In the latter part of the eighteenth and the first half of the
nineteenth century, Britain underwent what historians have called an ‘industrial
revolution’ with factories pouring out goods, chimneys polluting the air,
escalating exports and productivity spiralling upwards. This was an epic drama,
of Telford, the Stephensons and the Darbys, Macadam, Brunel and Wedgwood, a
revolution not simply of inventions and economic growth but of the spirit of
enterprise within an unbridled market economy. This is, however, misleading.
Industrial change was not something that occurred simply after 1780 but took
place throughout the eighteenth century. There was substantial growth in a whole
range of traditional industries as well as in the obviously ‘revolutionary’
cases of textiles, iron and coal. Technical change was not necessarily
mechanisation but the wider use of hand working and the division of labour.
Changes were the result of the conjunction of old and new processes. Steam power
did not replace waterpower at a stroke. Work organisation varied: the ‘dark
satanic mills’ were not all conquering. In 1850, factories coexisted with
domestic production, artisan workshops, large-scale mining, and metal
production. Change also varied across industries and regions.
Why did economic change occur in Britain between 1780 and 1850?
Answering this question usually focuses on why industries like cotton, iron and
coal expanded and what influence the spread of steam power had. These areas were
important but undue emphasis on them neglects the broader economic experiences
of Britain. Similarly, the question ‘Why did the industrial revolution take
place in Britain rather than France or Germany?’ misses the crucial point that
economic change did not occur in Britain as a whole. Growth was regional and
industrialisation took place in particular locations like Lancashire, the
Central Lowlands of Scotland and South Wales and around Belfast. Explaining the
industrial revolution is a very difficult undertaking since economic change had
an effect, however small, on all aspects of society. Some circumstances that
were present in Britain made change possible and, in that sense, can be said to
be causal. Others held back progress but change occurred despite them. This
section will look at the importance of certain ‘key’ factors in explaining
growth in the economy.
Population
If it is possible to identify a single cause for the industrial
revolution, then a strong case can be made for population increase. Between 1780
and 1850, the population of England and Wales increased from over seven million
to nearly eighteen million. This led to mounting demand for goods like food and
housing. Nevertheless, the increase in demand for other goods – more
manufactured goods or more efficient means of communication – did not
necessarily follow from population expansion. The problem is one of timing. When
did population growth occur? When did economic growth occur? Did they
correspond? Although historians broadly accept population growth from the
mid-eighteenth century, they do not agree when the economy began to grow.
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If population growth stimulated demand, you would expect economic and population growth to coincide. However, they did not. Accelerated economic growth was concentrated in the last quarter of the eighteenth century while the maximum rate of population growth on mainland Britain was not achieved until after 1810.
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Population began to expand after 1750 and some historians argue that this provided the final ingredient necessary to trigger off industrialisation. Berg and Craft have shown that the origins of higher growth rates went back to the early decades of the century. In this scenario, population growth came after the beginnings of economic growth.
The impact of population growth causes problems for historians
who argue for economic growth from the 1780s and those who see growth as
something that began earlier in the century. It had favourable effects on
economic growth in three important respects:
1. Population growth provided Britain with an abundant and
cheap supply of labour.
2. Population growth stimulated investment in industry and
agriculture by its effects on demand for goods and services.
3. Urbanisation made it profitable to create or improve
services. For example, the building of the canal from the Bridgewater coalmines
at Worsley to Manchester took advantage of the growing demand for domestic coal.
The role of population growth in the origins of Britain’s
industrial revolution was far from straightforward.
Investment
Britain was a relatively wealthy country in the mid-eighteenth
century with a well-established system of banking. This enabled people to build
up savings and provided them with capital to invest. Between 1750 and 1770,
there was growing investment in roads, canals, and buildings and in enclosing
land. This process continued after 1780 through to the 1850s with continued
investment in transport and enclosure and in the expansion of the textile and
iron industries, and after 1830 in the development of railways.
