Topic 2: Britain the Pioneer: The First Industrial Revolution

Question 1

When did the First Industrial Revolution occur in Britain? What was on average trend growth estimated to have been?

Answer 1

It began in the late eighteenth century with the emergence of capitalism. Estimated to be from 1780 to 1850.
Growth is estimated to have persisted in the range of 1.5% to 2% which was unprecedented at the time.

Question 2

What is the First Industrial Revolution characterised by? What changed?

Answer 2

• This revolution is mainly characterised by the growth in the manufacturing industry, especially in cotton and iron production, innovation with productivity growth and considerable growth in capital per person. It involved a major transformation in agriculture, mining, transport and communications as well as in banking, and was associated with an ongoing expansion in foreign trade.
  ○ Importance of innovation - could not rely on export-led growth
• It involved considerable social, demographic and political changes in Britain: a sharp upturn in population growth; a large migration of labour from the country to urban cities; the emergence of the capitalist class and ‘commodity-labour’ market; the shift in political power from the land-owning to the merchant/capitalist class.

Question 3

When was Rostow’s self-sustaining growth phase reached?

Answer 3

Probably the 1870s, when the living standards of the mass population had considerably improved to generate the perpetual consumption for self-sustaining demand growth.

Question 4

What was the key origin of British industrialisation?

Answer 4

• The origins of Britain’s industrialisation lie with the commercial revolution of the eighteenth century that emerged from its ‘empire economy’ developed under a longstanding mercantilist policy.
• By 1750 Britain was the dominant mercantile economy in the world, with the most powerful navy and the largest merchant fleet. London was indisputably the financial capital, emanating from Britain’s dominant position in international trade.
• Under longstanding mercantilist policy, Britain acquired colonial possessions enabling it to import raw materials as well as luxury goods scarce in the British Isles and export principally manufactured products. In the eighteenth century its most valuable colonial possessions were the North American, Indian and West Indies colonies, which enabled an expanding trade in re-exports.

Question 5

Why was the Atlantic Trade important and what did it enable?

Answer 5

• The Atlantic Trade was important because it enabled Britain to widen the range of products it could export to Europe to obtain needed imports for productive use such as timber, pitch and hemp for shipping and high-grade bar iron for the metal trade. The plantations in the West Indies supplied luxury income-elastic products – sugar, tobacco, indigo, cotton and dyewoods – for re-export. This added to its East Indies luxury re-exports of tea, coffee, silks and spices. It is estimated that in the fifty years to the early 1750s the re-export trade increased by 90% and then expanded by twice that in the second half of the eighteenth century.
  ○ Also porcelain
• Britain overcame the limits to the expansion of its international trade by developing a complex network of trade based on its colonial empire.

Question 6

What was the structure of Britain’s trade network and what was the role of slavery?

Answer 6

• This network was essentially triangular between Britain, west Africa and the West Indies. Weapons, hardware, spirits and woollens from Britain and calicoes from India were shipped to west Africa in exchange for slaves, ivory and gold. The slaves were shipped to the West Indies to work the plantations in exchange for the valuable ‘tropical products’ of sugar, dyestuffs, mahogany, logwood, tobacco and raw cotton. The gold and ivory was shipped to the East for teas, silks, calicoes, coffee and spices which, along with the tropical products, constituted re-exports to Europe so Britain could acquire Baltic timber, hemp, pitch and tar (essential for ship building), Swedish and Russian iron and, later in the century, grain.
• The role of slavery was crucial in the trade network and in expanding the production of tropical products. It would assume greater importance for producing cotton in the plantations of the United States ‘American South’.

Question 7

What was the role of North America in Atlantic Trade and when did its importance increase?

Answer 7

• In the second half of the eighteenth century North America assumed greater importance in Atlantic Trade not only for acquiring tropical re-exports and raw materials like raw cotton for British industry but as a growing market for exports.
• The rapid growth in population together with the high incomes of white North Americans, created a valuable market for British products. Whilst the American War of Independence (1775-83) disrupted this trade, the establishment of an independent United States actually augmented expansion of its economy, incomes and, thereby, British exports over time.
  ○ Settlement colonies
  ○ Southern slave states - agricultural based
• Whereas in 1750 North America constituted about 11% of British domestic exports, by the late 1790s it was 32%.This expanding trade also reduced Britain’s reliance on European imports (and indeed progressively the need to ship slaves to the American south)
  ○ * Note Britain abolished the trade in slavery in 1807. - the Americas from the 1920s had to rely on repopulation of the slaves themselves

Question 8

What was the contribution of foreign trade to British industrialisation?

