Summary
Although Western Europe had long had the basic trappings of capitalism
(private property, wealth accumulation, contracts), the Industrial Revolution
fueled the creation of a truly modern capitalist system. Widespread
credit, business corporations, investments and large-scale stock markets all
become common. Britain led the way in this transformation.
By the 1780s, the British Industrial Revolution, which had been developing
for several decades, began to further accelerate. Manufacturing, business, and
the number of wage laborers skyrocketed, starting a trend that would continue
into the first half of the 19th century. Meanwhile, technology changed: hand
tools were replaced by steam- or electricity-driven machines.
The economic transformation brought about the British industrial revolution was
accompanied by a social transformation as well. Population boomed, and
demographics shifted. Because industrial resources like coal and iron were in
Central and Northern England, a shift in population from Southern England
northward took place. Northern cities like Manchester grew tremendously.
These changes in social and demographic realities created vast pressure for
political change as well. The first act to protect workers went into affect in
1802 (though in practice it did very little). Pressure to redress the lack of
representation for the new industrial cities and the newly wealthy industrial
manufacturers also began to build.
Meanwhile, industrialists developed an ideology called Laissez Faire based
on Adam Smith's Wealth of Nations (1776) and continued by David
Ricardo and Robert Malthus. Based on this, the discipline known as
"economics" developed, largely to give the manufacturers a basis for arguing for
little or no regulation of industry. Instead of government interference, these
economists argued that a free market, in which everyone followed their own self-
interest, would maximize the nation's utility.
Britain, with its head start in manufacturing, its many world markets, and its
dominant navy, would dominate industry for most of the 19th century. Towards the
end of that century, the United States and Germany would begin to challenge
Britain's industrial power.
Among the Western European countries, Britain was the ideal incubator for the
Industrial Revolution because an "Agricultural Revolution" preceded it. After
the 1688 "Glorious Revolution", the British kings lost power and the
aristocratic landholders gained power. The landholders tried to rationalize
their landholdings and started the Enclosure Movement to bring more and more
of their own land under tighter control, a process that went on throughout the
1700s. This policy had two main effects: it increased the productivity of the
land, and transformed the people who used to work land into an unemployed, labor
class of poor in need of work. Thus, the first factories had a ready labor-
supply in Britain that was not available in other nations. Important inventions
like the "Spinning Jenny" to produce yarn began to be made in 1760s, and soon
the British textile industry was booming, aided by Eli Whitney's invention
of the "Cotton Gin" in America, which provided a ready source of cotton.