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The annual rate of domestic investment rose from about £13 million in the 1780s to over £40 million by the 1830s.
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The ratio of gross investment to the gross national product rose from 6 per cent in the 1770s to 12 per cent by the 1790s at which level, it remained until 1850.
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Widespread capital investment was largely confined to a small, though important part of the economy. Capital investment rose in farming, communications and textiles, especially cotton and in iron and steel. Other areas of the economy were often undercapitalised relative to these industries.
Capital investment in farming was largely on enclosures,
drainage and buildings. Landowners ploughed back about 6 per cent of their total
income into the land. This rose to about 16 per cent during the French wars when
high wheat prices encouraged investment in enclosure. Investment fell back after
1815 with the onset of depression and did not revive until the 1840s. In the
1780s, a third of all investment was in farming. By 1850, this had fallen to an
eighth. By contrast, there was a rapid growth of investment in industry and
communications. Annual investment in industry and trade rose from £2 million in
the 1780s to £17 million by 1850. Between 1780 and 1830, there was an annual
investment of £1.5 million on canals and roads and for the improvement of docks
and harbours. These figures were dwarfed by investment in railways that peaked
at £15 million per year in the 1840s, some 28 per cent of all investment. The
increase in the availability of capital to invest allowed economic growth to
occur.
Trade
Britain was already a well-established trading nation. Colonies
were important sources of raw materials as well as markets for manufactured
goods. London was a major centre for the re-export trade. The slave trade played
a major role in the development of Liverpool and Bristol and its profits
provided an important source of capital for early industrialisation. By the
1780s, the export trade was expanding annually by 2.6 per cent. Cotton
production depended on international trade and was responsible for half the
increase in the value of exports between 1780 and 1830. Cotton accounted for
just over half Britain’s exports by 1830 and three-quarters of all exports were
associated with textiles. This represented a narrow trading base and helps to
explain why the British economy underwent depression in the 1830s and early
1840s. British factories were over-producing for European and global markets
already saturated with textile goods. The result was some changes in the goods
exported with iron exports growing from 6 per cent in the 1810s to 20 per cent
by 1850 and the growing importance of coal exports. In the 1780s, Europe was a
major market for British goods and this remained the case in 1850. However,
there were important changes in the destination of British goods.
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The United States increasingly became a focus for exports of manufactured goods and for raw cotton. This process was helped by the opening up of the Latin American markets in the early nineteenth century.
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India was a huge market for cotton goods. Similar possibilities exited in the Middle East and South America. Britain increasingly shifted trade towards less developed economies that provided growing imports of tropical products to Britain and other industrialised countries like Germany and France.
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Overseas trade has been highlighted by some historians as a primary cause of economic growth. The growth of export industries at a faster rate than other industries was closely linked to foreign trade.
To what extent was the growth in trade between 1780 and 1850
central to Britain’s economic development?
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It stimulated a domestic demand for the products of British industry.
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International trade gave access to raw materials that both widened the range and cheapened the products of British industries.
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It provided purchasing power for countries to buy British goods since trade is a two-way process.
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Profits from trade were used to finance industrial expansion and agricultural improvement.It was a major cause of the growth of large towns and industrial centres.
The role of British trade must, however, be put into
perspective. Changes in the pattern of British trade between 1780 and 1850 – the
export or re-export of manufactured goods in return for imports of foodstuffs
and raw materials – were relatively small and the industrial developments from
the 1780s consolidated already existing trends. Exports may have helped textiles
and iron to expand but they made little impact on the unmodernised, traditional
manufacturing sectors.
Transport
By 1750, Britain was already a highly mobile society. Travel
may have been slow and, on occasions dangerous but it was not uncommon. Within a
hundred years, the British landscape was scarred by canals and railways and
traversed by improved roads and the movement of goods and people quickened
dramatically. Turnpike roads and the emergence of a sophisticated coaching
industry, canals with their barges carrying the raw materials and manufactured
goods of the industrial revolution, new harbours and the railways were symbolic
of ‘progress’ as much as factories and enclosed fields.There were 800 market
towns in England and Wales in the 1780s. This reflected the intensity of
production and the ability of particular areas to specialise in particular
products. These products were then moved to markets across the country often
using the turnpike roads. In 1767, 16,000 sheep and 14,000 cattle passed through
the Birdlip Hill Turnpike in Gloucester en route from south Wales to London.