Answer 8

Foreign trade was crucial to Britain’s industrialisation:
- It supplied the raw materials scarce in the British Isles necessary for production, especially for manufacturing production
- It widened the potential markets for domestic products at a time when the expansion in domestic demand was limited by low incomes of the mass population. This in turn encouraged specialization, to develop special skills and techniques of economic organization and to reap the cost efficiencies of large-scale production.
s necessary for production, especially for manufacturing production
- In the Wealth of Nations (1776) Adam Smith advanced the thesis that the ‘division of labour’ – as the forerunner to industrialisation – was limited by the ‘extent of the market’, something that could be overcome through foreign trade.

Question 9

What was the role of financing?

Answer 9

• Intricate to the financing of international trade was the City of London financial centre. The bill of exchange was the chief financial (or credit) instrument that facilitated Britain’s foreign and, indeed, its internal trade. This credit instrument relied on the confidence provided by solid financial institutions discounting the bills all underwritten by the liquidity of the London market.
  ○ What is needed - confidence that the outstanding value of the bill will be met
  ○ Underwritten by financial institutions and ultimately by the Bank of England
  ○ Bank had a monopoly for 25 miles
  ○ Main currency: Bank of England note
  At the pinnacle of the British financial system was the Bank of England, established by merchants in 1694, which out of its role as lender to the government created a liquid money market (with note issues) for the expansion of private credit. Around the Bank of England, a range of major financial institutions developed: insurance companies (especially for marine insurance), partnership banks, including merchant banks, Chartered Trading Companies and the London Stock Exchange.

Question 10

What was the overall effect of the mercantilist policies of the British government in the 17th and 18th C?

Answer 10

The overall effect of the mercantilist policies of the British government in the seventeenth and eighteenth centuries was to establish a ‘national market’ in Britain that opened up greater opportunity for the most competitive enterprises to capture a wider market and encourage specialization by firms to adopt more efficiently organised techniques of production. Usually in response to regional demands (and policies) the government’s policies facilitated it in three basic ways:

1. protect key domestic industries from foreign competition and to secure foreign produced raw material inputs at cheapest cost (i.e. Navigation Acts, Calico Acts, etc
2. promote transport and communications infrastructure 
3. remove feudal-based obstacles to the internal mobility of labour and capital (mainly in early 19C)

Question 11

What did different regions specialise in?

Answer 11

It is a feature of Britain’s industrial revolution that there is a distinct regional diversity of its industry identifiable from the early 18C:
○ West Riding, Yorkshire: woollen textiles
○ Lancashire, Manchester: cotton textiles
○ Midlands, Birmingham: small metal wares and hardware trades (i.e. tools, porcelain)
○ West Midlands, Staffordshire: pottery and porcelain
○ Northumberland, Durham: coal-mining industry (though coal mining was widespread in West Midlands, West Lancashire and South Yorkshire).

A consequence of ‘external economies’ by reference to local policies, access to raw material inputs, skilled labour, transportation and energy sources.

Question 12

What is at the heart of the first industrial revolution? what were the origins of modern manufacturing?

Answer 12

• At the heart of the first industrial revolution is the development of modern manufacturing industry: large scale units of operation, labour-saving machinery and non-skilled labour regimented under a factory system. This system enabled innovation to increase productivity through better machinery or organization of the production process
• The origins of modern manufacturing is the putting-out cottage industries of the early 18C in which urban entrepreneurs (‘merchant-manufacturers’) organized rural workers to produce textiles and other consumer products by supplying the raw materials and then marketing their output.

Question 13

What was the origin of modern manufacturing? How did they evolve to a factory system?

Answer 13

• The cottage manufacturing process evolved from putting-out different processes of production to specialists (i.e. in textiles: spinning, carding, weaving), from a rudimentary to more advanced division of labour that enabled the adoption of labour-saving machinery harnessing water power and later steam power.
  
  • The evolvement to a factory system first occurred, on a relatively small scale, when production was reliant on water power (i.e. John Lombe’s silk mill in Derby, 1721; also common in iron industry), or involved many stages of production (i.e. metal wares; like Adam Smith’s WN nails example).
    (Primarily in textiles and cotton production)

Question 14

What were the key sectors of the Industrial Revolution?

Answer 14

• It is generally agreed that the leading sector of Britain’s industrial revolution was the cotton textile industry. The essential reason for this was that the income-elasticity for demand for cotton cloth was high. Also it involved a manufacturing process that in the late 18C was highly conducive to innovation in production that improved its quality and lowered its (relative) price.
  ○ As incomes rise, they tend to buy this product
• Another important sector was the iron industry, that was important to construction, engineering and the production of machinery, especially in the steam-powered age.

