Importance of the Industrial Revolution - Literature review Example

RUNNING HEAD: THE INDUSTRIAL REVOLUTION The Industrial Revolution Name Institution Tutor Date Introduction The industrial revolution can be described as one of the landmark occurrences in human history. The revolution, which first emerged in Britain, was characterized by the shift from dependence on agricultural production to the dependence of manufacturing industry. According to Hartwell (1971, p8) before the industrial revolution, most of population in British lived under poor conditions, with a minority enjoying a luxurious lifestyle from the surplus produced from land and taxation. Nevertheless, the advent of the industrial revolution instigated various transformations. The industrial revolution is still a subject of intense debate amongst scholars. Several questions have been raised for instance; why did the revolution begin in Britain, was the revolution a dramatic or a continuous occurrence and many more questions. This particular paper therefore seeks to examine the main forces which created the industrial revolution in Britain in the eighteenth and nineteenth centuries. The scope of the paper will also be grounded on evaluating the ways in which the industrial revolution altered the British economy. Kenwood and Lougheed (2002, p10) reveal that one of the major forces that influenced the industrial revolution was innovation. According Kenwood, and Lougheed, (2002, p10) before 1870, the major innovation industries were the textile industry essentially iron and cotton, whereby stem acted as the source of power. After 1870, the attention was directed towards technical change. More emphasis was now employed on the production of machine tools, steel; products from electrical engineering and chemicals. Electricity then emerged as the new source of energy while internal combustion was used for transport. The implication of all these innovations was a rapid growth within the manufacturing industry for instance; the production of a variety of manufactured good, electrical products and the invention of new means of transport. The two main views that were propagated in order to explain the industrial revolution also provided the basis of forces that influenced this particular revolution. The traditional /classical view propagated by Thomas Ashton and Landes, provides an insight into the forces that influenced the industrial revolution. According to Ashton innovation was not the only force that spearheaded the industrial revolution. Rather, Ashton argues that a ‘’wave of gadgets ‘’ which swept over Britain’’ greatly influenced the emergence of the industrial revolution. The wave of gadgets includes; finance, trade, agriculture, manufacture. According to Ashton (1971, p42) it is the wave of gadgets that spearheaded the suddenness in the occurrence of the industrial revolution in Britain. On the contrary, the classical view by Ashton and Landes was challenged by a recent school of thought proposed by Crafts and Harley. According to Crafts and Harley, the industrial revolution was basically a narrow occurrence that only emerged from technical change in a few industries. The few industries were iron and cotton. The new school of thought proposed by Crafts and Harley therefore indicate that the forces behind the industrial revolution were not derived from the ‘’ wave of gadgets’’ as proposed by the classical view, but rather from just a few industrial sectors (Temin, 1995, p1). Another force that instigated the industrial revolution was the changing structure of British agriculture. O'Rourke and Williamson (1999, p87) reveals that before the industrial revolution, the trend of agricultural production was estimated to move in a steady or advanced level. Despite of the agrarian depression the agricultural sector recovered steadily. Consequently, as argued by the new growth theorists, the expansion of agricultural production was a dynamic force that spearheaded the expansion of the manufacturing industry. This is because; Britain was able to transfer resources from agriculture to the industry (O’Rourke &Williamson, 1999, p88). Mokyr, (1985, p21) also supports the notion that the agrarian revolution was a dominant force that influenced the emergence of the industrial revolution in Britain. Mokyr, (1985,p21) highlights that the rising productivity in agriculture did not only supply the manufacturing industry with raw material to be processed but also it supplied labor . In addition, the enclosure movement after 1760 was perceived to be instrumental in the process of ‘’ labour release. Mokyr, (1985, p21) asserts that due to the adaption of the enclosure system in the agricultural sector coupled with the accelerating growth and a decline in the need for labour in the agricultural sector. There was a significant reshuffling of the labour force towards the industry. Thus, it can be argued that as a result of this reshuffle of labour, the industrial revolution emerged in order to meet the needs of the labour demand. Mokyr, (1985, p21) therefore argues that the latter could not have occurred without the former. A study conducted by Allen (2010,p2), to examine how commerce created the industrial revolution and modern economic growth revealed that the structure of the British economy was another influential force that spearheaded the industrial revolution. Allen (2006, p2) highlights that; labor was predominantly expensive while energy was particularly cheap in Britain. The structure of the British economy stood out as a high wage and cheap energy economy. As a result, investors in Britain were swayed to invest on machines that substituted capital and energy for labor. In his study Allen (2010, p2) argues that Britain was a high wage economy as compared to its competitors as indicated by figure 1.0 below, which highlights the history of the wages of leading Asian and European cities from the middle ages up to the industrial revolution period. The graph indicates that the wages in London continued to rise as compared to other European and Asian cities. From the later years of the 17th century, London recorded the highest rate in terms of wages. Allen (2010, p2) highlights that the high wage price structure in Britain prompted the industrial revolution in sense that Britain established an exceptional arrangement of wage and price, in turn the price structure influenced more technological inventions that substituted energy and capital for labor. Consequently, more people were forced to venture into literacy, numeracy and craft which was vital for the industrial revolution. According to the resource based view (RBV), in order to attain a competitive advantage, a firms or even in this context a nation should utilize the bundle of resources that it or she has, in order sustain its growth. The RBV recommends for the identification of the key resources that can assist in enhancing growth. It can be argued that prior to the industrial revolution; Britain identified its key resources to act as forces that were effective in influencing the industrial revolution. Lee (000, p41), highlights that Great Britain had readily available resources that would be used in propelling the industrial revolution. Some of the