INDUSTRIAL REVOLUTION IN GREAT BRITAIN.   Term Paper ID:20172 Click to get this paper

Essay Subject: Causes of development (exports, demand), relevance to late 20th Cent., agriculture, technology, growth, wages.... More...

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Paper Abstract: Causes of development (exports, demand), relevance to late 20th Cent., agriculture, technology, growth, wages. Paper Introduction: A wide range of possible causes can be suggested for the development of the Industrial Revolution in Great Britain, in advance of comparable development, during roughly the period 17501830. Possible reasons range from the nature of English society, to the country's natural abundance of those basic earlyindustrial materials, iron and coal, to the growth of population at a time when agriculture techniques were improving rapidly, freeing labor to move to industrial work in the cities, to the advantages in export trades which Britain had due in part to its large seafaring sector and its naval power. The tendency of economic historians, however, has been to identify one or a few of these factors as critical, while relegating others to a secondary status as contributory, perhaps, but not necessary.1 Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Mingay, eds., Land, Labour, and Population in the Industrial Reveolution. M. name. This makes thequestion of development economics one of the most pressing issues of thecontemporary world. C. (Chicago:University of Chicago Press, 1976), 9 . Interestingly, the argument for high wages as a root of economicgrowth is hinted at by Adam Smith. Eversley, D. The total demandfor agricultural products, which are mainly "food and clothing" showslittle elasticity in volume, although the "basket" of goods demanded ishighly variable. Jones and and G. the driving engine of industrialization was demand generated by an increasingly prosperous home market.4 If the entire world were today in a "developed" economiccondition, the question of the forces that drove Britain'sindustrialization would be primarily of historical interest. When hen clothes arebought, not homespun, and eggs are sold rather than eaten, the range ofchoices is greater, and therefore there will be more options which amoralist might disapprove of. The strongest argument for the export-driven theory may perhapsbe found not by looking at industrial production and exports in the secondhalf of the eighteenth century, but at agricultural developments at asomewhat earlier period, in the first half of the century. But it is precisely the model of unbalanced growth that is putforward by development theorists such as Rostow. This is to examinewhether economic growth was "balanced" or "unbalanced."13 Balanced economic growth, as the name implies, takes place moreor less evenly among many sectors and regions. L. John, A. It is true that "unbalanced" activities are the onesthat draw the greatest attention. One requirement of this theory is the assumption that Malthus iswrong (or at any rate was wrong with respect to the eighteenth century inBritain), about the tendency of wages to be driven to subsistance level.Had most wages been driven down in this way, the surplus that created adomestic market for industrial "decencies" would not have arisen. But taken as a whole,British growth in the early industrial revolution seems more balanced. Edwin Cannan, ed. It would besimply a matter of seeking to understand an important episode in the past.But, in fact, about three quarters of the world's people live in a state ofpersistant underdevelopment and consequent mass poverty. What took place instead was a greatrationalization of farming practices, with (intensely controversial)"enclosures" of previously-common land ________ 5A. Eversley, "The Home Market and Economic Growth inEngland, 175 -178 ," in E. This brief examination suggests that both the export-driven and"demand side" models of economic growth can be shown to be the source ofBritain's eighteenth-century industrial take-off. In this environment, the gradualoverall growth of the economy leads to disproportionately rapid growth inthe size and spending power of the nascent economic "middle class." Thiswas the segment of the population which had significant reserve spendingpower after purchasing necessities, but which lacked the wealth to spend asubstantial proportion of its reserve on luxury goods and services. In the process, more money was put into the economy, particularlyinto the pockets of the upper end of the old "lower order," a group thatcould afford few if any luxuries, but which could -- and would -- buy awider range of "decencies," many of them produced by the new industries.This stage of take-off was relatively balanced growth. Smith, Adam. It was this relative optimistic, high-wave English society, whichin this view, created the driving impetus of demand for the products ofindustrialization. "The Course of Agriculture Change, 166 -176 . 7John, 238-39. Essays in Agrarian History. New York: Augustus M. Bibliography Chambers, J. The economiceffect is ________ 1 Ibid., 233-34. first kick to the English economic engine.Because of expanded sales in international markets, farm output rose asprices fell, so incomes at least held steady. Unless the extra output can find new markets, it will ineffect simply pile up in barns. The Agricultural Revolution, 175 -188 . This was aperiod of rapid agricultural progress in Britain.5 This progress was not"industrial" in the modern sense, since there was little application of newtechnology to the land. L. It isimpossible perhaps to quantify the comparison, but the reader of Wealth ofNations lives in a world where the face of economic life seems morecheerful than in Malthus, just as the upper-middle-class world of JaneAusten, though preocuppied with wealth, are less anxious than the ________ 12Adam Smith, The Wealth of Nations, Edwin Cannan, ed. 1 (New York: Augustus M.Kelly, 1968), 223-53. 