Question 15

How did the cotton textiles industry in Britain develop and what were the restrictions in place?

Answer 15

• Whilst England had a long tradition in woollen textiles production it had none in cotton early in the 18C. The Calico Acts, by prohibiting the import of superior Indian cotton products, enabled a nascent cotton textile industry to develop in the 18C.
• Nevertheless, its cotton was higher in price and lower in quality (being a mixture of cotton-linen-wool) than Indian textiles. Hence, the latter were subject to prohibition until 1774 and then to high tariffs to protect the domestic industry. Under this protection, the domestic cotton industry strengthened in the 1750s when European demand for Indian cotton increased in relation to its supply.
  • There were two sets of factors that revolutionised Britain’s cotton industry:
    1. Attainment of progressively larger quantities of cheaper raw cotton imported from the slave-based plantations of North America. In its foreign trade this involved, in part, trading slaves employed in cotton growing plantations for its raw cotton. No doubt cotton produced by slave labour in the New World was cheaper than had it been produced with ‘free’ labour.
    2. A series of important inventions that improved the quality and price of British cotton textiles.

Question 16

What were the most important inventions in revolutionising the cotton industry? How did they facilitate modern manufacturing?

Answer 16

• The most important inventions were:
  ○ Hargreaves spinning jenny, invented 1764, patented 1770: easy to operate it could spin many times the amount of yarn of any single operator according to how many spindles were employed.
  ○ Arkwright’s water frame, patented in 1769: it produced a strong cotton yarn, indeed, a new British cotton product and could be powered by water and then steam.
  ○ Crompton’s mule, patented 1779, combined the processes of the jenny and the water-frame to produce a smoother and finer quality cotton, powered by a steam engine.
• Also developments in dying, weaving
• Simplification of the process - more machines could be created -> increased inventions
• These inventions speedily facilitated the adoption of the factory system in cotton production. Other improvements in the processes of bleaching, dyeing, and carding also lent itself to large scale factory production.
• The process of weaving lagged behind with power-looms only slowly introduced, partly because of opposition by handloom weavers. Only from the 1820’s were power looms adopted on a large scale in factory production.
• Why the industry was concentrated in Lancashire is historical: lime-free water, its damp climate, abundance of labour, expansion of Liverpool port. Woollen industry was already concentrated in this area

Question 17

What was the contribution of the cotton industry to the Industrial Revolution?

Answer 17

• In only 50 years between the 1780s and 1830s Britain had become the dominant global producer of cotton textiles: its cotton was of a consistently finer quality and at a low price.
• Estimated that by 1812 cotton output accounted for 7-8% of national income; by 1815 cotton was about 40% of Britain’s total exports and more than 50% by 1830. In 1812 estimated that over 100,000 workers were employed in cotton-spinning factories and probably one-quarter million in weaving.
• Its great contribution was in generating income by demand in exports, consumption and by technical progress (and via its profits to investment).

Question 18

Which happened first, iron production or steel production? When did these industries undergo a technological revolution?

Answer 18

Iron production. In the last quarter of the eighteenth century.

Question 19

What was a major challenge to iron production? How did they overcome this and what did they use instead?

Answer 19

• In the early 18C iron production was organised along the capitalist-style factory system but on a relatively small scale necessarily situated remotely on waterways to use power of a water mill.
  ○ Required power: water mills
  ○ Power used for combustion of fires - critical in melting iron
• The first major challenge for iron production was to shift from using charcoal – based on a diminishing supply of wood – with coal. Abraham Darby successfully smelted iron from coke in 1709 and this opened the way for the industry.
  ○ Charcoal was becoming scarce
  ○ Britain was abundant in coal
  ○ Better quality iron they could produce - coal burns for longer and at a higher temperature

Question 20

What was a major constraint on the iron industry and how did it change over time? What were the two key factors that acted as an impetus to iron production?

Answer 20

• A major constraint on the iron industry was demand such that it could not properly develop until an industrialisation process had begun. In the last quarter of the 18C the demand for iron increased for building and construction, shipping, mining, military (French Wars, 1793-1815) and machinery after the invention of the steam engine.
  ○ Cannons, military equipment
  ○ Especially, naval shipping for war
• After Boulton and Watts steam engine was introduced in 1775, it generated a demand for iron for building steam engines but, moreover, it enabled the location of iron production in coal producing areas and enabled increased plant size.
  ○ Much hotter furnaces –> Required new machinery
  ○ Machinery powered by steam power meant that the machinery had to be made of a harder substance
  ○ Machines got much larger and much sturdier
  ○ Eventually led to production of steel

Question 21

What were the key innovations in the iron industry?