Imports of coal into London from the north-east rose from one million to three
million tons per year between 1720 and 1790.
Britain’s road system in the mid-eighteenth century was
extensive but under-funded. Just over £1 million was spent annually. This was,
however, insufficient to maintain the road system necessary to growing trade and
manufactures. Turnpike roads, the first was established in 1663, grew slowly in
the first half of the eighteenth century. An average of eight were established
each year. From the 1750s, this went up to about forty a year and from the
1790s, to nearly sixty. By the mid-1830s, there were 1,116 turnpike trusts in
England and Wales managing slightly more than a sixth of all roads, some 22,000
miles. Parallel to this organisational development, there were improvements in
the quality of road building associated particularly with Thomas Telford and
John Loudon Macadam. What contribution did turnpike and parish roads make to
improved communication in Britain between 1780 and 1850? Spending on parish
roads did not increase markedly though there was a significant growth in
spending by turnpike trusts. This reached a peak of £1.5 million per year in the
1820s. The problem was that improvements to the road system were patchy and
dependent on private initiatives. Despite this, there were significant
reductions in journey times between the main centres of population. In the
1780s, it took ten days to travel from London to Edinburgh; by the 1830s, 45
hours. This led to a dramatic increase in the number of passengers carried by a
rapidly expanding coaching industry. The road system transported all kinds of
industrial material and manufactured goods. There was a significant growth of
carrier firms after 1780. In London, for example, there were 353 firms in 1790
but 735 in the mid-1820s and a five-fold increase in the number of carriers in
Birmingham between 1790 and 1830. These firms were, however, unable to compete
with the canals or the railways and concentrated on providing short distance
carriage of goods from canals and railway stations to local communities.
The major problem facing early industrialists was the cost of
carrying heavy, bulky goods like coal or iron ore. The solution was to use
water, rivers, coastal transport and from the 1760s, canals. The first phase of
canal development took place in the 1760s and early 1770s beginning with the
construction of the Bridgewater canal. The second phase, in the 1790s, has
rightly been called ‘canal mania’ with the completion of several important
canals and the setting-up of fifty-one new schemes. By 1820, the canal network
was largely completed linking all the major centres of industrial production and
population.
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Canals dramatically enhanced the efficiency of the whole economy by making a cheap system of transport available for goods and passengers. The price of raw materials like coal, timber, iron, wood and cotton tumbled. The needs of farming, whether for manure or for access to markets for grain, cheese and butter, were easily satisfied where farmers had access to canals.
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Canals were a means of overcoming the fuel crisis that threatened to limit industrial growth by making cheap, abundant coal supplies available.
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The building of canals created massive employment and spending power at a time when growing industries were looking for mass markets.
It is difficult to exaggerate the importance of canals to
Britain’s industrial development between 1780 and 1830.
From 1830, railways were the epoch-making transport innovation.
Between 1830 and 1850, 7,000 miles of track was laid with railway ‘manias’ in
the 1830s and between 1844 and 1847 when investment was at its peak. Their
economic importance lay in their ability to handle both major types of traffic –
people and goods – that no other single mode of transport had previously been
able. They offered lower costs and greater speed attracting passengers, mail and
high-value goods. Mail went to new railways in six months and coaches running in
direct competition lost out. However, canals were able, by cutting their rates
and improving their services, to continue to carry goods for several years. In
1840, the volume of traffic carried by canal from Liverpool to Manchester was
more than twice that carried by railway. The Victorians had no hesitation in
assuming a direct link between railways and economic growth though historians
are today far less convinced. There was increased demand for coal and iron. In
the 1840s, 30 per cent of brick production went into railways and between 1830
and 1845, some 740 million bricks were used in railway construction. Towns grew
up round established engineering centres at Swindon, Crewe, Rugby and Doncaster.
