The Industrial Revolution involves four phenomena: regional specialization, the emergence of new industries, an increase in the scale of production, and a dramatic increase in the rate of technological innovation. The fourth of these is caused in large part by the other three. It is also the most important in the view of most historians and will be my primary focus as well. Any attempt to describe the Industrial Revolution without devoting considerable attention to the question of technological innovation would be highly suspect.
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The Industrial Revolution is so important precisely because it is the starting point of a new era in which economic growth has largely been generated by persistent technological innovation. While the eighteenth century was not characterized by high growth rates in aggregate output (see below), the period saw the emergence of a new environment highly conducive to technological change, which would come to dominate the whole economy in succeeding centuries.
Chandler (1994) has described this as a transformation from an economy where improvements in productivity are mostly generated by expansion in trade, the spreading of fixed costs, and increasing division of labor to an economy where the engine of growth is continuous technological change (which he terms Schumpeterian growth).
While technological change has occurred throughout history, the Industrial Revolution created for the first time an environment in which it could occur with such frequency as to be the major cause of economic growth. Because of the special importance of this great transformation, my analysis extends not only to the more direct effects of improved transport on technology but also to the indirect effects through regional specialization, the emergence of new industries, and increasing scale of production (Montagna 2006).
The other three factors are necessary for a balanced view of the Industrial Revolution for they are quite important in their own right, as well as being causes of technological innovation. Regional specialization has long been recognized as an integral part of the history of England during this period, and many scholars have focused on such questions as the reasons for the increasing concentration of the wool industry (Chandler 43).
The emergence of new industries was another cause of the Industrial Revolution. The fact that the English Industrial Revolution was characterized by the increasing scale of operation of a large number of productive units is commonly recognized. As with technological change, the Industrial Revolution marks the beginning of the modern era; while isolated factories had existed before, it is in late eighteenth-century England that the factory begins to emerge as a common form of industrial organization.
The coincidence of dramatic changes in the rate of technological innovation and in industrial organization has unfortunately led many scholars to attribute the latter to the former (Chandler 54). “The improved yield of the agricultural sector can be attributed to the enclosure movement and to improved techniques and practices developed during this period. A common practice in early agriculture was to allow the land to lie fallow after it had been exhausted through cultivation” (Montagna 2006).
As new technology was developed in the Industrial Revolution, it made factory organization seem more attractive and hastened the adoption of this organizational form. Nevertheless, it is very important to recognize that many eighteenth-century “factories” used old cottage technology exclusively, and to realize especially that this was certainly the case for the earliest workshops which predated the new power technology. First, this forces one to look for other causes of the rise of the factory.
Second, it allows workshops to be treated as a source of technological innovation. Rather than factories being a response to new technology, this new technology is to some degree a result of the creation of a new method of organization suited to new technology (Montagna 2006).
In addition, new political and social changes opened new opportunities for industries to compete on the market. Monopolies and syndicates forced the evolution creating new methods of production and supply, labor relations and capital accumulation. “ Prior to industrialization in England, land was the primary source of wealth. The landed aristocracy held enormous powers the feudal system. However, a new source of great wealth grew from the Industrial Revolution, that which was derived from the ownership of factories and machinery” (Montagna 2006).
Lower transport costs mean wider markets which allow firms to operate on a larger scale. Even under the conditions of monopolistic competition which characterized most English industry of the time, it is a straightforward result that market widening will cause firms to face a more elastic demand curve and induce them to expand production (King and Timmings 43). The narrowness of the internal market made mass production impossible.
For instance, in France, communities that were more than eight kilometers from navigable water were effectively cut off from access to markets (King and Timmings 65). There are examples of very large putting-out firms throughout western Europe employing thousands of workers in their own homes.
Thus, size of market does not appear to be the binding constraint preventing firms from moving toward workshop production. Clearly, a market large enough to absorb the output of a small workshop is necessary before this form of production can emerge. However, it is in no way a sufficient condition, and one must look to other causal links for a more powerful explanation of the emergence of workshops in the eighteenth century. In some product lines, market widening may have been of crucial importance during this period, while in others the necessary market had perhaps existed for some time (Yorke 82).
Along with increasing regional specialization comes increasing division of labor. As Smith noted, the production of large amounts of a particular product in a narrow geographical area allows for labor to become increasingly specialized (King and Timmings 61).
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Division of labor increased productivity and demanded new methods of production. Workers must have had a comparative advantage in one task. Moreover, some of the gains from practice would have been lost had the worker performed a variety of tasks (Weightman 53). Training costs must also have been lower where each worker mastered only one task. The fact that increasing division of labor is seen in a wide range of industries in the late eighteenth century is the best evidence that there were significant gains in productivity from this source (King and Timmings 62).
Technological innovation was not a new phenomenon, but what was new was the rate of innovation. Political, social and economic changes influenced new technology and innovations. A gradual transformation ushered in the modern world of constant technological change, large factories, industrial concentration, and a variety of new industries. Viewed in this light, it becomes very difficult (and fairly unimportant) to date the Industrial Revolution exactly. so, the main causes of the Industrial Revolution were the end of feudalism and technological innovations, new social and political order and new economic relations.
Chandler, A.D. Scale & Scope The Dynamics of Industrial Capitalism (Paper): Dynamics of Industrial Capitalism.Harvard University Press; New Ed edition, 1994.
King, S., Timmings, G. Making Sense of the Industrial Revolution: English Economy and Society 1700-1850. Manchester University Press, 2001.
Montagna, J.A. The Industrial Revolution. 2006. Web.
Weightman, G. The Industrial Revolutionaries: The Creation of the Modern World 1776-1914. Atlantic Books, 2007.
Yorke, S. The Industrial Revolution Explained: Steam, Sparks and Massive Wheels. Countryside Books, 2005.