Answer 21

• The coal-fired and steam-powered blast furnace, capable of generating much more heat for smelting facilitated innovation in iron making. The most important was Henry Cort’s puddling and rolling process, patented in 1783 & 1784, which was able to convert native pig-iron into high quality iron bars on a par with the Swedish product, and had the advantage of simplifying the process of puddling, hammering and rolling into one process.
  ○ Initially, had to import iron bars from Sweden
• There followed a series of innovations, including a steam hammer, in puddling, rolling, forging and milling, conducive to large-scale production of an improved iron product at lower cost.

Question 22

Who invented the puddling and rolling process and when was it patented?

Answer 22

Henry Cort. Patented in 1783 and 1784.

Question 23

What was the growth trend of the iron industry in late 18C and the 19C?

Answer 23

• The growth of the industry was substantial in the late 18C with output of pig-iron estimated at over 250,000 tons in the first decade of 19C compared to some 30,000 tons in 1760. By this time the industry exported more bar-iron than it imported.
  
  • After the boost provided by military and naval demand in the French Wars, the industry suffered a depression from which it slowly recovered and then boomed with railway construction in the 1830s through to the 1870s. Its growth slowed during the last quarter of the 19C indicating relative decline to German and US industries (economies) then was boosted by naval demand leading up to WWI.
    Decline from 1880s

Question 24

What was the contribution of the iron industry to Britain’s Industrial Revolution?

Answer 24

• A key to industrialisation, the iron industry supplied a cheap and tough iron product to other industries: it was required for implements and tools of all kinds, for naval and military purposes, for hardware, for building and for industrial machinery. It underpinned British competitive superiority.
• It generated considerable exports in the mid- nineteenth century when it supplied foreign (including colonial) railway construction. Iron exports reached over 40% of the industry output by the 1860s. Its revolution is largely attributable to coal conversion, the invention of the steam engine and a long series of innovations. (Does not include machines made out of iron)

Question 25

What was the role of agriculture in the revolution? How did it contribute?

Answer 25

• An industrial revolution, involving the expansion of the manufacturing sector, cannot take place if agriculture cannot produce the food for a growing population as well as release labour for employment in the other modern industries.
  ○ Agriculture has to develop
  ○ And release labour for manufacturing sector
• Britain did experience a revolution in agriculture characterised by a considerable increase in productivity per worker on large-scale and enclosed farming units. It involved the private appropriation of commons farming land and the adoption of intensive livestock husbandry which compelled workers/peasants to migrate to towns.
  ○ Commons farming land: can be farmed by anybody
  ○ Acts allowed these farms to be privatised
  ○ Migrate: lost access to farming lands

How it contributed:

- Feeding a fast growing population: the latter more than doubled between 1751 and 1821.
- Releasing labour for manufacturing and other industries needed to industrialize.  
- Rise in agricultural income important to the growth of consumption demand (for manufactured goods) by wider population. Technological progress in agriculture contributed to lower prices of foodstuffs and, thereby, to higher average income per capita. 
- Large profitable land-owners contributed capital to other industries such as mining, ironworks and  manufacturing as well as to infrastructure (i.e. canals) and were the largest holders of public debt.

Question 26

What were the key technological innovations in agriculture in the 18th Century?

Answer 26

In the eighteenth century improved farming methods were introduced steadily in England which involved limited mechanisation (that came later in the mid-nineteenth century):
○ Jethro Tull (1674-1741): method of using a tool to seed drill wheat and root vegetables in straight lines with space to permit a horse-drawn hoe to cultivate rows between lines enabled constant seasonal cultivation of same field.
-> Lead to higher productivity in both sowing and harvesting
○ Rotherham triangular plough, patented in 1730, more effective and required less horse and men to plough.
○ improved hand tools and earlier cutting of grain
( Most labour intensive process of farming)
○ better methods of crop rotation by way of legume planting and field-grass husbandry (i.e. animals) to extend area under cultivation and to provide winter feed for livestock.
(Allowed soil to regenerate more quickly - e.g. manure)
Utilising the land better such as - Winter feed: could grow potatoes which could help the soil grow quicker

Question 27

What is Mixed Farming?

Answer 27

• Mixed farming rotation in which livestock supplied manures and legumes (i.e. turnips and potatoes) helped to fertilise the soils for grain crops. It also allowed farmers to diversify their output and reduce the risks of climate on farmer’s income.
• This method required large farming units and, unlike France, England had an advantage because primogeniture allowed land-owning families to enlarge their estate through marriage and not dilute them.
  ○ Other children had to find new careers
  ○ Enabled large farming estates
• Enclosures by Act of Parliament or privately increased arable farming land at cost of rural poor (by loss of game-meat in diet and farming land).
  ○ As the land was privatised in the process
  ○ Encouraged migration to city areas

Question 28

What was the main structural change in Britain’s Industrialisation?

