THE INDUSTRIAL REVOLUTION EMERGENCE OF CAPITALISM HST 103 THE WEST AND THE WORLD

Focus Questions Why was Great Britain the first state to have an Industrial Revolution? What were the basic features of the new industrial system created by the Industrial Revolution? Why was Great Britain the first state to have an Industrial Revolution? What were the basic features of the new industrial system created by the Industrial Revolution? What role did government and trade unions play in the industrial development of the Western world? Who helped the workers the most? What role did government and trade unions play in the industrial development of the Western world? Who helped the workers the most?

Before the Industrial Revolution Cottage industry Production at home, but under the social conditions of capitalism

German hand-loom weaver

ECONOMIC TRANSFORMATION Agricultural Revolution of 18 th Century Introduction of New Crops Introduction of New Crops  Legumes, turnips, clover, potatoes  Scientific Livestock Breeding  Enclosure System

ECONOMIC TRANSFORMATION Rapid Population Growth in 18 th Century Rapid Population Growth in 18 th Century :110 million to 190 million :110 million to 190 million Better health practices Better health practices –Smallpox Inoculation –Sanitation

INDUSTRIAL REVOLUTION Increased Demand for goods Increased Demand for goods Investment Capital Investment Capital Cheap Labor Cheap Labor Inventions Inventions –Flying Shuttle –Cotton Gin –Spinning Jenny –Power Loom –Steam Engine

Role of Technology Cotton and the spinning jenny Cotton and the spinning jenny Cotton gin (Eli Whitney, 1793 ) Cotton gin (Eli Whitney, 1793 )

The Industrial Revolution Steam power Thomas Newcomen James Watt

Cotton Production Factory System

INDUSTRIAL REVOLUTION Some Statistics Some Statistics –1760: Britain Imports 2.5 million pounds of raw cotton; mostly processed by hand in cottage system –1787: Britain Imports 22 million pounds of raw cotton; mostly processed by machines and water power –1840: Britain Imports 366 million tons; mostly processed in factories by steam power

INDUSTRIAL REVOLUTION Improved Transportation Improved Transportation –Canals –Railroads Iron Production Iron Production Factory System Factory System

Role of technology: Iron and steam Iron smelting – coke Iron smelting – coke 1780s – high quality iron (ships, weapons, rails and nails) 1780s – high quality iron (ships, weapons, rails and nails) 1782 – rotary engine 1782 – rotary engine

Role of Technology: railroad Rocket Rocket Liverpool to Manchester line (1830) Liverpool to Manchester line (1830) 20 years: 50 mph, 2,000 miles of tracks 20 years: 50 mph, 2,000 miles of tracks effects effects

Role of technology: transportation Revolution

INDUSTRIAL REVOLUTION More Statistics More Statistics –1800: Steam engines generating 10,000 horsepower –1850: 500,000 horsepower stationary engines; 790,000 horsepower in mobile engines

SPREAD OF INDUSTRIAL REVOLUTION

Great Britain Great Britain Northern Germany Northern Germany Netherlands Netherlands Northeastern France Northeastern France

SPREAD OF INDUSTRIAL REVOLUTION

Social impacts: factories and their effects

Urbanization Significant Population Growth Significant Population Growth Move to the cities--shift of orientation from countryside to city. Move to the cities--shift of orientation from countryside to city. Housing, public health, crime, sanitation Housing, public health, crime, sanitation Poor working conditions Poor working conditions Child labor; female labor Child labor; female labor

Social Impacts: new social classes Working class Working class Child and female labor Child and female labor Working conditions Working conditions

Class Consciousness Middle Class—bourgeoisie Middle Class—bourgeoisie Working Class—proletariat Working Class—proletariat Peasant Peasant Landed Gentry—old aristocracy Landed Gentry—old aristocracy

Social and political impacts: middle, entrepreneurial and business classes Concept of “middle class” Concept of “middle class” New business aristocracy New business aristocracy

The Industrial Revolution— from order to classes Reciprocal obligation? Thinning of social bonds Conflicting interests Where does the bourgeoisie identify their interests?

Social and political impacts: reforms, regulations and labor organizations Cotton factories Regulation Act (1819) Cotton factories Regulation Act (1819) MP Sadler and the Factory Act (1833) MP Sadler and the Factory Act (1833) Ashley and the Mines Act (1842) Ashley and the Mines Act (1842) Unions, 1824 Unions, 1824 Grand National Consolidated Trade Unions, 1834 Grand National Consolidated Trade Unions, 1834

The Emergence of Capitalism in Western Europe The source of wealth in feudal societies is the land, agriculture. In Europe, as trade became more endemic, as itinerant traders morphed into respected merchants, and permanent towns replaced occasional fairs, trade enabled the acquisition of a more ‘liquid’ form of wealth— money. Early capitalism, also called merchant capitalism or mercantilism, challenged the hegemony of the landed aristocracy.

