1. 1 Requirements for the industrial Revolution The Industrial Revolution in England

2. 2 Requirements for Industrial Revolution 1. Savings or surplus (S) require: 2. Savings have to turn into productive investment: a. Capitalist = Businessman. A market is needed, so we need: * Reliable Demand (10)Reliable Demand * Transport and Communication Revolution b. Capitalist  Businessman. Besides the market, we need: * Credit Revolution (bank development…) * Legal – corporative revolution (stockmarket, joint stock companies, bankruptcy…) a. Agricultural revolutionAgricultural revolution b. Commercial revolution and/or Economic Development: Y = C + S  Y = I / KPR S  I Demographic revolutionDemographic revolution )

3. 3 3. Capital-product relationship is labour applied to physical capital We need: a. Technology - Previous Scientific Revolution (XVII th century) - Applicability of inventions for the sake of profit b. Labour - Quality * Educational Revolution * Mentality Revolution (bourgeois revolution, women liberation…) - Quantity * Agricultural Revolution * Demographic Revolution Requirements for Industrial Revolution

4. 4 Demographic Indicators Rate of reproduction= 2,1 or 2,2 Gross birth rate (N) = n/P x 1000 Mortality Rate (M) = m/P x 1000 Rate natural increase= n – m Life Expectancy (e0) Population pyramids Human Development Index

5. 5 World map of Human life expectancy, 2007 http://www.gamedesign.jp/flash/worldmap/worldmap.html

6. 6 Population pyramid: developing country

7. 7 Population pyramid

8. 8 Human Development Index 2006 ██ 0.950 and over ██ 0.900-0.949 ██ 0.850-0.899 ██ 0.800-0.849 ██ 0.750-0.799 ██ 0.700-0.749 ██ 0.650-0.699 ██ 0.600-0.649 ██ 0.550-0.599 ██ 0.500-0.549 ██ 0.450-0.499 ██ 0.400-0.449 ██ 0.350-0.399 ██ 0.300-0.349 ██ under 0.300 ██ n/a

9. 9 Value theory in David Ricardo THEORETICAL PROBLEM: In 1815, corn price increased in England and a Parliamentary Commision tried to determine if it was due to the high rents demanded by landowners RICARDIAN SOLUTION: CORN MODEL. Assumptions: Corn is the only commodity in the economy Corn value depends on the cost of production in the land with worst natural conditions Different lands have different fertilities Diminishing marginal returns in agriculture Classical Economics

10. 10 Population increases 100 U 1 ALand K/L 80 U 90 U 2 100 U 1 BALand K/L Population increases 60 U70 U 80 U 3 70U 80 U 9O U 2 80 U 90 U 100 U 1 CBALand K/L Population increases 40 U50 U60 U 70 U 4 50 U60 U 70 U 80 U 3 60 U 70 U 80 U 90 U 2 70U 80 U 90 U 100U 1 DCBA Land K/L TP and MgP L = 100 U R = 0 U Price increases TP = 280 U MgP L = 90 U R = 10 U Price increases TP = 520 U MgP L = 80 U R = 40 U Price increases TP = 800 U Mg L P = 70 U R = 100 U

11. 11 Putting-Out system 1884, Van Gogh1883, Van GoghJan Gossaert, 1530 Las Hilanderas, Diego Velázquez (1599-1660) Santa Isabel’s tapestry factory workshop

12. 12 Papin Newcomen

13. 13 Model of the spinning jenny (Hargreaves) in a museum in Wuppertal, Germany SPINNER Flying shuttle, Kay WEAVER