Answer 28

• The main structural change is that manufacturing and mining grew relatively to agriculture and made a greater contribution to national income.
• Before the industrial revolution it is estimated that 40% of national income came from agriculture; in 1801 it was 32% and the industry employed about 36% of total labour, in 1851 it was 20% and 22% respectively, and by 1901, 8% and 6%.
  ○ Agriculture becoming much less important
• Whereas manufacturing and mining in 1801 contributed 30% to national income and employed 23%, in 1851, it was 43% and 34% and in 1901, 46% and 40%
  ○ * Note the rise in the contribution of foreign income in the last thirty years of 19C, reflecting the return on British colonial investment.
  Additionally, foreign income became more important (from colonies)

Question 29

What were the advantages of British transport and how did they facilitate regional specialisation?

Answer 29

• The regional specialisation of industry referred to earlier was only sustainable because firms could sell their products into a national market established by the transport and communication network.
• Britain had advantages in transport compared to other European countries because the country was narrow with no part of it more than 115 kilometres from the sea and with considerable navigable inland rivers. With water transport the cheapest way to transport bulky and weighty goods (like coal), coastal river shipping was the main means of transport, supplying industry and towns.
  - The regional specialisation of industry referred to earlier was only sustainable because firms could sell their products into a national market established by the transport and communication network.
  
  • Britain had advantages in transport compared to other European countries because the country was narrow with no part of it more than 115 kilometres from the sea and with considerable navigable inland rivers. With water transport the cheapest way to transport bulky and weighty goods (like coal), coastal river shipping was the main means of transport, supplying industry and towns.
    ○ Inland shipping
    ○ Coastal shipping - supplying industries and distributing products to towns

Question 30

What was the main revolution in transport in the 18th Century? What was it motivated by and what legacy did it leave?

Answer 30

• The main revolution in transport in the 18C was inland water transport by river improvement and the building of canals.
  
  • Most famously canal building was kicked off by the Duke of Bridgewater’s canal opened in 1761, designed to bring coal from his Worsley colliery to Manchester, halving the price of coal. Its success sparked a mania of canal building from the 1760s to the 1790s which established an inland water network for transport that reduced the transport cost considerably of coal and other bulk commodities by end of 18C.
  • All the canal projects were motivated by the needs of industry and the growth of towns. They all involved raising considerable amounts of private capital, mainly locally in the region (often with business interests in the project), content with earning dividend income over the long-term. Most funds were raised through share issues by a Joint Stock Company established by an Act of Parliament. No doubt low interest rates of the time helped canal investment.
  • Besides the enormous external benefits of canals, the experience of their building and financing would leave an important legacy for railway construction.

Question 31

What was the transport revolution in the nineteenth century based on? What did it facilitate?

Answer 31

• If the transport revolution in eighteenth-century Britain was based on waterways, in the nineteenth century it was railways. It revolutionised transport not only of bulk freight but also of people (social mobility) and facilitated regional branch banking.
  
  • Early in 19C there were small-scale localised railways operated by horse power or by stationary engines not only in ironworks and mines but to transport people. The first major line (over 25 miles) was the Stockton-Darlington Railway opened in 1825 but where locomotives only powered a short section of the line with stationary engines mostly used.

Question 32

What was the first major railway line (over 25 miles)?

Answer 32

The Stockton-Darlington Railway in 1825

Question 33

What sparked the railway boom?

Answer 33

• It was with the opening of the Liverpool-Manchester Railway in 1830 that locomotive power was first used. The great financial success of this line sparked a railway investment boom that reached a mania in the 1840s. While initially railways were projected on the basis of freight income and designed to compete with or compliment canals, in the 1830s it was passenger traffic which made them highly profitable.
  ○ Link between textile industry (Manchester) and major harbour/port (Liverpool)
• In the 1830s major long trunk lines were projected: London-Birmingham, Birmingham-Lancashire, Yorkshire-Derby, Bristol-London.

Question 34

How much railway was constructed in the 1830s and 1840s? When was the peak? What did it lead to?

Answer 34

• In the 1830s some 2200 miles of new railway had been sanctioned. This was dwarfed in the 1840s when over 8200 miles was sanctioned and over 6000 miles constructed so that in 1850 around 6600 miles of rail network was open.
  