Classical Capitalism As capitalism ‘matured,’ the source of wealth shifted to industry; In classical capitalism, instead of ‘adding value’ by merely moving a commodity in time and space, value is added in a production process in which resources are transformed into products— goods and services—ostensibly more valuable to consumers than the cost of the factors of production employed to produce them. The value added, when realized, is profit.

ECONOMIC LIBERALISM Adam Smith, The Wealth of Nations, 1776 Adam Smith, The Wealth of Nations, 1776 –Laissez-faire economics –“Hidden hand” Thomas Malthus ( ), Essay on the Principles of Population Thomas Malthus ( ), Essay on the Principles of Population –Geometric Growth of Population –Arithmetic Growth of Food Supply David Ricardo ( ), Principles of Political Economy David Ricardo ( ), Principles of Political Economy –“Iron Law of Wages”

Adam Smith The Wealth of Nations, 1776 Economic Liberalism laissez faire The Hidden Hand Theory of Progress Role of government limited to national defense, domestic justice and public works

“Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society….” Adam Smith “…he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part his intention.” Adam Smith The Hidden Hand of the laissez-faire economy

Thomas Malthus “Population, when unchecked, increases in a geometrical ratio. Subsistence only increases in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first power in comparison of the second.” Thomas Malthus Who is mainly responsible for poverty?

David Ricardo David Ricardo ( ), Principles of Political Economy “Iron Law of Wages”

Socialism Utopian Socialism Utopian Socialism –Henri de Saint-Simon ( ) –Charles Fourier ( ) –Robert Owen ( ) Scientific Socialism Scientific Socialism –Karl Marx ( )  Communist Manifesto (1848)  Das Kapital –Friedrich Engels ( )

( ) Karl Marx ( ) not only anticipated the ability of capitalism to achieve unprecedented rates of economic growth but also predicted the exacerbation of income inequality: a larger pie but more disparate slices

Marx and Alienated Labor (Labour) “The devaluation of the human world increases in direct relation with the increase in value of the world of things. Labour does not only create goods; it also produces itself and the worker as a commodity, and in the same proportion as it produces goods. “The devaluation of the human world increases in direct relation with the increase in value of the world of things. Labour does not only create goods; it also produces itself and the worker as a commodity, and in the same proportion as it produces goods Karl Marx ( )

Communism Economics as the Foundation Economics as the Foundation Mode of Production Mode of Production “The history of all hitherto existing society is the history of class struggle.” “The history of all hitherto existing society is the history of class struggle.” Theory of “surplus value.” Theory of “surplus value.” Dialectical Materialism Dialectical Materialism Mode of Production and material conditions drive ideas Mode of Production and material conditions drive ideas Violent Revolution as inevitable Violent Revolution as inevitable Classless Society -- bourgeois state will “wither away.” Classless Society -- bourgeois state will “wither away.”

Political and Economic Liberalism The Inherent Tension or Heilbroner’s Two Realms “…capitalism is unique in history in having not one but two centers of authority, one built around the ‘economic’ prerogatives of the business system, the other around the ‘political’ prerogatives of the governmental system.”

Political and Economic Liberalism The Inherent Tension or Heilbroner’s Two Realms “…there is an inherent pulling apart in a social order composed of two realms---one built on the verticality of wealth, the other on the horizontality of democracy.” Wealth & Class Capitalism Democracy Equality

Declaration of Rights of Man & Citizen, Public relief is a sacred debt. Society owes maintenance to unfortunate citizens, either procuring work for them or in providing the means of existence for those who are unable to labor. 22. Education is needed by all. Society ought to favor with all its power the advancement of the public reason and to put education at the door of every citizen. 34. There is oppression against the social body when a single one of its members is oppressed: there is oppression against each member when the social body is oppressed. 35. When the government violates the rights of the people, insurrection is for the people and for each portion of the people the most sacred of rights and the most indispensable of duties.

Political and Economic Liberalism The Inherent Tension or Heilbroner’s Two Realms “…there is an inherent pulling apart in a social order composed of two realms---one built on the verticality of wealth, the other on the horizontality of democracy.” Wealth & Class Capitalism Democracy Equality

Conclusions and Consequences: New kind of economy Continuous, rapid, self-sustaining economic growth came to be seen as fundamental characteristic of new economy Continuous, rapid, self-sustaining economic growth came to be seen as fundamental characteristic of new economy