As the middle ages ended the
feudalism came to an end in Europe due to Renaissance and other
developments. Rise in towns and cities created a demand for
goods which in turn stimulated the production of manufactured
goods. But for a long time the techniques and organization for
production of goods did not undergo any significant improvement.
It was during the later half of the 18th century that the
methods of production were revolutionized.
These developments resulted in the rise of a new type of economy
called an industrial economy.
Industrial Revolution is used to describe
these developments because the changes came rapidly and they had
far reaching effects on World history.
This new system of economy emerged
in Europe around the 15th century and emerged as an important
form of economy that has continued to be economic system of most
present day countries.
Features of Capitalism
- Instruments and means of production i.e. industries are
owned by private entrepreneurs and the purpose of production
- The profit or wealth earned by the entrepreneur was used
mostly as an investment for further increasing the means of
- Workers were wage earners who did not own anything.
- Profit was the only motive for production and selling in the
- This system became a replacement of the feudal system where
goods were produced for local consumption but wealth produced
was for personal use or consumption by the owner.
- Economic life in capitalism was fast moving as owners had
incentive to increase means of production so that profits
could be increased. Unlike capitalism in feudalism the there
is no incentive to produce more and economic life is static.
The desire to produce more goods
at a cheaper price and thus increase profits gave rise to
industrial revolution. It led to the beginning of Industrial
Revolution in England in 1750. The Machine Age had
started and soon people started losing out jobs to machines. The
industrial revolution changed the way of thinking rapidly. More
inventions came up that changed people's lives.
Industrial Revolution also led to
creation of Factory System that used machines
and steam power in place of humans and animals for production.
Factory system meant that the Capitalists,
who were people who brought investment and owned the means of
production, setup factories that made finished
products. The finished products were also under ownership of
capitalists who decided where to sell. They earned profits and
invested it to further increase means of production.
Factory system turned early
capitalism into Industrial Capitalism.
Birth of Industrial Revolution -
England became the birthplace of
the industrial revolution because of the following reasons:
- It had accumulated vast capital, that could be invested to
create factories, from its overseas trade and colonial
possessions. It had emerged as the unrivaled leader in Europe
during the trade wars. The continuous supply of raw materials
can be ensured from the colonies.
- The end of feudalism and serfdom created a class of people
who were not tied to land but could take any occupation. The
big landowner in England consolidated their land holdings and
ousted the small landowners. This created no shortage of labor
- A stable system of government was created in colonies and
this was under the influence of the capitalist class. Thus
there was no problem of government interference in economy.
- England had plenty of sources of Iron and coal which were
needed for the industries.
- System of shipping was developed by England which made it a
powerful force in Europe. These could be used for transporting
finished products in colonies which would also become
Other European economies saw unfavorable conditions as natural
resources were not available or capital or lack of political
unity. However soon these to started developing and competed
with England for markets overseas.
Textile and Transport Revolution
Indian calico cloth made in
Calicut , Dacca muslin in Dhaka and Kashmir shawl from Kashmir
were very popular in the English market. The English traders
then imported raw materials and made the textile products in
England for higher profits. The series of inventions further
boosted the growth of textile industries in England.
- Powerloom - Speed up spinning
- Cotton gin - Speed up cleaning of cotton
- Steam engine - easy transportation of goods
- Blast furnace - cheaper and easier way of producing steel.
in England when Railways were started to transport coal from
mines to ports and then also from ports to factories. Roads
called mcadamised roads were built to facilitate smoother
transport by land and since water transport was easier than land
transport canals were built.
Pre industrial revolution
The revolution in agriculture started before the
industrial revolution as the demand for more food
production was created. Mechanization of agriculture was
done as the machines were used to reap and thresh. Steel
plough and harrow were used for cultivating cash crops
and raw materials for industries.
land was allowed to lie
fallow every third year to regain its nutrients. However
this wasn't possible after industrial revolution as demand
from agriculture increased. Crop rotation became a popular
technique to achieve balance.
Land Consolidation movement was the "Enclosure
. In this the big landowners consolidated
their land holdings and evicted the small peasants. They
also usurped the common pastures and grazing grounds and the
small grazers and peasants had to move to cities and towns.
They did whatever work was available at the wage offered.
The industrialists benefited from this as there was cheap
and easily available labor.
Peak of Industrial Revolution
Industrial revolution peaked
the factory output of England. It went from a net importer to
exporter. Its imports to India and other nations improved. The
industries of other nations of Europe couldn't compete with
industrial goods of England. This create a chain of events
that led to a race for colonies.
As industrialization spread to other
countries production of goods started increasing. But as
England was far ahead of others in the industrial revolution,
its goods were far better and cheaper than their own goods.
The governments were forced to impose high import duty on
goods which made them noncompetitive over domestic goods. As
every country started imposing tariff barriers to protect
local industry, The need to explore and find new markets was
felt and this fueled the race for colonies.
Race for raw materials
As countries started industrialization they
wanted more and more raw materials to fuel their growth. They
captured colonies and exploited them for their own benefit.
The economy of colony was subordinated and this phenomenon was
Imperialism created friction between
countries as they fought over colonies and dominance over a
region. They created exclusive rights to trade with them and
ruthlessly exploited the local population. Countries that
industrialized late wanted to snatch colonies from developed
nations. The countries that had colonies wanted more.
Consequences of the Industrial
Earlier people lived in
villages and village life was self sufficient. But with
industrialization newer towns and cities emerged. They became
the centers of political and administrative activity. They
were more important as centers of industry.
People lost their traditional occupations and migrated to
cities. The social bonds and constraints of village life were
broken. The conditions of towns and cities deteriorated which
created consequences for people.
However the change industrial revolution brought was creating
an international consciousness amongst the
people as trade was carried out between countries and things
that happened in one part affected the other.
Laissez faire - Leave us Alone doctrine
The capitalists had laissez faire
as a religion, it meant leave us alone. The governments should
not interfere in industry and capitalists alone should be
responsible for managing the affairs of industry.
Industrial revolution created miserable conditions for workers
which led to reforms in industry and increased state
interventions. These created the current system of labor
reforms prevalent even today.
- Slums were created around industries as workers had to
live nearby and large number of workers created congestion
and disease. After the epidemic outbreaks government
reformed housing policy for workers.
- Women and children provided cheap labor and so were
employed for long hours. Soon factory reforms were passed to
regulate work hours and ban child labor.
- Unions couldn't be formed and right to strike didn't
exist. However today in most countries its a legal right.
- Employers could fire workers anytime and workers had no
security or other benfits. Till a long time they weren't
given the vote. However in middle of 18th century "Chartist
movement" began and soon by 1929 all
adults got the right to vote.
Due to ill effects of Capitalism a new social order
emerged called Socialism. This was completely
opposed to capitalism and had a different social order where
workers were owners of the means of production.