  • The peak in the railway investment boom was 1844-46 when £207 million in capital was authorised with £50 million raised by share issue for expenditure on construction (nearly 10% of national income).
  • In 1847 the railway mania led to financial crisis and huge losses were incurred by railway investors – being the cost of financing large-scale railway infrastructure.
    ○ Collapse in railway shares
    ○ Huge amount of speculation
    ○ Major contributor - bank of england which had lowered interest rates

Question 35

Who was George Hudson?

Answer 35

• The most important railway promoter was George Hudson (1800-71) – the ‘railway king’ – who controlled 30% of the network in 1849 before financial scandal brought his downfall. He amalgamated a number of short lines and set up a ‘Clearing House’ in 1842 which rationalized the service by providing uniform paperwork and standardized methods for transferring passengers and freight between lines, and loaning out freight cars.
  ○ E.g. timetabling system for shifting
  ○ Using freight cars on different lines at different times
  
  • Hudson nevertheless contributed toward the beginnings of a modern railway network in Britain under private ownership.

Question 36

How did the railways contribute to economic development? How did they contribute to the British economy?

Answer 36

The railways made an enormous contribution to the economic development of Britain’s 19C economy:
1. Enormous investment of over £200 million between 1830 and 1860: boost to coal, iron, and engineering industries.
2. Employed at its peak 300,000 workers on construction in 1847 with 60,000 employed to run the network in 1850.
3. Reduced the cost of freight transport and its speed of delivery.
Reduced cost of passenger transport (relative to road) and increased labour mobility (a boost for tourism and holiday resorts).

- Railways also provided the basis of branch banking by joint stock deposit banks along the network (via cheque clearing) that greatly increased capital mobility as well as the regional security of English banking.
- They also opened up new markets for investment by linking cities and towns, in exploiting resources and through lower freight costs for goods.  Overall, the railways contributed to a larger national market and, by reducing transport costs, ensured Britain was the most competitive producer until late in the nineteenth century.

Question 37

What were the key roles of technological progress in the Industrial Revolution? What other innovations contributed?

Answer 37

• As shown in the iron and cotton industries, innovation played a critical role in Britain’s industrial revolution: in overcoming resource constraints and producing new or better products at lower cost that made the economy by far the most competitive.
• Fundamental was the technology developed in the 18C to shift from charcoal to coal in heating and in the generation of energy. Whilst water power remained the most important until end of 18C, the development of the steam engine was fundamental to industrialisation in the 19C, in engineering and construction, manufacturing and rail transport.
  
  • Besides fundamental ones, there were a series of innovations across all economic activities, many of an incremental nature, that cumulatively contributed to higher productivity and higher quality products.
• A feature of Britain’s industrialisation is how receptive industry was to developing and adopting new innovations: due to (1) enlightenment thought in which people believed their actions could change their destiny and that of society; (2) greater scientific awareness; (3) production progressively organised along factory system, and; (4) oncoming capitalism in which innovation could be rewarded with high profits while the inability to adapt led to failure.

Question 38

What was the effect of early industrialisation on living standards? What did this in turn imply for industrialisation?

Answer 38

There has been considerable controversy about the effect of early industrialisation (up to 1850) on the living standards of the mass working population. The pessimistic line of argument (i.e. Hobsbawm, Engels, Marx and Toynbee) is that whilst it brought affluence to some it led to a deterioration in living standards of the labouring poor. The optimistic view (Tooke, Ashton, and Clapham) is that most workers were better off because of more regular employment and wider earning opportunities.

The evidence suggests that from the 1740s living standards did perceptively increase, possibly as a consequence of a long series of productive harvests between 1730-55 lowering the price of foodstuffs in relation to the money wage.

From 1780 to 1820, during the early phase of industrialisation, it is not certain whether the real income of the mass population did increase or not. Whilst the growth of output certainly seems to have increased so does population growth and the high inflation of the French Wars (1793-1815) followed by a severe post-war depression (1816-1822) with high unemployment, kept living standards down.

The issue is important because if living standards did not keep pace then a slow growth of consumption inhibited Britain’s industrialisation.

Question 39

What suppressed living standards?

Answer 39

• The large migration of people from the country to towns led to a higher death rate in over-populated urban areas from poor sanitary conditions and poor working conditions in factories. This was an issue in Britain up to the end of the 19C.
  • Sanitary issues started affecting all people not just the poor
  
  • With little organised representation, factory workers had little bargaining power over money wages and work conditions. Only from the 1820s did British workers begin to organise into trade unions.
  • The distribution of income was clearly skewed in favour of profits over wages during early industrialisation – partially needed for investment growth associated with the role of foreign trade.