9Ibid., 218. John, "The Course of Agricultural Change, 166 -176 ," inW. "The Home Market and Economic Growth in England, 175 -18 ." In E. By the end of the century,industrialization was spreading rapidly, and by 183 the spread offactories and the beginning of railroads gave Britain the character of a"newly industrializing" economy. In a country such as Britain, which still had manyregional economic divisions and partial self-sufficiencies, unbalanced"export" growth could include local exports into other parts of Britain. Unbalanced growth, incontrast, occurs explosively in certain sectors only, sectors which undergoradical transition, even while the rest of the economy lags somewhat.Eventually, the broader economy is pulled along by the "locomotive" of thesectors which experienced unbalanced growth. It does not necessarily follow that all unbalanced growth mustappear as exports. Chambers and G. In W. Inincome structure, the population was divided between a wealthy elite,mainly though not exclusively landowners, and a mass of people who livedonly slightly above the subsistance level. Development was noteven, but it was spread out among diverse areas and sectors. comparable world when seen through the eyes of Dickins. One can drive down any Americanstreet and see Toyotas and Hyundais as physical testimony of the power ofexports to fuel economic growth. But the British agricultural market was not closed. Mingey, The Agricultural Revolution(New York: Schocken Books, 1966), 54-75; for enclosure see 77ff. D. ________ 13Hartwell, 188-92. Land, Labour,and Population in the Industrial Revolution (New York: Barnes & Noble,1967), 2 7. New York: Barnes & Noble, 1967. The tendency of economic historians,however, has been to identify one or a few of these factors as critical,while relegating others to a secondary status as contributory, perhaps, butnot necessary.1 In particular, two schools of thought may be identified which putforth quite different arguments as to the driving force behind theIndustrial Revolution. With food prices droppingwhile incomes remained relatively high, a greater margin was made availablefor either non-food consumption or economic investment. The Industrial Revolution and Economic Growth. in order to make more efficient use of it.6 Combined with aprolonged spell of good weather, the result was a surge in agriculturalproduction and a moderate relative reduction in the quantity of laborneeded to provide it. The surplus will drive prices down, andwith them farm earnings. E. M. Particularlyin the Thames Valley and the eastern regions of England, comparative seriesshow that grain prices closely tracked prices on major European grainmarkets.7 From some areas was as easy to export abroad, in terms oftransportation prices, as to ship coastwise to other parts of Britain.Moreover, European agriculture tended to progress less slowly thanBritain's, so that British farm exports gained a comparative advantage. Urbanization and industrialization were thus in some degree self-accelerating. While it is true that individual export marketssometimes expanded much more rapidly than the domestic market, thesemarkets still represented a relatively small proportion of the overallindustrial market until late in the eighteenth century. While inmany individual cases downward wage pressure was almost unbearable, thetestimony of the moralists earlier, and the evidence of companies likeWedgwood, argues for a widespread tendency toward higher real wages. Indeed, the overall tone of Adam Smith's Wealth of Nations issuggestive of an environment of relative high wages, particularly when itcompared to the writings of later thinkers such as Malthus. E. Possiblereasons range from the nature of English society, to the country's naturalabundance of those basic early-industrial materials, iron and coal, to thegrowth of population at a time when agriculture techniques were improvingrapidly, freeing labor to move to industrial work in the cities, to theadvantages in export trades which Britain had due in part to its largeseafaring sector and its naval power. The modest increased prosperity that followed then permitted a broad-basedtake-off, driven by middle-class demand.________ 14John, 223-53. They simply acted indifferent periods, on different sides of the economy. This particular topic of moralizing hints at the growing presenceof a class which -- in the eyes of self-proclaimed social betters -- wasdoing what it could to live "above" itself. The familiarexample of Japan and other East Asian newly-industrialized economies seemsoutwardly to favor the export theory. New York: Schocken Books, 1966. In the early eighteenth century, Britain was by modern ________ 4Eversley, 2 9-52. It has been customary to interpret British industrial growth asunbalanced growth. Mingay, eds. He suggested that the high wage oflabor was a major cause of greater productivity and of population growth.12 These two factors would indeed lead to economic growth, and both were infact present in the Industrial Revolution. The turnpike and canal booms of theeighteenth century poured relatively disproportionate investments intothose sectors, and the same pattern was seen, with much greater rapidnessand intensity in the railway boom after 183 . An alternative view, presented for example by Eversley, might becalled "demand side" economics.8 It also starts with an environment offalling farm prices and steady wages. E. They were ineffect loss-leaders, subsidized as a prestige item that enhanced thecompany ________ 8Eversley, 2 9-52; but "demand side" is my own expression. The tendency to divertspending away from any arbitrarily group of "necessities" will grow whenmore of economic life is spent in a cash economy. Chicago: University of Chicago Press, 1976. H. There is another way at looking at the question of industrial"takeoff" that does not specifically address exports versus domesticconsumption, but which proves to be closely related. Mingey. Thus we tend to look at the Industrial Revolution inBritain not only to understand the past, but to seek guidance for thepresent. 