, Britain had enjoyed political stability for some time, and government interference in the economy was less pervasive than in most other countries. This policy was partly influenced by Adam Smith's landmark Wealth of Nations, published on the eve of the Industrial Revolution in 1776, which extolled the virtues of a laissez-faire economy (Stearns 5–8). The importance of minimal economic regulation is underlined by the historian Arnold J. Toynbee, who characterizes the essence of the Industrial Revolution as "the substitution of competition for the mediaeval regulations which had previously controlled the production and distribution of wealth" (Toynbee 58).

Another important reason was that Britain, owing to its vast empire and global trading interests, was generating significant surplus profits available for industrial investment. Its expertise in world trade meant that markets for surplus manufactured goods were readily accessible. Britain also possessed the natural resources — principally iron and coal — necessary for industrial development. Several of the most important technological innovations of the era also occurred in Britain. The most significant was the development of the steam engine by the engineer James Watt, who registered his patent in 1769. The steam engine made vast amounts of power available to major industries such as iron, steel, and textiles. Before its invention, hydropower had been the principal energy source for large industries, which required factories to be located near water; the steam engine removed that constraint. Other important innovations included improvements in the iron-smelting process — particularly the substitution of cheaper coal and coke for traditional charcoal — and the power loom for the textile industry. When the steam engine was applied to textile mills and to blast furnaces in 1788, industrial production truly took off; the amount of iron manufactured nearly doubled in the eight years following that year (Toynbee 64).

There was also a rapid increase in Britain's population that coincided with the Industrial Revolution. Some writers have attributed this growth to industrial advancement; others have treated it as a cause. T. S. Ashton, in The Industrial Revolution 1760–1830, argues that if population increase were a cause of industrial growth, then the many Western and Northern European countries experiencing similar demographic expansion should have undergone their own industrial revolutions — but they did not. Moreover, large population increases occurred in Egypt, India, and China during the nineteenth century without corresponding industrialization (Ashton 3–6). In all probability, then, population growth and industrialization in Britain were parallel rather than causally linked phenomena.

The eighteenth-century Industrial Revolution was essentially confined to Britain. France, the other major power of the era, was beset by internal turmoil and foreign wars; Germany was still forging itself into a single nation-state; and the United States was engaged in a struggle for independence. Britain therefore gained a substantial head start in industrial development. Soon, however, the benefits of industrialization became apparent to all nations with the potential to replicate it, and they accelerated their efforts to catch up.

Industrial Revolution beyond Britain

Apart from Britain, France was the other major European power of the eighteenth century, yet it embraced industrialization rather slowly. There were several reasons for this. France had greater agricultural resources than Britain, reducing the pressure to seek alternatives to traditional farming. It possessed fewer deposits of iron and coal, and less capital was available for industrial investment because its overseas trading had been less successful than Britain's. Above all, the French Revolutionary and Napoleonic Wars kept the country in near-constant turmoil until peace finally came in 1815.

Technological advances achieved in Britain could not remain confined within its borders indefinitely. Countries capable of absorbing the new techniques began applying the lessons of industrial growth in their own contexts. France entered a period of rapid industrial expansion around 1830, initially driven by its textile sector. From 1860 onwards, heavy industry and railroad construction brought France fully into the fold of the Industrial Revolution (Rostow 206).

In the United States, the need for industrialization was recognized soon after independence, as political and business leaders understood that economic strength was vital for sustaining national sovereignty. At the time of independence, the United States had a traditional economy with more than three-quarters of its workforce engaged in agriculture. Nevertheless, the country enjoyed many advantages that made it fertile ground for an industrial revolution. The U.S. government expanded the nation's territory by purchasing or seizing land from Native Americans, Mexico, and other European powers, providing access to a resource-rich and sparsely inhabited continent. The national philosophy of individual liberty and minimal government interference created the laissez-faire environment that industrial development required.

The American population was also highly literate, and there were few barriers to upward mobility for the white population. Limitless opportunities in the new land attracted many skilled immigrants — particularly from Britain — who transferred essential technology. As a result, industrialization in the United States during the nineteenth century grew at an even faster rate than in Europe. Advances in communication and transportation through a vast railroad network and the invention of the telegraph, along with continuous-process manufacturing and mass-production methods, were American innovations that further accelerated the process. The surge of industrialization in the latter part of the nineteenth century and the early twentieth century is sometimes termed the "Second Industrial Revolution." It is typified by the assembly-line production methods introduced by Henry Ford for automobile manufacturing and the scientific management principles developed by Frederick Taylor. These advances made the United States the most industrially advanced nation in the world ("Industrial Revolution").

Conclusion

The Industrial Revolution that started in Britain in the eighteenth century and later spread to different parts of the world was one of the most important transformations in human civilization. It changed the lives of people wherever it occurred and had a profound effect on the world economy. At the same time, it gave rise to deepening inequality between industrialized and non-industrialized nations and triggered European imperial expansion in the 1800s, especially in Africa. The industrialized nations expanded their military power and looked to colonized countries as markets for their surplus goods and as sources of raw materials for their industries. As a result, the benefits of the Industrial Revolution were not shared equally among the world's population.