Question 40

Describe living standards in Britain after 1820

Answer 40

• From 1820 to 1840 on balance the evidence suggests there was a slight increase in real income but that it was associated with a decline in the very poorest of the labouring class (both rural and urban).
  • Potentially manufacturing workers who improved their bargaining power
  • Large factory sizes - useful in making a trade union
• Stronger evidence of healthy growth in average real income from the 1840s onwards:
  • with negotiating power industrial workers obtained significant wage rises in the 1850s and 1860s
  • abolition of the corn laws in 1846 permanently reduced the price of foodstuffs
  (Were established in 1815 to protect the landowners who were major holders of government debt)
  • a significant middle class began to emerge mid-19C
  • improvements in urban living occurred from 1860s (especially from government improving water quality)

Question 41

How did the population change during the population of industrialisation?

Answer 41

• The evidence suggests that the population growth of Britain accelerated in the early stages of industrialisation from the 1740s and markedly from the 1780s until the 1820s (hence Malthus’s theory) when it peaked and resumed a steady growth rate above 1% per annum for the remainder of the 19C.
  • Malthus’ theory - thought population would become a problem - would grow at a rate more than could be fed as it was thought to grow at a geometric rate while food production grew at an arithmetic rate
• There is some controversy over its causes. A decline in the death rate (and child mortality) due to better living conditions and diet was an underlying factor, especially in 18C; an increase in the birth rate is also likely to have contributed as better employment and income prospects encouraged people to marry earlier and have more children.

Question 42

Where did economic liberalism stem from in Britain?

Answer 42

• In 1776 Adam Smith’s ‘Wealth of Nations’ was published critical of mercantilism and advocating policies of economic liberalism, in particular, freer trade. Smith’s argument had an enormous influence and by the early nineteenth century there was strong support for liberal policies.

Question 43

What did Adam Smith’s laissez-faire argument advocate for?

Answer 43

Economic liberalism.
However, Smith’s laissez-faire argument needs to be understood in its historical context: the main focus was on removing feudal-based rules and regulations dating from medieval times that inhibited the mobility of capital and labour and to facilitate the development of the new emerging manufacturing industries.
• E.g. removing guilds

Question 44

What was the purpose of new government policies from the 1780s?

Answer 44

• Adam Smith essentially advocated better and more enlightened government policies based on economic principles for national interest, not merely to serve vested interest groups. The point was to remove out-dated and ineffective regulations and rules which inhibited Britain’s economic progress.
  
  • Under Prime Minister Pitt, the younger, steps were made from the 1780s to improve the financial accountability of the government and to rationalise the taxation system.
  • It was not until the early 19C that the government made progress in repealing out-dated restrictions.
    • First income tax ever introduced during this era

Question 45

Why was liberal reform postponed?

Answer 45

Liberal reform was effectively postponed because of the long-running French Wars which required the government to raise revenue for war by increasing custom duties and imposing other taxes. It also caused the government to adopt a conservative approach to social and economic freedom.

Question 46

What was the government intent on in the aftermath of the French Wars?

Answer 46

In the aftermath of the French Wars, with the nation in economic depression, the Liverpool Tory-Liberal government was intent on re-establishing social and economic order and to implement laissez-faire reforms of the economy. A new era of modern government in Britain unfolded.

Question 47

What were the Government Liberal Reforms of the Nineteenth Century?

Answer 47

• The Elizabethan ‘Statute of Apprenticeships’ – repealed 1814
  • Pursue other employers
• The Combination Acts (of 1799/1800) – repealed 1824
• A host of out-dated feudal industry regulations affecting production were repealed in 1820s
• The Bank Charter Act of 1833 permitted the Bank of England to disregard Usury Laws (imposing 5% maximum discount rate); the Usury Laws were repealed in 1854
• Restrictions on joint-stock banking and branch banking were removed in the 1830s
  • As they were not very stable (e.g. bills issued by small banks)
  • 1855 Limited liability act implemented
• New Poor Laws introduced by Act in 1834
• Removal and reduction of custom duties in 1820s (‘Free Trade’ Budget of 1824) that was resumed by Gladstone in the 1850s
• Removal of Corn Laws in 1846
  • Move towards free trade
  • 1820s: anti-corn law league was established - higher food prices -> higher cost of living and employers were having to pay higher income
• Navigation Acts repealed in 1849

Question 48

What social welfare policies did the government adopt after the French Wars?

Answer 48

• After the French Wars the British government adopted a more professional approach to policy making with experts placed on independent boards and commissions such as the ‘Board of Trade’ and the ‘Poor Law Commission’ to advise government.
• Whilst the Poor laws of 1834 were in many respects regressive, it did portend the central government taking responsibility for social welfare and there followed other reforms and institutions to deal with poverty, health, child labour, education, factory safety and labour laws (hours worked etc). Government intervention in these cases was seen to be entirely consistent with economic liberalism.

