LEARNING OBJECTIVE Understanding economics as it applies to the industrial revolution
INDUSTRIALIZATION Developed 1 st in England (already discussed) Continued throughout Europe, Russia, and the U.S. 1840’s until early 1900’s Eventually spread to Japan (China has industrialized areas) Not all countries are industrialized, but have sections of industrialization (Think Rostow’s Model) Industrial Revolution was: “a series of improvements in industrial technology that transformed the process of manufacturing goods” (Rubenstein, p. 393).
INDUSTRIALIZATION CONT. Industrial Revolution actually includes: New social, economic, and political inventions, not just machinery ones Changes were gradual and ideas diffused over multiple decades Improved processes in most industries, some significant ones: Iron: was always useful, but now ovens could be heated by coal and used more frequently Coal: Wood was scarce and costly, was able to replace it Transportation: 1 st canals then railroads allowed factories to attract large number of workers and then move finished goods Textiles: Invented machines to untangle cotton prior to spinning Chemicals: Dye cloth Food Processing: Canning in glass bottles; helpful for feeding factory
ECONOMICS SNAPSHOT Price Equilibrium Where supply (companies) and demand (consumer) meet
ECONOMIC PERSPECTIVE Production: “creates an object that is more valuable than the sum of the raw materials going into it This sum is called “value added” Example: $2.00 in wood becomes a $5.00 chair Value is added during production process Mass production: created more goods in a rapid and efficient manner Many items were outside of consumer price point Were not willing to pay a high price for cotton Decreasing the cost of cotton production increased the consumer demand (equilibrium price was met) Producer wanted to increase output Still made profit and wanted to maximize profit Just ONE example of goods and increase in both production & desire
SITE AND SITUATION (REMEMBER US?) Understanding site and situation is VITAL to understanding where industrialization occurs Situation factors: involve transporting materials to and from a factory. Situation factors are MAN made. A firm seeks a location that minimizes the cost of transporting inputs to the factor and finished goods to the consumer Site: Result from the unique characteristics of a location (will be there without man, would have been there BEFORE man) Think Natural: iron ore, water, rivers, bays, harbors, trees, wind, currents (HUB has a quiz I made for you to practice)
RESOURCES Industrialization occurred in areas with RESOURCES Typically included most or all of the following: Labor (Humans), coal, iron, and water (power or transportation) Transportation was/is vital as well Initially water transport most important Progressed to railroad transportation Industrialization did not always occur in a major city Just somewhere in the country
CAPITAL AS A RESOURCE Money/Capital is a resource You need money to build Europe (especially U.K.) had money from its colonies which helped finance the industrial revolution.
MONEY MAKES MONEY Industrialized countries had money before industrialization Sold goods to colonies & money came back to them Money helps to pay for innovation & inventions During industrialization able to sell MORE goods Make more money from colonies Further spurs more innovation & inventions Exploited countries don’t have money to industrialize
OH NO, WE NEED MORE RESOURCES Jump ahead 50 years…. Industrialized areas can run out of resources OR realize they need resources they don’t have Oil Get it from colonies or territorial possessions Better transportation is vital to this development Areas with these resources don’t have the money to develop it themselves
WALLENSTEIN'S WORLD SYSTEM THEORY This is a theory and a theorist; which are really important. Wallerstein’s theory is a bit different than others; it’s Macro and argues that countries stay where they are at. Globalization plays a key role.
WORLD SYSTEM’S THEORY 1)The world economy has one market & a global division of labor Which means the world focuses on capitalism and the goal is achieving profit. Which may means finding the cheapest location for resources or production.
WORLD SYSTEM’S THEORY 2) Although the world economy has multiple states, almost everything takes place within the context of the world economy. Which means colonialism set-up a system with the financial feedback loop previous discussed.
WORLD SYSTEM’S THEORY 3) The world economy has a three-tier structure Which means that different countries are part of different processes. Core, semi- periphery, or periphery. Core has higher processes that require higher education.
TIMELINE Colonization 1440’s onward Industrialization 1840’s onward Your entire chapter 12 covers historical information on industrializing areas that you’re responsible for that’s not discussed Transportation increases (trains, ships, cars) 1880’s onward Where resources gathered increases
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