The Industrial Revolution A cotton mill in Lancashire, England, ca Dr. Gomis-Porqueras ECO 680

Industrial Revolution ( in England) was heralded by the introduction of machines Machines –increased demand for inputs –increased supply of output –Business needed free markets to more easily obtain inputs and sell outputs Industrial Revolution gave rise to the market economy, the policy of laissez faire Historical backdrop

–Industrial revolution was based on the principle of the division of labor, –Industrial Revolution Led to the decline of cottage industries (production based in the home) Reduced the demand for skilled craftsman Introduced a new means of organizing production: the factory system Based on a new energy sources: fossil fuels

The Industrial Revolution: Characteristics New energy sources –Steam –Electricity –Oil New forms of organization –The factory system –The joint stock investment bank New means of transportation –Steamships –Railroads –Automobiles New industries –Coal –Iron –Steel –Chemicals “The Triumph of Steam and Electricity”

Why did the Industrial Revolution begin in Great Britain? Rise of science Increasing productivity in agriculture Expanding population Merchant tradition; entrepreneurial spirit; capitalist philosophy

Why did the Industrial Revolution begin in Great Britain? Geography –Coal deposits –Navigable rivers –Natural harbors –Island location Global trading State-supported economic development Constitutionalism; Locke’s philosophy (property!)

Consequences of the Industrial Revolution Urbanization –Overcrowding –Crime –Sanitation Population growth Social change: new social classes –Middle class (bourgeoisie) –Urban working class (proletariat) Tenements in Manchester, England, ca.1850

Consequences of the Industrial Revolution Rise in overall standard of living Split between producer and consumer Era saw rise of classical liberal political and economic thought

Post-industrial society Characteristics of the post-industrial society: –Rise of the service sector –Decline of agricultural-based economy –Predominance of “information-based” work –Knowledge now key factor in the economy, outstripping physical plant / manufacturing