2Ibid., 2 7. Minchinton, ed., Essays in Agrarian History, v. Jones and G. 3R. Export-drivengrowth therefore is, by its nature, unbalanced growth. 15Eversley, 2 9-52. A wide range of possible causes can be suggested for thedevelopment of the Industrial Revolution in Great Britain, in advance ofcomparable development, during roughly the period 175 -183 . reminiscent of the dictum attributed to Ford, that his workers shouldbe able to buy his product. D.; and G. One school of thought, associated with Rostow,holds that exports were the "leading sector" in Britain's growth.2 Rostow,indeed, applied the terminology and concepts of contemporary developmenteconomics, as interpreted by the export-led school, to the development ofBritain.3 An alternative view, argued recently by Eversley, but for whichroots can perhaps be found in Adam Smith, argues that ________ 1D. Was this change primarily due to exportsor to development of the domestic market? But the real driving force ofindustrialization may be more complex, for these exports depend on already-developed markets abroad, something which in most (but not all) respectswas not available to eighteenth-century Britain, and which may not beavailable to the increasing number of emerging countries seeking toaccelerate their own economic development. Theworkers in the new domestic "takeoff" economies, in this theories, weredisproportionately the customers for their own products. 11Ibid., 215. Wedgewoodbecame famous for its "high end" products, extremely fine china pieces,many sold in export to foreign nobility. The Wealth of Nations. Workers in industry might earn the same real wage as farmworkers, but they had more ways to spend it, and therefore more opportunityto spend it on the very items which their industries were producing. This, according to the export-engine theorists, provided the________ 6J. Therefore,expansion of the agricultural sector will hardly appear as "unbalanced"growth, simply because it touches so much of centemporary economic life.But agricultural expansion could still play the functional role of"unbalanced growth" if its development was disproportionate, and favorablychanged the balance of trade in the whole economy. Hartwell, R. London: Methuen & Co., 1971. Prices did go down, but incomeswere sustained by the increased production for export. Exports in the firsthalf of the century kept an agricultural expansion from choking itself off. Eighteenth-centuryBritain was still predominantly an agricultural society. These conditions might have directly favored industrialization inone respect, by freeing more of the population for other pursuits, whileproducing sufficient output to feed them. But this, as we saw earlier, is precisely what has been argued byJohn as a factor in the agricultural expansion of the earlier eighteenthcentury14-- the agricultural expansion which Eversley identifies asbuilding the foundation for the high-wave "take-off" of the latereighteenth century.15 As agricultural production increased during theearlier period, it found markets abroad, and so increased total incomeinstead of simply driving prices down. In fact, the company often madeno money off these items, and perhaps did not expect to. Is the key to economic "take-off" in an underdeveloped country tobe found in exports, or in development of a domestic market? Wesee more factories, producing a wide variety of outputs, we see expandedfarming, we see expanded investments in transportation and other"infrastructure." Canals may boom at one time, and textiles at another. Kelly, 1968. Britain wasunderdeveloped in the sense that the great bulk of the population lived onthe land, engaged in what was still largely subsistance agriculture. H. But the bulk of its actual production was low-priced, and soldin vast quantity to the emerging "decencies"-consuming classes.1 Socialevidence of the growth of a large class enjoying moderate prosperity mayperhaps be found in the tendency of contemporary moralists to criticize thedeparture of many of "the poor" from traditional simplicity.11 The moralcritics particularly remarked on the tendency of many urban workers tobedeck themselves in "luxuries" (as the moralists defined them), even atthe price of going with fewer of some necessities. However, in the absense of a pre-existing market, the more likely outcome of a production increase wouldsimply be falling prices and an agricultural depression. Hartwell, The Industrial Revolution and Economic Growth(London: Methuen & Co., 1971), 185-86. standards most certainly an "underdeveloped" country, even when makingallowance for the fact that so many goods and services which we take for granted did not yet exist. Thus, agriculturalimprovements did not stagnate by backfiring into an agriculturaldepression. Minchington, ed. Among thefamous English firms which built on this market was Wedgewood. Agriculture represents a special case. What this section of the population did buy in substantialamounts was what might be called the "decencies" -- soap, clothes ofrelatively good quality, household furnishings.9 There is considerableevidence of rapid increase in production of just such goods. Their export-drivendevelopment models call for disproprotionate investment and rapid growth incertain sectors (which happen to be the export sectors). 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