key resources were iron and coal. These resources were basically key ingredients that were required in the manufacturing industry. Lee (000, p41), further reveals that by the year 1700, Britain mined an ever increasing amount of coal that was about 3 million tons each year. By 1845 approximately 44 million tons of coal was mined. The existence of huge deposits of coal enabled the country to develop its industrial base with adequate fuel and widespread expansion. Furthermore, during the 17th centaury coal as a key resource was further advanced by the discovery of the production of coke from coal. Coke was useful in the smelting of iron which was also another valuable resource from the industrial revolution (Lee (000, p41). What is evident is that Britain utilized the Resources Based View in order to propel the industrial revolution. This is because she identified her key resources such as; coal, iron and coke in order advance her manufacturing capability and thus enhancing a competitive advantage during the industrial revolution. Ways in Which the Industrial Revolution Altered the British Economy The industrial revolution transformed the British economy in a variety ways. One of the ways in which the industrial revolution transformed the British economy is through advancing or enhancing economic growth. Crafts, (1987, p1) highlights that the British economy experienced a take into what he refers as a ‘’self-sustained economic growth. The period between; 1783-1802 witnessed a sharp increase in the countries resources which were allocated to investment. Due to increased investment, leading sectors such as iron and cotton emerged which influenced immense growth on the economy. Crafts, (1987, p2) further reveals that during the classical era of the industrial revolution from 1780 to 1801 there was a steady increase in the Gross Domestic Product from 1.3 to 2.0 between 1901-1831 as indicated by the table below. The table shows a steady increase of the GDP of Britain during the 18th and the 19th centaury. Industrial Output Whole Economy GDP 1700-1760 0.7 0.7 1760-1780 1.5 0.7 1780-1801 2.0 1.3 1801-1831 3.0 2.0 1831-1860 3.3 2.5 An increase in the level of foreign trade was another alteration that the industrial revolution brought to the British society. Oxbridge, (2012, p1) highlight that foreign trade is one of the strategies through which an economy is able to advance its industrial state. Exporting products that are plentiful within the home country and importing products that are scarce is a major way of enhancing foreign trade. During the industrial revolution, the stake of foreign trade in Britain experienced an increase from 12% in the middle years of the 18th centaury to 18% in the later years of the industrial revolution. During the initial phases of the revolution, the main British exports were manufactured goods such as woollen products which gave approximately 69% of the manufactured products for export. As the industrial revolution progressed, the share of exports provided by woollen products reduced, while iron and cotton products become more significant, providing a share of 12% and 51% respectively. In the context of imports, food products and raw material were the most significant. The imports were mainly derived from British colonies and contained products like; tea, tobacco, raw cotton and coffee. Most of the tropical products imported from the British colonies were later on re-exported to other European nations. The industrial revolution also resulted to a growth in the demand for British products. Although prior to the industrial revolution, products from Britain were in high demand for instance agricultural products and mineral resources. The emergence of the industrial revolution further intensified the demand for British commodities. As argued by the economics perspective an increase in demand should result to an increase in the level of production. More British industries reverted to increasing their level of production in order to meet the increasing demand of products both inside the country and outside (Oxbridge, 2012, p). Kenwood and Lougheed (2002, p10) highlight that; the industrial revolution brought about technical progress through the production of new and cheaper products. Increased innovation and the production of cheaper good implied that more avenues for trade were expanded. Britain therefore increased the level of its export of manufactured goods to other countries. In addition the industrial revolution also improved the opportunity of trading in raw materials (Kenwood and Lougheed, 2002, p11). The industrial revolution also resulted to the emergence of entrepreneurship in Britain. More (2000, p19) highlights that during the industrial revolution, entrepreneurship was perceived as being able to take advantage of the capitalist system and taking opportunities in order to make profits. Profit in this context was not just perceived as return on investment, but rather it involved making returns that were higher than normal. Consequently, in order to be entrepreneurs, innovation was quite necessary. Many business people come up with new business ideas for instance venturing into new markets, creation of new sources raw material supply and new products brands. More (2000, p19) highlights that it was the rise of innovation that led to the rise of entrepreneurship. Conclusion The above discussion has presented various forces that influenced the industrial revolution in Britain during the 17th and the 18th centaury. One of the factors highlighted was innovation which was argued in the context of the traditional view and the new school of thought. Other aspects were the agrarian revolution, the structure of the British economy and the adaption of the Resource Based View. The paper also presented the economic alterations which were brought about by the industrial revolution. These include foreign trade, growth in the demand of British products, economic growth and entrepreneurship. In conclusion it stated that the Industrial revolution was one of the most significant and yet controversial revolutions that have taken in the world and British economy. References Ashton, T. S. (1971). The Industrial Revolution. Oxford: Oxford University Press. P42 Allen, R. (2010). Why was the Industrial Revolution British? The Kuznets Lecture: Yale University. Oxford University, p 1-4. Crafts, N. (1987). The Industrial Revolution: Economic Growth in Britain, 1700-1860. Refresh. Hartwell, M.(1971). The Industrial Revolution and economic growth. Methuen. Kenwood, A., and Lougheed, A.L.,2002, The Growth of the International Economy 1820-2000, Taylor and Francis Lee , W. (2009). The Industrial Revolution . Greenwood Press. Mokyr, J. (1985). The Economics of the Industrial Revolution. Government Institutes. O'Rourke, Kevin H. & Williamson, Jeffrey G.(1999 ) . 'Convergence in History', in: Globalization and history: the evolution of a nineteenth-century Atlantic economy. MIT Press. Temin, P, (1995). Two Views of the British Industrial Revolution. Massachusetts Institute of Technology, p1. More, C.(2000). Understanding the Industrial Revolution. Rutledge. P19. Oxbridge, N,.(2012). Growth of Overseas Trade During The Industrial Revolution. Read More