Question 49

When was freer trade adopted in Britain?

Answer 49

From the early 1820s

Question 50

Describe Britain’s relationship with free trade from the 1820s to 1850s

Answer 50

• Britain adopted freer trade from the early 1820s, but because of the large public debt (about 250% of National Product) the government was constrained in lowering custom duties by the need to maintain its revenues (to service the debt). It was not until the end of the 1850s that the government had considerably lowered or abolished duties on a whole range of imported goods.
  • 1821 moved on to the gold standard which then became standard for world financial system
• The key reform was the repeal of the Corn Laws, which provided protection to agriculture, in 1846, after a long and heated debate.
• Free trade was not afforded to the colonies with, for example, protection against Indian cotton.

Question 51

Why was a liberal foreign trade policy in Britain’s interests?

Answer 51

• A liberal foreign trade policy was firmly in the interests of Britain.
  
  1. Britain’s competitiveness was so superior that the biggest problem was that its European neighbours could not purchase its products because of their low income. Hence, the more these countries could export to Britain, the more of Britain’s superior manufactures they could purchase.
  2. In particular, removal of the corn laws enabled cheaper foreign grain that lowered the prices of foodstuffs and increased the living standard of the British working population.* The higher real income of the population translated into greater consumption on domestic manufactures.
     
     • Repeal of corn laws occurred once food security was seen to be met by a reliable foreign supplier of grain in North America, namely, the colony of Canada. It also marked a watershed politically in which liberals came to dominate over (split) conservatives.

Question 52

Describe the shift between mercantilism and free trade

Answer 52

• Britain’s industrial revolution arose from a mercantilist policy to foreign trade. The protection given to domestic industry from foreign competition in the 18C played an important role in the early development of British manufacturing by securing the national market and creating an environment for innovation.
• Britain’s 19C freer trade policy arose from industrialisation making its economy dominant. This policy would assist other Western European countries through the demand for their products by a relatively high income Britain.

Question 53

What was the demand-led perspective of the problem of development? What was the foundation of the first industrial revolution?

Answer 53

• From a demand-led perspective the problem of development is how to generate demand growth when income is low. Unlike all countries which have historically followed Britain, as the first to industrialise, it had to generate demand on its own: ‘Pull itself up by its own bootstraps’.
  
  • The foundation was no doubt established by the Glorious Revolution of 1688 and parliament’s victory over the sovereign which established the basis in the 18C for a financially sound government, led by mercantile interests with a national purpose and of liberal orientation as well as to a flourishing financial market in London.

Question 54

What was the role of technological innovation in the first industrial revolution?

Answer 54

• Technological innovation played a crucial role in the first industrial revolution – more so than any that followed by today’s advanced nations – in lifting income and, thereby, generating demand.
  
  • It enabled Britain to produce products of higher quality at a vastly cheaper cost that captured domestic and foreign demand. The lowering of prices, contributed to higher real incomes which facilitated higher consumption growth as well as affording higher profits for capitalists to re-invest and expand their manufacturing enterprises.
  • The wider market was conducive to the factory system and technical innovation.

Question 55

What was the role of Britain’s colonies and the slave trade in the First Industrial Revolution?

Answer 55

• Important role of Britain’s colonies: West Indies for supply of tropical goods; North American colonies for raw cotton but an important source of demand for manufactures; India in providing spices and other raw materials and later in 19C opium for Chinese tea and the market for cotton textiles.
  
  • Slave trade in 18C intricate to its mercantile expansion and for plantations in West Indies (sugar) and in North America (cotton). The latter critical in supplying cheap raw cotton and promoting the key cotton textiles industry.

Question 56

Why was the increase in living standards as a result of technological innovation slow?

Answer 56

• In the early phase of industrialisation technological innovation only raised living standards slowly because of the unequal distribution of income which saw productivity gains of income mainly appropriated as profits for re-investment.
  
  • Also innovation took a long time to spread across industries to generate large productivity gains in income: with steam-powered machinery in a factory organized system spreading across manufacturing industry from the 1820’s onwards.

This helps explain the slower trend growth (1.5-3%) and longer period of Britain’s transformation (80-100 years) than for later industrialisations.

Question 57

What marks the high point of Britain’s economic dominance?

Answer 57

In Britain this appears to have been achieved by the 1870s. This marks the high point of Britain’s economic dominance: as Germany and the United States catch-up in the last quarter of 19C so that by WWI they possess a superior productive capacity.