Food could be transported more cheaply and arrived fresher. There is, however,
no doubting their social and cultural impact of railways. This is clearly
supported by the statistics. 64,000 passengers were in 1843 but 174,000 in 1848
with an increase in the third-class element from 19,000 to 86,000 in the same
period. The Great Exhibition of 1851 reinforced this increased mobility of
population.
Between 1780 and 1850, great output was achieved by the
transport industry, as in manufacturing industry, by applying a rapidly
increasing labour force to existing modes of production as well as using new
techniques and applying steam-driven machinery. Historians have emphasised the
importance of canals and railways that respectively in the eighteenth and
nineteenth centuries in reducing transport costs. However, coastal and river
traffic and carriage of goods and people by road remained important and the
horse was the main means of transport well beyond 1850.
Social factors
British society in the eighteenth and nineteenth century was
profoundly conservative. How was a society with highly traditional structures
able to generate changes in so many areas of economic life? First, by 1780,
British society was capitalist in character and organisation. Its aristocracy
was remarkably ‘open’, allowing the newly rich and talented to ‘climb’. The most
successful merchants, professional and businessmen in each generation were
funnelled off into landed society. Success brought wealth and the ultimate proof
of success in business was the ability to leave it. In France, where social
climbing was discouraged there was political and social discontent and
ultimately political revolution. In Britain, where social climbing was not
obstructed, there was an industrial revolution.
Secondly, Britain was already a highly market-oriented society.
Imports, whether smuggled or not, were quickly moved to market. Domestic goods,
both agricultural and manufactured, were bought and sold directly at the network
of markets or through middlemen, who acted as a channel between producer and
consumer. Until 1830, the key to economic growth was the growing home demand for
consumer goods. Growing consumption influenced trade and economic growth.
Possessing and using domestic goods enhanced social status or displayed social
rank. Lower food prices after 1780 may well have stimulated a consumer boom:
people had more disposable income. There was a dramatic increase in the number
of permanent shops in major urban centres and many of the characteristics of
modern advertising emerged with circulars, showrooms and elaborate window
displays. Changing patterns of consumption created an environment in which
manufacturers could exploit known and growing demand.
Finally, entrepreneurial skill and ‘enterprise’ played a major
role in the development of the late eighteenth and early nineteenth century
economy. Entrepreneurs did three things:
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They organised production.
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They brought together capital (their own or others’) and labour.
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They selected the geographical site for operations, the technologies to be used, bargained for raw materials and found markets for their products.
They often combined the roles of financiers, capitalists, work
managers, merchants and salesmen. Three main explanations for the place of
entrepreneurs in leading economic change have been identified by historians:
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There was a change in the ways people viewed social status from one where it was the result of birth to one where it related to what individuals achieved. Status was based on what you did, not who you were. This was a reflection of the openness and mobility of British society.
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Nonconformity seems to have been a crucial experience for many of the first-generation entrepreneurs encouraging a set of values outwardly favourable to economic enterprise.
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Entrepreneurs were able effectively to exploit advances in technology and industrial organisation. Most entrepreneurs were not pioneers of major innovations or inventions but realised how best to utilise them. James Watt would not have been successful but for the entrepreneurial skills of Matthew Boulton. This allowed them to manufacture and market goods effectively within a highly competitive consumer society.
British society did not prevent entrepreneurs from using their
talents and motivation.
Conclusions
There was no blueprint for the ‘industrial revolution’.
Population growth stimulated demand that entrepreneurs were able to satisfy.
Developments in transport led to reductions in the cost of production making
manufactured good cheaper. Investment in industry often brought good returns.
The state made little attempt to control growth. Foreign trade brought raw
materials and profits that could be invested in enterprise. The social structure
was adaptable and relatively flexible. Each of these factors helped create an
environment in which change could occur.